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HomeMy WebLinkAbout21-Police Department o o o (]'fY OF SAN BERNARDINO - REQUEST FOR COUNOL ACTION From: Michael A. Billdr, (]tief of Police Subject: Resolution of the Ma}Ur and Common Council of the C1ty of San Bernardino authorizing the execution of a lease agreement and issuance of a purchase order to Owe Fin.n{"i.l Services for tenant improvements required to expand Police parking and for the FY 2008-09 parking lot lease and utility payments not to exceed $70,000. M/CC DATE: June 16,2008 Dept: Police Department Date: June 12, 2008 Synopsis of Previous Council Action None Recommended Motion: Adopt Resolution. WAL&'ANTODEPOFPOIJCE Contact person: Captain Ted Henson Phone: (909) 384-5609 Ward: 1 Supporting data attached: Yes Staff Report/Resolution .FUNDING REQUIREMENTS: Amount: $70,000 SOURCE: Measure Z Budget Jack Brown Donation $35,000 $35,000 001-223-5803 to be assigned Council Notes: Finance Agenda Item No. J 1 o o o CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of a lease agreement and issuance of a purchase order to Chase Financial Services for tenant improvements required to expand Police parking and for the FY 2008-09 parking lot lease and utility payments not to exceed $70,000. BACKGROUND The San Bernardino Police Department is experiencing a period of rapid growth resulting from the implementation of the Combined Hiring Plan. Since the 2006-2007 fiscal year, the Police Department has added 41 of the 50 proposed Combined Hiring Plan positions including vehicles and equipment. As a result, the Police parking lot can no longer accommodate both city and employee vehicles. Two properties located adjacent to the Police station were considered for the expansion of employee parking. The San Bernardino County Superintendent of Schools property, located south of the Police station, would require an estimated $200,000 or more in tenant improvements (trenching, electricity, lighting, fencing and paving) to make the location ready for occupancy. Terms for the lease of this property are five years or fewer with no annual lease payment. Additionally, the school district indicated that they had plans to use this property in the next three to five years, which potentially would cause them to tprmin~te the ~eement before the end of the lease. At the conclusion of the ~eement, all improvements must be removed at the expense of the City of San Bernardino. The Chase Financial Services parking lot, located west of the Police station, is vacant, ready for occupancy and requires minim.! improvements (fencing, striping and driveway construction) to secure 80 additional spaces for employee parking.. The required improvements, estimated at $35,000, will be completed by Chase Financial Services and reimbursed by the City. Terms for the lease of this property are four years (with optional renewals) at a rate of $2,500 per month in FY 2008-09. The lease schedule includes a 3.5% increase (based upon Consumer Price Index) in subsequent fiscal years. In addition to the annual lease payment, the City will be responsible for the payment of electrical costs to light the parking lot. Chase Financial Services will bill the City for actual charges on a quarterly basis. T oral cost for electrical usage is projected not to exceed $5,000 annually. The costs for the Chase Financial Services lot over four years are enumerated below. Capital Lease Period Fiscal Period Improvements Utilities Annual Lease Total Cost Year 1 FY 2008-09 $35,000 $5,000 $30,000 $70,000 Year 2 FY 2009-10 $-0- $5,000 $31,050 $36,050 Year 3 FY 2010-11 $-0- $5,000 $32,137 $37,137 Year 4 FY 2011-12 $-0- $5,000 $33,262 $38,262 o o o FINANQAL IMPACT The FY 2008-09 Police proposed budget includes $35,000 for the annual lease payment for parking at O1ase Financial Services in the Measure Z budget, Account # 001-223-5803. Tenant improvements totaling $35,000 will be fully funded through a generous donation fromJackH Brown in honor of his mother, Rose Brown. In 1954, it is believed that Ms. Brown became the C1ty's first female Reserve Police Officer. Ms Brown served the Gty of San Bernardino as a Reserve Police OffICer for numerous ~ars and was acknowledged at the Police Department's 100 ~ar anniversaIY in 2005 when she presented to the Gty her Reserve Police Officer badge and ID., officially retiring her reserve status. RECOMMENDATION 1. Adopt Resolution. o o o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. . RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT AND ISSUANCE OF A PURCHASE ORDER TO CHASE FINANCIAL SERVICES FOR TENANT IMPROVEMENTS REQUIRED TO EXPAND POLICE PARKING AND FOR THE FY 2008-09 PARKING LOTLEASE AND UTILITY PAYMENTS NOT TO EXCEED 570,000. