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HomeMy WebLinkAbout25-SBETA CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Dept: San Bernardino Employment and Training Agency Subject: Resolution authorizing the San Bernardino Employment and Training Agency ("SBETA") to enter into a Lease with the Arrowhead Professional Center, L.P., for the premises located at 600 N. Arrowhead Avenue, Suite 300, San Bernardino From: Ernest B. Dowdy, Executive Director Date: August8,2005 MICC Meeting Date: August 15,2005 Synopsis of Previous Council Action: None Recommended Motion: Adopt Resolution ., " r '. , -"'" L" '. ~, t. .J... .',. Signature .~ < , .' Contact person: Ernest S, Dowdv Phone: 888-7881 Supporting data attached: Yes Ward: N/A FUNDING REQUIREMENTS: Amount: $2.195,472.00 Source: (Acct. No.) 123-949-5171 & 123-950-5171 (Acct. Description) WIA Admin Cost Pool WIA Program Cost Pool Finance: Council Notes: Agenda Item No. Z5 8'1/6/05 CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: Resolution authorizing the San Bernardino Employment and Training Agency ("SBETA") to enter into a Lease with Arrowhead Professional Center, L.P., for the premises located at 600 No. Arrowhead Avenue, Suite 300, San Bernardino. Backeround: Presently, the San Bernardino Employment and Training Agency (SBET A) is located at 599 North Arrowhead. The office is crowded and does not provide sufficient space to meet the requirements of a fully operational One-Stop Career Center, as defined in the Workforce Investment Act (WIA). In addition, the office does not provide adequate space to accommodate customer flow/processing and business service activities, nor is it suitable to support the program growth anticipated in the immediate future. Additionally, there are a number of major building deficiencies in SBET A's current location, none of which can be easily corrected. In response to these issues, SBETA staff has surveyed a number of buildings in the immediate area to determine appropriateness for our needs. The building that is being recommended for lease is located at 600 North Arrowhead Avenue and is owned by Arrowhead Professional Center, L.P. The building is approximately 18,654 square feet, at a negotiated lease price of $1.28 per square foot. The lease agreement is for a seven-year period. The cost per square foot price increases $.04 per year. The building should be available for occupancy within 45-60 days following execution of the lease agreement. The owners have expressed agreement with a seven-year lease term, with a provision for termination in the event that program funding is curtai led/ e I i minated. Therefore, it is requested that the Mayor and City Council authorize SBET A to enter into a lease agreement for the following reasons: I. A larger facility is essential to meet the requirements of the Workforce Investment Act, and to effectively cope with ever expanding program needs and partnership collaboration. 2. Additional space will permit expansion of the One-Stop Career Center to include adequate areas for orientations, classroom instruction, record storage, and business service. Financial Impact: It is anticipated that the present and future SBET A administration budgets provide sufficient funding to meet our financial obligation as it pertains to the current cost of the lease at $23,877.00 per month, through the seventh year of the agreement at which time the monthly cost will be $28,510.00. There will be no impact to the City's General Fund. This building will be used to administer the Workforce Investment Act (WIA) programs and the funding that is made available through the Department of Labor is adequate to support the rent and incremental increases to the base rent. Recommendation: Adopt Resolution. 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND 3 TRAINING AGENCY ("SBETA") TO ENTER INTO A LEASE WITH ARROWHEAD PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD 4 A VENUE, SUITE 300, SAN BERNARDINO. 5 BE IT RESOLVED BY THE MA YOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 6 7 8 SECTION 1. The Mayor and Common Council of the City of San Bel1lardino do hereby authorize the San Bel1lardino Employment and Training Agency ("SBET A") to enter into a lease with Arrowhead Professional Center, L.P. with an initial rent of $23,877 per month, to be adjusted 9 10 annually as provided in Exhibit B of said lease, for a term of seven years and any extensions thereof, for premises located at 600 N. Arrowhead Avenue, Suite 300, San Bel1lardino. 11 /II 12 1/1 13 /II 14 III 15 /II 16 III 17 /II 18 /II 19 /II 20 III 21 1/1 22 /II 23 1/1 24 /II 25 /II 26 /II 27 1/1 28 DHC/js [Resolutions\SBETA.Rcs] 1 25 26 27 28 I 2 3 RESOLUTION OF THE MA YOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND TRAINING AGENCY ("SBETA") TO ENTER INTO A LEASE WITH ARROWHEAD PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD A VENUE, SUITE 300, SAN BERNARDINO. 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 Common Council of the City of San Bernardino at a meeting thereof, held on the day of 7 COUNCIL MEMBERS: AYES 8 ESTRADA 9 LONGVILLE 10 MCGINNIS II DERRY 12 KELLEY 13 JOHNSON 14 MCCAMMACK 15 16 17 18 , 2005, by the following vote, to wit: NAYS ABSTAIN ABSENT CITY CLERK 19 20 The foregoing Resolution is hereby approved this _ day of ,2005. JUDITH V ALLES, Mayor 21 City of San Bernardino 22 Approved as to form and legal content: 23 JAMES F. PENMAN, 24 City Attorney By: iJ. 't:.--t.~ DHCljs [Rcsolutions\SBET A.Res] 2 OFFICE LEASE PREAMBLE This lease is dated for reference August 3, 2005, by and between Arrowhead Professional Center, L.P., referred to in this lease as "Landlord," and City of San Bernardino Employment and Training Agency ("SBET A"), referred to in this leasc as "Tenant." RECITALS Whereas, the City of San Bernardino Employment Agency (SBET A"), is an agency authorized by, and operating pursuant to the Workforce Investment Act of 1998 ("Act"), Public Law 105-220; and Whereas, the purpose of the Act is to consolidate, coordinate, and improve employment, training, literary, and vocational training in the United States, and for other purposes; and Whereas, SBET A receives funds to carry out its duties from various sources, including the Federal Government, the State of California, and the City of San Bernardino; and Whereas, funding of SBET A is discretionary and may be affected at any time by actions with the various funding agencies; and Whereas, SBET A, is desirous of acquiring a suitable location to carry out its duties and obligations composed by the Act, and has determined that the property located at 600 N. Arrowhead A venue, San Bernardino, California is suitable for its operations. PREAMBLE Subject to the terms and conditions set forth in this lease, Landlord