HomeMy WebLinkAbout10/18/2006 - STAFF REPORTS - 2.J. P 6M S'OP
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Cq<IFORN�P CITY COUNCIL STAFF REPORT
DATE: October 18, 2006 CONSENT CALENDAR
SUBJECT: NONEXCLUSIVE OPERATING & LEASE AGREEMENT WITH
MARRIOTT OWNERSHIP RESORTS, INC. D/B/A MARRIOT VACATION
CLUB INTERNATIONAL FOR TERMINAL COUNTER PROMOTIONAL
SPACE
FROM: David H. Ready, City Manager
BY: Department of Aviation
SUMMARY
Airport staff is requesting approval for a non-exclusive operating and lease agreement
with Marriott Ownership Resorts, Inc. d/b/a Marriott Vacation Club International for
terminal counter promotional space within the airport terminal.
RECOMMENDATION:
1. Approve Minute Order No. , approving Non-Exclusive Operating &
Lease Agreement for Terminal Counter Promotional Space with Marriott
Ownership Resorts, Inc. d/b/a Marriott Vacation Club International effective
September 1, 2006 and valid until August 31, 2009 with two (2) one-year
options.
2. Authorized the City Manager to execute all necessary documents, and the
two one-year options.
STAFF ANALYSIS:
The Marriott Vacation Club International current terminal counter promotional space
Lease for Terminal Counter Space #1 expired August 31, 2006. Marriott requests a new
lease agreement for the existing Space #1 (68 sq, ft.) plus an additional 16 sq. ft.
adjacent to the current space for a total of 84 sq. ft. The rental rate was calculated
based on the current rental rate of $22,000 per annum and adding an 18.79% five-year
CPI adjustment. This translates into $384.32 per sq. ft. per annum.
Item No. L .tJ .
City Council Staff Report
(October 18, 2006 -- Page 2)
(Marriott Counter Agreement)
At its regularly scheduled meeting on October 4, 2006, the Airport Commission
recommended City Council approve the Non-exclusive Operating and Lease Agreement
ifor Terminal Counter Promotional Space with Marriott Ownership Resorts, Inc. d/b/a
(Marriott Vacation Club International effective September 1, 2006 and valid until August
31, 2009 with two (2) one-year options.
FISCAL IMPACT: Finance Director Review:
,Airport revenue will increase by $10,282.88 annually to $32,282.88 per annum due to
the CPI adjustment and increased square footage.
7
David H. Ready, ity ger Richard S. Walsh, A.A.E.
Director of Aviation
Attachments:
Minute Order
Lease Agreement
MINUTE ORDER NO.
APPROVE MINUTE ORDER NO. ,
APPROVING NON-EXCLUSIVE OPERATING
AND LEASE AGREEMENT FOR TERMINAL
COUNTER PROMOTIONAL. SPACE WITH
MARRIOTT OWNERSHIP RESORTS, INC.
D/B/A MARRIOTT VACATION CLUB
INTERNATIONAL EFFECTIVE SEPTEMBER
1, 2006 AND VALID UNTIL AUGUST 31, 2009
WITH TWO (2) ONE-YEAR OPTIONS.
I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that
this Minute Order Approving Non-Exclusive Operating and Lease Agreement for
Terminal Counter Promotional Space with Marriott Ownership Resorts, Inc. d/b/a
Marriott Vacation Club International effective September 1, 2006 and valid until
August 31, 2009 with two (2) one-year options adopted by the City Council of the
City of Palm Springs, California, in a meeting thereof held on the 18th day of
October, 2006
James Thompson, City Clerk
MARRIOTT OWNERSHIP RESORTS, INC
D/B/A MARRIOTT VACATION CLUB INTERNATIONAL
NON-EXCLUSIVE OPERATING AND LEASE AGREEMENT
FOR TERMINAL COUNTER PROMOTIONAL SPACE
AT PALM SPRINGS INTERNATIONAL AIRPORT
THIS LEASE ("Lease") is made and entered into this 1st day of September 2006, by and between
the CITY OF PALM SPRINGS, a charter city and California municipal corporation ("City"), and
MARRIOTT OWNERSHIP RESORTS, INC D/B/A MARRIOTT VACATION CLUB INTERNATIONAL, a
Delaware corporation ("Tenant"). City and Tenant may hereinafter be referred to individually as a "Party"
and collectively as"Parties".
RECITALS
A. Tenant desires to lease and operate a promotional terminal counter space at Palm Springs
International Airport("Airport").
B. City believes that travelers and visitors using the City's airport terminal would benefit from the
convenience and accessibility of such promotional space.
NOW THEREFORE, City and Tenant mutually agree as follows:
AGREEMENT
Section 1. LEASE SUMMARY
Certain fundamental Lease provisions are presented in this Section and represent the agreement
of the parties hereto, subject to further definition and elaboration in the respective referenced Sections
and elsewhere in this Lease_ In the event of any conflict between any fundamental Lease provision and
the balance of this Lease, the latter shall control.
1.1 Demised Premises. The "Demised Premises' shall refer to Terminal Counter Space #1
located in the airport terminal and more particularly described in Exhibit "A" attached
hereto.
1.2 Lease Term. The term of this Lease shall commence on September 1, 2006 and shall
terminate on August 31, 2009, unless extended as provided herein_
1.3 Extension Options. Two (2) one-year options.
1.4 Lease Rental Payments. $2,69024 per month due on the first of each month. $32,282.88
per annum.
1.5 Security Deposit. $5380.48
1.6 Use of Demised Premises. Demised Premises may be utilized for the display of
promotional material permitted under the City Zoning Ordinances of the City applicable to
the Demised Premises and the Airport Rules and Regulations.
1.7 Days/ Hours of Operation- Seven days per week, a minimum of six (6) hours per day.
Marriott Ownership Resorts, Inc. Page 1 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive operating&Lease Agreement
Palm Springs International Airport
Section 2. TERM
2.1 Initial Term. The initial term of this Lease shall commence on the date specified in Section
1.2 ("Commencement Date") and shall continue for the period specified therein unless
earlier terminated as provided herein.
