LEASE AGREEMENT
THIS LEASE is made and entered into this 1s' day of February, 2020, by and between WM INLAND INVESTORS IV LP, a Delaware limited partnership, dba INLAND CENTER MALL herein referred to as "Lessor" and THE CITY OF SAN BERNARDINO, herein referred to as "Lessee."
RECITALS
A. Lessor is the owner of the premises, which are deemed to be 1,920 square feet and are made a part hereof by this reference.
B. Lessor desires to lease the Premises to Lessee for use as a community service administrative office by the Police Department of the City of San Bernardino or for other police service purpose.
Lessee desires to lease the Premises from Lessor pursuant to the provisions stated herein.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee hereby agree as follows:
1. Lessor leases to Lessee, and Lessee lets from Lessor, as herein provided, the Premises. Lessee shall have access to the Premises at all times and shall have the nonexclusive right to use common areas, including parking areas. In addition, Lessee shall have the right to use seven (7) reserved parking spaces designated by Lessor, as more fully described in Section 14 below.
2. Subject to Section 16 below, the term of this lease shall be for seven (7) years, beginning February 1, 2020, and ending January 31, 2027 (the "Term"), unless sooner terminated pursuant to Section 16 below.
3. The total rent for the Premises shall be $1.00 (one dollar) annually, payable in advance on February 1 of each year of the Term. Lessee shall not be liable for other costs or expenses, except as agreed to herein. Payment of rent shall be made to Lessor at 500 Inland Center Drive, San Bernardino, California 92408.
The Premises are leased to be used as a community service administrative office for the Police Department of the City of San Bernardino or for other police services purposes, and for no other purpose without the prior written permission of Lessor, which may be withheld in its sole and absolute discretion.
1 W990-001 - 3798466.1
5. Except as otherwise provided herein, Lessor shall pay for all utilities furnished for the Premises during the Term, including electricity, gas, water and rubbish removal. Lessee shall pay for telephone service and data service.
Lessee shall maintain all internal portions of the Premises in good condition.
Lessor shall be responsible for the exterior of the building, foundations, structural condition of interior bearing walls, exterior roof, fire sprinkler system, smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and utility systems serving the common areas. Lessee shall be liable for any damage to windows and doors over and above ordinary wear and tear, resulting from the act or omission of Lessee or its authorized representatives.
Notwithstanding the foregoing, Lessee hereby accepts the Premises in an "AS IS" condition and Lessor expressly disclaims any warranty or representation with regard to the condition, safety, security, or suitability of the Mall or the Premises. It is understood by Lessee that Lessor does not provide security protection for the Premises.
Lessor certifies to Lessee that as of the date of this lease, an inspection of the Premises has not been performed by a Certified Access Specialist (CASp) in conjunction with the lease.
Notwithstanding that an access inspection has not been performed, Lessor remains obligated for the compliance of the Premises with all applicable laws for the duration of the lease. In the event that an access inspection is performed by Lessor at any time during the Term, Lessor shall provide Lessee a copy of the inspection report and Lessor shall, at its sole cost and expense, promptly complete all required repairs and modifications to the Premises identified in the inspection report.
Lessee shall have the right to install such removable fixtures as are necessary for the proposed use of the Premises and such removable fixtures installed by Lessee shall not become part of the real property. Any business or trade fixtures, equipment, furniture, movable partitions or personal property of Lessee (collectively, "Lessee Property") not permanently affixed to the Premises will remain the property of Lessee and shall be removed by Lessee upon expiration or earlier termination of this lease, at Lessee's sole cost and expense. Lessee shall repair any damage caused by such removal.
In the event that any Lessee Property remains on the Premises after expiration or early termination of this lease, Lessor shall provide notice to Lessee regarding such Lessee Property and allow Lessee thirty (30) days from such notice to remove such Lessee Property. In the event that Lessee fails to remove the Lessee Property from the Premises within such thirty (30) day period, the remaining Lessee Property shall be deemed abandoned, and Lessor may either retain or dispose of any Lessee Property remaining on the Premises upon expiration of such thirty (30) day period. Title to any Lessee Property which Lessor elects to retain shall vest in Lessor.