hereby leases to Tenant that certain space outlined in red on the plat map attached and marked Exhibit "A" on the 3rd floor of the building located at 600 North Arrowhead Avenue, San Bernardino, California. The leased space outlined in red on the attached marked Exhibit "A" referred to in this lease as the "Leased Space" or the "Premises," is presently designated Suite 300, but Landlord reserves the right to renumber and redesignate at any time during this lease the number of any space in the Building, including the Leases Space. TERM I. The term of this lease shall be a period of 7 years commencing at 12:0 I a.m. on the earlier of (a) the 60th calendar day after the date the lease is approved by the San Bernardino City Councilor (b) the date Tenant takes possession, which date shall be at the sole discretion of the Landlord(the "Commencement Date") and ending at II :59 p.m. on the date seven years following the Commencement Date, unless terminatcd earlier as provided in this lease. If Tenant holds over and continues in possession of the Premises after termination of the term of this lease, Tenant's continued occupancy of the Premises shall be deemed merely a tenancy from month-to- month at a minimum rental of23,877 per month subject to all the terms and conditions, including the provisions for the rent increase provided in Paragraph 2, contained in this lease. 2.. (a) Landlord hereby grants to Tenant two options to extend the Lease Term ("Extension Option") for a period of five years (each an "Option Term"), subject to the conditions described in this Section 2. Tenant shall have no other right to extend the ternl of this Lease. The Extension Option is subject to the following conditions: (I) The Extension Option may be exercised only by written notice delivered by Tenant to Landlord not less than 120 days prior to the expiration of the lease term or the first Option term, as applicable, and only if, as of the date of delivery of the notice, Tenant is not in default under this Lease. (2) The rights contained in this Section 2. shall be personal to the originally named Tenant and may be exercised only by the originally named Tenant (and not any assignee, sublessee, or other transferee of Tenant's interest in this Lease) and only if the originally named Tenant occupies the entire Leased Space as of the date it exercises the Extension Option in accordance with the terms of this Section 2. (3) If Tenant properly exercises the Extension Option and is not in default under this Lease at the end of the initial Lease Term or the first Option Term, as applicable, the Lease Term, as it applies to the entire Leased Space then leased by Tenant, shall be extended for the Option Term. (b) The rent and other lease terms applicable during the Option Term will be determined by negotiation between Landlord and Tenant, and for that purpose Landlord and Tenant or their authorized representatives will meet and attempt in good faith to negotiate the lease terms that will govern the tenancy during the applicable Option Term. If Landlord and Tenant cannot agree to a rent amount within 30 days after Tenant's notice to extend the term has been given, the Extension Option and any rights under this Section 2 shall terminate. Notwithstanding, Tenant shall be entitled to terminate this lease at any time during the term of this Lease, if Tenant's funding sources are terminated. RENT 3. Tenant agrees to pay to Landlord as basic rent, to be adjusted as provided in Exhibit "8," for the use and occupancy of the Leased Space, the sums of $23,877.00 per month payable on the I sl day of each and every month The rent from the Commencement Date to the beginning of the next month of the lease shall be due on the Commencement Date. All rent shall be paid by Tenant to Landlord at the address set forth on the signature page, or any other place or places that Landlord may from time to time designate by written notice given to Tenant. '") ~ USE OF PREMISES 4. The Leased Space shall be used for general office purposes by Tenant and for no other use or uses without the prior express written consent of Landlord. Tenant shall have access to the Leased Space 24 hours each day. PROHIBITED USES 5. Tenant shall not commit or permit the commission of any acts on the Leased Space nor use or permit the use of the Leased Space in any way that violates or conflicts with any law, statute, ordinance, whether now in force or hereinafter enacted governing the Leases Space or the Building. ALTERATIONS BY TENANT 6. (a) Tenant may not make any improvements, alterations, additions, or changes to the Leased Space ("Alterations") without first obtaining Landlord's prior written consent. Tenant shall request consent by written notice to Landlord, which must be accompanied by the plans and specifications for the proposed work and a good faith estimated cost of the Alteration (a "Cost Estimate"). Within 30 days after receipt by Landlord of Tenant's request for consent, Landlord shall either give consent to Tenant to complete the Alteration (a "Tenant Alteration"), withhold its consent, or give notice that the Landlord has chosen to complete the Alteration itself (a "Landlord Alteration"). If Landlord fails to give or withhold its consent in writing within the 30-day period, Landlord shall be deemed to have given its consent to the proposed Alteration by the Tenant. If Landlord gives written consent or decides to complete the Alteration itself, Landlord and Tenant shall agree in writing to the date when that undertaking will be completed. (b) Any Alteration made and any fixtures installed as a part of the construction, shall, at the option of the Landlord, become the property of the Landlord on the expiration or earlier termination of the Lease. However, the Tenant may remove any fixtures installed at its cost in a Tenant Alteration on termination of the Lease. Tenant shall repair and restore any damages to the Leased Space or the property caused by such removal. (c) Tenant shall cause each contractor and subcontractor to maintain all workers' compensation insurance required by law and liability insurance (including property damage) in amounts reasonably required by Landlord. Tenant shall provide evidence of that insurance to Landlord before construction begins. (d) On completion of any Tenant Alteration, Tenant shall: (1) Cause a timely notice of completion to be recorded in the office of the recorder of the county in which the Building is located, in accordance with Civil Code section 3093 or any other applicable statute; (2) Deliver to Landlord evidence of full payment and unconditional final waivers of all liens for labor, services, or materials; and 3 (3) Reimburse Landlord for any actual expenses paid to third parties or for additional