HomeMy WebLinkAbout28- Public Works FILE NO. 15.06-051
CI Y OF SAN BERNARDINO REQUEST FOR COUNCIL ACTION
From:ROGER G. HARDGRAVE, Director Subject: TWO YEAR LEASE WITH OPTION TO PURCHASE:
from Ayala family - City-owned property
Dept: public Works/Engineering located at 1505 North Waterman Avenue
Date: ! gff (old Gallo's Flowers and Gifts)
February 26, 1996 �� � b
Synopsis of Previous Council action:
04/17/95 --- Authorization granted to obtain an appraisal for City-owned proper-
ty located at 1505 North Waterman Avenue - in "as is" condition,
and that matter be brought back to the Mayor and Council meeting of
May 15, 1995.
05/17/95 --- Resolution No. 95-159 approved giving notice inviting competitive
bids for sale of 1505 North Waterman Avenue by 06/27/95.
06/27/95 --- No bids received.
02/19/96 --- Real Property Staff directed to prepare lease/option for 1505 North
Waterman Avenue.
Recommended motion: B r,,:l 96 o, 7'43
ADOPT RESOLUTION
cc: Shauna Clark, City Administrator
Barbara Pachon, Finance Director gnature
James F. Penman, City Attorney
Contact person: Anne DeBolt Phone: 5328
Supporting data attached: Staff Report, Resolution & Map Ward: 2
FUNDING REQUIREMENTS: Amount:
Source: Acct_No.)
(Acct. Description)
Finance:
Council Notes:
CI`T'Y OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
A proposal to lease the City property located at 1505 North Waterman Avenue
(Waterman and Gilbert) , with an option to purchase, was received from the Ayala
family. This proposal was accepted at the Council meeting of 02-05-96, and
authorization granted to negotiate a Lease with Option to Purchase Agreement.
A Lease with Option to Purchase Agreement has been negotiated with the Ayala family
pursuant to this authorization. The Agreement provides for the Ayala family to
lease the old Gallo's Flower and Gift Shop building for a lease payment of $1,500
per month. Also, the Lessee has a two-year Option to Purchase the property for the
amount of $120,000.
In the event the Lessee does not exercise the Option to Purchase within the two
year period, the Lease may be extended for 2 terms of five years each. The lease
payments for the first five-year extension will be $1,600 per month and will
increase to $1,700 per month for the second five-year term.
The Ayala family will accept the building in an "as is" condition, subject to the
provision that all remaining equipment, trash, broken glass, fallen ceiling panels,
etc. be removed by the City. Also, that the landscaping be trimmed or removed, the
roof swept and the rain gutters cleaned.
A cash deposit of $5,000 has been submitted by the Lessee as security for the lease
payments and as evidence of good faith.
We recommend that the Lease with Option to Purchase Agreement be approved.
URGENCY CLAUSE:
The Ayala family is very anxious to occupy the building in order to prevent any
further damage from the elements or from vandalism.
02/26/96 2
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 2. Term.
2 This Agreement shall be for a term of two (2) years, beginning March 18,
3 1996, and ending March 17, 1998, providing that Lessee has the right and
4 option to purchase said Premises at anytime within said two (2) year lease
5 term at a sales price of One Hundred Twenty Thousand Dollars ($120,000) .
6 3. Extension of Lease Term.
7 If at the end of the initial two (2) year lease term, the Lessee has not
8 exercised its option to purchase the Premises as stated in Paragraph No. 2
9 above, then Lessee shall have the option to renew the Lease portion of the
10 Agreement for two (2) five (5) year terms by written notification to Lessor
11 no later than ninety (90) days prior to expiration of the original Agreement
12 or any extension of the Agreement, subject to acceptance by Lessor. The
13 monthly rental shall be One Thousand Six Hundred Dollars ($1,600.00) for the
14 first five (5) year extension, and One Thousand Seven Hundred Dollars
15 ($1, 700.00) for the second five (5) year term extension. All other terms and
16 conditions shall remain the same.
17 4. Lease Payments/Option to Purchase.
