109.4.1 Investigation fee for work without permit. Whenever any work for which a permit is required has been commenced without first obtaining said permit, an investigation shall be made before a permit may be issued for such work. An investigation fee, in addition to the permit fee, shall be collected whether or not a permit is then or subsequently issued. The investigation fee shall be equal to three times the permit fee as set forth in the City’s adopted fee schedule. The payment of such investigation fee shall not exempt any person from compliance with all other provisions of either this code nor from any penalty prescribed by law.
4. Section 109.6 is amended to read as follows:
109.6 Refunds. The Building Official shall not authorize the refunding of any fee paid except upon written application filed by the original permittee not later than 180 days after the date of fee payment.
The Building Official may authorize the refunding of any fee paid hereunder which was erroneously paid or collected.
The Building Official may authorize the refunding of not more than 80 percent of the permit fee paid when no work has been done under a permit issued in accordance with this chapter.
The Building Official may authorize the refunding of not more than 80 percent of the plan review fee paid when an application for a permit for which a plan review fee has been paid is withdrawn or canceled before any plan checking is done.
5. New Section 109.7 is added as follows:
109.7 Reinspection fee. A reinspection fee may be assessed for each inspection or reinspection when such portion of work for which inspection is called is not complete or when corrections called for are not made.
This section does not require reinspection fees the first time a job is rejected for failure to comply with the requirements of the codes. Subsequent inspections or the practice of calling for inspections before the job is ready for such inspection or reinspection may be subject to reinspection fees.
To obtain a reinspection, the applicant shall file an application therefor in writing upon a form furnished for that purpose and pay the reinspection fee in accordance with the fee schedule adopted by the City.
In instances where reinspection fees have been assessed, no additional inspection of the work will be performed until the required fees have been paid.
6. New Section 113.3.1 is added as follows:
113.3.1 Appointment and Number of Members Appointed. The City Manager or their designee is authorized by the governing body to appoint the Board of Appeals. The Board shall consist of 5 members with a quorum of 3 to conduct business.
7. New Section 103.4.1 is added to Appendix P as follows:
P103.4.1 Fire & Life Safety Systems. Whenever any existing buildings have any existing fire and life safety systems, i.e. fire sprinkler and/or fire alarm system, these systems are required to be maintained in operation or made to conform to provision of these regulations to the extent that reasonable and adequate life safety against the hazards of fire, panic and explosion is substantially provided. Additional means of egress may be required to provide reasonable and adequate safety.
8. New Section 103.4.2 is added to Appendix P as follows:
P103.4.2 Emergency Responder Radio Coverage in Existing Buildings.
Emergency Responder Radio Coverage in Existing Buildings that do not have approved radio coverage for emergency responders within the building, based upon the existing coverage levels of the public safety communications systems of the jurisdiction at the exterior of the building, shall be equipped with such coverage according to one of the following:
1. Where an existing wired communication system cannot be repaired or is being replaced, or where not approved in accordance with current or adopted California Fire Code Section 510.1, Exception 1.
2. Within a time frame established by the adopting authority.
Exception: Where it is determined by the fire code official that the radio coverage system is not needed.
9. New Section 104.10 is added to Appendix P as follows:
P104.10 Portable Fire Extinguishers. Portable Fire extinguisher shall be selected, installed and maintained in accordance with California Fire Code Section 906.2 (General requirements) and California Code of Regulations, title 19, Division 1, Chapter 3 in any emergency housing and emergency housing facility.
10. New Section 109.3 is added to Appendix P as follows:
P109.3 Emergency Vehicle Access. Emergency vehicle access shall be maintained for any emergency housing facilities. The fire code official shall approve any temporary emergency vehicle access routes for any emergency housing facility.
11. New Section 111 is added to Appendix P as follows:
P111 Fire Safety and Emergency Evacuation Plan.
12. New Section 111.1 is added to Appendix P as follows:
P111.1 Evacuation Diagram. A diagram depicting two evacuation routes shall be posted on or immediately adjacent to every required egress door from each of the emergency housing facility.
13. New Section 111.2 is added to Appendix P as follows:
P111.2 Fire Safety and Emergency Evacuation Plan. Where the fire code official determines that an emergency housing facility has an adverse impact on public safety through diminished access to buildings, structures, fire hydrants and fire apparatus access roads or where such facility adversely affect public safety services of any kind, the fire code official shall have the authority to order the development of or prescribe fire safety and emergency evacuation plan that provides an approved level of public safety and addresses the following items:
Fire Safety and Emergency Evacuation Plan shall include the following:
1. Emergency egress or escape routes and whether evacuation of the building is to be completed by selected floors or areas only or with a defend-in-place response.
2. Procedures for the use of elevators to evacuate the building where occupant evacuation elevators complying with Section 3008 of the California Building Code are provided.
3. Procedures for assisted rescue for persons unable to use the general means of egress unassisted.
4. Procedures for accounting for employees and occupants after evacuation have been completed.
5. The preferred and any alternative means of reporting fires and other emergencies to the fire department or designated emergency response organization.
6. Identification and assignment of personnel who can be contacted for further information or explanation of duties under the plan.
7. A description of the emergency voice/alarm communication system alert tone and preprogrammed voice messages, where provided.
8. Procedures for notifying occupants, including areas with a private mode alarm system.
9. Procedures for evacuating occupants, including those who need evacuation assistance.
10. The occupant assembly point(s).
11. The location of fire hydrants.
12. The normal routes of fire department vehicle access.
14. New Section 111.3 is added to Appendix P as follows:
P111.3 Emergency Housing Facility Floor Plan. Floor plans shall identify the locations of the following:
1. Exits
2. Primary evacuation routes
3. Secondary evacuation routes.
4. Accessible egress routes.
5. Areas of refuge.
6. Exterior areas for assisted rescue.
7. Refuge areas associated with smoke barriers and horizontal exits.
8. Manual fire alarm boxes.
9. Portable fire extinguishers
10. Fire alarm annunciators and control(s), if applicable.
11. Fire department connections and sprinkler riser location(s), if applicable.
(B) Amendments, additions and deletions to 2022 California Residential Code Chapter 1 Division II Administration:
1. New Section R105.3.2.1 is added as follows:
R105.3.2.1 Expiration of Plan Review. Applications for which no permit is issued within 180 days following the date of last plan review correspondence by either the City or the applicant will expire by limitation, and plans and other data submitted for review may thereafter be destroyed by the Building Official.
2. New Section R105.5.2 is added as follows:
R105.5.2 Completion of work after permit expiration. Before work on an expired permit can be recommenced, a new permit shall first be obtained and the fee for such new permit shall be one -half the amount required for a new permit for such work, provided no changes have been made or will be made in the original plans and specifications for such work; and provided further that such suspension or abandonment has not exceeded one year. Any suspension or abandonment in excess of one year shall be treated as a new permit and subject to all the provisions thereof.
3. Section R108.5 is amended to read as follows:
R108.5 Refunds. The Building Official shall not authorize the refunding of any fee paid except upon written application filed by the original permittee not later than 180 days after the date of fee payment.
The Building Official may authorize the refunding of any fee paid hereunder which was erroneously paid or collected.
The Building Official may authorize the refunding of not more than 80 percent of the permit fee paid when no work has been done under a permit issued in accordance with this chapter.
The Building Official may authorize the refunding of not more than 80 percent of the plan review fee paid when an application for a permit for which a plan review fee has been paid is withdrawn or canceled before any plan checking is done.
4. New Section R108.6.1 is added to read as follows:
R108.6.1 Investigation fee for work without permit. Whenever any work for which a permit is required has been commenced without first obtaining said permit, an investigation shall be made before a permit may be issued for such work. An investigation fee, in addition to the permit fee, shall be collected whether or not a permit is then or subsequently issued. The investigation fee shall be equal to three times the permit fee as set forth in the City’s adopted fee schedule. The payment
of such investigation fee shall not exempt any person from compliance with all other provisions of either this code nor from any penalty prescribed by law.
5. New Section R108.7 is added as follows:
R108.7 Reinspection fee. A reinspection fee may be assessed for each inspection or reinspection when such portion of work for which inspection is called is not complete or when corrections called for are not made.
This section does not require reinspection fees the first time a j ob is rejected for failure to comply with the requirements of the codes . Subsequent inspections or practice of calling for inspections before the job is ready for such inspection or reinspection may be subject to reinspection fees.
To obtain a reinspectio n, the applicant shall file an application therefor in writing upon a form furnished for that purpose and pay the reinspection fee in accordance with the fee schedule adopted by the City.
In instances where reinspection fees have been assessed, no additional inspection of the work will be performed until the required fees have been paid.
6. New Section R112.3.1 is added as follows:
R112.3.1 Appointment and Number of Appointees. The City Manager or their designee is authorized by the governing body to appoint the Board of Appeals. The Board shall consist of 5 members with a quorum of 3 required to conduct business.
7. Section R313.2 Exception 1 is amended to read as follows:
R313.2 Exception 1: An automatic residential fire sprinkler system shall not be required for additions or alterations to existing buildings that are not already provided with an automatic residential sprinkler system unless the addition or alteration is considered a substantial addition or substantial alteration per California Fire Code (CFC) 903.6.1 and 903.6.2 (Richmond local amendments):
a substantial addition is an addition of new gross floor area that exceeds fifty percent of the existing gross floor area, or the total new gross floor area is 3,600 square feet or greater. A substantial alteration is an alteration where fifty percent of the combined linear length of all the exterior and interior walls are altered, and fifty percent of the roof structure is being altered.
8. New Section AZ103.4.1 is added to Appendix AZ as follows:
AZ103.4.1 Fire & Life Safety Systems. Whenever any existing buildings have any existing fire and life safety systems, i.e. fire sprinkler and/or fire alarm system, these systems are required to be maintained in operation or made to conform to provision of these regulations to the extent that reasonable and adequate life safety against the hazards of fire, panic and explosion is substantially provided. Additional means of egress may be required to provide reasonable and adequate safety.
9. New Section AZ103.4.2 is added to Appendix AZ as follows:
AZ103.4.2 Emergency Responder Radio Coverage in Existing Buildings.
Emergency Responder Radio Coverage in Existing Buildings that do not have approved radio coverage for emergency responders within the building, based upon the existing coverage levels of the public safety communications systems of the jurisdiction at the exterior of the building, shall be equipped with such coverage according to one of the following:
1. Where an existing wired communication system cannot be repaired or is being replaced, or where not approved in accordance with current or adopted California Fire Code Section 510.1, Exception 1.
2. Within a time frame established by the adopting authority.
Exception: Where it is determined by the fire code official that the radio coverage system is not needed.
10. New Section AZ104.10 is added to Appendix AZ as follows:
AZ104.10 Portable Fire Extinguishers. Portable Fire extinguisher shall be selected, installed and maintained in accordance with California Fire Code Section 906.2 (General requirements) and California Code of Regulations, title 19, Division 1, Chapter 3 in any emergency housing and emergency housing facility.
11. New Section AZ109.3 is added to Appendix AZ as follows:
AZ109.3 Emergency Vehicle Access. Emergency vehicle access shall be maintained for any emergency housing facilities. The fire code official shall approve any temporary emergency vehicle access routes for any emergency housing facility.
12. New Section AZ111 is added to Appendix AZ as follows:
AZ111 Fire Safety and Emergency Evacuation Plan.
13. New Section AZ111.1 is added to Appendix AZ as follows:
AZ111.1 Evacuation Diagram. A diagram depicting two evacuation routes shall be posted on or immediately adjacent to every required egress door from each of the emergency housing facility.
14. New Section AZ111.2 is added to Appendix AZ as follows:
AZ111.2 Fire Safety and Emergency Evacuation Plan. Where the fire code official determines that an emergency housing facility has an adverse impact on public safety through diminished access to buildings, structures, fire hydrants and fire apparatus access roads or where such facility adversely affect public safety services of any kind, the fire code official shall have the authority to order the development of or prescribe fire safety and emergency evacuation plan that provides an approved level of public safety and addresses the following items:
Fire Safety and Emergency Evacuation Plan shall include the following:
1. Emergency egress or escape routes and whether evacuation of the building is to be completed by selected floors or areas only or with a defend-in-place response.
2. Procedures for the use of elevators to evacuate the building where occupant evacuation elevators complying with Section 3008 of the California Building Code are provided.
3. Procedures for assisted rescue for persons unable to use the general means of egress unassisted.
4. Procedures for accounting for employees and occupants after evacuation have been completed.
5. The preferred and any alternative means of reporting fires and other emergencies to the fire department or designated emergency response organization.
6. Identification and assignment of personnel who can be contacted for further information or explanation of duties under the plan.
7. A description of the emergency voice/alarm communication system alert tone and preprogrammed voice messages, where provided.
8. Procedures for notifying occupants, including areas with a private mode alarm system.
9. Procedures for evacuating occupants, including those who need evacuation assistance.
10. The occupant assembly point(s).
11. The location of fire hydrants.
12. The normal routes of fire department vehicle access.
15. New Section AZ111.3 is added to Appendix AZ as follows:
AZ111.3 Emergency Housing Facility Floor Plan. Floor plans shall identify the locations of the following:
1. Exits
2. Primary evacuation routes
3. Secondary evacuation routes.
4. Accessible egress routes.
5. Areas of refuge.
6. Exterior areas for assisted rescue.
7. Refuge areas associated with smoke barriers and horizontal exits.
8. Manual fire alarm boxes.
9. Portable fire extinguishers
10. Fire alarm annunciators and control(s), if applicable.
11. Fire department connections and sprinkler riser location(s), if applicable.
SECTION 3.
Any provisions of the Richmond Municipal Code, or appendices thereto, or any other ordinances of the City inconsistent with this ordinance are repealed only to the extent of such inconsistencies. References to the Building Code of the City of Richmond are also
hereby updated.
SECTION 4. SEVERABILITY.
If any section, subsection, paragraph, sentence, clause or phrase of this Ordinance is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid, the remaining portions of this Ordinance shall remain in full force and effect. The City Council hereby declares that it would have passed each section, subsection, paragraph, sentence, clause or phrase of this Ordinance irrespective of the unconstitutionality or invalidity of any section, subsection, paragraph, sentence, clause or phrase.
SECTION 5. EFFECTIVE DATE.
All building permit applications filed after the effective date of this Ordinance shall be subject to this Ordinance. This Ordinance becomes effective thirty (30) days after its final passage and adoption however, no sooner than January 1, 2023, as mandated by the State.
----------------------------------------------
First introduced at a regular meeting of the City Council of the City of Richmond held November 15, 2022. Passed and adopted on ________________ by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
_____________________________
CLERK OF THE CITY OF RICHMOND
(SEAL)
Approved:
______________________
Mayor
Approved as to form:
______________________
City Attorney
2022 TITLE 24
California Code Changes
July 2022
1st Edition
Acknowledgements
Governor Gavin Newsom
Secretary of the Government Operations Agency, Amy Ton
Director of the Department of General Services, Ana Lasso Members of the California Building Standards Commission Chair, Secretary Amy Tong
Vice Chair, Rajesh Patel
Commissioners:
Kent Sasaki Erick Mikiten
Elley Klausbruckner Rajesh Patel
Peter Santillan Juvilyn Alegre
Aaron Stockwell Laura Rambin
Frank Ramirez James Haskin
Executive Director, Mia Marvelli
Deputy Executive Director, vacant
The California Building Standards Commission is a commission within the Department of General Services
Visit our website at dgs.ca.gov/BSC
Please submit comments and suggestions for improvements or additions to this publication to [email protected]
or mail to
California Building Standards Commission
Mia Marvelli, Executive Director
2525 Natomas Park Drive, Suite 130
Sacramento, CA 95833
Some of CBSC’s publications available on the website’s Resources page:
Guide to Title 24
It’s Your Building Department
Guide for Local Amendments of
Building Standards
Public Guide to the Building
Standards Adoption Process
Frequently Asked Questions
Glossary of Terms
i
TABLE OF CONTENTS
Introduction ............................................................................................... 1 California Administrative Code – Part 1 .................................................. 3 Chapter 1 – Building Standards Commission ............................................................ 3 Chapter 3 – State Fire Marshal .................................................................................. 3 Chapter 4 – Division of the State Architect ................................................................ 3 Chapter 7 – Office of Statewide Health Planning and Development .......................... 4 Chapter 10 – California Energy Commission ............................................................. 5 California Building Code – Part 2 ............................................................ 6 Tall Wood/Mass Timber provisions in various chapters of Part 2 .............................. 6 Chapter 1 – Scope and Administration ...................................................................... 6 Chapter 2 – Definitions .............................................................................................. 7 Chapter 3 – Occupancy Classification and Use ......................................................... 8 Chapter 4 – Special Detailed Requirements .............................................................. 9 Chapter 5 – General Building Heights and Areas ...................................................... 9 Chapter 7A – Materials and Construction Methods.................................................... 9 Chapter 9 – Fire Protection Systems ....................................................................... 10 Chapter 10 – Means of Egress ................................................................................ 10 Chapter 11B – Accessibility to Public Buildings ....................................................... 11 Chapter 12 – Interior Environment ........................................................................... 11 Chapter 14 – Exterior Walls ..................................................................................... 16 Chapter 16 – Structural Design ................................................................................ 16 Chapter 16A – Structural Design ............................................................................. 16
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Chapter 17 – Special Inspections and Tests ............................................................ 17 Chapter 17A – Special Inspections and Tests ......................................................... 18 Chapters 18 and 18A – Soils and Foundations ........................................................ 18 Chapter 19 – Concrete ............................................................................................. 18 Chapter 19A – Concrete .......................................................................................... 19 Chapter 21 – Masonry ............................................................................................. 20 Chapter 21A – Masonry ........................................................................................... 20 Chapter 24 – Glass and Glazing .............................................................................. 21 Chapter 25 – Gypsum Board, Gypsum Panel Products and Plaster ........................ 21 Chapter 27 – Electrical ............................................................................................. 22 Chapter 31 – Special Construction .......................................................................... 22 Chapter 31B – Public Swimming Pools .................................................................... 22 Chapter 35 – Referenced Standards ....................................................................... 23 California Residential Code – Part 2.5 ................................................... 24 Chapter 1 – Scope and Application.......................................................................... 24 Chapter 2 – Definitions ............................................................................................ 24 Chapter 3 – Building Planning ................................................................................. 24 Chapter 4 – Foundations ......................................................................................... 26 Chapter 7 – Wall Covering ....................................................................................... 27 Chapter 8 – Roof-Ceiling Construction .................................................................... 27 Chapter 9 – Roof Assemblies .................................................................................. 28 Chapter 44 – Referenced Standards ....................................................................... 28 Appendix AS – Strawbale Construction ................................................................... 28 Appendix AX ............................................................................................................ 29
iii
California Electrical Code – Part 3 ......................................................... 30 California Energy Commission ................................................................................. 30 Housing and Community Development .................................................................... 30 State Fire Marshal .................................................................................................... 30 Office of Statewide Health Planning and Development ............................................ 30 California Mechanical Code – Part 4 ..................................................... 32 Chapter 1 – Scope and Application.......................................................................... 32 Chapter 2 – Definitions ............................................................................................ 33 Chapter 3 – General Regulations............................................................................. 33 Chapter 4 – Ventilation Air ....................................................................................... 33 Chapter 6 – Duct systems ........................................................................................ 34 Chapter 9 – Installation of Specific Appliances ........................................................ 34 Chapter 11 – Refrigeration ....................................................................................... 35 Chapter 12 – Hydronics ........................................................................................... 35 California Plumbing Code – Part 5 ........................................................ 36 Chapter 1 – Scope and Application.......................................................................... 36 Chapter 4 – Plumbing Fixtures and Fixture Fittings ................................................. 36 Chapters 5 and 6 – Water Heaters and Water Supply and Distribution ................... 37 Chapter 6 – Water Supply and Distribution .............................................................. 37 Chapter 13 – Health Care Facilities and Medical Gas and Vacuum Systems .......... 37 Chapter 15 – Alternate Water Sources for Nonpotable Applications........................ 37 Chapter 17 – Referenced Standards ....................................................................... 38 California Energy Code – Part 6 ............................................................ 39
iv
California Fire Code – Part 9 .................................................................. 40 Overview .................................................................................................................. 40 Chapter 1 – Scope and Application.......................................................................... 40 Chapter 2 – Definitions ............................................................................................ 41 Chapter 3 – General Regulations............................................................................. 42 Chapter 4 – Emergency Planning and Preparedness .............................................. 42 Chapter 9 – Fire Protection and Life Safety Systems .............................................. 42 Chapter 10 – Means of Egress ................................................................................ 43 Chapter 12 – Energy Systems ................................................................................. 43 Chapter 31 – Tents, Temporary Special Event Structures and Other Membrane Structures ....... 43 Chapter 38 – Higher Education Laboratories ........................................................... 43 Chapter 49 – Requirements for Wildland-Urban Interface (WUI) Fire Areas ........... 44 Chapter 80 – Referenced Standards ....................................................................... 45 Appendix P – Community Wildland-Urban Interface (WUI) Fire Hazard Evaluation Framework .. 45 California Existing Building Code – Part 10 .......................................... 46 Chapter 1 – Scope and Application.......................................................................... 46 Chapter 2 – Definitions ............................................................................................ 46 Chapter 3 – Provisions for All Compliance Methods ................................................ 47 Chapter 5 – Prescriptive Compliance Method .......................................................... 48 Chapter 16 – Referenced Standards ....................................................................... 48 Department of Housing and Community Development ............................................ 49 California Green Building Standards Code – Part 11 ........................... 50 Chapter 2 – Definitions ............................................................................................ 50 Chapter 4 – Residential Mandatory Measures ......................................................... 50
v
Chapter 5 – Nonresidential Mandatory Measures .................................................... 52 Chapter A4 – Residential Voluntary Measures ........................................................ 53 Chapter A5 – Nonresidential Voluntary Measures ................................................... 53 California Referenced Standards – Part 12 ........................................... 55 Building Standards Commission .............................................................................. 55 State Fire Marshal .................................................................................................... 55
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1 INTRODUCTION
During the 2021 Triennial Code Adoption Cycle, California state agencies reviewed the most recent edition of national model codes and standards, and made amendments and additions to most parts of the California Building Standards Code, Title 24 of the California Code of Regulations (Title 24). This publication contains information regarding substantive changes of interest to code users as they familiarize themselves with the 2022 edition of Title 24. For ease of reading, this document uses all normal font style (no italics). When looking at Title 24, it is a good idea to learn about and understand the various margin markings, banners and text styles that will indicate where changes have been made to the code and what amendments are model code changes versus California amendments. An explanation of margin markings can be found in the preface of each part of Title 24.
State agency acronyms that may be used in this publication BSC – Building Standards Commission
CDPH – California Department of Public Health
CEC – California Energy Commission
DSA – Division of the State Architect
DWR – Department of Water Resources
HCD – Department of Housing and Community Development
OSHPD – Office of Statewide Health Planning and Development (now Department of Health Care Access and Information – HCAI)
SFM – State Fire Marshal
For the applications of amendments adopted by the various state agencies, reference Chapter 1 of each part of Title 24.
The parts of Title 24 may be abbreviated as follows:
CBC – California Building Code, Part 2, Volumes 1 and 2 CRC – California Residential Code, Part 2.5
CMC – California Mechanical Code, Part 4
CPC – California Plumbing Code, Part 5
CFC – California Fire Code, Part 9
CEBC – California Existing Building Code, Part 10
CALGreen – California Green Building Standards Code, Part 11 CRSC – California Referenced Standards Code, Part 12
To avoid confusion with other acronyms, abbreviations are not used for the California Administrative Code (Part 1), California Electrical Code (Part 3) or California Energy Code (Part 6).
2 Note that there were no significant updates to the California Historical Building Code, Part 8 of Title 24, and Part 7 is vacant, so those parts are not listed here. There are no changes to Part 8 because the State Historical Building Safety Board adopted the 2022 California Historical Building Code by carrying forward existing provisions from the 2019 edition without further amendment.
Model code developers:
Every three years the national model codes and standards are published, and by law California is required to incorporate specific model codes and standards into Title 24.
The model code publishers often issue significant code change documents explaining national code updates and the reasons for them. Links to those documents are provide below.
IAPMO – The International Association of Plumbing and Mechanical Officials (Parts 4 and 5)
Uniform Mechanical and Plumbing Code Updates webpage
ICC – The International Code Council (Parts 2, 2.5, 9 and 10) Purchase ICC’s 2021 Significant Changes publications
NFPA – National Fire Protection Association (Part 3)
2020 National Electrical Code updates links
Please watch the California Building Standards Commission’s (CBSC) video About Title 24 t o learn about the code's layout and contributing state agencies . For more in- depth information, visit CBSC’s Resources webpage to view and download educational publications such as a Guide to Title 24.
3 CALIFORNIA ADMINISTRATIVE CODE – PART 1
Chapter 1 – Building Standards Commission
1-209 Code Advisory Committees
Amended existing section footnote to clarify the requirements of the Fire Official and Local Government Water Efficiency Official positions in the Code Advisory Committees.
Sections 1-407, 1-411, 1-415, 1-419
Added document accessibility as a requirement for documents included in state agencies’ rulemaking submittals and added reference to Government Code Section 11546.7.(a).
1-507 Fee Collection
Amended existing section to remove information regarding the check-only payment method, added instructions for submitting payment and forms by mail (check) or email (electronic payment platform), and let fee payers know that they may only use the approved electronic payment platform, and that there is information regarding the platform on CBSC’s website.
Chapter 3 – State Fire Marshal
Article 3-1 General Provisions and Article 3-2 Definitions Added sections to Chapter 3 that was reserved for SFM in the 2019 edition. These sections provide clarifying language regarding the SFM fire and life safety authority for state-owned buildings, specified state-occupied buildings, and state institutions.
Chapter 4 – Division of the State Architect
4-309(c).2.B Reconstruction or alteration projects in excess of $100,000 in cost
Repealed exception to the section as it is inconsistent with the definition of “rehabilitation” in the regulations. The exception also implied that only the “…elements of the lateral force resisting system” need be evaluated, which led to confusion as DSA’s Seismic Performance Requirements per Table 317.5 explicitly require that the evaluation include assessment of non-structural components. 4-330 Time of beginning construction and partial construction Changed requirements that construction must commence on all school buildings with an approved project within four years instead of one year or else the approval is void.
Given this new four-year rule, extensions no longer apply and were repealed. Added an exception permitting DSA to withdraw approval or institute post-approval
4 requirements as necessary to address life-safety concerns in response to information received after approval of plans and before commencement of construction. 4-335(f)4 Structural tests and special inspections
Clarified requirements to provide DSA with daily special inspection reports when requested.
Group 3, Article 3 and deletion of Article 4
Revised procedure regarding submission of landscape plans for modifications, rehabilitations and new construction of landscape areas at public K-12 schools and community colleges.
The revisions include the elimination of a fee for review of landscape plans and revisions to the self-certification form, a provision that periodic site observations during construction will occur to ensure the work is completed in accordance with CALGreen Section 5.304 requirements, and replacement of two previously required self- certification forms with a single form.
Chapter 7 – Office of Statewide Health Planning and Development 7-111 Definitions
Added clarification that the equipment referred to in the definition of “Actual Construction Cost” is construction equipment only.
Added the definition of “Start of Construction” to clarify that the start date of construction may include actual physical work as well as the preparation for construction such as manufacturing components offsite.
Sections 7-111, 7-121, 7-130, 7-133 and others
Combined “Phased Plan Review” and “Collaborative Review and Construction” into a single process called “Integrated Review.” Renamed “Phased Plan Review” to “Integrated Review” so the definition of “Integrated Review” is added, the definition of “Phased Plan Review” is repealed, all references to “Phased Plan Review” and “Collaborative Review and Construction” are removed, and Memorandum of Understanding (MOU) is renamed to Integrated Review Plan (IRP).
Sections 7-113, 7-153 and others
Amended existing language to provide requirements for electronic submittals and field records.
7-123 Preliminary plans and specifications
Amended existing language to remove “outline” from the submittal requirements for specifications during a preliminary review as it has been proven an outline specification is insufficient for most preliminary reviews.
5 7-129 Time limitations
Amended following subsections:
7-129(b) to provide revised time limitations based on the cost of a project. 7-129(d) to include a description of when a project is considered abandoned. 7-129(d) Exception to limit the exception to paragraphs (a) and (b) so they do not apply to managed projects. Manage project time limitations would not apply as the durations are negotiated.
7-133 Fees
Amended following subsections:
7-133(a) to allow for projects with estimated construction cost of less than $250,000 to be invoiced at the rate of 2.0 percent of the estimated construction cost. 7-133(h) to remove collaborative review and replace phased review with integrated review. The fee of 1.95% is to be applied to integrated review. 7-145 Continuous inspection of the work
Clarified the requirement for the Inspector of Record to notify the office in writing when work is started and for the field record report to include the time and date of all correspondence with the contractor regarding incomplete work, potential deficiencies or deviation which require the contractor’s attention. Added additional requirements for the reports.
Chapter 10 – California Energy Commission
Please visit the California Energy Commission’s website for updates. energy.ca.gov/programs-and-topics/programs/building-energy-efficiency- standards/online-resource-center/overview
6 CALIFORNIA BUILDING CODE – PART 2
Tall Wood/Mass Timber provisions in various chapters of Part 2 BSC—DSA—HCD—OSHPD—SFM
Sections regarding construction elements of Tall Wood/Mass Timber and Heavy Timber were early adopted by various state agencies as amendments to the 2019 California Building Code (CBC) during the 2019 Intervening Code Adoption Cycle and issued as a supplement with a July 1, 2021, effective date. The amendments are repealed, as they are now included in the adopted 2021 International Building Code (IBC).
Part 2 Chapter Sections
Chapter 1 110.3.5
Chapter 2 202
Chapter 5 508.4.4.1, 509.4.1.1
Chapter 6 602.4 through 602.4.4.2
Chapter 7 703.6, 703.7, 718.2.1, 722.7 through 722.7.2.2 Chapter 17 - Sections 1705.5.3, 1705.5.5, 1705.11.1, 1705.11.2, 1705.12.2, 1705.12.3, 1705.20, 1705A.4.1, 1705A.5.5, 1705A5.7
Chapter 17 - Tables 1705.5.3, 1705.5.7, 1705A.5.3
Chapter 23 2304.10.1.2, 2304.11.3, 2304.11.4
Chapter 31 3102.3, 3102.6.1.1
Chapter 35 ANSI/APA PRG 320-2019, ASTM D3498-03(2011)
Chapter 1 – Scope and Administration
Building Standards Commission
105.5.1 [Permit] Expiration
New section changed permit expiration from 180 days to 12 months. Includes a provision stipulating that every permit shall remain valid if the work on the site authorized by the permit is commenced within 12 months after its issuance. This amendment also allows for permit extensions; the exception being when the work authorized by the permit is determined to have been abandoned. The new code language reflects statutory requirements in Assembly Bill 2913 (Statutes of 2018), which became operative January 1, 2019, and amended Health and Safety Code (HSC) Section 18938.5(b)(2)(B) and added HSC Section 18938.6 to Building Standards Law.
CBSC Information Bulletin 19-03
regarding permit expiration dates was issued May
23, 2019, to local building departments, state agencies and CBSC interested parties.
7 Office of Statewide Health Planning and Development
1.10.2 OSHPD 2, 2A and 2B
OSHPD added new occupancy classifications to address distinctions between skilled nursing facility and intermediate care facility buildings erected with specific construction materials.