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECfION 1: That the City Manager is authorized to execute on behalf of the City a lease agreement between the City of San Bernardino and Chase Financial Services, a copy of which is attached hereto, marked Exhibit "A" and incorporated herein by reference as fully as though set forth at length. SECfION 2: That the Purchasing Manager is directed to issue a purchase order to Chase Financial Services in an amount not to exceed $70,000. The Purchase Order shall reference this Resolution No. 2008-_ and shall read, Tenant hnprovements and Annual Lease of Parking Lot, total not to exceed $70,000. SECTION 3: The authorization to execute the service agreement referenced as Exhibit "A" and the Purchase Order referenced above is rescinded if it is not issued within sixty (60) days of the passage of this resolution. III III III III III III III t -/6-17'6 llJo.OlI o o o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT AND ISSUANCE OF A PURCHASE ORDER TO CHASE FINANCIAL SERVICES FOR TENANT IMPROVEMENTS REQUIRED TO EXPAND POLICE PARKING AND FOR THE FY 2008-09 PARKING LOT LEASE AND UTILITY PAYMENTS NOT TO EXCEED 570,000. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a meeting thereof, held on the day of , 2008, by the following vote, to wit: Council Members Aves Navs Abstain ESTRADA BAXTER BRINKER DERRY KELLEY JOHNSON McCAMMACK Rachel G. Clark, City Clerk The foregoing resolution is hereby approved this day of Patrick J. Morris, Mayor City of San Bernardino Approved as to form: Absent ,2008. Exhibit "A" o LEASE AGREEMENT This lease agreement was entered into on {date}, between CHASE FINANCIAL SERVICES, a government corporation organized under the laws of the State of California, having its principal place of business at 701 North E Street, San Bernardino, San Bernardino County, CA., referred to as "lessor," and CITY OF SAN BERNARDINO, a government corporation organized under the laws of the State of California, having its principal place of business at 300 North D Street, San Bernardino, San Bernardino County, CA., referred to as "lessee." SECTION ONE DESCRIPTION OF PREMISES Lessor leases to lessee a parking lot area of the premises located at 701 North E Street, San Bernardino, San Bernardino County, CA., and described more particularly as follows: approximately 80 stalls in an existing parking lot located north of the Cllase Financial Services building and directly adjacent to the west property line of the SAN BERNARDINO POLICE DEPARTMENT HEADQUARTERS located at 710 North D Street, San Bernardino, San Bernardino County, California. o SECTION TWO TERM The term of this lease agreement is four years, beginning on July 1, 2008, and terminating on June 30, 2012, at 11 :59.59 PM. The Agreement may not be terminated by either party during the first two years. The Agreement may be terminated during the last two years with 90-days written notice. Lessee will have first right of refusal pertaining to any other agreements with the Lessor. SECTION THREE RENT A. The total rent under this lease agreement is scheduled as follows: Year -1 (7/1/08-6/30/09) Year -2 (7/1/09-6/30/10) Year -3 (7/1/10-6/30/11) Year-4 (7/1/11-6/30/12) $2500 per month $2587.50 per month $2678.06 per month $2771.79 per month o B. In addition to the above rent schedule, Lessee shall reimburse Lessor for electricity required to operate parking lot lights. Page 10f9 o B. SECTION FOUR . Exhibit itA" USE OF PREMISES AND IMPROVEMENTS A. The demised premises are to be used for the purposes of parking City employee vehicles and City owned police sedans, motorcycles, utility pick-up trucks, trailers, radar/sign trailers, and other specialized law enforcement support vehicles on an asphalt surface inside a fenced perimeter with lighting, security cameras, concrete curbs, drainage, and paint designated parking stalls. Lessee shall restrict its use to such purposes, and shall not use or permit the use of the demised premises for any other purpose without the prior, express, and written consent of lessor, or lessor's authorized agent. B. The lessee shall be responsible for reimbursing the lessor for all improvements to the parking lot area including, but not limited to, wrought iron fencing, cutting existing curbing to create a driveway, striping of asphalt surface, tree trimming and electricity costs not to exceed $35,000. These improvements become the sole property of the lessor. C. Lessor agrees to award all contracts for improvements using lessor's purchasing guidelines. Further lessor agrees to consult With lessee regarding final approval of improvements before final acceptance of any improvements. o D. Lessor agrees to consult with lessee to develop bid specification for all improvements prior to selecting a vendor to provide the improvements. E. At the termination of this agreement, lessee