HomeMy WebLinkAboutA8407 - DESERT WATER AGENCY 1
LEASE AGREEMENT—TRIPLE NET
This Lease Agreement ("Lease"), dated for reference purposes only October 1, 2019, is
made by and between Desert Water Agency, a California public agency ("Lessor"), and the City
of Palm Springs, a California municipal corporation("Lessee").
The parties hereto agree as follows;
. 1. Letting oFP�ernises
Lessor agrees to lease the Premises (defined below) to Lessee, and Lessee agrees to lease
the Premises from Lessor,according to the terms and conditions of this Lease. This Lease is triple
net to the Lessor and Lessee shall be responsible for paying for all operation and maintenance costs
of the Premises, in addition to the payment of rent,as provided more fully hereunder.
1 2. Premises �`AS-IS?'Condition. The Premises consists of that certain real property
described on the attached Exhibit"A"&"B"and depicted on the attached'Exhibit"B"located in
the County of Riverside, State of California. LESSEE REPRESENTS THAT AS THE OWNER
OF THE PREMISES PRIOR TO THE COMMENCEMENT OF THIS LEASE, IT IS SATISFIED
THAT THE PREMISES ARE SUITABLE FOR ITS INTENDED USE. LESSOR AND LESSEE
ACKNOWLEDGE AND AGREE THAT LESSOR MAKES NO WARRANTY OR
REPRESENTATION CONCERNING THE CONDITION OF THE PREMISES AND THAT
LESSOR DELIVERS THE PREMISES TO LESSEE IN AN "AS-IS", "WHERE-IS"
CONDITION. LESSEE SHALL BE RESPONSIBLE FOR THE COST OF ANY COMPLIANCE
WITH ANY APPLICABLE LAW OR REGULATION.
3. Term. The term ("Term")of this lease shall commence as of October 1,2019,and
terminate immediately.on October 1,2029,or upon such other date as the parties hereto may agree.
However, either party may terminate at any time upon twelve (12) months written notice to the
other party.
4. Ownershig;Surredde'r.
(a) Subject to Lessor's right to require removal or elect ownership, all
improvements, alterations and utility installations made by Lessee shall be the property of Lessee,
but considered a part of the Premises. All Lessee owned improvements, alterations and utility
installations shall, at the expiration or termination of this Lease, become the property of Lessor
and will be surrendered by Lessee with the Premises unless Lessee removes them from the
Premises on or before the termination of this Lease without substantial damage to the Premises.
(b) LESSEE SHALL SURRENDER AND VACATE THE PREMISES BY
NO LATER THAN THE END OF THE TERM.
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5. ftrit;;'.Additional Rent.
(a) Lessee shall pay to Lessor annual rent of$74,135. Such annual rent shall be
payable in annual installments with each such installment payable within ten days of the date of
this Lease and on each subsequent annual anniversary thereof.
(b) Any other monies to be paid to the Lessor pursuant to the terms hereunder
shall be deemed additional rent.
6. Annual Rental Increase. The annual rental shall increase annually on each
anniversary of the Commencement Date by an amount equal to the increase during the
immediately preceding fiscal year ending on June 30 as set forth in the Consumer Price Index—All
Urban Consumers, Los Angeles-Orange-Riverside County(All items; 1982-84 equals 100) issued
by the U.S. Department of Labor, Bureau of Labor Statistics or any successor agency("CPI-U").
7. Taxes and Assessments. Lessee shall pay all taxes and assessments, including,
without limitation, real estate, personal property, and possessory interest taxes, and any and all
utility, city, or county assessments, for any purpose, assessed, levied, confirmed, or imposed
during the Term.
8. Ut'ilittes. Lessee shall pay the suppliers for all water, gas, electricity, light, heat,
telephone,power,and other utilities and communications services used by Lessee on the Premises
during the Term, whether or not the services are billed directly to Lessee. Lessee shall also
procure, or cause to be procured, without cost to Lessor, but only upon the prior written consent
of Lessor, any and all necessary permits, licenses, or other authorizations required for the lawful
and proper installation and maintenance upon the Premises of wires, pipes, conduits, tubes, and
other equipment and appliances for use in supplying any of the services to and upon the Premises.