expenses reasonably incurred by Landlord in connection with the construction of any Alteration. (e) If the Alteration is conducted as a Landlord Alteration, the Tenant shall reimburse the Landlord for completing the Alteration up to the total Cost Estimate, but not more than the actual cost incurred by Landlord. The reimbursement due under this Section 6(e) will be due in full within 30 days of delivery by Landlord to Tenant ofa statement of the amount due. ALTERATIONS BY LANDLORD 7. (a) Before the Commencement Date, Landlord shall, at Landlord's sole cost and expense, make the improvements to the Leased Space as stated in the detailed drawings and specifications (the "Specifications") and generally described in Exhibit C. If Exhibit C and the Specifications conflict, Exhibit C shall control. If Landlord fails to complete the improvements under this Section 7 on or before the Commencement Date, Tenant's obligation to pay rent shall not commence until the construction is substantially completed, but Tenant shall have no right to cancel or otherwise terminate this Lease as the result of a delay. Notwithstanding the preceding sentence, if Landlord fails to complete construction and deliver possession of the Leased Space on or before the expiration of the 120th day following the approval of the Lease by the San Bernardino City Council, Tenant shall have the right to terminate the lease in the following manner: (l) the Tenant and Landlord agree to meet within 10 days after the expiration of the 120-day period to discuss the status of construction and agree to determine in good faith the causes for the delay (2) by giving written notice of its election to terminate to Landlord after the meeting in Section 7(a)(I) takes place. Tenant shall not be liable for construction costs incurred by Landlord ifit terminates the Lease according to this Section 7(a). If the construction will take longer than 60 days to complete, the Landlord shall give written notice to the Tenant within five days after the expiration of the 60-day period described in Section lea). (b) Notwithstanding Section 7(a) above, if there are delay(s) in the completion of the improvements as a direct, indirect, partial, or total result of: (l) Tenant's failure to timely approve any matter requiring Tenant's approval within a reasonable amount of time; (2) A material breach by Tenant of the terms of the Lease; (3) Changes in any of the Specifications after disapproval because they do not comply with Code or other applicable laws; (4) Tenant's request for changes in the Specifications that, when taken alone or together with all Tenant's requests, would substantially extend the time period; 4 (5) Tenant's requirement for materials, components, finishes or improvements that are not immediately available; (6) Changes required by the Specifications to the base building of the Leased Space, which shall consist of the ceiling, building support, drywall,and/or the floors of the Building on which the Leased Space is located (the "Base Building"), and/or the Premises Systems, as defined in Section 9, below; or (7) Any other acts or omissions of Tenant, or its agents, or employees, when taken alone or together with other acts of omissions of Tenant, that would substantially extend the time period; then, notwithstanding anything to the contrary set forth in the Lease and regardless of the actual date of the completion of the Leased Space, the Commencement Date shall remain the date set forth in Section 1 as if no delay had occurred. WORKSTATIONS 8. As of the Commencement Date, Landlord hereby transfers to Tenant any metal workstations that are on the Leased Space at that time, in as-is condition with all faults. Tenant acknowledges that Landlord has made no representation or warranty as to the condition or number of workstations. MAINTENANCE AND REPAIRS 9. (a) Tenant shall, at Tenant's sole expense and in accordance with the terms of this Lease, repair and maintain in good order and condition (reasonable wear and tear excepted): (1) The nonstructural portions of the Leased Space (including all Alterations); (2) The portion of any Base Building Systems in the Leased Space, as defined below; and (3) All Premises Systems, as defined below. "Premises Systems" means all systems and equipment that serve only the Leased Space, regardless of whether such systems or equipment are located within or outside the Leased Space. "Base Building Systems" means all systems and equipment (including plumbing, HV AC, electrical, fire/life-safety, elevator, and security systems) that serve the entire Building or portions of the Building other than simply the Premises, excluding all Premises Systems. (b) Notwithstanding Section 9(a), Tenant shall not be responsible for the repair of any latent defects in the improvements to be made by Landlord pursuant to Section 7, above, that existed as of the Lease Commencement Date and were of such a nature that Tenant could not normally discover them in the exercise ofreasonable diligence in Tenant's inspection of the 5 Leased Space on or before the Lease Commencement Date. Any repair and maintenance work affecting the Building Systems shall be performed only by the contractor used by Landlord in the Building for such work, unless that contractor is unwilling or unable to perform the work, in which event Tenant may use the services of another qualified contractor reasonably approved by Landlord and that normally and regularly performs similar work in comparable buildings. Landlord may, but need not, make such repairs and maintcnance if: (1) Tenant fails to perform any repair and maintenance obligation within 30 days after written notice by Landlord to Tenant of the need for such repairs and maintenance; or (2) Tenant fails to commence any repair and maintenance obligation for which the reasonable completion period exceeds 30 days, and to diligently prosecute this obligation to completion. (c) Within 30 days after a written demand from Landlord (including a reasonably particularized statement), Tenant shall pay Landlord Landlord's reasonable out-of-pocket costs incurred in connection with the repairs and maintenance plus interest at the rate of 10% per year from the date these costs are incurred until the date of Tenant's repayment. Despite any other provision of this Section 9, in the event ofan emergency, Landlord may perform any Tenant repair and maintenance obligation that Tenant fails to perform promptly. Within 30 days after written demand (including a reasonably particularized statement), Tenant shall pay Landlord Landlord's reasonable costs incurred in connection with the repair and maintenance obligation. (e) Subject to Sections 16 and 17, Landlord shall repair and maintain in good order and condition (reasonable