HomeMy WebLinkAbout7/3/2002 - STAFF REPORTS (22) DATE: JULY 3, 2002
TO: CITY COUNCIL
FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT
APPROVAL OF LEASE WITH PALM SPRINGS TENNIS CLUB OWNERS ASSOCIATION, A
CALIFORNIA NON-PROFIT MUTUAL BENEFIT CORPORATION, FOR THE DEVELOPMENT
AND OPERATION OF THE NORTHERN UNDEVELOPED PORTION OF THE PALM
SPRINGS TENNIS CENTER, 1300 EAST BARISTO ROAD
RECOMMENDATION:
It is recommended that the City Council approve the Lease on the northern,
undeveloped portion of the Palm Springs Tennis Center, 1300 East Baristo Road, a
City-owned facility, with the Palm Springs Tennis Club Owners Association, a California
non-profit mutual benefit corporation, for a period not to exceed eight years and three
months
SUMMARY:
This lease is for the undeveloped portion of the Palm Springs Tennis Center on Baristo
Road. The Council approved a lease on April 9, 2002 with Kurt & Ana Haggstrom of
the Plaza Racquet Club at the Palm Springs Hilton Resort for the previously-developed
portion of the facility. Mr. Haggstrom is relocating because of the expansion of the
casino. The Tennis Club had made an alternate proposal for the Tennis Center early in
2001. After considerable negotiation, the Council decided to move the Haggstrom's
into the Tennis Center but allow the Tennis Club to submit a proposal to build new
courts there. The business terms of the two leases are nearly identical, at $150
per year in rent to the City with the requirement the operator pays all of the
maintenance and utility costs, differing only by the nature of the improvements.
BACKGROUND:
As part of the negotiation between the City and the Haggstroms on a new Tennis Center
lease, staff was directed to negotiate with the Palm Springs Tennis Club for a lease on the
undeveloped portion of the Tennis Center. Staff immediately negotiated a draft lease with
the Tennis Club that awaited a development plan that showed what the club or its
representative, Mr. Matzner, proposed on the site.
The Tennis Club has now proposed the construction of six new courts, including two clay-
type courts, as well as a small clubhouse/lounge building on the site. Entrance to the
facility would be made from the existing Tennis Center parking lot via a short walkway on
the east side of the property. The parking lot was designated common area under the
terms of the Haggstrom lease, and the walkway was reserved as a pedestrian easement
along the rear of the existing pro shop building.
Because the development plan is only preliminary and has not been approved by either
the Planning Commission or Parks and Recreation Commission, it shall be subject to the
I BR
regulatory approval of the City. The Haggstrom lease had a similar provision that required
them to submit a development plan to the City by June 1. The difference here is that the
current lease contemplates a true development project (with the construction of courts,
perhaps lights, a building, and other related infrastructure), with a more significant
regulatory role of the City.
Both lessees are aware that the City owns the Tennis Center under the terms of a
sublease with the Palm Springs Unified School District, which expires in August, 2010.
Any renegotiation of the lease at that point assumes the cooperation of the School District.
The Tennis Club shall bear all responsibility for constructing its improvements according
to City Planning Commission and Parks & Recreation Commission standards; it will also
be responsibility for the ongoing cost of utilities, water, and landscape maintenance. No
utilities will be shared between the two operators: the new facility will need to run new
services (water, sewer, and electric) in.
The estimated investment in this facility will probably exceed $300,000, and will both add
to and consolidate the club-related tennis opportunities in the City of Palm Springs. The
amount of lease payment to the City shall be $150 per year. The intent of the new courts
is to provide overflow tennis play for members of the Tennis Club, as well as to run tennis
introduction and reintroduction programs for disadvantaged youths and seniors.
As this facility develops, the overall facility, the Palm Springs Tennis Center, will grow into
one of the finest municipally-owned tennis facilities in California, with experienced
operators from the Plaza Racquet Club and the Palm Springs Tennis Club.
///C Ll
��
JOHN y4. RAYM,,0 b
DLreetor of Community and Economic Development
APPR'�
City Manager
ATTACHMENTS:
1. Minute Order
2. Tennis Center Lease
SUBLEASE
By and Between
TIIE CITY OF PALM SPRINGS
and
Palm Springs Tennis Club Owners Association
IRV#21100 vI
SUBLEASE
THIS SUBLEASE (`Sublease") is made and entered into 1" day of October, 2002, by
and between the CITY OF PALM SPRINGS, a municipal corporation (referred to variously as
"Landlord" or "City"), and Palm Springs Tennis Club Owners Association, a California non-
profit mutual benefit corporation (`Tenant").
1.0 SUBLEASE SUMMARY. Certain fundamental Sublease 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 Sublease.
In the event of any conflict between any fundamental Sublease provision and the balance of this
Sublease, the latter shall control. References to specific Sections are for convenience only and
designate some of the Sections where references to the particular fundamental Sublease
provisions may appear.
1.1 Demised Premises. The "Demised Premises" shall refer to that certain
real property located in the County of Riverside, State of California, and leased to the City of
Palm Springs by the Palm Springs Unified School District through a Lease and Agreement dated
August 7, 1974 (PSUSD Lease), as more particularly described in Exhibit "A" hereof together
with the improvements located thereon and as depicted on the Plot Plan attached as Exhibit "B-
1" hereof. Certain portions of the Demised Premises shall be nonexclusive and Landlord may
include them in a lease of adjacent property (`Adjacent Property") Nonexclusive areas are
shown on Exhibit "13-2" and include the parking lot and an access area from the parking lot to
Adjacent Property.
1.2 Sublease Commencement Date. The Sublease shall commence June 1,
2002 and continue until August 6, 2010, and thereafter as may be allowed by the Pahn Springs
Unified School District (School District) and/or the City of Palm Springs,
13 Extension Options. N/A
1 4 Rental. Rental shall be equal to the amount owed by the City to the
School District pursuant to the PSUSD Lease Agreement with the District, with Tenant to pay all
operational, utility and - maintenance cost necessary to operate the Demised Premises in
accordance with the maintenance standards of Section 5.3 and the other provisions of the
Sublease. All such amounts shall be deemed payment of rent hereunder. After any lease of
Adjacent Property providing for joint use of the parking area, there shall be shared payment for
the future maintenance of the parking area (including any necessary reslurrying).
1.5 Security Deposit. $ N/A
1 6 Use of Demised Premises. Operation of a Tennis Center; construction of
improvements to courts, facilitation and promotion of an affordable membership and walk-in
tennis club facility for use by residents and tourists from area hotels and motels; promotion and
operation of tournaments and operation of an affordable junior tennis program; pro shop retails
sales, refreshments and youth entertainment. Pursuant to the Joint Use of Facilities Agreement
IRv 121100 vl 1
I �►A `�
between the Landlord and the School District the School District and the Tenant shall make good
faith efforts to coordinate usage of the Demised Premises for the boys and girls tennis teams.
Tenant shall make Demised Premises available for the USTA National Junior Tennis
Tournament (the "Easter Bowl") in the spring of each year.
1.7 Tenant' s Address for Notices.
Palm Springs Tennis Club
701 West Baristo Road
Palm Springs, CA 92262
Telephone: 760.325.1441
With a copy to:
David L. Baron, Esq.