2.2 Option Term. Tenant is given the option(s) to extend the term on all of the provisions
contained in this Lease for the period specified in Section 1.3 ("Extension Options"). Upon
exercise of each and every Option Term, the monthly and annual rent shall be
automatically adjusted in an amount equal to the increase in the Consumer Price Index
published by the United States Department of Labor, Bureau of Labor Statistics (1982-
1984 � 100) [the "CPI"] for "All Items - All Urban Consumers", for the Los Angeles-
Anaheim-Riverside Metropolitan Statistical Area, during the preceding term. City shall send
Tenant written notice of the applicable Rent increase for the term of each Option Term
along with documentation evidencing the calculation used to arrive at that figure no less
than thirty(30)days prior to the date the increase becomes effective.
2.3 Tenant's Termination Right. Tenant shall have the right to terminate this Lease, with or
without cause, by giving City thirty (30) days' prior written notice. In the event that Tenant
terminates this Lease as provided in this Section 2.3, City shall retain the Security Deposit
as its remedy hereunder, and upon payment by Tenant to City of all amounts otherwise
due under this Lease through the date of termination, Tenant and City shall thereafter have
no rights or obligations under this Lease.
Section 3- RENTAL.
3.1 Monthly Rental. Tenant shall pay to City, during the term of this Lease from and after the
Commencement Date as monthly rental for the Demised Premises the sum specified in
Section 1.4 hereof, which sum shall be paid in advance on the first day of each calendar
month. All rental to be paid by Tenant to City shall be in lawful money of the United States
of America and shall be paid without deduction or offset, prior notice or demand at the
address designated in Section 15.12 hereof.
3.2 Additional Rental. For purposes of this Lease, all monetary obligations of Tenant under
this Lease, including, but not limited to, insurance premiums, property taxes (if any),
maintenance expenses, late charges and utility costs shall be deemed additional rental.
3.3 Real Property Taxes. In addition to all rentals herein reserved, Tenant shall pay, at the
election of City, either directly to the taxing authority or to City, any annual real estate taxes
and assessments levied upon the Demised Premises (including any possessory interest
taxes), as well as taxes of every kind and nature levied and assessed in lieu of, in
substitution for, or in addition to, existing real property taxes, if any. (Tenant specifically
acknowledges that the interest granted under this Lease may be subject to possessory
interest taxes.) Such amount shall be paid on the date that is twenty (20) days prior to the
delinquent date or, if City receives the tax bill, ten (10) days after receipt of a copy of the
tax bill from City, whichever is later. Even though the term of this Lease has expired and
Tenant has vacated the Demised Premises, when the final determination is made of
Tenant's share of such taxes and assessments, Tenant shall immediately pay to City the
amount of any additional sum owed.
Marriott Ownership Resorts, Inc. Page 2 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating & Lease Agreement
Palm Springs International Airport
3.4 Personal Property Taxes. During the term hereof Tenant shall pay prior to delinquency all
taxes (if any) assessed against and levied upon fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Demised Premises, and when possible
tenant shall cause said fixtures, furnishings, equipment and other personal property to be
assessed and billed separately from the real property of City-
3-5 Utilities. All cost for water, gas, heat or electricity used in connection with the heating or air
conditioning furnished to the Demised Premises shall be paid by City. Tenant shall pay
before delinquency all charges for telephone service, trash removal and all other services
and utilities used in, upon, or about the Demised Premises by Tenant.
3.6 Late Payment. Tenant hereby acknowledges that late payment by Tenant to City of rental
or other sums due hereunder will cause City to incur costs not contemplated by this Lease,
the exact amount of which is extremely difficult to ascertain. Such costs include, but are
not limited to, processing and accounting charges. Accordingly, any payment of any sum
to be paid by Tenant not paid within five (5) days of its due date shall be subject to a five
percent (5%) late charge. City and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to City for its
loss suffered by such late payment by Tenant-
3-7 Interest. Any sum to be paid pursuant to the terms of this Lease not paid when due shall
bear interest from and after the due date until paid at a rate equal to three percent (3%)
over the reference rate being charged by Bank of America, N.A. from time to time during
such period so long as the rate does not exceed the maximum non-usurious rate permitted
by law in which case interest shall be at the maximum non-usurious rate allowed by law at
the time the sum became due.
3.8 Security Deposit. Tenant shall provide a security deposit In the amount specified in
Section 1.5 hereto. Said deposit shall be paid at the commencement of Lease Term.
Upon termination of this Lease and provided that all amounts due to the City are paid, and
the Demised Premises has been returned to the City in the same condition as received by
the Tenant, the deposit shall be returned to the Tenant. In the event fees are not paid or if
the Demised Premises are damaged, City shall have the right, but not the obligation to
draw upon the deposit to cover said costs. Upon termination of this Lease any balance of
the deposit not drawn against shall be paid to the Tenant.
Section 4. USE OF THE PREMISES-
4-1 Permitted Uses. Promotional services displayed shall be limited to the Demised Premises.
No signs, posters or similar devices shall be erected or displayed by Tenant without prior
written approval of the Director of Aviation. Merchandise or services shall not be sold from
the Demised Premises, but Tenant and its employees shall be permitted to greet and
converse with members of the public who approach the Demised Premises (or otherwise
initiate the contact) and only from the Demised Premises, The Director of Aviation must
approve the initial list of promotional services displayed on or from the Demised Premises
and any subsequent changes to the list of promotional services displayed.
4.2 Operational_Standards. The operations of the Tenant, its employees, invitees and those
doing business with it shall be conducted in an orderly and proper manner and so not to
annoy, disturb, or be offensive to others at the Airport. No solicitation of the public outside
the Demised Premises is allowed. Tenant shall provide and its employees shall wear or
Marriott Ownership Resorts, Inc. Page 3 of 17
d/b/a Marriott Vacation Club International
Nan-Exclusive Operating&Lease Agreement
Palm Springs International Airport
carry badges or other suitable means of identification. The badges or means of
identification shall be subject to the written approval of the Airport Director. The City shall
have the right to object to Tenant regarding the demeanor, conduct or appearance of
Tenant's employees, invitees and those doing business with it, whereupon Tenant will take
steps necessary to remove the cause of objection.