wear and tear excepted): (1) The structural portions of the Leased Space; (2) The Base Building; (3) The Base Building Systems located outside the Leased Space; (4) The exterior portions of the Building and real property; and (5) All other common areas located in the Building, or in or on the real property, including the parking facilities serving the Building. Repairs shall be made promptly when appropriate to keep the applicable portion of the premises, building, real property, and other items in the condition described in this clause. Landlord shall not be in default of its repair and maintenance obligations under this Section 9 if Landlord performs the repairs and maintenance within a reasonable amount of time not more than 30 days after written notice by Tenant to Landlord of the need for such repairs and maintenance (the "Repair Notice Period"). If, due to the nature of the particular repair or maintenance obligation, more than 30 days are reasonably required to complete it, Landlord shall 6 not be in dcfault under this Section 9(b) if Landlord begins work within the Repair Notice Period and diligently prosecutes this work to completion. Except as set forth in Section 9(f), no abatement of rent and no liability of Landlord shall result for any injury to or interference with Tenant's business arising from the making of or failure to make any repairs, replacements, alterations, or improvements in or to any portion of the premises, building, real property, fixtures, appurtenances, or equipment. (f) If Tenant provides notice to Landlord ofan cvent or circumstance that requires the action of Landlord with respect to the repairs or maintenance as set forth in Section 9(e) above, and Landlord fails to provide such action as required by the tenns of this Lease within the period specified in Section 9(e), Tenant may take the required action if: (I) Tenant delivers to Landlord an additional written notice advising Landlord that Tenant intends to take the required action if Landlord does not begin the required repair or maintenance within ten (10) days after the written notice; and (2) Landlord fails to begin the requircd work within this ten-day (I O-day) period. Landlord h'Tants to Tenant a license, effective during the Lease Term, to enter upon those portions of the Building access to which is reasonably necessary for Tenant to take such action. If such action was required under the terms of this Lease to be taken by Landlord, Tenant shall be entitled to prompt reimbursement by Landlord of Tenant's reasonable costs and expenses in taking such action from the date these costs are incurred until the date of Landlord's repayment. Landlord's obligation to reimburse Tenant shall survive expiration or earlier termination of this Lease. If any action taken by Tenant will affect any portion of the Base Building Systems, structural integrity of the Building, or exterior appearance of the Building, Tenant shall use only the contractor used by Landlord in the Building for such work, unless that contractor is unwilling or unable to perform the work, in which event Tenant may use the services of another qualified contractor reasonably approved by Landlord. Tenant shall take no action pertaining to or affecting any portion of the Base Building Systems that will adversely affect the enjoyment, possession, or other rights of any othcr tcnant in the Building. If, within thirty (30) days aftcr receipt of Tenant's written demand for payment of Tenant's costs incurred in taking such action on Landlord's behalf (including a reasonably particularized statement), Landlord has not paid the invoice or delivered to Tenant a detailed written objection to it, Tenant may deduct from rent payable by Tenant under this Lease the amount set forth in the invoice. Tenant shall not be entitled to this deduction from Rent, however, if, within thirty (30) days after receipt of Tenant's invoice, Landlord in good faith delivers to Tenant a written objection to its payment, setting forth with reasonable particularity Landlord's reasons for its claim that Landlord did not have to take this action under the terms of this Lease or that the charges are excessive (in which case Landlord shall pay the amount it contends would not have been excessive). 7 (g) Except in the case of an emergency, Landlord shall not enter the Leased Space for the purpose of effecting the repairs, alterations, or improvements other than during normal business hours, and shall give Tenant 24-hours notice of the intention to enter for those purposes. (h) Cleaning maintenance for the Leased Space shall be regularly performed by Landlord five days of the week, excepting holidays. SECURITY 10. Tenant shall hire at its own cost and expense, security guard(s) to provide security for the Premises and the Building. Tenant shall have full control and responsibility over the security guards subject to the Landlord's participation in their direction, and Tenant will be liable for all damage to the Building or harm to others caused by the security guards, except to the extent that any such damage or harm is caused by the security guard(s) when acting solely under the Landlord's direction. Tenant agrees to indemnifY Landlord for any and all claims, losses, costs, damage, expenses, liabilities, liens, actions, causes of action (whether in tort or contract, law or equity, or otherwise), charges, assessments, fines, and penalties of any kind (including consultant and expert expenses, court costs, and attorney fees actually incurred) (each an "Indemnifiable Loss") arising out ofthe Tenant's use of security guards, except to the extent that any such Indemnifiable Loss is caused by the security guard(s) when acting solely under the Landlord's direction. INSPECTION BY LANDLORD II. Tenant shall permit Landlord or Landlord's agents, representatives, or employees to enter the Leased Space at all reasonable times for the purpose of inspecting the Leased Space to determine whether Tenant is complying with the terms of this lease and for the purpose of doing other lawful acts that may be necessary to protect Landlord's interest in the Leased Space under this lease. COMMON AREAS OF BUILDING 12. (a) Landlord shall make available at all times during the term of this lease in any portion of the Building that Landlord from time to time designates or relocates, automobile parking and common areas (jointly referred to as "common areas, as that term is defined below) as Landlord shall from time to time deem appropriate, Tenant shall have the nonexclusive right during the term of this lease to use the common areas for itself, its employees, agents, customers, clients, invitees, and licensees. (b) The term "common areas" means the portions of the Building that, at the time in