Slovak, Baron & Empey, LLP
1111 E. Tahquitz Canyon Way, Suite 110
Palm Springs, CA 92262
Telephone: 760.3 22.2275
2.0 TERM.
2.1 Term. The term of this Sublease 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 Termination By Landlord. Landlord shall have the right to terminate this
Sublease effective on any anniversary of the Commencement Date, with or without cause, by
providing Tenant with at least sixty (60) days' advance written notice. If landlord terminates this
Sublease pursuant to this Section, Landlord shall pay Tenant the unamortized portion of the
Improvement Costs that are amortized pursuant to Section 51. (but not any portion of the
Improvement Costs paid from the Tribe Funds pursuant to Section 5.1). If Landlord terminates
this Sublease as provided in this Section, Tenant hereby waives any right to receive any other
compensation from Landlord, including, but not limited to, the value of Tenant's leasehold
interest, loss of goodwill and relocation benefits, inverse condemnation or the taking of property
and Landlord shall have no obligation to pay Tenant therefor.
2.3 Holding Over. Any holding over after the expiration of the term of this
Sublease, with the consent of Landlord, express or implied, shall be construed to be a tenancy
from month to month, cancelable upon thirty (30) days written notice, and at a rental equal to
one hundred fifty percent (150%) of the last applicable Monthly Rental and upon terms and
conditions as existed during the last year of the term hereof.
IRV#21 00 v
1 1 _2
3.0 RENTAL.
3.1 Annual Rental. Tenant shall pay to Landlord, during the term of this
Sublease from and after the Commencement Date as annual rental ("Rental") for the Demised
Premises the sum specified in Section 1.4 hereof, which sum shall be paid in advance on the
Commencement Date and yearly thereafter. All rental to be paid by Tenant to Landlord 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 12.10 hereof.
3.2 Real Property Taxes. In addition to all rentals herein reserved, Tenant
shall pay, at the election of Landlord, either directly to the taxing authority or to Landlord,
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. Such amount shall be paid
on the date that is twenty (20) days prior to the delinquent date or, if Landlord receives the tax
bill, ten (10) days after receipt of a copy of the tax bill from Landlord, whichever is later. Even
though the term of this Sublease 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 Landlord the prorated amount of any additional sum owed.
3.3 Personal Property Taxes. During the term hereof Tenant shall pay prior to
delinquency all taxes assessed against and levied upon fixtures, furnishings, equipment and all
other personal property as 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 Landlord.
3.4 Utilities. Tenant shall pay for all utilities to the Demised Premises which
shall be charged in the name of Tenant.
3.5 Late Payment. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rental or other sums due hereunder will cause Landlord to incur costs not
contemplated by this Sublease, 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 when within five (5) days of its due date shall
be subject to a five percent (5%) late charge. Landlord and Tenant agree that this late charge
represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord
for its loss suffered by such late payment by Tenant.
3.6 Interest. Any sum to be paid pursuant to the terms of this Sublease 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.
IRV#21100 v1
4.0 USE OF THE PREMISES.
41 Permitted Use. The Landlord hereby leases to Tenant and Tenant hires
from Landlord the Demised Premises with appurtenances as defined herein, for the purpose of
conducting thereon only the use specified in Section 1 6 of this Sublease.
4.2 Prohibited Uses. Tenant shall not sell or permit to be kept, used, displayed
or sold in or about the Demised Premises (a) pornographic or sexually explicit books, magazines,
literature, films or other printed material, sexual paraphernalia, or other material which would be
considered lewd, obscene or licentious, (b) any article which may be prohibited by standard
forms of fire insurance policies, or (c) any alcoholic beverages unless expressly permitted by
Section 1.6 hereof.
4.3 Compliance with Laws. Tenant shall, at his 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. Tenants violation of law shall constitute an incurable default
under this Sublease. The judgment of any court of competent jurisdiction, or the admission of
Tenant in any action or proceeding against Tenant, whether Landlord be a party thereto or not,
that Tenant has violated any such order or statute in said use, shall be conclusive of that fact as
between the Landlord and Tenant.
Tenant shall not engage in any activity on or about the Demised Premises that
violates any Environmental Law, and shall promptly, at Tenants 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 ou, 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 seq.; (iii)
California Health and Safety Code Sections 25100 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 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 terns "Hazardous Materials" and
"Environmental Laws" in their broadest sense Tenant shall provide all notices required pursuant
rav azi roo vr
/ 8A 7
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 Landlord of the
existence of Hazardous Substances on the premises and all notices of violation of the
Environmental Laws received by Tenant.
4.4 Si ns. Tenant shall not place or permit to be placed any sign that is not in
compliance with the sign ordinance of the Landlord upon the exterior or in the windows of the
Demised Premises. Any sign not constructed in accordance therewith shall be immediately
removed by Tenant and, if said sign is not removed by Tenant within ten (10) days of written
notice from Landlord to Tenant, then Landlord may remove and destroy said sign without
Tenants approval. At such time as a use is established on the adjacent parcel, Tenant shall allow
signage as approved by the Landlord related to the adjacent use.
4.5 Hours of Business. Subject to the provisions of Section 8.0 hereof, Tenant
shall continuously during the entire term hereof conduct and carry on Tenants business in the
Demised Premises and shall keep the Demised Premises open for business and cause Tenant's
business to be conducted therein during the usual business hours of each and every business day,
during Tenant's operation season from October 1 through June 1, on the same schedule as the
adjacent Plaza Racquet Club. In no event, however, shall such hours of being open for business
be less than 8:00 a.m. through 5:00 p.m at least five days per week This provision shall not
apply if the Demised Premises should be closed and the business of Tenant temporarily
discontinued therein on account of strikes, lockouts, or similar causes beyond the reasonable
control of Tenant.
4.6 Rules and Regulations. Tenant shall faithfully observe and comply with
the rules and regulations that Landlord shall from time to time promulgate and/or modify. The
rules and regulations, if any, are attached hereto as Exhibit "D" ("Rules and Regulations"), Any
amendment or modification of the Rules and Regulations shall be binding upon the Tenant upon
delivery of a copy of such amendment or modification to Tenant. Landlord shall not be
responsible to Tenant for the nonperformance of any said rules and regulations by any other
tenants or occupants. The Rules and Regulations shall apply and be enforced as to all tenants in
the Demised Premises on a uniform basis.
5.0 CONSTRUCTION OF NEW FACILITIES, ALTERATIONS AND
REPAIRS.
5.1 Construction of Improvements. Tenant shall, at its sole cost and expense,
install on the Demised Premises the improvements described in Attachment No. "E" (the
"Improvements"). Any or all such improvements shall be designed and constructed subject to
the approval of the City and Agency and shall be consistent with Exhibit "E." The
Improvements shall be completed according to the Schedule in Exhibit "F."
5.1.1 Development Plan On or before June 1, 2002, Tenant shall submit
to the City preliminary, and thereafter final plans, drawings, and specifications for development
of the Improvements in accordance with this Section and all in accordance with the City's
requirements. Tenant shall exercise its best efforts to timely submit all documents and
information necessary to obtain all development and building approvals from the City in a timely
IRV 921100 vl -5-
manner. Not by way of limitation of the foregoing, in developing and constructing the
Improvements, Tenant shall comply with all applicable development standards in City's
Municipal Code and shall comply with all building code, landscaping, signage, and parking
requirements, except as may be permitted through approved variances and modifications.