Lessee waives all claims, costs, expenses and causes of action, including, without limitation, reasonable attorneys' and other expert and third party fees and costs (collectively "Claims) against Lessor for any damage or loss to Lessee arising out of Lessor's retention or disposition of any Lessee Property, as provided herein and shall be liable to Lessor for Lessor's costs of removing, storing and disposing of any Lessee Property which Lessee fails to remove from the 2 W990-001 -- 3798466.1
Premises as provided herein, as well as all costs of restoring the Premises required as a result of removing such Lessee's Property.
8. Lessee may make such non-structural repairs and improvements as are required to fit the Premises for the proposed use. Notwithstanding the foregoing, Lessee shall not make any structural alterations, structural improvements or any interior alterations to the Premises without the prior written consent of Lessor, including without limitation, any opening or attachment to the roof, ceiling, floor or the interior or exterior walls of the Premises or attach or place anything on the roof or exterior walls of the Premises. Upon completion, any alterations or improvements to the Premises will become the property of Lessor and be subject to this Lease. Such prior written consent will not be necessary for mounting pictures or posters on the interior walls of the Premises.
9. Except in the case of emergency, Lessee agrees that Lessor, its agents, employees or any person authorized by Lessor may enter the Premises upon reasonable prior notice to Lessee (and at all times without notice in the event of an emergency) during regular business hours for the purpose of inspecting its condition, making repairs or improvements to the Premises or the Mall as Lessor may elect (or be required) to make for exhibiting the Premises to prospective occupants. Lessor agrees not to disturb Lessee's conduct of business during such access, except in the case of emergency.
10. Lessee, at its sole cost and expense, shall obtain and keep in full force and effect during the Term a policy of commercial general liability insurance, including broad form property damage liability and personal injury liability coverage, insuring Lessor and Lessee against liability arising out of the use or occupancy of the Premises and all areas appurtenant thereto. Said insurance shall at all times be in an amount of not less than Two Million and No/100 Dollars ($2,000,000.00) combined each occurrence in the aggregate for personal and bodily injury (including death) and property damage. Said policy shall also include Lessor as an additional insured and such other Lessor-affiliated entities as Lessor shall request. To the extent applicable, Lessee shall also obtain and keep in full force and effect during the Term of this lease, Workers' Compensation Insurance in the amount required by the State in which the Mall is located and Employers' Liability insurance on an "occurrence" basis but, in either case, with a limit of not less than Five Hundred Thousand Dollars ($500,000.00) each accident, Five Hundred Thousand Dollars ($500,000.00) each employee by disease and Five Hundred Thousand Dollars ($500,000.00) policy aggregate by disease, covering all persons employed by Lessee in the conduct of its operations (including the all states endorsement and, if applicable, the volunteers endorsement). A certificate evidencing the coverage required under this Section 10 shall be delivered to Lessor prior to Lessor entering upon the Mall. Such certificate shall contain a provision that Lessor and Lessee shall be given a minimum of ten (10) days written notice by the insurer prior to cancellation or termination of such insurance.
Lessor and Lessee each hereby agree that, absent willful or grossly negligent misconduct, they waive any rights to recover from each other for claims for damages including claims made by either party's employees, agents or independent contractors. This provision is intended to waive fully, and for the benefit of Lessor, any rights and/or claims which might give rise to a right of subrogation in favor of any insurance carrier. The coverages obtained by Lessee pursuant 3 W990-001 - 3798466.1
to this lease shall include, without limitation, a waiver of subrogation endorsement attached to the certificate of insurance.
If Lessee contracts with or hires independent contractors or vendors in connection with this lease at the Mall, Lessee shall require such independent contractors and/or vendors to obtain, maintain and furnish to Lessee and Lessor satisfactory evidence of insurance with coverages, limits and additional insureds endorsement outlined above. Lessee shall not allow any independent contractor or vendor to enter the Mall until each has obtained and submitted the insurance evidence required herein.
