HomeMy WebLinkAboutAgenda Report - August 2, 2006 E-12A�ENlOA ITM Ew 17W
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COUNCIL f O ![UNICATION
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AG&WO TtTII.E: Adopt msolutlon authorizing City Manager to execute agreement with the World cK
Wonder Science Museum for an option to lease and a subsequent lease of reftil
space in the Lodi Station Parking Structure.
MSETH DATE: August,2, 2006
PF&PA EDDY: City Mimager
RECOMMENIM ACTION: Adopt resolution authorizing City Manager to execute agreement
with the World of Wonder Science Museum for an option to lease
and a subsequent lease of retail space in the Lodi Station Parking
Structure.
BACKCOt i 1NFORMAWN: During the May 17, 2006 City Council meeting, members of the
World of Wonder Science Museum (WOW) Board of Directors
presented conceptual plans to establish a science museum in the
12,000 square feet of available retail space in the Lodi Station
Parking Garage. Council directed the City Manager to enter into negotiations with WOW and the
attached Option to Lease and corresponding Lease have been drafted for approval.
The Option allows the WOW to raise the finances necessary to construct tenant improvements for the
operation of a science museum and science store in the retail space owned by the City of Lodi. The
Option sets forth a requirement that the WOW will raise a minimum of $165,000 in cash for the purpose
of constucting the tenant improvements called for in the lease in a period of no more than 180 days. It is
anticipated the WOW Science Museum will secure commitments for in-kind assistance and additional
cash to complete the tenant improvements. If the Museum completes the conditions of the option
agreement, they may execute a lease agreement. No rent will be required to be paid until the tenant
improvements described in the lease are completed, or, 12 months from the lease commencement date,
whichever is earlier.
A concqptual timeline for the.project would reflect the following time increments:
• Option to Exercise lease and raise the required $165,000 6 months (maximum)
• Term of Lease 6 years
• Option to Extend lease (2 successive 5 -year terms) 10 years
The Tenant Improvements shall include an 800 square foot Museum Store, a public lobby and exhibit
hall, classroom, pubic resUmms, office space, all mechanical, electrical, telecommunications, and
utilities required to support the space and function. All Tenant Improvements shall comply with
regulations and requirements of the City of Lodi Building Division and the Fire Marshall.
APPROVED:__ --
Blair ing, City Manager
The comsponding lease specifies that the Science Museum and Science Store shall be open to the
public a minimum of 33 hours per week, at least 12 of which shall fall on a weekend, and of those hours,
no less gran six shall be on Sunday.
FISCAL. TACT: The VVM shall pay rent to the City in the amount of $1,000 per month, which is
the equ�alent of $1.25 per square foot per month for the estimated 800 square foot museum store. The
WOW'S monthly rental payment shall increase by 2.5% per year, except if the rate of inflation exceeds
6.5% in which case, the payment shall increase by 50% the rate of inflation. Revenues would benefit the
City's Tr*nsit Fund and, pursuant to FTA regulations, cannot be incorporated as general City revenues.
/7���
Blair King
City Manager
Attachmerfe
cc: Sally Onyde, President, The Worlc*of Wonder Science Museum
OPTION TO LEASE
WORLD OF WONDERS SCIENCE MUSEUM
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THIS OPTION TO LEASE AGREEMENT, entered into this 2nd day of August,
2006, by and between the CITY OF LODI, a municipal corporation ("City"), and the
World of Wonders Science Museum, a California Nonprofit Corporation (Tax ID No. 20-
3075595) ("The WOW") shall be as follows:
WHEREAS, the purpose of this Option is to allow The WOW to raise the finances
necessary to construct Tenant Improvements for the operation of a Science Museum
and Museum Store in the Lodi Parking Structure space owned by the City; and
WHEREAS, the proposed relationship and arrangement described herein are in
the best interests of the City, The WOW and the people of Lodi by combining the efforts
of both local government and the private sector; and
WHEREAS, The WOW's construction of the Tenant Improvements for and
operation of this facility in a City building will provide long term tangible benefits to the
citizens of Lodi by assuring them of a place to obtain education opportunities.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. GRANT OF OPTION. The City hereby grants to The WOW the exclusive right to
lease, upon the terms set forth in the Lease Agreement attached hereto as Exhibit A
("Lease"), the approximately 12,000 square feet (more or less) located in the Lodi
Parking Structure, more particularly described in the diagram attached hereto as Exhibit
B and incorporated by reference as if fully set forth herein ("Premises"). This Option
shall commence as of the date of the full execution of this Option and expire 180 -days
following its execution.