5.1.2 Schedule of Construction. Except as provided in the Improvmeent
Schedule (Exhibit F), Tenant shall begin and complete all plans, reviews, construction and
development specified in this Sublease prior to Tenant's commencement of operations, but in no
event later than November 1, 2002, unless an extension of time is approved in writing by City in
its sole discretion. Once construction is commenced, it shall be diligently pursued to completion,
and shall not be abandoned for more than thirty (30) consecutive days.
5.2 Alterations and Fixtures. To the extent required by law, the Tenant shall
be responsible for altering and modifying the restrooms at the Demised Premises into
compliance with the Americans with Disabilities Act, 42 U S.C. at Section 12111 et seq. (ADA
Improvements). The type of renovation made to the pro shop as specified in Exhibit "E" may be
dependant on obtaining grant funds to assist with the cost of any necessary modifications to the
restrooms. Tenant shall not make, or suffer to be made, any alterations to the Demised Premises,
or any part thereof, without the prior written consent of Landlord, and any alterations 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 Sublease belong to Landlord.
Tenant shall not in any event make any changes to the exterior of the Demised Premises. Any
such alterations shall be in conformance with the requirements of all municipal, state, federal,
and other governmental authorities, including requirements pertaining to the health, welfare or
safety of employees or the public and in conformance with reasonable rules and regulations of
Landlord. Landlord may require that any such alterations be removed prior to the expiration of
the term hereof Any removal of alterations or furniture and trade fixtures shall be at Tenant's
expense and accomplished in a good and workmanlike manner Any damage occasioned by such
removal shall be repaired at Tenants expense so that the Demised Premises can be surrendered in
a good, clean and sanitary condition as required by Section 5.2 hereof. Any and all fixtures 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. Upon completion of construction of the alterations, Tenant
shall submit to Landlord evidence satisfactory to Landlord of the cost of said alterations
(`Improvement Costs"), The Improvement Costs shall be amortized over the remaining term of
this Sublease on a straight line basis for the purposes specified in Section 2.2 (but not including
Tribe Funds in said amortization)
5.3 Maintenance and Repair Tenant shall, at all times during the term hereof,
and at Tenants 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) including without limitation, the maintenance and repair of any
doors, window casements, glazing, heating and air conditioning system, plumbing, pipes,
electrical wiring and conduits. 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 Landlord, and Tenant hereby waives all rights provided for by the Civil
IRV#21100 vl -6- ABA
Code 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 Sublease 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 fire, act of God or by the elements excepted. Tenant shall periodically sweep and
clean the sidewalks adjacent to the Demised Premises, as needed.
5.4 Free from Liens During the period of construction and thereafter 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. Upon
completion of construction of the improvements Tenant shall assure that lien releases are
obtained for all mechanics liens.
6.0 INSURANCE AND INDEMNIFICATION.
6.1 Insurance Provided by Landlord. Landlord shall maintain fire and
extended coverage insurance throughout the term of this Sublease in an amount equal to at least
ninety percent (90%) of the replacement value of any building on the Demised Premises,
together with such other insurance, coverages and endorsements as may be required by
Landlord's lender, or as Landlord may determine in its sole discretion Tenant hereby waives
any right of recovery from Landlord, its officers and employees, and Landlord hereby waives
any right of loss or damage (including consequential loss) resulting from any of the perils
insured against as a result of said insurance. Tenant agrees to pay to Landlord its pro rata share
of the cost of said insurance to be determined by the relationship that the gross floor area of the
Demised Premises bears to the total gross leasable floor area of the building or buildings for
which such policy relates.
6.2 Insurance Provided by Tenant.
(a) Food Preparation Tenant, if involved in food preparation and
sales as a cafe, restaurant, or similar use, and/or food takeout service, shall install at
Tenant's expense any fire protective systems in grill, deep fiy, and cooking areas which
are required by city, county, and state fire ordinances, and such system when installed
shall qualify for full fire protective credits allowed by the fire insurance rating and
regulatory body in whose jurisdiction the Demised Premises are located
(b) Tenant to Provide Personal Property Insurance. Tenant, at its
expense, shall maintain fire and extended coverage insurance written on a per occurrence
basis on its trade fixtures, equipment, personal property and inventory within the
Demised Premises from loss or damage to the extent of their full replacement value and
shall provide plate glass coverage.
(c) Tenant to Provide Liability Insurance During the entire term of
this Sublease, the Tenant shall, at the Tenants sole cost and expense, but for the mutual
benefit of Landlord and Tenant, maintain comprehensive general liability insurance
insuring against claims for bodily injury, death or property damage occurring in, upon or
IRV#21100 vl -7- 18W16
about the Demised Premises and on any sidewalks directly adjacent to the Demised
Premises written on a per occurrence basis in an amount not less than either (i) a
combined single limit of ONE MILLION DOLLARS ($1,000,000.00) for bodily injury,
death, and property damage or (ii) bodily injury limits of $250,000.00 per person,
$500,000.00 per occurrence and $500,000.00 products and completed operations and
property damage limits of$100,000.00 per occurrence and $250,000.00 in the aggregate;
provided, however, if Landlord so elects Landlord may provide such insurance and, in
such event, Tenant agrees to pay its pro rata share of the cost of said insurance on the
same basis as provided in Section 6.1 above.
(d) Tenant to Provide Worker's Compensation Insurance. If
applicable, Tenant shall, at the Tenants sole cost and expense, maintain a policy of
worker's compensation insurance in an amount as will fully comply with the laws of the
State of California and which shall indemnify, insure and provide legal defense for both
the Tenant and the Landlord against any loss, claim or damage arising from any injuries
or occupational diseases occurring to any worker employed by or any persons retained by
the Tenant in the course of conducting Tenant's business in the Demised Premises.
(e) General Provisions Applicable to Tenant's Insurance. All of the
policies of insurance required to be procured by Tenant pursuant to this Section 6.2 shall
be primary insurance and shall name the Landlord, its officers, employees and agents as
additional insureds. The insurers shall waive all rights of contribution they may have
against the Landlord, its officers, employees and agents and their respective insurers. All
of said policies of insurance shall provide that said insurance may not be amended or
cancelled without providing 30 days prior written notice by registered mail to the
Landlord. Prior to the Commencement Date or such earlier date as Tenant takes
possession of the Demised Premises for any purpose; and at least 30 days prior to the
expiration of any insurance policy, Tenant shall provide Landlord with certificates of
insurance or appropriate insurance binders evidencing the above insurance coverages
written by insurance companies acceptable to Landlord, licensed to do business in the
state where the Demised Premises are located and rated A:VII or better by Bests
Insurance Guide. In the event the Risk Manager of Landlord ("Risk Manager")
determines that (i) the Tenant's activities in the Demised Premises creates an increased or
decreased risk of loss to the Landlord, (ii) greater insurance coverage is required due to
the passage of time, or (iii) changes in the industry require different coverages be
obtained, Tenant agrees that the minimum limits of any insurance policy required to be
obtained by Tenant may be changed accordingly upon receipt of written notice from the
Risk Manager, provided that Tenant shall have the right to appeal a determination of
increased coverage by the Risk Manager to the City Council of Landlord within ten (10)
days of receipt of notice from the Risk Manager. Landlord and Tenant hereby waive any
rights each may have against the other on account of any loss or damage occasioned by
property damage to the Demised Premises, its contents, or Tenants trade fixtures,
equipment personal property or inventory arising from any risk generally covered by
insurance against the perils of fire, extended coverage, vandalism, malicious mischief,
theft, sprinkler damage, and earthquake sprinkler leakage Each of the parties, on behalf
of their respective insurance companies insuring such property of either Landlord or
IRV H21100 vl
$ 4,4 ■
Tenant against such loss, waive any right of subrogation that it may have against the
other. The foregoing waivers of subrogation shall be operative only so long as available
in California and provided further that no policy is invalidated thereby.