question, have been designated and improved for common use by or for the benefit of more than one tenant of the Building, including the parking areas; access and perimeter roads; landscaped areas: exterior walks, roofs, stairways, elevators, escalators and/or ramps; interior corridors, elevators, stairs, and balconies, directory equipment, the main entry lobby; restrooms; and drinking fountains. Landlord reserves the right to redesignate a common area for a noncommon 8 use or to designate as a common area a portion of the Building not previously designated a common area, so long as such designation does not interfere with Tenant's rights granted in this lease. (c) All common areas shall be subject to the exclusive control and management of Landlord or any other persons or nominees that Landlord may have delegated or assigned to exercise management or control, in whole or in part, in Landlord's place and stead. Landlord shall have the right to close, if necessary, and subject to Tenant's rights granted herein, all or any portion or construction, or to maintain the safety of tenants or the general public. Landlord will maintain the common areas in a clean, orderly, and sanitary manner. Landlord is responsible for all repairs of the common areas, except those required by the negligence of Tenant. (d) Rules and Regulations. Landlord and Landlord's nominees and assignees shall have the right to establish, modify, amend, and enforce reasonable rules and regulations with respect to the common areas and the Building. Tenant shall fully and faithfully comply with the observe the rules and regulations for the common areas and the Building ("the Building Rules and Regulations"), of which the Leased Space is a part, including any additions or amendments to the Building Rules and Regulations that may be hereafter enacted by Landlord in Landlord's sole discretion. Tenant acknowledges receipt of a copy of the Building Rules and Regulations, which are attached to and made a part of this lease as Exhibit "D." Landlord shall not be liable in any way for failure of any other occupant of the Building of which the Leased Space is a part to comply with and observe these rules and regulations. PARKING RIGHTS AND OBLIGA nONS 13. (a) Landlord agrees to maintain in good order, condition, and repair the covered and uncovered parking spaces for the Building. Landlord's obligations for maintenance shall include the following: (I) Maintenance of the ground surfaces in a level, smooth, and evenly covered condition with the type of surfacing material originally installed or any substitute that in all respects is equal in quality, use, and durability. (2) Removal of all papers, debris, filth, and refuse, and washing or sweeping the areas to the extent reasonably necessary to keep the parking garage in a neat, clean, and orderly condition. (3) Placement, repair and replacement of any necessary and appropriate dircctional sign, markers, and lines and any artificial lighting facilities that are reasonably required. (4) Maintenance of general public liability and property damage insurance covering the common areas against claims for personal injuries, death, or property damage, in the amounts determined by Landlord in its sole discretion. 9 (5) Provision of adequate lighting. (b) Included in the rent payable by Tenant under this lease for the Leased Space, Tenant shall have the exclusive right to eight (8) covered parking spaces in the parking garage, for use by it and its employees, and forty-six (46) additional parking spaces, in addition to any other empty spaces in parking area. (c) Tenant shall have access to the covered and uncovered parking areas 24 hours each day. UTILITIES FURNISHED BY LANDLORD 14. Landlord shall, at Landlord's own cost and expense, provide the following utilities to the Leased Spacc and the Building: (a) Water and electricity for the Leased Space and the Building, available as follows: 24 hours each day (b) Heating and air conditioning for the Leased Space and Building available as follows: 9 hours per day,S days a week excepting holidays. For any overage use on the Leased Space, Tenant shall pay Landlord $35 per hour. INSURANCE FOR TENANT'S PERSONAL PROPERTY IS. Tenant agrees at all times during the term of this lease to keep, at Tenant's sole expense, all of Tenant's personal property, including trade fixtures and equipment of Tenant that may be on or in the Leased Space form time to time, insured against loss or damage by fire and by any peril included within fire and extended coverage insurance for an amount that will insure the ability of Tenant to fully replace the personal property, trade fixtures, and equipment. Tenant represents and warrants that it is covered under the City of San Bernardino self-insurance program. If for any reason Tenant is no longer covered by the self-insurance program, Tenant shall obtain commercial general liability insurance written on an "occurrence" policy form, covering bodily injury, property damage, personal injury, and advertising injury arising out of or relating (directly or indirectly) to Tenant's business operations, conduct, assumed liabilities, or use or occupancy of the Leased Space or the Building. DESTRUCTION OF LEASED SPACE OR BUILDING 16. (a) Definitions. (I) "Premises Damage" shall mean if the Premises are damaged or destroyed to any extent. (2) "Premises Building Partial Damage" shall mean if the Building 10 of which the Premises are a part is damaged or destroyed to the extent that the cost to repair is less than fifty percent (50%) of the then replacement cost of the building. (3) "Premises Building Total Destruction" shall mean if the Building of which the Premises are a part is damaged or destroyed to the extent that the cost to repair is fifty percent (50%) or more than the then replacement cost of the building. (4) "Office Building Project Buildings" shall mean all of the buildings on the Offlce Building Project Site. (5) "Office Building Project Buildings Total Destruction" shall mean if the Building of which the Premises are a part is damaged or destroyed to the extent that the cost to repair is fifty percent (50%) or more than the then replacement cost of the Office Building Project buildings. (6) "Insured Loss" shall mean damage or destruction caused by an event required to be covered by the Landlord's insurance on the property. The fact that an Insured loss has a deductible amount shall not make the loss an uninsured loss. (7) "Replacement Cost" shall mean the amount of money necessary to be spent in order to repair or rebuild the damaged area to the condition that existed immediately prior to the damage occurring, excluding all improvements made by lessees other than those installed by Landlord at Tenant's expense. (b) Subject