Tenant shall select and appoint a manager for its operation within the Demised Premises.
Said person must be a qualified and experienced manager, vested with full power and
authority, and shall so inform City in respect to the method, manner and conduct of the
operation at the Airport. The manager shall be available during regular business hours
and at all times during his/her absence, a subordinate shall be in charge and available at
the Demised Premises.
Tenant shall be responsible for the conduct, demeanor and appearance of its officers,
agents, employees and representatives. Customer service personnel and attendants shall
be trained by Tenant to render a high degree of courteous and efficient service, and it shall
be the responsibility of the Tenant to maintain close supervision over said personnel to
assure the rendering of a high standard of service to the public and the patrons of the
Counter concession. Upon objection from the Director of Aviation concerning the conduct,
demeanor or appearance of such persons, Operator shall take all steps necessary to
remove the cause of the objection_
Tenant, its agents and employees shall conduct and maintain a friendly, cooperative,
though competitive relationship with its competitors operating in the Airport. Tenant shall
not engage in open, notorious and public disputes, disagreements or conflicts tending to
deteriorate the quality of service of its competitor or be incompatible to the best interest of
the public at the Airport. The City shall have the right to resolve all such disputes,
disagreements, or conflicts and its determination shall be final.
4.2 Compliance with Laws. Tenant shall, at its sole cost and expense, comply with all of the
requirements of all municipal, state, and federal authorities now in force or which may
hereafter be in force pertaining to the use of the Demised Premises, and shall faithfully
observe in said use all municipal ordinances, including, but not limited to, the General Plan
and zoning ordinances, state and federal statutes, or other governmental regulations now
in force or which shall hereinafter be in force.
Tenant shall not engage in any activity on or about the Demised Premises that violates any
Environmental Law, and shall promptly, at Tenant's sole cost and expense, take all
investigatory and/or remedial action required or ordered by any governmental agency or
Environmental Law for clean-up and removal of any contamination involving any
Hazardous Material created or caused directly or indirectly by Tenant. The term
"Environmental Law" shall mean any federal, state or local law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the environmental conditions on, under
or about the Demised Premises, including, without limitation, (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C.
Sections 9601 et seq.; (ii) the Resource Conservation and Recovery Act of 1976.
("RCRA"), 42 U.S.C. Sections 6901 et M.; (iii) California Health and Safety Code Sections
25 100 et seq.; (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986, California
Health and Safety Code Section 25249.5 et seq.; (v) California Health and Safety Code
Section 25359.7; (vi) California Health and Safety Code Section 25915; (vii) the Federal
Water Pollution Control Act, 33 U.S.C. Sections 1317 et Seq.; (viii) California Water Code
Marriott Ownership Resorts, Inc. Page 4 of 17
d/b/a Marriott Vacation Club International
Nori-Exclusive Operating&Lease Agreement
Palm Springs International Airport
Section 1300 et seq-; and (ix) California Civil Code Section 3479 et seq., as such laws are
amended and the regulations and administrative codes applicable thereto- The term
"Hazardous Material" includes, without limitation, any material or substance which is (i)
defined or listed as a "hazardous waste", "extremely hazardous waste", "restrictive
hazardous waste" or "hazardous substance" or considered a waste, condition of pollution
or nuisance under the Environmental Laws; (ii) petroleum or a petroleum product or
fraction thereof; (iii) asbestos; and/or (iv) substances known by the State of California to
cause cancer and/or reproductive toxicity. It is the intent of the parties hereto to construe
the terms "Hazardous Materials" and "Environmental Laws" in their broadest sense-
Tenant shall provide all notices required pursuant to the Safe Drinking Water and Toxic
Enforcement Act of 1986, California Health and Safety Code Section 25249-5 et seq,
Tenant shall provide prompt written notice to City of the existence of Hazardous
Substances on the premises and all notices of violation of the Environmental Laws
received by Tenant.
4.3 Operations for Benefit of Public- Tenant agrees to operate the Demised Premises for the
use and benefit of the public, to make available all Tenants' airport facilities to the public,
without discrimination on the grounds of sex, race, color or national origin. Nothing herein
contained shall be construed to grant or authorize the granting of an exclusive right within
the meaning of Section 308 of the Federal Aviation Act of 1958, as amended.
4.4 Public Facilities Ingress, Egress and Quiet Enjoyment- City agrees that Tenant, upon
payment of the rental hereunder and performing the covenants of the Lease, may quietly
have, hold and enjoy the Demised Premises during the term of the Lease, and that Tenant
shall have the non-exclusive right to use, in common with others, the public facilities at the
Airport and Tenant shall have a reasonable right of ingress to and egress from the
Demised Premises and the public facilities for its employees, visitors and customers- City
shall provide parking at no cost for two (2) Tenant employee vehicles in the Airport
Employee Parking Lot-
4-5 Rules and Regulations. Tenant shall faithfully observe and comply with the any rules and
regulations that City shall from time to time promulgate and/or modify. Any amendment or
modification of the Airport Rules and Regulations shall be binding upon the Tenant upon
delivery of a copy of such amendment or modification to Tenant. City shall not be
responsible to Tenant for the nonperformance of any said rules and regulations by any
other tenants or occupants. The Airport Rules and Regulations shall apply and be enforced
as to all tenants in the Demised Premises on a uniform basis.
Section 5. ALTERATIONS AND REPAIRS.