9. Insurance.
(a) .016h&611y. Lessee shall require its sublessee or contractor, as occupant of
the Premises, to obtain and keep in force general liability insurance, insurance covering loss or
damage to the Premises, and insurance coverage on all of the sublessee's or contractor's personal
property and sublessee or contractor owned improvements, alterations and utility installations to
the extent reasonably acceptable to Lessor.
(b) 'Policies. Insurance required hereunder shall be from companies_ duly
licensed or admitted to transact business in the State of California, and maintaining during the
policy term a rating that is reasonably satisfactory to Lessor. Lessee shall deliver to Lessor
certified copies of policies of insurance as Lessor may ask Lessee to deliver from time-to-time.
(c) Waiver. Without affecting any other rights or remedies, Lessor and Lessee
waive all rights to recover against each other or against the officers,directors,employees,or agents
of each of them, for any loss or damage arising from any cause covered by any insurance actually
carried by each of them. Lessor and Lessee will cause their respective insurers to issue appropriate
waiver of subrogation rights endorsements to all policies of insurance carried in connection with
the Premises.
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10. Permitted Use and Compliance.with Law. Lessee shall have the right, at its sole
and absolute cost, to operate, or allow a permitted sublessee or contractor to operate, a driving
range for a municipal golf course("Permitted Use"). Lessee shall obtain and maintain any and all
permits and licenses required by any federal, state, or local authority, in connection with the
permitted use of the Premises, in good standing at all times during the term of this Lease. Lessee
shall not use or occupy, or permit any portion of the Premises to be used or occupied in violation
of any law, ordinance, order, rule, regulation, certificate of occupancy, or other governmental
requirement.
11. Lesset?.ibbligations with Respect to Environmental Laws.
(a) Lessee shall comply with and cause the Premises to remain in compliance
with all applicable federal, state and local laws, ordinances, and regulations (including consent
decrees and administrative orders) relating to public health and safety and protection of the
environment and the discharge of any hazardous materials (as the same is defined and regulated
under any of the foregoing laws, ordinances and regulations), all as amended and modified from
time to time(collectively, "environmental laws"). All governmental permits relating to the use or
operation of the Premises required by applicable environmental laws are and will remain in effect,
and Lessee shall comply with them.
(b) Lessee shall immediately notify Lessor in writing and provide copies upon
receipt of all written complaints, claims, citations,demands, inquiries, reports, or notices relating
to the condition of the Premises or compliance with environmental laws. Lessee shall promptly
cure and have dismissed with prejudice any of those actions and proceedings to the satisfaction of
Lessor. Lessee shall keep the Premises free of any lien imposed pursuant to any environmental
laws.
(c) Lessor shall have the right at all reasonable times and from time to time to
conduct environmental audits of the Premises, and Lessee will cooperate in the conduct of those
audits. The audits will be conducted by a consultant of Lessor's choosing, and if any hazardous
material is detected or if a violation of any of the warranties, representations, or covenants
contained in this paragraph is discovered, the fees and expenses of such consultant will be-borne
by Lessee and will be paid as additional rent under this Lease on demand by Lessor. Lessor agrees
that pesticides, insecticides,and other chemicals typically used in the maintenance of golf courses
shall not be deemed hazardous materials for purposes of this provision.
(d) If Lessee fails to comply with any of the foregoing warranties,
representations, and covenants, Lessor may cause the removal (or other cleanup or remediation
acceptable to Lessor)of any hazardous material from the Premises.The costs of hazardous material
removal and any other cleanup or remediation (including transportation and storage costs)will be
additional rent under this Lease, whether or not a court has ordered the cleanup, and those costs
will become due and payable on demand by Lessor. Lessee will give Lessor, its agents, and
employees access to the Premises to remove or otherwise clean up any hazardous material. Lessor,
however, has no affirmative obligation to remove or otherwise clean up any hazardous material,
and this Lease will not be construed as creating any such obligation.