OSHPD 2 has been split into two (2) categories. OSHPD 2A is for skilled nursing facility and intermediate care facility buildings of single-story, wood-frame, or light steel frame construction or buildings of single-story, wood-frame, or light steel frame construction where only skilled nursing or intermediate care services are provided if the building is separated from a building housing other patients of the health facility receiving higher levels of care and must meet model code requirements.
OSHPD 2B skilled nursing facility and intermediate care facility buildings of all other types must meet the requirements designated by the OSHPD 2B banner.
If the only designation is OSHPD 2, the application is for both 2A and 2B.
State Fire Marshal
1.11.1 Specified state-occupied buildings
New definition with 11 criteria has been added in response to Senate Bill 85 (Public resources: omnibus trailer bill. (2019-2020)) that required the State Fire Marshal to provide a more accurate definition.
1.11.6 Certificate of Occupancy
Amendment citing a reference to Section 105.2 clarifying work exempt from permit.
Division of the State Architect, Department of Housing and Community Development, Office of Statewide Health Planning and Development, and State Fire Marshal
110.3.12 Types IV-A, IV-B and IV-C connection protection inspection This amendment was added in the 2019 intervening cycle but is now part of model code language in the 2021 IBC, therefore, this section is repealed to avoid duplication.
Chapter 2 – Definitions
California Energy Commission
CLIMATE ZONE Amended definition with specific reference to Figure 100.1-1 of the California Energy Code pertaining to the applicability of assigned climatic criteria for geographic regions to distinguish between the International Energy Conservation Code (IECC) and the California Energy Code.
8 State Fire Marshal
CHILD CARE Added a new defined term for child care that is consistent with the definition in Title 22 (Social Security) of the California Code of Regulations (Title 22).
DAY-CARE Amended the defined term day-care to specify the time period for the care of persons is not to exceed 24 hours, and is to be consistent with Title 22.
INFLATABLE AMUSEMENT DEVICE New defined term to specify characteristics of inflatable structures that need to be properly constructed and anchored.
PHOTOVOLTAIC (PV) PANEL SYSTEM, GROUND-MOUNTED New defined term to be consistent with references in CBC Chapters 16 and 31, CRC Chapter 3 and CFC Chapter 12.
PHOTOVOLTAIC (PV) SUPPORT STRUCTURE, ELEVATED New defined term for an elevated PV support structure designed with space underneath intended for secondary use such as providing shade for motor vehicle parking. Requirements for installation are addressed in Chapters 15 and 16.
TODDLER New defined term to align with the legal definition of toddlers from Health and Safety Code Section 1596.55. By distinguishing age differences, officials will be able to classify the related occupancies based on social services’ classifications used for licensing.
Chapter 3 – Occupancy Classification and Use
State Fire Marshal
304.1 Business Group B and 304.4 Higher education laboratories Removed new model code language about higher education laboratories from Section 304.1 and deleted new model code Section 304.4 since model code language for higher education laboratories is not used in California and conflicts with California’s Group L occupancy classification.
305.2 Group E, Child care facilities
Amendments clarifying child care regarding emergency situations applying to Groups I, E and R Occupancies.
310.3 Residential Group R-2
Amended the definition for Group R-2 to meet requirements of SB 234 (Chapter 244, Statutes of 2019): Small and large family child care in apartment houses can operate in R-2 occupancies when they comply with the regulations and with Health and Safety Code Section 1597.46.
9 Chapter 4 – Special Detailed Requirements
State Fire Marshal
455 Large Family Day-Care Homes
455.2. Amendment to meet requirements of SB 234 (Chapter 244, Statutes of 2019):
Small and large family child care in apartment houses can operate in R-2 occupancies when they comply with the regulations and with Health and Safety Code Sections 1597.45 and 1597.46 (reprinted in this section). 455.6 Compliance
Repealed an amendment regarding the enforcement of Health and Safety Code Sections 13145 and 13146 to align with Section 455.2.
Chapter 5 – General Building Heights and Areas
State Fire Marshal
508 Mixed Use and Occupancy
508.2.4 Separation of occupancies
Amendment permitting the consideration of some uses as accessory occupancies.
Among other requirements, the amendment revises Section 508.2.4 Exception and limits permitted, unseparated accessory covered entrances to those required by Section 11B-206.4.10 for weather protection at entrances to medical care and long-term care facilities or Section 1224.33.2.1, emergency medical service exterior entrances. The amendment eliminates a conflict with provisions enforced by Centers for Medicare-Medicaid Services (CMS).
Table 508.4 Required separation of occupancies (hours), Footnote J Amendment to the footnotes in Table 508.4 that reduces the fire-resistive separation criteria for covered vehicle entrances required by other provisions of the California Building Code associated with Group I-2 occupancies from 2-hour to 1- hour fire-resistance-rated construction.
Chapter 7A – Materials and Construction Methods
State Fire Marshal
Extensive amendments to Chapter 7A Wildland-Urban Interface (WUI) regulations.
The amendments were developed through the Office of the State Fire Marshal WUI task group and collaboration with local fire departments, other state agencies, building industry, testing labs, and stakeholders.
Other amendments have been made to be consistent with newly defined terms and to clarify established guidelines in WUI regulations that address different fire severity areas and agency responsibilities that are outlined in Chapter 49 of the CFC.
10 702A Definitions
FIRE PROTECTION PLAN Amended this defined term to align with the same defined term in Section 4903 of the CFC.
FIRE-RESISTANT VEGETATION New definition of plants less likely to ignite, contribute heat or spread flame. Also provides a list of resources for more information about these types of plants.
704A IGNITION-RESISTANT CONSTRUCTION Added testing standard for wood structural panels in Subsection 704A.3.1 Fire testing of wood structural panels.
Additional amendments in Section 704A are consistent with previous amendments made in Chapter 23 regarding fire-retardant-treated-wood and pressure treated materials.
710A Accessory Buildings and Miscellaneous Structures
710A.1 General Clarifies that Group U Occupancy accessory buildings shall conform to this section.
710A.3 Where required Amendment and subsections that are organized by uniform categories of distances from applicable buildings, and mandate enforcement for buildings greater than 120 square feet, and leave discretion to local Authority Having Jurisdiction (AHJ) for buildings less than 120 square feet. 710A.4 Roof construction Amendment that for an accessory building required to be constructed of noncombustible or ignition resistant materials, its roof must meet Class A fire rating.
Chapter 9 – Fire Protection Systems
State Fire Marshal
903.3.1.1.3 Solar photovoltaic power systems
Amendment to delete a requirement for the installation of smoke detectors in outdoor locations as a substitute for sprinkler protection.
Department of Housing and Community Development
915 Carbon monoxide detection
Modified to reference NFPA 72 National Fire Alarm and Signaling Code.
Chapter 10 – Means of Egress
State Fire Marshal
1032.2.1.2 Maintenance and 1032.2.1.3 Examination
Adjustments and revisions to CFC Sections 1104.16.7 and 1104.16.5.1 regarding the maintenance requirements for fire escapes have been relocated to Section 1032.
11 Chapter 11B – Accessibility to Public Buildings
Division of the State Architect – Access Compliance
11B-108 Maintenance of Accessible Features
Added requirements to include facilities regulated in Chapter 11B, including public and commercial buildings, as well as public housing in addition to public accommodations.
Chapter 12 – Interior Environment
California Energy Commission
User Note
Modified to properly reference the California Energy Code. 1202.3.1 California Energy Code and International Energy Conservation Code (IECC) Climate Zones and Table 1202.3.1 IECC vs California Energy Code Climate Zone Comparison
Added section and table to prevent confusion between climate zones identified in ICC model codes and climate zones identified in the California Energy Code by explaining the relationship between the two codes and adding Table 1202.3.1 to represent these differences.
Department of Housing and Community Development
1202.2.1 Ventilated attics and rafter spaces and 1202.3 Unvented attic and unvented enclosed rafter assemblies
Repealed reference to Climate Zones 14 and 16 and California Energy Code Figure 100.1-A since the California Energy Commission adopted a new Table 1202.3.1 from the International Energy Conservation Code.
Table 1202.3 Insulation for condensation control
Repealed reference to specific climate zones from the table since the California Energy Commission adopted a new Table 1202.3.1 from the International Energy Conservation Code.
Office of Statewide Health Planning and Development
1224.3 Definitions
HANDWASHING STATION Amended existing language to clarify that hands-free operation is required at the door and not at the handwashing fixture.
INVASIVE PROCEDURE New definition to be used to determine the classification of the imaging room or procedure room required.
LOCATION TERMINOLOGY Terms for relationship to an area or room.
12 READILY ACCESSIBLE Amended existing language to avoid ambiguity by removing the requirement that the area or room also be “directly accessible.” New language added to include option for locating readily accessible areas or rooms to within 200 feet of department or space served to accommodate space orientation or security concerns.
PROCEDURE ROOM New definition specifically designates the procedure room as the intermediate level room for procedures that do not require a full surgical environment.
RESTRICTED AREA Amended existing language to better align with Facilities Guidelines Institute (FGI), which stipulates that a restricted area is a designated space contained within the semi-restricted area and accessible only through a semi- restricted area. This definition is required to determine the level of procedure room to be used and the requirements therein.
SEMI-RESTRICTED AREA New defined term per request of CDPH. This area applies to intermediate level procedures and imaging as well as peripheral areas that support surgical services.
START OF CONSTRUCTION OSHPD added the definition to Part 1, California Administrative Code. The banner note added to this definition avoids ambiguity and clarifies that the term is not adopted by OSHPD.
UNRESTRICTED AREA New defined term per CDPH request. This area applies to any area of the department that is not defined as semi-restricted or restricted. This definition is required to determine the level of control outside a surgical area or within a medical department.
1224.4.4.1 Examination, treatment, and procedure rooms
Amended existing language to add “procedure room” to the heading. 1224.4.4.1.2 Treatment room
OSHPD has coordinated with CDPH to add a requirement for providing a new service space for exercise stress testing. This space can be in several locations within a hospital and not assigned to any one service. Amended language allows for exercise stress testing in a treatment room due to the need for space for a crash cart and possible resuscitation.
1224.4.4.1.4 Procedure room
Added new language to align with
Facilities Guidelines Institute (FGI) requirements
and renumbered following sections.
1224.4.4.4.1 Medication preparation room
Per CDPH request, amended existing language to remove the requirement that a medication preparation room be directly accessible from the nursing station.
13 Table 1224.4.6.1
Line 6 has been identified specifically for “Intensive Care” to avoid confusion with the similarly named room on Line 3.
Table 1224.4.6.5
Added Note 1 to the line for Patient Toilet Room under column 1226. Current language is confusing and is often misinterpreted that a nurse call station is required in all clinic patient toilets under column 1226. The note clarifies that a nurse call station is not required for Primary Care, Chronic Dialysis or Psychology Clinic patient toilet rooms.
1224.4.11 and 1224.4.11.4.1 Interior Finishes
Added a pointer to the new table for different levels of procedure and imaging rooms. Includes new Table 1224.4.11.4a which identifies the different levels of exam/procedure rooms as well as the different classes of imaging rooms, including the room type, the uses in each type of room, if the room is unrestricted, semi- restricted or restricted, how it is accessed, and the level of finishes required. 1224.14.2 Support areas
Amended existing language to allow for support areas that service nursing units to be shared if there is direct access, including nurses’ office, a clean utility/workroom, soiled workroom or soiled holding room, nourishment area and equipment storage room.
1224.14.2.15 Special bathing facilities
Amended existing language for special bathing facilities to be optional. Per review with CDPH, special bathing facilities for roll-in gurneys should not be a requirement as there are several other methods of bathing or cleaning bedridden patients. 1224.15.1 General
Amended existing language to clarify that a sterile core where clean equipment is stored prior to bringing into an operating room is required to be in a restricted area. 1224.15.2.2 Procedure room(s)
Added a pointer to the requirements for a procedure room. The following section 1224.15.2.2.1 was renumbered.
1224.16.3 Recovery and Post-Anesthesia Care Unit (PACU) Amended existing language to clarify the clearances required between beds and the access aisle at the foot of a bed.
1224.18 Radiological/diagnostic imaging service space
Amended existing language to provide direction for applying the new classes of imaging rooms. To alleviate confusion, pointers are provided to Table 1224.4.11.4a and to address more acute-level procedures using imaging systems in hybrid operating rooms.
14 1224.18.1 Minimum requirements
Amended existing language to allow a CT scanner to be used as the primary imaging modality once Title 22 is revised. Existing language was also amended to allow the space used for processing images to also be used exclusively for viewing, as processing technology is no longer required on newer equipment. Requirements for handwashing stations were added to provide direction for applying the new classes of imaging rooms.
1224.18.1.1 Radiation protection
Added requirements for radiation protection in the new classes of imaging rooms. 1224.18.1.2 Multiple-modality devices
Added new language to clarify that when two or more modalities are integrated into one device, the requirements of both must be met. This would apply to space requirements, radiation protection and any differences in the requirements. 1224.18.4 Magnetic resonance imaging (MRI)
Added new language to provide safety zones for MRIs. Existing language for the imaging equipment room was amended to align with other imaging equipment room annotation.
1224.18.5 Ultrasound
Amended existing language to properly identify an ultrasound exam room. An exception is added to not require a directly accessible toilet if only specific exams are conducted. Language is added for the requirements of a processing room if it is to be provided as a support service.
1224.19.7 Support areas for staff
Amended existing language to align with Title 22 and Board of Pharmacy regulations that pharmacy staff lounge, lockers and toilet may be readily accessible in lieu of immediately accessible.
1224.20.3 Outside service
Amended existing language to clarify that if a temporary mobile kitchen is approved by CDPH for use during construction, a separate warming kitchen is not needed internally.
1224.22 Central sterile supply
Per a request from CDPH, amended existing language to clarify that a central sterile supply process includes distinct spaces within one or more rooms. 1224.25 Employee dressing rooms and lockers
Amended existing language to clarify that the lockers must be separate from the toilet room and not within it.
1224.28.2.1 Procedure room and 1224.28.2.3 Equipment space Amended existing language to update “x-ray” to “imaging” equipment.
15 1224.28.4.8 Imaging equipment room
Amended existing language for the imaging equipment room to align with other imaging equipment room annotations.
1224.28.4.12 Staff changing areas
Amended existing language to clarify that both male and female staff changing areas are required as interventional procedures are equivalent to surgery and have the same changing requirements.
1224.28.5.2 Control room
Added new language to allow cameras to be used for patient observation in hybrid operating rooms as the configuration of the rooms may prevent full patient visibility within the equipment bore from within the control room. 1224.28.5.5.2 iMRI
Corrected reference pointer in Item 3 of 1224.28.5.5.2 to indicate that the anteroom must comply with Section 1224.18.4.2, Item 2.
1224.28.5.5.3 Vascular imaging
Corrected reference pointer to indicate that hybrid operating rooms with vascular imaging systems must comply with Section 1224.18.4.
1224.29.1.12 Medication station
Added to existing language to clarify that refrigerated storage is required for the medication station in an ICU.
1224.29.1.13 Airborne infection isolation room
Amended existing language to clarify that ICU units that are protected environments do not require airborne infection isolation rooms as all rooms are already negative pressure.
1224.29.2 Newborn intensive care units (NICU)
Amended existing language to clarify that the headwall in a NICU does not need to be 13 feet long as in an ICU. This would force the NICU bed spaces to be much larger than needed.
1224.30 Pediatric and Adolescent Unit
Amended existing language to align with Title 22 language for pediatric and adolescent units, and clarified that both an exam room and a treatment room are required in or adjacent to the pediatric unit.
1224.31.1.1 General
Amended existing language to clarify that the requirements for a psychiatric nursing unit in Section 1224 is for a psychiatric medical unit and Section 1228 is for a psychiatric ambulatory unit.
16 1224.31.1.10 Occupational therapy
Amended existing language to remove the requirement for an area for teaching daily living activities.
1224.31.1.17 Administrative center(s) or nurse stations(s) Added new language to state that a nurse station can be no further than 90 linear feet from the furthest patient room doorway. This is a Title 22 requirement for a medical psychiatric unit which was not currently in the building code.
Chapter 14 – Exterior Walls
California Energy Commission
1404.3.3 California Energy Code and International Energy Conservation Code Climate Zones
Amendment added to prevent confusion between climate zones identified in ICC model codes and climate zones identified in the California Energy Code and to cross- reference Table 1202.3.1, which describes the differences between these codes.
Chapter 16 – Structural Design
Office of Statewide Health Planning and Development
1605.2 (Formerly 1605.3.2) Alternative allowable stress design load combinations
Added variable load requirement for the alternative allowable stress design load combinations for OSHPD 1R, 2B and 5.
Table 1613.2.3(1) and Table 1613.2.3(2)
Amendment language for Site Class E (Table 1613.2.3(1) only) and Footnote C to be consistent with ASCE 7-16 Supplement 3 as amended in CBC Chapter 35.
Division of the State Architect
1617.3.2 Alternative allowable stress design load combinations Added variable load requirement where the alternative allowable stress design load combinations of Section 1605.2 are used.
Chapter 16A – Structural Design
Division of the State Architect and
Office of Statewide Health Planning and Development
Updates, clarifications and revisions to ASCE 7 standards: Seismic ground motion values, response modification coefficient; Two-Stage Analysis Procedure; Horizontal and Vertical Irregularities for Seismic Design Categories; Foundation connections; Wall, Roof or Floor Hung Equipment; Provisions for piping and tubing systems.
17 1605A.2 Alternative allowable stress design load combinations Added a variable load requirement for the alternative allowable stress design load combinations.
Table 1613A.2.3(1) and Table 1613A.2.3(2)
Amendment language in Site Class E (Table 1613.2.3(1) only) and footnote C to be consistent with ASCE 7-16 Supplement 3 as amended in CBC Chapter 35. 1617A.1.3 ASCE 7, Section 11.4
Modifications to ASCE 7 including an amendment added to adopt ASCE 7-16 Supplement 3 which updates various subsections in ASCE 7-16 Section 11.4 to the seismic ground motions values.
1617A.1.5 ASCE 7, Section 12.2.3, 12.2.3.1, and 12.2.3.2 Amended to incorporate the ballot change proposals related to combining of different lateral force resisting systems and the Two Stage Analysis Procedures that passed main committee ballot of ASCE 7-22. Some of these amendments will need to be deleted when ASCE 7-22 is adopted to avoid duplication. 1617A.1.10 ASCE 7, Section 12.3.3.1
Exception 2 added to address structures having a horizontal structural irregularity Type 1b of Table 12.3-1.
1617A.1.16 ASCE 7, Section 12.13.9.2
Clarification added that lateral building response including seismic load combinations do not need to be considered concurrently with differential settlements for shallow foundations on liquefiable sites, and to clarify that force demands due to differential settlements are not required to be additive to the seismic earthquake demands.
1617A.1.18 ASCE 7, Section 13.1.4
This section applying to different types of equipment is now being co-adopted by DSA with varying weight requirements. Wall, Roof or Floor Hung Equipment requirements added by both DSA and OSHPD.
1617A.1.27 and 1617A.1.28
Clarification added that minimum horizontal acceleration requirement is an allowable stress design load.
Chapter 17 – Special Inspections and Tests
Office of Statewide Health Planning and Development
1705.3.9 (formerly 1705.19) Shotcrete and 1705.3.9.1 (formerly 1705.19.1) Visual examination for structural soundness of in-place shotcrete Existing amendments about shotcrete inspections and tests relocated to Section 1705.3 that addresses concrete construction.
18 1705.3.9.2 Preconstruction tests
ICC deleted requirements for shotcrete from the model code Section 1908 as they are now incorporated in referenced standard ACI 318-19, so OSHPD added new section 1705.3.9.1 to incorporate requirements previously located in an amendment to Section 1908A.10.2 and model code Sections 1908.4.1 and 1908.5.
Chapter 17A – Special Inspections and Tests
Division of the State Architect and
Office of Statewide Health Planning and Development
1705A.3.9 (formerly 1705A.19) Shotcrete and 1705A.3.9.1 (former 1705A.19.1) Visual examination for structural soundness of in-place shotcrete Existing amendments about shotcrete inspections and tests relocated to Section 1705.3 that addresses concrete construction.
1705A.3.9.2 Preconstruction tests
ICC deleted requirements for shotcrete from the model code Section 1908 as they are now incorporated in referenced standard ACI 318-19, so OSHPD added new section 1705.3.9.1 to incorporate requirements previously located in amendment to Section 1908A.10.2 and model code Sections 1908.4.1 and 1908.5. 1705A.8.1 Micropile tests and 1705A.9.1 Helical pile tests Added preproduction and production load tests requirements. 1705A.13.5.2 Structural sealant glazing and 1705A.14.2.1 Structural sealant glazing testing
Added testing, manufacturer’s certification, and special inspection requirements.
Chapters 18 and 18A – Soils and Foundations
Division of the State Architect and
Office of Statewide Health Planning and Development
Amendments regarding construction documentation, seismic designs of precast concrete piles and corrosion protection throughout Chapters 18 (OSHPD only) and 18A (OSHPD and DSA) are to correspond with revisions and updated references in model code regarding OSHPD and DSA occupancies and compliance to ACI 318 and ASCE 7.
Chapter 19 – Concrete
Office of Statewide Health Planning and Development
1901.3.4 Tests for post-installed anchors in concrete and 1901.3.4.3 Test frequency
OSHPD 2A excluded from the scope of Section 1901.3.4. Exception added for OSHPD 2B to clarify that for in-state detention and correctional facilities, tension
19 testing is not required for post-installed anchors used for attaching nonstructural components under certain circumstances.
1905.1.7 ACI 318, Section 14.1.4
Amendment to ACI 318 has been revised to not permit plain concrete in place of required longitudinal reinforcing of footings in Seismic Design Categories D, E and F.
1908 Shotcrete
The model code has repealed all shotcrete requirements in favor of those contained in the new version of the adopted material standard ACI 318-19, so some amendments have been relocated to Section 1905 or 1705 and amendments were added to coordinate with the updated standards.
Division of the State Architect
1909.2.8 Flat wall insulating concrete form (ICF)
Amendment to facilitate the enforcement of code and industry standards where appropriate based on unique aspects of ICF construction. 1909.3 Modifications to ACI 318 and 1909.4 Shotcrete
Existing amendments revised as necessary to coordinate with the new version of the adopted material standard ACI 318-19. The 2021 IBC repealed shotcrete requirements in deference to requirements contained in the adopted material standard ACI 318-19, so continued DSA amendments associated with the repealed model code language are relocated to amend the applicable sections.
Chapter 19A – Concrete
Division of the State Architect and
Office of Statewide Health Planning and Development
1903A.4 Flat wall insulating concrete form (ICF) systems Amendment to facilitate the enforcement of code and industry standards where appropriate based on unique aspects of ICF construction (DSA only). 1905A.1.3 ACI 318, Section 9.6.1.3
Amendment to allow the minimum steel reinforcement limit given in the adopted material standard ACI 318-19 to apply to foundation members resisting seismic loads designed for load combinations, including the overstrength factor.
Sections 1905A.1.15, 1905A.1.16, 1908A
The 2021 IBC has repealed shotcrete requirements in deference to requirements contained in the adopted material standard ACI 318-19 so continued DSA amendments associated with the repealed model code language are relocated to amend the applicable sections.
20 1910A.5.3 Test frequency
Exception added for OSHPD 4 to clarify that in state detention and correctional facilities, tension testing is not required for post-installed anchors used for attaching nonstructural components under certain circumstances (OSHPD only).
Chapter 21 – Masonry
California Energy Commission
2109.2.4.8.2 Vapor permeance
Amendment added with specific reference to Table 1202.3.1 to distinguish between climate zones identified in ICC model codes and climate zones identified in the California Energy Code.
Division of the State Architect
2115 Additional requirements for community colleges
Existing amendments in sections 2115.5, 2115.6, 2115.7 and 2115.9 revised as necessary to align with changes DSA and OSHPD made in sections 2104A.3, 2105A.2 and 2106A.1, and changes OSHPD made in 2104.2, 2105.2 and 2106.1. All the above-mentioned amendments in Chapters 21 and 21A have been made to provide better clarity and alignment with TMS 402/602.
Office of Statewide Health Planning and Development
Sections 2101, 2103, 2104, 2105, 2106, 2107 and 2108
Added a new occupancy classification OSHPD 2B to address skilled nursing and intermediate care facilities to distinguish application to care facilities other than OSHPD 2A regarding grout pours, approved masonry admixtures and quality assurance measures. Revisions also made to the existing amendments to provide better clarity and alignment with TMS 402/602.
2103.4 Metal reinforcement and accessories
Amendment added clarifying that unidentified reinforcement also includes bar reinforcement without mill certification.
2103.5 Air entrainment
Amendment repealing the use of air-entraining materials or air-entraining admixtures in masonry grout.
Chapter 21A – Masonry
Division of the State Architect and
Office of Statewide Health Planning and Development
2103A.4 Metal reinforcement and accessories
Amendment added clarifying that unidentified reinforcement also includes bar reinforcement without mill certification.
21 2103A.5 Air entrainment
Amendment repealing the use of air-entraining materials or air-entraining admixtures in masonry grout.
2104A Construction, 2105A Quality assurance, 2106A Seismic design, 2107A Allowable stress design and 2108A Strength design of masonry Revisions to existing amendments including relocation to other sections that modify associated sections in TMS 402 and 602 and adding amendments to provide better clarity and alignment with the referenced standards.
California Energy Commission
2109.2.4.8.2 Vapor permeance. Exception
Amendment to distinguish between climate zones identified in ICC model codes and climate zones identified in the California Energy Code, and to cross-reference Table 1202.3.1 that describes the differences between these codes.
Chapter 24 – Glass and Glazing
Division of the State Architect and
Office of Statewide Health Planning and Development
2410 Structural sealant glazing (SSG)
OSHPD 2A facilities excluded from the scope of Section 2410. 2410.1.2 Testing and inspection
In Item 1, the reference to ASCE 7 Section 13.5.9.2 is removed for clarity, as the language contradicts the requirements of Item 1 by allowing engineering analysis in lieu of testing. DSA added an exception to reduce testing requirements for Risk Category I, II, and III buildings within DSA-SS and DSA-SS/CC authority where the prevention of glass fallout is not dependent on the structural sealant in two-sided configurations.
Chapter 25 – Gypsum Board, Gypsum Panel Products and Plaster California Energy Commission
2510.6.3 California Energy Code and International Energy Conservation Code Climate Zones
Amendment with reference to Table 1202.3.1 pertaining water-resistive barriers and applicability of climate zone criteria to distinguish between climate zones identified in ICC model codes and climate zones identified in the California Energy Code.
22 Chapter 27 – Electrical
State Fire Marshal
Section 2702 Emergency and Standby Power Systems
[F] 2702.1.2 Fuel-line piping protection
Added new Group I-2 occupancies having occupied floors located more than 75 feet above the lowest level of fire department vehicle access to the section.
Chapter 31 – Special Construction
California Building Standards Commission
3109.2 California swimming pool safety act (statewide)
Amended to reflect Senate Bill 1078, Statutes of 2018.
Department of Housing and Community Development
3115 Intermodal Shipping Containers, Exception 5
Adopted IBC Section 3115 and added an amendment to clarify that the use of shipping containers constructed or converted off-site that qualify as Factory-built Housing pursuant to HSC Section 19971 or Commercial Modular(s) pursuant to HSC Section 18001.8, must be approved by HCD.
State Fire Marshal
3111.3.5 Elevated photovoltaic (PV) support structures and 3111.3.5.1 PV panels installed over open grid framing or non-combustible deck Amendment establishing appropriate fire testing and listing criteria for overhead photovoltaic (PV) support structures that could have people or vehicles in the space beneath them.
Division of the State Architect
3115 Intermodal shipping containers
Added regulations regarding the use of shipping containers.
Chapter 31B – Public Swimming Pools
Department of Housing and Community Development
Chapter 31B Public swimming pools
Adopted as applicable to swimming pools which are permanent accessory structures in Mobilehome Parks (MHP) and Special Occupancy Parks (SOP). The adoption provides health and safety standards similar to those for public pools outside of MHPs and SOPs.
23 Chapter 35 – Referenced Standards
Division of the State Architect and
Office of Statewide Health Planning and Development
Amendments to update the edition of various referenced standards including but not limited to AAMA 501.4, AAMA 501.6, ACI 355.2 and ACI 355.4. Add amendment to adopt Supplements 2 and 3, in addition to Supplement 1 of ASCE/SEI 7-16. Add amendments to adopt 506.4R-94 and 506.6T-17 for facilities within OSHPD authority.
State Fire Marshal
ASTM F2374 Standard Practice for Design, Manufacture, Operation, and Maintenance of Inflatable Amusement Devices
Added provisions for inflatable amusement devices.
Several updates to NFPA referenced standards including NFPA 10-21, 13-22, 13D- 22, 13R-22, 24-19, 37-18, 54-18, 72-22, 111-19, 130-20, 289-19, 502-20 to follow 2021 IBC model code revisions and to align with state laws and regulations based on California specific topographical, climatic and geological issues.
NFPA 13-22 Installation of Sprinkler Systems
Corrections made to the referenced standard to resolve conflicts in requirements for positive alarm features and pre-signaling devices in I-2 and R2.1 occupancies affected by CBC Section 1008.3.2 regarding signaling delay issues and emergency power and egress illumination.
NFPA 45-19 is deleted since it conflicts with CFC regulations.
NFPA 72-22 National Fire Alarm and Signaling Code
Corrections made to the referenced standard to resolve conflicts in requirements for positive alarm features and pre-signaling devices in I-2 and R2.1 occupancies affected by CBC Section 1008.3.2 regarding signaling delay issues and emergency power and egress illumination.
24 CALIFORNIA RESIDENTIAL CODE – PART 2.5
Chapter 1 – Scope and Application
Building Standards Commission
R105.5.1 [Permit] Expiration
New section changed permit expiration from 180 days to 12 months. Includes a provision stipulating that every permit shall remain valid if the work on the site authorized by the permit is commenced within 12 months after its issuance. This amendment also allows for permit extensions; the exception being when the work authorized by the permit is determined to have been abandoned. The new code language reflects statutory requirements in Assembly Bill 2913 (Statutes of 2018), which became operative January 1, 2019 and amended Health and Safety Code (HSC) Section 18938.5(b)(2)(B) and added HSC Section 18938.6 to Building Standards Law.
CBSC Information Bulletin 19-03
regarding permit expiration dates was issued May
23, 2019 to local building departments, state agencies and CBSC interested parties.
State Fire Marshal
1.11.1 Specified State-occupied Buildings
New definition with 11 criteria has been added in response to Senate Bill 85 (Chapter 31, Statutes of 2019) that required the State Fire Marshal to provide a more accurate definition.
Chapter 2 – Definitions
State Fire Marshal
Added new DEFINITIONS to support 2022 code changes: Child Care; Exterior Wall Assembly; Exterior Wall Covering; Inflatable Amusement Device; Photovoltaic (PV) Panel System, Ground Mounted; Photovoltaic (PV) Support Structure, Elevated; Toddler; Wildland-Urban Interface (WUI).
Chapter 3 – Building Planning
Department of Housing and Community Development
R301.2.2.10 Anchorage of water heaters
Repealed model code language about seismic design categories and replace references to IRC sections not adopted in California with reference to CPC.
R320.2 Live/work units
Amendment to correct references to CBC Chapters 11A and 11B for accessibility requirements.
25 R327 Aging-in-place design and fall prevention
Added new section that replaces IRC Section 327, Swimming Pools, Spas and Hot Tubs. Added to address specific aging-in-place design elements in new residential construction to facilitate access to operational features and to allow people to stay longer in their homes as they age.
State Fire Marshal
R310.1 Emergency escape and rescue opening required
Repealed language that conflicts with the CFC and California Code of Regulations, Title 19, Public Safety.