5.1 Improve lents Alterations and Fixtures. Tenant shall not make or suffer to be made, any
alterations or improvements to the Demised Premises, or any part thereof,without the prior
written consent of City, and any alterations or improvements to the Demised Premises,
except movable furniture, and trade fixtures, shall become at once a part of the realty and
shall at the expiration or earlier termination of this Lease belong to City free and clear of
any liens or encumbrances. Tenant shall not in any event make any changes to the
exterior of the Demised Premises, if any. Any such alterations or improvements shall be in
conformance with the requirement of all municipal, state, federal, and other governmental
authorities, including requirements pertaining to the health, welfare or safety of employees
of the public and in conformance with reasonable rules and regulations of City- City may
require that any such alterations or improvements be removed prior to the expiration of the
Marriott Ownership Resorts, Inc. Page 5 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating&Lease Agreement
Palm Springs International Airport
term hereof. Any removal of alterations or improvements or furniture and trade fixture shall
be at Tenant's expense and accomplished in a good and workmanlike manner. Any
damage occasioned by such removal shall be repaired at Tenant's expense so that the
Demised Premises can surrender in a good, clean and sanitary condition as required by
Section. 5.2 hereof. All fixtures, improvements and appurtenances installed by Tenant shall
conform with the requirements of all municipal, state, federal, and governmental authorities
including requirements pertaining to the health, welfare, or safety of employees or the
public-
5.2 Maintenance and Repair. Tenant shall, subject to City's obligations hereinafter provided, at
all times during the term hereof, and at Tenant's sole cost and expense, keep, maintain
and repair the Demised Premises and other improvements within the Demised Premises in
good and sanitary order, condition, and repair (except as hereinafter provided)_. Tenant
shall also at its Sole cost and expense be responsible for any alterations or improvements
to the Demised Premises necessitated as a result of the requirement of any municipal,
state or federal authority. Tenant hereby waives all right to make repairs at the expense of
the State of California to make said repairs. By entering into the Demised Premises,
Tenant shall be deemed to have accepted the Demised Premises as being in good and
sanitary order, condition and repair, and Tenant agrees on the last day of said term or
sooner termination of this Lease to surrender the Demised Premises with appurtenances,
in the same condition as when received and in a good, clean and sanitary condition,
reasonable use and wear thereof and damage by tire, act of God or by the elements
excepted.
5.3 Free From Liens. Tenant shall keep the Demised Premises free from any liens arising out
of any work performed, material furnished, or obligation Incurred by Tenant or alleged to
have been incurred by Tenant.
5.4 City's_Reserved Rights.
(a) Airport Development and SafeY . City reserves the right to further develop or improve
the aircraft operating area of the Airport as it sees fit, and City reserves the right to take
any action it considers necessary to protect the aerial approaches of the Airport against
obstruction, together with the right to prevent Tenant from erecting or permitting to be
erected any building or other structure of the Demised premises which, in the opinion of
City, would limit the usefulness of the Airport or constitute a hazard to aircraft.
(b) Right to Relocate Customer Service Counter. City reserves the right to relocate all of
the Customer Service Counter Space within the Terminal Building if required to ensure the
operational effectiveness of the Terminal Building and concourses and if City agrees to
reimburse such Relocation Costs to Tenant through Concession Fee credits. Said
relocation shall be in order of original counter selection to an area of comparable size and
quality as is reasonably practicable. "Relocation Costs' shall mean the reasonable and
actual out-of-pocket expenses incurred by Tenant to move from the existing assigned
Customer Service Counter Space to a substituted area (Substituted Premises) and the
unamortized cost of Customer Service counter improvements made by Tenant, if any, that
cannot be relocated to the Substituted Premises. The unamortized cost of the
improvements shall be determined in accordance with Generally Accepted Accounting
Principles with a useful life not to exceed the term of the this Lease.
Marriott Ownership Resorts, Inc. Page 6 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating &Lease Agreement
Palm Springs International Airport
Upon completion of such relocation, Tenant shall provide City with a statement certified by
a financial officer of Tenant: (1) setting out Tenant's Relocation Costs; and (2) itemizing the
improvements made by Tenant that cannot be relocated to the Substituted Premises and
showing the calculation of the unamortized value of such improvements. Copies of
invoices shall accompany said statement for such Relocation Costs. City shall thereafter
reimburse Tenant for such Relocation Costs by crediting the Privilege Fee thereafter due
until the Relocation Costs are reimbursed.
Notwithstanding the foregoing, in the event the Substituted Premises is unsatisfactory to
Tenant in its reasonable discretion, Tenant shall give Landlord written notice thereof
("Tenant's Objection Notice") within ten (10) days following Tenant's receipt of notice of
such relocation, following which Tenant and Landlord shall work in good faith to resolve
Tenant's objections to the Substituted Premises or to locate alternate Substituted Premises
reasonably acceptable to Tenant. In the event that Landlord and Tenant are unable to
reach agreement within thirty (30) days following Landlord's receipt of Tenant's Objection
Notice, Tenant may terminate this Lease by giving written notice thereof to City, which
termination shall be effective the date relocation is required by the City. In the event of
termination by Tenant under this paragraph, the Security Deposit shall be returned to
Tenant upon payment by Tenant to City of all amounts otherwise due under this Lease
through the date of termination. Tenant and City shall thereafter have no rights or
obligations under this Lease.
(c) Termination By City For Airport Related Purpose. In the event City should require the
Demised Premises, or any portion thereof, for any Airport related purpose whatsoever,
Tenant agrees that City may terminate this Lease by giving Tenant one hundred twenty
(120) days written notice. If this Lease is terminated under the provisions of this Section
5.4(c), City shall reimburse Tenant for Tenant's actual construction cost of any new
improvements installed subsequent to the execution of this Lease and pursuant to the
provisions of Section 5A of this Lease, less depreciation at the rate of 20% per year from
date of this Lease, regardless of when such improvements are installed_
The reimbursement provided above shall be Tenant's sole and exclusive remedy and form
of compensation, costs or damages, including Relocation Assistance benefits (Sec. 7260
et sea. of the California Government Code), due to termination, re-entry or acquisition by
City.