agrees to be responsible for fence removal (if desired by lessor) and wall repairs to the existing boundary wall of the San Bernardino Police Department's headquarters located at 710 North D Street, San Bernardino, San Bernardino County, California. SECTION FIVE RESTRICTIONS ON USE A. Lessee shall not use the demised premises in any manner that will increase risks covered by insurance on the demised premises and result in an increase in the rate of insurance or a cancellation of any insurance policy, even if such use may be in furtherance of lessee's business purposes. B. Lessee shall not keep, use, or sell anything prohibited by any policy of fire insurance covering the demised premises, and shall comply with all requirements of the insurers applicable to the demised premises necessary to keep in force the fire and liability insurance. o Page 2 of9 o o o Exhibit "A" SECTION SIX. WASTE, NUISANCE, OR UNLAWFUL ACTIVITY Lessee shall not allow any waste or nuisance on the demised premises, or use or allow the demised premises to be used for any unlawful purpose. SECTION SEVEN DELAY IN DELIVERING POSSESSION This lease agreement shall not be rendered void or voidable by the inability of lessor to deliver possession to lessee on the date set forth in Section Two. Lessor shall not be liable to lessee for any loss or damage suffered by reason of such a delay; provided, however, that lessor does deliver possession no later than July 1,2008. No extension of this lease agreement shall result from a delay in delivering possession. SECTION EIGHT UTILITIES Lessee shall pay lessor for electricity required for parking lot lighting. Actual costs will be calculated by comparing a 3-month average of electrical costs before and after occupancy to determine actual usage. Payment will be prorated and paid in arrears for the term of this lease agreement. SECTION NINE REPAIRS AND MAINTENANCE Lessee shall maintain the demised premises and keep them in good repair at its expense. SECTION TEN DELIVERY, ACCEPTANCE, AND SURRENDER OF PREMISES A. Lessor represents that the demised premises are in fit condition for use by lessee. Acceptance of the demised premises by lessee shall be construed as recognition that the demised premises are in a good state of repair and in sanitary condition. B. Lessee shall surrender the demised premises at the end of the lease term, or any renewal of such term, in the same condition as when lessee took possession, allowing for reasonable use and wear, and damage by acts of God, including fires and storms. Page 3 of9 o o o Exhibit "A" C. SECTION ELEVEN PARTIAL DESTRUCTION OF PREMISES A. Partial destruction of the demised premises shall not render this lease agreement void or voidable, nor terminate it except as specifically provided in this lease agreement. If the demised premises are partially destroyed during the term of this lease agreement, lessor shall repair them when such repairs can be made in conformity with governmental laws and regulations, within 180 days of the partial destruction. If the repairs cannot be made in 180 days, and if lessor does not elect to make them within a reasonable time, either party shall have the option to terminate this lease agreement. '!,.. B. Disputes between lessor and lessee relating to provisions of this section shall be arbitrated. The parties shall each select an arbitrator, and the two arbitrators selected shall together select a third arbitrator. The three arbitrators shall determine the dispute, and their decisions shall be binding on the parties. The parties shall divide the costs of arbitration equally between them. SECTION TWELVE ENTRY ON PREMISES BY LESSOR A. Lessor reserves the right to enter on the demised premises at reasonable times to inspect them, perform required maintenance and repairs, or to make additions, alterations, or modifications to any part of the parking lot in which the demised premises are located, and lessee shall permit lessor to do so. Lessor agrees to coordinate any access to the property with the San Bernardino Police Department in advance before entry. Lessor acknowledges that there are inherent risks associated with law enforcement services and agrees to instruct all of it's agents, employees, contractors, officers, and representatives to follow instructions related to safety and security provided by uniformed police personnel and civilian City managers while on the premises of the San Bernardino Police Department and on the leased property once occupied by the lessor. SECTION THIRTEEN SIGNS, AWNINGS, AND MARQUEES INSTALLED BY LESSEE A. Lessee shall not construct or place signs, awnings, marquees, or other structures projecting from the exterior of the demised premises without the prior, express, and written consent oflessor. SECTION FOURTEEN BUSINESS