Loading...
HomeMy WebLinkAbout28- Public Works FILE NO. 15.06-051 CI Y OF SAN BERNARDINO REQUEST FOR COUNCIL ACTION From:ROGER G. HARDGRAVE, Director Subject: TWO YEAR LEASE WITH OPTION TO PURCHASE: from Ayala family - City-owned property Dept: public Works/Engineering located at 1505 North Waterman Avenue Date: ! gff (old Gallo's Flowers and Gifts) February 26, 1996 �� � b Synopsis of Previous Council action: 04/17/95 --- Authorization granted to obtain an appraisal for City-owned proper- ty located at 1505 North Waterman Avenue - in "as is" condition, and that matter be brought back to the Mayor and Council meeting of May 15, 1995. 05/17/95 --- Resolution No. 95-159 approved giving notice inviting competitive bids for sale of 1505 North Waterman Avenue by 06/27/95. 06/27/95 --- No bids received. 02/19/96 --- Real Property Staff directed to prepare lease/option for 1505 North Waterman Avenue. Recommended motion: B r,,:l 96 o, 7'43 ADOPT RESOLUTION cc: Shauna Clark, City Administrator Barbara Pachon, Finance Director gnature James F. Penman, City Attorney Contact person: Anne DeBolt Phone: 5328 Supporting data attached: Staff Report, Resolution & Map Ward: 2 FUNDING REQUIREMENTS: Amount: Source: Acct_No.) (Acct. Description) Finance: Council Notes: CI`T'Y OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT A proposal to lease the City property located at 1505 North Waterman Avenue (Waterman and Gilbert) , with an option to purchase, was received from the Ayala family. This proposal was accepted at the Council meeting of 02-05-96, and authorization granted to negotiate a Lease with Option to Purchase Agreement. A Lease with Option to Purchase Agreement has been negotiated with the Ayala family pursuant to this authorization. The Agreement provides for the Ayala family to lease the old Gallo's Flower and Gift Shop building for a lease payment of $1,500 per month. Also, the Lessee has a two-year Option to Purchase the property for the amount of $120,000. In the event the Lessee does not exercise the Option to Purchase within the two year period, the Lease may be extended for 2 terms of five years each. The lease payments for the first five-year extension will be $1,600 per month and will increase to $1,700 per month for the second five-year term. The Ayala family will accept the building in an "as is" condition, subject to the provision that all remaining equipment, trash, broken glass, fallen ceiling panels, etc. be removed by the City. Also, that the landscaping be trimmed or removed, the roof swept and the rain gutters cleaned. A cash deposit of $5,000 has been submitted by the Lessee as security for the lease payments and as evidence of good faith. We recommend that the Lease with Option to Purchase Agreement be approved. URGENCY CLAUSE: The Ayala family is very anxious to occupy the building in order to prevent any further damage from the elements or from vandalism. 02/26/96 2 LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 2. Term. 2 This Agreement shall be for a term of two (2) years, beginning March 18, 3 1996, and ending March 17, 1998, providing that Lessee has the right and 4 option to purchase said Premises at anytime within said two (2) year lease 5 term at a sales price of One Hundred Twenty Thousand Dollars ($120,000) . 6 3. Extension of Lease Term. 7 If at the end of the initial two (2) year lease term, the Lessee has not 8 exercised its option to purchase the Premises as stated in Paragraph No. 2 9 above, then Lessee shall have the option to renew the Lease portion of the 10 Agreement for two (2) five (5) year terms by written notification to Lessor 11 no later than ninety (90) days prior to expiration of the original Agreement 12 or any extension of the Agreement, subject to acceptance by Lessor. The 13 monthly rental shall be One Thousand Six Hundred Dollars ($1,600.00) for the 14 first five (5) year extension, and One Thousand Seven Hundred Dollars 15 ($1, 700.00) for the second five (5) year term extension. All other terms and 16 conditions shall remain the same. 17 4. Lease Payments/Option to Purchase. 18 Lessee agrees to pay, and Lessor agrees to accept as lease payments for 19 said Premises, a monthly rental of One Thousand Five Hundred Dollars 20 ($1, 500.00) . Said total monthly rental is to be paid on or before the first 21 day of each month, made payable to the Lessor, and sent to: 22 City of San Bernardino Real Property Section 23 300 North "D" Street, 3rd Floor San Bernardino, CA 92418. 