PARKING AGREEMENT
This PARKING AGREEMENT (the “Agreement”) is dated for reference purposes as of the ____ day of ___________, 2025, and is being entered into by and between the CITY OF SAN CLEMENTE, a California municipal corporation (“City”), and the HAPPY COFFEE CLUB LLC, a California limited liability company with its principle place of business at 114 Avenida Victoria, San Clemente, California 92672 (“Happy Coffee Club”) (with City and Happy Coffee Club hereinafter being individually referred to individually as a “Party” and collectively as the “Parties”).
R E C I T A L S:
Happy Coffee Club is the tenant of that certain real property commonly known as 114 Avenida Victoria, in the City of San Clemente, County of Orange, California (the “Property”). Happy Coffee Club operations include use of the Property as a coffee shop with beer and wine service (“Facility”). Pursuant to applicable provisions of the San Clemente Municipal Code, Happy Coffee Club must have a total of eight (8) off-street parking spaces to operate the Facility on the Property with the proposed floor plan and seating count of 32 indoor seats and 16 outdoor. The Property currently provides three (3) onsite spaces plus one parking space credit due to the improvement of one State-required handicapped parking space that resulted in a loss of one parking space, and no offsite spaces, resulting in a deficiency of four (4) off-street parking spaces.
On July 18, 2024, the Zoning Administrator approved Minor Conditional Use Permit (MCUP) 24-057, via adoption of Resolution No. ZA 24-012, to allow outdoor beer and wine service at the Facility, conditioned upon, among other things, an off-site parking agreement between the City and the Facility for the use of parking spaces at a City-owned parking lot located at 118 Avenida Rosa. This approval was conditioned upon the Parties entering into an exclusive license agreement for four (4) off-street parking spaces at the parking lot at the Dorothy Visser Senior Center at 118 Avenida Rosa, in the City of San Clemente, County of Orange, California 92672 (the “Dorothy Visser Parking Lot”), during the hours of 4 p.m. until 9 p.m., Mondays through Fridays; and 6 a.m. until 9 p.m. on Saturdays and Sundays to satisfy the off-street parking requirement in accordance with Section 17.64.120 of City’s Municipal Code.
The City owns fee title to the Dorothy Visser Parking Lot. The Dorothy Visser Parking Lot is located within 200 feet of the Property and has a sufficient number of parking spaces to serve the needs of Happy Coffee Club, without impairing the primary use of the parking lot for senior care services provided Monday through Friday, from 8:30 a.m. to 4 p.m. at the Dorothy Visser Senior Center. See Exhibit B for the lease between the City and the senior center.
The Parties desire to enter into this Agreement for the purpose of providing Happy Coffee Club with an exclusive license for the use of four (4) parking spaces in the Dorothy Visser Parking Lot, during the hours of 4 p.m. until 9 p.m., Mondays through Fridays; and 6 a.m. until 9 p.m. on Saturdays and Sundays, to satisfy the off-street parking requirements set forth in the San Clemente Municipal Code and in order for Happy Coffee Club to operates the Facility on the Property with a maximum of 32 indoor seats and 16 outdoor seats, all in accordance with and subject to the terms and conditions set forth in this Agreement.
C O V E N A N T S
Based upon the foregoing Recitals, which are incorporated fully into this Agreement by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both Parties, the City and Happy Coffee Club hereby agree as follows:
Grant of License. During the Term (as defined and described in Sections 2 and 3 below) of this Agreement, the City hereby grants to Happy Coffee Club and its customers and invitees of the Facility a revocable, non-transferable, exclusive license (“License”) to utilize up to four (4) vehicular parking spaces (the “Parking Spaces”) in the portion of the Dorothy Visser Parking Lot depicted in Exhibit “A”, which is attached hereto and incorporated herein fully by this reference, which license shall include a right of vehicular and pedestrian ingress and egress between the Parking Spaces and the adjacent public streets and rights-of-way. Said license shall be limited to the hours of 4 p.m. until 9 p.m., Mondays through Fridays; and 6 a.m. until 9 p.m. on Saturdays and Sundays. The Happy Coffee Club shall separately apply for Special Event or Activity permit(s) for nonstandard activities that increase use of the Facility or generate additional parking demand, or if the Parking Spaces are needed outside the foregoing licensed hours.