6.3 Indemnification of Landlord Tenant, as a material part of the
consideration to be rendered to Landlord under this Sublease, hereby waives all claims against
Landlord for damage to equipment or other personal property, trade fixtures, leasehold
improvements, goods, wares, inventory and merchandise, in, upon or about the Demised
Premises and for injuries to persons in or about the Demised Premises, from any cause arising at
any time. Tenant agrees to indemnify the Landlord, its officers, agents and employees against,
and will hold and save them and each of them harmless from, any and all actions, suits, claims,
damages to persons or property, losses, costs, penalties, obligations, errors, omissions or
liabilities, (herein "claims or liabilities") that may be asserted or claimed by any person, firm or
entity arising out of or in connection with the negligent performance of the work, operations or
activities of Tenant, its agents, employees, subcontractors, or invitees, provided for herein, or
arising from the use of the Demised Premises or the parking and common areas by Tenant or its
employees and customers, or arising from the failure of Tenant to keep the Demised Premises in
good condition and repair, as herein provided, or arising from the negligent acts or omissions of
Tenant hereunder, or arising from Tenant's negligent performance of or failure to perform any
term, provision covenant or condition of this Sublease, whether or not there is concurrent passive
or active negligence on the part of the Landlord, its officers, agents or employees but excluding
such claims or liabilities arising from the sole negligence or willful misconduct of the Landlord,
its officers, agents or employees, who are directly responsible to the Landlord, and in connection
therewith:
(a) Tenant will defend any action or actions filed in connection with
any of said claims or liabilities and will pay all costs and expenses, including legal costs
and attorneys' fees incurred in connection therewith;
(b) Tenant will promptly pay any judgment rendered against the
Landlord, its officers, agents or employees for any such claims or liabilities arising out of
or in connection with the negligent performance of or failure to perform such work,
operations or activities of Tenant hereunder, and Tenant agrees to save and hold the
Landlord, its officers, agents, and employees harmless therefrom,
(c) In the event the Landlord, its officers, agents or employees is made
a party to any action or proceeding filed or prosecuted against Tenant for such damages
or other claims arising out of or in connection with the negligent performance of or
failure to perform the work, operation or activities of Tenant hereunder, Tenant agrees to
pay to the Landlord, its officers, agents or employees, any and all costs and expenses
incurred by the Landlord, its officers, agents or employees in such action or proceeding,
including but not limited to, legal costs and attorneys' fees
7.0 ABANDONMENT AND SURRENDER ? t
IRV 921100 vI 9_
7.1 Abandonment. Tenant shall not vacate or abandon the Demised Premises
at any time during the term of this Sublease; 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 Landlord, except such property as may be mortgaged to Landlord.
7.2 Surrender of Sublease. The voluntary or other surrender of this Sublease
by Tenant or a mutual cancellation thereof, shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of
Landlord, operate as an assignment to it of any or all of such subleases or subtenancies.
8.0 DAMAGE AND DESTRUCTION OF PREMISES. In the event of(a) partial
or total destruction of the Demised Premises during the term of this Sublease 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 other than Tenant's act, use or
occupation, which declaration requires repairs to the Demised Premises, Landlord shall forthwith
make said repairs provided Tenant gives to Landlord thirty (30) days written notice of the
necessity therefor. No such partial 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 Sublease except that Tenant shall be entitled to a proportionate reduction of Monthly
Rental while such repairs are being made, such proportionate reduction to be based upon the
extent to which the making of such repairs shall interfere with the business carried on by Tenant
in the Demised Premises. However, if during the last two (2) years of the term of this Sublease
the Demised Premises are damaged as a result of fire or any other insured casualty to an extent in
excess of twenty-five percent (25%) of the then replacement cost (excluding foundations),
Landlord may within thirty (30) days following the date such damage occurs terminate this
Sublease by written notice to Tenant. If Landlord, however, elects to make said repairs, and
provided Landlord uses due diligence in making said repairs, this Sublease shall continue in full
force and effect, and the Monthly Rental shall be proportionately reduced while such repairs are
being made as hereinabove provided. Nothing in the foregoing to the contrary withstanding, if
the Demised Premises or said building is damaged or destroyed at any time during the term
hereof to an extent of more than twenty-five percent (25%) of the then replacement cost
(excluding foundations) as a result of a casualty not insured against, Landlord may within thirty
(30) days following the date of such destruction terminate this Sublease upon written notice to
Tenant. If Landlord does not elect to terminate because of said uninsured casualty, Landlord
shall promptly rebuild and repair the Demised Premises and/or the building and the Monthly
Rental shall be proportionately reduced while such repairs are being made as hereinabove
provided. If Landlord elects to terminate this Sublease, all rentals shall be prorated between
Landlord and Tenant as of the date of such destruction. In respect to any partial or total
destruction (including any destruction necessary in order to make repairs required by any such
declaration of any authorized public authority) which Landlord is obligated to repair or may elect
to repair under the terms of this Section, Tenant waives any statutory right it may have to cancel
this Sublease as a result of such destruction.
9.0 ASSIGNMENT AND SUBLETTING Tenant shall not assign this Sublease or
sublet the Demised Premises, or any interest therein, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. For purposes of this Sublease, an
IRV#21100 vl _10- 8
13
assignment shall be deemed to include the transfer to any person or group of persons acting in
concert of more than twenty five percent (25%) of the present ownership and/or control of
Tenant, taking all transfers into account on a cumulative basis. Landlord may withhold its
consent to an assignment or sublease to a proposed assignee or sublessee, and Tenant agrees that
Landlord shall not be unreasonable for doing so, unless all the following criteria are met: (a) The
proposed assignee's or sublessee's general financial condition, including liquidity and net worth,
verified by audited financial statements prepared by a Certified Public Accountant in conformity
with Generally Accepted Accounting Principles is equal to or greater than that of Tenant; (b) the
proposed assignee or sublessee has a demonstrated merchandising capability equal to or greater
than that of Tenant as to the use for which the Demised Premises are leased; (c) the proposed
assignee or sublessee is morally and financially responsible; and (d) the failure of tenant's use of
the Demised Premises to fit the business plan of Landlord to promote tourism to the City of Palm
Springs. Any such assignment shall be subject to all of the terms and conditions of this Sublease
and the proposed assignee shall assume the obligations of Tenant under this Sublease in writing
in form satisfactory to Landlord. The proposed assignee shall simultaneously provide to
Landlord an estoppel certificate in the form described in Section 12.2 hereafter. Consent by
Landlord to one assignment, subletting, occupation or use by another person shall not be deemed
to be a consent to any subsequent assignment, subletting, occupation or use by another person.