R313.3.2 Sprinklers
Amended existing California amendment to add dry pipe sprinkler.
R324.8
Elevated photovoltaic (PV) support structures, R324.8.1 and R324.8.2 Added new sections to establish appropriate fire testing and listing criteria for overhead photovoltaic (PV) support structures that could have people or vehicles in the space beneath them.
Figure R328.8.1 ESS vehicle impact protection
Added to illustrate the zones in which a typical residential garage Energy Storage System (ESS) installation would trigger the need for impact protection.
R328.8.2 Other locations subject to vehicle impact
Added to address other-than-garage locations that may also have vehicle access, such as residential driveways, and allows some flexibility to the AHJ and installer for larger, non-typical, or custom residential garages where the normal path of vehicle travel falls outside of the area defined in R328.8.1.
R328.8.3 Impact protection options
Added to define an impact protection area and set the expectation that the barriers are intended to deflect, resist or visually deter an impact. This language matches Section 312.3 in the IFC.
R336.2. Health and Safety Code Section 1597.46
Amendment to comply with changes made to the California Health and Safety Code (HSC) by Senate Bill 234 (Chapter 244, Statutes of 2019) regarding large family day-care homes. The revised HSC Section 1597.46 is printed in this section.
R336.6 Compliance
The paragraph regarding enforcement of HSC Sections 13145 and 13146 is repealed to comply with SB 234 (Chapter 244, Statutes of 2019).
R337.2 Definitions
APPLICABLE BUILDING Added to define an applicable building relative to the regulations of Chapter 7A.
26 EXTERIOR WALL ASSEMBLY and EXTERIOR WALL COVERING Added to distinguish between different exterior wall products in Section 707 of the California Building Code.
FIRE PROTECTION PLAN Modified existing definition to provide a reference pointer to CFC Chapter 49 for Wildland-Urban Interface (WUI) Fire Area requirements.
FIRE-RESISTANT VEGETATION Add new definition of plants less likely to ignite, contribute heat or spread flame. Also provides a list of resources for more information about these types of plants.
IGNITION-RESISTANT MATERIAL Revised because SFM Standard 12-7A-5 has been repealed and rendered obsolete.
LOCAL AGENCY VERY HIGH FIRE HAZARD SEVERITY ZONE Repealed existing definition.
R337.6.2.1 Off ridge and ridge vents
Repealed language regarding vents mounted on a vertical surface that has been incorporated into CBC Section 706A.2 requirements. The new language in R337.6.2.1 allows for a compliance path for off ridge and ridge vents to be used in the wildland urban interface, with protections against ember intrusion.
R337.7.3 Exterior wall coverings and R337.7.3.1 Exterior wall assembly Separated into two sections.
R337.7.4 Exterior wall assemblies and R337.7.4.1 Conditions of acceptance when tested in accordance with ASTM E2707
Revised language to clarify that the fire resistance rating for the newly defined “exterior wall assemblies” is consistent with exterior wall coverings in Section R337.7.3.
R337.10.4 Roof construction
Revised language to clarify that when an accessory building is required to be constructed of noncombustible materials or of ignition-resistant materials, its roof must meet Class A fire rating.
Chapter 4 – Foundations
Department of Housing and Community Development
R408.3 Unvented crawl space
Repealed amendment regarding crawl space perimeter wall insulation and reference to the California Energy Code.
27 California Energy Commission
R408.8 Under-floor vapor retarder
New Note with a specific reference to Table R702.7(5) in this section regarding the applicability of vapor retarders and insulation with respect to the difference between climate zones identified in ICC model codes and climate zones identified in the California Energy Code.
Chapter 7 – Wall Covering
Department of Housing and Community Development
R702.7.1 Class III vapor retarders
Repealed amendments pertaining to the California Climate Zones relative to vapor retarders for interior wall coverings. The California Energy Commission amended sections specific to climate zones in CRC Chapters 4, 7, 8, and Appendix AS and in the California Energy Code.
California Energy Commission
R702.7.2 California Energy Code and International Energy Conservation Code Climate Zones.
New section with a specific reference to Table R702.7(5) pertaining to the use spray foam plastic insulation and the difference between the applicability of climate zones identified in ICC model codes and the climate zones identified in the California Energy Code.
Table R702.7(5) IECC vs. California Energy Code Climate Zone Comparison New Table depicting specific differences between climate zones identified in ICC model codes and climate zones identified in the California Energy Code.
Chapter 8 – Roof-Ceiling Construction
California Energy Commission
R806 Roof Ventilation, Note
Informational Note added to the section with specific reference to Table R702.7(5) regarding the applicability of energy efficiency measures and to reinforce the difference between climate zones identified in ICC model codes and climate zones identified in the California Energy Code.
State Fire Marshal
R806.1.1 Vents in the Wildland Urban Interface (WUI)
Amended to ensure that where vents are provided in WUI areas, they are required to be protected from the intrusion of burning embers and flame.
28 Chapter 9 – Roof Assemblies
State Fire Marshal
R902.1.2 Roof coverings within state responsibility areas This existing amendment is repealed to correlate with CBC Chapters 7A and 15 for roof coverings in WUI areas.
Chapter 44 – Referenced Standards
State Fire Marshal
ASTM F2374
Added to address safety requirements for inflatable amusement devices also known as “bounce houses,” and to correlate with the type of devices covered by IFC requirements.
UL 9540-2020
Modifies the existing standard. The second edition of UL 9540 has new requirements that limit the maximum energy capacity of individual nonresidential electrochemical Energy Storage Systems (ESS) to 50 kWh with certain exceptions.
UL 9540A-Edition 4 2019
Modified the existing California amendment to correlate with other updates and new regulations regarding battery ESS.
Appendix AS – Strawbale Construction
California Energy Commission
Appendix AS – Strawbale Construction
Informational Note added to the appendix title heading with specific reference to Table R702.7(5) regarding the applicability of energy efficiency measures and to reinforce the difference between climate zones identified in ICC model codes and climate zones identified in the California Energy Code.
Department of Housing and Community Development
Amended this appendix to repeal references to climate zones and the California Energy Code.
29 Appendix AX
Building Standards Commission
Swimming Pool Safety Act
Amended the note under the title to reflect this law is mandatory, not optional for local adoption. To align with the CBC, Chapter 31, Appendix AX section numbers were reformatted to reflect the numbering used in HSC 115920 through 115929.
30 CALIFORNIA ELECTRICAL CODE – PART 3
California Energy Commission
Sections of the California Electrical Code were amended by CEC to assist code users by identifying additional applicable energy efficiency-based electrical requirements in the California Energy Code that are applicable to the following systems:
• Electrical power distribution systems.
• Panelboards in single-family and multifamily buildings • Heat pump water heaters, electric cooktops, electric clothes dryers and their electric readiness in single-family and multifamily buildings • Electrical requirements for energy storage systems (ESS) and their electric readiness in multifamily buildings
Part 3 Chapter Sections
Chapter 1 89.101.8.2
Chapter 4 408.2(A), 408.2(B), 422.3(A),
422.3(B), 440.3(E), 440.3(F)
Chapter 7 706.10
Housing and Community Development
90.2 Scope
New amendment to avoid conflict with text in Section 89.101.3.3 regarding installations in ships, watercraft other than floating dwelling units, railway rolling stock, aircraft, automotive vehicles, commercial coaches, mobile homes and recreational vehicles.
State Fire Marshal
620.71 Guarding Equipment
Repealed California amendment that prohibited the installation of an elevator motor controller and/or motion controller in the hoistway.
Office of Statewide Health Planning and Development
110.2 Approval
Defined new requirements for equipment that must be satisfied in order to be approved by OSHPD for use.
110.26 Spaces About Electrical Equipment. (C) Entrance to and Egress from Working Space. (3) Personnel Doors
Amendment to reference the CBC for additional exit door requirements for electrical equipment room rated 800-amperes or more.
31 404.4 Damp or Wet Locations. (C) Switches in Tub or Shower Spaces Amendment to reduce the restriction distance for the installation of receptacles from five feet to three feet horizontally. This aligns with model code language in Section 406.9(C).
517.30 Sources of Power. (B) Types of Power Sources. (3) Battery Systems Amendment to allow battery systems to be used as an alternate power source. 517.32 Branches Requiring Automatic Connection. (A) Life Safety and Critical Branch Used in a Type 1 EES
Restore the 10-second restoration time for Type 1 life safety and critical branches. 517.34 Critical Branch. (A) Task Illumination, Fixed Equipment, and Selected Receptacles
Amendment for imaging equipment used for diagnostic services of emergency/trauma patients to be powered by the critical branch or equipment branch.
517.44 Connection to Equipment Branch. (B) Delayed Automatic or Manual Connection to the Equipment Branch. 517.44.1 [OSHPD 2, 4 & 5] Connection to Equipment Branch
Amendment to restore the requirement that Type 2 EES equipment branch load listed in Section 517.44(A) must automatically restore to operation at appropriate time-lag intervals following the energization of the life safety branch. 517.123 [OSHPD 1, 2, 3, 4 & 5] Call Systems
(A) General. Added references to the CBC’s applicable sections for nurse call systems.
(C) Bath Stations
. Changed the mounting height requirements for nurse call system “bath station” devices located at the patient toilets.
700.12 General Requirements. (C) Storage Battery
Amendment to require a storage battery system used as an alternate power source to have the equivalent capacity and operating duration as an equivalent generator set operating on an on-site fuel supply.
32 CALIFORNIA MECHANICAL CODE – PART 4
Chapter 1 – Scope and Application
Building Standards Commission
104.4.3.1 Expiration
New section changed permit expiration from 180 days to 12 months. Includes a provision stipulating that every permit shall remain valid if the work on the site authorized by the permit is commenced within 12 months after its issuance. This amendment also allows for permit extensions; the exception being when the work authorized by the permit is determined to have been abandoned. The new code language reflects statutory requirements in Assembly Bill 2913 (Chapter 655, Statutes of 2018), which became operative January 1, 2019 and amended Health and Safety Code (HSC) Section 18938.5(b)(2)(B) and added HSC Section 18938.6 to Building Standards Law.
CBSC Information Bulletin 19-03
regarding permit expiration dates was issued May
23, 2019 to local building departments, state agencies and CBSC interested parties.
State Fire Marshal
1.11.4.4 Fire Clearance Preinspection and 1.11.4.5 Care Facilities Updated to meet Health and Safety Code Section 13244 and to align with other parts of Title 24 regarding fee structures for Fire Clearance Pre-inspection and Care Facilities.
1.11.6 Certificate of Occupancy
Updated to correlate with the requirements for certificate of occupancy in the CBC.
California Energy Commission
Section 1.1.8 California Energy Code Requirements for Locally Adopted Energy Standards
Amendment clarifies that “local jurisdictions that adopt changes to energy conservation or insulation standards (including energy efficiency measures) may not enforce such changes until the California Energy Commission has made the findings required by Public Resources Code Section 25402.1(h)(2), following the process specified in Section 10-106 of the California Administrative Code.”
33 Chapter 2 – Definitions
Office of Statewide Health Planning and Development
228.0 Z
ZONE [OSHPD 1, 2, 3, 4 & 5]
New code section has been added. OSHPD has added the definition of Zone to OSHPD 1, 2, 3, 4 & 5 to specify the meaning of this term within Part 4 and reduce confusion.
Chapter 3 – General Regulations
Department of Housing and Community Development
311.2 Air Filters
Repealed amendment in the exceptions referencing the California Energy Code, since the California Energy Commission included this amendment in their rulemaking.
California Energy Commission
Section 311.5 California Energy Code Requirements for Residential Air Filtration
New code section added pointers specifying requirements for outdoor air delivery to occupied spaces where specified in California Energy Code Sections 150.0(m)12 and 160.2(b).
Chapter 4 – Ventilation Air
Building Standards Commission
402.1 Occupiable Spaces
Repealed amendment in the exceptions referencing the California Energy Code, since the California Energy Commission included this amendment in their rulemaking.
Department of Housing and Community Development
405.3 Bathroom Exhaust
Amendment providing a reference pointer to CALGreen (Part 11 of Title 24), Division
4.5, Environmental Quality.
Office of Statewide Health Planning and Development
407.5.1.3 Variable Air Volume
Amendment clarifies that spaces with pressure requirements per Table 4-A shall utilize an automatic modulating damper in the return or exhaust air for each space and that the damper will modulate from full open to minimum position in conjunction with the supply air VAV terminal equipment.
34 407.6 Economizers
New code section requires that systems with economizers shall include modulating relief and/or return fans to ensure compliance with the pressure requirements of spaces listed in Table 4-A.
420.0 Air Distribution Devices [OSHPD 1, 2, 3, 4 & 5]
New code section requires all air distribution devices and supply air outlets meet ASHRAE 170-2013, Section 6.7.2 and Table 6.7.2. This is consistent with other regulations that address prevention measures to abate disease-causing microorganisms within mechanical systems.
Chapter 6 – Duct systems
Department of Housing and Community Development
601.2 Sizing Requirements
Repealed amendment in the exceptions referencing the California Energy Code, since the California Energy Commission included this amendment in their rulemaking 603.10.1.1 Duct Leakage Tests for Residential Buildings Repealed amendment in the exceptions referencing the California Energy Code, since the California Energy Commission included this amendment in their rulemaking.
California Energy Commission
Section 601.2.1 California Energy Code Residential Return Duct Sizing Requirements
New code section applicable to new construction and alterations with pointers to California Energy Code Tables 150.0-B and 150.0-C to specify return duct sizing requirements for single return and multiple return duct systems, respectively. 603.9.2.1 Duct Leakage Tests for Buildings that Meet Air Distribution System Duct Leakage Sealing Criteria in Title 24, Part 6
New code section with pointers to the California Energy Code applicable to single- family and multifamily buildings, hotels/motels and nonresidential buildings.
Chapter 9 – Installation of Specific Appliances
Department of Housing and Community Development
911.2.2 In Manufactured Homes and 912.1 1 Prohibited Installations and Exception
HCD does not adopt model code sections 911.2.2 and 912.1.1 to avoid possible conflict and to properly align with CCR, Title 25, and HSC Section 18025 regarding references and standards incorporated by reference for construction of manufactured homes, including decorative gas appliances for installation in fireplaces. HCD has reserved these sections accordingly.
35 Chapter 11 – Refrigeration
State Fire Marshal
1104.6 Applications for Human Comfort and for Nonindustrial Occupancies Exceptions 1 and 2 added to allow the use of A2L refrigerant in specific self- contained factory sealed air conditioning units.
Chapter 12 – Hydronics
Department of Housing and Community Development
1217.5.2 Insulation, 1217.7 Wall and Ceiling Panels and 1220.4.5 Insulation HCD repealed amendments in the exceptions referencing the California Energy Code, since the California Energy Commission included this amendment in their rulemaking for insulation requirements for concrete radiant flooring heated slabs, pipe insulation, and concrete snow melt heated slab floors.
California Energy Commission
1217.7.1 California Energy Code Pipe Insulation Requirements New code section to reference the California Energy Code Sections 150.0(j)2 and 120.3(c) for pipe insulation requirements based on fluid temperature and pipe diameter. Also, where California Energy Code Table 120.3-A specifies insulation greater than R-12, the higher value is required.
1220.4.5.1 California Energy Code Insulation Requirements for Heated Slab Floors
New code section to reference the California Energy Code Section 110.8(g) and Table 110.8-A for additional insulation requirements for heated slab floors. Also, a higher level of insulation is required for Climate Zone 16, and more detailed requirements for installing insulation are specified in all climate zones.
36 CALIFORNIA PLUMBING CODE – PART 5
Chapter 1 – Scope and Application
Building Standards Commission
R105.5.1 [Permit] Expiration
New section changed permit expiration from 180 days to 12 months. Includes a provision stipulating that every permit shall remain valid if the work on the site authorized by the permit is commenced within 12 months after its issuance. This amendment also allows for permit extensions; the exception being when the work authorized by the permit is determined to have been abandoned. The new code language reflects statutory requirements in Assembly Bill 2913 (Chapter 655, Statutes of 2018), which became operative January 1, 2019 and amended Health and Safety Code (HSC) Section 18938.5(b)(2)(B) and added HSC Section 18938.6 to Building Standards Law.
CBSC Information Bulletin 19-03
regarding permit expiration dates was issued May
23, 2019 to local building departments, state agencies and CBSC interested parties Chapter 4 – Plumbing Fixtures and Fixture Fittings
Building Standards Commission
412.1.4.1 Nonwater Urinals with Drain Cleansing Action
Changed the term from “Urinals, Hybrid.”
Building Standards Commission and Division of the State Architect Table 4-1 Occupant Load Factor
Co-adopted with BSC, who made the changes during the 2019 Intervening Code Adoption Cycle.
422.1 Fixture count and Table 422.1
Co-adopted with BSC to permit an alternate Table 4-1 (replaced Table A) as an exception which can be used if the jurisdiction has adopted it. In the 2019 edition of the CPC, DSA inadvertently omitted the language. DSA co-adopted the BSC amendment in the statement at the top of Table 422.1 to allow usage of Table 4-1 as an alternate for calculations.
Table A/Table 4-1
Table A is superseded by Table 4-1 which incorporates numerous additions, deletions and revisions for determining plumbing fixture count minimums.
37 California Energy Commission
401 General
Amended to prevent confusion regarding the interaction between standards for plumbing fixtures and fittings subject to regulation as water-using appliances, and standards for plumbing systems specified in adopted model code language.
Chapters 5 and 6 – Water Heaters and Water Supply and Distribution California Energy Commission
501 General and 609.12 Residential Fire Sprinkler Systems Amended to assist readers of the CPC by identifying additional energy efficiency requirements applicable to water heating systems and pipe insulation.
Chapter 6 – Water Supply and Distribution
State Fire Marshal
612.2 through 612.7.2 Water Supply and Distribution
Removed residential fire sprinkler systems from California Plumbing Code, and comply with California Residential Code and California Fire Code.
Chapter 13 – Health Care Facilities and Medical Gas and Vacuum Systems Office of Statewide Health Planning and Development
1304.1.1 [OSHPD 1, 1R, 2, 3, 4 & 5]
Added a reference to the California Fire Code Chapter 80. 1304.1.2 [OSHPD 1, 1R, 2, 3, 4 & 5]
New exception that a medical gas source system serving only an OSHPD 1R or 3 building may be located within it.
Chapter 15 – Alternate Water Sources for Nonpotable Applications Department of Water Resources
1505.1 General
Amended this section to clarify the applicability of Section 1505 to landscape irrigation systems using recycled water.
1505.4 Connections to Potable or Recycled Water Supply Systems – Exception (4)
Added an exception for the use of a swivel ell or changeover device to supply potable water to a dual-plumbed system during an interruption in recycled water service.
38 Chapter 17 – Referenced Standards
Office of Statewide Health Planning and Development
Table 1701.1
Added ANSI/AAMI reference standard for water treatment equipment for hemodialysis applications.
39 CALIFORNIA ENERGY CODE – PART 6
Please visit the California Energy Commission’s website for Part 6 updates. energy.ca.gov/programs-and-topics/programs/building-energy-efficiency- standards/online-resource-center/overview
40 CALIFORNIA FIRE CODE – PART 9
Overview
State Fire Marshal
The Office of the State Fire Marshal (SFM) has authority for the building standards in the California Fire Code (CFC). Unless otherwise noted, all updates noted in this section were made by SFM.
The bulk of amendments regarding Energy Storage Systems (ESS) occur in Chapters 1, 2, 9, 12 and Chapter 80, Referenced Standards. SFM repealed California ESS Intervening Code Adoption Cycle amendments and definitions that were early adopted ICC provisions in the 2019 Intervening Code Adoption Cycle, then adopted and replaced with unamended 2021 International Code Council (ICC) model code provisions in several chapters.
The bulk of amendments regarding Type IV construction—tall wood/mass timber and cross-laminated timber—occur in Chapter 7 Section 701.6, Chapter 9 Section 914.3.1.2, and Chapter 33 Section 3303.5, based on changes in model code. SFM repealed California tall wood/mass timber amendments that were early-adopted ICC provisions in the 2019 Intervening Code Cycle, then adopted and replaced with unamended 2021 ICC model code provisions.
Part 9 Chapter Sections
Chapter 2 202 Definitions
MASS TIMBER (CA amended defined term remains)
Chapter 7 Section 701 General
701.6 Owners responsibility (Updated model code
references)
Chapter 9 Section 914 Fire Protection Based on Special Detailed Requirements of Use and Occupancy
914.3.1.2 Water supply to required fire pumps. (CA
amendment remains)
Chapter 33 Section 3303 Owners Responsibility for Fire Protection. 3303.5 (Adopted model code section and repealed
California Section 3308.9)
Chapter 1 – Scope and Application
Building Standards Commission
R105.5.1 [Permit] Expiration
New section changed permit expiration from 180 days to 12 months. Includes a provision stipulating that every permit shall remain valid if the work on the site authorized by the permit is commenced within 12 months after its issuance. This
41 amendment also allows for permit extensions; the exception being when the work authorized by the permit is determined to have been abandoned. The new code language reflects statutory requirements in Assembly Bill 2913 (Chapter 655, Statutes of 2018), which became operative January 1, 2019 and amended Health and Safety Code (HSC) Section 18938.5(b)(2)(B) and added HSC Section 18938.6 to Building Standards Law.
CBSC Information Bulletin 19-03
regarding permit expiration dates was issued May
23, 2019 to local building departments, state agencies and CBSC interested parties.
State Fire Marshal
1.11.1 Scope Specified state-occupied buildings
New definition with 11 criteria has been added in response to Senate Bill 85 (Chapter 31, Statutes of 2019) that required the State Fire Marshal to provide a more accurate definition.
1.11.6 Certificate of Occupancy
Amendment referencing CBC Section 105.2 to clarify work exempt from permitting requirements.
105.6.53 Lithium batteries
Amendment to require an operational permit for an accumulation of more than 15 cubic feet of lithium-ion and lithium metal batteries and storage shall comply with new amendments in CFC Section 322.
Chapter 2 – Definitions
CHILD CARE Added a new defined term for child care that is consistent with Title 22 (Social Security) of the California Code of Regulations.
DAY-CARE Amended the defined term day-care to specify the time period for the care of persons is not to exceed 24 hours, and is to be consistent with Title 22.
INFLATABLE AMUSEMENT DEVICE New defined term to specify characteristics of inflatable structures that need to be properly constructed and anchored.
MOBILE FOOD PREPARATION VEHICLES Repealed this term to align with California Code of Regulations Title 25, Housing and Community Development. See Chapter 3 changes below.
PHOTOVOLTAIC (PV) PANEL SYSTEM, GROUND-MOUNTED New defined term to be consistent with references in CBC Chapters 16 and 31, CRC Chapter 3 and CFC Chapter 12.
PHOTOVOLTAIC (PV) SUPPORT STRUCTURE, ELEVATED New defined term for an elevated PV support structure designed with useable space underneath intended for secondary use such as providing shade for motor vehicle parking. Requirements for installation are addressed in CBC Chapters 15 and 16.
42 TODDLER New defined term to align with the legal definition of toddlers from Health and Safety Code Section 1596.55. By distinguishing age differences, officials will be able to classify the related occupancies based on social services’ classifications used for licensing.
Chapter 3 – General Regulations
User Note, Section 301.2 Permits and Section 319 Mobile Food Preparation Vehicles
Repealed model code and references to mobile food vehicles throughout the code to address concerns regarding conflicting jurisdiction requirements between Title 25 and the CFC.
Section 322 Storage of Lithium-ion and Lithium Metal Batteries Adopted new section to address safety requirements, as well as associated sections in Chapter 4 below.
Chapter 4 – Emergency Planning and Preparedness
403.10.6 Lithium-ion and lithium metal batteries and 403.10.6.1 Mitigation planning
Amendments in these sections address fire safety and emergency action regarding battery storage and mitigation planning in the event of thermal runaway.
Chapter 9 – Fire Protection and Life Safety Systems
Amendments in this chapter address nearly every subsection regarding every occupancy and SFM application.
SFM repealed several California amendments and adopted 2021 IFC model c ode language for automatic sprinkler systems, energy storage systems, explosion control, venting, and gas detection systems.
Major amendments were made to requirements for compliance with updated NFPA 72 standards in model code regarding solar photovoltaic power systems, portable fire extinguishers and gas detection systems.
907.2.6.4 Group I-4
New section to include the intent of the smoke detection requirements for Group I-4 occupancies with a reference to Section 436.1.
907.2.11.8 Specific location requirements
Modified to address the references based on changes to both the NFPA 72 Standard
29.11.3.4, and the model code regarding smoke alarms and smoke detection systems.
43 913.1 General
Amend the exception for automatic sprinkler pumps to correlate with the California Residential Code section R313.
Chapter 10 – Means of Egress
1032.2.1.2 Maintenance and 1032.2.1.3 Examination
Adjustments and revisions to address maintenance requirements for fire escapes that have been relocated to Section 1032.
Chapter 12 – Energy Systems
Sections 1202, 1203, 1204, 1205, 1206 and 1207
Repealed, renumbered, amended and carried forward existing amendments in Chapter 12 to adopt updated 2021 IFC model code language. 1207.11.7 through 1207.11.7.3
Section 1207.11.7
Amendments regarding specific appliances, ESS equipment and devices that need protection from impact in a clearly defined area in residential garages and carports.
Figure 1207.11.7.1
Added to illustrate the zones in which a typical residential garage ESS installation would trigger the need for impact protection, following prescriptive barrier and post designs.
Chapter 31 – Tents, Temporary Special Event Structures and Other Membrane Structures
3101.1 Scope
Carried forward existing amendments and added new amendment regarding temporary structures, water filled vessels and inflatable amusement devices. 3103.8.2 Location
Repealed the reference to Title 19 regulations regarding vehicle parking near tents. 3103.9.1 Water Filled Vessels
Amendment requiring the tent manufacturer to provide the documentation permitting use of water filled vessels for anchoring and securing their tents.
Section 3106 Inflatable Amusement Devices
Amendment requiring basic design and safety criterion in accordance with ASTM F2374 for inflatable amusement devices also known as “bounce houses.” Chapter 38 – Higher Education Laboratories
IFC Chapter 38 is omitted in its entirety to correlate with the California Building Code and amendments regarding the Group L occupancy.
44 Chapter 49 – Requirements for Wildland-Urban Interface (WUI) Fire Areas The WUI amendments to the CFC were developed through the Office of the State Fire Marshal WUI task group and collaboration with local fire departments, state agencies, building industry, testing labs, and stakeholders.
The user note under the Chapter 49 title is added to give the code user a general understanding and background information on the development process of the regulations and their application.
4902 Definitions
FIRE-RESISTANT VEGETATION New definition of plants less likely to ignite, contribute heat or spread flame. Also provides a list of resources for more information about these types of plants.
LOCAL RESPONSIBILITY AREA (LRA) Amended to be consistent with language used in rest of the WUI regulations.
4903 Plans
Added to grant authority to local fire officials to require building owners to provide a fire protection plan to mitigate the wildfire hazards that may exist based on a project- specific wildfire hazard assessment that includes considerations of location, topography, aspect, and climatic and fire history.
The fire protection plan shall address fire department access, egress, road and address signage, water supply, fuel reduction and defensible space requirements in accordance with the California Public Resources Code.
4904.3 Local Agency Requirements
New amendment establishes requirements for local agencies to provide information to the public regarding the identification of very high fire hazard severity zones (VHFHSZ) within a 30-day period. Other new requirements in this subsection address local agency responsibilities and duties to develop fire severity zone maps accessible to the general public, as well as requirements to designate by ordinance VHFHSZ.
Section 4906 Vegetation Management
New amendments in this section include additional requirements for the development, identification and maintenance of the vegetation management zones adjacent to structures, as well as design criteria for specific types of fire-resistant and non-fire-resistant vegetation.
4908 Fire Safe Development Regulations & Section 4909 Subdivision Review Survey
New code sections added to comply with AB 2911 (Chapter 641, Statutes of 2018) which requires a survey of local governments every five years to identify existing subdivisions in the state responsibility area (SRA) or VHFHSZ without a secondary egress route. Subsections authorize the Board of Forestry and SFM-specified local
45 government bodies to make recommendations to include creating secondary access or access road improvements, among other options.
4910 General Plan Safety Element
Added to comply with AB 2911 (Chapter 641, Statutes of 2018) which requires cities and counties to adopt a comprehensive general plan with various elements including a safety element for protection of the community from unreasonable risks associated with various hazards, including wildfires.
Chapter 80 – Referenced Standards
Amended several referenced standards to correlate with model code revisions and new California amendments.
ASTM F2374
Added regarding provisions for inflatable amusement devices.
Appendix P – Community Wildland-Urban Interface (WUI) Fire Hazard Evaluation Framework
Although SFM does not adopt Appendix P statewide in the California Fire Code, when adopted by local jurisdictions and fire districts, this appendix is meant to be a tool to enable communities to collect, assemble and represent the associated risks within a WUI fire area.
46 CALIFORNIA EXISTING BUILDING CODE – PART 10
Chapter 1 – Scope and Application
Building Standards Commission
R105.5.1 [Permit] Expiration
New section changed permit expiration from 180 days to 12 months. Includes a provision stipulating that every permit shall remain valid if the work on the site authorized by the permit is commenced within 12 months after its issuance. This amendment also allows for permit extensions; the exception being when the work authorized by the permit is determined to have been abandoned. The new code language reflects statutory requirements in Assembly Bill 2913 (Chapter 655, Statutes of 2018), which became operative January 1, 2019 and amended Health and Safety Code (HSC) Section 18938.5(b)(2)(B) and added HSC Section 18938.6 to Building Standards Law.
CBSC Information Bulletin 19-03
regarding permit expiration dates was issued May
23, 2019 to local building departments, state agencies and CBSC interested parties.
Division of the State Architect
1.9.2.1.4 Reference to other chapters and 1.9.2.2.4 Reference to other chapters Added to redirect references for public schools and community colleges to the applicable “A” chapters of the CBC.
State Fire Marshal
1.11.1 SFM—Office of the State Fire Marshal
Added a definition of Specified State-occupied Building.
1.11.4.4 Fire clearance preinspection and 1.11.4.5 Care facilities Update the fees that are charged for inspections to meet the requirements of Health and Safety Code Section 13244.
1.11.6 Certificate of Occupancy
Correlated the requirements for certificate of occupancy with the regulations in the California Building Code.
Chapter 2 – Definitions
Building Standards Commission and Division of the State Architect 202 General Definitions
Relocated existing definitions for BUILDING OFFICIAL and ENFORCEMENT AGENCY from Section 318.1 to Section 202.
47 Division of the State Architect
201 General
Adopted Section 201 (it was not adopted in 2019 CEBC).
201.3 Terms defined in other codes
Amended to reference applicable sections of the California Administrative Code (Part 1 of Title 24) where the definitions contained therein govern.
Chapter 3 – Provisions for All Compliance Methods
Building Standards Commission and Division of the State Architect Table 317.5 Minimum seismic design performance levels for structural and nonstructural components
Revised table footnote #2 and added footnote #3 to clarify that there are two alternate compliance paths in addition to the criteria presented in the table. 317.8 ASCE 41 Chapter 14
Coordinated with the latest version of referenced standard ASCE 41. 319.7 Prescriptive selection of the design method
Revised Subsection 319.7.2 to clarify the condition triggering Method B approach based on building irregularities.
319.10 Structural observation, testing and inspection
Revised the language to coordinate with associated regulations in Chapter 17 of the California Building Code and repeal redundant and/or contradictory regulations.