RELATED SIGNS Lessee shall not conduct "Going out of Business," "Lost Our Lease," "Bankruptcy," or other sales of that nature on the demised premises without the written consent oflessor. Page 4 of9 o o o "., Exhibit" A" SECTION FIFTEEN. NONLIABILITY OF LESSOR FOR DAMAGES Lessee agrees to indemnify and hold harmless Lessor, its officers and agent from any and all claims, actions, or losses, damages and/or liability resulting from Lessee's negligent acts or omissions arising from the Lessee's performance of its obligations under the Agreement. Lessor agrees to indemnify and hold harmless the City, its officers, agents, and volunteers from any and all claims, actions, or losses, damages and/or liability resulting from Lessor's negligent acts or omissions arising from the Lessor's performance of it's obligations under the Agreement. In the event the Lessee and/or the Lessor is found to be comparatively at fault for any claim, action, loss or damage which results from their respective obligations under the Agreement, the Lessee shall indemnify the other to the extent of its fault. SECTION SIXTEEN LIABILITY INSURANCE A. Lessee shall procure and maintain in force at its expense during the term of this lease agreement and any extension of such term, public liability insurance with insurers and through brokers approved by lessor. Such coverage shall be adequate to protect against liability for damage claims through public use of or arising out of accidents occurring in or around the demised premises, in a minimum amount of $ for each person injured, $ for anyone accident, and $ for property damage. The insurance policies shall provide coverage for contingent liability of lessor on any claims or losses. The insurance policies shall be delivered to lessor for. safekeeping. Lessee shall obtain a written obligation from the insurers to notify lessor in writing at least {number] days prior to cancellation or refusal to renew any policy. In lieu of the foregoing policy of insurance, the Lessee may provide a Certificate of SelfInsurance to Lessor. B. If the insurance policies required by this section are not kept in force during the entire term of this lease agreement or any extension of such term, lessor may procure the necessary insurance and pay the premium for it, and the premium shall be repaid to lessor as an additional rent installment for the month following the date on which the premiums were paid by lessor. Page 5 of9 '~ibit "J, o a:xllIuai: nA" ASSIGNMENT, SUBLEASE, OR LICENSE SECTION SEVENTEEN A. Lessee shall not assign or sublease the demised premises, or any right or privilege connected with the demised premises, or allow any other person except agents and employees of lessee to occupy the demised premises or any part of the demised premises without first obtaining the written consent of lessor. A consent by lessor shall not be a consent to a subsequent assignment, sublease, or occupation by other persons. B. An unauthorized assignment, sublease, or license to occupy by lessee shall be void and shall terminate this lease agreement at the option oflessor. C. The interest of lessee in this lease agreement is not assignable by operation of law without the written consent oflessor. SECTION EIGHTEEN. BREACH o The appointment of a receiver to take possession of the assets of lessee, a general assignment for the benefit of the creditors of lessee, any action taken or allowed to be taken by lessee under any bankruptcy act, or the failure of lessee to comply with each term and condition of this lease agreement shall constitute a breach of this lease agreement. Lessee shall have 90 days after receipt of written notice from lessor of any breach to correct the conditions specified in the notice. If the corrections cannot be made within the 90-day period, lessee shall have a reasonable time to correct the default if action is commenced by lessee within 30 days after receipt of the notice. SECTION NINETEEN REMEDIES OF LESSOR FOR BREACH BY LESSEE Lessor shall have the following remedies in addition to its other rights and remedies in the event lessee breaches this lease agreement and fails to make corrections as set forth in Section Eighteen: A. Lessor may reenter the demised premises immediately and barricade entry onto the property but shall allow personnel of lessee to remove vehicles and other items on the property at the expense of lessee. SECTION TWENTY ATTORNEY FEES o In the event that litigation is brought by any party in connection with this Agreement, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorney's fees, incurred by the prevailing party Page 6 of9 Exhibit "A" o in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement on behalf of the City shall be considered as "attorney's fees" for the purpose of this