11. Performance of Tenant Improvements.
i. As a material part of this lease and in consideration for Lessee agreeing to a seven (7) year lease term, Lessor shall, at its sole cost and expense, cause the installation of tenant improvements necessary for the initial build-out of the Premises for Lessee's intended use, the nature and extent of which shall be determined by Lessor, in its sole and absolute discretion, after receiving Lessee's input regarding the tenant improvements. Such tenant improvements shall include all new interior partitions, doors and door hardware, HVAC (heating, ventilating, and air conditioning systems) and HVAC distribution, ceiling systems, light fixtures, plumbing installations, electrical installations and outlets, telephone outlets, required fire and life-safety systems, wall finishes and floor coverings, an exterior entrance and exterior storefront signage, and Lessee's reserved parking signage, interior reception area, multiple interior offices, work area, bathroom and a conference room (the "Initial Improvements"). Lessor will engage an architect to prepare the detailed design and construction plans for the Initial Improvements and will accept Lessee's input regarding the design of the Initial Improvements.
However, after receiving Lessee's input, the design of the Initial Improvements shall be determined by Lessor, in its sole and absolute discretion. Upon completion, any alterations or improvements to the Premises, including the Initial Improvements, will become the property of Lessor and subject to this Lease.
ii. Lessor shall construct and complete the Initial Improvements within one hundred twenty (120) days following receipt of all applicable permits required from the applicable governmental authorities for the commencement of the work.
i11. Lessor shall pay for and obtain or cause to be paid and obtained all permits, licenses and approvals required by all applicable laws with regard to the Initial Improvements.
iv. Lessor shall perform or cause to be performed all work in connection with the Initial Improvements in a good and workmanlike manner, in compliance with all applicable laws, ordinances, rules and regulations.
V. For one (1) year after the date of substantial completion of the Initial Improvements, Lessor shall, following written notice from Lessee, make any repair, replacement, correction or other alteration of any nature necessary by 4 W990-001 -- 3798466.1
virtue of any defective construction of the Initial Improvements or defective materials used therein.
Lessor shall be responsible, at its sole cost and expense, for the exterior storefront signage at the entrance of the Premises and for the signage in connection with Lessee's reserved parking spaces. The location and design of all signage shall be subject to the prior approval of Lessor in order to maintain consistency with the overall aesthetic of the Premises. Lessee shall remove all existing signage on the Premises at its sole cost and expense and Lessee shall repair any damage caused by the removal of existing signage, reasonable wear and tear excepted. In the event that Lessor requires Lessee to move to another location in the Mall, Lessor shall solely be responsible for the cost and expense of installing equivalent signage at the new location, including cost of removal of existing signage and repair of damage caused by removal of existing signage from the previous location. All signage installed under this Section 12 shall be installed by Lessor.
13. At any time, but in no event more than one (1) time during the Term, Lessor may require Lessee to relocate its operations from the demised Premises to another equivalent space located within the Mall, which space is determined by Lessor in its sole and absolute discretion to be equivalent and suitable to Lessee's use. In case of relocation, all costs and expenses of such relocation shall be borne solely and exclusively by Lessor and the terms and conditions of this lease shall apply to the new demised Premises. In addition, in case of relocation under this Section 13, Lessor shall, at its sole cost and expense, construct and install the Initial Improvements outlined above in the new demised Premises.
14. Lessor shall provide Lessee seven (7) reserved parking spaces designated by Lessor in a portion of the Mall parking area reasonably close to the Premises, including reserved parking signage as determined by Lessor, in its sole and absolute discretion.
15. Lessee shall indemnify, defend and hold Lessor harmless from and against any and all loss, cost, damage, injury or expense arising out of or in any way related to claims of injury to or death of persons, or damage to property, occurring or resulting directly or indirectly from the use or occupancy of the Premises or activities of Lessee in or about the Premises or the Mall, except to the extent such claims arise solely from the negligence or misconduct of Lessor.
Lessor shall indemnify, defend and hold Lessee harmless from and against any and all loss, cost, damage, injury or expense arising out of Lessor's gross negligence or willful misconduct in the operation of the common areas of the Mall (but, not within the Premises), except to the extent such claims arise solely from the gross negligence or willful misconduct of Lessee.