Building Standards Commission
318 Definitions
Relocated BUILDING OFFICIAL and ENFORCEMENT AGENCY definitions to Chapter 2 and repealed the rest of the definitions from Section 318.1 except ADDITION, ALTERATION, and REPAIR.
Division of the State Architect
318 Definitions
Relocated BUILDING OFFICIAL and ENFORCEMENT AGENCY definitions to Chapter 2 and repealed the rest of the definitions from Section 318.1 except for REPAIR. Added reference to applicable sections of California Administrative Code (Part 1), where the definitions contained therein govern. 319.1 Basis for evaluation and design
Revised Exception 2 to restore original intent and update for compatibility with current code adoption cycle. As originally authored, Exception 2 was intended to apply to the conversion of a nonconforming building to use as a school building in accordance with Section 4-307 of Part 1. It was not intended to apply to the rehabilitation of an
48 existing school building when required by Section 4-309(c) of Part 1. Restored the phrase “as it was adopted by the governing jurisdiction” to make clear that the previous code is permitted to be used as originally applied rather than requiring compliance with its DSA-SS or DSA-SS/CC amendments (e.g., the “A” chapters). 321.2.3 Peer review
Added language to align with the current practice of review and approval by the California Geological Survey. This updates regulations to reflect the current requirements for seismic ground motion records used in time history analysis.
Office of Statewide Health Planning and Development
Because several sections were added to the IEBC, OSHPD sections in Chapters 3 and 3A were relocated and renumbered.
312.3.3.2 (formerly 309.3.3.2) Psychiatric nursing service Amended existing language to replace 1224.31 with Section 1228 for psychiatric nursing service. Section 1224.31 applies to medical psychiatric services and is not acceptable for an OSHPD 1R building.
304A.3.4.5 (formerly 303A.3.4.5) SPC-4D using ASCE 41
Replaced entire section on seismic separations in ASCE 41-13 to be more consistent with the initial intent of the change and current inventory of SPC-3 and higher buildings, at the same time ensuring adequate level of safety from collapse of the adjacent building due to potential pounding impacts.
304A.3.5.9 ASCE 41 Section 8.4.2.3.2.1
Added new section for foundations modeled as a fixed base or a flexible base. 304A.3.5.13 ASCE 41 Section 10.12.3
Added new section
to modify ASCE 41 Section 10.12.3 and provide a new exception to this section.
Chapter 5 – Prescriptive Compliance Method
Building Standards Commission
502.1 General
Repealed the language requiring Sections 502.4 and 503.3 be replaced by the requirements of Sections 317 through 322. Sections 502.4 and 503.3 have been adopted by BSC since 2016.
Chapter 16 – Referenced Standards
State Fire Marshal
Added amendments to the adopted and referenced NFPA 13R and NFPA 72 standards from the California Fire Code, so the same information is found in both codes.
49 Division of the State Architect
Adopted Supplement 3 of ASCE 7 in addition to Supplement 1, which is already adopted by the model code.
Office of Statewide Health Planning and Development
Adopted ASCE 7-16 Supplement 3 for OSHPD 1, 1R, 2, 4 and 5. Adopt ASCE 41-17 Supplement 1 for OSHPD 1R, 2, 4 and 5.
Department of Housing and Community Development
HCD proposed editorial changes only with no intended change in regulatory effect, such as moving existing amendments following model code changes. Example: carbon monoxide alarm requirements were moved from Chapter 5 to Chapter 3.
50 CALIFORNIA GREEN BUILDING STANDARDS CODE – PART 11
Chapter 2 – Definitions
Building Standards Commission (BSC), Division of the State Architect (DSA), Department of Housing and Community Development (HCD)
AUTOMATIC LOAD MANAGEMENT SYSTEMS – ALMS (BSC, DSA, HCD) Added to clarify the term as used within CALGreen and in the EV charging industry and refers to ALMS which is allowed for use by the California Electrical Code.
ELECTRIC VEHICLE (EV) CAPABLE SPACE (BSC, HCD, DSA) Added to clarify the term as used within CALGreen and in the EV charging industry and refers to a space which has capability or infrastructure to facilitate future EV charging.
ELECTRIC VEHICLE (EV) READY SPACE (HCD) Added to clarify the term as used within CALGreen and in the EV charging industry and refers to a space which is ready for EV charging and equipped with a receptacle or charger.
LEVEL 2 ELECTRIC VEHICLE SUPPLY EQUIPMENT (EVSE) (HCD) Added to residential sections of CALGreen and clarifies that the new term as used within Sections 4.106.4.2. and A4.106.8.2.1 refers a Level 2 EV charger and supporting electrical equipment.
LOW-POWER LEVEL 2 ELECTRIC VEHICLE (EV) CHARGING RECEPTACLE (HCD) Added to residential sections of CALGreen to clarify the electrical requirements for this type of receptacle as required in Sections 4.106.4.2.1 and
4.106.4.2.2.
ZERO-EMITTING AND HIGH-EFFICIENT VEHICLES (BSC, DSA)
Amended from
“Low-Emitting and Fuel-Efficient Vehicles” to “Zero-emitting and High-efficient Vehicles.” OFF-STREET LOADING SPACES (BSC, DSA) Added to align with the new code language for EV charging for medium-duty and heavy-duty vehicles.
NONWATER URINAL WITH DRAIN CLEANSING ACTION (BSC, HCD, DSA) Amended from “Urinal, Hybrid” to “Nonwater Urinal with Drain Cleansing Action” to align terminology with the California Plumbing Code; no change in regulatory effect.
Chapter 4 – Residential Mandatory Measures
Department of Housing and Community Development
HCD repealed various existing code sections and provisions to reformat, modify, and adopt new sections addressing EV charging for multifamily buildings, and hotels and motels.
51 4.106.4 and subsections. EV charging for new construction Expanded EV charging requirements to installation of EV charging receptacles and EV chargers (EVSE).
• Modified Exception 1 to address situations in which there is no local utility power supply or when the local utility is unable to supply adequate power. • Repealed references to specific dollar amounts for exceptions due to variations in utility costs based upon locations.
• Included an exception related to adverse impact to construction cost of a project, similar to the provision for nonresidential EV charging.
4.106.4.2 New multifamily dwellings, hotels and motels and new residential parking facilities
New regulation to clarify that calculations for EV spaces are to be rounded up to the nearest whole number and EV spaces to be counted as parking spaces only for the purposes of meeting parking space requirements at the local level (Vehicle Code Section 22511.2).
4.106.4.2.1 Multifamily development projects with less than 20 dwelling units; and hotels and motels with less than 20 sleeping units or guest rooms New regulation requiring that ten percent of the total number of parking spaces on a building site support future Level 2 EVSE, the installation of EV ready spaces for twenty-five percent (25%) of the total number of parking spaces equipped with low power Level 2 EV charging receptacles, and clarification that no more than one receptacle must be installed per dwelling unit.
4.106.4.2.2 Multifamily development projects with 20 or more dwelling units, hotels and motels with 20 or more sleeping units or guest rooms New regulations requiring that ten percent (10%) of the total number of parking spaces on site support future Level 2 EVSE; the installation of EV-ready spaces for twenty-five percent (25%) of the total number of parking spaces equipped with low power Level 2 EV charging receptacles; and five percent (5%) of the total number of parking spaces shall be equipped with Level 2 EVSE. The use of an ALMS is allowed when low-power Level 2 EV charging receptacles or Level 2 EVSE are installed beyond the minimum required.
4.106.4.2.2.1 Electric vehicle charging stations (EVCS) Added requirements for space location and dimensions, with a reference to the California Building Code to address accessibility.
4.106.4.2.3 EV space requirements
Amended requirements for single and multiple EV spaces, and added a requirement for EV-ready space signage.
52 4.106.4.3 Electric vehicle charging for additions and alterations of parking facilities serving existing multifamily buildings
Expanded EV charging infrastructure for additions and alterations triggered when new parking facilities are added, or electrical systems or lighting of existing parking facilities are added or altered, and the work requires a building permit. The new regulation requires that 10 percent (10%) of the total number of parking spaces being added or altered be EV capable to support future Level 2 EVSE.
4.410.1 Operation and maintenance manual
Amended existing Item 11 to add Department of Forestry and Fire Protection, and added a new Item 12 to require that the operation and maintenance manual contain information and/or drawings identifying the location of grab bar reinforcements.
Chapter 5 – Nonresidential Mandatory Measures
Building Standards Commission and Division of the State Architect
5.106.5.2 Designated parking for clean air vehicles
Repealed the mandatory requirement for designated parking for clean air vehicles.
5.106.5.3 Electric vehicle (EV) charging and subsections Amended to increase the EV capable space percentages and add a new requirement for installed Level 2 or DCFC chargers.
5.504.4.7 Thermal insulation
Relocated thermal insulation from voluntary to mandatory and added verification of compliance.
5.504.4.8 Acoustical ceilings and wall panels
Relocated acoustical ceilings and wall panels from voluntary to mandatory along with verification of compliance.
Building Standards Commission
5.106.5.4 Electric vehicle (EV) charging: medium-duty and heavy-duty and subsections
Added new regulations for electric vehicle charging readiness requirements for new construction of warehouses, grocery stores and retail stores with planned off-street loading spaces.
Division of the State Architect – Structural Safety
5.506.3 Carbon dioxide (CO2) monitoring in classrooms
Added new requirement for carbon dioxide monitors in classrooms only in new building construction, and not alterations and additions.
53 5.106.12 Shade trees and subsections
Amended exceptions for surface parking and hardscape areas to provide clarity that excepted play areas for organized sports activities, such as basketball courts, are removed from the total area calculation of the hardscape areas on the campus.
Chapter A4 – Residential Voluntary Measures
California Energy Commission
A4.2 Energy efficiency
A4.201.1 Scope
Updated and provided a new web link to the CEC website.
A4.203.1.1 Hourly source energy design rating (EDR1) and Table A4.203.1.1 Updated for EDR1 margins for climate zones.
A4.203.1.2.3 HERS – Verified compact hot water distribution system and A4.203.1.2.4 HERS – Verified drain water heat recovery
Amended to add details for compliance.
A4.203.1.2.5 High performance vertical fenestration, A4.203.1.2.6 Heat pump water heater demand management, A4.203.1.2.7 Battery storage system controls and A4.203.1.2.8 Heat pump space and water heating Added as prerequisite options to standardize phrasing to remove unneeded references to HERS verification and to apply a broader range of equipment types and construction performance approaches to meet the overall requirements.
A4.203.1.3 Performance standard (repealed), A4.203.1.3.1 Tier 1 (repealed), A4.203.1.3.2 Tier 2. (repealed) and A4.203.1.3 Consultation with local electric service provider (renumbered)
Sections repealed and amended to remove reference to CALGreen tiers and to recommend consultation with a local electric service provider for jurisdictions considering reducing the Energy Design Rating (EDR) target when using solar PV systems larger than required by the California Energy Code.
Chapter A5 – Nonresidential Voluntary Measures
Building Standards Commission
A5.106.5.1.1, A5.106.5.1.2, Table A5.106.5.1.1 and Table A5.106.5.1.2 Designated parking for clean air vehicles
Amended the Tier 1 and Tier 2 voluntary requirements and repealed Tables A5.106.5.1.1 and A5.106.5.1.2.
A5.106.5.3.1 and A5.106.5.3.2 Electric vehicle charging Increased voluntary EV capable space percentages.
54 A5.303.4.1 Nonwater urinal with drain cleansing action Amended to align with the new definition and California Plumbing Code.
A5.504.4.8 Thermal insulation
Amended to move Tier 2 requirements to Tier 1 (Tier 1 moved to mandatory) and verification of compliance was renumbered to A5.504.8.1.
A5.6 Voluntary Tiers and CALGreen Verification Guidelines Amend checklists affected by proposed mandatory and voluntary updates.
California Energy Commission
A5.201.1 Scope
Updated and provided a new web link to the CEC website.
55 CALIFORNIA REFERENCED STANDARDS – PART 12
Building Standards Commission
Cross Reference Table
Amended the chapter titles and associated sections in Title 24. This table serves as a non-regulatory aid to the code user.
State Fire Marshal
Chapter 12-7A, Materials and Construction Methods for Exterior Wildfire Exposure
Repealed ignition-resistant material SFM Standard 12-7A-5.
November 15, 2022
Economic Development
DATE: November 15, 2022
TO: Mayor Butt and Members of the City Council
FROM:
Gabino Arredondo, Project Manager
Craig K. Murray, Development Project Manager II
Subject:
Marina Lease Amendment and Assignment
FINANCIAL IMPACT: The City of Richmond would receive $480,000 in property transfer tax.
PREVIOUS COUNCIL
ACTION:
July 1, 2000
STATEMENT OF THE
ISSUE:
City staff is requesting authorization to approve a lease assignment with Safe Harbor Marinas (SHM MBYH, LLC)
for the operation of the Richmond Marina as requested
by the current Marina Operator Richmond Bay Marina,
LLC and as authorized under the Marina Lease. SHM
MBYH, LLC agrees to continuously operate the
Richmond Marina under an amended and restated
Agreement Lease with a balance of 33 years of the
original 55-year term.
RECOMMENDED ACTION:
APPROVE an assignment of Marina Lease to Safe
Harbors Marinas (SHM MBYH, LLC); and APPROVE an
amended and restated Marina Lease between the City of
Richmond and Safe Harbors Marinas (SHM MBYH, LLC)
for the balance of the 55-year original lease term ending June 30, 2055 – City Manager’s Office (Craig Murray
307-8188). This item was continued from the
November 1, 2022, meeting.
AGENDA
REPORT
November 15, 2022
DISCUSSION:
The original Richmond Marina lease was entered into on July 1, 2000, between the City and Richmond Bay Marina, LLC (“Original Lease”) through negotiations with the City of Richmond and the former Richmond Redevelopment Agency to operate the public operation of the Marina and its facilities. The leased facilities included buildings such as the Harbor Master Building at 1340 Marina Way South, the Boathouse at 2580 Spinnaker Way, boat launch ramp, locker, and washroom facilities, associated parking lots and 850 slip Marina with associated gangways and docks and facilities. At the beginning of the Original Lease term, Richmond Bay Marina, LLC utilized the operator Westrec and then conducted the Richmond Marina operations itself.
On May 23, 2022, Mr. David H. Clark, President of Warmington Capital Marinas, LLC, forwarded a letter to the City Attorney’s Office and City Manager’s Office stating that Richmond Bay Marina, LLC is under contract to sell one-hundred percent (100%) of its leasehold interest to SH Marinas, LLC (Safe Harbor Marinas) and is requesting that the City of Richmond, as Landlord, consent to Richmond Bay Marina, LLC assigning its interest to Safe Harbor Marinas.
Staff from the City Attorney’s Office and the City Manager’s Office conducted a series of meetings with both the proposed Buyer and Seller during the due diligence period that ended on July 10, 2022. During these meetings, there were several discussions regarding the Original Lease. Both the current and proposed operators worked to clarify obsolete and expired provisions in the Original Lease that are reflected in the draft amended and restated lease (“Amended and Restated Lease”). Attorneys from all parties reviewed these proposed modifications and the proposal to consent to Safe Harbor Marinas as the new operator.
Other than several expired or obsolete provisions in the Original Lease, the new Amended and Restated Lease is similar to the Original Lease. The Amended and Restated Lease will allow the Landlord/City to have rights to the launch ramp and up to six (6) boat side-ties at no cost or expense to the Landlord. Richmond’s Police and Fire Boats have slip space in the Marina and the Fire Department has an additional storage container for their operations.
Land Econ Group performed a financial review and analysis of the proposed Marina Lease transfer for the City Manager’s Office. Land Econ Group reviewed the financial status of the proposed new Marina Operator Safe Harbor Marinas and reviewed three marinas it operates in northern California: (1) Ballena Isle Marina in Alameda; (2) Loch Lomond Marina in San Rafael; and (3) Emeryville Marina in Emeryville. This review illustrated that Safe Harbor Marinas has displayed a pattern of making investments to improve facilities and operation. Safe Harbor Marinas was acquired by Sun Communities, a real estate investment trust, for $2.11 billion in September 2020, and acquisition of Richmond Marina appears to be one implementation of this growth strategy. Safe Harbor owns 130 Marinas with nine Marinas in California that it owns or operates, and the
November 15, 2022
economic review notes that Safe Harbor is the largest and most diversified owner and operator in the United States.
The Richmond Marina Lease transfer from Richmond Bay Marina, LLC (Original Tenant) to Safe Harbor Marinas (SHB MBYH, LLC) will transfer at $16 million, and the terms of the Original Lease remain essentially intact. The economic review notes that Richmond’s Property Transfer Tax, Measure H passed in 2018, allowing for $30 for each $1,000 in transaction amount for property transfers over $10 million, will allow for a one-time payment to the City’s General Fund of $480,000 due to the $16 million transfer price. In addition, the Possessory Interest tax on leased public property, would amount to $68,000 per year and exceeds the current tax of just under $60,000 per year based on that formula. The Original Lease requires a base minimum rent of $243,504 per year to be paid to the City, plus the City will continue to receive additional percentage income adjustments for slip, dry boat, building, parking, and other gross income each year.
City staff is requesting approval of an assignment of Marina Lease to SHM MBYH, LLC and to approve an amended and restated Marina Lease between the City of Richmond and SHM MBYH, LLC for the balance of the 55-year original lease term ending June 30, 2055.
DOCUMENTS ATTACHED:
Attachment 1 - Marina Lease – City of Richmond and Richmond Redevelopment Agency and Richmond Bay Marina, LLC July 1, 2000
Attachment 2 - Amended and Restated Marina Lease – City of Richmond and SHM MBYH, LLC October 2022
SF_DOCSI221983.17 [W97]
AGREEI\1ENT OF MARINA LEASE
by and between
the CITY OF RlCHMOND
and
RlCHMOND REDEVELOPI\1ENT AGENCY,
as Landlord,
and
RlCHMOND BAY MARINA, LLC
as Tenant
Dated: July I, 2000
Property:
Richmond Bay Marina
TABLE OF CONTENTS
ARTICLE 1. PROPERTY AND TERM OF LEASE 1
ARTICLE 2. DEFlNITIONS 3
ARTICLE 3. RENT 9
ARTICLE 4. GROSS INCOME AND AUDIT 13
ARTICLE 5. TAXES AND OTHER CHARGES 16
ARTICLE 6. INSURANCE 17
ARTICLE 7. INSURED AND UNINSURED CASUALTY 19
ARTICLE 8. ASSIGNMENT, SUBLETTING, ETC 21
ARTICLE 9. MORTGAGING OF LEASE BY TENANT 24
ARTICLE 10. MAINTENANCE 28
ARTICLE 11. CAPITAL IMPROVEMENTS 31
-------- --~_.,--- --.---'.'------ ------ --------- ,---- .'_.,'_ .•.. _- ARTICLE 12. REQUIREMENTS OF PUBLIC AUTHORITIES AND OF INSURANCE UNDERWRITERS AND POLICIES 32
ARTICLE 13. LANDLORD ACTING IN PROPRIETARY CAPACITY 33
ARTICLE 14. LANDLORD NOT LIABLE FOR INJURY OR DAMAGE 34 ARTICLE 15. INDEMNIFICATION OF LANDLORD 34
ARTICLE 16. LANDLORD'S RIGHT OF ACCESS 35
ARTICLE 17. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS 35 ARTICLE 18. PERMITTED USE 36
ARTICLE 19. DEFAULT, REMEDIES, ETC 37
ARTICLE 20. NOTICES 39
ARTICLE 21. CONDEMNATION 41
ARTICLE 22. IMPROVEMENTS 42
ARTICLE 23. CERTIFICATES BY LANDLORD AND TENANT .43
ARTICLE 24. LANDLORD'S CONSENTS .43
ARTICLE 25. SURRENDER AT END OF TERM : 43
ARTICLE 26. NO ORAL AGREEMENTS 44
ARTICLE 27. QUIET ENJOYMENT .44
ARTICLE 28. EI\TVIRONMENTALPROVISIONS .44
ARTICLE 29. INVALIDITY OF CERTAIN PROVISIONS .48
SF_DOCS\22198J.17 [W97] Page 569 of 726
ARTICLE 30. RECORDING OF MEMORANDUM 48
ARTICLE 31. REPRESENTATIONS A1\1]) WARRANTIES .48
ARTICLE 32. COVENANTS 51
ARTICLE 33. EASEMENTS 54
ARTICLE 34. MISCELLANEOUS 54
11 SF_DOCS1221983.17 [\\'97J Page 570 of 726
MARINA LEASE
This AGREEMENT OF MARINA LEASE ("Lease") is made as ofthis 1st day of July, 2000 (the "Commencement Date"), between the CITY OF RICHMOl\lJ), a municipal corporation of the State of California ("City"), and RICHMOND REDEVELOPMENT AGENCY, a public body corporate and politic ("Agency") (collectively, "Landlord"), and RICHMOND BAY MARINA, LLC, a Delaware limited liability company ("Tenant"). It is hereby mutually covenanted and agreed by and between the Parties hereto that this Lease is made upon the foregoing and upon the agreements, terms, covenants and conditions hereinafter set forth.
ARTICLE 1.
PROPERTY AND TERM OF LEASE
Section 1.01 Property. Landlord does hereby demise and lease to Tenant, and Tenant does hereby lease from Landlord, all of the land described in Exhibit A (and graphically depicted in Exhibit A-I) to this Lease, together with all Improvements and fixtures located thereon and the basin which is a part thereof (collectively, the "Property"). Tenant acknowledges that the Property may be adjusted pursuant to Sections 32.05 and 32.07, and that the Property does not include any mineralintt;re$t~ under th~f1QOLofthe Inner Harbor]2ortion oftht; Prol'erty.
Section 1.02 Term. The Term ofthis Lease shall commence on the Commencement Date, and shall continue until 11:59 P.M. on the date fifty five (55) years after the Commencement Date (''Term'') unless such Term shall be sooner terminated as hereinafter provided.
Section 1.03 Rights and Obligations With Respect To Certain Additional Property. In addition to the leasing of the Property to Tenant under Section 1.01, the Parties agree that this Lease establishes certain rights and obligations with respect to certain real and personal property within and/or adjoining the Property.
(a) Landlord shall continue to control and maintain the breakwater structure and those portions of the riprap, the structural components ofthe riprap shoreline, and the esplanade within or contiguous to the Property, as set forth in Section 10.03. (b) Landlord shall have the right to ingress, egress, and use of portions of the Property, for official use by itself and its invitees at the Marina, as set forth in Sections 18.03 and
18.04. (c) From the Commencement Date until December 31, 2001, or such later date as Landlord in its sole discretion shall establish, the term "Property" shall include an exclusive, revocable license to Tenant to use the area depicted on Exhibit A-I as the "Dryboat Storage Parking Area," for itself and its invitees at the Marina. During the period of Tenant's license to use the Dryboat Storage Parking Area, all the terms ofthis Lease shall be applicable thereto, including but not limited to the income and rent provisions of Articles 3 and 4, the insurance obligations of Article 6, and the maintenance obligations of Article 10, provided, however, that notwithstanding anything to the contrary in Article 8, Tenant shall not have the right to assign, sublicense, or hypothecate the Dryboat Storage Parking Area during the term of Tenant's use of such area.
1 SF_DOCSI22l983.17 [W97J Page 571 of 726
(d) Tenant shall control and maintain all gangways, gang planks and ramps leading from the shore to the floating docks and ties, and associated gates and fencing, and all the terms ofthis Lease shall be applicable thereto, including but not limited to the income and rent provisions of Articles 3 and 4, the insurance obligations of Article 6, and the maintenance obligations of Article 10.
(e) Tenant shall keep those sections of riprap shoreline that are within or contiguous to the Property free and clear of rubbish and litter, as set forth in Section 10.01. (f) Tenant shall keep the Channel Entrance, the Marina Fairway and the access channel between them free of permanent obstruction, and shall maintain an adequate depth in the Marina Fairway as set forth in Section 10.04.
(g) Landlord also hereby grants Tenant a non-exclusive right to use the Channel Entrance, the Marina Fairway and an access route between these two areas for access to the Property, and a non-exclusive right to conduct marina operations in the Marina Fairway, during the Term.
(h) Landlord hereby grants Tenant a non-exclusive easement over and across the walkways, roadways, parking areas and other realproperty which is owned by Landlord and which is depicted on Exhibit A-I as-the "Access Easement Area," for the purpose of allowing Tenant, its sublessees, agents, employees and invitees to obtain access to, and to move and circulate between, the different portions of the Property by pedestrian and vehicular means.
Tenant shall not have the right to alter any portion of the Access Easement Area or to construct any improvements thereon. If, in the course of Tenant's use of the Access Easement Area, any damage is done to grass areas, landscaped areas, paved areas or other real or personal property located in or on the Access Easement Area, then Tenant shall, at Tenant's sole cost and expense, promptly repair any and all such damage as necessary to restore the affected area to the condition that existed immediately prior to the commencement of the activities that resulted in such damage. Tenant shall defend, save harmless and indenmify Landlord from any claim for personal injury or property damage that may at any time occur or arise out of the use by Tenant, its sublessees, agents, employees or invitees of the Access Easement Area or the actions of Tenant, its sublessees, agents, employees or invitees. Landlord retains the right to fully use and enjoy the Access Easement Area, including the right of Landlord to reconfigure the Access Easement Area (including without limitation upon the sale of Parcels G and H in connection with the development of the North Shore, as contemplated by the Accommodation Agreement), to fill over or pave over any portion of the Access Easement Area, to modify the improvements within the Access Easement or to alter the Access Easement Area in any other way, provided that such alterations do not materially interfere with the access rights granted hereunder.
Section 1.04 Certain Ancillary Agreements. Concnrrently with the execution of this Lease, Landlord and Tenant shall execute the following agreements (collectively the "Ancillary Agreements"):
(a) that certain Accommodation Agreement between Landlord, Tenant and Penterra Marina Bay LLC regarding certain parking and related rights and affecting, among other property, Parcels G and H as described on Exhibit A-I;
2 SF_DOCS\221983.17 [W97J Page 572 of 726
(b) that certain Assigmnent Agreement between City and Tenant regarding the Slip Agreements for which City is landlord thereunder; and
(c) that certain Bill of Sale between City and Tenant regarding the Personal Property set forth in Exhibit B.
ARTICLE 2.
DEFINITIONS
The terms defined in this Article shall, for all purposes of this Lease and all agreements supplemental hereto, have the meanings specified below. "Accommodation Agreement" shall have the meaning set forth in Section L04(a). "Accounting Year" shall have the meaning provided in Section 4.11. "Additional Rent" shall have the meaning provided in Section 3.06. "Affiliate" shall mean, for any Person, any Person which directly or indirectly controls, is controlled by or is under common control with, such Person. "Agency" shall mean the Richmond Redevelopment Agency, a public body corporate and politic.
"Ancillary Agreements" shall have the meaning provided in Section 1.04. "Annual Minimum Rent"shall have the meaning provided in Section 3.04(b). "Annual Report" shall have the meaning provided in Section 4.09. "Assignment Agreement" shall have the meaning provided in Section L04(b). "Audits" shall have the meaning provided in Section 4.12. ''Bathvmetric Survey" means the Bathymetric Survey attached to this Lease as Exhibit E.
"Bill of Sale" shall have the meaning set forth in Section 1.04(c). "Boathouse" shall mean the building of approximately 3300 square feet located on the east shore of the Marina, as indicated on Exhibit A-I. . "Building Revenue" shall have the meaning provided in Section 4.0l(c). ''Business Day" shall mean a day of the year on which banks are not required or authorized by law or executive order to close in the State of California. "Channel Entrance" shall mean that area where the Inner Harbor meets San Francisco Bay, at the southwest comer of the Inner Harbor, as indicated on Exhibit A-I. 3 SF_DOCS\221983.17 [W97] Page 573 of 726
"City" shall mean the City of Richmond, a municipal corporation of the State of California.
"City Council" shall have the meaning provided in Section 32.01(b). "Closing Date" and such phrases as "upon the execution of this Lease" or "concurrently herewith" shall be synonymous and shall mean December F{, 2000. "Commencement Date" shall mean July 1, 2000.
"DBAW" shall have the meaning provided in Section 3.01. "Defeased DBAW Loans" shall mean DBAW loan numbers 1 - 5 (inclusive), which are fully paid offby the Initial Payment, and that portion of DBAW loan number 6 which is paid offby the Initial Payment, as shown on Exhibit C-l. "Default" shall mean any condition or event which, with giving of notice or lapse of time or both, would constitute an Event of Default as defmed in Section 19.01. "Dryboat Storage Parking Area" shall mean the area northwest of the Harbormasteri3nilding-and north-of1:he-Ford-AssemblyBuilding; as showlrin-Exhibit-A~l and used as of the Commencement Date for the long-term storage of watercraft, or such other area of the Property as Landlord and Tenant may agree shall serve as an area for the long-term storage of watercraft.
"Environmental Clainr" shall mean any complaint, summons, citation, notice, directive, order, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication from any governmental authority, or any third party involving any violation of any Environmental Law or any Release of any Hazardous Material. ''Environmental Law" shall mean any federal, state or local law, statute, ordinance or regulation, now or hereafter in effect, and in each case as amended or supplemented from time to time, and any judicial or administrative interpretation thereof, including, without limitation, any judicial or administrative order, consent decree or judgment, relating to the regulation and protection of human health, safety, the environment and natural resources (including, without limitation, ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws shall include without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.) ("CERCLA"); the Hazardous Material Transportation Act, as amended (49 U.S.C. § 180 et seq.) ("HMTA"); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. § 136 et seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.c. § 6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as amended (42 U.S.C. § 2601 et seq.) ("TSCA"); the Clean Air Act as amended (42 U.S.C. § 7401 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.c. § 1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et seq.); and the Safe Drinking WaterAct as amended (42 U.S.C. § 3001 et seq.), and their state and local counterparts or equivalents, all as amended from time to tinre, and any transfer of ownership notification or approval statutes.
4 SF,DOCS\221983.17 [W97] Page 574 of 726
"Environmental Liabilities and Costs" shall mean, collectively, all obligations. losses, liabilities (including strict liability), damages, punitive damages, consequential damages, treble damages, costs and expenses (including, without limitation, all fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any Release or threatened Release of any Hazardous Material, any Remedial Action, any Environmental Claim or any violation of any Environmental Law.
"Environmental Lien" shall mean any lien in favor of any governmental authority for any Environmental Liabilities or Costs.