paragraph. SECTION TWENTY-ONE CONDEMNATION Eminent domain proceedings resulting in the condemnation of a part of the demised premises, but leaving the remaining premises usable by lessee for the purposes of its business, will not terminate this lease agreement unless lessor, at its option, terminates this lease agreement by giving written notice of termination to lessee. The effect of any condemnation, where the option to terminate is not exercised, will be to terminate this lease agreement as to the portion of the demised premises condemned, and the lease of the remainder of the demised premises shall remain intact. The rental for the remainder of the lease term shall be reduced by the amount that the usefulness of the demised premises has been reduced for the business purposes of lessee. Lessee assigns and transfers to lessor any claim it may have to compensation for damages as a result of any condemnation. -. SECTION TWENTY-TWO o OPTION TO RENEW After the initial term of this agreement expires, the lessor grants to the lessee an option to renew this lease agreement, under the existing terms on an annual basis. To exercise this option to renew, lessee must give lessor written notice of intention to do so at least 90 days before this lease agreement expires. SECTION TWENTY-THREE W ANERS Waiver by lessor of any breach of any covenant or duty of lessee under this lease is not a waiver of a breach of any other covenant or duty of lessee, or of any subsequent breach of the same covenant or duty. SECTION TWENTY-FOUR GOVERNING LAW It is agreed that this lease agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California. o Page 7 of9 o o o SECTION TWENTY-FIVE Exhibit HAil ENTIRE AGREEMENT This lease agreement shalI constitute the entire agreement between the parties. Any prior understanding or representation of any kind preceding the date of this lease agreement shalI not be binding upon either party except to the extent incorporated in this lease agreement. SECTION TWENTY-SIX MODIFICATION OF AGREEMENT Any modification of this lease agreement or additional obligation assumed by either party in connection with this agreement shalI be binding only if evidenced in a writing signed by each party or an authorized representative of each party. SECTION TWENTY-SEVEN NOTICES A. AlI notices, demands, or other writings that this lease agreement requires to be given, or which may be given, by either party to the other, shall be deemed to have been fulIy given when made in writing and deposited in the United States mail, registered and postage prepaid, and addressed as follows: To lessor: Ali Moghadam Chase Financial Services 701 North E Street San Bernardino, CA. 92410 To lessee: Chief of Police San Bernardino Police Department 710 North D Street San Bernardino, CA. 9240 I B. The address to which any notice, demand, or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. SECTION TWENTY-EIGHT BINDING EFFECT This lease agreement shalI bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties. Page 8 of9 o o o SECTION TWENTY-NINE Exhibit "A" TIME OF THE ESSENCE It is specifically declared and agreed that time is of the essence of this lease agreement. SECTION THIRTY PARAGRAPH HEADINGS The titles to the paragraphs of this lease agreement are solely for the convenience of the parties and shall not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this lease agreement. In witness, each party to this lease agreement has caused it to be executed at (place of execution) on the date indicated below. Dated ,2008 VENDOR: CHASE FINANCIAL SERVICES By: Ali Moghadam Dated ,2008 CITY OF SAN BERNARDINO Fred Wilson, City Manager Page 9 of9 4 LEASE AGREEMENT This lease agreement was entered into on 00/2510,9 , between CHASE FINANCIAL SERVICES, a government corporation organized under the laws of the State of California, having its principal place of business at 701 North E Street, San Bernardino, San Bernardino County, CA., referred to as "lessor," and CITY OF SAN BERNARDINO, a government corporation organized under the laws of the State of California, having its principal place of business at 300 North D Street, San Bernardino, San Bernardino County, CA., referred to as "lessee." SECTION ONE DESCRIPTION OF PREMISES Lessor leases to lessee a parking lot area of the premises located at 701 North E Street, San Bernardino, San Bernardino County, CA., and described more particularly as follows: approximately 80 stalls in an existing parking lot located north of the Chase Financial Services building and directly adjacent to the west property line of the SAN BERNARDINO POLICE DEPARTMENT HEADQUARTERS located at 710 North D Street, San Bernardino, San Bernardino County, California. SECTION TWO TERM The term of this lease agreement is four years, beginning on July 1, 