Any assignment or subletting without the prior written consent of Landlord shall be void, shall
constitute a material breach of this Sublease, and shall, at the option of Landlord, terminate this
Sublease. Neither this Sublease nor any interest therein shall be assignable as to the interest of
Tenant by operation of law.
Landlord shall be under no obligation to consider a request for Landlord's consent
to an assignment until Tenant shall have submitted in writing to Landlord a request for
Landlord's consent to such assignment together with audited financial statements of Tenant and
the proposed assignee, a history of the proposed assignee's business experience and such other
information as required by Landlord to verify that the criteria for assignment as set forth herein
are met. If Landlord approves such assignment, Tenant shall pay to Landlord one-half(1/2) of
any consideration received by Tenant for such assignment. In addition, if Landlord determines
that the Monthly Rent payable to Landlord under this Sublease is less than the fair market rental
value, as determined by Landlord, Landlord shall have the right to condition its approval to an
assignment or subletting on the increase of Monthly Rent to the fair market rental value.
10.0 DEFAULT AND REMEDIES
10.1 Default by Tenant. In addition to the defaults described in Section 9.0
hereinabove, the occurrence of any one or more of the following events shall constitute a default
and breach of this Sublease by Tenant. (a) the failure to pay any rental or other payment required
hereunder to or on behalf of Landlord more than three (3) days after written notice from
Landlord to Tenant that Tenant has failed to pay rent when due; (b) the failure to perform any of
Tenants agreements or obligations hereunder (exclusive of a default in the payment of money)
where such default shall continue for a period of thirty (30) days after written notice thereof from
Landlord to Tenant which notice shall be deemed to be the statutory notice so long as such notice
complies with statutory requirements; (c) the vacation or abandonment of the Demised Premises
by Tenant; (d) the making by Tenant of a general assignment for the benefit of creditors; (e) the
filing by Tenant of a voluntary petition in bankruptcy or the adjudication of Tenant as a
rayszuoovr
bankrupt; (f) the appointment of a receiver to take possession of all or substantially all the assets
of Tenant located at the Demised Premises or of Tenants leasehold interest in the Demised
Premises; (g) the filing by any creditor of Tenant of an involuntary petition in bankruptcy which
is not dismissed within sixty (60) days after filing; or (h) the attachment, execution or other
judicial seizure of all or substantially all of the assets of Tenant or Tenant's leasehold where such
an attachment, execution or seizure is not discharged within sixty (60) days. Any repetitive
failure by Tenant to perform its agreements and obligations hereunder, though intermittently
cured, shall be deemed an incurable default. Two (2) breaches of the same covenant within a
sixty (60) day period, a notice having been given pursuant to (a) or (b) above for the first breach,
or three (3) of the same or different breaches at any time during the term of this Sublease for
which notices pursuant to (a) or (b) above were given for the first two (2) breaches shall
conclusively be deemed to be an inclinable repetitive failure by Tenant to perform its obligations
hereunder.
In the event of any such default or breach by Tenant, Landlord may at any time
thereafter, without further notice or demand, rectify or cure such default, and any sums expended
by Landlord for such purposes shall be paid by Tenant to Landlord upon demand and as
additional rental hereunder. In the event of any such default or breach by Tenant, Landlord shall
have the right (i) to continue the Sublease in full force and effect and enforce all of its rights and
remedies under this Sublease, including the right to recover the rental as it becomes due under
this Sublease, or (ii) Landlord shall have the right at any time thereafter to elect to terminate the
Sublease and Tenants right to possession thereunder. Upon such termination, Landlord shall
have the right to recover from Tenant'
(i) The worth at the time of award of the unpaid rental which had been
earned at the time of termination;
(ii) The worth at the time of award of the amount by which the unpaid
rental which would have been earned after termination until the time of award exceeds
the amount of such rental loss that the Tenant proves could have been reasonably
avoided;
(iii) The worth at the time of award of the amount by which the unpaid
rental for the balance of the term after the time of award exceeds the amount of such
rental loss that the Tenant proves could be reasonably avoided, and
(iv) Any other amount necessary to compensate the Landlord for all the
detriment proximately caused by Tenants failure to perform its obligations under the
lease or which in the ordinary course of things would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in subparagraphs (i)
and (ii) above shall be computed by allowing interest at three percent (3%) over the prime rate
then being charged by Bank of America, N.A. but in no event greater than the maximum rate
permitted by law. The worth at the time of award of the amount referred to in subparagraph (iii)
above shall be computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%), but in no event greater than
ten percent (10%).
IRV#21100 vI _1 1944Ar
As used herein "rental" shall include the Monthly Rental, percentage rental equal
to the average percentage rental paid or payable by Tenant for the last twelve (12) months or
such lesser period as Tenant has been open for business, other sums payable hereunder which are
designated `rental" or "additional rental" and any other sums payable hereunder on a regular
basis such as reimbursement for real estate taxes.
Such efforts as Landlord may make to mitigate the damages caused by Tenants
breach of this Sublease shall not constitute a waiver of Landlord's right to recover damages
against Tenant hereunder, nor shall anything herein contained affect Landlord's right to
indemnification against Tenant for any liability arising prior to the termination of this Sublease
for personal injuries or property damage, and Tenant hereby agrees to indemnify and hold
Landlord harmless from any such injuries and damages, including all attorney's fees and costs
incurred by Landlord in defending any action brought against Landlord for any recovery thereof,
and in enforcing the terms and provisions of this indemnification against Tenant.
Notwithstanding any of the foregoing, the breach of this Sublease by Tenant, or
an abandonment of the Demised Premises by Tenant, shall not constitute a termination of this
Sublease, or of Tenant's right of possession hereunder, unless and until Landlord elects to do so,
and until such time Landlord shall have the right to enforce all of its rights and remedies under
this Sublease, including the right to recover rent, and all other payments to be made by Tenant
hereunder, as they become due. Failure of Landlord to terminate this Sublease shall not prevent
Landlord from later terminating this Sublease or constitute a waiver of Landlord's right to do so.
102 No Waiver. Acceptance of rental hereunder shall not be deemed a waiver
of any default or a waiver of any of Landlord's remedies
10.3 Landlord's Default. Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no event later than
thirty (30) days after written notice by Tenant to Landlord and to the holder of any first mortgage
or deed of trust covering the Premises whose name and address shall have theretofore been
furnished to Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is such that more than
thirty (30) days are required for performance then Landlord shall not be deemed in default if
Landlord commences performance within a (30) day period and thereafter diligently prosecutes
the same to completion. In no event shall Tenant have the right to terminate this Sublease as a
result of Landlord's default and Tenant's remedies shall be limited to damages and/or an
injunction.
11.0 CONDEMNATION. In the event a condemnation or a transfer in lieu thereof
results in a taking of any portion of the Demised Premises, Landlord may, or in the event a
condemnation or a transfer in lieu thereof results in a taking of twenty-five percent (25%) or
more of the Demised Premises, Tenant may, upon written notice given within thirty (30) days
after such taking or transfer in lieu thereof, terminate this Sublease. Tenant shall not be entitled
to share in any portion of the award and Tenant hereby expressly waives any right or claim to
any part thereof. Tenant shall, however, have the right to claim and recover, only from the
condemning authority (but not from Landlord), any amounts necessary to reimburse Tenant for
IRV 921100 vl 13 19416
the cost of removing stock and fixtures. If this Sublease is not terminated as above provided,
Landlord shall use a portion of the condemnation award to restore the Demised Premises.