Term. Subject to Section 3 of this Agreement, the initial term of the License shall commence upon the approval of the final building permit related to the tenant improvement of the Facility, upon the date that Code Compliance Case CE25-0643 is deemed closed and the business has achieved compliance with on-site parking requirements, or upon the date of execution of this document, whichever occurs last (the “Commencement Date”), and shall continue thereafter for an initial term of five (5) years. Subject to Section 3 of this Agreement, Happy Coffee Club shall have the right to extend the initial term of the License for one (1) successive term of five (5) years. The option shall be deemed to have been exercised (and the term of the License so extended) unless Happy Coffee Club delivers a written notice to City at least thirty (30) days prior to the end of the then-current term of its intent to not extend the License. The initial term of the License as extended pursuant to such options (and subject to Section 3) is referred to herein as the “Term.” Termination. Notwithstanding Section 2, the Term of the License and this Agreement automatically shall terminate if Happy Coffee Club (or successor or assignee approved in writing in advance by the City) does not maintain in effect a valid conditional use permit or other legally required permit or permits to operate the Facility or if Happy Coffee Club discontinues operation of the Facility for a period of six (6) consecutive months. In addition, and notwithstanding Section 2, this Agreement and the License may be terminated as follows: (i) Happy Coffee Club may terminate the License sixty (60) days after it delivers written notice to City of its intent to terminate, provided that Happy Coffee Club is terminating operation of the Facility as well; (ii) the City Council of City has the right by a majority vote of its membership that is eligible and qualified to vote on the issue to terminate the License and this Agreement upon a determination by the City Council that it desires to devote the Parking Spaces to a different public use or there is an occurrence of non-compliance related to the use of the business’s required on-site parking at 114 Avenida Victoria; (iii) the City Manager has the right to terminate the License and this Agreement upon failure of Happy Coffee Club to timely remit the License Payment following notice and an opportunity to cure of at least ten (10) days; and (iv) either Party may terminate the License and this Agreement and any and all rights or obligations that exist hereunder if a court of law finds that the License or this Agreement is not valid and enforceable. The Parties agree that in the event the License and this Agreement are terminated pursuant to this Section 3, neither Party shall have any further rights or liabilities to the other with respect to the period of time after the effective date of the termination.
License Payment. Happy Coffee Club shall remit to the City an initial license fee of Two Thousand, One Hundred Sixty Dollars ($2,160.00) per year, with the first payment due within thirty (30) days of the Commencement Date (“License Payment”). On each successive anniversary date of the Commencement Date, the License Payment shall be increased in accordance with the percentage increase in the Consumer Price Index, All Items, published by the United States Department of Labor for the smallest geographical area within which the City of San Clemente is located (the “CPI Index”) (or such index is discontinued, such substitute index as is most closely comparable thereto), and with said percentage increase being based upon the percentage increase in the CPI Index between the date that is fifteen (15) months prior to the applicable License Payment adjustment date and the CPI Index on the date that is three (3) months prior to the applicable License Payment adjustment. The first License Payment shall be paid in advance on the Commencement Date (as to the first License Payment), and each License Payment thereafter shall be paid on each anniversary of the Commencement Date. Payments shall be made in U.S. dollars. Checks or money orders shall be made out to the “City of San Clemente.” If any License Payment or any other sum due the City is not received by City within ten (10) days after the date it is due, Happy Coffee Club shall be deemed delinquent in its License Payment and a late charge of one and one-half percent (1.5%) of the delinquent amount, plus the sum of Fifty Dollars ($50.00), shall become immediately due and payable to City. An additional charge of one and one-half percent (1.5%) of such delinquent License Payment (excluding late charges) shall be added for each additional calendar month (or portion thereof) that the delinquent sum remains unpaid. The Parties hereby acknowledge and agree that such late charges do not represent and shall not be deemed to be an interest payment, but that such late charges represent a fair and reasonable estimate of the costs and expenses that City will incur by reason of Happy Coffee Club’s late payment. City’s acceptance of any delinquent License Payment or late charge shall in no way constitute a waiver of Happy Coffee Club’s default with respect to such overdue and delinquent payment, or in any way impair, prevent, or restrict City from exercising any of its rights or remedies set forth in this Agreement or otherwise provided at law.