2008, and terminating on June 30, 2012, at 11:59.59 PM. The Agreement may not be terminated by either party during the first two years. The Agreement may be terminated during the last two years with 90-days written notice. Lessee will have first right of refusal pertaining to any other agreements with the Lessor. SECTION THREE RENT A. The total rent under this lease agreement is scheduled as follows: Year-1 (7/1/08-6/30/09) $2500 per month Year-2 (7/1/09-6/30/10) $2587.50 per month Year-3 (7/1/10-6/30/11) $2678.06 per month Year-4 (7/1/11-6/30/12) $2771.79 per month B. In addition to the above rent schedule, Lessee shall reimburse Lessor for electricity required to operate parking lot lights. Page 1 of 9 SECTION FOUR USE OF PREMISES AND IMPROVEMENTS A. The demised premises are to be used for the purposes of parking City employee vehicles and City owned police sedans, motorcycles, utility pick-up trucks, trailers, radar/sign trailers, and other specialized law enforcement support vehicles on an asphalt surface inside a fenced perimeter with lighting, security cameras, concrete curbs, drainage, and paint designated parking stalls. Lessee shall restrict its use to such purposes, and shall not use or permit the use of the demised premises for any other purpose without the prior, express, and written consent of lessor, or lessor's authorized agent. B. The lessee shall be responsible for reimbursing the lessor for all improvements to the parking lot area including, but not limited to, wrought iron fencing, cutting existing curbing to create a driveway, striping of asphalt surface, tree trimming and electricity costs not to exceed $40,000. These improvements become the sole property of the lessor. I C. Lessor agrees to award all contracts for improvements using lessor's purchasing guidelines. Further lessor agrees to consult with lessee regarding final approval of improvements before final acceptance of any improvements. D. Lessor agrees to consult with lessee to develop bid specification for all improvements prior to selecting a vendor to provide the improvements. I E. At the termination of this agreement, lessee agrees to be responsible for fence removal (if desired by lessor) and wall repairs to the existing boundary wall of the San Bernardino Police Department's headquarters located at 710 North D Street, San Bernardino, San Bernardino County, California. SECTION FIVE RESTRICTIONS ON USE A. Lessee shall not use the demised premises in any manner that will increase risks covered by insurance on the demised premises and result in an increase in the rate of insurance or a cancellation of any insurance policy, even if such use may be in furtherance of lessee's business purposes. B. Lessee shall not keep, use, or sell anything prohibited by any policy of fire insurance covering the demised premises, and shall comply with all requirements of the insurers applicable to the demised premises necessary to keep in force the fire and liability insurance. Page 2 of 9 SECTION SIX WASTE, NUISANCE, OR UNLAWFUL ACTIVITY Lessee shall not allow any waste or nuisance on the demised premises, or use or allow the demised premises to be used for any unlawful purpose. SECTION SEVEN DELAY IN DELIVERING POSSESSION This lease agreement shall not be rendered void or voidable by the inability of lessor to deliver possession to lessee on the date set forth in Section Two. Lessor shall not be liable to lessee for any loss or damage suffered by reason of such a delay; provided, however, that lessor does deliver possession no later than July 1, 2008. No extension of this lease agreement shall result from a delay in delivering possession. SECTION EIGHT UTILITIES Lessee shall pay lessor for electricity required for parking lot lighting. Actual costs will be calculated by comparing a 3-month average of electrical costs before and after occupancy to determine actual usage. Payment will be prorated and paid in arrears for the term of this lease agreement. SECTION NINE REPAIRS AND MAINTENANCE Lessee shall maintain the demised premises and keep them in good repair at its expense. SECTION TEN DELIVERY, ACCEPTANCE, AND SURRENDER OF PREMISES A. Lessor represents that the demised premises are in fit condition for use by lessee. Acceptance of the demised premises by lessee shall be construed as recognition that the demised premises are in a good state of repair and in sanitary condition. B. Lessee shall surrender the demised premises at the end of the lease term, or any renewal of such term, in the same condition as when lessee took possession, allowing for reasonable use and wear, and damage by acts of God, including fires and storms. Page 3 of 9 SECTION ELEVEN PARTIAL DESTRUCTION OF PREMISES A. Partial destruction of the demised premises shall not render this lease agreement