24 25 The Lease payments of One Thousand Five Hundred Dollars ($1, 500) per month 26 shall not commence until the first (1st) day of the fifth (5th) month follow- 4- 27 ing the commencement of the Agreement or August 1, 1996. Each month, Five 28 Hundred Dollars ($500.00) ,Jf the total monthly lease payment of One Thousand _5.06-51 / /1/� LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 Five Hundred Dollars ($1500.00) shall be set aside to be credited towards the 2 down payment for the purchase of said Premises. Said Five Hundred Dollars 3 ($500.00) credit shall extend to the end of the two (2) year Option to Pur- 4 chase the Premises, with a total credit of Ten Thousand Five Hundred Dollars 5 ($10, 500) accruing towards the purchase of said Premises. In the event 6 Lessee does not exercise said Option to Purchase the Premises within the two 7 year option period, the Ten Thousand Five Hundred Dollars ($10,500) shall be 8 considered a portion of the Lease payments and shall not accrue to the bene- 9 fit of the Lessee. In the event Lessee does exercise the Option to Purchase, 10 the Five Thousand Dollar ($5,000) deposit made at the commencement of the 11 Lease shall also be credited to the purchase of the Premises as long as all 12 lease payments are current and the Lessee is in good standing with the 13 Lessor. If the Lessee does not exercise said Option to Purchase, the Five 14 Thousand Dollar ($5,000) shall be considered a security deposit for the Lease 15 and shall not be refunded, but may be used by Lessee for regular lease pay- 16 ments at the end of the two (2) year option term. 17 5. Late Payments: 18 In the event the monthly rental is paid later than the fifth day of any 19 month, a late payment penalty of One Hundred Dollars ($100) shall be as- 20 sessed. 21 6. Use of Premises. 22 The Premises are leased to the Lessee for use as an insurance office, 23 beauty salon/beauty supplies, and/or educational training facility, and 24 related uses. Lessee agrees not to use the Premises, nor to permit their use 25 or the use of any part of them, for any other purpose, without the prior 26 written consent of the Lessor. 27 7. Improvements. 28 Lessee a not make, or suffer to be made, any alterations to the 5.06-51 LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 leased Premises, or any part thereof, without the prior written consent of 2 Lessor. Any and all alterations and/or improvements made to the demised 3 Premises pursuant to this section shall, upon termination of this Agreement, 4 remain as a part of the Premises and at no cost or obligation to the Lessor. 5 As a matter of this Lease, Lessee shall be permitted to make any and all 6 repairs and improvements, major or minor, to the Premises to make them hab- 7 itable. Lessee will commence with said repairs no later than March 31, 1996. 8 Lessee will provide Real Property Staff an accurate accounting of all the 9 above repair expenses. These repairs and improvements may include, but are 10 not limited to, the repair or replacement of the roof of the building, the 11 interior ceiling and lighting, any flooring, painting of the interior and 12 exterior of the building, any necessary electrical, plumbing and heating and 13 air conditioning repair, addition of a security system, repair or replacement 14 of the existing signage, and any tenant improvements the Lessee requires to 15 begin operation. The repairs to the roof, ceiling and flooring shall be 16 completed within ninety (90) days of the commencement of this Agreement and 17 all repairs and improvements shall be done in accordance with applicable 18 current City and State code requirements under the supervision of the Facili- 19 ties Manager of the Lessor. Prior to the Lessee's occupation of the Premis- 20 es, Lessor shall remove, or have removed, all remaining equipment, trash, 21 broken glass, fallen ceiling panels, etc. , in the interior of the building. 22 The exterior landscaping shall be trimmed and cleaned or removed as needed. 23 The roof shall be swept and all foreign materials removed from gutters, etc. 24 8. Maintenance and Operation. 25 Lessee is familiar with the leased Premises and has knowledge of the 26 present conditions that exist thereon. Lessee shall, at Lessee's own 27 cost and expense, keep and maintain all improvements thereon in good condi- 28 tion and repair, both as to the exterior and interior portions thereof. 