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(e) Lessee shall indemnify, defend (with counsel reasonably acceptable to
Lessor and at Lessee's sole cost), and hold Lessor and Lessor's managers, directors, officers,
trustees,employees, contractors, agents,representatives, successors and assigns free and harmless
from and against all losses, liabilities,obligations,penalties,claims,litigation,demands,defenses,
costs,judgments, suits,proceedings, damages (including consequential damages), disbursements,
or expenses of any kind(including attorneys'and experts'fees and expenses and fees and expenses
incurred in investigating, defending, or prosecuting any litigation, claim, or proceeding)that may
at any time be imposed upon, incurred by, or asserted or awarded against Lessor or any of them in
connection with or arising from or out of(i)any misrepresentation, inaccuracy, or breach of any
warranty, covenant, or representation contained or referred to in this paragraph; (ii) any violation
by Lessee of any environmental law; and (iii) the imposition of any lien for the recovery of any
costs for environmental cleanup or other response costs relating to the release or threatened release
of hazardous material due to use or misuse of the Premises by the Lessee. This indemnification
will survive termination of this Lease.Lessee, its successors,and assigns waive,release,and agree
not to make any claim or bring any cost recovery action against Lessor under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or any state equivalent
or any similar law now existing or enacted after this date. To the extent that Lessor is strictly liable
under any such law,regulation,ordinance,or requirement, Lessee's obligation to Lessor under this
indemnity will also be without regard to fault on the part of Lessee with respect to the violation or
condition that results in liability to Lessor.
(f) The foregoing obligations of the Lessee shall not apply to environmental
conditions or contamination which was the result of action taken by Lessor during the Term.
12. AssiWnents and Subleases. Lessee shall not assign this Lease in whole or in part,
nor sublease all or part of the Premises without the prior written consent of Lessor and such consent
shall not be unreasonably withheld. The parties hereto acknowledge and agree that prior to the
acquisition of the Premises by Lessor from Lessee, Arnold Palmer Golf Management Company
("Sublessee"), leased the Premises from Lessee and shall continue to lease the Premises from
Lessee as a sublessee subject to the terms and conditions of this Lease. The Sublessee and any
assignee of the Sublessee shall be deemed approved assignees or sublessees pursuant to this
Section 11. Lessor also recognizes as an approved sublessee of the Premises any person or entity
that manages or subleases from the City the Tahquitz Creek Golf Resort and concurrently
therewith manages or subleases the Premises.
13. Maintenance of the:Premises. During the Term, Lessee shall, at Lessee's sole
expense, maintain, repair_and replace, and keep in good and safe condition, all portions of the
Premises.
14. Indemnification...
(a) Lessee shall indemnify and hold Lessor, and its managers, directors,
officers, trustees, employees, contractors, agents, representatives, successors and assigns (each a
"Lessor Party"), harmless from any and all demands, claims, causes of action, fines, penalties,
damages (including consequential damages), losses, liabilities, judgments, and expenses
(including without limitation attorneys'fees and court costs) incurred in connection with or arising
from (1) the use or occupancy of the Premises by Lessee, sublessees, invitees or licensees of
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Lessee,or any other person;(2)any activity,work,or thing done or permitted or suffered by Lessee
in or about the Premises; (3) any acts, omissions, or negligence of Lessee; any person claiming
under Lessee, or the employees,agents,contractors, sublessees, invitees or licensees of Lessee, or
any person; (4) any breach, violation, or nonperformance by Lessee, any person claiming under
Lessee, or the employees, agents, contractors, sublessees, invitees or licensees of Lessee, or any
person, of any term, covenant, or provision of this Lease or any law, ordinance, or governmental
requirement of any kind; or (5) any injury or damage to the person, including death or serious
injury,property, or operation of Lessee or its employees, agents; contractors, invitees or licensees
of Lessee, or any other person entering upon the Premises under the express or implied invitation
of Lessee. The foregoing indemnity shall not apply to the extent any liability, claim or damage is
the result of Lessor's negligence or willful misconduct. If any action or proceeding is brought
against Lessor, or a Lessor Party, by reason of any claim, Lessee, upon notice from Lessor, will
defend the claim at Lessee's expense with counsel reasonably satisfactory to Lessor.
(b) Lessor shall indemnify Lessee, and hold Lessee, its managers, directors,
officers, shareholders, employees, contractors, agents, representatives, successors and assigns
(each a "Lessee Party") harmless from, any and all demands, claims, causes of action, fines,
penalties,damages(including consequential damages), losses, liabilities,judgments,and expenses
(including without limitation attorneys'fees and court costs)incurred in connection with or arising
from (1) any acts, omissions, or negligence of Lessor; and (2) any breach, violation, or
nonperformance by Lessor of any term,covenant,or provision of this Lease or any law,ordinance,
or governmental requirement of any kind. The foregoing indemnity shall not apply to the extent
any liability, claim or damage is the result of Lessee's negligence or willful misconduct. If any
action or proceeding is brought against Lessee, or a Lessee Party,by reason of any claim, Lessor,
upon notice from Lessee, will defend the claim at Lessor's expense with counsel reasonably
satisfactory to Lessee.