18 Lessee agrees to pay, and Lessor agrees to accept as lease payments for
19 said Premises, a monthly rental of One Thousand Five Hundred Dollars
20 ($1, 500.00) . Said total monthly rental is to be paid on or before the first
21 day of each month, made payable to the Lessor, and sent to:
22 City of San Bernardino
Real Property Section
23 300 North "D" Street, 3rd Floor
San Bernardino, CA 92418.
24
25 The Lease payments of One Thousand Five Hundred Dollars ($1, 500) per month
26 shall not commence until the first (1st) day of the fifth (5th) month follow-
4-
27 ing the commencement of the Agreement or August 1, 1996. Each month, Five
28 Hundred Dollars ($500.00) ,Jf the total monthly lease payment of One Thousand
_5.06-51 / /1/�
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 Five Hundred Dollars ($1500.00) shall be set aside to be credited towards the
2 down payment for the purchase of said Premises. Said Five Hundred Dollars
3 ($500.00) credit shall extend to the end of the two (2) year Option to Pur-
4 chase the Premises, with a total credit of Ten Thousand Five Hundred Dollars
5 ($10, 500) accruing towards the purchase of said Premises. In the event
6 Lessee does not exercise said Option to Purchase the Premises within the two
7 year option period, the Ten Thousand Five Hundred Dollars ($10,500) shall be
8 considered a portion of the Lease payments and shall not accrue to the bene-
9 fit of the Lessee. In the event Lessee does exercise the Option to Purchase,
10 the Five Thousand Dollar ($5,000) deposit made at the commencement of the
11 Lease shall also be credited to the purchase of the Premises as long as all
12 lease payments are current and the Lessee is in good standing with the
13 Lessor. If the Lessee does not exercise said Option to Purchase, the Five
14 Thousand Dollar ($5,000) shall be considered a security deposit for the Lease
15 and shall not be refunded, but may be used by Lessee for regular lease pay-
16 ments at the end of the two (2) year option term.
17 5. Late Payments:
18 In the event the monthly rental is paid later than the fifth day of any
19 month, a late payment penalty of One Hundred Dollars ($100) shall be as-
20 sessed.
21 6. Use of Premises.
22 The Premises are leased to the Lessee for use as an insurance office,
23 beauty salon/beauty supplies, and/or educational training facility, and
24 related uses. Lessee agrees not to use the Premises, nor to permit their use
25 or the use of any part of them, for any other purpose, without the prior
26 written consent of the Lessor.
27 7. Improvements.
28 Lessee a not make, or suffer to be made, any alterations to the
5.06-51
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 leased Premises, or any part thereof, without the prior written consent of
2 Lessor. Any and all alterations and/or improvements made to the demised
3 Premises pursuant to this section shall, upon termination of this Agreement,
4 remain as a part of the Premises and at no cost or obligation to the Lessor.
5 As a matter of this Lease, Lessee shall be permitted to make any and all
6 repairs and improvements, major or minor, to the Premises to make them hab-
7 itable. Lessee will commence with said repairs no later than March 31, 1996.
8 Lessee will provide Real Property Staff an accurate accounting of all the
9 above repair expenses. These repairs and improvements may include, but are
10 not limited to, the repair or replacement of the roof of the building, the
11 interior ceiling and lighting, any flooring, painting of the interior and
12 exterior of the building, any necessary electrical, plumbing and heating and
13 air conditioning repair, addition of a security system, repair or replacement
14 of the existing signage, and any tenant improvements the Lessee requires to
15 begin operation. The repairs to the roof, ceiling and flooring shall be
16 completed within ninety (90) days of the commencement of this Agreement and
17 all repairs and improvements shall be done in accordance with applicable
18 current City and State code requirements under the supervision of the Facili-
19 ties Manager of the Lessor. Prior to the Lessee's occupation of the Premis-
20 es, Lessor shall remove, or have removed, all remaining equipment, trash,
21 broken glass, fallen ceiling panels, etc. , in the interior of the building.
22 The exterior landscaping shall be trimmed and cleaned or removed as needed.
23 The roof shall be swept and all foreign materials removed from gutters, etc.
24 8. Maintenance and Operation.