2. CONDITION OF OPTION.
It shall be an express condition precedent to the right of The WOW to exercise
this Option that The WOW shall have raised the sum of $165,000 in cash for the
purpose of constructing the Tenant Improvements called for in the Lease. The
determination of The WOW's performance of this obligation shall be made in the sole
and absolute discretion of the City Manager.
3. EXERCISE OF OPTION. This option may be only exercised in writing. The
Notice of Exercise shall set forth the commencement of the Lease.
4. TERM.
This Option will expire 180 -days following the execution thereof by the parties.
5. NOTICES.
All notices required under this Option or the Lease shall be given in writing, by
first-class mail with postage prepaid to the following addresses:
City shall be: City Manager
P.O. Box 3006
Lodi, CA 95241-1910
The WOW shall be: World of Wonders Science Museum
P.O. Box 1671
Woodbridge, CA 95258
6. FEDERAL TRANSPORTATION ADMINISTRATION REVIEW.
The parties acknowledge that the Lease is subject to review by the Federal
Transportation Administration (FTA) and must satisfy FTA requirements and be
acceptable to FTA in accordance with the FTA Master Agreement regarding the Lodi
Parking Structure.
7. CALIFORNIA LAW.
This Option shall be construed in accordance with the laws of the State of Cali -
fornia.
8. SEVERABILITY.
If any term of this Option is found to be void or invalid, such invalidity shall not
affect the remaining terms of this Option, which shall continue in full force and effect.
9. ENTIRE AGREEMENT.
This Option constitutes the entire understanding and agreement between the
parties hereto. There shall be no modifications without the written consent of both
parties. The titles contained in this Option are provided for convenience only and are not
controlling in any interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands the day and
year first hereinabove mentioned.
CITY OF LODI,
a municipal corporation
BL.AIR KING, City Manager
ATTEST:
Jennifer Perrin, Interim City Clerk
APPROVED AS TO FORM:
JANICE D. MAGDICH
Deputy City Attorney
World of Wonders Science Museum,
a California Nonprofit Corporation
By
- t!& U
SALLY SNY
President
EXHIBIT A
(Lease Agreement — World of Wonders Science Museum)
LEASE AGREEMENT
WORLD OF WONDERS SCIENCE MUSEUM
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THIS LEASE AGREEMENT, entered into this day of , 2006, by
and between the CITY OF LODI, a municipal corporation ("City"), and the World of
Wonders Science Museum, a California Nonprofit Corporation (Tax ID No. 20-3075595)
("The WOW" or "Lessee") shall be as follows:
WHEREAS, the purpose of this Agreement is to allow the construction of Tenant
Improvements for and the operation of a Science Museum and Museum Store by The
WOW in the Lodi Parking Structure space owned by the City; and
WHEREAS, the proposed relationship and arrangement described herein are in
the best interests of the City, The WOW and the people of Lodi by combining the efforts
of both local government and the private sector; and
WHEREAS, The WOW'S construction of the Tenant Improvements for and
operation of this facility in a City building will provide long term tangible benefits to the
citizens of Lodi by assuring them of a place to obtain education opportunities.
NOW, THEREFORE, BE IT AGREED AS FOLLOWS:
1. DEMISED PREMISES.
The premises demised hereunder shall constitute approximately 12,000 square
feet (more or less) located in the Lodi Parking Structure, more particularly described in
the diagram attached to the Option to Lease as Exhibit B and incorporated by reference
as if fully set forth herein ("Premises").