15. Covenant of`C}uiettnjoyment; Landscaping.
(a) So long as Lessee pays the rent and performs all of its obligations in this
Lease, Lessee's possession of the Premises will not be disturbed by Lessor,or anyone claiming by,
through or under Lessor.
(b) During the term, Lessor has the right to install landscaping on that portion
of the Premises that abuts Lessor's property as necessary to create a visual barrier between the
Premises and the Lessor's road and reclamation facilities, (including the planting of trees, shrubs,
ground cover of the same type and size used on the City's municipal golf course, and related or
necessary irrigation systems) and in a manner reasonably acceptable to Lessee ("Landscaping");
provided, however,that the Landscaping shall in no event interfere with or endanger Lessor's use
of the Lessor's property. Lessee shall maintain the Landscaping.
16. Events of Default. The following occurrences are "events of default":
(i) Lessee defaults in the due and punctual payment of any amount due to
Lessor hereunder,and the default continues for thirty(30)days after notice
from Lessor;
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s
(ii) Lessee vacates or abandons the Premises prior to the end of the Term
without giving written notice to Lessor;
(iii) This Lease or the,Premises or any part of the Premises is taken upon
execution or by other process of law directed against Lessee, or is taken
upon or subjected to any attachments by any creditor of Lessee or claimant
against Lessee,and the attachment is not discharged within fifteen(15)days
after its levy;
(iv) Lessee files a petition in bankruptcy or insolvency or for reorganization or
arrangement under the bankruptcy laws of the United States or under any
insolvency act of any state, or is dissolved, or makes an assignment for the
benefit of creditors;
(v) Involuntary proceedings under any bankruptcy laws or insolvency act or for
the dissolution of Lessee are instituted against Lessee, or a receiver or
trustee is appointed for all or substantially all of Lessee's property, and the
proceeding is not dismissed or the receivership or.trusteeship is not vacated
within sixty(60)days after institution or appointment;
(vi) Lessee breaches any of the other agreements, terms, covenants, or
conditions that this Lease requires Lessee to perform, and the breach
continues for a period of thirty(30)days after notice by Lessor to Lessee.
17. Remedies. In addition to any other remedies that Lessor may have under law or
equity, if any one or more events of default set forth under this Lease occurs and Lessee has not
cured in the time provided for,then Lessor may, at its election,terminate this Lease.
18. No.b tion to Renew. Lessee is not granted any option to renew the Lease.
19. Hbld'insxOver. Without limiting the obligation of Lessee to surrender the Premises
as provided above, neither the holding over by Lessee nor the acceptance by Lessor of any rent
relating to any period subsequent to the expiration date of the Lease shall in itself constitute any
extension or renewal of this Lease but shall constitute a month-to-month tenancy terminable by
either party upon such notice as may be required by law for the termination of month-to-month
tenancies.
20. Estoppel Certificate. Lessee shall within (ten) 10 days after written notice from
Lessor execute, acknowledge and deliver to Lessor a statement in writing in the form provided by
Lessor, plus such additional information, confirmation and/or statements as may be reasonably
requested by Lessor.
21. No Waiver. No waiver of any condition or agreement in this Lease by Lessor will
imply or constitute a further waiver by Lessor of the same or any other condition or agreement.
22. Notices. Any notice, request, demand, consent, approval, or other communication
required or permitted under this Lease will be written and will be deemed to have been given when
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personally delivered, or on the third (3rd) day after it is deposited in any depository regularly
maintained by the United States postal service,postage prepaid,certified or registered mail,return
receipt requested, and addressed to either Lessor or Lessee at the Premises or such other address
as the parties may provide from time to time.
23. Attorneys' lees. If Lessor and Lessee litigate any provision of this Lease or the
subject matter of this Lease, the unsuccessful litigant will pay to the successful litigant all costs
and expenses, including reasonable attorneys' fees and court costs, incurred by the successful
litigation at trial and on any appeal.