25 Lessee is familiar with the leased Premises and has knowledge of the
26 present conditions that exist thereon. Lessee shall, at Lessee's own
27 cost and expense, keep and maintain all improvements thereon in good condi-
28 tion and repair, both as to the exterior and interior portions thereof.
15.06-51
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 Lessee shall provide or cause to be provided, all services which are required
2 for the proper care and use of the Premises. Lessee shall use all reasonable
3 precaution to prevent waste, damage or injury to the Premises. Lessor, shall
4 at any reasonable time, have the right to enter the Premises and inspect and
5 examine the same relative to such maintenance and upkeep. The Lessee shall
6 keep the leased Premises and any and all improvements thereon free and clear
7 of all liens, charges, and encumbrances.
8 9. Utilities.
9 Lessee shall pay for all electricity, gas, water, refuse service, tele-
10 phone service, and all other services and utilities, including service in--
11 stallation fees and charges for such utilities which are now or may hereafter
12 be provided to the leased Premises as to any charges or fees accruing during
13 the term of this Agreement. If Lessee desires additional utilities and/or
14 utility services to the Premises, Lessee must first obtain written consent
15 from Lessor.
16 10. Ownership.
17 Lessee acknowledges Lessor's title, paramount interest and ownership of
18 the subject Premises, and Lessee agrees never to claim, challenge, or con-
19 test said title, ownership or interest of Lessor.
20 11. Taxes/Possessory Interest.
21 Lessee covenants during the term of this Agreement to pay, when due, all
22 taxes and assessments that may be assessed or imposed upon the Lessee's
23 possessory interest in and to the Premises and upon personal property located
24 on the leased Premises. During Lessee's possession and use of the leased
25 Premises, should any taxes thereon be assessed against Lessor, Lessee agrees
26 to indemnify Lessor thereon.
27 12. Amendment.
28 This Agreement may be amended or modified only by written agreement
15.06-51
rr
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 signed by both parties.
2 13. Insurance.
3 (a) Fire. Lessee agrees to procure and maintain in force during the
4 term of this Agreement and any extension thereof, at its expense, a policy or
5 policies of insurance whereby the CITY OF SAN BERNARDINO will be named as the
6 primary insured against loss or damage to the leased Premises, appurtenances
7 and permanent equipment therein, resulting from fire, windstorm and extended
8 perils, in a minimum amount of Two Hundred Thousand Dollars ($200,000) ,
9 Damage from lightning, vandalism, malicious mischief and such perils ordinar-
10 ily defined as "extended coverage" shall be included in such coverage. The
11 insurance policy shall be issued in the names of Lessor and Lessee. The
12 insurance policy shall provide that any proceeds shall be made payable solely
13 to the Lessor, or, alternatively, to Lessor and Lessee, as their interests
14 may appear.
15 (b) Liability. Lessee agrees to procure and maintain in force during
16 the term of this Agreement and any extension thereof, at Lessee's expense,
17 public liability insurance in companies approved by Lessor through its Risk
18 Manager, adequate to protect against liability for damage claims through the
19 Lessee's use of or arising out of the use of the leased Premises, in a mini-
20 mum amount of ONE MILLION DOLLARS ($1,000,000.00) combined single limit.
21 Lessee shall provide to Lessor's Risk Management Division, an annual policy
22 of insurance which includes:
23 1. The City of San Bernardino as an additional named insured;
24 2. The insurance company name, policy number, period of coverage and
25 the amount of insurance;
26 3. That the Real Property Section of the City of San Bernardino must
27 be given notice, in writing, at least thirty (30) days prior to cancella-
28 tion, material change or refusal to renew policy; and
15.06-51
nn i,)c inc—'.
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 4. Condition that Lessee's insurance will be primary to any cover-
2 age that Lessor may have in effect.
3 Lessee agrees that, if such insurance policies are not kept in fora:
4 during the term of this Agreement, and any extension thereof, Lessor may have
5 the option of one of the following:
6 (a) Procure the necessary insurance, pay the premium therefor, and
7 that such premium shall be repaid to Lessor as an additional rent installment
8 for the month following the date on which such premium is paid.
9 (b) Immediately declare this Agreement in default, and terminate this
10 Agreement forthwith.
11 14. Damage by Fire, Earthquake or Calamity.