void or voidable, nor terminate it except as specifically provided in this lease agreement. If the demised premises are partially destroyed during the term of this lease agreement, lessor shall repair them when such repairs can be made in conformity with governmental laws and regulations, within 180 days of the partial destruction. If the repairs cannot be made in 180 days, and if lessor does not elect to make them within a reasonable time, either party shall have the option to terminate this lease agreement. SECTION TWELVE ENTRY ON PREMISES BY LESSOR A. Lessor reserves the right to enter on the demised premises at reasonable times to inspect them, perform required maintenance and repairs, or to make additions, alterations, or modifications to any part of the parking lot in which the demised premises are located, and lessee shall permit lessor to do so. Lessor agrees to coordinate any access to the property with the San Bernardino Police Department in advance before entry. Lessor acknowledges that there are inherent risks associated with law enforcement services and agrees to instruct all of it's agents, employees, contractors, officers, and representatives to follow instructions related to safety and security provided by uniformed police personnel and civilian City managers while on the premises of the San Bernardino Police Department and on the leased property once occupied by the lessor. SECTION THIRTEEN SIGNS, AWNINGS, AND MARQUEES INSTALLED BY LESSEE A. Lessee shall not construct or place signs, awnings, marquees, or other structures projecting from the exterior of the demised premises without the prior, express, and written consent of lessor. SECTION FOURTEEN BUSINESS RELATED SIGNS Lessee shall not conduct"Going out of Business," "Lost Our Lease,""Bankruptcy," or other sales of that nature on the demised premises without the written consent of lessor. SECTION FIFTEEN NONLIABILITY OF LESSOR FOR DAMAGES Lessee agrees to indemnify and hold harmless Lessor, its officers and agent from any and all claims, actions, or losses, damages and/or liability resulting from Lessee's Page 4of9 negligent acts or omissions arising from the Lessee's performance of its obligations under the Agreement. Lessor agrees to indemnify and hold harmless the City, its officers, agents, and volunteers from any and all claims, actions, or losses, damages and/or liability resulting from Lessor's negligent acts or omissions arising from the Lessor's performance of it's obligations under the Agreement. In the event the Lessee and/or the Lessor is found to be comparatively at fault for any claim, action, loss or damage which results from their respective obligations under the Agreement, the Lessee shall indemnify the other to the extent of its fault. i SECTION SIXTEEN LIABILITY INSURANCE 3 A. Lessee shall procure and maintain in force at its expense during the term of this lease agreement and any extension of such term, public liability insurance with insurers and through brokers approved by lessor. Such coverage shall be adequate to protect against liability for damage claims through public use arising out of accidents occurring in or around the demised premises, in a minimum amount of$1,000,000 for each person injured, $1,000,000 for any one accident, and $1,000,000 for property damage. The insurance policies shall provide coverage for contingent liability of lessor on any claims or losses. The insurance policies shall be delivered to lessor for safekeeping. Lessee shall obtain a written obligation from the insurers to notify lessor in writing at least 30 days prior to cancellation or refusal to renew any policy. In lieu of the foregoing policy of insurance, the Lessee may provide a Certificate of Self Insurance to Lessor. B. If the insurance policies required by this section are not kept in force during the entire term of this lease agreement or any extension of such term, lessor may procure the necessary insurance and pay the premium for it, and the premium shall be repaid to lessor as an additional rent installment for the month following the date on which the premiums were paid by lessor. SECTION SEVENTEEN ASSIGNMENT, SUBLEASE, OR LICENSE A. Lessee shall not assign or sublease the demised premises, or any right or privilege connected with the demised premises, or allow any other person except agents and employees of lessee to occupy the demised premises or any part of the demised premises without first obtaining the written consent of lessor. A consent by lessor shall not be a consent to a subsequent assignment, sublease, or occupation by other persons. B. An unauthorized assignment, sublease, or license to occupy by lessee shall be void and shall terminate this lease agreement at the option of lessor. Page 5 of 9 C. The interest of lessee in this