Acceptability of the Parking Spaces. The Parking Spaces have been determined to conform to current City of San Clemente standards for parking spaces, and Happy Coffee Club accepts them “AS IS” and agrees to maintain the Parking Spaces in a manner that meets City standards.
Exclusive Use of the Parking Spaces. The Parking Spaces will be available to the public for purposes related to the Happy Coffee Club use. Happy Coffee Club shall post signage on the Parking Spaces indicating that the Parking Spaces are for the exclusive use of Happy Coffee Club customers or employees during the business operating hours specified in Section 1 above and restricting use of the Parking Spaces by other members of the public. Signage shall be submitted to and approved by the Community Development Director prior to purchase and installation.
City’s Reservations. City reserves physical and legal control over the Parking Spaces. As part of that control, the City reserves the right to temporarily, and at no cost to the City, take the Parking Spaces out of service for any purpose, including maintenance, repair, or re-striping. City also reserves the right to designate any or all of the Parking Spaces as handicapped spaces. Additionally, City reserves the right to change the configuration of the Parking Spaces and the drive aisles providing access to the Parking Spaces at City’s sole and absolute discretion; provided, however, if City takes an action during the Term of this Agreement that results in the permanent reduction in the number of Parking Spaces in a manner that affects the location, configuration, or availability of the parking spaces indicated within Exhibit A, City shall be required to act reasonably to amend the area subject to the License to include an additional number of Parking Spaces sufficient to replace the number of Parking Spaces removed from the area subject to the License as of the date this Agreement is being executed.
Further, City reserves the right to require amendments to this Agreement in the event that the use or hours of operation of the Dorothy Visser Senior Center, or any subsequent primary tenant on the Property, change in a manner that reduces or otherwise affects Happy Coffee Club’s use of the Parking Spaces.
In addition, City reserves the right to require that Happy Coffee Club require its employees to utilize the Parking Spaces during the hours that the License is in effect in order to provide a greater number of convenient visitor parking spaces on the Property.
Maintenance. Happy Coffee Club, at its sole cost and expense, shall maintain the Parking Spaces in a safe and clean condition, and shall be responsible for any damage committed to the Parking Spaces by Happy Coffee Club members and invitees. Such maintenance shall include removing all trash and debris from the Parking Spaces, cleaning any spilled liquids or other substances from the Parking Spaces, removing any abandoned or non-operable vehicles parked within the License area, and providing such security personnel as may be needed to ensure the safety of Happy Coffee Club members and invitees using the Parking Spaces. Happy Coffee Club shall be responsible for all repairs to the Parking Spaces, including asphalt sealing and restriping, reasonably determined to be necessary by City.
Indemnity. Happy Coffee Club shall protect, defend (with counsel acceptable to City), indemnify, and hold harmless City and City’s officers, employees, agents, and representatives (collectively, the “City Parties”), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses, and liabilities, at law and in equity, of every kind or nature whatsoever, including attorneys’ fees and expert witness fees, including, without limitation, injury to or death of any person or persons and damage to or destruction of any property, threatened, brought, or instituted, arising out of, or in any manner directly or indirectly connected with the entry upon, or the engagement of any activities on, near or in route to or from the Parking Spaces or the Property by any Happy Coffee Club employees or invitees, including, without limitation:
any damage to the Parking Spaces or the Property and any liability to any third party incurred by reason of any acts or omissions, or any commission of any negligent or tortious acts by Happy Coffee Club customers or invitees in connection with the activities permitted or required by this Agreement; any mechanics’ or materialmens’ liens, claims, demands, actions or suits arising (directly or indirectly) from (i) the performance of the activities permitted or required by this Agreement, or (ii) the activities of Happy Coffee Club customers or invitees on or relating to the Parking Spaces (including, without limitation, any claims by any such customers or invitees); and any costs of removing Happy Coffee Club property or the property of any of its employees, customers or invitees from the Parking Spaces or the Property after the last to expire of the Term or the earlier termination of this Agreement.
The foregoing obligations shall not apply to claims, liabilities, or losses arising out of the sole active negligence or willful misconduct of City.