(d) Lease to United States. During the time of war or national emergency, City shall have
the right to lease the landing area or any part thereof to the United States Government for
military or naval use, and, if such lease is executed, the provisions of this Lease insofar as
they are inconsistent with the provisions of the lease to the Government shall be
suspended and, in that event, a just and proportionate part of the rent hereunder shall be
abated, and the period of such closure shall be added to the term of this Lease Se as to
extend and postpone the expiration thereof unless the Tenant otherwise elects to terminate
this Lease.
Section 6. INSURANCE AND INDEMNIFICATION.
6A Insurance. Prior to its ability to access the Demised Premises, Tenant will provide City
with proof of insurance, at Tenant's sole cost and expense, to remain in full force and
effect during the entire term of this Lease. The following policies of insurance shall be
maintained:
Marriott Ownership Resorts, Inc. Page 7 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating & Lease Agreement
Palm Springs International Airport
6.1.1 Workers'Compensation Insurance. Workers' Compensation Insurance in an
amount required by the laws of California and Employer's Liability Insurance in an amount
not less that ONE MILLION DOLLARS ($1,000,000) combined single limit for all damages
arising from each accident or occupational disease.
6.1.2 Commercial General Liabilitv.Commercial General Liability Insurance written on a
per-occurrence and not a claims-made basis with a combined single limit of at least ONE
MILLION DOLLARS ($1,000,000) bodily injury and property damage including coverages
for contractual liability, personal injury, independent contractors, broad form property
damage, products and completed operations.
6.1.3 Automobile Liability Insurance. A policy of comprehensive automobile liability
insurance written on a per-occurrence basis in an amount not less than ONE MILLION
DOLLARS ($1,000,000) combined single limit covering all owned, non-owned, leased, and
hired vehicles used in connection with operations occurring on the Demised Premises.
6.1.4 Other Insurance. Such other policies of insurance including, but not limited to,
casualty insurance, business interruption insurance, and fidelity insurance, as may be
required by the nature of operations.
6.1.5 General Provisions. The above insurance shall be primary and no other
insurance maintained by the City will be called upon to contribute to a loss. All polices
except Workers Compensation shall have the City named as an additional insured.
Workers Compensation insurance of the Tenant shall contain a waiver-of-subrogation
clause in favor of the City, its officers, directors, officials, agents, employees, volunteers,
and representatives. All policies of insurance required to be obtained by Tenant hereunder
shall be issued by insurance companies authorized to do business in California and must
be rated no less than A-, VII or better in Best's Insurance Guide. Prior to engaging in any
operations hereunder, Tenant shall deliver to City certificate(s) of insurance and
endorsements evidencing the coverages specified above. Such policies shall not be
cancelled or materially altered to the detriment of City or Tenant without the insurer
providing City with thirty (30) days'written notice.
6.2 Indemnification by Tenant. Tenant shall indemnify, defend (with counsel designated by
City), protect and hold harmless City, City's Parties and the Releasing Parties from and
against any and all claims, demands, judgments, actions, damages, losses, penalties,
liabilities, costs and expenses (including, without limitation, attorney's fees and court costs)
arising at any time directly or indirectly from or in connection with (i) any default in the
performance of any obligation by Tenant to be performed under the terns of this Lease, (ii)
Tenant's use of the Demised Premises, or (iii) the conduct of Tenant's business or any
activity, work or things done, permitted or suffered by Tenant in or about the Demised
Premises, except to the extent caused by City's negligence or willful misconduct. The
obligations of Tenant under this Article 6 shall survive the expiration or earlier termination
of this Lease.
Tenant, as a material part of the consideration to City, hereby assumes all risk of damage
to the Demised Premises, including, without limitation, injury to persons in, upon or about
the Demised Premises during Tenant's use of the Demised Premises, except where such
damage or injury is caused solely by the negligence or willful misconduct of the City or the
City's Parties. Tenant hereby waives all claims with respect thereof against City. City shall
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Nan-Exclusive Operating & Lease Agreement
Palm Springs International Airport
not be liable for any injury to the Tenant, or injury to or death of any of Tenant's Parties, or
injury to or death of any other person in or about the Demised Premises from any cause
except to the extent caused by the negligence or willful misconduct of the City or the City's
Parties.
6.3 Assumption of All Risks and Liabilities. Tenant assumes all risks and liabilities arising out
of any and all use of the Demised Premises by Tenant or Tenant's Parties, except where
such damage or injury is caused solely by the negligence or willful misconduct of the City
or the City's Parties.
Section 7. ABANDONMENT AND SURRENDER_
7.1 Abandonment. Tenant shall not vacate or abandon the Demised Premises at any time
during the term of this Lease; and if Tenant shall abandon, vacate or surrender the
Demised Premises or be dispossessed by process of law, or otherwise, any personal
property belonging to Tenant and left on the Demised Premises shall be deemed to be
abandoned, at the option of City, except such property as may be mortgaged to City.
7.2 Surrender of Lease. The voluntary or other surrender of this Lease by Tenant or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of City, terminate all
provisions of existing lease. Tenant shall not assign or sublease.
Section 8. DAMAGE AND DESTRUCTION OF DEMISED PREMISES. In the event of (a) partial or
total destruction of the Demised Premises during the term of this Lease, which requires
repairs to the Demised Premises, or (b) the Demised Premises being declared unsafe or
unfit for occupancy by any authorized public authority for any reason, which declaration
requires repairs to the Demised Premises, Tenant shall forthwith make said repairs, except
where such damage or injury is caused solely by the negligence or willful misconduct of
the City or the City's Parties. No such damage or destruction (including any destruction
necessary in order to make repairs required by any declaration made by any public
authority) shall in any way annul or void this Lease. Tenant shall promptly clean and
remove all debris resulting from said damage or destruction. Tenant shall take preliminary
steps toward restoring the improvements with thirty (30) days of the casualty and such
improvements shall be restored within a reasonable time thereafter. The Demised
Premises shall be restored to the condition they existed immediately before said casualty.
Section 9. ASSIGNMENT.