to the provisions of Sections 16(e), (f), and (j), ifat any time during the term of this Lease there is damage which is an Insured Loss and which falls into the classification of either Premises Damage or Premises Building Partial Damage, then Landlord shall as soon as reasonably possible and to the extent the required materials and labor are readily available through usual commercial channels, at Landlord's expense, repair such damage (but not Tenant's fixtures, equipment or tenant improvements originally paid for by Tenant) to the condition existing at the time of the damage, and the Lease shall continue in full force and effect. (c) Subjcct to the provisions of Sections 16(e), (f), (g), (h), and (i), ifat any time during the term of this Lease there is damage which is not an Insured Loss and which falls within the classification of Premises Damage or Premises Building Partial Damage, unless caused by a negligent or willful act of Tenant (in which event Tenant shall make the repairs at Tenant's expense), which damage prevents Tenant form making any substantial use of the Premises, Landlord may at Tenant's option either (i) repair such damage as soon as reasonably possibly at Landlord's expense, in which event this Lease shall continue in full force and effect, or (ii) give written notice to Tenant within thirty (30) days after the date of the occurrence of such damage of Landlord's intention to cancel and terminate this Lease as of the date of the occurrence of such damage, in which event this Lease shall terminate as of the date of the occurrence of such damage. (d) Subject to the provisions of 16(c), (f), (g), (h), and (i), ifat any time during the term of this Lease there is damage, whether or not it is an Insured Loss, which falls into the II classifications of either (i) Premises Building Total Destruction, or (ii) Office Building Project Total Destruction, then Landlord may at Landlord's option either (i) repair such damage or destruction as soon as reasonably possible at Landlord's expense (to the extent the required materials are readily available through usual commercial channel) to its condition existing at the time of the damage, but not Tenant's fixtures, equipment or tenant improvements, and this Lease shall continue in full force and efIect, or (ii) give written notice to Tenant within thirty (30) days after the date of occurrence of such damage of Landlord's intention to cancel and terminate this Lease, in which case the Lease shall terminate as of the date of the occurrence of such damage. (e) Subject to section ]6(f) below, ifat any time during the last twelve (12) months of the term of this Lease there is substantial damage to the Premises, Landlord may at Landlord's option cancel and terminate this Lease as of the date of occurrence of such damage by giving written notice to Tenant of Landlord's election to do so within 30 days after the date of occurrencc of such damage. (f) Notwithstanding section l6(e), in the event that Tenant has an option to extend or renew this Lease, and the time within which said option may be exercised has not yet expired, Tenant shall exercise such option, ifit is to be exercised at all, no later than twenty (20) days after the occurrence of an Insured Loss falling within the classification of Premises Damage during the last twelve (12) months of the term of this Lcase. If Tenant duly exercises such option during said twenty (20) day period, Landlord shall, at Landlord's expense, repair such damage, but not Tenant's fixtures, equipment or tenant improvements, as soon as reasonably possible and this Lease shall continue in full force and effect. If Tenant fails to exercise such option during said twenty (20) day period, then Landlord may at Landlord's option terminate and cancel this Lease as of the expiration of said twenty (20) day period by giving written notice to Tenant of Landlord's election to do so within ten (10) days after the expiration of said twenty (20) day period, notwithstanding any term or provision in the grant of option to the contrary. (g) In the event Landlord repairs or restores Building or Premises pursuant to the provisions of this Section 16, and any part of the Premises are not usable (including loss of use due to loss of access or essential services), the rent payable hereunder for the period during which such damage, repair or restoration continues shall be abated, provided (I) the damage was not the result of the negligence of Tenant, and (2) such abatement shall only be to the extent that the operation and profitability of Tenant's business as operated from the Premises is adversely afIected. Except for said abatement ofrent, if any, Tenant shall have no claim against Landlord for any damage suffered by reason of any such damage, construction, repair or restoration. 12 (h) If Landlord shall be obligated to repair or restore the Premises or the Building under the provisions of this Section 16 and shall not commence such repair or restoration within ninety days after such occunence, or if Landlord shall not complete the restoration and repair within six (6) months after such occunence, Tenant may at Tenant's options cancel and terminate this Lease by giving Landlord written notice of Tenant's election to do so at any time prior to the commencement or completion, respectively, of such repair or restoration. In such event, this Lease shall terminate as of the date of such notice. (i) Tenant agrees to cooperate with Landlord in connection with any such restoration and repair, including but not limited to the approval and/or execution of plans and specifications required. G) Upon termination of this Lease pursuant to this Section 16, an equitable adjustment shall be made concerning advance rent and any advance payments made by Tenant to Landlord. Landlord shall, in addition, return to Tenant as much of Tenant's security deposit as has not theretofore been applied by Landlord. (k) Landlord and Tenant agree that termination of the Lease when Leased property is destroyed shall be governed by the terms of this Lease. CONDEMNATION 17. (a) If all or any part of the Leased Space and/or common areas is taken by any public or quasi-public agency or entity under the power of eminent domain during the term of this lease. (I) Either Landlord or Tenant may terminate this lease by giving the other 30 days' written notice of termination. (2) If only a portion of the Leased Space is taken by eminent domain and neither Landlord nor Tenant terminates this lease, the rent thereafter payable under this lease shall be reduced by the same percentage that the floor area of the portion taken by eminent domain bears to the floor area of the entire Leased Space. (b) If any portion of the Building other than the Leased Space is