2. USES ALLOWED.
The WOW agrees that it will use the Science Museum constructed under the
provisions of this Lease for the citizens of Lodi, to provide place of scientific learning for
Lodi Citizens of all ages.
3. HOURS OF OPERATION.
The Science Museum and the Museum Store shall be open to the public a
minimum of thirty three (33) hours per week, at least 12 hours of which shall fall on a
weekend, and of those hours, no less than six (6) hours shall be on Sunday. As used in
this paragraph, "Open to The Public" means open to any person seeking admission to
the Science Museum or the Museum Store off the street. However, this paragraph shall
not prevent The WOW from charging a fee for admission to the Science Museum.
4. MUSEUM STORE.
The Museum Store may be open hours in addition to the minimum hours set forth
in Paragraph 3 above, but the store must be open at least the same hours as those of
the Science Museum. The Museum Store shall be operated in a professional manner
with competent retail management and the goods carried for sale in the Museum Store
shall compliment the educational objectives of the Science Museum.
5. TERM.
The term of this Lease shall be for a period of six (6) years commencing
and ending pursuant to the provisions of Government Code
Section 37380.
The WOW shall have the option to extend this lease on the same terms and
conditions set forth in this agreement for two successive five year terms, provided the
WOW
A) has complied will all obligations under this agreement and
B) provides two months written notice of its intent to exercise the option.
6. RENT.
Upon completion of the Tenant Improvements and issuance of the Certificate of
Occupancy, or 12 months from the Lease commencement date, whichever is earlier,
The WOW shall pay rent in the amount of $1,000.00 monthly (which is the equivalent of
$1.25 per square foot rent per month for the estimated 800 square foot Museum Store.)
to City.
The WOW's monthly rental payment shall increase by 2.5% per year, except if
the rate of inflation exceeds 6.5% in which case the payment shall increase by 50% the
rate of inflation.
7. TENANT IMPROVEMENTS.
a. Tenant Improvements. Tenant Improvements for The Science Museum shall
be provided for and funded by The WOW. Construction of Tenant Improvements shall
commence upon issuance of a building permit by CITY. Tenant Improvements shall be
constructed in similar form and content to The Plan attached to the Option to Lease as
Exhibit "C" and incorporated by reference herein as though fully set forth, and shall
include, but not be limited to, the following components:
i. An 800 square foot Museum Store.
ii. Public lobby and Exhibit hall.
iii. Classroom.
iv. Public restrooms.
V. Office space.
vi. All mechanical, electrical, telecommunications, and utilities
required to support the above spaces and functions.
vii. Compliance with regulations and requirements of the City of Lodi
Building Division and the Fire Marshall.
b. Security for Tenant Improvements. The WOW shall post security with City in
the sum of $165,000 in a form acceptable to the City Attorney upon the execution of this
Lease. The security will be forfeited to the City in the event The WOW fails to comply
with its Tenant Improvement obligations but will be returned in the event The WOW fully
complies with its Tenant Improvement obligations.
c. Construction Timeline. The parties anticipate that Tenant Improvements will
be completed within seven (7) months of the execution of this Lease, but in no event
shall such improvements be completed later than February 28, 2008. Failure of The
WOW to complete construction of Tenant Improvements as set forth above shall be
deemed a material breach of this Option and the Lease.
8. OWNERSHIP OF IMPROVEMENTS UPON TERMINATION OR EXPIRATION OF
LEASE.
It is agreed between the parties that upon the expiration or termination of this
Lease, the parties shall in good faith attempt to renegotiate an agreement to continue
similar uses to those specified in Paragraph 2 above. However, upon surrender,
termination or expiration of this Lease, ownership of the Tenant Improvements shall vest
in the City.
The Lease does not include dedicated parking spaces within the parking
structure, but does include the availability of parking on the same terms and conditions
as provided to the general public, with the following exceptions:
(a) Required disabled persons parking spaces may be designated on
the ground level; and
(b) Specific spaces for loading or other purposes may be approved by
the City recognizing the higher priority of transit dedicated parking
spaces.
The City also reserves the right to remove stalls from public use and to designate
stalls for specific purposes, including, but not limited transit uses.