"Event of Default" shall have the meaning provided in Section 19.01. "Gross Income" shall have the meaning provided in Section 4.01. "Guaranteed Debt Service Rent" shall have the meaning provided in Section 3.09. ''Harbormaster Building" shall mean the building of approximately 3000 square feet located on the west shore of the Marina, as indicated on Exhibit A-I. --- -"Hazardous Nlalerial" shalEnean any -miliilifable explosive, as1:leslos;-radioactive material, hazardous waste, toxic substance or related injurious material whether injurious by itself or in combination with any other material, any substances defined as a "hazardous substance", "hazardous material", or "toxic substance", in CERCLA, HMTA or RCRA, and any substances defined as a "hazardous waste" in Section 25117 of the California Health and Safety Code or as a "hazardous substance" in Section 25316 of the California Health and Safety Code; or in any regulation adopted or publication promulgated pursuant to any Environmental Law. "Improvements" shall mean, collectively, all floating docks and ties, buildings, improvements, structures and fixtures now existing or at any time hereafter erected, constructed, affixed or attached to or placed in or placed upon the Land or the basin, whether ovmed by Tenant or Landlord, or used for or adapted to in any way the use, enjoyment, occupancy and operation of the Land or the buildings, improvements and structures thereon, and any and all alterations, renewals and replacements thereof, additions thereto and substitutes therefor, and shall include but not be limited to the Harborrnaster Building, the Boathouse, and the two (2) restroom buildings existing on the Property as of the Commencement Date, but shall exclude all fixtures (and all personal property and equipment) that is the property of Slip Tenants. "Initial Payment" shall have the meaning provided in Section 3.°1. "Inner Harbor" shall mean the Richmond Inner Harbor as shown on Exhibit A-I. . "Institutional Lender" shall mean (whether acting individually or in a representative, proprietary or fiduciary capacity, or as a general partner, or affiliate of any entity acting in such capacity), a nationally recognized bank, savings bank, investment bank, savings and loan association, commercial bank or trust company, real estate investment trust, or any combination of such entities, which, together with its Affiliates, has a net worth of Five Hundred Million Dollars ($500,000,000) or more. The participation or securitization of a loan by an 5 SF_DOCS\221983.17 [W97J Page 575 of 726
Institutional Lender shall not give rise to any requirement that each lender participating in such participation or securitization itself be an Institutional Lender, so long as (a) at the inception of the loan, the originating agent lender is an Institutional Lender, and (b) at the time of any subsequent assignment of the loan, the assignee and agent lender is an Institutional Lender.
Banc of America Commercial Finance Corporation ("BACFC") shall be deemed an Institutional Lender.
"Land" shall mean the parcels of land described in Exhibit A and graphically depicted in Exhibit A-I.
"Landlord" shall mean Agency and City, whether collectively or individually, and their successors and assigns. Where any provision of this Lease requires Tenant to obtain the consent of Landlord, consent must be obtained from each of Agency and City. Notwithstanding the foregoing, Tenant's obligation to make payments to "Landlord" shall be satisfied by Tenant's payment of such payments to either of Agency or City, provided that written notice of such payment, including the amount of same, is provided to the other Landlord party. The liability of Agency and City for the obligations of Landlord hereunder shall be joint and several, except for any environmental liabilities of Landlord, which, subject to Section 28.06, shall be the sole obligation of Agency.
"Landlord's Agents" shall mean Landlord's agents, officials, employees, contractors, licensees or invitees.
"Landlord's Maintenance Fund" shall have the meaning provided in Section 10.02.
"Landlord's Maintenance Propertv" shall have the meaning provided in Section 10.03.
"Laws" shall mean all applicable laws, statutes, ordinances, resolutions, regulations, proclamations, orders or decrees of any municipal, county, state or federal government or other governmental or regulatory authority with jurisdiction over the Property, or any portion thereof, whether currently in effect or adopted in the future and whether or not in the contemplation of the Parties.
"Lease" shall mean this Agreement of Lease and all amendments made in compliance herewith.
"Leasehold Mortgage" shall mean any mortgage or deed of trust created by Tenant and constituting a lien on the Improvements and the leasehold interest ofTen ant hereunder.
"Leasehold Mortgagee" shall mean an Institutional Lender who is the holder at the time of any Leasehold Mortgage (including the trustee under a deed of trust). "Live Aboards" shall have the meaning provided in Section 32.02. "Losses" shall have the meaning provided in Section 11.02. 6 SF_DOCS\221983.J7 [W97] Page 576 of 726
"Marina" shall be interchangeable with "Property."
"Marina Fairway" shall mean a strip of property within the Remainder Inner Harbor, immediately south of and abutting the Property, of fifty-five (55) feet in width as indicated in Exhibit A-I.
"Minimum Rate" shall mean the minimum amounts required to be charged to Slip Tenants for Slip Rates under California Harbor & Navigation Code § 71.8(a)(5) and (c). "Qther Income" shall have the meaning provided in Section 4.01(e). "Parking Revenue" shall have the meaning provided in Section 4.01(d). "Partial Taking" shall mean a taking, for any public or quasi-public purpose by a lawful power or authority by the exercise of the power of condemnation or by agreement under threat thereof, which does not qualifY as a Total Taking as defmed. "~" shall mean Tenant or Landlord (collectively, "Parties"). "Percentage Rent" shall have the meaning provided in Section 3.03. ''Periodic Rent" shall have the meaning provided in Section 3.02(a). "Person" shall mean a corporation, an association, a partnership, a joint venture, a limited liability company, an association, a joint stock company, an estate, a trust, any other legal entity, or an individual. Without exception to the foregoing, each of Agency, City and Tenant shall be a Person.
"Personal Property" shall mean the personal property identified on Exhibit B. ''Property'' shall mean the Land, the Improvements, and the Personal Property, and shall be interchangeable with "Marina."
"Proposed Sublease" shall have the meaning provided in Section 8.02(b). "Proposed Transfer" shall have the meaning provided in Section 8.02(a). "Quarterly Minimum Rent" shall mean one-fourth (1/4) of Annual Minimum Rent, as provided in Sections 3.03(a) and 3.04(a).
"Quarterly Report" shall have the meaning provided in Section 4.09. "Release" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous Material (including without limitation the abandonnient or discarding of any barrel, container or other closed receptacle containing any Hazardous Material) into the indoor or outdoor environment. "Remainder Inner Harbor" shall mean the area within the Richmond Inner Harbor lying beyond the boundaries of the Property, as shown on Exhibit E. 7 SF_DOCS\221983.17 [W97] Page 577 of 726
"Remedial Action" shaH mean aH actions taken to (a) investigate, clean up, remove, remediate, contain, treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a Release or threatened Release of Hazardous Materials so they do not migrate beyond the boundaries of the Property or endanger or threaten to endanger publie health or welfare or the indoor or outdoor environment, (c) perform pre-remedial studies and investigations and post-remedial operation and maintenance activities; or (d) perform any other actions authorized and/or required by CERCLA, RCRA, or any other Environmental Law.
"Remedial Expenditure" shaH have the meaning provided in Section 10.02. "Remedial Schedule" shaH have the meaning provided in Section 10.02. "Rent" shall mean Periodic Rent and Additional Rent, collectively. "Restructured DBAW Loans" shall mean (i) that portion of DBAW loan number 6 which is not paid off and remains outstanding after the application of the Initial Payment, (ii) DBAW loan numbers 7 and 8, no portion of either of which is paid off by the Initial Payment, as shown on Exhibit C-2, and (iii) a new DBAW loan of up to $1,500,000.00 and entered on or before December 31,2000, for purposes of Landlord's ciredging the Channel Entrance.
"Security Deposit" shall have thil meaning provided in Section 3.1O(a). "Slip Agreement" shall mean a lease or a license to a slip at the Marina. "Slip Income" shall have the meaning provided in Section 4.01(a). "Slip Rate" shall mean the then-current schedule of fees charged by Tenant to Slip Tenants for slips at the Marina, as provided in Section 32.01(b). "Slip Tenant" shall mean any Person who occupies a slip at the Marina (including without limitation end-ties and side-ties) subject to a Slip Agreement. "Storage Income" shall have the meaning provided in Section 4.01 (b). "Taxes" shall have the meaning provided in Section 5.01. "Tenant" shall mean Richmond Bay Marina, LLC, a California limited liability company.
"Tenant's Agents" shall mean Tenant's agents, managers, officers, directors, employees, contractors, lessees, licensees and invitees. "Tenant's Estate" shall mean all of Tenant's leasehold interest in the Property under this Lease.
"Term" shall have the meaning provided ill Section 1.02. 8 SF_DOCS\221983.17 [W97] Page 578 of 726
"Total Taking" shall mean the taking of all or substantially all of the Marina for any public or quasi-public purpose by a condenming authority by the exercise of the power of condemnation or by agreement under threat thereof. The phrase "substantially all of the Marina" shall mean such portion of the Marina as, when so taken, would leave a remainder parcel or parcels which, due either to the area so taken or the location of the portiones) so taken in relation to the portiones) not so taken, would not under then existing economic conditions, zoning laws, and building regulations, readily accommodate the economic operation of the Marina, as determined by Tenant in its reasonable discretion.
"Unavoidable Delay" shall mean any delay due to strike, lockout, act of God, inability to obtain labor or materials due to governmental restrictions or other shortages, enemy action, civil commotion, fIre, unavoidable casualty or other similar causes beyond the reasonable control of any Party, provided that (a) as soon as is reasonably practicable, the Party seeking to claim Unavoidable Delay gives the other Party written notice describing the particulars of the Unavoidable Delay event, (b) any resulting suspel1sion of performance is of no greater scope and of no longer duration than is reasonably required by the Unavoidable Delay event, (c) the Party uses commercially reasonable efforts to overcome or rnitigate the effects of such occurrence, and .(d) when the Party is able to resume performance of its obligations under this Lease, such Party shall give the other Party written notice to that effect and shall promptly resume performance under- this Lease. The payment of money shall never be subject to Unavoidable Delay.
ARTICLE 3.
RENT
Section 3.01 Initial Pavrnent. Upon the execution of this Lease, Tenant shall pay to Landlord the sum of Five Million Five Hundred and Twenty-Five Thousand Dollars ($5,525,000.00) (''Initial Payment"). Upon the execution of this Lease, Landlord shall pay Five Million Two Thousand Dollars ($5,002,000) of the Initial Payment to the California Department of Boating and Waterways ("DBA W") for reduction of the outstanding balance(s) of the Defeased DBAW Loans.
Section 3.02 Rent.
(a) Throughout the Term of this Lease, Tenant shall pay Landlord the following (collectively, "Periodic Rent"): (i) Annual Minimum Rent, by paying Quarterly Minimum Rent in advance of each calendar quarter and (ii) Percentage Rent, by paying Percentage Rent in arrears for each calendar quarter. All Rent, whether Annual Minimum Rent payable in advance or Percentage Rent payable in arrears, shall be paid in cash to Landlord at the address set forth in Section 20.03.
(b) Tenant shall pay Periodic Rent as follows:
(i) On or before the fIrst day of each calendar quarter, being the fIrst day of January, April, July and October of each calendar year, Tenant shall pay Quarterly Minimum Rent to Landlord. .
. (ii) Within fIfteen (15) days after the end of each calendar quarter, Tenant shall calculate its Gross Income for such quarter and resulting Percentage Rent for such calendar 9 . SF_DOCS\221983.17 [\\'97] Page 579 of 726
quarter. If the Percentage Rent so calculated for any calendar quarter is higher than the Quarterly Minimum Rent payment made at the start of that calendar quarter, Tenant shall within the same fifteen (15) day period after the end of such calendar quarter pay the difference to Landlord. If Percentage Rent for any calendar quarter is the same as or less than the Quarterly Minimum Rent payment made for such calendar quarter, Tenant shall be under no obligation to pay any additional amount to Landlord for such calendar quarter, except as set forth in Section 3.09, and neither shall Tenant be entitled to any refund or credit based on such underpayment.
(c) In the event that this Lease commences on a date other than the start ofa calendar quarter, or terminates on a date other than the end of a calendar quarter, Tenant's Quarterly Minimum Rent shall be prorated to represent the number of days in such quarter included within the Term ofthis Lease, divided by the number of days in such calendar quarter. (d) The portion of Tenant's first Quarterly Minimum Rent payment applicable to the month of December, 2000, shall be due upon the execution of this Lease. - (e) Gross Income shall be calculated on a receipts, as opposed to an accrual, basis.
Notwithstanding the foregoing, during the fust Accounting Year during the Term, Landlord shall receive credit for sums applicabletoJhe_period_before the-Co=encementDate and Tenant shall receive credit for sums applicable to the period after the Commencement Date. Accordingly, appropriate prorations shall be made with respect to (a) sums received by Landlord prior to the Commencement Date but applicable to the period after the Commencement Date (with the amounts applicable to periods before the Commencement Date being for the account of Landlord and amounts applicable to periods after the Commencement Date being for the account of Tenant) and (b) sums received by Landlord or Tenant after the Commencement Date but applicable to the period before the Commencement Date (with the amounts applicable to periods before the Commencement Date being for the account of Landlord and amounts applicable to periods after the Commencement Date being for the account of Tenant).
Section 3.03 Percentage Rent. Tenant shall pay percentage rent to Landlord based on the following percentages of the categories of Gross Income set forth in Section 4.01 (collectively, "Percentage Rent"):
(i) twenty percent (20%) of Tenant's Slip Income, plus
(ii) twenty-five percent (25%) of Tenant's Dryboat Storage Income, plus (iii) seven percent (7%) of Tenant' s Building Revenue, plus (iv) five percent (5%) of Tenant's Parking Revenue, plus (v) ten percent (10%) of Tenant's Other Income.
Section 3.04 Annual and Ouarterly Minimum Rent.
(a) "Annual Minimum Rent" for each of the first five (5) calendar years of the Term of this Lease, being the calendar years beginning on the Commencement Date and the first, 10 SF_DOCSI22J983.J7 [W97J Page 580 of 726
second, third, and forth anniversaries thereof, shall mean One Hundred Twenty Thousand Dollars ($120,000.00). "Quarterly Minimum Rent" shall always mean one-fourth (1/4) of Annual Minimum Rent.
(b) For each subsequent period of five (5) calendar years of the Term of this Lease (beginning on the fifth anniversary of the Commencement Date), Annual Minimum Rent shall be adjusted as follows: within fifteen (15) days after the end of each such period, Tenant shall calculate the average of the Percentage Rent paid for each of the three irumediately prior Accounting Years, and shall multiply this number by seventy-five percent (75%). If the resulting number is greater than the Annual Minimum Rent for the preceding five-year calendar year period, then Annual Minimum Rent for the new five-year calendar year period shall be increased to such resulting number. If the resulting number is equal to or less than the Annual Minimum Rent for the preceding five-year calendar year period, then Annual Minimum Rent for the new five-year calendar year period shall be the same as the Annual Minimum Rent for the preceding five-year period.
Section 3.05 Annual Rent Reconciliation. If Tenant's Annual Report shows that Tenant has overpaid the Percentage Rent for the immediately preceding Accounting Year, Landlord shall, within fifteen (15) days of its receipt of such Annual Report, either (a) refund the overage to - -----'f-enant-Or-(b)-deduct-the-Overage.from_Tenant's_Qllarterly..Minimum.RenLobligation foUh_e _ following calendar quarter(s), at Landlord's sole discretion. If Tenant's Annual Report shows that Tenant has underpaid the Percentage Rent for that Accounting Year, Tenant shall pay to Landlord such deficiency of Percentage Rent within fifteen (15) days after Landlord's receipt of Tenant's Annual Report.
Section 3.06 Additional Rent. Except as otherwise provided herein, Tenant shall pay and discharge, before delinquency, all of Tenant's costs, each and every expense and obligation of every kind arising from Tenant's tenancy or from Tenant's obligations under this Lease (collectively, "Additional Rent"), so that the Periodic Rent due and payable hereunder shall be absolutely "net" to Landlord.
Section 3.07 Reimbursements. Tenant shall reimburse Landlord upon demand for all costs and expenses, including reasonable attorneys' fees, reasonably paid to or incurred by Landlord in curing any Event of Default or arising out of any indemnity given herein by Tenant to Landlord.
Landlord shall reimburse Tenant upon demand for all costs and expenses, including reasonable attorneys' fees, paid or incurred by Tenant in curing any of Landlord's defaults or arising out of any indemnity given herein by Landlord to Tenant, provided that Landlord has not cured such default within forty-five (45) days (or such longer period as may be provided herein) of receipt of notice of such default from Tenant.
Section 3.08 Taxes. Tenant shall pay all Taxes as further set forth in Article 5. Reference is hereby made to California Revenue and Taxation Code § 107.6, regarding contracts between public entities and private parties that create possessory interests in real property. Tenant acknowledges and understands that this Lease may create a real property possessory interest and on that basis (among others) Tenant may be subject to real property or other taxation. Tenant covenants and agrees to pay any and all taxes (including any possessory interest tax), assessments, and other charges of any description levied or assessed against or on the Property or 11 SF_DOCS\221983.17 [W97] Page 581 of 726
the Tenant's use of the Property or any portion thereof, and any interest thereon, by any governmental agency or entity.
Section 3.09 Guaranteed Debt Service. In addition to its obligation to pay Periodic Rent as set forth in this Section, Tenant shall have an obligation to pay to Landlord, upon notice from Landjord as specified herein, any shortfall between Tenant's total Periodic Rent payments to Landlord during the first two (2) years ofthe Term following the Closing Date and Landlord's debt service obligations to DBAW under the Restructured DBAW Loans, as specified on Exhibit C-2, during such period (such shortfall the "Guaranteed Debt Service Rent"); provided, however, that the Guaranteed Debt Service Rent shall not exceed a total of One Hundred Eighty Thousand Dollars ($180,000) for such two (2) year period. IfLandlord determines that it is owed any Guaranteed Debt Service Rent, Landlord shall provide Tenant with a written demand for payment of the specified amount of Guaranteed Debt Service Rent within fifteen (15) days after each of the first and second anniversaries of the Closing Date. Tenant shall pay the amount specified by Landlord as Guaranteed Debt Service Rent within fifteen (15) days of Tenant's receipt of such written demand. Tenant shall not be liable for any Guaranteed Debt Service Rent in connection with any debt service obligations of Landlord to DBAW incurred on or after the .Closing Date and not part ofthe Restructured DBAW Loans, as specified in Exhibit C-2. --""'S'ectiun-3:1:0 :SS~ect<!urrni!·tvy·lf)~e;rPfQomsil!t.:------------------------- (a) Upon the execution ofthis Lease, Tenant shall provide Landlord with a payment in immediately available funds of Sixty Thousand Dollars ($60,000.00) ("Security Deposit").
The Security Deposit shall be invested in the Local Agency Investment Fund. All interest on the Security Deposit shall accrue for the benefit of Tenant, and shall be added to the Security Deposit at such regular times as may be standard for such investments, but in no instance less frequently than annually nor more frequently than monthly. No trust or fiduciary relationship is created hereby between Landlord and Tenant with respect to the Security Deposit. The funds of the Security Deposit shall at all times be accounted for separately from all other deposits of Landlord, except in the event of Landlord's use of all or a part of the Security Deposit and accrued interest, ifany, as a result of Tenant's breach ofthis Lease. In the event that Landlord uses any portion of the Security Deposit as a result of Tenant's breach, Tenant shall immediately deposit funds sufficient to restore the Security Deposit to the amount existing immediately prior to such Landlord use or withdrawal, as adjusted from time to time for the accrual of interest. (b) If Tenant performs all of its obligations under this Lease, the entire amount of the Security Deposit at the time of termination of this Lease plus accrued interest, if any, or so much thereof as has not been applied by Landlord, shall be returned to Tenant within thirty (30) days following the termination ofthis Lease.
Section 3.11 Late Fee. If any payment due under this Lease is not paid to Landlord within 5 Business Days of when due, a late charge of five percent (5%) of the payment shall be added to the amount outstanding and shall become immediately due and payable to Landlord. An additional charge often percent (10%) per annum on said payment (excluding late charges), or the highest lawful interest rate permissible under state and federal law, whichever is lower, shall be added to the unpaid balance for each additional day that said payment remains unpaid, commencing on the due date.
12 SF,DOCS\221983.17 [W97]
ARTICLE 4.
GROSS INCOME AND AUDIT
Section 4.01 Gross Income. As used in this Lease, the term "Gross Income" shall include all gross income received by Tenant from the Property, including without limitation the following:
(a) Slip Income: All charges levied upon Marina users, whether for cash or credit (but if on credit, Tenant will receive an offset if any portion thereof is not paid) including but not limited to, berthing fees, live-aboard fees charged to Live Aboards, guest docking fees and any penalties levied for delinquent user payments whether levied by Tenant, its agents, sublessees, licensees and/or concessionaires;
(b) Storage Income: All charges levied upon Marina users and all others who store or access boats stored in the Dryboat Storage Parking Area or at any other location on the Property, whether for cash or credit (but if on credit, Tenant will receive an offset if any portion thereof is not paid), and including but not liffiited to periodic fees, rents, maintenance charges, utility charges and any penalties levied for delinquent user payments whether levied by Tenant, its agents, sublessees, licensees and/or concessionaires, and including any income from subleases and/or operating agreements relating to such Dryboat Storage Parking Area or other boat storage ~----- facility-or-facilities-twhetb.er-ifl~additiGIl-tG-{)r-in~plaG8{3f-the-0rigmal-Dry~()at--£t~mge-l'.arking Area);
(c) Building Revenue: All other charges received by Tenant, directly or indirectly, from users of the Marina or of the Improvements (other than parking lots, structures, or facilities), including but not limited to locker fees, storage fees, key fees, office rents and other fees associated with the use of the Harbormaster Building or the Boathouse; (d) Parking Revenue: All charges received by Tenant, directly or indirectly, from users of any parking lot, structure, or facility within the Property, whether existing at the time of the execution of this Lease or constructed during the Term of this Lease; and (e) Other Income: (i) All of Tenant's interest, and limited solely to Tenant's interest, in sums deposited in any coin-operated vending machine or other device maintained on the Property, regardless of the ownership of the machine or device, or whether such sums are removed or counted by Tenant or others; (it) All of Tenant's income from launch fees, haul-out charges, battery charges, pump-outs and other incidental services provided by Tenant; (iii) All of Tenant's incidental sales of goods, wares, products and/or merchandise and the total selling price of all services sold or rendered by Tenant in, on, upon, through or from the Property, whether for cash or credit and if on credit whether or not paid, minus cost of goods sold; (iv)AlI of Tenant's income from any sailing, diving, boating or other schools or clas.seswhich may be established; (v) All of Tenant's payments received from Slip Tenants for utilities and other common area maintenance charges, to the degree such payments exceed the cost to Tenant of such utilities and charges; and (vi) All of Tenant's sales of gasoline, diesel fuel or other fuel from any facilities which may be established for such fuel services if applicable, minus cost of to Tenant of such fuel sold. .
Section 4.02 Exclusions from Gross Income. Gross Income shall not include:
13 SF_DOCS\221983.17 [W97] Page 583 of 726
(a) Sales or excise taxes paid by Tenant to Federal, State, County, or Municipal governments as a direct result of operations under this Lease; (b) Refunds for goods returned, and refundable deposits; (c) Tenant-originated gift certificates (until and unless redeemed); (d) Tenant's transfer of merchandise, furniture, fixtures or equipment not in the ordinary course of business (not including berths which, if removed by Tenant, shall be replaced);
(e) Tenant's donation of merchandise to benefit charitable organizations; (f) Insurance proceeds, except to the extent such proceeds derive from business interruption or similar insurance that is intended by the Parties to cover Rent payments; (g) Tips and gratuities;
(h) Actual cost to Tenant for utilities and common area maintenance charges which are passed through to Slip Tenants;
------------------
(i) Actual cost to Tenant for collecting fees from and or evicting any Slip Tenant; and
G) Charges paid to financial institutions or other credit card issuers or facilitators in connection with credit card sales.
Section 4.03 Records. Tenant shall keep or cause to be kept true and complete records of all personnel matters and financial transactions conducted in the operation of its business or the perfonnance of this Lease, which records shall be kept in conformance with generally accepted accounting principles. These accounting records must be supported by source documents such as sales slips, cash register tapes, purchase invoices, or other pertinent documents.
Section 4.04 Cash Register. All sales and charges shall be recorded by means of cash registers or other comparable devices which display to the customer the amount of the transaction and automatically issue a receipt. The registers shall be equipped with devices which lock in sales totals and other transaction records, or with counters which are not resettable and which record transaction numbers and sales details. At the beginning and end of each business day, Tenant shall read and record the sales total on each register. Exceptions to the use of cash registers of the type mentioned above must be approved in writing by Landlord.
Section 4.05 Admission Charges. In the event of admission charges or rents, either as a universal practice or for special events, Tenant shall issue serially numbered tickets for each such admission or rent and shall keep an adequate record of said tickets, both issued and unissued.
The admission charges received by Tenant shall be considered Qther Income.
Section 4.06 Slip Agreements. All Slip Agreements of berths or slips to Slip Tenants shall, to the extent practicable, be documented by written leases which, at a mininlum, set forth the tenn 14 SF_DOCS\221983.17 [W97] Page 584 of 726
of such agreement, the Slip Tenant's payment obligations thereunder and the Slip Tenant's name, address, vessel identification and vessel size.
Section 4.07 Location of Records. The financial and accounting records described in this Article 4, including sales slips, cash register tapes, purchase invoices, berth leases and all banki)lg deposit tickets, statements and any other banking records, and all records of sales, excise or luxury taxes paid or payable by Tenant for sales, fees and charges from the operation of the Property, shall be kept and made available at one location in Northern California for a period of at least six (6) years.
Section 4.08 Ouarterly Reporting. Within fifteen (15) days after the end of each calendar quarter, Tenant shall deliver to Landlord a Statement of Operations for such calendar quarter substantially in the form of, and containing the same level of detail as set forth in, Exhibit D, together with Tenant's statement of Periodic Rent, Additional Rent and capital expenditures for such calendar quarter ("Quarterly Report"). The Quarterly Report shall be accompanied by Tenant's payment of Percentage Rent for such calendar quarter.
Section 4.09 Annual Reporting. Within twenty (20) days after the end of each calendar year, Tenant shall, at its own expense, deliver to Landlord a Statement of Operations for such calendar __ _--y~auJl.bstantiall)' in the form of, and containing the same level of detail as set forth in, Exhibit D, together with Tenant's statement of Gross Income, Periodic Rent, Additional Rent and capital expenditures for such calendar year (the "Annual Report").
Section 4.10 Filing. Tenant shall file all statements and reports required under this Article 4 with Landlord. Any and all reports which Tenant is required to provide hereunder shall be prepared in accordance with generally accepted accounting principles and shall be certified as to accuracy by the managing member or executive officer of Tenant.
Section 4.11 Accounting Year. Tenant's "Accounting Year" shall be the calendar year, except for the first Accounting Year which shall begin on the Commencement Date and end on December 31, 2000.. This definition of Accounting Year shall not change unless Landlord specifically approves in writing a different Accounting Year. Landlord shall approve a change in Accounting Year only in the event of undue hardship being placed on either Tenant or Landlord, and not because of mere convenience or inconvenience.
Section 4.12 Landlord Audits. Landlord shall, through its duly authorized agents or representatives, have the right to examine and audit Tenant's accounting records for the purpose of determining the accuracy of the accounting records and the accuracy of all financial and accounting reports prepared or submitted by Tenant under this Article 4 ("Audits"). Within twenty (20) days' afterreceipt of notice by Landlord of any Audit, Tenant shall m3ke its account records available to Landlord and its representatives during normal business hours at the Property. The cost of any Audit shall be borne by Landlord, unless the audit reveals a discrepancy of greater than four percent (4%), in which case Tenant shall be responsible for the costs ofthe Audit. If the annual Gross Income shown by Tenant's Annual Report should be found to be less than the amount of annual Gross Income disclosed by an Audit and such discrepancy affects the amount Tenant owes Landlord, Tenant shall pay any delinquent amount within thirty (30) days after the date on which Landlord mails Tenant a bill therefor. 15 SF_DOCSI221983.17 [W97] Page 585 of 726
ARTICLES.
TAXES AND OTHER CHARGES
Section 5.01 PaYment Responsibility. Tenant shall pay any and all real and personal propert taxes, including, but not limited to, possessory interest taxes, general and special assessments, excis~s, licenses, permit fees and other charges and impositions of every description levied on assessed against the Property, Tenant's personal property, or any portion thereof, or Tenants w of the Property or any portion thereof ("Taxes"). Tenant shall make all such payments directly to the charging authority when due and payable and at least ten (10) Business Days prior to delinquency, subject, however, to Tenant's right to challenge or protest any Tax. With respect to real property taxes and assessments levied on or assessed against the Property for which Landlord receives the tax bill directly from the taxing authority, Tenant shall reimburse Landlord for payment of such sums within ten (10) Business Days after demand from Landlord.
Notwithstanding the foregoing, Tenant shall not be liable for any real property tax increase under Proposition 13 resulting from Landlord's sale of the Land or Improvements. Tenant recognizes and understands that this Lease may create a possessory interest subject to property taxation and that Tenant may be subject to the payment of property taxes levied on such interest.
Section 5.02 Utilities. Tenant shall payor caused to be paid, and hold Landlord free and ---~.harmless-frDm,_aILchar.ge&.iorjhc-installation,_conne.ction,Jl1aintenanD_e-.andJ'umishing.oi-.aII _ necessary utilities, utility facilities, and services from and after the Commencement Date, including but not limited to, gas, water, electricity, telephone and telecommunications services, sewage and other public utilities to the Property during the Term of this Lease and for the removal of garbage, rubbish, and weeds from the Property during the Term of this Lease.
Landlord shall cooperate, at Tenant's expense and to the extent it is able, in providing such utilities and services.
Section 5.03 Pro-Rata Taxes. Any Tax on any portion of the Property relating to a fiscal period of the taxing authority, a part of which period is included within the Term of this Lease and a part of which is included in a period of time before the commencement or after the expiration ofthe Term of this Lease, shall (whether or not such Tax shall be assessed, levied, confirmed, imposed upon or in respect of or become a lien upon the Property, or shall become payable, during the Term of this Lease) be apportioned between Landlord and Tenant on a straight-line pro-rata apportionment, provided, however, that if, at the expiration of the Term, Tenant owes Landlord any Rent hereunder, Tenant shall not be entitled to the refund of any such Tax paid by Tenant prior to such expiration, up to the amount of such Rent.
Section 5.04 Contest. Tenant shall have the right, at its sole cost and expense, to contest in good faith the amount or validity, in whole or in part, of any Tax by appropriate proceedings diligently conducted in good faith, provided that (a) Tenant gives Landlord written notice of Tenant's intention to do so at least 30 days prior to delinquency, (b) Tenant diligently prosecutes any such contest, (c) Tenant either pays the full amount of such Tax under protest or posts a bond sufficient in Landlord's reasonable judgment to at all times protect the Property against the iinposition of any lien upon any portion of the Property or this Lease and to effectively stay or prevent any non-judicial or judicial foreclosure of any such lien, and (d) Tenant pays any final judgments relating to any such Tax so contested. Landlord shall, if requested, cooperate with Tenant at any such proceedings at Tenant's sole expense but only if and so long as neither the 16 SF_DOCS\221983.17 [W97] Page 586 of 726
Property nor any part thereof would by reason of such postponement or deferment be in danger of being foreclosed, forfeited or lost. Upon the termination of such proceedings, Tenant shall pay the amount of the Tax or part thereof as fmally determined in such proceedings, the payment of which may have been deferred during the prosecution of such proceedings, together with any costs, fees (including counsel fees), interest, penalties or other liabilities in connection therewith, and upon such payment, Landlord shall return any amount deposited with it with respect to such Tax as aforesaid; provided, however, that Landlord shall, if requested by Tenant, disburse said moneys on deposit with it directly to the imposing authority to whom such Tax is payable. If at any time during the continuance of such proceedings Landlord shall reasonably determine in good faith that the amount deposited as aforesaid insufficient, Tenant shall upon demand, make an additional deposit of such additional sums or other acceptable security as Landlord reasonably may request, and upon failure of Tenant so to do, the amount theretofore deposited may be applied by Landlord to the payment, removal and discharge of such Tax and the interest and penalties in connection therewith and any costs, fees (including counsel fees) or other liability accruing in any such,proceedings, and the balance, if any, shall be returned to Tenant or the deficiency, if any, shall be paid by Tenant to Landlord on demand.
Section 5.05 No Tax Lien Foreclosure. Tenant shall immediately, and in any event prior to foreclosure, discharge by payment or bond any lien for any Taxes payable by Tenant under this ---bease--4mposed-0F-threate-fl€4-te-b~imp(Jsed-upGn-the-P-rGperty-ol'- any-pomon-thereof,ol'-Upon-. -- any equipment or other personal property located on the Property.