12.0 MISCELLANEOUS.
12.1 Entry and Inspection. Tenant shall permit Landlord and his agents to enter
into and upon the Demised Premises at all reasonable times for the purpose of inspecting the
same or for the purpose of maintaining the Demised Premises as required by the terms of this
Sublease or for the purpose of posting notices of nonliability for alterations, additions or repairs,
or for the purpose of placing upon the property in which the Demised Premises are located any
usual or ordinary "For Sale" signs or any signs for public safety as determined by Landlord.
Landlord shall be permitted to do any of the above without any rebate of rent and without any
liability to Tenant for any loss of occupation or quiet enjoyment of the Demised Premises
thereby occasioned. Tenant shall permit Landlord, at any time within six (6) months prior to the
expiration of this Sublease, to place upon the Demised Premises any usual or ordinary "For
Sublease" signs, and during such six (6) month period Landlord or his agents may, during
normal business hours, enter upon said Demised Premises and exhibit same to prospective
tenants.
12.2 Estoppel Certificate. If, as a result of a proposed sale, assignment, or
hypothecation of the Demised Premises or the land thereunder by Landlord, or at any other time,
an estoppel certificate shall be requested of Tenant, Tenant agrees, within ten (10) days
thereafter, to deliver such estoppel certificate in the form attached hereto as Exhibit "C"
addressed to any existing or proposed mortgagee or proposed purchaser, and to the Landlord.
Tenant shall be liable for any loss or liability resulting from any incorrect information certified,
and such mortgagee and purchaser shall have the right to rely on such estoppel certificate and
financial statement.
12.3 Jurisdiction and Venue. The parties hereto agree that the State of
California is the proper jurisdiction for litigation of any matters relating to this Sublease, and
service mailed to the address of tenants set forth herein shall be adequate service for such
litigation. The parties further agree that Riverside County, California is the proper place for
venue as to any such litigation and Tenant agrees to submit to the personal jurisdiction of such
court in the event of such litigation.
124 Partial Lnvalidity. If any term, covenant, condition or provision of this
Sublease is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the provisions hereof shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereof.
12.5 Successors in Interest. The covenants herein contained shall, subject to
the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators
and assigns of all the parties hereto, and all of the parties hereto shall be jointly and severally
liable hereunder.
12.6 No Oral Agreements. This (i) Sublease covers in fll each and every
agreement of every kind or nature whatsoever between the parties hereto concerning this
rRv azr roo vr
-14- � ��/7
Sublease, (ii) supersedes any and all previous obligations, agreements and understandings, if any,
between the parties, oral or written, and (iii) merges all preliminary negotiations and agreements
of whatsoever kind or nature herein. Tenant acknowledges that no representations or warranties
of any kind or nature not specifically set forth herein have been made by Landlord or its agents
or representatives.
12.7 Authority. In the event that Tenant is a corporation or a partnership, each
individual executing this Sublease on behalf of said corporation or said partnership, as the case
may be, represents and warrants that he or she is duly authorized to execute and deliver this
Sublease on behalf of said corporation or partnership, in accordance with a duly adopted
resolution of the Board of Directors, if a corporation, or in accordance with the Partnership
Agreement if a partnership, and that this Sublease is binding upon said corporation or partnership
in accordance with its terms. Tenant represents and warrants to Landlord that the entering into
this Sublease does not violate any provisions of any other agreement to which Tenant is bound!
12.8 Relationship of Parties. The relationship of the parties hereto is that of
Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any
way or for any purpose become a partner of Tenant in the conduct of Tenant's business or
otherwise, or a joint venturer with Tenant, and that the provisions of this Sublease and the
agreements relating to rent payable hereunder are included solely for the purpose of providing a
method whereby rental payments are to be measured and ascertained.
12.9 Nondiscrimination. Tenant herein covenants by and for itself, its heirs,
executors, administrators and assigns and all persons claiming under or through it, and this
Sublease is made and accepted upon and subject to the following conditions: That there shall be
no discrimination against or segregation of any person or group of persons on account of race,
sex, marital status, color, creed, national origin or ancestry, in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the Demised Premises herein leased, nor
shall the Tenant itself, or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the Demised
Premises.
12.10 Notices. Wherever in this Sublease it shall be required or permitted that
notice and demand be given or served by either party to this Sublease to or on the other, such
notice or demand shall be given or served in writing and shall not be deemed to have been duly
given or served unless in writing, and personally served or forwarded by certified mail, postage
prepaid, addressed, if to Landlord, to City of Palm Springs, P.O. Box 2743, Palm Springs,
California, 92263, Attn: City Manager, and if to Tenant, as specified in Section 1.7. Either party
may change the address set forth herein by written notice by certified mail to the other. Any
notice or demand given by certified mail shall be effective one (1) clay subsequent to mailing.
12.11 Waiver. No delay or omission in the exercise of any right or remedy by a
nondefaulting party shall impair such right or remedy or be construed as a waiver. A party's
consent to or approval of any act by the other party requiring the party's consent or approval
shall not be deemed to waive or render unnecessary the other party's consent to or approval of
IRV 921100 vI -1 5-
any subsequent act. Any waiver by either party of any default must be in writing and shall not be
a waiver of any other default concerning the same or any other provision of this Sublease.
12.12 Exhibits and Addenda. The Exhibits and Addenda attached to this
Sublease are made a part hereof as if fiilly set forth herein. In the event of a conflict between the
terms and provisions of an Addenda and the terms and provisions of this Sublease, the terms and
provisions of the Addenda shall prevail.
[SIGNATURES ON NEXT PAGE]
IRV 921100 vl
IN WITNESS WHEREOF, the parties have duly executed this Sublease together with the
herein referred to Exhibits which are attached hereto, on the day and year first above written in
Palm Springs, California.
ATTEST: CITY OF PALM SPRINGS, a
municipal corporation
By: By:
City Clerk City Manager
REVIEWED AND APPROVED
BURKE WILLIAMS & SORENSEN, LLP
By:
David J. Aleshire, Esq.
City Attorney
"LANDLORD"
By:
Its:
By:
Its.
"TENANT"
IRV#21100 vl
EXHIBIT "A"
LEGAL DESCRIPTION OF THE DEMISED PREMISES
IRV#21100 vl %AAl
EXWBIT"A"
TO SUBLEASE
EXFIIBIT "B-2"
PLAN OF NON EXCLUSIVE AREAS
IRV#21100 vl
EXHIBIT"B-2"
TO SUBLEASE
EXHIBIT "C"
ESTOPPEL CERTIFICATE
Tenant:
Landlord: CITY OF PALM SPRINGS, a
municipal corporation
Date of Sublease:
Demised Premises:
To:
The undersigned hereby certifies as follows
1. The undersigned is the tenant ("Tenant") under the above-referenced Sublease
("Sublease") covering the above-referenced premises ("Demised Premises").