10. USE OF FACILITIES BY CITY.
The first priority for all uses of the facility built on the Premises shall be for the
operation of The WOW's own programs; however, the City may use the facility at such
reasonable times when no other activities are scheduled by The WOW, and City shall
pay to The WOW a fee intended to be minimal, and covering only necessary costs of
operation and maintenance as determined by The WOW.
11. ABANDONMENT/CESSATION OF USE BY THE WOW.
Any cessation of use by The WOW for a continuous period of ninety (90) days or
more shall allow City, within its discretion, to operate the facility. The parties hereto may
mutually agree at any time that the City may assume operation of the facilities.
In the event of the City's declaration of abandonment or cessation of use, The
WOW can cure such default and resume operations by demonstrating that it has on
hand the projected operating cost for a twelve (12) month period. In the event of
cessation or abandonment of operations under this Lease for a period of three (3)
months, the City may deem the Lease null and void within its sole discretion.
12. MAINTENANCE OF FACILITIES.
The WOW shall be responsible for all Tenant Improvements constructed
hereunder. City shall be responsible for the maintenance and upkeep of all
improvements constructed by the City.
13. UTILITIES/MISCELLANEOUS COSTS.
The WOW shall be responsible during the term of the Lease for all utility costs,
including water, sewer, refuse, gas and electricity. The WOW shall also be responsible
for the interior maintenance of the Premises, and all janitorial and cleaning expenses
associated with the maintenance thereof.
14. DESTRUCTION OF PREMISES.
In the event that the Premises is totally destroyed by any causes whatsoever
prior to the commencement of or during the term of this Lease, this Lease shall
immediately terminate and no party shall have any rights or be under further obligation,
except for rent accrued prior to destruction. CITY shall refund to The WOW any
unearned rent. Total destruction of the Premises shall be defined as any destruction
sufficient to make the Premises no longer suitable for the conduct of business as
intended by this Lease.
In the event that the Premises is partially destroyed by any cause whatsoever,
CITY, with reasonable promptness, shall repair and rebuild same provided that it may be
repaired and rebuilt under State and Municipal laws and regulations within ninety (90)
working days, and The WOW shall pay rent during such period of repair or rebuilding in
proportion to the square footage of The Premises actually being occupied and used by
The WOW. In the event of partial destruction of the Premises, The WOW shall be
responsible for reconstruction or replacement of the Tenant Improvements identified
herein.
15. ASSIGNMENT AND SUBLETTING.
The WOW shall not assign or sublet the whole or part of the Premises.
16. ENTRY BY CITY.
CITY may enter the Premises with consent of The WOW or upon written notice to
The WOW (twenty-four (24) hours shall be deemed reasonable advance notice) for the
purposes of reasonable inspection, making repairs, alteration or additions, to show the
Premises to prospective purchasers, or mortgagees, or any other valid and reasonable
business purpose. Entry shall be made during regular business hours. In the event of
any emergency such as a fire, CITY may enter the Premises without consent or prior
notice. The WOW may re -key the locks to any or all exterior access doors with City's
consent, which shall not be unreasonably withheld.
17. INSURANCE.
Lessee is required to carry a policy of Comprehensive General Liability insurance
in compliance with all of the provisions of the "Risk Transfer Requirements For Lease or
Use of City of Lodi Facilities, attached to the Option to Lease as Exhibit "D" and
incorporated herein by reference as if fully set forth herein.
18. HOLD HARMLESS.
City and The WOW hereby agree to save, defend and hold harmless the other
for any suit or cause of action arising exclusively from the negligence or alleged
negligence of the indemnifying party, its agents, officers and employees, including
reasonable attorneys' fees.
19. TERMINATION/SURRENDER.
Lessee may at any time after completion of construction of the Tenant
Improvements under this Lease terminate or surrender such Lease with the written
consent of City upon six (6) months' written advance notice. Otherwise, Lessee shall not
vacate, abandon, terminate nor surrender the Premises at any time during the term
hereof and if Lessee shall abandon or vacate the Premises, or be dispossessed by
process of law or otherwise, all personal property belonging to Lessee left upon the
Premises shall be deemed abandoned at the option of City.