15.06-51 LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 Lessee shall provide or cause to be provided, all services which are required 2 for the proper care and use of the Premises. Lessee shall use all reasonable 3 precaution to prevent waste, damage or injury to the Premises. Lessor, shall 4 at any reasonable time, have the right to enter the Premises and inspect and 5 examine the same relative to such maintenance and upkeep. The Lessee shall 6 keep the leased Premises and any and all improvements thereon free and clear 7 of all liens, charges, and encumbrances. 8 9. Utilities. 9 Lessee shall pay for all electricity, gas, water, refuse service, tele- 10 phone service, and all other services and utilities, including service in-- 11 stallation fees and charges for such utilities which are now or may hereafter 12 be provided to the leased Premises as to any charges or fees accruing during 13 the term of this Agreement. If Lessee desires additional utilities and/or 14 utility services to the Premises, Lessee must first obtain written consent 15 from Lessor. 16 10. Ownership. 17 Lessee acknowledges Lessor's title, paramount interest and ownership of 18 the subject Premises, and Lessee agrees never to claim, challenge, or con- 19 test said title, ownership or interest of Lessor. 20 11. Taxes/Possessory Interest. 21 Lessee covenants during the term of this Agreement to pay, when due, all 22 taxes and assessments that may be assessed or imposed upon the Lessee's 23 possessory interest in and to the Premises and upon personal property located 24 on the leased Premises. During Lessee's possession and use of the leased 25 Premises, should any taxes thereon be assessed against Lessor, Lessee agrees 26 to indemnify Lessor thereon. 27 12. Amendment. 28 This Agreement may be amended or modified only by written agreement 15.06-51 rr LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 signed by both parties. 2 13. Insurance. 3 (a) Fire. Lessee agrees to procure and maintain in force during the 4 term of this Agreement and any extension thereof, at its expense, a policy or 5 policies of insurance whereby the CITY OF SAN BERNARDINO will be named as the 6 primary insured against loss or damage to the leased Premises, appurtenances 7 and permanent equipment therein, resulting from fire, windstorm and extended 8 perils, in a minimum amount of Two Hundred Thousand Dollars ($200,000) , 9 Damage from lightning, vandalism, malicious mischief and such perils ordinar- 10 ily defined as "extended coverage" shall be included in such coverage. The 11 insurance policy shall be issued in the names of Lessor and Lessee. The 12 insurance policy shall provide that any proceeds shall be made payable solely 13 to the Lessor, or, alternatively, to Lessor and Lessee, as their interests 14 may appear. 15 (b) Liability. Lessee agrees to procure and maintain in force during 16 the term of this Agreement and any extension thereof, at Lessee's expense, 17 public liability insurance in companies approved by Lessor through its Risk 18 Manager, adequate to protect against liability for damage claims through the 19 Lessee's use of or arising out of the use of the leased Premises, in a mini- 20 mum amount of ONE MILLION DOLLARS ($1,000,000.00) combined single limit. 21 Lessee shall provide to Lessor's Risk Management Division, an annual policy 22 of insurance which includes: 23 1. The City of San Bernardino as an additional named insured; 24 2. The insurance company name, policy number, period of coverage and 25 the amount of insurance; 26 3. That the Real Property Section of the City of San Bernardino must 27 be given notice, in writing, at least thirty (30) days prior to cancella- 28 tion, material change or refusal to renew policy; and 15.06-51 nn i,)c inc—'. LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 4. Condition that Lessee's insurance will be primary to any cover- 2 age that Lessor may have in effect. 3 Lessee agrees that, if such insurance policies are not kept in fora: 4 during the term of this Agreement, and any extension thereof, Lessor may have 5 the option of one of the following: 6 (a) Procure the necessary insurance, pay the premium therefor, and 7 that such premium shall be repaid to Lessor as an additional rent installment 8 for the month following the date on which such premium is paid. 9 (b) Immediately declare this Agreement in default, and terminate this 10 Agreement forthwith. 