16. Either Lessor or Lessee shall have the right to terminate this Lease for any reason by giving thirty (30) days' written notice to the other of its intent to so terminate and in that event, this Lease shall terminate thirty (30) days thereafter. If Lessee terminates this Lease under this Section 16 prior to the expiration of the Term, Lessee shall reimburse Lessor for the remaining unamortized value of the Initial Improvements, which the parties have agreed shall be fifteen thousand dollars ($15,000.00) for each year remaining on the Term of this lease, prorated accordingly for partial calendar years; provided, however, Lessee shall not be obligated to 5 W990-001 - 3798466.1
reimburse Lessor for the remaining unamortized value of the Initial Improvements if this Lease is terminated due to Lessor's default. Payment of all such sums shall be made by Lessee upon the termination of this Lease.
17. All notices herein required shall be in writing and delivered in person or sent by certified mail, postage prepaid, return receipt requested, addressed as follows:
"Lessor" "Lessee"
WM INLAND INVESTORS IV LP, City of San Bernardino
a Delaware limited partnership 290 North "D" Street
500 Inland Center Drive San Bernardino, CA 92401
San Bernardino, CA 92408 Attn: City Manager
Attn: Arun Parmar
Such notices shall be deemed given upon receipt, rejection or inability to deliver to the addressee.
Lessee agrees not to permit or cause any mechanic's lien to be filed against the Premises or the Mall by reason of any work, labor, services or material performed at or furnished to the Premises, to Lessee or to anyone holding the Premises through or under Lessee. Nothing in this lease shall be construed as consent on the part of Lessor to subject Lessor's estate in the Premises to any mechanic's liens or liability under the mechanic's lien laws in the state in which the Mall is located.
19. Lessee shall comply promptly with all applicable laws, ordinances, orders and regulations affecting the Premises and the occupancy, condition, configuration, cleanliness, safety, operation and/or use thereof.
20. This Lease may not be assigned by Lessee without the prior written consent of Lessor (which consent may be withheld in Lessor's sole and absolute discretion), nor may any of Lessee's rights under this Lease be transferred to any other party by operation of law. Any such prohibited assignment or transfer will be void and of no effect and will constitute a material breach of this Lease.
21. Lessor shall have the right to transfer and assign, in whole or in part, all of its rights and obligations under this Lease and in the Premises and/or the Mall. Upon transfer, Lessor shall be released from any further obligations hereunder and Lessee agrees to look solely to the successor in interest of Lessor for the performance of such obligations, provided that any successor under a voluntary, third party transfer (but not as part of an involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall have assumed Lessor's obligations under this Lease.
22. Lessor and Lessee agree that all rent paid to Lessor under this lease shall qualify as "rents from real property" as defined in Internal Revenue Code Section 856(d) and as further defined in Treasury Regulation Section 1.856-4, as each is amended from time-to-time. Should 6 W990-001 -- 3798466.1
the requirements of the said Internal Revenue Code Section or Treasury Regulation Section be amended so that any rent no longer qualifies as "rents from real property" for the purposes of the Internal Revenue Code or the Treasury Regulation, the rent payable to Lessor shall be adjusted so that such rent will qualify as "rents from real property" under the Internal Revenue Code and Treasury Regulation; provided that such adjustments required under the provisions of this Section 22 shall not increase the monetary obligations of Lessee. If any adjustment of rent under this Section 22 or if Lessor in good faith determines that its status as a real estate investment trust under the provisions of the Internal Revenue Code or the Treasury Regulation will be jeopardized because of any provision of this lease, Lessee without charge therefor and within ten (10) days after Lessor's written request therefor, shall execute and deliver to Lessor such amendments to this lease as may reasonably be required by Lessor to avoid such jeopardy; provided such amendments do not increase the monetary obligations of Lessee or in any other manner materially increase Lessee's obligations or materially decrease Lessee's rights under this
23. The parties hereto are independent contractors. It is not the intent of the parties to form any partnership or joint venture and it is understood that each party will exercise full power and authority, except as specifically provided otherwise in this Lease, to select the means, method and manner of performing all obligations to be performed under this Lease.