12 If by earthquake, flood or other similar calamity or act of God, or
13 by fire, act of war or other similar cause, any existing improvements, or any
14 improvements constructed by Lessee on the leased Premises are destroyed or
15 damaged to a substantial degree, Lessee shall repair them when such repairs
16 can be made in conformity with any applicable law, and if, within ninety (90)
17 days after the date when such destruction or damage occurs, Lessee has not
18 commenced repair or reconstruction, the Lessor may terminate this Agreement
19 upon forty-five (45) days' written notice to Lessee. If so terminated, then
20 Lessee shall, at its own expense, and upon election by Lessor, forthwith
21 remove any or all of the damaged improvements.
22 15. Indemnification.
23 Lessee shall exercise its privileges under this Agreement at its own
24 risk. Lessee shall indemnify and hold harmless Lessor, its elective and
25 appointive boards, commissions, officers, agents and employees from
26 liability resulting from, arising out of, or in any way connected with, the
27 Lessee's operations under this Agreement or Lessee's occupation of the Prem-
28 ises, including claims resulting from the conduct of Lessee, its employees,
15.06-51
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 invitees, guests or agents of Lessee, or Lessee's failure to perform its
2 promises in connection herewith. Lessee shall defend Lessor, its elective
3 and appointive boards, commissions, officers, agents, and employees from any
4 suits or actions at law or in equity for damages caused, or alleged to have
5 been caused, by reason of any of Lessee's operations under this Agreement.
6 Lessor shall not be liable to Lessee if Lessee's occupation or use of the
7 Premises is hindered or disturbed.
8 16. Notices.
9 All notices herein required shall be in writing and delivered in
10 person or sent by certified mail, postage prepaid, addressed as follows:
11 LESSOR: LESSEE:
12 CITY OF SAN BERNARDINO ROSEMEAD INSURANCE AGENCY
Real Property Section c/o Salvador Ayala, Jr.
13 300 North "D" Street, 3rd Floor 1505 N. Waterman Avenue
San Bernardino, CA 92418 San Bernardino, CA 92404
14 (909) 384-5328 (909)
15 17. Condition of Property Upon Surrender.
16 In the event the Option to Purchase the Premises is not exercised and
17 the Lease is terminated, Lessee agrees to surrender the said Premises occu-
18 pied under the Agreement herein granted, in as good condition as same was on
19 the date of completion of all repairs and improvements to the Premises as set
20 forth in Paragraph 7 above. Lessor may elect to take possession of and
21 appropriate to itself without payment any property of Lessee, or anyone
22 claiming under Lessee, which Lessee fails to remove after notice.
23 18. Severability.
24 In the event this Agreement, or any portion thereof, should be deter-
25 mined to be void, illegal or improper, for any reason whatever, all other
26 portions of the Agreement shall remain fully enforceable to the extent
27 possible after such determinations.
28 19. Default.
15.06-51
._ WfYfW®I Wif *.
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 In the event Lessee shall be in default in the payment of rentals,
2 taxes, or other charges hereunder, or shall otherwise breach its covenants or
3 obligations hereunder, and shall be and remain in default for a period of ten
4 (10) days after written notice from Lessor to it of such default, Lessor
5 shall have the right and privilege of terminating this Agreement and
6 declaring the same at an end, and of entering upon and taking possession of
7 said Premises, and shall have the remedies now or hereafter provided by law
8 for recovery of rent and/or taxes, repossession of the Premises and damages
9 occasioned by such default. If such default should occur, then Lessor shall
10 have the right to take possession of and appropriate to itself without pay-
11 ment therefor, any property of Lessee or anyone claiming under him, then
12 remaining on said Premises.
13 20. Effect of Lessor's Waiver.
14 Lessor's waiver of breach of one term, covenant, or condition of this
15 Agreement is not a waiver of breach of others, nor of subsequent breach of
16 the one waived. Lessor's acceptance of rent installments after breach is not
17 a waiver of the breach, except of breach of the covenant to pay the rent
18 installment or installments accepted.
19 21. Duty to Make Alterations, Additions, or Changes Required by Law.