taken by eminent domain, Landlord may, at its option, terminate this lease by written notice to Tenant. (c) Any and all damages and compensation awarded or paid because ofa taking of the Leased Space or the Building shall belong to Landlord, and Tenant shall have no claim against Landlord or the entity exercising eminent domain power for the value of the unexpired term of this lease. Tenant does not waive its right to potential claims such as loss of goodwill and relocation benefits. ASSIGNMENT AND SUBLETTING I3 18. Tenant shall not encumber, assign, sublet or otherwise transfer this lease, any right or interest in this lease, or any right or interest in the Leased Space without first obtaining the express written consent of Landlord. Furthermore, Tenant shall not sublet the Leased Space or any part of it or allow any other persons, other than Tenant's employees and agents, to occupy or use the Leased Space or any part of it without the prior written consent of Landlord. A consent by Landlord to one assignment, subletting, or occupation and use by another person shall not be deemed to be a consent to any subsequent assignment, subletting, or occupation and use by another person. The consent of Landlord to any assignment of Tenant's interest in this lease or the subletting by Tenant of the Leased Space not be unreasonably withheld. As a reasonable condition to Landlord's consent to any transfer pursuant to this Section (a 'Transfer"), Tenant shall pay to Landlord a Transfer Premium, as defined below. "Transfer Premium" means all rent and other consideration actually received by Tenant from the transferee (including key money and bonus money and any payment in excess of fair market value for services rendered by Tenant to the transferee or assets, fixtures, inventory, equipment, or furniture transferred by Tenant to the transferee in connection with the Transfer ("Transferee Rent")), after deducting: (a) The Rent payable by Tenant under this Lease (excluding the Transfer Premium) for the Leased Space ("Tenant Rent"); (b) Reasonable leasing commissions paid by Tenant; (c) Other reasonable out-of-pocket costs paid by Tenant (including attorney fees, advertising costs, and expenses of readying the Leased Space for occupancy by Transferee); (d) Any consideration paid to the transferee or any third party to induce the Transferee to consummate the Transfer. The costs referred to in subparagraphs (a)-(d) are referred to as the "Transfer Costs." Tenant shall pay the Transfer Premium on a monthly basis. In calculating the Transfer Premium, Tenant shall first deduct all of the Transfer Costs from any Transferee Rent received. ACTS CONSTITUTING BREACH BY TENANT 19. Tenant: The following shall constitute a default under and a breach ofthis lease by (a) The nonpayment of rent when due, when the nonpayment continues for 30 days after written notice to pay rent or surrender possession of the Leased Space has been given by Landlord to Tenant; 14 (b) A failure to perform any provision, covenant, or condition of this lease other than one for the payment of rent, when that failure is not cured within 30 days after written notice of the specific failure is given by Landlord to Tenant; (c) The breach of this leased and abandonment of the Leased Space before expiration of the term ofthis lease; The notices provided for in subsections (a) and (b) of this Paragraph 16 are not intended to replace, but rather are in addition to, any required statutory notices for unlawful detainer procccdings under Code of Civil Procedure Section 1161 et seq. LATE PAYMENT OF RENT 20. If Tenant believes in any month that its payment of rent will be late, Tenant forthwith shall notify Landlord in writing, but in no event later than the fifth day of the month for which the rent is due; this notice shall state the estimated date of payment. If Tenant does not give notice pursuant to this Section 20, Tenant shall pay to Landlord a late fee of 6% of any rent payment or portion thereof that is not received by Landlord or Landlord's designee within 10 days after that rent is due. If Tenant gives notice pursuant to this Section 20, Tenant shall pay to Landlord a late fee of6% of any rent payment or portion thereof that is not received by Landlord or Landlord's designee within 15 days after that rent is due. The parties agree that the late charges specified in this paragraph represent a reasonable estimate of the expenses Landlord will incur because of any late payment of rent (other than attorneys fees and costs). Landlord's acceptance of any liquidated damages shall not constitute a waiver of Tenant's default with respect to the overdue amount or prevent Landlord from exercising any of the rights or remedies available to Landlord under this Lease. Tenant shall pay the late charge as additional rent with the next installment of rent. LANDLORD'S REMEDIES 21. If Tenant breaches or is in default under this lease, Landlord, in addition to any other remedies given Landlord by law or equity, may: (a) Continue this lease in effect by not terminating Tenant's right to possession of the Leased Space and thereby be entitled to enforce all Landlord's rights and remedies under this lease including the right to recover the rent specified in this lease as it becomes due under this lease; or (b) Terminate this lease and all rights of Tenant under the lease and recover from Tenant: (1) The worth at the time of award of the unpaid rent that had been earned at the time oftermination of the lease; 15 LANDLORD ARROWHEAD PROFESSIONAL CENTER, L.P. f:k~ By: Steve M f att, resident of its General Partner, Sierra West Properties, Inc., a California Corporation 3043tJ R~n"~'fJ.v,, ,,'/ v \ {~Sl-A'( c. '{13Btj (ADDRESS OF LANDLORD) TENANT CITY OF SAN BERNARDINO By: Mayor City of San Bernardino Approved as to form and legal content JAMES F. PENMAN, City Attorney By: J I) 1~ /' I (':~~....--. 