Tenant shall not assign this Lease the Demised Premises, or any interest therein. Any
assignment without the prior written consent of City shall be void, shall constitute a
material breach of this Lease, and shall, at the option of City,terminate this Lease.
Section 10. ENCUMBRANCE.
10.1 This Lease, or any right to or interest in, or any of the improvements on the Demised
premises, may be encumbered with the written approval of City. Any such approved
encumbrance shall be subject to the covenants, conditions and restrictions set forth herein
and to all rights of City.
10.2 Any encumbrance must be confined to the leasehold interest of Tenant and shall not affect
in any way the City's interest in the land. The encumbrance shall provide that the proceeds
from fire or extended coverage insurance shall be used for the repair or rebuilding of the
Marriott Ownership Resorts, Inc. Page 9 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating& Lease Agreement
Palm Springs International Airport
leasehold improvements and not to repay any part of the outstanding mortgage. Tenant
• agrees to furnish, as requested, any financial statements or analyses pertinent to the
encumbrance that City may deem necessary to justify the amount, purpose and tems of
said encumbrance.
10.3 In the event of default by the Tenant of the terms of an approved encumbrance, the
encumbrancer may exercise any rights provided in such approved encumbrance provided
that, before any sale of the leasehold estate, whether by power of sale or foreclosure, the
encumbrancer shall give to City notice of the same character as is required to be given to
Tenant by such encumbrancer pursuant to the loan documents and/or the laws of the State
of California and City shall be given an additional thirty (30) days in which to cure the
default after the time for Tenant to cure has expired.
10.4 If any sale under the approved encumbrance occurs, whether by power of sale or
foreclosure, and the purchaser at such sale is the encumbrancer, the encumbrancer may
sell and assign this Lease without any further consent of City provided that the assignee
shall agree in such assumption by the assignee, the encumbrancer shall be released from
all future obligations of the Tenant under this Lease. If a sale under the approved
encumbrance occurs, and the purchaser is a party other than the encumbrancer, said
purchaser, as successor in interest to the Tenant shall be bound by all the terms and
conditions of this Lease and the purchaser shall assume in writing the obligations of
Tenant hereunder.
10.5 If notice of such sale shall be given and the defaults or any of them upon which such notice
of sale is based shall then continue, City shall have the right to correct such defaults at any
time prior to the date of sale or foreclosure, and to terminate such leasehold upon paying
to the encumbrancer the balance of the encumbrance as hereinafter defined.
10.6 "Balance of encumbrance" shall mean the amount of principal remaining unpaid on a note
secured by a trust deed or mortgage of an interest plus accrued and past due interest
thereon and expenses incurred by the lender in connection with foreclosure including by
not limited to, fire insurance premiums, title insurance expenses, recording fees, appraisal
fees, credit reports and any tax reporting services and additional expenditures paid by the
lender on additions, betterments and rehabilitations of improvements on the property
encumbered pursuant to plans approved by City, which consent may not be unreasonably
withheld, and other expenses necessary to place the improvements in marketable
condition, such adjusted principal to be paid in case or, at the option of City, amortized
over the term and in accordance with the schedule set forth in said note, the interest rate
on the unpaid balance thereto to be as set forth in said note.
10.7 City agrees to provide encumbrancer written notice of any default by Tenant under this
Lease and an opportunity to cure at the time notice of such default is provided to Tenant
and give encumbrancer thirty(30) days to cure a monetary default or forty-five (45) days to
cure a non-monetary default; provide, however, that if such non-monetary default cannot
be cured within such period of forty-five (45) days, encumbrancer shall have a reasonable
time to cure such default provided that encumbrancer commences to cure within said forty-
five (45) days and diligently prosecutes the cure to completion. Such period shall include
the time to complete a foreclosure action If encumbrancer needs to gain possession of the
Demised Premises to cure said default by Tenant.
Marriott Ownership Resorts, Inc. Page 10 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating R Lease Agreement
Palm Springs International Airport
Section 11. DEFAULT AND REMEDIES.
11A .In the event Tenant fails to perform any obligations under this Lease and after the
expiration of any cure period, City may terminate Tenant's right to possession of the
Demised Premises by any lawful means, in which case this Lease shall terminate.
112 Neither party shall be deemed to be in default in the performance of any obligation
required to be performed by it hereunder unless and until it has failed to perform such
obligation within thirty (30) days after written notice by the other party specifying in
reasonable detail the nature and extent of any such failure; provided, however, that if the
nature of the obligation is such that more than thirty (30) days are required for its
performance, then the party shall not be deemed to be in default if it shall commence such
performance within such thirty (30) day period and thereafter diligently prosecutes the
same to completion.
Section 12 ENFORCEMENT OF LAW
12.1 Governing Law. This Lease shall be governed by, interpreted under, and construed and
enforced in accordance with the laws of the State of California.
12.2 Compliance with Law. All services rendered hereunder shall be provided in accordance
with all ordinances, resolutions, statutes, rules, and regulations of the City and any
Federal, State, or local governmental agency having jurisdiction in effect at the time
service is rendered.
12.3 Waiver. The waiver of any breach of any provision hereunder by City or Tenant shall not
be deemed a waiver of any preceding or subsequent breach hereunder. No failure or
delay of any Party in the exercise of any right given hereunder shall constitute a waiver
thereof nor shall any partial exercise of any right preclude further exercise thereof.
12.4 Severability. If any paragraph, section, sentence, clause or phrase contained in this
Lease shall become illegal, null or void, against public policy, or otherwise unenforceable,
for any reason, or held by any court of competent jurisdiction to be illegal, null or void,
against public policy, or otherwise unenforceable, the remaining paragraphs, sections,
sentences, clauses or phrases contained in this Lease shall not be affected thereby.
12.5 Termination Prior to Expiration of Term. The parties agree that if Tenant: (i)files a petition
in bankruptcy, (ii) is adjudicated bankrupt, (iii) if a petition in bankruptcy is filed against
Tenant and not discharged within thirty (30) days, (iv) if Tenant becomes insolvent or
makes an assignment for the benefit of its creditors or an arrangement pursuant to any
bankruptcy law, or(v) if a receiver is appointed for Tenant or its business during the Term
of this Lease, City may terminate this Lease upon twenty-four(24) hours' written notice to
Tenant.