20 If, during the term of this Agreement, any law, regulation, or rule
21 requires that an alteration, addition, or other change be made to the leased
22 Premises, the parties agree as follows:
23 (a) If the alterations, additions, or changes are required as a result.
24 of Lessee's use of the Premises, Lessee will make them and bear all expense
25 connected therewith.
26 (b) If the alterations, additions, or changes are required as a result
27 of the condition or nature of the Premises after the completion of the re-
28 pairs and tenant improvements constructed under this Agreement, and not
15.06-51
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERNAN AVENUE - AYALA
1 caused by use of the Premises by Lessee, Lessor will make them and bear all
2 expense connected therewith.
3 22. Inspections.
4 Lessor, its agents, officers, or employees may enter upon the leased
5 Premises at such reasonable times during Lessor's normal business hours a:=.
6 it deems necessary for the purpose of inspection of the Premises to determine
7 whether the terms and conditions of this Agreement are being performed and
8 kept by Lessee.
9 23. Non-Discrimination.
10 The Lessee hereby covenants by and for itself, its heirs, executors, ad-
11 ministrators, employees, agents, and assigns, and all persons claiming under
12 or through it, that there shall be no discrimination against or segregation
13 of any person or group of persons, on account of race, color, religion, sex,
14 national origin, ancestry, age, or handicap, in the leasing, subleasing,
15 transferring, use, occupancy, tenure, or enjoyment of the Premises herein
16 leased, nor shall the Lessor itself, or any person claiming under or through
17 it, establish or permit any such practice or practices of discrimination or
18 segregation with reference to the selection, location, number, use, or occu-
19 pancy of lessees, sublessees, tenants, subtenants, agents, employees, as-
20 signs, or vendees in the Premises herein leased.
21 24. Assignments: Sole Occupancy.
22 Lessee shall not assign this Agreement or sublet the leased Premises or
23 any part thereof without obtaining the prior written consent of the Lessor.
24 The parties contemplate that Lessee shall be the sole occupant of these
25 Premises, and the rental rate is established based in part thereon. Any
26 change in occupancy constitutes a material breach of this Agreement.
27 25. Agreement Breached by Lessee's Receivership, Assignment for Bene-
28 fit of Creditors, Insolvency, or Bankruptcy.
15.06-51
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
f '
3fE�
1 Appointment of a receiver to take possession of Lessee's assets, Less
2 eels general assignment for benefit of creditors, or Lessee's insolvency or
3 taking or suffering action under the Bankruptcy Act is a breach of this
4 Agreement and shall terminate same.
5 26. Agreement Applicable to Successors, Etc.
6 This Agreement and the terms, covenants and conditions hereof apply to,
7 and are binding on the heirs, successors, executors, administrators and
8 assigns of the parties hereto.
9 27. Entire Agreement.
10 This document represents the entire, total, and complete Agreement and
11 no other written and/or oral agreements exist in this regard.
12
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15.06-51
LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA
1 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
2 the date first above written.
3
4 LESSOR: CITY OF SAN BERNARDINO
5 *,¢
6 DATED: By:
TOM MIN?R, Mayor
7
8 ATTEST:
9
10 DATED: By:
11 RAC CLARK, City Clerk
12
13 LESSEE: ROSEMEAD INSURANCE AGENCY
14
15 DATED:
SALVADOR AYALA, JR.
16
17 _
SALVADOR AYALA MARIA C. AYALA
18
19
MARIA E. AYALA FRANK HALSTEAD
20
21
------------------
BLANCA 0. LOPEZ CARLOS E. LOPEZ
22
23
24 Approved as to form
and legal content:
25
26 JAMES F. PENMAN,
City Attorney
27
28 By:
15.06-51
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AREA CALCULATIONS
16• x 24, _
384
3Y- ` 21 x 10• = 20
Z(� 3.5, x 42, = 147
11.5 x 48, = 552
4.5 x 44.51 200
6.5 x 46.51 302
24, x 43, = 1,032
61 x 46.5, 279
61 x 18• = 108
4, x 9• x 2 = 72
- -
16 Total S.F. 3,096
.
Say 3,100
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