Section 5.06 Receipts. Upon Landlord's written request, Tenant shall, within ten (10) days after the date when any Taxes are due and payable, furnish to Landlord official receipts of the appropriate taxing authority or other evidence reasonably satisfactory to Landlord evidencing payment thereof, subject to Tenant's rights to protest and challenge as set forth in this Article 5.
Section 5.07 Closing Costs. Landlord shall pay for the legal description engineering performed prior to the execution ofthis Lease. Tenant shall pay for the survey performed prior to, and title insurance policy provided at the time of, the execution ofthis Lease.
ARTICLE 6.
INSURANCE
Section 6.01 General Provisions. Certificates and Other Requirements. (a) Tenant shall procure and maintain insurance against claims for injuries to persons or damages to the Property which may arise from or in connection with Tenant's operation and use of the Property and Improvements. The cost of such insurance shall be borne by the Tenant. (b) All insurance policies required under this Article 6 shall be satisfactory to Landlord in its reasonable discretion and shall be provided by companies having a Best's rating of "A" or better (and if Best no longer provides such ratings, an equivalent rating). '(c) Tenant shall promptly provide to Landlord and DBAWall certificates of insurance with original endorsements reflecting coverage required by this Article on or before the effective date of the Lease. Upon request, Tenant shall provide Landlord and DBAW with copies of policies.
17 SF.DOCS\221983.17 [W97] Page 587 of 726
(d) All insurance policies required under this Lease shall be in full force and effect on or before the Closing Date. As often as any such policies shall expire or terminate, renewal or additional policies shall be procured and maintained in like manner and to like extent during the term of this Lease. All policies of insurance shall provide the same shall be non-cancelable or subject to reduction in the amounts of coverage without thirty (30) days' written notice to each of Landlord and DBAW.
(e) Any deductible or self-insured retention greater than One Hundred Thousand Dollars ($100,000) must be declared to and shall be subject to the separate approval of each of City and Agency, to be granted by each in its reasonable discretion.
Section 6.02 Workers' Compensation Insurance. Tenant shall, at Tenant's ovm cost and expense, procure and maintain workers' compensation insurance in accordance with the laws of California.
Section 6.03 General Liability Insurance. Tenant shall, at Tenant's own cost and expense, secure and maintain commercial general liability insurance, written on an occurrence basis and naming each of Agency, City and the State of California as additional insureds, insuring Tenant, Tenant's Agents and Tenant's officers and employees against all bodily injury, property damage, j:lersonal injJID', and other loss or liability caused or connected with Tenant's oj:lerationand !1se--- of the Marina undiOrthis Lease in amounts not less than Five Million Dollars ($5,000,000) per injury to or death of one person and, subject to the limitation for the injury or death of one person, of not less than Eight Million Dollars ($8,000,000) for injury to or death of two or more persons as a result of anyone accident or incident. Tenant's insurance coverage shall be primary insurance as respects each of Agency and City and their officers, officials, employees and volunteers. Any insurance or self-insurance maintained by each of Agency and City and their officers, officials, employees or volunteers shall be eXcess of Ten ant's insurance and shall not contribute with it.
Section 6.04 Property Insurance.
(a) Tenant shall, at Tenant's own cost and expense, secure and maintain all risk extended form insurance coverage in an amount equal to 100% of the full replacement cost ofthe Property (including all changes in building code requirements) and Tenant's personal property and covering course of construction exposure and all risks of direct physical loss (including flood, earthquake and materials and supplies used at the site including all changes in code requirement). Any loss payable under any policy described in this Section shall be used to rebuild and/or repair the damaged portions of the Property or Tenant's personal property. The insurer shall waive all rights of subrogation against Landlord. Each of Agency and City shall be named a loss payee on all insurance policies covering casualty losses and builder's risk. (b) Tenant's obligation to secure and maintain earthquake insurance shall be conditioned upon Tenant's ability to obtain such coverage with commercially reasonable prernium cost, as determined by mutual agreement between Landlord and Tenant. If such earthquake insurance coverage should, after diligent effort by Tenant, be unobtainable at such mutually determined commercially reasonable premium cost, then Tenant shall obtain the maximum insurance reasonably obtainable at commercially reasonable premium cost (if any) 18 SF_DOCS\221983.17 [W97) Page 588 of 726
and give notice to Landlord of the extent of Tenant's inability to obtain, in full, the insurance required by this Lease, and in such event, Tenant's obligation to procure and maintain such insurance, to the extent unobtainable, shan be excused. Notwithstanding the foregoing, if at any time Tenant's Mortgagee requires Tenant to carry earthquake insurance in excess of that required by Tenant to be carried pursuant to this Section 6.04, Tenant shan carry such additional earthquake insurance for the benefit of Landlord.
Section 6.05 Business Interruption Insurance. Tenant shan, at Tenant's own cost and expense, procure and maintain during the entire term of this Lease, business interruption insurance to insure that the payments provided for in Article 3 shall be paid to Landlord for a period of up to one (1) year in the event the Property is totany or partially damaged or destroyed so as to render Tenant's business activities at the Marina impossible or impracticable, due to any cause whatsoever, include cause(s) not otherwise required to be insured against under this Lease.
Tenant shall maintain coverage based on the Annual Minimum Rent and Percentage Rent for the then current five-year period, as determined in accordance with Article 3.
Section 6.06 Automobile Insurance. Tenant shall, at Tenant's own cost and expense, secure and maintain during the entire term of this Lease, automobile insurance insuring Tenant and Tenant's employees to an amount not less than One Million Dollars ($1,000,000) combined _.---is:uinlligleJimit-PeLaccillentioLbmlily.inj~and_pmpJ':rty_damage., _ Section 6.07 Landlord's Right to Perform Tenant's Obligations. In the event of Tenant's failure to procure or renew insurance as required by this Section, Landlord may, at its discretion, procure or renew such insurance and pay all premiums in connection therewith and all monies so paid by Landlord shall be repaid by Tenant to Landlord upon demand.
Section 6.08 Waiver of Subrogation. To the extent that Landlord or Tenant purchases any hazard insurance relating to the Property (except workers' compensation insurance), the party purchasing such insurance shall obtain a waiver of subrogation from its insurance carrier, by which the insurance carrier agrees to waive all rights of recovery by way of subrogation against the other parties Lease in connection with any loss covered by such insurance policy.
Section 6.09 Adjustments. The amounts and extent of coverage of property insurance and general liability insurance policies (except workers' compensation insurance) shall be subject to adjustment every five (5) years, based on Landlord's review of such amounts and extent of coverage in consultation with its insurance advisors, and based on customary insurance requirements for facilities of size, value and operation similar to the Property and its improvements.
ARTICLE 7.
INSURED AND UNINSURED CASUALTY
Section 7.01 Repair, Replacement or Reconstruction During the First FortY-Five Years. (a) If, any time on or before December 31,2044, the Property is totally or partially damaged or destroyed from a risk covered by insurance required to be carried by Tenant hereunder, this Lease shall not terminate, and Tenant shaH, within ninety (90) days after the date of such damage or destruction, commence and diligently pursue to completion the repair, 19 SF_DOCSI22\983.17 [\\'97) Page 589 of 726
replacement, or reconstruction of the Property to substantially the same condition as it was in immediately before such damage or destruction, whether or not the insurance proceeds actually received are sufficient to cover the actual cost ofthe repair, replacement, or reconstruction. (b) If, any time on or before December 31, 2044, the Property is totally or partially damaged or destroyed from a risk not covered by insurance required to be carried by Tenant hereunder, Tenant, subject to the remaining provisions of this Section 7.0l(b), shall have the right to terminate this Lease by written notice given to Landlord within ninety (90) days after the date of such damage or destruction, which termination shall be effective thirty (30) days after the ,date of such notice, and Rent and other charges shall be apportioned as of the date of te=ination. Prior to such effective te=ination, Tenant shall remove all debris and rubble, secure the Property from trespassers, provide protections or appropriate warnings to any third parties of any dangerous conditions that may exist on the Property and to protect Landlord from attractive nuisance liability, and put the Property in a safe condition. Thereupon, this Lease shall terminate and the Parties shall have no further obligations to each other excepting those previously accrued but theretofore unsatisfied. Notwithstanding the foregoing, Tenant shall not have the right to te=inate this Lease if (a) the cost of restoration, reconstruction and repair is twenty percent (20%) or less of the replacement cost of the Property prior to such damage or destruction, in which event this Lease shall not terminate, and Tenant shall, within one hundred ----tw.enty-+1.2D;l-day,,-after-the-date-of-such-damage-OLdestruction,-commence_and-diligen1Ly-pursue_~ __~_ to completion the repair, replacement, or reconstruction of the Property to substantially the same condition as it was in immediately before such damage or destruction, whether or not the insurance proceeds actually received (if any) are sufficient to cover the actual cost of the repair, replacement, or reconstruction.
Section 7.02 Insured Losses After the First Forty-Five Years. If, at any time on or after January 1, 2045 the Property is totally or partially damaged or destroyed from a risk covered by insurance required to be carried by Tenant hereunder, this Lease shall not te=inate, and Tenant shall be required to restore, reconstruct and repair the Property, to the extent ofinsurance proceeds received by Tenant.
Section 7.03 Uninsured Losses After the First Forty-Five Years. If, at any time on or after January 1, 2045 the Property is totally or partially damaged or destroyed from any cause not covered by insurance required to be carried by Tenant hereunder, then:
(a) If the cost of such repair and replacement is less than ten percent (10%) of the replacement cost ofthe Property prior to such damage or destruction (or, if the cost of such repairs and restoration is ten percent (10%) or more ofthe replacement cost of the Property prior to such damage or destruction, but Tenant nonetheless, at its sole option, elects within thirty (30) days to restore the Property), then Tenant shall, to the extent permitted by law, and provided that Landlord provides the funds necessary to accomplish the same, perfo= the work required to restore the Property to its condition prior to the damage or destruction, and this Lease shall remain in full force and effect. Subject to Tenant's receipt of such Landlord funds, Tenant shall commence and diligently pursue to completion the repair, replacement or reconstruction of the Property within one hundred twenty (120) days of the date of such damage or destruction.
Should Landlord not provide the requisite funds, Tenant shall have the right to te=inate the Lease.
20 SF_DOCS\221983.17 [W97] Page 590 of 726
(b) In the event that (i) Landlord does not provide the requisite funds referred to in subsection (a) above, or (ii) the cost of such repair and replacement is ten percent (10%) or more of the replacement cost of the Property prior to such damage or destruction and Tenant elects not to restore, Tenant shall have the right to terminate this Lease by written notice given to Landlord within ninety (90) days after the date of such damage or destruction, which termination shall be effective thirty (30) days after the date of such notice, and Rent and other charges shall be apportioned as ofthe date of termination. Prior to such effective termination, Tenant shall remove all debris and rubble, secure the Property from trespassers, provide protection or appropriate warnings to any third parties of any dangerous conditions that may exist on the Property and to protect Landlord from attractive nuisance liability, and put the Property in a safe condition. Thereupon, this Lease shall terminate and the Parties shall have no further obligations to each other excepting those previously accrued but theretofore unsatisfied.
If Tenant terminates this lease under this Article 7, Tenant shall remit to Landlord any c_asualtyinsurance proceeds it receives. All repair, replacement, or reconstruction of the Property pursuant to this Article 7 shall be accomplished pursuant to the requirements of Article II of this Lease
Section 7.04 No Option to Terminate for Insured Casualtv. Except as stated in Section 7.03, Tenant shall have no Ol1tionto terminate this Lease or otherwise be relieved of its oblig>::a:=ti"'o=nc-=t"'o _ restore the Improvements on the Premises where the damage or destruction results from a cause required to be insured against by this Lease. Tenant hereby waives and releases its rights under the provisions ofCalifomia Civil Code §§ 1932(2) and 1933(4), it being the intention of the parties hereto that the express terms of this Lease shall control under any circumstances in which those provisions might otherwise apply.
Section 7.05 Certain Proceeds. Ifin connection with any casualty Landlord receives any insurance or other proceeds which are required to be paid to Tenant, Landlord shall deliver such proceeds to the highest priority Leasehold Mortgagee whose address has been provided to Landlord in accordance with Article 9.
ARTICLE 8.
ASSIGNMENT, SUBLETTING, ETC.
Section 8.01 Tenant's Right to Sublet and Assign.
(a) Tenant may not sel~ assign, transfer, sublease, encumber, conveyor otherwise dispose of the Tenant's interest in this Lease (including, without limitation, an assignment of this Lease Of a subletting of the Property, as an entirety or substantially as an entirety) without the prior written consent of Landlord as set forth in Section 8.03, provided, however; that with respect to Slip Agreements, Tenant shall from time to time (but not less frequently than annually) provide Landlord with its then-current form Slip Agreement, which Landlord shall approve or disapprove in its commercially reasonable discretion and, so long as such standard Slip Agreement has been approved, Tenant need not seek approval for any Slip Agreement that conforms to such then-standard form. In no event shall Tenant have the right, or attempt, to enter into any assignment, transfer, sublease or other transfer agreement which purports to extend any rights to any third party beyond the Term of this Lease. 21 SF_DOCS\221983.17 [W97} Page 591 of 726
(b) Landlord shall have the right to approve or disprove, in its sole discretion, any transaction or series of transactions (i) which would result in the cumulative transfer of more than twenty percent (20%) of any Person's ownership in or control of Tenant, as compared to the ownership structure of Tenant as of the Closing Date, or (ii) which would result in the addition, removal or replacement of one or more general partners or managing members in Tenant if Tenant is a partnership or a limited liability company or comparable entity, provided, however, that Landlord shall not have the right to approve or disapprove any transfer of any membership interest in Richmond Bay Marina, LLC to BACFC, to any subsequent holder ofBACFC's security interest ("Subsequent Holder"), to any affiliate ofBACFC or any Subsequent Holder, or to any Permitted Purchaser, which is made pursuant to the terms of those certain Assignments of Member Interest dated substantially concurrently with the date of the execution of this Lease by and between the members of Richmond Bay Marina, LLC and BACFC.
Section 8.02 Landlord Right of First Refusal. If Tenant proposes to assign, transfer or sublet fifty percent (50%) or more of its interest in this Lease at any time after January I, 2030 (a "Proposed Transfer"), Tenant shall provide Landlord with written notice of such desire and the terms upon which Tenant proposes to consummate the Proposed Transfer. Within ninety (90) days thereafter; Landlord shall provide Tenant with written notification as to whether Landlord will exercise its right of first refusal with respect to the Proposed Transfer, on the same terms as -----sseH{)rth-iR-'I'enant'-s-netiee-(Jfthe-P~BreseB-+Fansfer.-Duffilg_st!eh-Bffiety-t9Gt_Bay-jjeFied",------- Tenant shall make the Property and Tenant's books and records reasonably available for inspection by Landlord and Landlord's Agents and third parties as reasonably requested by Landlord. If Landlord either (i) fails to elect to exercise its right of first refusal within the ninety (90) day period or (ii) gives written notice that it has elected not to exercise its right of first refusal, then Tenant shall be entitled to consummate the Proposed Transfer with a third party, subject to Landlord's approval rights otherwise set forth in this Article 8, and so long as the economic terms upon which Tenant proposes to consummate the Proposed Transfer do not change and the other terms of the Proposed Transfer do not materially change from the terms initially disclosed to Landlord. If, at any time prior to the consummation of the Proposed Transfer, the economic terms upon which Tenant proposes to consummate the Proposed Transfer change or the other terms of the Proposed Transfer materially change from the terms initially disclosed to Landlord, Tenant shall so notifY Landlord and the transaction, as so modified, shall be deemed a new Proposed Transfer subject to the terms of this Section 8.02.
Section 8.03 Landlord Review. Landlord's review of any proposed assignment, transfer, or sublease under this Lease, other than Slip Agreements, shall be made according to the terms of this Section '8.03, as well as the rights set forth in Section 8.02 for Proposed Transfers. (a) Landlord's consent to a proposed assignment, transfer or sublease shall not be unreasonably withheld. In determining whether to grant or withhold consent to a proposed assignment, transfer or sublease, Tenant agrees that it is reasonable for Landlord to consider the any relevant factors. Without limiting the foregoing, Tenant agrees that it is reasonable for Landlord to consider whether:
(i) Tenant has complied with the requirements set forth in Article 8 above; 22 SF_DOCSI221983.17 [W97] Page 592 of 726
(ii) The proposed assignee or subtenant, in Landlord's reasonable judgment, has a sufficient worth, considering the financial responsibility involved; (iii) The prospective assignee or subtenant has the marina management experience necessary to perform Tenant's obligations under this Lease; (iv) Landlord has had prior negative leasing experience with the proposed assignee or subtenant;
(v) The use of the Property by the proposed assignee or subtenant will be identical to the use permitted by this Lease;
(vi) In Landlord's reasonable judgment, the proposed assignee or subtenant is engaged in a business, or the relevant part of the Property will be used in a manner, that is not in keeping with the then current standards of the Property, or that will violate any restrictive or exclusive covenant as to use of the Property or any Law; (vii) The proposed assignee or sublessee assumes in writing all of the obligations of Tenant under the Lease applicable to the portion of the Property affected by the assignment or subletting; or
(viii) Tenant is then in default of any obligation of Tenant under this Lease, and Tenant has defaulted under this Lease on three (3) or more occasions during the twenty-four (24) months preceding the date on which Tenant makes its request. (b) Tenant acknowledges that the time needed for Landlord to review a proposed assignment depends on many factors, including without limitation the complexity of the proposed transaction, the financial and other information submitted for review, and the workload of Landlord's personnel. Notwithstanding the foregoing, Landlord shall act as promptly as goverrunental processes permit in processing and acting upon a requested approval of an assignment of Tenant's interest under this Article 8.
(c) Landlord's decision either to grant or to deny consent to any proposed assignment, transfer or sublease shall not limit or affect Landlord's ability to assess independently subsequently proposed assignments, transfers or subleases. (d) Tenant shall be required to reimburse Landlord for its costs incurred in connection with the proposed assignment, whether or not Landlord ultimately grants its approval to the proposed assignment.
(e) Promptly upon Landlord's demand, Tenant agrees to furnish Landlord ,,,,ith a photostatic copy of each sublease, license and assignment made for space in the Property, including but not limited to Slip Agreements. Landlord shall have no obligation to execute any nondisturbance agreement with any proposed assignee or sublessee not approved by Landlord. (f) Tenant hereby waives any and all rights which it does or may have under California Civil Code § 1995.310 with respect to Landlord's failure to consent to a proposed assignment, transfer or sublease.
23 SF_DOCS\221983.17 [1'/97] Page 593 of 726
Section 8.04 Existing Slip Agreements. City shall execute the Assignment Agreement, pursuant to which City shall assign and transfer to Tenant, and Tenant shall assume, City's interest as landlord under the Slip Agreements (together with all deposits and prepaid rent, if any, held by City) applicable to the Property.
ARTICLE 9.
MORTGAGING OF LEASE BY TENANT
Section 9.01 Tenant's Right to Mortgage Lease.
(a) Upon not less than thirty (30) days written notice to Landlord, Tenant shall have the right, at any time and from time to time, with Landlord's written consent or approval, not to be unreasonably withheld, to mortgage and/or pledge the interest of Tenant under this Lease to one or more Institutional Lenders, provided, however, that Tenant shall not be required to provide notice to Landlord for Tenant's initial loan from BACFC. (b) Tenant agrees to furnish Landlord with a photostatic copy of each such mortgage or pledge. Until such time as Tenant provides Landlord with such a copy, Tenant shall not be able to enforce this Article against the Landlord.
(c) No mortgage anctrorpledge of tD:e interest of I enant unGer tnis tease snal1resuir-- --- in a loan to value ratio of more than seventy percent (70%) without Landlord's prior written approval.
Section 9.02 No Subordination. Landlord's rights in the Property and this Lease, including without limitation Landlord's right to receive Periodic Rent, shall not be subordinated to the rights of any Leasehold Mortgagee. Notwithstanding the foregoing, a Leasehold Mortgagee shall have all of the rights set forth in the Leasehold Mortgage, as approved by Landlord in accordance with this Article 9, to the extent that such rights are not inconsistent with the terms of this Lease, including the right to commence an action against Tenant for the appointment of a receiver and to obtain possession of the Property under and in accordance with the tenns of said Leasehold Mortgage, provided that all obligations of Tenant hereunder shall be kept current, including but not limited to the payment of Periodic Rent and curing of all defaults or Events of Default hereunder.
Section 9.03 Landlord's Covenants. Landlord agrees, for the benefit of the Tenant and of each Leasehold Mortgagee, to comply with the following provisions, all of which shall be binding on the Tenant and each Leasehold Mortgagee, as set forth herein:
(a) Landlord and Tenant shall not enter any agreement of cancellation, surrender, acceptance of surrender or modification of this Lease without the prior written consent of the Leasehold Mortgagee. This Lease shall not merge in the fee of the Property without the prior written consent of such Leasehold Mortgagee.
(b) Landlord, upon serving Tenant any notice or demand under Section 3.09, Section
4.12, Section 5.01, Section 10.05, Article 19 or Section 28.04 ofthis Lease, shall at the same time serve copies of such notice upon each Leasehold Mortgagee that has complied with the provisions of this Article 9, and no such notice or demand shall be deemed to have been served 24 SF_DOCS\221983.17 [W97] Page 594 of 726
unless and until so served upon each such Leasehold Mortgagee. Tenant shall provide the address of each Leasehold Mortgagee to Landlord, and shall be solely responsible for the accuracy thereof. Each such Leasehold Mortgagee shall have the right to remedy the Event of Default, or cause the same to be remedied, within the time allowed to Tenant therefor, plus, in the case of monetary Events of Default, an additional twenty (20) days, and in the case of non monetary Events of Default, an additional forty-five (45) days (unless such failure requires work to be perfo=ed, acts to be done, or conditions to be removed which cannot by their nature reasonably be perfo=ed, done or removed, as the case may be, within such time period, in which case no Event of Default shall be deemed to exist so long as Leasehold Mortgagee shall have commenced curing the same within such time period and shall diligently and continuously prosecute the same to completion), provided that Leasehold Mortgagee (i) expeditiously pursues its remedies as herein described, (ii) continues to pay Percentage Rent and Quarterly Minimum Rent while the cure is pending, and, (iii) continues to perfo= and/or cure all of Tenant's obligations (provided, however, that in no event shall any Leasehold Mortgagee ever be required to cure any default by Tenant under Section 31.03(b».
(c) With respect to those Events of Default the curing of which requires entry upon the Property, then (1) whenever a Leasehold Mortgagee desires to cure an Event of Default, there shall be added to the period otherwise provided to the Leasehold Mortgagee for the cure of the -------B¥6Rt-of-DefauH--th~adffitional-peFi{)Q-l1eedeciby-ihe-LeaseholdMortgagee_in-ihe-=ercise__o,J-f _ reasonable diligence to enter upon the Property, (2) whenever a Leasehold Mortgagee seeks to have a receiver appointed for the interest of the Tenant under this Lease, so as to have the receiver cure such Event of Default, then there shall be added to the period otherwise provided to the Leasehold Mortgagee for the cure of such Event of Default the additional period needed by the Leasehold Mortgagee to effect with reasonable diligence, the appointment of such receiver and the entry by such receiver upon the Property, (3) whenever a Leasehold Mortgagee elects to foreclose upon the interest of the Tenant under this Lease, there shall be added to the period otherwise provided to the Leasehold Mortgagee for the cure of such Event of Default, such additional period as is needed, in the exercise of reasonable diligence, for the effectuation of a private foreclosure sale and (4) whenever a Leasehold Mortgagee is prohibited from commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereofby any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Tenant, then there shall be added to the period otherwise provided to the Leasehold Mortgagee for the cure of such Event of Default the additional period needed by the Leasehold Mortgagee to avoid such prohibition, provided, in each case, that Leasehold Mortgagee shall have fully cured any Event of Default in the payment of any monetary obligation and shall continue to pay currently those monetary obligations as and when the same fall due and shall have cured or be in the process of curing all non-monetary Events of Default that are capable of being cured by such Leasehold Mortgagee without possession of the Property (provided, however, that in no event shall any Leasehold Mortgagee ever be required to cure any default by Tenant under Section 31.03(b». Landlord recognizes that each Leasehold Mortgagee has the right to proceed by any or a combination of the courses of action described in clauses (1), (2), (3) and (4) ofthis Section 9.03(c), and, in that event, the Leasehold Mortgagee in question shall be entitled to the maximuro cumulative period allowed by anyone such clause (but not the curoulative period of two or more such clauses added together), so long as such Leasehold Mortgagee is proceeding diligently and in good faith.
For the protection of each Leasehold Mortgagee, it is the intention of the Parties that there shall 25 SF__DOCS\22198J.17 [W97) Page 595 of 726
not be any Event of Default or condition entitling Landlord to terminate this Lease, which is incapable of being cured by a Leasehold Mortgagee upon taking possession of the Property or by any other person who acquires the interest of Tenant hereunder as a result of the foreclosure of a Leasehold Mortgage.
(d) Landlord shall accept perfonnance by, or on behalf of, any Leasehold Mortgagee who has complied with the notice provisions of Section 10.02 as if the same had been perfonned by Tenant. Such acceptance shall not thereby create any additional rights as against Landlord in such Leasehold Mortgagee, nor shall such Leasehold Mortgagee thereby be subrogated to any interest or right of Landlord.
(e) Leasehold Mortgagee shall have the right, to the extent Tenant agrees in writing, to appear in a legal action or proceeding on behalf of Tenant. (f) In the event of conflict between the rights of multiple Leasehold Mortgagees the rights of the respective LeasehoHl Mortgagees shall be determined in the order of priority of their Leasehold Mortgages.
(g) Foreclosure of the Leasehold Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the Leasehold Mortgage, or any conveyance of this Lease illTieu ofloreclosure or tfuougliOtlier appropnate proceedmgs m tlie nature thereof, from Tenant to (1) any Leasehold Mortgagee, (2) any affiliate of any Leasehold Mortgagee (a "Leasehold Mortgagee Affiliate") or (3) any third party which (A) has the marina management experience (either directly or by contract with a manager having such experience) necessary to perfonn Tenant's obligations under this Lease, (B) has a minimum net worth of at least $3,000,000 (as increased by four percent (4%) on January 1 of each calendar year, on a cumulative basis, commencing on January 1, 2002), and (C) and satisfies Landlord's requirements under Sections 8.03(a)(v) and (vii) (a "Pennitted Purchaser"), shall not, in the case of such Leasehold Mortgagee or such Leasehold Mortgagee Affiliate, require the consent of Landlord and shall not, in the case of such Permitted Purchaser, require any further consent of Landlord, or constitute a breach of any provision of, or a default under, this Lease, and upon such foreclosure, sale or conveyance, Landlord shall recognize such Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser, as the case may be, as the Tenant under this Lease.
(h) Landlord agrees that, in the event oftennmation of this Lease by Tenant or any debtor in possession, Landlord will, upon request of Leasehold Mortgagee, enter into a new lease· of the Property with the applicable Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser for the remainder of the Tenn, effective as of the date of such tennination, at the then-applicable Periodic Rentand upon the tenns, provisions, covenants and agreements as contained in this Lease with respect to the remainder of the Tenn, provided:
(i) Said Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser shall make written request upon Landlord for such new lease within thirty (30) days after the date of its'receipt of written notice from Landlord of such tennmation and such written request shall be accompanied by payment to Landlord ofall sums then due Landlord under this Lease up to date oftermination as to which Landlord has previously notified the Leasehold 26 SF_DOCS\221983.17 [W97] Page 596 of 726
Mortgagee. Landlord shal1, within ten (10) Business Days after request from any Leasehold Mortgagee, advise such Leasehold Mortgagee of the amounts then claimed by Landlord to be due under this Lease.
(ii) Said Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser shall pay to Landlord as they become due, Periodic Rent and any other amounts hereunder and, at the time of execution and delivery of said new lease, any and al1 sums which would at the time of execution and delivery thereof, be due pursuant to this Lease but for such termination, and in addition thereto, any expenses, including reasonable attorneys' fees, to which Landlord shall have been subjected to by reason of such Event of Default and termination, less the net income actually collected by Landlord subsequent to the termination of this Lease and prior to execution of the new lease as rental payments; any excess of such net income over the aforesaid sums and expenses shall be applied in payment of the Periodic Rent thereafter becoming due under the new lease.
(iii) Said Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser shan cure al1 past defaults and remedy any other conditions which Tenant under the terminated lease was obligated to perform under the terms of this Lease, whether before or after .the default or execution and delivery of a new lease.
(iv) The Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser shall have the same right, title and interest in and to the Property and Improvements thereon as Tenant had under the terminated lease, to the extent that priority of interest may be preserved by law or by the inclusion in this Lease of the right to obtain such new lease; and, notwithstanding the reference to such new lease as a "new lease" such "new lease" shall be a continuation or extension of this Lease; and in the event that any Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser shall exercise its right to such new lease, . such new lease shall be considered for al1 purposes a continuation or extension of this Lease, . without lapse or break in continuity of Tenant' s interest or of the Term, and the termination from which the right to such neW lease has arisen shall be deemed void ab initio except to the extent of terminating the rights of the then Tenant, transferring all such rights to the Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser electing the new lease, and forming the basis for such election.
(v) Landlord shall assign its interest, if any, in all applicable leases and subleases then in force for all or a portion of the Property to the Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser under the new lease and deliver to said Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser all unapplied security deposits, if any, which were delivered to Landlord and the income thereon. Such assignment shall be effective as of the termination of the terminated lease and all rights of Tenant (sublessor) thereunder shall be transferred to the new tenant.
(i) In the event any Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser becomes the Tenant under this Lease as a result of foreclosure or conveyance in lieu thereof, or under a new lease, as provided herein, such Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser shall be required, as a condition to Landlord's recognition of such party as the Tenant under this Lease, to cure all previous Events 27 SF_DOCS\221983.17 [W97] Page 597 of 726
of Default hereunder (except as set forth in Section 28.09 and except for any previous default under Section 31.03(b)) that are capable of being cured or perfonned by such transferee.
Following such cure, each such party shall be personally liable for the obligations of Ten ant under this Lease or the new lease (as applicable) only insofar as they arise during the period of time that such party remains the beneficial holder of the leasehold estate under this Lease.
G) The name of the Leasehold Mortgagee may be added as a named insured to any insurance carried by Tenant, provided insurance proceeds are first used for repair and restoration, and provided, further, that said addition has no effect upon the rights of Landlord hereunder. (k) Whenever requested in writing by any Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Pennitted Purchaser, Landlord shall, within twenty (20) days after such request, execute, acknowledge and deliver to such Leasehold Mortgagee, Leasehold Mortgagee Affiliate or Permitted Purchaser a certificate certifYing (l) that this Lease is unmodified and in full force and effect (or if there have been modifications, that this Lease is in full force and effect as modified and stating the modifications), (2) the dates, if any, to which the Periodic Rent and Additional Rent and any other sums payable with respect to this Lease have been paid, (3) the Commencement Date and expiration date of the Tenn of this Lease, (4) whether or not to the knowledge of Landlord, there are then existing any Events of Defaults under this Lease (and, if so, specifYing same), (5) whether there are any outstanding notices of Event of Default or termination, and the nature thereof, and (6) if notice of Event of Default has been given, the period remaining for the cure of said Event of Default as then estimated by Landlord. (1) The making of any Leasehold Mortgage shall not, by itself, be deemed to constitute an assignment or transfer of this Lease or of the leasehold estate, nor shall any Leasehold Mortgagee, as such, be deemed to be an assignee or transferee of this Lease or the leasehold estate so as to require such Leasehold Mortgage, as such, to assume the perfonnance of any of the terms, covenants or conditions on the part of Tenant under this Lease to be perfonned. (m) All notices to which any Leasehold Mortgagee shall be entitled under this Article from Landlord shall be sent by certified or registered mail, return receipt requested, and shall be marked LANDLORD'S NOTICE TO LEASEHOLD MORTGAGEE.