2. The Sublease constitutes the entire agreement between landlord under the
Sublease ("Landlord") and Tenant with respect to the Demised Premises and the Sublease has
not been modified, changed, altered or amended in any respect except as set forth above.
3. The term of the Sublease commenced on , 20 and, including any
presently exercised option or renewal term, will expire on 20 Tenant has
accepted possession of the Demised Premises and is the actual occupant in possession thereof
and has not sublet, assigned or hypothecated its leasehold interest All improvements to be
constructed on the Demised Premises by Landlord have been completed and accepted by Tenant
and any tenant construction allowances have been paid in full.
4. As of this date, to the best of Tenant's knowledge, there exists no breach or
default, nor state of facts which, with notice, the passage of time, or both, would result in a
breach or default on the part of either Tenant or Landlord. To the best of Tenants knowledge, no
claim, controversy, dispute, quarrel or disagreement exists between Tenant and Landlord.
5. Tenant is currently obligated to pay Annual Rent in installments of$
per month, and such monthly installments have been paid not more than one month in advance.
In addition, the Sublease requires Tenant to pay percentage rent each month in the amount of
percent (_%) and percentage rent has been paid through 119_.
To the best of Tenants knowledge, no other rent has been paid in advance and Tenant has no
claim or defense against Landlord under the Sublease and is asserting no offsets or credits
IRV 921100 v1
EXI-i1BIT"C"
TO SUBLEASE .
against either the rent or Landlord. Tenant has no claim against Landlord for any security or
other deposits except $ which was paid pursuant to the Sublease.
6. Tenant has no option or preferential right to lease or occupy additional space
within the Property of which the Demised Premises are a part. Tenant has no option or
preferential right to purchase all of any part of the Demised Premises nor any right or interest
with respect to the Demised Premises other than as Tenant under the Sublease. Tenant has no
right to renew or extend the term of the Sublease except as set forth in the Sublease.
7. Tenant has made no agreements with Landlord or its agent or employees
concerning free rent, partial rent, rebate of rental payments or any other type of rent or other
concession except as expressly set forth in the Sublease
8. There has not been fled by or against Tenant a petition in bankruptcy, voluntary
or otherwise, any assignment for the benefit of creditors, any petition seeking reorganization or
arrangement under the bankruptcy laws of the United States, or any state thereof, or any other
action brought under said bankruptcy laws with respect to Tenant.
9. All insurance which Tenant is required to maintain under the Sublease has been
obtained by Tenant and is in full force and effect and all premiums with respect thereto have
been paid
Dated this day of 20
By.
Its:
IRV#21100 vl
EXHIBIT"C"
TO SUBLEASE
EXHIBIT "D"
RULES AND REGULATIONS
1. All loading and unloading of goods shall be done only at the times, in the areas
and through the entrances reasonably designated for such purposes by Landlord.
2. The delivery or shipping of merchandise, supplies and fixtures to and from the
Demised Premises shall be subject to such rules and regulations as in the reasonable judgment of
Landlord are necessary for the proper operation of the Demised Premises or of the Property
generally.
I All of Tenant's refuse and rubbish shall be removed to central trash bins located
in the Property, at Tenants sole cost and expense.
4. No radio or television or other similar device audible outside the Demised
Premises shall be installed without obtaining in each instance the written consent of Landlord.
No aerial shall be erected on the roof or exterior walls of the Demised Premises or on the
grounds of the Property without first obtaining in each instance the written consent of Landlord
which consent shall not be unreasonably withheld or delayed. Any aerial so installed without
such written consent shall be subject to removal without notice at any time.
5. No loudspeakers, televisions, phonographs, radios or other devices shall be used
in a manner so as to be heard or seen outside of the Demised Premises without first obtaining in
each instance written consent of Landlord.
6. The outside sidewalks and loading areas immediately adjoining the Demised
Premises shall be kept clean and free from dirt and rubbish by Tenant to the reasonable
satisfaction of Landlord, and Tenant shall not place or permit any obstructions or merchandise in
such areas, except to the extent specifically permitted by the provisions of Tenants Sublease.
7. Tenant shall not burn any trash or garbage of any kind in or about the Demised
Premises or the Property generally.
8. Tenant will not allow animals, except seeing-eye dogs, in, about or upon the
Demised Premises.
9. Tenant shall not use, and shall not allow anyone else to use, the Demised
Premises as a habitation. Such prohibition shall include, without limitation, sleeping, eating or
bathing.
10. Tenant shall not place any rubbish or other matter outside any building within the
Property, except in such containers as are authorized from time to time by Landlord.
ntvsziioovi
EM3IBIT"D"
TO SUBLEASE
EXHIBIT "E"
CONSTRUCTION OBLIGATIONS
Lessee shall construct the following improvements to the Center, at Lessee's sole cost, herein the
improvements. Should the City receive a contribution from the Agua Caliente Band of Cahuilla
Indians for the purpose of making improvements to the Center, the City shall deposit the funds in
the Disbursement Account, and disburse them in accordance with Section 5.1.3.
A. Required Improvements Prior to October l 2002
1. Court surfacing repair. The Tenant shall repair the portions the surface of Courts
1 through 9 that show evidence of water and sand damage. All future court
resurfacing shall be the responsibility of the Tenant
2. All windscreens need to be replaced with permeable material to reduce dust on
the courts and increase privacy. Open mesh vinyl on all exterior sides, estimated
to be 23,100 total square feet
3. All lights shall be painted and lowered for improved lighting.
4. All fences shall be painted green or black electropaint.
S. Tenant shall lower interior fences between courts to 3 1/2' to 4' from the current
6', from the first light pole to the last light pole, a distance of 80 feet for each
court.
B. Discretionary Improvements
1. Tenant may install a ` lceypad" gate lock to allow play after hours or in the
summer while maintaining the overall security at the facility.
2. Tenant may install benches with awnings between courts
3. Tenant shall participate in the City's annual slurry seal program, and reimburse
the City for its pro rata share of the parking lot maintenance cost for the slurry on
the third year of this Sublease.
4. Tenant may install a new sign for the Center, subject to staff approval by the
City's Parks and Recreation Department and the normal City Planning
Department process.
IRV#21100 yr 18A4)-?
EXHIBIT`E"
TO SUBLEASE
C. Parking Improvements within 3 years
1. Tenant shall reslurry the common area parking lot Tenant may participate in
City's annual slurry program and reimburse City for Tenant's prorata share of
parking lot, taking into account the Adjacent Property lessee participation.
D. Building Improvements within 2 years
1. Tenant shall update and modernize the pro shop area, repainting, recarpeting and
making similar improvements.
2. Tenant may replace the glass in the pro shop with laminated security glass.
3. Tenant may upgrade the bathrooms making them ADA complaint and add
showers. This will be required if (a) Tenant makes major structural changes, as
required by law, or (b) if grant funds are available for financing the
improvements. City will cooperate as necessary to obtain available grant funds.
IRV 421100 vI A '
EXHIBIT"E"
TO SUBLEASE
EXHIBIT "F"
IMPROVEMENT SCHEDULE
Tenant shall construct the improvements listed in Section A of Exhibit"E", Construction
Obligations, noted as "Prior to October 1, 2002" between the commencement of the Sublease on
May 1, 2002 and the date of occupancy, October 1, 2002.