'ity Attorney City of San Bernardino Date of City Council Approval: August~, 2005 Date Tenant took possession: , 2005 18 EXHIBIT "A" See attached plat map. 19 EXHIBIT "B" Months Base Rent Total Monthlv Rent First Lease Year* $1.28 PSF $23,877.00** Second Lease Year $1.32 PSF $24,593.00 Third Lease Year $1.36 PSF $25,331.00 Fourth Lease Year $1.40 PSF $26,091.00 Fifth Lease Year $1.44 PSF $26,874.00 Sixth Lease Year $1.48 PSF $27,680.00 Seventh Lease Year $1.52 PSF $28,510.00 *The first Lease Year shall commence on the Lease Commencement Date and ends on the last day of the 11 th calendar month thereafter. The Second and each succeeding Lease Year commences on the first day of the next calendar month. * * Payable upon Lease Commencement Date by Tenant 20 EXHIBIT "C" Improvements by Landlord Complete remodel of the 3'd floor to meet SBETA's specifications to include: Configuring 3 large class rooms (36 capacity each) Configuring I medium conference room (24 capacity) Configuration of a computer resource room with separate electrical breaker Establishment of2 copy room with shelves Establishment of a third employee break room with sink Additional electrical outlets in public break room to accommodate vending Modification of the receptionist counter to meet ADA standards Modification of the restrooms to meet ADA standards Complete rewiring per SBETA's specifications for voice and CAT 5 data, not to exceed $50,000. All quotes must be approved by Landlord in his reasonable discretion. Re-painting of wallpapering as necessary per SBETA's wishes New Carpeting in designated areas New linoleum in all break rooms and copy room to SBETA's wishes Non-static flooring in the MIS server room Self-contained wall mounted Air Conditioner for the MIS server room Additional elevator access keys as necessary for access to the third floor Additional interior signage as necessary Where a task is to be completed pursuant to SBET A's wishes, Landlord will provide Tenant with selections and Tenant will be allowed to choose only from those selections. 21 See Attached. EXHIBIT "D" BUILDING RULES AND REGULATIONS 22 . GENERAl,. ItULES . . . '.. . - ,. . ~ - aot_ .penna... __II ct...., cOmmOn .......; n.,h,dnt! ddv";""'..__ oniI..-lfOL .. . .', 2. L.-- _ ... rlghl to ..... ._ '" _ _ L_1n good ..... Jl"'-1o ~ . ..... II> tie ~. repullJllqn, CO' p~ of.. CllIOe a~ Projeollllld .. 0GCl4l-. '. . . .. . , .,,, . 3. ~_IlCIt_.orpormll...yno'''Or._t/l81,linnoyor _"",,o-l_"'_hoWlg~_ th801lc0 ~ Projod.. . . .. . . . .. ,.. , . " .., .. . . . . .. . ...', '-- - nO! UlIp ......... bird. wi.... ... otIIce Buldrv PnijO... ond ~. no! bi1ng b1.,a;;" mollllqdoo ... Other _cl....., _ not ~ulUlllartz8dtotam.. ..,. '.. .... , " . .'. .. . ,.. .. ;l. L_...IlCIt"",ke;itJflwor,,",,,*,_..copllll~.....pta"iarlhal~ .. .. 11. L........IIlCItIlll..-IIly_........-or..ddIli.mllliiolul..._, , , 7... 1.- ohIII b. ....ponoIbIo t'lIr Iho, Inoppo,........ ... at fII'/y lol!,l rOom.. pllimblft& Ot ............. No foreign ........... 01 lilY Imd ... DINt ~lIIon1n. ' ' , .. . . .., &. . ~_IlIll_Cl/l/lI._'.;per1IIori..r_.u.......ct...~_.J>.....otIIOI..-.a""'jeel. , ' . 9. . L__ noI_.r~hn\'lhlngln CO'imlnd.. Pnom...:. Bulldlng.tilI......_"...""'*"orftaor-.uln.nypll1:ct... OIIaelluldlnllP,qa. . ..'.' . '" . " . , .. .. ,0.' F......... ~..oIli>l_etjUIpment Ihlili be mawdlntocr.utofuMt bu~ pnlywllh the ~_~ end...... end ......"'. .."" _bl.l__.lNhnlq""", ."'fUmIng.... _ be dulllllllllo;l by.L....... L_._I be..".-,- far _llImIglllI> ... 0IlIce ~ f'nlIederfolngfllo,unylUChec:lMlr. .,... ,. . .,', . ' . . ,.. .. .: '.. . . . .11'. . L_lhIIloot ~."._ ......,i,..4..rar~ ..._111.... ............In II. B~. ........"'prDIIICl 11)'......... ,12. . le....._...~wn...cb...nd _th.jl.,uilllllianlleluideye; SIJI1deye8nd legII.....cleyI,. .lIdon_dlye_"'-'''' " ,'. . .'. . ".. .' ',.. - '. '. 6:00 P.M...d 8: 00. .~. of "'falawlngdt>/. H teu.....1ho P_ duq ..."" pellode, ~ehIIJ be _........ oea.rei\IlDddng.iIydoa.tlnie)/""..""'....lorenby. .' . . . . . .., 13., .'lIHH .".11 .....m..r~III...:....lri8Iian ofllllenllhcy...d lIIa1i be............,....... DO..' repIIocIIlg '.Y ~ lNl",,1DIL . 14. No _ _............ "'lIlOIlInge.hIlII be ......Ied CO' ulOd II)' L.oiooee.: . . . 15. No....... ,",,*,_.;!mII.. .""II!' upOn... rucjfaf""lIuildlng. . , : 1&. . ...... ... IlCIt IUllIr ... .p.-mJl1lllOldiv CI celJ)'lnQ at lighted dgIn of ~~ In .. r.1OI1IIbIy ~by lI..... at by __ govemmenllll__. nolHmaIlIna........ .. '. . '.. 17. . 'Lee..._.... uaellily melhodllf"'eH"" ",""CIlIHiHIaning DlI>erthen.. pravlded ""LeoICO'. 18. LeI... .... ..../nItaI. m_lrulI' _II .ny vending m.."ln. upen ... i>rII.j_ _ Lao--. lOIIlen llll.oonL 19. nie p"",,_ _ notbe..-.s lor IadgIng or~' ooaldl1ll or food prePMl/On. . ZO" . lAiei...",. 0DIT.,Iyft1lh II ..~,ft..prilIIi:kInendlWlCUdon regu/...... __ by L.euilrorany.~ -"",_IIllIllCY. .. .,al. ~ .....- .... tight. b wolve.." an. af. ...... rulu . 'NIgUIIllDna.. endIor .. III _ portlcul.. ~ 111<1 _ IUd1 WU- ."111 not ....._ ._iver d 'oY- RII. or ~ dt _lUboequilnt;,pp.DIItan lIIftaIt.........~. ' 22. . ~........;. II rl8a Ir... 1lIIl... ...l\deIIi1Iend ...!O kIoj,'HBP_ klI*lld II OIly be ",,_. . , . 23. LIIeCI_ the ~.to mete IUdI _ _ rulllond "'llulItJono... lmey f!om 1m.... lImI -. nee 1 ""I far Ihe epp~ ope'*" .ncl..1IIy 0I1he ~ BUilding Prq~ond II. occupinia. LeI_ 8iI- to _ by 1II....nd auch .....d regulllianI. PARKING RULES . . : " .," . ", ." .' .,.' . .... . ',: 'Par1dnS ~ __ beuaed onI1lor pOrIdng' by....lei. nobf9r It..n lull ..... po....... ..;.......... .........~ 'hI.._ _ VtftIoleo.o "OhIt1__thenP_"V___ref8mlIIlD.."OwerilIzadV_o. . . . . .', 2. . L-eholI nai """,aor_ iny_idee -boIor1ti iii or.ata __ by t:-'orLaaMe'" ,",pia"'" euppI_. ~ __ or nv_"'belolded,u"lIIded.orpnedln_.oI1iirthll1~d~...o..tby~rareuchllC!M_ . .. . , 3.: ~ ~ or kII1nUftcdm lIto_.""'1 be.... POINllll' afLelIOl'.nd be_1a L.-.ir by IhIlholder Ill"'" """" __ oIlIII hoider'l pIIlcIng~. LeI_wlll poy oucIl nojIIocern..nt "-'lle.. Ie _y_b1_ "" l8uOr....tho _01_ - . :,4: us- '1'IIIierv8e 1h8<WlllDrtrfi.l.. 1hI_ of _y "*",Mflce,,, dovI.-la eny _nor llIIIIr'lhet wtIfuUy ..,...... comPlY........ .",*"IIie_~_ondIor_1e, ..: . . '. .. . : . .. '. .. , 5. . L__,....;,. /lie flGhl" ......11 II ..... pen of porklng .jxioe. frilm _ iii _....... ono ftaor. encI/Dt ID ..-..bIy ...-, -.. _(.). and Ii> rIIIOflSly ..... Ih.............. _,c1l1ld lIlIIndanl oIze ._... """,.. th...... CII1'4l!Ioo with appI_l-. - end .....lIorii. ,. . .. . . . ..' .,. "...'.. ,. ,.." .., . 6. u.n.Ofthepl/U1g_wIIabey..pclied..- I*konlyln tlio._ ",_ledfDr...lepoltlng. " T..' .'iJnIiin oItilir lo.lllIIi'lded.__ UeIng,1hO p.lldng..... Ie nICJ'IrIId "'pall'lIld 10'* llii.wn."",*,- .lI_wl nDIlNt __"'r BOy domIog. to _... "juty io potIDI1I Dr I... '" ~. eII.r_ '11" ......LIfIlMlIlli... party uellIll the J!IlIlInll-. . 'a. Vo/IdI1Iiifl; K _.b1_.;,o1 b.' pemilaelb/e anlyby 0_ mtltIlctl ... _' II l.IsIDr endIar III IIoonooe mey IIIIIIbIIoh II ..... IIIf1IIIIIb' oppIceblelll ...Itar~. , . . . 9. The melnllnan<l8. ~Ing. -II ...cfeenlno "'-..In Ihe ptlIlo/f1lI_... CoaImon """. II pnlhI_. 10. Leo- 01>81 be ~far ""'"" Ihll pi' aflla III1p1oyeM,..gionll and Iri_llllI1lplywllll II. ~. poltitg ...... ragorlallonl, ......nd -QlNlftSi.... '. ". . . . .' '.' ',' . - - , - '. " . - . 11. Lee.... _IV';' th.. ~Wrt 10 madlly _ ruloo endIa( .dopl.uch _ .....~_l1llflodIacirtmnlltlly ruIoo and ..-n'1I b may- ~"rltl'prOp.:__ofthlipe~d'~1I1IL '. ,. .. .... . . . . ...' . 12. Such porIdng .- ..Ia herein prCJl!lded 10 Inlendid niojqly ... -'H only II1d no ........nllo Inlanded or IIlolI b. c:raeied..........,.. EXHrBIT D