24. -Bindina 13,M6 t. This Lease will inure to the benefit of, and will be binding upon,.
Lessor's successors and assigns.
25. Severability. The invalidity of any provision of this Lease,as determined by a court
of competent jurisdiction, shall in no way affect the validity of any other provision hereof.
26. Lirnitation bt Liability. The obligations of Lessor under this Lease shall not
constitute personal obligations of Lessor or its managers, directors, officers, trustees, employees,
contractors, agents, representatives, successors and assigns (each a "Lessor Party"), and Lessee
shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any,liability of
Lessor with respect to this Lease, and shall not seek recourse against any Lessor Party or any of
their personal assets for satisfaction.
27. Time of the Essence. "Time is of the essence with respect to the performance of all
obligations to be performed or observed by the parties hereto under this Lease.
28. Entire Agreeimeiit Amendment: This document represents the entire agreement
between the parties hereto with regard to the subject matter hereof and supersedes any and all prior
understandings and agreements,whether oral or written, with respect thereof. Any amendment of
this Lease shall only be effective when made by a writing executed by both parties hereto.
29. Govomintti'_Law. This Lease shall be governed by the laws of the State of
California.
[Signatures Follow on the Next Page]
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i
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the
date first written above.
LESSOR:
Desert Water Agency
I a California public agency
l
s
ST: By.
ty Cle'rk Name:
Mark S. Krause
Its:
General Manager-Chief Engineer
LESSEE:
City of Palm Springs
a California municipal corporation
By:
�✓ l
Name:Dxv
Its:
0-1e� AN a.Aar-r'y
See attached.
APPROVED AS TO FORM
CI ATTO EY
j.
DWMOption Property\10 Year Lease AppROVEQBycriyCOUNCIL
P
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EXHIBIT" A"
Legal Description of the Premises
See attached.
E
i
Exhibit A
KIR,IEGI';R. .Cf.OSTEWADT
EXHIBIT "A"
PURCHASE OPTION
PARCEL N0.3
LEASE AREA
i'
That portion of the northeast quarter of the southeast quarter of the southwest quarter of Section 20,
Township 4 South, Range 5 East, San Bernardino Meridian, in the County of Riverside, State of
California,being more particularly described as follows:
COMMENCING at the southeast corner of the northeast quarter of the southeast quarter
of the southwest quarter of said Section 20,said point being on the centerline of Crossley
Road(30-foot half width);
lhu tee North 89°50'46.." West, aping the soutlt line of the •northeast quaiiter of the
SQ.uthpAst quarter of the southwiest ttuarter of swirl,Section 20, a distance iif 74.00 feet to
the T I2UE POINT OF BEGINNING,-
Thertce.continuing North 89°5.0'46" West;along the south line of the n6ribeast quarter of
the.south east.quarter of the southwest quarter.of said Section 20,a distance of 585:3€3 feet
to the southwest corner thereof;
Thenee i lorth 00012'29" West, along the west line of the northeast quarter of the
sotitlieast,quarter of the southwest quarter of said Section 20,a distance of 411.22 feet to
the south line of the north 3.75 acres thereof;
Thence South 89°54'07" East,along the south line of said north 3.75 acres,a distance of
629.38 feet to the west right-of-way line of said Crossley Road(30-foot half width);
Thence South 00°12'25" East,along said west right-of-way line, a distance of 60.00 feet
to a line parallel with and distant south 60.00 feet as measured at right angles to the south
line of said north-3.75 acres;
Thence North 89°54'07" West,along said parallel line,a distance of 44.00 feet to a line
parallel with and distant 74.00 feet west as measured at right angles to the centerline of
said Crossley Road;
Thence South 00°12'25" East, along said parallel line, a distance of 351.79 feet to the
TRUE POINT OF BEGINNING.
Page 1 of 2
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KRIEGEa 05TEWAM
_
EXHIEI'T "A"
PURCHASE OPTION
i � PARCEL NO.3
LEASE AREA
(Continued)
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i. Excepting therefrom the northerly 60.00 feet thereof, said 60.00 feet being measured at right
angles to the south line of said north 3.75 acres.
Contains 4.72 acres,more or less.
' See Exhibit V attached hereto and made a part hereof.
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