Insurance. Prior to the Commencement Date and during the entire Term, Happy Coffee Club shall furnish or cause to be furnished to City, duplicate originals of policies and endorsements, or appropriate certificates thereof, of commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $2,000,000 per occurrence, $4,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted. The City may require Happy Coffee Club to increase coverage limits at intervals not more frequent than once every two (2) years during the Term, with the amount of increased coverage determined by City in its reasonable discretion, taking into consideration City’s practice and standards in the industry generally. In addition, all such insurance:
shall be primary insurance and not contributory with any other insurance City or any City official, employee, or agent may have; shall name the City and its officials, employees, and agents as additional insureds and contain no special limitations on the scope of protection afforded to City and City officials, employees, and agents; shall be “date of occurrence” and not “claims made” insurance; shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability; shall provide that the policy shall not be cancelled or not renewed by the insurer or Happy Coffee Club unless there is a minimum of thirty (30) days prior written notice to City; shall be endorsed to include a waiver of subrogation rights against City and City’s officials, employees, and agents; shall not require Happy Coffee Club to meet a deductible or self-insured retention amount of more than Ten Thousand Dollars ($10,000) unless approved in writing by City in its reasonable discretion; and shall be from a company or companies with a current A.M. Best's rating of no less than A- VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
Notices. All notices, documents, correspondence, and communications concerning this Agreement shall be addressed as set forth in this clause, or as the Parties may hereafter designate by written notice, and shall be personally delivered or sent through the United States mail, first class, postage prepaid. Any mailed notice shall be deemed served or delivered forty-eight (48) hours after mailing. Either Party may change the address for notices by giving the other Party at least ten (10) calendar days prior written notice of the new address.
Notwithstanding the above, either Party may also provide notices, documents, correspondence, or such other communications to the other by personal delivery or facsimile and, so given, shall be deemed to have been given upon receipt.
To Happy Coffee Club LLC: Cameron Houle
114 Avenida Victoria
San Clemente, CA 92672
To City: City of San Clemente
910 Calle Negocio
San Clemente, CA 92673
Attention: City Clerk
Assignability. The License shall not be assignable except to an authorized successor of Happy Coffee Club’s right to operate the Facility on the Property. All assignments require prior approval in writing by the City Manager. Attempted assignments not approved in writing in advance shall automatically terminate this Agreement.
Miscellaneous.
Authority. Each person executing this Agreement on behalf of a Party represents and warrants to the other Party that he or she has the authority to execute this Agreement on behalf of its principal and shall indemnify the other Party should such representation or warranty prove false.
Attorney’s Fees. In the event either Party hereto brings suit to enforce the terms of this Agreement or on account of breach hereof, the Party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other Party in such suit, including, without limitation, court costs, attorney’s fees, and expert witness fees.
Entire Agreement. This Agreement sets forth the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, understandings, and agreements relating thereto.
Amendments. This Agreement may not be modified except by written instrument signed by each of the Parties hereto.
Counterparts/Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. This Agreement may be signed electronically with the same force and effect as original ink signatures.
Litigation Matters. The Superior Court of the State of California in the County of Orange shall have the exclusive jurisdiction of any litigation between the Parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the internal laws of the State of California without regard to conflict of law principles. Happy Coffee Club waives any rights under California Code of Civil Procedure section 394.
Time of Essence. Time is of the essence in the performance of this Agreement.
No Property Interest Conveyed. Happy Coffee Club acknowledges and agrees that this Agreement grants Happy Coffee Club a revocable, non-exclusive license to enter upon and use real property and does not convey a leasehold or any other interest in real property.
IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement to be effective as of the Commencement Date.
CITY OF SAN CLEMENTE
By:
Andy Hall, City Manager
ATTEST:
By:
Laura Campagnolo, City Clerk
APPROVED AS TO FORM:
By:
Elizabeth A. Mitchell, City Attorney
Happy Coffee Club LLC
By:
Cameron Houle, Manager/Member
By:
Shelby Houle, Manager/Member
Appendix “1”
DEPICTION OF THE PARKING SPACES
Four (4) exclusive spaces within the Dorothy Visser Senior Center parking lot on Mondays through Fridays, from 4 p.m. until 9 p.m.; and on Saturdays and Sundays, from 6 a.m. until 9 p.m.
Appendix “2”
LEASE AGREEMENT BETWEEN THE CITY AND AGE WELL
Exhibit A