11 14. Damage by Fire, Earthquake or Calamity. 12 If by earthquake, flood or other similar calamity or act of God, or 13 by fire, act of war or other similar cause, any existing improvements, or any 14 improvements constructed by Lessee on the leased Premises are destroyed or 15 damaged to a substantial degree, Lessee shall repair them when such repairs 16 can be made in conformity with any applicable law, and if, within ninety (90) 17 days after the date when such destruction or damage occurs, Lessee has not 18 commenced repair or reconstruction, the Lessor may terminate this Agreement 19 upon forty-five (45) days' written notice to Lessee. If so terminated, then 20 Lessee shall, at its own expense, and upon election by Lessor, forthwith 21 remove any or all of the damaged improvements. 22 15. Indemnification. 23 Lessee shall exercise its privileges under this Agreement at its own 24 risk. Lessee shall indemnify and hold harmless Lessor, its elective and 25 appointive boards, commissions, officers, agents and employees from 26 liability resulting from, arising out of, or in any way connected with, the 27 Lessee's operations under this Agreement or Lessee's occupation of the Prem- 28 ises, including claims resulting from the conduct of Lessee, its employees, 15.06-51 LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 invitees, guests or agents of Lessee, or Lessee's failure to perform its 2 promises in connection herewith. Lessee shall defend Lessor, its elective 3 and appointive boards, commissions, officers, agents, and employees from any 4 suits or actions at law or in equity for damages caused, or alleged to have 5 been caused, by reason of any of Lessee's operations under this Agreement. 6 Lessor shall not be liable to Lessee if Lessee's occupation or use of the 7 Premises is hindered or disturbed. 8 16. Notices. 9 All notices herein required shall be in writing and delivered in 10 person or sent by certified mail, postage prepaid, addressed as follows: 11 LESSOR: LESSEE: 12 CITY OF SAN BERNARDINO ROSEMEAD INSURANCE AGENCY Real Property Section c/o Salvador Ayala, Jr. 13 300 North "D" Street, 3rd Floor 1505 N. Waterman Avenue San Bernardino, CA 92418 San Bernardino, CA 92404 14 (909) 384-5328 (909) 15 17. Condition of Property Upon Surrender. 16 In the event the Option to Purchase the Premises is not exercised and 17 the Lease is terminated, Lessee agrees to surrender the said Premises occu- 18 pied under the Agreement herein granted, in as good condition as same was on 19 the date of completion of all repairs and improvements to the Premises as set 20 forth in Paragraph 7 above. Lessor may elect to take possession of and 21 appropriate to itself without payment any property of Lessee, or anyone 22 claiming under Lessee, which Lessee fails to remove after notice. 23 18. Severability. 24 In the event this Agreement, or any portion thereof, should be deter- 25 mined to be void, illegal or improper, for any reason whatever, all other 26 portions of the Agreement shall remain fully enforceable to the extent 27 possible after such determinations. 28 19. Default. 15.06-51 ._ WfYfW®I Wif *. LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 In the event Lessee shall be in default in the payment of rentals, 2 taxes, or other charges hereunder, or shall otherwise breach its covenants or 3 obligations hereunder, and shall be and remain in default for a period of ten 4 (10) days after written notice from Lessor to it of such default, Lessor 5 shall have the right and privilege of terminating this Agreement and 6 declaring the same at an end, and of entering upon and taking possession of 7 said Premises, and shall have the remedies now or hereafter provided by law 8 for recovery of rent and/or taxes, repossession of the Premises and damages 9 occasioned by such default. If such default should occur, then Lessor shall 10 have the right to take possession of and appropriate to itself without pay- 11 ment therefor, any property of Lessee or anyone claiming under him, then 12 remaining on said Premises. 13 20. Effect of Lessor's Waiver. 14 Lessor's waiver of breach of one term, covenant, or condition of this 15 Agreement is not a waiver of breach of others, nor of subsequent breach of 16 the one waived. Lessor's acceptance of rent installments after breach is not 17 a waiver of the breach, except of breach of the covenant to pay the rent 18 installment or installments accepted. 