(n) Upon request, Landlord agrees to execute, acknowledge and deliver to the Leasehold Mortgagee an agreement, prepared by the Leasehold Mortgagee at Tenant's sole cost and expense, agreeing to the foregoing provisions.
ARTICLE 10.
MAINTENANCE
Section 10.01 Tenant Responsible for Maintenance and Repair. (a) Tenant assumes full and sole responsibility for the condition, operation, repair an~ maintenance and management of the Property, including paved and unpaved ground surfaces and landscaping and the gangways, gangplanks and ramps, whether or not they cross the boundary of the Property, from and after the Co=encement Date. Tenant shall make all repairs, interior and exterior, structural as well as non-structural, ordinary as well as extraordinary, foreseen or unforeseen, which may be necessary to maintain the Property and Improvements at all times in 28 SF_DOCS\221983.17 [W97} Page 598 of 726
as good condition as exists on the Commencement Date or, for those items addressed by Section 10.02, as will exist after the satisfactory completion of the work described in Section lO.02, and in a reasonably clean, safe, attractive and sanitary condition. Tenant's repair, restoration, and maintenance activities shall be performed in a manner consistent with commercially reasonable maintenance at other flIst-class marina facilities in the San Francisco Bay region. Tenant specifically agrees to provide and maintain proper containers for trash and garbage, screened from public view, and to keep the Property (including those sections of riprap shoreline that are within or contiguous to the Property) free and clear of rubbish and litter.
Landlord shall not be responsible for the performance of any repairs, changes or alterations to the Property, nor shall Landlord be liable for any portion of the cost thereof, except for repairs necessitated by the gross negligence or willful misconduct of Landlord or Landlord's Agents after the Commencement Date.
(b) Without limiting Tenant's obligations under this Section 10.01, Tenant shall each year set aside and accrue at least five percent (5%) of that year's annual Gross Income, from all categories, to repair and maintain the Property. Unspent portions of this five percent (5%) shall accumulate with, and not substitute for, the five percent (5%) maintenance set aside for any subsequent year(s). For purposes of this Section 10.01(b), the costs of Tenant's capital improvements and reasonable overhead allocable to same shall qualifYas expenditures for repair and maintenance ofthe Property.
(c) Tenant shall keep and maintain records of all expenditures and accruals pursuant to this Section 10.1 and shall provide reasonable proof of such expenditures and accruals, and lor make Tenant's records of such expenditures and/or accruals, available to Landlord, at Landlord's reasonable request.
Section 10.02 Remedial Schedule and Landlord's Maintenance Fund. (a) Tenant agrees to perform remedial maintenance work identified in a Condition Survey from Concept Marine Associates, Inc. dated March, 1998 (the "Condition Survey") or other repairs and maintenance to the existing docks comprising a portion of the Property as Tenantshall identifYto Landlord and which Landlord shall approve as specified herein. Tenant shall expend at least Five Hundred Twenty-Three Thousand Dollars ($523,000) for such remedial maintenance work ("Remedial Expenditure"). Within sixty (60) days after the Closing Date, Tenant shall provide a list of remedial maintenance activities to which it desires to apply the Remedial Expenditure (the ''Remedial Schedule"). At least eight percent (80%) of the items on the Condition Survey (as determined by cost) shall be included on the Remedial Schedule. (b) Landlord shall have thirty (30) days in which to reject or approve each item on the Remedial Schedule in its reasonable discretion. Failure of Landlord to approve any given remedial maintenance activity on the Remedial Schedule shall be deemed a rejection of such activity. Once Landlord and Tenant have agreed upon the Remedial Schedule, Tenant shall submit plans and specifications to Landlord for the remedial work. Landlord shall use reasonable commercial efforts to approve or disapprove such plans and specifications within thirty (30) days after receipt. If Landlord disapproves such plans and specifications or any portion thereof, Landlord and Tenant shall confer in good faith to reach agreement. Once Landlord and Tenant have agreed on such plans and specifications, Landlord and Tenant shall 29 SF_DOCS\221983.17 [W97] Page 599 of 726
design a mutually satisfactory payment arrangement based upon a typical construction draw arrangement, subject to the terms of this Section 10.02 and pursuant to which Landlord shall disburse progress and final payments to Tenant upon presentation of invoices, receipt of conditional and final lien waivers from Tenant and its contractors or subcontractors, as appropriate, work inspection by Landlord, sign-off by all applicable governmental inspectors and delivery of "as built" drawings for the work.
(c) Landlord has agreed to make available to Tenant Four Hundred Sixty-Three Thousand Dollars ($463,000) ("Landlord's Maintenance Fund") to offset the costs of the Tenant's Remedial Expenditure. Landlord shall not make Landlord's Maintenance Fund available to Tenant until Tenant demonstrates to Landlord that Tenant has already spent at least Sixty Thousand Dollars ($60,000) of Tenant's own Remedial Expenditure funds on the required remedial maintenance work.
(d) If the cost of completing the Remedial Schedule as initially approved is less than the amount of the Remedial Expenditure, Tenant may submit additional Remedial Schedule(s) at any time of its choosing, which lists may include previously rejected remedial maintenance activities, and Landlord shall have thirty (30) days to object to or approve each item on such additional Remedial Schedule(s) in its reasonable discretion, provided that Landlord shall be under no obligation to consider or approve any additional Remedial Schedule(s) provided to it by Tenant more than twelve (12) months after the Closing Date. Any cost of completing the Remedial Schedule that exceeds the amount of Landlord's Maintenance Fund shall be the sole responsibility of Tenant.
(e) Tenant shall use its best cornmercial efforts to complete the work on the approved Remedial Schedule(s) within six (6) months of Landlord's approval of such activity.
Section 10.03 Landlord's Maintenance. Landlord shall, at its sole cost and expense, (1) perform future breakwater repair as necessary; and (2) repair as necessary the riprap and the structural components of the riprap shoreline and the esplanade within and contiguous to the Property (each as shown in Exhibit A-I, and together with all their components, systems, members and features, "Landlord's Maintenance Property"). Landlord's future use and development of Landlord's Maintenance Property shall not materially interfere with Tenant's use of and operations at the Property as such existed on the Commencement Date. The exclusion of Landlord's Maintenance Property from Tenant's repair and maintenance obligations under this Article 10 shall not relieve Tenant from the obligation to repair and restore any damage to Landlord's Maintenance Property caused by Tenant or Tenant's Agents, their use of the Property, or by improvements constructed by or on behalf of Tenant, and Tenant hereby agrees to perform such repair or restoration work at Tenant's sole cost and expense.
Section 10.04 Dredging. To the degree required, as indicated by the Bathymetric Survey, Landlord shall dredge the Channel Entrance by December 15, 2000 to a depth of eleven (11) feet below mean lower low water ("MLLW"). Landlord shall periodically thereafter dredge the Channel Entrance and the access channel to the Marina Fainvay (but not the Marina Fairway) as needed when the floor thereof is less than eight (8) feet below MLLW. Tenant shall have responsibility for dredging the Property and the Marina Fairway to the depths required for the operation of the Marina; provided, however, that Tenant shall never dredge the Property and the 30 SF_DOCSI221983.17 [W97] Page 600 of 726
Marina Fairway beneath the floor levels shown on the Bathymetric Survey without the written consent of Landlord, which Landlord may withhold in its sole discretion.
Section 10.05 Failure to Repair by Tenant. If Tenant defaults in its obligation to make any repairs or replacements as required by this Lease, Landlord may make or arrange for such repairs or replacements, and Tenant shall reimburse Landlord for all costs associated therewith, including but not limited to the cost oflabor, overhead, materials and equipment, together with interest thereon calculated as the highest rate allowed by law or three percent (3%) over the Bank of America prime rate, whichever is lower. Landlord shall provide notice to Tenant on or prior to cornmencing action under this Section 10.05, but shall not be required to wait or to undertake additional delay therefor.
ARTICLE 11.
CAPITAL IMPROVEMENTS
Section 11.01 Capital Improvements. The Parties anticipate that Tenant will from time to time make capital improvements to the Property. Prior to undertaking any material capital improvements, whether mandatory (because .required by Tenant's obligations under this Lease (including without limitation Articles 10 and 12) or voluntary, Tenant shall provide Landlord with detailed plans and specifications for such capital improvements, together with evidence of its contractors' and subcontractors' insurance in conformity with the provisions ofthis Lease.
All capital improvements, whether mandatory or voluntary, shall be subject to, and made in compliance with, the requirements of this Article 11.
Section 11.02 Compliance. All capital improvements by Tenant or Tenant's Agents, whether voluntarily undertaken or undertaken in order to comply with Tenant's obligations under this Lease, shall be made in material compliance with all applicable permits, authorizations, building and zoning laws and with all other Laws, including Environmental Laws. Tenant shall properly dispose of any contaminated soil and other material that is Released from the Property by Tenant or Tenant's Agents as a result of construction thereon. Tenant understands and agrees that Tenant's use of the Property and alterations thereto may require authorizations, approvals or permits from governmental agencies with jurisdiction over the Property. To the extent such approvals or permits are required, Tenant shall be solely responsible for obtaining any and all such regulatory approvals, including without limitation any regulatory approvals required to be obtained from City or Agency acting in their respective governmental capacities. Tenant shall bear all costs associated with applying for, obtaining and maintaining any necessary or appropriate regulatory approval(s) and shall be solely responsible for satisfying any and all conditions imposed by regulatory agencies as part of a regulatory approval. Any fines or penalties levied as a result of Tenant's failure to comply with the terms and conditions of any regulatory approval shall be timely and promptly paid and discharged by Tenant, subject to Tenant's rights of appeal thereof, and Landlord shall have no liability, monetary or otherwise, for any such fines or penalties. Tenant shall indemnify, protect, defend and hold harmless forever .
Landlord and Landlord's Ageilts against any and all claims, demands, losses, liabilities, .damages, liens, injuries, penalties, fines, lawsu,itsand other proceedings, judgments and awards, including, without limitation, reasonable attorney and consultant fees (together, "Losses") arising in connection with Tenant's failure to obtain, maintain, or comply in all material respects with the terms and conditions of any regulatory approval, except to the extent that such Losses are 31 SF_DOCS\221983.J7 [W97] Page 601 of 726
caused by the gross negligence or willful misconduct of Landlord or Landlord's Agent. In its proprietary capacity, Landlord shall reasonably cooperate with Tenant with respect to Tenant's obligations under this Section 11.02.
Section 11.03 Landlord's Consent in Proprietary Capacity. Each of Agency and City, in addition to any right they may have to review and approve any capital improvement of Tenant in their governmental capacity, shall have the right to remove and reasonably approve all proposed capital improvements in their proprietary capacity as Landlord under this Lease. Accordingly, Tenant shall be required to obtain Landlord's prior written approval in its proprietary capacity of each capital improvement unless such capital improvement( s) cost less than an aggregate of One Hundred Thousand Dollars ($100,000.00) in a given Accounting Year and could not reasonably be expected to diminish the value ofthe Property.
Section 11.04 Disclaimer. Nothing in this Section shall be construed to obligate Tenant to make such capital improvements or repairs that are the responsibility of Landlord under Section 10.03 . herein.
Section 11.05 Sales and Use Tax. Tenant agrees to inform Landlord as to how it will determine point of sale or use for purposes of collection of California sales and use tax. To the extent legally feasible given Tenant's business operations and to the extent the same will not materially increase Tenant's cost of doing business, Tenant will adopt sales and use tax reporting procedures which will provide the Landlord the greatest benefit from the allocation of the local 1% share of California sales and use taxes. Tenant agrees to designate the City as the qualifying point of sale for all retail sales, and register such with the State of California Board of Equalization; to report properly consumer use tax; to request vendors to cooperate with Landlord with regard to vendor use tax reporting; and to request that qualified construction contractors cooperate with Landlord with regard to job site allocations of sales and use taxes. Tenant shall exercise commercially reasonably efforts to encourage all businesses that perform services or provide products at the site of Tenant's operations to obtain and maintain a Business License from City.
Section 11.06 Financial Ability. Without limiting the other requirements of this Article 11, prior to the commencement of any construction on the Property, Tenant shall provide to Landlord evidence reasonably satisfactory to Landlord of Tenants ability to satisfy the costs of such construction.
ARTICLE 12.
REQUIREMENTS OF PUBLIC AUTHORITIES AND OF INSURANCE
UNDERWRITERS AND POLICIES
Section 12.01 Tenant's Legal Compliance.
(a) Tenant shall at its own cost and expense promptly comply in all material respects with (i) any and all present and future Laws of any present or future federal, state, city, county or other authority having jurisdiction over the Property or any street, avenue or any sidewalk in front thereof or any vault in or under the same, and of any and all of their departments and bureaus, including, but not limited to all Environmental Laws and the terms, conditions and 32 SF_DOCS\221983.17 [W97) Page 602 of 726
requirements ofBCDC Permits Nos. 11-78,25-82, 11-86,6-88, M86-51 and M87-19; (ii) any and all applicable Fire Rating Bureau or other body exercising similar functions affecting the Property or requiring the removal of any encroachment or affecting the maintenance, use or occupation of the Property, whether or not the same involves or requires any structural change or addition in or to the Property, and irrespective of whether or not such changes or additions be required on account of any particular use to which the Property, or any part thereof, may be put by Tenant or Landlord; and (iii) any and all provisions and requirements of any fire, liability or other insurance policy required to be carried by Tenant under the provisions of this Lease. (b) After the Commencement Date, BCDC may require Landlord and Tenant to be co-permittees under any new BCDC permits or any amendments to the BCDC permits specified in Section 12.01(a). Each Party agrees promptly to execute and deliver such further documents and to perform such further acts as may be necessary to allow Tenant to become such a co permittee, provided that Landlord shall not be required to execute and deliver any document or to perform any act which !p.ightresult in (i) the imposition of any material liability or obligation upon Landlord, (ii) any violation of any Law or (iii) any material expansion of any rights of Tenant under this Lease beyond those contemplated by the Parties on the Commencement Date.
Section 12.02 Landlord's Compliance. Landlord shall comply in all material respects with the terms, conditions and requirements ofBCDC Permits Nos. 11-78, 25-82, 11-86, 6-88, M86-51 andM87-19.
Section 12.03 DBAW Approval. Landlord and Tenant acknowledge that the execution of this Lease requires the approval of DBAW, under California Harbors and Navigation Code § 72.
ARTICLE 13.
LANDLORD ACTING IN PROPRIETARY CAPACITY
Section 13.01 Preservation of Landlord's Governmental Capacity. Tenant understands and agrees that each of Agency and City are entering this Lease in their capacity as a property owner with a proprietary interest in the Property and not in their capacity as a governmental or regulatory agency with police powers, and any obligation(s) or restriction(s) imposed by this Lease on Landlord shall be limited to Landlord's proprietary capacity and shall not relate to, constitute a waiver of, supersede or otherwise limit or affect the governmental and regulatory capacities of Landlord, including enacting laws, inspecting structures, reviewing and issuing permits, and all of the other legislative and administrative or enforcement functions pursuant to federal, state and/or local law. Nothing in this Lease shalllim.it in any way Tenant's obligation to obtain any required approvals from City officials, departments, boards or commissions having jurisdiction over the Property, nor shall anything in this Lease be deemed a waiver of any . governmental or regulatory requirements by any City official, department, board or commission.
By entering this Lease, Landlord is in no way modifying or limiting Tenant's obligation to use the Property in accordance with all applicable Laws, as provided in this Lease, or making any representations or warranties, express or implied, regarding its present or future exercise of its governme~tal and regulatory authority with respect to Tenant or the Property. 33 SF_DOCS\221983.1 7 [W97] Page 603 of 726
ARTICLE 14.
LANDLORD NOT LIABLE FOR INJURY OR DAMAGE
.Section 14.01 Limitation on Liability. Landlord shall not in any event whatsoever be liable for any injury or damage to any property or to any person happening, on or after the Commencement Date,on, in or about the Property and its appurtenances, nor for any injury or damage to the Property or to any property belonging to Tenant or any other person which may be caused by any fire, breakage, leakage or defect or by water or rain that may leak into, issue or flow from any part ofthe Property or by the use, misuse or abuse of any ofthe structures, areas of egress or ingress, or which may arise from any other cause whatsoever, except to the extent caused by the gross negligence or willful misconduct of Landlord or Landlord's Agents or their breach of any of its representations andlor obligations hereunder.
ARTICLE 15.
INDEMNIFICATION OF LANDLORD
Section 15.01 Tenant's Indenmification of Landlord. In addition to any other indemnities to Landlord specifically provided in this Lease, Tenant shall indemnify, defend, protect, and save hannless Landlord and Landlord's Agents from and against all liabilities, suits, obligations, fines, d lll1lages, penalties, demands, claims, costs, charges and expenses, including without limitation reasonable fees of attorneys, architects and consultants, which may be imposed upon or incurred by or asserted against Landlord and arising directly or indirectly out of any of the following (except to the extent accrued prior to the Commencement Date or caused by the gross negligence or willful misconduct of Landlord or Landlord's Agent, or Landlord's breach of any of its representations andlor obligations hereunder):
(a) any work, act or event occurring on the Property or any part thereof, or any work, act or event occurring in any area adjacent to the Property and related to the activities of Ten ant or Tenant's Agents;
(b) any use, possession, occupation, alteration, repair, condition, operation, maintenance or management of the Property or any part thereof; (c) any negligence on the part of Tenant or any of Tenant's subtenants, contractors, employees, licensees or invitees;
(d) any lien or claim which may be alleged to have arisen against or on the Property. . under the laws ofthe State of California or of any other governmental authority; (e)
Lease; or
any breach by Tenant of any of its representations andlor obligations under this (f) any failure on the part of Tenant to keep, observe and perform any of the terms, covenants, agreements, provisions, conditions or limitations contained in any Leasehold Mortgage or in any subleases or other contracts or agreements affecting the Property, on Tenants part to be kept, observed or performed.
This Article 15 shall survive the expiration or termination of this Lease. 34 SF_DOCS\221983.17 [W97] Page 604 of 726
ARTICLE 16.
LANDLORD'S RIGHT OF ACCESS
Section 16.01 Access. Landlord, Landlord's Agents, and DBAW shall have the right to enter onto the Property or any portion thereof at all reasonable times and upon not less than 24 hours oral or written notice to Tenant (except in the case of emergency access by Landlord or Landlord's Agents) in order to review the condition of the Property and to perform Landlord's obligations or to exercise Landlord's rights hereunder. An emergency is any event or circumstance which poses an imminent threat to life or property.
Section 16.02 Emergency Access. In the event of emergency access, Landlord shall have the right to enter without notice and shall not be responsible for any damage or injury to any property, nor for the replacement of any such property and any such emergency entry shall not be deemed to be a forcible or unlawful entry onto or a detainer of, the Property, or an eviction, actual or constructive, of Ten ant from the Property or any portion thereof.
Section 16.03 No Liability. Landlord shall not be liable in any manner, and Tenant hereby waives any claims, for any inconvenience, disturbance, loss of business, loss of revenue, loss or profit, nuisance or any other damage arising out of Landlord's entry onto the Property, except damage resulting from the gross negligence or willful misconduct of Landlord or Landlord's agents.
ARTICLE 17.
LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS
Section 17.01 Landlord's Right to Cure Tenant Defaults. If Tenant shall at any time fail to pay any Tax in accordance with the provisions hereof, or to take out, pay for, maintain or deliver any of the insurance policies provided for herein, or shall fail to make any other payment or perform any other act on its part to be made or performed under this Lease, then Landlord, without waiving or releasing Tenant from any obligation of Tenant contained in this Lease, may (but shall be under no obligation to):
(a) pay such Tax payable by Tenant pursuant to the provisions hereof; (b) take out, pay for and maintain any of the insurance policies provided for herein; or
(c) make any other payment or perform any other act on Tenant's part to be made or performed under this Lease. Landlord may, after such notice as is provided for herein, enter upon the Property for the purpose of curing Tenant's defaults and take all such action thereon as may be necessary to effect such cure. .
All sums so paid by Landlord and all costs and expenses incurred by Landlord in connection with the performance of any such act, together with interest thereon at the highest rate allowed by law or five percent (5%) over the Bank of America prime rate, whichever is lower, from the respective dates of Landlord's making of each such payment and giving written notice of same to Tenant, shall be paid by Tenant to Landlord on demand. Any payment or performance by Landlord pursuant to the foregoing provisions ofthis Article shall not be nor be 35 SF_ DOCS\221983. 17 [W97J Page 605 of 726
deemed to be a waiver or release of the default or Event of Default of Tenant with respect thereto or of the right of Landlord to terminate this Lease, institute summary proceedings and/or take such other action as may be permissible hereunder in the event of default or Event of Default by Tenant.
ARTICLE 18.
PERMITTED USE
Section 18.01 Permitted Use. Tenant shall use, operate and manage the Property only and exclusively for the purposes of (i) berthing, fueling, and storing boats; (ii) providing berthing spaces for owners of boats who wish to reside on their boats; (iii) other uses that are generally consistent with waterfront recreation areas; and (iv) providing services related to any the activities described in subsections (i)-(iii), or any other commercially reasonable services arising in connection with operation of the Marina, such as lockers, food, beverage and goods concessionaires, and other services. Other uses, activities and programs must receive the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed.
Tenant shall provide security protections to the Premises at a level at least equal to the level customarily provided at Northern California marinas comparable to the Marina. Nothing in this Section shall be construed as Landlord's permission for uses that require a use permit or other approval by the City, unless such permit or approval is properly obtained.
Section 18.02 Limitations on Use. Tenant shall not use or occupy, nor permit or suffer the Property or any part thereof to be used or occupied for any unlawful, noisy, hazardous or illegal business, use or purpose, or for any business, use or purpose in any way in violation of any present or future Laws. Tenant shall immediately upon the discovery of any such unlawful or illegal use take all reasonable steps, legal and equitable, to compel the discontinuance of such use and to oust and remove any subtenants, occupants, licensees, invitees, or other persons guilty of such unlawful or illegal use.
Section 18.03 Landlord's Use.
(a) Landlord and their officials and employees shall have the right to use, in their official capacity, the boat launch ramp and up to six (6) boat side-ties at no cost or expense to Landlord.
(b) Landlord shall retain for its own use two storage containers located south of the Harbormaster Building, as graphically depicted on Exhibit A-I. Landlord, in its sole discretion, may remove these storage containers or relocate them beyond the Property. Tenant shall also have the right to relocate these storage containers with Landlord's prior approval, which approval shall not be unreasonably withheld.
(c) Landlord and its designees (including without limitation the Marina Bay Neighborhood Council) shall have the continuing right to use the Property, including without limitation the Harbormaster Building, the Boathouse and the docking berths for the Sea ScoutslNorthland Nautical Foundation, for public events and activities (including without limitation public water-related activities) throughout the Term. Tenant shall have the right to charge Landlord or its designees, as appropriate, for such uses and activities at the rates in effect 36 SF.DOCSI221983.17 [W97] Page 606 of 726
on the Commencement Date for the initial three (3) years of the Term. (Without limiting the foregoing, if any such use or activity is free on the Commencement Date, such use or activity shall remain free for the initial three (3) years of the Term.) After the initial three (3) years of the Term, Tenant shall have the right to charge Landlord or its designees, as appropriate, for such uses and activities at such reasonable and non-discriminatory rates as shall be set by Tenant from time to time. Landlord shall deliver a reservation notice to Tenant no less than sixty (60) days in advance of any proposed use or activity by Landlord or its designees. So long as the facility in question has not already been booked for the date and activity requested, Tenant shall use its best commercial efforts to accommodate such reservation.
(d) Landlord shall have the right to keep and maintain its "800 trunk" equipment and antenna at the Harbormaster Building throughout the Term. Tenant may from time to time, if necessary for Tenant's use or maintenance of the Harbormaster Building, request the relocation of this equipment to a different area within the Harbormaster Building or the Property; Landlord may agre()or disagree with this request in its sole and absolute discretion, and if Landlord agrees to relocate the equipment in response to such Tenant request the costs for such relocation shall be borne solely by Tenant.
Section 18.04 Public Use. The general public shall at all times have the right and ability to gain access to the shoreline of San Francisco Bay and the-Marina, as further provided in the BCDC permits applicable to the Property, the Restructured DBAW Loans, and certain Laws ofthe State of California, including California Harbors and Navigation Code § 40.
ARTICLE 19.
DEFAULT, REMEDIES, ETC.
Section 19.01 Event of Default. Each of the following events shall be an ''Event of Default" hereunder:
(a) Any action taken or suffered by Tenant under any insolvency or bankruptcy act, including the appointment of a receiver to take possession of all or substantially all of the assets of Tenant, provided that if such action is not initiated by Tenant, Tenant shall have sixty (60) days in which to terminate, set aside, or dismiss such action; (b) Any general assignment by Tenant on behalf of creditors; (c) Any vacation or abandonment of the Property by Tenant for more than thirty (30) consecutive days, except to the extent such abandonment is caused by Unavoidable Delay or by damage or destruction covered by Section 7.01 or 7.02 of this Lease; (d) Any failure by Tenant to make any scheduled monetary payment where delinquency continues for ten (10) days after the due date of the payment, or any failure by Tenant to make any unscheduled monetary payment to payment where delinquency continues for ten (10) days after Tenant's receipt ofwritten notice of such delinquency from Landlord; or (e) Any failure by Tenant to perform or comply with any other term, covenant, or condition contained in this Lease within thirty (30) days after Tenant's receipt of Landlord's written notice of default; provided, however, that if the default is of such a nature that it cannot 37 SF_DOCS\221983.17 [W97] Page 607 of 726
reasonably be cured within a thirty (30) day period, such failure shall not constitute an Event of Default so long as Tenant, after receiving such notice, begins to cure the default as soon as reasonably possible and diligently continues in good faith to take all steps necessary to complete the cure as soon as reasonably possible; provided further, however, that such default must in all events be finally cured within one-hundred twenty (120) days after Tenant's receipt of Landlord's initial notice of default.
Section 19.02 Termination of Lease. In the event of an occurrence of an Event of Default Landlord may, at its option, terminate this Lease by giving Tenant written notice, and thereupon this Lease shall cease and terminate and Tenant's rights in and to the Property shall also terminate, and Tenant shall quit and surrender possession of the Property; provided, however that such termination shall not relieve Tenant from its obligation to pay any Rent or any other sums then due and payable to Landlord hereunder or from any obligations which survive the expiration or termination of this Lease, and Landlord may recover any such Rent or other sums by any means allowed under applicable Law.
Section 19.03 Landlord's Rights and Remedies. In the event of any Event of Default or breach of this Lease by Tenant, Landlord's obligations under this Lease shall be suspended and Landlord may at any time thereafter, without limiting Landlord in the exercise of any other right or remedy at law or in equity_which Landlord may have (all remedies providedherein being non exclusive and cumulative), do anyone or more of the following:
(a) This Lease shall continue in effect so long as Landlord does not terminate Tenant's right to possession of the Property after a breach of this Lease, and Landlord may enforce all of its rights and remedies, including the right to recover Rent as it becomes due; and (b) Landlord has the remedy described in California Civil Code § 1951.4 (Landlord may continue Lease in effect after Tenant's breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations). (c) After notice as provided herein, Landlord may elect to terminate this Lease after the occurrence of any Event of Default and in such case Landlord may declare this Lease and Tenant's right to possession terminated and reenter the leased Property and remove Tenant's property therefrom and store such property for Tenant's account and at Tenant's expense. (d) Ifthis Lease terminates, Landlord shall be entitled to recover from Tenant:
(i) the worth at the time of award ofthe unpaid Rent which had been earned at the time oftermination;
(ii) the worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the arnount of such rental loss that Tenant proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid Rent for the balance oftlie Term after the time of the award exceeds the amount of each such rental loss that the Tenant proves could be reasonably avoided; and 38 SF_DOCS\221983.17 [W97] Page 608 of 726
(iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom. (e) The "worth at the time of award" of the amounts referred to in subsection (i) and (ii) of subdivision (d) shall be computed by allO\vinginterest at the highest rate then allowed by Law. The worth at the time of award of the amount referred to in paragraph (iii) of subsection (d) shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1 %).
Section 19.04 Tenant's Rights and Remedies. If Landlord defaults in the performance of its obligations hereunder, then Tenant shall be entitled to exercise all rights and remedies available to Tenant at law and equity if Landlord has not commenced curing such default within forty-five (45) days after receipt of written notice from Tenant specifying such default.
ARTICLE 20.
NOTICES
.Section 20.01 Definition of Notice. As used in this Lease, notice includes but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver and appointment.
Section 20.02 Reguirements. All notices must be in writing, except as otherwise provided in this Lease.
Section 20.03 Delivery. All notices shall be delivered via confirmed facsimile, ovemight courier, by hand delivery or by certified mail, return receipt requested, to the appropriate party at the addresses set forth below. All communications shall be deemed served upon delivery of, or if mailed, upon the first to occur of receipt or the expiration ofthree (3) days after the deposit in the United States Postal Service mail, postage prepaid and addressed to the address specified below or, if transmitted via facsimile, upon electronic confirmation of receipt; provided, however, that non-receipt of any communication as the result of any change of address or facsimile number of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication.
Notice To Landlord:
Richmond Redevelopment Agency
330 25th Street
P.O. Box 4046
Richmond, CA 94804 .
Attn: David Thompson, Redevelopment Director
510-307-8140
Fax: 510-307-8149
with a copy to:
39 SF_DOCS\221983.17 [W9J] Page 609 of 726
Office of the City Attorney, City of Richmond
City Hall, Room 330
2600 Barrett Avenue
P.O. Box 4046
Richmond,CA 94804
Attn: Malcolm Hunter, City Attorney
510-620-6509
fax: 510-620-6518
Notice to Tenant:
Richmond Bay Marina, LLC
clo Westrec Marinas
16633 Ventura Blvd. 6th Floor
Encino, CA 91436
Attn: Thomas J. Hogan
818-907-0400
fax: 818-907-1104
Notice to BACFC:
Bane of America Commercial Finance Corporation
187 Danbury Road
Wilton, Connecticut 06897
Attn: Vice President Commercial Real Estate
Bane of America Commercial Finance Corporation
187 Danbury Road
Wilton, Connecticut 06897
Attn: General Counsel
Bane of America Commercial Finance Corporation
400 Northridge Road, Suite 520
Atlanta, Georgia 30350
Notice to Other Institutional Lenders:
See Article 9
Section 20.04 Other Parties. Either Party and any Leasehold Mortgagee or Institutional Lender (including BACFC) may by notice given at any time or from time to time, require subsequent notices to be given to another individual person, whether a Party or an officer or representative, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change.
40 SF_DOCSI221983.17 [W97] Page 610 of 726
ARTICLE 2l.
CONDEMNATION
Section 21.01 Date of Condemnation. The Property or any portion thereof shall be deemed to have been taken or condemned on the earlier of (a) the date on which actual possession of the Property or such portion is acquired by the condemning authority or (b) the date on which title to the Property or such portion vests in such condemning authority.