lease agreement is not assignable by operation of law without the written consent of lessor. SECTION EIGHTEEN BREACH The appointment of a receiver to take possession of the assets of lessee, a general assignment for the benefit of the creditors of lessee, any action taken or allowed to be taken by lessee under any bankruptcy act, or the failure of lessee to comply with each term and condition of this lease agreement shall constitute a breach of this lease agreement. Lessee shall have 90 days after receipt of written notice from lessor of any breach to correct the conditions specified in the notice. If the corrections cannot be made within the 90-day period, lessee shall have a reasonable time to correct the default if action is commenced by lessee within 30 days after receipt of the notice. SECTION NINETEEN ATTORNEY FEES In the event that litigation is brought by any party in connection with this Agreement, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorney's fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement on behalf of the City shall be considered as "attorney's fees" for the purpose of this paragraph. SECTION TWENTY CONDEMNATION Eminent domain proceedings resulting in the condemnation of a part of the demised premises, but leaving the remaining premises usable by lessee for the purposes of its business, will not terminate this lease agreement unless lessor, at its option, terminates this lease agreement by giving written notice of termination to lessee. The effect of any condemnation, where the option to terminate is not exercised, will be to terminate this lease agreement as to the portion of the demised premises condemned, and the lease of the remainder of the demised premises shall remain intact. The rental for the remainder of the lease term shall be reduced by the amount that the usefulness of the demised premises has been reduced for the business purposes of lessee. Lessee assigns and transfers to lessor any claim it may have to compensation for damages as a result of any condemnation. Page 6 of 9 SECTION TWENTY-ONE OPTION TO RENEW After the initial term of this agreement expires, the lessor grants to the lessee an option to renew this lease agreement, under the existing terms on an annual basis. To exercise this option to renew, lessee must give lessor written notice of intention to do so at least 90 days before this lease agreement expires. SECTION TWENTY-TWO WAIVERS Waiver by lessor of any breach of any covenant or duty of lessee under this lease is not a waiver of a breach of any other covenant or duty of lessee, or of any subsequent breach of the same covenant or duty. SECTION TWENTY-THREE GOVERNING LAW It is agreed that this lease agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California. SECTION TWENTY-FOUR ENTIRE AGREEMENT This lease agreement shall constitute the entire agreement between the parties. Any prior understanding or representation of any kind preceding the date of this lease agreement shall not be binding upon either party except to the extent incorporated in this lease agreement. SECTION TWENTY-FIVE MODIFICATION OF AGREEMENT Any modification of this lease agreement or additional obligation assumed by either party in connection with this agreement shall be binding only if evidenced in a writing signed by each party or an authorized representative of each party. SECTION TWENTY-SIX NOTICES A. All notices, demands, or other writings that this lease agreement requires to be given, or which may be given, by either party to the other, shall be deemed to have been fully given when made in writing and deposited in the United States mail, registered and postage prepaid, and addressed as follows: Page 7 of 9 To lessor: Ali Moghadam Chase Financial Services 701 North E Street San Bernardino, CA. 92410 To lessee: Chief of Police San Bernardino Police Department 710 North D Street San Bernardino, CA. 92401 B. The address to which any notice, demand, or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. SECTION TWENTY-SEVEN BINDING EFFECT This lease agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties. SECTION TWENTY-EIGHT TIME OF THE ESSENCE It is specifically declared and agreed that time is of the essence of this lease agreement. SECTION TWENTY-NINE PARAGRAPH HEADINGS The titles to the paragraphs of this lease agreement are solely for the convenience of the parties and shall not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this lease agreement. In witness, each party to this lease agreement has caused it to be executed at San Bernardino on the date indicated below. Dated 4n , 2008 VENDOR: Page 8 of 9 i CHAS FINANCIAL SERVICES- By: I I oghadam Dated , 2008 CITY OF SAN BERNARDINO Fred Wilson, City Manager APPROVED TO FORM: James F. Penman City Attorney By: Page 9 of 9