19 21. Duty to Make Alterations, Additions, or Changes Required by Law. 20 If, during the term of this Agreement, any law, regulation, or rule 21 requires that an alteration, addition, or other change be made to the leased 22 Premises, the parties agree as follows: 23 (a) If the alterations, additions, or changes are required as a result. 24 of Lessee's use of the Premises, Lessee will make them and bear all expense 25 connected therewith. 26 (b) If the alterations, additions, or changes are required as a result 27 of the condition or nature of the Premises after the completion of the re- 28 pairs and tenant improvements constructed under this Agreement, and not 15.06-51 LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERNAN AVENUE - AYALA 1 caused by use of the Premises by Lessee, Lessor will make them and bear all 2 expense connected therewith. 3 22. Inspections. 4 Lessor, its agents, officers, or employees may enter upon the leased 5 Premises at such reasonable times during Lessor's normal business hours a:=. 6 it deems necessary for the purpose of inspection of the Premises to determine 7 whether the terms and conditions of this Agreement are being performed and 8 kept by Lessee. 9 23. Non-Discrimination. 10 The Lessee hereby covenants by and for itself, its heirs, executors, ad- 11 ministrators, employees, agents, and assigns, and all persons claiming under 12 or through it, that there shall be no discrimination against or segregation 13 of any person or group of persons, on account of race, color, religion, sex, 14 national origin, ancestry, age, or handicap, in the leasing, subleasing, 15 transferring, use, occupancy, tenure, or enjoyment of the Premises herein 16 leased, nor shall the Lessor itself, or any person claiming under or through 17 it, establish or permit any such practice or practices of discrimination or 18 segregation with reference to the selection, location, number, use, or occu- 19 pancy of lessees, sublessees, tenants, subtenants, agents, employees, as- 20 signs, or vendees in the Premises herein leased. 21 24. Assignments: Sole Occupancy. 22 Lessee shall not assign this Agreement or sublet the leased Premises or 23 any part thereof without obtaining the prior written consent of the Lessor. 24 The parties contemplate that Lessee shall be the sole occupant of these 25 Premises, and the rental rate is established based in part thereon. Any 26 change in occupancy constitutes a material breach of this Agreement. 27 25. Agreement Breached by Lessee's Receivership, Assignment for Bene- 28 fit of Creditors, Insolvency, or Bankruptcy. 15.06-51 LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA f ' 3fE� 1 Appointment of a receiver to take possession of Lessee's assets, Less 2 eels general assignment for benefit of creditors, or Lessee's insolvency or 3 taking or suffering action under the Bankruptcy Act is a breach of this 4 Agreement and shall terminate same. 5 26. Agreement Applicable to Successors, Etc. 6 This Agreement and the terms, covenants and conditions hereof apply to, 7 and are binding on the heirs, successors, executors, administrators and 8 assigns of the parties hereto. 9 27. Entire Agreement. 10 This document represents the entire, total, and complete Agreement and 11 no other written and/or oral agreements exist in this regard. 12 13 14 15 16 17 18 19 20 21 22 23 / 24 25 26 27 / t 28 / 15.06-51 LEASE WITH OPTION TO PURCHASE: 1505 NORTH WATERMAN AVENUE - AYALA 1 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on 2 the date first above written. 3 4 LESSOR: CITY OF SAN BERNARDINO 5 *,¢ 6 DATED: By: TOM MIN?R, Mayor 7 8 ATTEST: 9 10 DATED: By: 11 RAC CLARK, City Clerk 12 13 LESSEE: ROSEMEAD INSURANCE AGENCY 14 15 DATED: SALVADOR AYALA, JR. 16 17 _ SALVADOR AYALA MARIA C. AYALA 18 19 MARIA E. AYALA FRANK HALSTEAD 20 21 ------------------ BLANCA 0. LOPEZ CARLOS E. LOPEZ 22 23 24 Approved as to form and legal content: 25 26 JAMES F. PENMAN, City Attorney 27 28 By: 15.06-51 M -- EVANS - - STREET— . a M Z . W Q NO v 0� 11 1111110, 11111, . g PROPERTY FOLDER Q , GILBERT • STREET J. DAWSON • [-n A 1 r. ill_r!-0 6 2 5 �0 L � i T�3 0 AREA CALCULATIONS 16• x 24, _ 384 3Y- ` 21 x 10• = 20 Z(� 3.5, x 42, = 147 11.5 x 48, = 552 4.5 x 44.51 200 6.5 x 46.51 302 24, x 43, = 1,032 61 x 46.5, 279 61 x 18• = 108 4, x 9• x 2 = 72 - - 16 Total S.F. 3,096 . Say 3,100 •.r err Ono*&tic Oco"ftow,m