Section 21.02 Total Taking. If a Total Taking shall occur, then this Lease shall terminate on the date of such taking and the Periodic Rent and other sums and charges herein provided to be paid by Tenant shall be apportioned and paid to the date of such taking. Ifthis Lease terminates as provided in this Section 21.02, each of Landlord and Tenant shall have the right to seek a condemnation award and such award shall be apportioned between Landlord and Tenant under then applicable Law as their interests may appear. The parties to this Lease hereby waive the provisions of Califomia Code of Civil Procedure § 1265.130. This Lease shall not terminate due to Tenant's determination that the taking involves "substantially all of the Marina" without the first priority Leasehold Mortgagee's prior written consent, unless the indebtedness of Tenant to such Leasehold Mortgagee is paid in full.
Section 21.03 Partial Taking ..
(a) If a Partial Taking shall occur, then this Lease shall terminate as to the portiones) so taken but shall remain in effect as to the portiones) not so taken; provided, however, that in such event, each of Landlord and Tenant shall execute any and all documents that may be required in order to facilitate collection of any and all condemnation awards from the condemning authority, but such award shall be apportioned between Landlord and Tenant as follows:
(i) There shall be first paid any and all reasonable fees and expenses incurred by Landlord, and then by Tenant, in connection with the collection of the award(s); (ii) Remaining proceeds, if any, shall be applied to repair, rebuild or restore any remaining part of the Improvements not taken, provided, however, that (a) if so required by either DBAW (as to Landlord's proceeds) or any Leasehold Mortgagee (as to Tenant's proceeds), such funds as may be necessary shall first be applied to the unpaid debts owed to DBAW or such Leasehold Mortgagee(s), as the case may be, followed then by the protection of Improvements as set forth in this Section 21.03(a)(ii) and (b) if required by both DBAW and any Leasehold Mortgagee, such funds as may be necessary shall be applied first to the unpaid debts of DBAW and second to the unpaid debts of such Leasehold Mortgagee(s), respectively, followed then by the protection of Improvements as set forth in this Section 21.03(a)(ii). Tenant shall perform such repair, rebuilding or restoration in accordance with the applicable requirements of this Lease; and
(iii) Remaining proceeds, if any, shall be distributed to Landlord and Tenant as if they were proceeds of a Total Taking.
(b) In the event of a Partial Taking, and from the date thereof, Annual Minimum Rent shall be reduced by a fraction, the numerator of which is the number of slips remaining at the 41 SF_DOCS\221983.17 [W97] Page 611 of 726
Marina following the taking, and the denominator of which is the number of slips existing immediately prior to the date of the Partial Taking, provided, however, at no time shall the Annual Minimum Rent be reduced below Seventy-Five Thousand Dollars ($75,000) per year, and the percentages ofthe categories of Gross Income set forth in Article 3 shall remain the same following any Partial Taking,
Section 21.04 Temporarv Taking. If a temporary taking shall occur with respect to the use or occupancy of the whole or any part of the Marina for a period greater than one hundred and twenty (120) days, for any public or quasi-public purpose by any lawful power or authority, by the exercise of the power of condemnation or by agreement under threat thereof, then Tenant shall, at its option, be entitled to terminate this Lease effective as of the commencement of such temporary taking. If the temporary taking relates to a period of one hundred and twenty (120) days or less, or if Tenant does not elect to terminate this Lease, then all proceeds and awards relating to such temporary taking (to the extent attributable to periods within the Term) shall be paid to Tenant, and Tenant's obligations under this Lease shall not be affected in any way; provided, however, that if such temporary taking shall be for a period extending beyond the expiration of the Term, Landlord shall be entitled to receive such portions thereof attributable to the period after such expiration on a straight-line pro-rata apportionment.
Section.21,05 Other_Governmental Action .. In case of any governmental action not resulting in the taking or condemnation of any portion of the Property but creating a right to compensation therefor, such as the changing of the grade of any street upon which the Property abuts, this Lease shall continue in full force and effect without reduction or abatement of Rent and the award shall be paid to Tenant.
Section 21.06 Certain Proceeds .. Ifin connection with any condemnation or conveyance in lieu thereof Landlord receives any proceeds which are required to be paid to Tenant, Landlord shall deliver such proceeds to the highest priority Leasehold Mortgagee of whose address has been provided to Landlord in accordance \vith Article 9, ARTICLE 22.
IMPROVEMENTS
Section 22,01 Ownership of Improvements. All Improvements located on the Land on the Cornmencement Date shall be the property of Landlord .. Any Improvements erected on the Property by Tenant during the Term shall be the property of Tenant during the Term, but shall become the property of Landlord upon the expiration or sooner termination of this Lease, without Landlord's payment of any consideration therefor. Notwithstanding Landlord's ownership ofthe improvements located on the Land on the Commencement Date, it is the intention of Landlord and Tenantthat Tenant shall have the right to the federal income tax depreciation on all of the Improvements, whether owned by Landlord or Tenant, during the Term.
42 SF_DOCS\221983.17 [W97] Page 612 of 726
ARTICLE 23.
CERTIFICATES BY LANDLORD AND TENANT
Section 23.01 Tenant's Certificate of Lease. Tenant agrees at any time and from time to time upon not less than ten (10) Business Days' prior notice by Landlord to execute, acknowledge and deliver to Landlord, or any other Party specified by Landlord, a statement in writing certifYing that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect as modified and stating the modifications) and the dates to which the Rent, Taxes and other amounts and charges due under this Lease have been paid, and stating whether or not to the best knowledge of Tenant Landlord is in default in the performance of any covenant, agreement or condition contained in this Lease on Landlord's part to be performed. and, if so, specifYing each such default of which Tenant may have knowledge.
Section 23.02 Landlord's Certificate of Lease. Landlord agrees at any time and from time to time upon not less then twenty (20) days' prior notice by Tenant to execute, acknowledge and deliver to Tenant, or any Institutional Lender or other approved Leasehold Mortgagee, a statement in writing certifYing that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect as modified and stating the modifications) and the dates to which the Rent, Taxes and other amounts and charges due --uuder-this-LeaseJJave.been.paid,-and-stating.w.hether.or.not, to_thebes! knowkdge_QfLl!IldLo.nL .
Tenant is in default in the performance of any covenant. agreement or condition contained in this Lease on Tenant's part to be performed, and, if so specifYing each such default of which Landlord may have knowledge.
ARTICLE 24.
LAA'DLORD'S CONSENTS
Section 24.01 Consent Not a Waiver. It is understood and agreed that the granting of any consent by Landlord to Tenant to perform any act of Tenant requiring Landlord's consent under the terms of this Lease, or the failure on the part of Landlord to object to any such action taken by Tenant without Landlord's consent, shall not be deemed a waiver by Landlord of its rights to require such consent for any further similar act by Tenant.
Section 24.02 Reasonable Modifications of Lease. Landlord shall consent to any commercially reasonable modifications of this Lease required by any Leasehold Mortgagees, provided that such modifications do not change the fundamental economic terms of the Lease or, in Landlord's sole opinion, materially adversely affect its interests under this Lease. Where Landlord's consent is so requested, Landlord shall be reasonable in its consideration. Landlord's consent is deemed denied if not given within sixty (60) days of request.
ARTICLE 25.
SURRENDER AT END OF TERM
Section 25.01 Terms of Surrender. On the last day of the Term or upon any earlier termination of this Lease, orupon a re-entry by Landlord upon the Property pursuant to Article 19 hereof, Tenant shall surrender and deliver to Landlord the Property, without any payment or allowance whatever by Landlord, (a) free and clear of all (i) lettings and occupancies other than subleases 43 SF_DOCS\221983.17 [W97) Page 613 of 726
then terminable at the option of Landlord or subleases to which Landlord shall have specifically consented, and (ii) liens and encumbrances other than those, if any, existing at the date hereof or created by Landlord or subsequent owners of the Land, and (b) in good condition and repair, as required by this Lease, ordinary wear and tear excepted. Tenant hereby waives any notice now or hereafter required by law with respect to vacating the Property on any such tennination date.
Tenant hereby waives any claim to relocation benefits available to it under California or federal law as a result of the termination of this Lease.
Section 25.02 Holdover. Tenant shall not holdover after the tennination, revocation or expiration of this Lease without the prior written approval of Landlord, which may be withheld in Landlord's sole discretion. Any unpermitted holdover shall be deemed an extension of this Lease upon a month-to-month basis upon the same terms and conditions as set forth in this Lease as such exist immediately prior to the commencement ofthe holdover period, except that Annual Minimum Rent shall be increased to one hundred twenty five percent (125%) of the Annual Minimum Rent applicable to the immediately preceding Accounting Year. In the event of any unpennitted holdover, Tenant shall be a tenant at sufferance.
ARTICLE 26.
NO ORAL AGREEMENTS
Section 26.01 Integration. This Lease contains the entire understanding of the Parties. Tenant acknowledges that there is no other written or oral understanding between the Parties with respect to the Marina. No modification, amendment, or alteration of this Lease shall be valid unless it is in writing and signed by each of the Parties.
ARTICLE 27.
QUIET ENJOYMENT
Section 27.01 Quiet Enjoyment. Landlord covenants that, if and so long as Tenant shall faithfully perform the agreements, terms, covenants and conditions hereof, Tenant shall and may (subject, however, to the exceptions, reservations, terms and conditions of this Lease) peaceably and quietly have, hold and enjoy the Property for the term hereby granted without disturbance by or from Landlord and free of any encumbrance created or suffered by Landlord, except those to which this Lease is subject and subordinate.
ARTICLE 28.
ENVIRONMENTAL PROVISIONS
Section 28.01 Tenant's Compliance. Tenant, Tenant's Agents and Affiliates shall comply with all Environmental Laws affecting the Property and shall not perform, or suffer or permit to be performed, any acts, or omit or refuse to take any required actions, in violation of Environmental Laws. In addition to the foregoing, Landlord and Tenant agree as follows:
(a) Tenant will not use the Property, nor will Tenant permit the Property to be used, for the purpose of refining, producing, storing, handling, transferring, processing, transporting, generating, manufacturing, treating or disposing of any Hazardous Material except in material compliance with all Environmental Laws and as necessary for the operation of Tenant's business 44 SF_DOCS\221983.17 [W97] Page 614 of 726
(but in no event in excess of that required for the ordinary corrunercial operations of comparable marinas).
(b) Tenant shall comply, and shall cause Tenant's Agents, Affiliates, Slip Tenants and other Persons using or occupying all or a portion of the Property with Tenant's consent or to TenaJ1t's knowledge to comply, with all Environmental Laws affecting the Property and shall notifY Landlord of any Release or any violation of any Environmental Law affecting the Property that is actually known to Tenant. Tenant shall be responsible for all Environmental Liabilities and Costs and all Remedial Actions associated with any Release or threatened Release in, over, on, under or about the Property which occurs after the Commencement Date and which is caused by Tenant or any Tenant Agent, Affiliate, Slip Tenant, or other Person using or occupying all or a portion of the Property. Without limiting the foregoing (but subject to the provisions of this Article 28), Tenant shall be responsible for all Environmental Liabilities and Costs and all Remedial Actions associated with any Release or threatened Release in, over, on, under or about the Property which occurs after the Commencement Date and which is caused by Tenant or any Tenant Agent, Affiliate, Slip Tenant, or other Person using or occupying all or a portion of the Property in the course of Tenant's construction or dredging activities. (c) Except as set forth in Section 28.01(d), Tenant shall have no liability or resRonsibilityjorEnvir0 Ill11entalI,jabilities ~d Costs arising from Hazardous Materials present in, over, on, under or about the Property on or prior to the Commencement bate ("Pre-existing Hazardous Materials"), or the migration or threatened migration of Pre-existing Hazardous Materials within the Property or from the Property onto adjacent or other third-party property, including without limitation any liability or responsibility of Landlord with respect to Pre existing Hazardous Materials under the provisions ofthe Harding Lawson Associates Final . Remedial Action Plan dated as of July 25, 1993, as amended from time to time (the "RAP"). (d) If any disturbance of Pre-existing Hazardous Materials occurs in the course of Tenant's construction or dredging activities (each a "Disturbance of Pre-existing .Hazardous Materials"), or any Environmental Claim arises as a result of a Disturbance of Pre-existing Hazardous Materials which requires Remedial Action or other compliance with Environmental Laws with respect to Pre-existing Hazardous Materials in an area larger than that affected by the Disturbance of Pre-existing Hazardous Materials (each a "Follow-On Claim"), Tenant shall be responsible for such Disturbance of Pre-existing Materials and associated Follow-On Claims as set forth below. If any Disturbance of Pre-existing Materials occurs, Tenant shall immediately notifY Landlord of such occurrence and shall promptly take all necessary Remedial Actions required to contain the Disturbance of Pre-existing Materials and inform Landlord of such actions.
(i) If the Disturbance of Pre-existing Hazardous Materials occurs in connection with Tenant's construction activities on the land portion of the Property, Tenant shall be responsible for all Environmental Liabilities and Costs associated with the Disturbance of Pre-existing Materials and all Follow-On Claims, as set forth in Article 11. (ii) If the Disturbance of Pre-existing Hazardous Materials occurs in connection with Tenant's construction activities in the water portions of the Property, and Tenant has obtained Landlord's prior written consent to such construction activities in accordance with 45 SF_DOCS\221983.17 [W97]
this Agreement and complied in all material respects with all applicable Laws in connection with such activities, Tenant shall be responsible for all Environmental Liabilities and Costs associated with the Disturbance of Pre-existing Materials; provided, however, that in such event Tenant shall not be obligated to incur more than $250,000 in costs in connection with any single Disturbance of Pre-existing Hazardous Materials and shall not be responsible for any Follow-On Claims. However, if Tenant failed to obtain Landlord's prior written consent and approval of the construction activities in accordance with this Agreement or failed to comply in all material respects with all applicable Laws in connection with such activities, then Tenant shall be responsible for all Remedial Activities required to contain the Disturbance of Pre-existing Materials and for all resulting Follow-On Claims.
(iii) If the Disturbance of Pre· existing Hazardous Materials occurs in connection with Tenant's dredging activities, and Tenant has obtained Landlord's prior written consent to dredge beneath the floor levels recorded in the Bathymetric Survey, then Tenant's responsibility for Environmental Liabilities and Costs associated with the Disturbance of Pre existing Hazardous Materials and all Follow-On Claims shall be determined by the terms of Landlord's consent.
(iv) If the Disturbance of Pre-existing Hazardous Materials occurs in ~oill1ectionwith Tenant's_dredging activities, and Tenant has not obtained Landlord's prior written consent to dredge beneath the floor levels recorded in the Bathymetric Survey; Tenant shall be responsible for all Environmental Liabilities and Costs associated with the Disturbance of Pre-existing Materials. Tenant shall be responsible for all Follow-On Claims if Tenant intentionally dredged beneath such levels, but shall not be responsible for any Follow-On Claims if Tenant negligently dredged beneath such levels.
(e) For purposes of this Section 28.01, Tenant shall be deemed to have negligently dredged beneath the floor levels recorded in the Bathymetric Survey if Tenant failed to exercise reasonable management and control over its own operations or over the contractors, subcontractors or other Tenant Agents, Affiliates or Persons engaged in such activity on Tenant's behalf.
(f) In the event that an Environmental Lien is filed against the Property or any portion thereof as a result of any act or omission for which Tenant bears responsibility under this Article 28, Tenant shall immediately notify Landlord thereof and, within thirty (30) days from the date that Tenant receives notice that said Environmental Lien has been placed against the Property or within such shorter period of time as may be required to stay the enforcement of such Environmental Lien and to ensure that no portion of the Property shall be sold pursuant to any foreclosure of any such Environmental Lien, Tenant shall either (i) pay the claim and remove the lien from the Property or any portion thereof or (ii) institute at Tenant's sole cost and expense, and acting diligently and in good faith, an appropriate legal proceeding to contest, object or appeal the validity of such Environmental Lien; provided, however, that the contest, objection or appeal with respect to the validity of an Environmental Lien shall suspend Tenant's obligation to elimin8;tesuch Environmental Lien under this paragraph pending a final determination by appropriate administrative or judicial authority of the legality, enforceability or status of such Environmental Lien.
46 SF_DOCS\221983.17 [W97J
(g) Tenant shall cause all of Tenant's Agents, Affiliates, Slip Tenants and other Persons using or occupying all or any part of the Property to comply in all material respects with the representations, warranties and covenants contained in subparagraphs (a) through (f) above.
Section 28.02 Tenant's Indemnification of Landlord. Except as expressly set forth in Section
28.03, Tenant agrees to defend, indemnify and hold harmless Landlord and its respective Agents from and against any and all Enviromnental Liabilities and Costs which result directly or indirectly from (a) any violation of any Enviromnental Law with respect to all or any portion of the Property caused by Tenant or any of Tenant's Agents, Affiliates, Slip Tenants or other Persons using or occupying all or a portion of the Property after the Commencement Date; (b) any Enviromnental Liability or Cost and any Remedial Action associated with any Release or threatened Release in, over, on, under or about the Property which occurs after the Commencement Date and which is caused by Tenant or any Tenant Agent, Affiliate, Slip Tenant, or other Person using or occupying all or a portion ofthe Property; (c) any breach of any warranty or representation regarding enviromnental matters made by Tenant hereunder; (d) the migration, seepage, leaching or other movement of any Hazardous Materials which have been Released onto the Property by Tenant or any of Tenant's Agents, Affiliates, Slip Tenant or other Persons using or occupying all or a portion of the Property after the Commencement Date (regardless of whether, in the case of migration of Hazardous Materials into the soils beneath the water-portions-oftheProperty, such migration affects sediments lying beneath or above the levels recorded in the Bathymetric Survey); and (e) any obligation of Tenant with respect to Pre existing Hazardous Materials under Section 28.01 above.
Section 28.03 Landlord's Indemnification of Tenant. Landlord agrees to defend, indemnify and hold harmless Tenant and its Affiliates and their respective Agents from and against any and all Enviromnental Liabilities and Costs which result directly or indirectly from (a) any violation of any Enviromnental Laws at, in, under or about the Property, or any Enviromnental Claims, arising from acts, omissions or events which occurred prior to the Commencement Date (except for any Disturbance of Pre-existing Hazardous Materials or Follow-On Claim for which Tenant is responsible pursuant to Section 28.01 above); (b) any violation of any Enviromnental Law caused by the gross negligence or willful misconduct of Landlord or Landlord's Agents after the Commencement Date; (c) the presence or Release of any Pre-existing Hazardous Materials or any seepage, leaching or other movement, of any Pre-existing Hazardous Materials (regardless of whether, in the case of migration of Hazardous Materials into the soils beneath the water portions of the Property, such migration affects sediments lying beneath or above the levels recorded in the Bathymetric Survey (except for any Disturbance of Pre-existing Hazardous Materials or Follow-On Claim for which Tenant is responsible pursuant to Section 28.01 above; (d) any obligation of Landlord's with respect to Pre-existing Hazardous Materials under Section 28.01 above; and (e) any obligations and liabilities of Landlord under the RAP.
Section 28.04 Notification. The Parties agree that in the event that any investigation, litigation or proceeding is threatened in writing or instituted against either Tenant or Landlord, or any Remedial Action is requested of either Tenant or Landlord, for which the other party hereto may be entitled to indemnification or defense hereunder, the Party against which the investigation, litigation or proceeding is threatened or instituted shall promptly notify the other Party in writing.
47 SF.DOCS\221983.17 [W97] Page 617 of 726
Section 28.05 Indemnitees. Any Indemnitee may participate in the defense of any investigation, litigation or proceeding with legal counsel of their choice at their cost.
Section 28.06 Release of City. Agency and Tenant each agree that City is released from all liability under this Article 28, up to and until such time (if any) as the City becomes the owner of the fe~ interest in the Property. Reference is made to Section 3l.04(c).
Section 28.07 Surviyal of Obligations. The provisions of this Article 28 shall survive the expiration or earlier t~nnination of this Lease.
Section 28.08 Third PartY Actions. Nothing in this Article 28 or this Agreement shall preclude or prejudice either Party's right or ability to assert a claim or bring an action against any responsible third party, including but not limited to the United States Government and certain Kaiser entities, under any state or federal statutory or cornmon law concerning the environmental condition of the Property.
Section 28.09 Leasehold Mortgages. Anything to the contrary in Article 9 or in tbis Article 28 notwithstanding, the Leasehold Mortgagee shall not be obligated to cure any default of Tenant under this Article 28 or to indemnify any party or perfonn any Remedial Action at any time with respect to any Hazardous Materials existing or disturbed on the Property prior to the date that such Leasehold Mortgagee or its designee succeeds to the-interest of Tenanf under the Lease.
ARTICLE 29.
INVALIDITY OF CERTAIN PROVISIONS
Section 29.01 Survival of Lease. If any tenn or provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.
ARTICLE 30.
RECORDING OF MEMORANDUM
Section 30.01 Recording. Landlord and Tenant may execute and record in the official records a Memorandum of Lease and Tenant's rights thereunder, pertaining to the Property.
ARTICLE 31.
REPRESENTATIONS AND WARRANTIES
Section 31.01 Mutual Representations and Warranties. On and as of the Closing Date, each of Landlord and Tenant represents and warrants to the other Party as follows:
(a) The consummation of the transactions contemplated by tills Lease are duly authorized by the appropriate authority and will not violate any provision of its governing documents or require any notice, consent or filing or result in the breach of any tenn or provision of any contract, governmental regulation, judgment, decree, writ, injunction, order of any court 48 SF_DOCS\221983.17 [W97] Page 618 of 726
or governmental authority or agreement to which it or any of its Affiliates are a Party or by which it or its Affiliates are bound;
(b) No action, suit or proceeding is pending or, to its actual knowledge, threatened against it or any portion of the Property which may adversely affect the consummation of the transaction contemplated by this Lease.
Section 31.02 Landlord's Representations and Warranties. On and as of the Closing Date, Landlord represents and warrants to Tenant as follows:
(a) No eminent domain or condemnation action has been filed against the Property and, to Landlord's actual knowledge, there are no plans to file an action for eminent domain or condemnation against the Property, and Landlord has not received any notice from any governmental authority regarding the annexation of all or any portion of the Property; (b) Except as previously disclosed to Tenant, there are no currently effective material contracts or agreements entered into by Landlord relating to the sale, management, maintenance, or operation of the Property;
(c) Except as previously disclosed to Tenant, to Landlord's actuallmowledge the FroperiY isnot the subject of anygcl'\'ernment investigaticlll; (d)
DBAW;
The Restructured DBAW Loans are all loans outstanding between Landlord and (e) There are no leases of the Property entered into by Landlord other than this Lease and the Slip Agreements; and
(f) Except as previously disclosed to Tenant, Landlord is not now subject to, to Landlord's actual knowledge, nor has Landlord received or been served with any written notice of any liens or any written notices or reports of any material violation of any Law applicable to the Property (including without limitation any zoning ordinance or BCDC permit). (g) Landlord has disclosed to Tenant all material documentation in its possession regarding the environmental condition of the Property and the immediately surrounding harbor. (h) Landlord has, to Landlord's actuallmowledge, followed and satisfied the requirements of California Harbor and Navigation Code § 72. (i) As used in this Section 31.02, "to Landlord's actual knowledge" means to the actual, current knowledge of David Thompson and Bill Bonnell.
Section 31.03 Tenant's Representations and Warranties. On and as of the Closing Date, Tenant· represents and warrants to Landlord as follows:
(a) Tenant is duly organized, validly existing and in good standing under the laws of the State of California and has all the necessary powers to. enter into this Lease and to carry on its business as now owned and operated by it;
49 SF_DOCSI221983.17 [W97] Page 619 of 726
(b) Tenant has not employed, retained, relied upon, received assistance or solicited aide from any official, agent, representativ~ or employee of Landlord or any person related by blood or maniage to any said Landlord employee, official, agent or representative in the negotiation ofthis Lease or in the operation of the Property. Tenant warrants that it will not in the future knowingly employ, retain or become affiliated in any fashion with any officer, agent, representative or employee of Landlord, any business entity in which any such officer, agent, representative or employee is interested or any person related by blood or maniage to any such officer, agent, representative or employee in the performance of this Lease. Violation of this provision shall be deemed a material breach and an Event of Default. In the event the Landlord determines such employment, retention or affiliation exists, Landlord, in addition to any other remedy it may have under this Lease, or at law or equity, may request Tenant to terminate its affiliation, employment or retention of said person and Tenant shall comply with Landlord's request. In the event ofthe termination of said affiliation, employment or retention, Tenant shall release, indemnify, hold harmless and defend Landlord and all of its agents, officers, employees and representatives from any and all liability, injury, damage or claim of any sort, including attorneys' fees, or other damages or injuries arising out of said termination; and (c) All information regarding Tenant and its members submitted by Tenant or such members in connection with the bid process for this Lease or in connection with the negotiation and implementation of this Lease (including without limitation financiaLinformation and information regarding operations experience) has been true and correct in all material respects and has not omitted any information required to be disclosed in connection therewith in order for the disclosed information not to be materially misleading. (d) The Marina Fairway, Channel Entrance and access channel between them, are adequate for the anticipated use of and access to the Marina.
Section 31.04 Condition of the Property.
(a) Tenant is leasing the Property in its "as-is condition" with all faults and without representation or warranty of any kind by Landlord, except as explicitly set forth in this Lease, and subject to all Laws. Tenant acknowledges that neither Landlord nor any of Landlord's Agents shall be deemed to have made or given (and Landlord hereby disclaims) any representation or warranty, express or implied, as to the value or condition of the Property or any other representation or warranty, express or implied, with respect to the Property, except as expressly set forth herein. This Lease is made subject to any and all easements, covenants, conditions, restrictions and other title matters and rights appurtenant to the Property or any portion thereof, whether or not of record, as further referenced in Section 33.01, including without all limitation all existing Slip Agreements.
(b) Without limiting the foregoing, Tenant acknowledges and agrees that, except as expressly set forth herein, neither Landlord nor any of Landlord's Agents have made, and Landlord hereby disclaims, any representations or warranties, express or implied, concerning (i) title or survey matters affecting the Property; (ii) the physical, geological, seismological or environmental condition of the Property or any adjoining property, including without limitation the Remainder Inner Harbor; (iii) the quality, nature or adequacy of any utilities serving the Property; (iv) the feasibility, cost or legality of constructing any alterations or improvements on 50 SF_DOCS\221983.17 [W97] Page 620 of 726
the Property; or (v) the safety of the Property, whether for the use of Tenant or any other person, including v.>ithoutlimitation Tenant's Agents.
(c) Except to the extent Landlord expressly assumes liability for Environmental Liabilities and Costs pursuant to Article 28, Tenant hereby releases Landlord and Landlord's Agents from, and accepts and assumes, as between Landlord and Tenant, sole responsibility for, all claims, loss or liability, including third party claims and regardless oflegal theory, arising by virtue of the physical or environmental condition of the Property or the use and condition of the Property after the Commencement Date. Tenant agrees to waive the benefits of California Code of Civil Procedure § 1542, which provides as follows:
"A general release does not extend to claims which the creditor does not know or expect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor."
ARTICLE 32.
COVENANTS
Section 32.01 Slip Agreements.
(a) Tenant hereby covenanfsthat it snil1ruse itsoest commercial efforts to enter into Slip Agreements with responsible boaters for any slips which are vacant as of the Commencement Date or which become vacant during the Term. (b) Tenant hereby covenants that, notwithstanding any other provision of this Lease, so long as Landlord is indebted to DBAW under the Restructured DBAW Loans, all slip fees, slip rents, or other charges for services offered by Tenant at the Marina (collectively the "Slip Rates") shall be set at or above the Minimum Rate approved by the Council ofthe City of Richmond ("City Council") as provided in this Section 32.01(b). On or after April 1 of each calendar year, the City Council shall hold a public hearing to consider readjusting the Minimum Rate in conformity with California Harbors & Navigation Code § 71.8(a)(5) and (c), which provide that a Minimum Rate shall be set to cover the repayment of principal and interest on outstanding DBAW debts as well as Tenant's operating, maintenance and repair expenses. In determining whether to adjust the Minimum Rate, the City shall assume that all slips are occupied so as to spread the rate adjustment, if any, across all slips, and not just those which are actually occupied, and unless the City determines otherwise, the number and linear footage of slips covered by this Lease shall be based on the slips in existence as of the Commencement Date. In any given year during which the City determines that the Minimum Rate should be adjusted, it will make such determination no later than May 1, so long as by February I of that year Tenant has submitted its Annual Report for the preceding year, as required by this Lease.
The date by which the City is required to make a Minimum Rate adjustment determination shall be extended by the number of days after February 1 that Tenant actually submits its Annual Report. Tenant may also submit such other information as Tenant believes it would be commercially reasonable for the City Council to consider in adjusting the Minimum Rate. The City Council shall notify Tenant in Writingwithin thirty (30) days in the event of any determination of a new Minimum Rate, and Tenant shall if necessary adjust its Slip Rates 51 SF_DOCS\221983.17 [W97] Page 621 of 726
accordingly within thirty (30) days of its receipt of such notice, or as otherwise set forth in any existing Slip Agreement(s) as of Tenant's receipt of such notice.
Section 32.02 Live Aboards. Tenant hereby covenants that Tenant shall use at all times limit to seventy-five (75) the number of slips it rents to Slip Tenants who live on or in their vessels while dockf,d in the Marina ("Live Aboards"), in accordance with a City program approved by the San Francisco Bay Conservation and Development Commission ("BCDC"). Tenant acknowledges that, unless and until otherwise approved by BCDC, Live Aboards shall be charged at the same berthing rates and utility charges as other Slip Tenants, and in addition shall be charged a live aboard fee of One Hundred Fifty Dollars ($150) per month per berth. Nothing in this covenant shall otherwise limit Tenant in its full right to manage and control the Marina, including Tenant's right to charge each of its Slip Tenants, including Live Aboards, their pro-rata potion of insurance, maintenance, taxes and other expenses passed through to the Slip Tenants. Tenant shall assume the obligations of the Landlord for all the Slip Agreements, including those with Live Aboards, if any.
Section 32.03 Customer Service and Periodic Meetings. Subject to the other provisions of this Lease, Tenant hereby covenants that Tenant shall keep the Property open and operate the Marina in a commercially reasonable fashion as a public marina throughout the Term of this Lease, and -shall-ll1aintain office hours every business day (lK~ept holidays) frQm_8:00 'l.rn. to 6:00 p.JP.
Tenant shall establish a practice acceptable to Landlord to hear complaints of the Slip Tenants on an ongoing basis. In addition, Tenant shall hold a meeting six (6) months after the Closing Date and once every six (6) months thereafter to address the concerns of a representative advisory board of Slip Tenants and any other community groups specified by Landlord.
Section 32.04 Compliance with Municipal and Health and Safety Codes. (a) . Tenant agrees to observe the provisions of Section 2.28.030 of the Municipal Code of the City of Richmond, obligating every contractor or subcontractor under a contract or subcontract with the City for public works or for goods or for services to refrain from discriminatory employment or subcontracting practices on the basis of the race, color, sex, sexual orientation, religious creed, national original or ancestry of any employee, any applicant for employment or any potential subcontractor. Said Section 2.28.030 is, by this reference, made a part ofthis Lease.
(b) Tenant agrees to comply with all applicable provisions of Chapter 2.50 of the Municipal Code of the City of Richmond.
(c) Pursuant to Section 33436 of the California Health and Safety Code, Tenant covenants by and for itself and its administrators and assigns, and all persons claiming under or through it or them, and this Lease is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property nor shall Tenant itself; or any person claiming under or through Tenant, establish or petmit any such practice or practices of discrimination or segregation with reference to the selection, location, 52 SF_DOCS\221983.17 [W97]