The schedule of the construction of the additional improvements noted in Exhibit "E" shall be at
the discretion of the Tenant except as follows
1. All capital improvements to the pro shop building must happen within twenty-four (24)
months of the commencement of Tenant's operation (October 1, 2004)
2. The parking lot will be reslurred within 36 months of the commencement of Tenant's
operation (October 1, 2005).
jn
IRv#21100 vI EXHIBIT"F
TO SUBLEASE
TABLE OF CONTENTS
Page No.
1.0 SUBLEASE SUMMARY. ......... . .. ......... . .. .......... .. ........... . . .................... 1
1.1 Demised Premises..... ........... ........... . ........... ..... 1
1.2 Sublease Commencement Date . ......... .. ........ .. ........... . .. ............ ... 1
1.3 Extension Options. N/A ............ . ............ ............................. .............. 1
1.4 Rental. .............. . ................. .. ....... . .... .......... ..................................... 1
1.5 Security Deposit. .......... .............. ........... .. ............ ... .......................... 1
1.6 Use of Demised Premises. ........... . . ....... . . ........ .. ......... . .......... 1
1.7 Tenant' s Address for Notices........ 2
2.0 TERM.............................. . . ........ . . ....... . .......... .. ........... . ................... 2
2.1 Term............ ............ . ........... . .... ...... .... ...... . .. ........ .. .............. 2
2.2 Termination By Landlord........ ............ ............ .. ........... .. ............. ..... 2
2.3 Holding Over........ . ........................... .......... .. . ................................... 2
3.0 RENTAL............................ ............ .. ............ ............ ... .......... .. ............ ...... 3
3.1 Annual Rental.... . ......... ......... . ......... ......... . ........... .............. 3
3.2 Real Propert Taxes......................... .. .......... . . ............ ........................ 3
3.3 Personal Property Taxes.. ......... . .. . ....... .. .. .......... ........... ............... 3
3.4 Utilities.. ............. ........... ........... . .......... .. ............. ........... ................ 3
3.5 Late Payment............... .............. ............ ............. ........... .................... 3
3.6 Interest. . .......... ............ . .. ...... . ....... .... . 3
4.0 USE OF THE PRE LSES ..... . ............... ...... . 4
4.1 Permitted Use. .... . . ....... . .......... . . .......... . . ......... ......................... 4
4.2 Prohibited Uses.......... . ............ . ........... . ........ ... ............ .................. 4
4.3 Compliance with Laws..... .. ......... . ......... ... . .......................... ............. 4
4.4 Si_s....................... ........ .. ......... . ......... . . .......... ............ .. ......... 5
4.5 Hours of Business ... ..... .. ....... . .. .......... . ........ .. ........... ............ . 5
4.6 Rules and Regulations.. - . ........... ............... 5
5.0 CONSTRUCTION OF NEW FACILITIES, ALTERATIONS AND
REPAIRS..................... ......... . .. ......... ............ . ............. ........................... 5
IRV#21100 vl
1 ftyj
5.1 Construction of Improvements— . ......... . ...... . ........ .. ..................... 5
5.2 Alterations and Fixtures ...... 6
5.3 Maintenance and Repair ....................... ........ . ......... ........... ............. 6
5.4 Free from Liens. .. .. ..................... ............ .......... ................................. 7
6.0 INSURANCE AND INDEMNIFICATION......... ......... ................................. 7
6.1 Insurance Provided by Landlord...... ......... . .......... ........... ................... 7
6.2 Insurance Provided by Tenant .... ........ ........ .. ........... ........... .............. 7
6.3 Indemnification of Landlord. .., , , . .. .. ...... . ....... . ........ .. ....... . .. 9
7.0 ABANDONMENT AND SURRENDER...... . ......... ....... .. ....... ........... ..... 9
7.1 Abandonment, . .... . .. ....... . ...... . . ......... ....... ........ ..................... 10
7.2 Surrender of Sublease. ..... ........... ......... . ......... . ........ ................... 10
8.0 DAMAGE AND DESTRUCTION OF PREMISES.... .......... ...................... 10
9.0 ASSIGNMENT AND SUBLETTING ......., ........ . ........ ........... 10
10.0 DEFAULT AND REMEDIES ....... . ..... . ..... . 11
10.1 Default by Tenant. ., . ......... ........ . ..... . . .......I................. 11
10.2 No Waiverr. ......... . ......... ......... . ............. ...... .............................. . 13
10.3 Landlord's Default................. ........... .......... .......... .......... ................. 13
11.0 CONDEMNATION... ................. . ......... . ......... .......... ........... .................. 13
12.0 MISCELLANEOUS ........ ..................... ........ 14
12.1 Entry and Inspection. . . ...... ...... .......... ......... ....... 14
12.2 Estoppel Certificate........................... ............ .. ........ .. ..... .. ........ ...... 14
12.3 Jurisdiction and Venue ........ ......... . . .... . . ...... . ................. ........... 14
12.4 Partial Invalidity. ........ ...... . ...... ......... ...................... ...... 14
12.5 Successors in Interest.... . .............. ..... . ........ . .......... ........ 14
12.6 No Oral Agreements ..... .... ....... . .. ......... ....... . ....... ........... ........... 14
12.7 Authority. ... ....... . ............ ......... ......... . ....... .......... ......................... 15
12.8 Relationship of Parties . ........ . ...... . ........ .... ........... ......... 15
12.9 Nondiscrimination. ...... ....... . . ..... ... ....... ........ . ....... .. ...... .......... 15
12.10 Notices. ......... ......... . ....... . ....... . ........ . ....... . ........ ...................... 15
12.11 Waiver.................. ........ ......... . ......... ............ ................................... 15
IRV 921100 v] '
12.12 Exhibits and Addenda. ....... ......... .................... ........ ........................... 16
EXHIBIT A- LEGAL DESCRIPTION OF TIM DEMISED PREMISES
EXHIBIT B-1 - PLOT PLAN OF DEMISED PREMISES
EXHIBIT B-2 —PLAN OF NON EXCLUSIVE AREAS
EXHIBIT C - ESTOPPEL CERTIFICATE
EXHIBIT D - RULES AND REGULATIONS
EXHIBIT E - CONSTRUCTION OBLIGATIONS
EXHIBIT F - IMPROVEMENT SCHEDULE
IRV 921100 vl
lll 16A32-
MINUTE ORDER NO.
APPROVING A LEASE WITH PALM SPRINGS
TENNIS CLUB OWNERS ASSOCIATION, A
CALIFORNIA NON-PROFIT MUTUAL BENEFIT
CORPORATION FOR THE DEVELOPMENT AND
OPERATION OF THE NORTHERN, UNDEVELOPED
PORTION OF THE PALM SPRINGS TENNIS
CENTER AT 1300 EAST BARISTO ROAD, A
CITY-OWNED FACILITY, IN A FORM ACCEPTABLE
TO THE CITY ATTORNEY
I HEREBY CERTIFY that this Minute Order approving a Lease with the Palm Springs Tennis
Club Owners Association, a California non-profit mutual benefit corporation for the development
and operation of the northern, undeveloped portion of the Palm Springs Tennis Center, 1300
East Baristo Road, a City-owned facility, in a form acceptable to the City Attorney, was adopted
by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 3rd
day of July, 2002.
PATRICIA A. SANDERS
City Clerk
# y