12.6 Attorney's Fees. If either party to this Lease is required to initiate or defend or made a
party to any action or proceeding in any way connected with this Lease, the prevailing
party in such action or proceeding in addition to any other relief, which may be granted,
shall be entitled to reasonable attorney's fees and costs.
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d/b/a Marriott Vacation Club International
Non-Exclusive Operating S Lease Agreement
Palm Springs International Airport -
Section 13. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION.
13.1 Non-liability of City Officers and Employees.No officer or employee of the City shall be
personally liable to the Tenant, or any successor in interest, in the event of any default or
breach by the City or for any amount, which may become due to the Tenant or to its
successor, or for breach of any obligation of the terms of this Lease.
13.2 Conflict of Interest. No officer or employee of the City shall have any financial interest,
direct or indirect, in this Lease nor shall any such officer or employee participate in any
decision relating to this Lease which effects his financial interest or the financial interest of
any corporation, partnership or association in which he is, directly or indirectly, interested,
in violation of any State statute or regulation. Tenant warrants that it has not paid or given
and will not pay or give any third party any money or other consideration for obtaining this
Lease.
13.3 Standard Covenant Against Discrimination. Tenant covenants that, by and for itself, its
heirs, executors, assigns, and all persons claiming under or through them, 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
performance of this Lease. Tenant shall take affirmative action to insure that applicants are
employed and that employees are treated during employment without regard to their race,
color, creed, religion, sex, marital status, national origin, or ancestry.
13.4 Americans With Disabilities Act. In its operation of Demised Premises, Tenant shall
comply with the Americans with Disabilities Act and all federal regulations applicable under
the Act.
Section 14. FAA REQUIRED PROVISIONS_
14.1 Tenant, as a part of the consideration for this Lease, covenants and agrees "as a covenant
running with its interest in property" that in the event facilities are constructed, maintained,
or otherwise operated on the Airport or the Demised Premisess for a purpose for which a
Department of Transportation ("DOT") program or activity is extended or for another
purpose involving the provision of similar services or benefits, the Tenant shall maintain
and operate such facilities and services in compliance with all other requirements imposed
pursuant to Title 49, Cade of Federal Regulations DOT, Part 23, Nondiscrimination in
Federally Assisted Programs of the Department of Transportation-Effectuation of Title VI of
the Civil Rights Act of 1964, as such regulations may be amended from time to time.
14.2 This Lease is subject to the requirements of the U.S. Department of Transportation's
regulations, 49 CFR part 23. The Tenant or contractor agrees that it will not discriminate
against any business owner because of the owner's race, color, national origin or sex in
connection with the award or performance of any concession agreement, management
contract, or subcontract, purchase or lease agreement or other agreement covered by 49
CFR part 23.
14.3 The Tenant or contractor agrees to include the above statements in any subsequent
concession agreement or contract covered by 49 CFR part 23, that it enters and causes
those businesses to similarly include the statements in further agreements.
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d/b/a Marriott Vacation Club International
Nora-Exclusive Operating& Lease Agreement
Palm Springs International Airport
14.4 In the event of a breach of the covenants specified in Subsection 14.1 and 14.2 of this
Lease, City shall have the right to terminate this Lease and to reenter and repossess the
Demised Premisess and the facilities thereon and hold the same as if said Lease had
never been made or issued. This provision does not become effective until the procedures
of Title 49, Code of Federal Regulations, Part 23 are followed and completed, including the
expiration of any appeal rights.
14.5 Tenant shall furnish its services on a fair, equal, and not unjustly discriminatory basis to all
users thereof and it shall charge fair, reasonable, and not unjustly discriminatory prices for
its services; provided that Tenant may be allowed to make reasonable and
nondiscriminatory discounts, rebates, or other similar type of price reductions to volume
purchases or other rational, reasonable basis. Non-compliance with this provision shall
constitute a material breach of this Lease and in the event of such non-compliance, City
shall have the right to terminate this Lease and any interest in property created without
liability or at the election of the City or the United States either or both Governments shall
have the right to judicially enforce this provision.
14.6 Tenant agrees that it shall insert the above five provisions in any lease or contract by
which Tenant grants a right or privilege to any person, partnership, or corporation to render
services to the public on the Demised Premises pursuant to this Lease. Nothing in this
provision shall be construed as waiving any obligations or requirements of the Tenant
pursuant to Subsection 4.3 of this Lease or abrogate the rights of the City pursuant to such
Subsection.
14.7 This Lease shall be subordinate to the provisions and requirements of any existing or
future agreement between the City and the United States relative to the development,
operation, or maintenance of the Airport.
14.8 This Lease, and all provisions hereof, shall be subject to whatever right the United States
Government now has or in the future may have or acquire, affecting the control, operation,
regulation, and taking over of the Airport or the exclusive or non-exclusive use of the
Airport by the United States during a time of war or national emergency.
Section 15 MISCELLANEOUS PROVISIONS
15.1 Headinas. The headings of this Lease are for purposes of reference only and shall not
limit or define the meaning of the provisions of this Lease.
15.2 Counterparts. This Lease may be signed in any number of counterparts, each of which will
be deemed an original, but all of which together will constitute one instrument.
15.3 Labor Disputes. Tenant shall give prompt notice to City of any actual or potential labor
dispute which delays or may delay performance of this Lease.