24. No gift or gratuity or any promise of gift or gratuity has been given, offered or made to or for the benefit of any employee or agent of Lessor as a result of or in any way in connection with Lessee entering into this Lease.
In the event of default by any party under this Lease, the non-defaulting party shall have all remedies available to it at law or in equity including, without limitation, the remedy described in Section 1951.2 of the California Civil Code.
Lessor and Lessee each hereby waive trial by jury in any action, proceeding or ounterclaim brought by either party against the other on any matter whatsoever arising out of or in any way connected with this Lease or Lessee's use or occupancy of the Premises, including any claim of injury or damages and any emergency and other statutory remedy with respect thereto. Lessor and Lessee also agree that the venue of any such action or proceeding shall be in the city, county and state in which the Mall is located.
27. In the event any legal action is commenced to enforce the terms of this lease, the prevailing party shall be awarded its costs and expenses, including reasonable attorneys' fees.
28. In the event of a fire or any other casualty to all or a portion of the Premises or the Mall or in the event of a Taking of any portion or all of the Premises or the Mall, Lessor may terminate this Lease upon written notice to Lessee, such termination to be effective upon the date of such damage or upon the date the condemning authority takes title, as the case may be.
Absent any termination, Lessor shall be obligated to promptly commence and diligently prosecute to completion any work Lessor must undertake to restore the Premises to the same condition as when the Initial Improvements outlined in Section 11 were completed. Lessee must also diligently complete any work required to open the Premises for business within thirty 7 W990-001 - 3798466.1
(30) days after Lessor delivers the Premises to Lessee with the Initial Improvements completed.
As used in this Section 28, 'Taking" shall mean any taking or appropriation for public or quasi- public use by the right of eminent domain or otherwise by a taking in the nature of inverse condemnation, with or without litigation, or a transfer by agreement in lieu thereof.
29. This lease may be amended or modified only by written agreement signed by both parties and failure on the part of either party to enforce any provision of this lease shall not be construed as a waiver of the right to compel enforcement of such provision or provisions, nor act to release any surety from its obligations under this lease.
30. Any signature to this lease transmitted electronically through DocuSign (or a comparable electronic execution system shall be deemed an original signature and be binding upon the parties hereto it being agreed that such electronic signature shall have the same force and effect as an original signature). This Lease may be executed in counterparts with the same effect as if both parties hereto had executed the same document. All counterparts shall be construed together and shall constitute a single lease.
31. This Lease and the following Exhibit, which are hereby incorporated into and made a part of this lease, together with any simultaneous or subsequent written agreement between the parties, will constitute the entire agreement and understanding between the parties hereto, all prior negotiations are merged herein and no representations have been made by either of the parties except as expressly contained in this lease. [Signature Page Follows]
8 0990-001 - 3798466.1
IN WITNESS THEREOF, the parties executed this lease on the date first above written.
LESSOR:
WM INLAND INVESTORS IV LP,
a Delaware limited partnership
dba INLAND CENTER MALL
By: WM INLAND INVESTORS IV GP
LLC, a Delaware limited liability
company, its General Partner
By:
Name: Olive Buret hugh.
Its: Sr. VP, Portfolio operations+ Peopk
LESSEE:
THE CITY OF SAN BERNARDINO
ATTEST:
Pacher
enover
for City Clerk
Approved as to form
and legal content:
Gary D. Saenz
City Attorney
By:
9 W990-001 -- 3798466.1
EXHIBIT A
FLOOD CONTROL CHANNEL
"E STREET
SOUTH MALL. WAY
PARKING
STRUCTURE
FLOOD CONTROL CHANNEL
INLAND CENTER MALL
SAN BERNARDINO, CA
NORTH MALL WAY
Reserved
*Parking
Spaces (7) INLAND CENTER DRIVE
eSp. 458
FLOOD CONTROL CHANNEL INLAND CENTER DRIVE
INLAND CENTER DRIVE
NORTH
W990-00: -- 3708466.1