15.4 Califomia Law_ This Lease shall be construed and interpreted both as to validity and to
performance of the parties in accordance with the laws of the State of California. Legal
actions concerning any dispute, claim or matter arising out of or in relation to this Lease
shall be instituted in the Superior Court of the County of Riverside, State of California, or
any other appropriate court in such county, and Tenant covenants and agrees to submit to
the personal jurisdiction of such court in the event of such action_
Marriott Ownership Resorts, Inc. Page 13 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating& Lease Agreement
Palm Springs International Airport
15.5 Disputes. In the event of any dispute arising under this Lease, the injured party shall notify
the injuring party in writing of its contentions by submitting a claim therefore. The injured
party shall continue performing its obligations hereunder so long as the injuring party
commences to cure such default within ten (10) days of service of such notice and
completes the cure of such default within forty-five (45) days after service of the notice, or
such longer period as may be permitted by the injured party; provided that if the default is
an immediate danger to the health, safety and general welfare, such immediate action may
be necessary. Compliance with the provisions of this Section shall be a condition
precedent to termination of this Lease for cause and to any legal action, and such
compliance shall not be a waiver of any party's right to take legal action in the event that
the dispute is not cured, provided that nothing herein shall limit City's or the Tenant's right
to terminate this Lease without cause pursuant to Subsection 5.4(c).
15.6 Rights and Remedies are Cumulative. Except with respect to rights and remedies
expressly declared to be exclusive in this Lease, the rights and remedies of the parties are
cumulative and the exercise by either parry of one or more of such rights or remedies shall
not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by the other party.
15.7 Legal Action. In addition to any other rights or remedies, either party may take legal
action, in law or in equity, to cure, correct or remedy any default, to recover damages for
any default, to compel specific performance of this Lease, to obtain declaratory or
injunctive relief, or to obtain any other remedy consistent with the purposes Of this Lease.
15.8 Reservation of City Rights. City reserves the right, but shall not be obligated to Tenant, to
maintain the Demised Premises and keep in good repair the Airport or the Demised
Premises. The City further reserves the right to direct and control all activities of Tenant
consistent with the provisions of this Lease.
15.9 Interpretation. The terms of this Lease shall be construed in accordance with the meaning
of the language used and shall not be construed for or against either party by reason of the
authorship of this Lease or any other rule of construction which might otherwise apply.
15.10 Integration; Amendment. It is understood that there are no oral leases between the parties
hereto affecting this Lease and this Lease supersedes and cancels all previous
negotiations, arrangements, leases and understandings, if any, between the parties, and
none shall be used to interpret this Lease. This Lease may be amended at any time by the
mutual consent of the parties by an instrument in writing.
15.11 Corporate Author Yv. The persons executing this Lease on behalf of the parties hereto
warrant that (i) such party Is duly organized and existing, (ii) they are duly authorized to
execute and deliver this Lease on behalf of said party, (iii) by so executing this Lease, such
party is formally bound to the provisions of this Lease, and (iv) the entering into this Lease
does not violate any provision of any other Lease to which said party is bound.
15.12 Notice.Any notice required or permitted to be given hereunder shall be in writing and
signed by the Party, officer or agent of the Party to whom it is to be sent, and shall be
either: (1) personally delivered to the Party to whom it is to be sent, or (2) sent via
overnight courier services, or (3) sent via certified or registered mail, return receipt
requested, postage prepaid to the respective addresses, or such other addresses as the
Parties may specify in writing:
Marriott Ownership Resorts, Inc. Page 14 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating& Lease Agreement
Palm Springs International Airport
To City: Palm Springs International Airport
Attn: Director of Aviation
3400 East Tahquitz Canyon Way, Suite OFC
Palm Springs, California 92262-6966
To Tenant: Marriott Vacation Club International
Attn: Ryan Caress/ Marketing Manager
9000 Shadow Ridge Road
Palm Desert, CA 92211
Marriott Ownership Resorts, Inc. Page 15 of 17
d/b/a Marriott Vacation Club International
Nan-Pxclusive Operating& Lease Agreement
Palm Springs International Airport
IN WITNESS WHEREOF, the parties have executed and entered into this Lease as of the date first
written above.
CITY OF PALM SPRINGS
ATTEST: a municipal Corporation
By: By:
City Clerk City Manager
APPROVED A$TO FORM:
By:
City Attorney
CONTRACTOR: Marriott Ownership Resorts, Inc,d/b/a Marriott Vacation Club International
Check one:_Individual_,Partnership_Corporation
Corporations require two notarized signatures:One from each of the following A Chairman of Board, President,or any Vice!President:ANO B.
Secretary,Assistant Secretary.Treasurer,Assistant Treasurer,or Chief Financial Officer).
By: By:
Signature(notarized) Signature(notarized)
Name: Name:
Title: Title.
State of L State of ❑
County of ass County of ❑ss
On before me, On before me ,
Personally appeared Personally appeared
personally known to me(or proved to me on the basis of personally known to me(or proved to me on the basis of satisfactory
satisfactory evidence)to be the person(s)whose name(s) evidence)to be the person(s)whose name(s)islare subscribed to
islare subscribed to the within instrument and acknowledged the within instrument and acknowledged to me that he/she/they
to me that helshe/they executed the same in his/her/their executed the same in his/her/their authorized rapacity(ies).and that
authorized capacity(ies),and that by his/her/their signalure(s) by his/her/their signature(s)on the instrument the person(s),or the
on the instrument the person(s),or the entity upon behalf of entity upon behalf of which the person(s)acted,executed the
which the person(s)acted,executed the instrument. instrument.
WITNESS my hand and official seal. WITNESS my hand and official seal.
Notary Signature: Notary Signature:
Notary Seal: Notary Seal:
Marriott Ownership Resorts, Inc. Page 16 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating&Lease Agreement
Palm Springs International Airport
Exhibit"A"
Terminal Counter Space#1
See Attached
Marriott Ownership Resorts, Inc. Page 17 of 17
d/b/a Marriott Vacation Club International
Non-Exclusive Operating&Lease Agreement
Palm Springs International Airport
EXHIBIT "A"
Palm Springs International Airport
Marriott Terminal Counter Space
Terminal Counter Space#1
NOTE: SHADED AREA REPRESENTS LEASED SPACE
OF 84 SQUARE FEET. 12 x 7 SQ. FT.
12
AREA OF BLOWUP