20. NO ENCUMBRANCE BY THE WOW OF THE PREMISES.
The WOW shall in no way encumber, mortgage or hypothecate nor pledge as
security for any debt all or any portion of the Premises demised hereunder nor
improvements thereon, including Tenant Improvements, except with the written consent
of City.
21. MECHANIC'S LIEN.
The WOW agrees to keep the Premises free from all liens and claims of
mechanics, laborers, material suppliers, and others for work done, and material
furnished, and Lessee shall not create, or suffer to be created, any lien or encumbrance
on said Premises.
22. NOTICES.
All notices required under this Lease shall be given in writing, by first-class mail
with postage prepaid to the following addresses:
City shall be: City Manager
P.O. Box 3006
Lodi, California 95241-1910
THE WOW shall be: World of Wonders Science Museum
P.O. Box 1671
Woodbridge, CA 95258
23. APPROVAL OF CONSTRUCTION PLANS BY CITY PRIOR TO
CONSTRUCTION OR REMODEL.
The WOW shall work cooperatively with City Management on the development of
Tenant Improvements. Prior to the commencement of construction, reconstruction, or
substantial remodeling of the Premises, The WOW will submit such plans in advance to
the City for approval. The WOW will be responsible for all applicable development fees
and permits.
24. ACCEPTANCE OF PREMISES.
The WOW has examined the Premises, knows the conditions thereof, and
accepts possession thereof in its condition.
25. WAIVER.
Failure of City to insist upon performance of any of the terms or conditions of this
Lease in any one or more instances shall in no event be construed as a waiver or a
relinquishment of its right to future performance thereof, and Lessee's obligations to
such future performance shall continue in full force and effect. The receipt by City of
rent, with the knowledge of the breach of any agreement or condition hereof, shall not be
determined to be a waiver of any such breach.
26. BANKRUPTCY. RECEIVERSHIP. AND INSOLVENCY.
If Lessee should make a general assignment for the benefit of creditors, or file a
voluntary petition in bankruptcy, or be adjudicated bankrupt or insolvent, or permit a
receiver to be appointed to take possession of a substantial portion of its assets or of the
premises, and such bankruptcy, insolvency, or receivership proceeding shall not be
dismissed within ninety (90) days, then City may, without notice or demand, terminate
this Lease and forthwith reenter and repossess the Premises, and remove all persons
There from, and under no circumstances shall this Lease be assignable or transferable
by operation of law.
27. FEDERAL TRANSPORTATION ADMINISTRATION REVIEW.
The parties acknowledge that this Lease is subject to review by the Federal
Transportation Administration (FTA) and must satisfy FTA requirements and be
acceptable to FTA in accordance with The FTA Master Agreement regarding the Lodi
Parking Structure.
28. CALIFORNIA LAW.
This Lease shall be construed in accordance with the laws of the State of Cali-
fornia.
29. SEVERABILITY.
If any term of this Lease is found to be void or invalid, such invalidity shall not
affect the remaining terms of this Lease, which shall continue in full force and effect.
30. ENTIRE AGREEMENT.
This Lease constitutes the entire understanding and agreement between the
parties hereto. There shall be no modifications without the written consent of both
parties. The titles contained in this Lease are provided for convenience only and are not
controlling in any interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands the day and
year first hereinabove mentioned.
CITY OF LODI,
a municipal corporation
BLAIR KING, City Manager
ATTEST:
Jennifer Perrin, Interim City Clerk
APPROVED AS TO FORM:
JANICE D. MAGDICH
Deputy City Attorney
World of Wonders Science Museum,
a California Nonprofit Corporation
By
SALLY SNYDE
President
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EXHIBIT D
(Insurance Requirements)
EXHIBIT D
CITY OF LODI
RISK TRANSFER REQUIREMENTS FOR LEASE OR USE OF CITY FACILITIES
Any individual party or group (hereinafter "The WOW") leasing, renting or
otherwise using City of Lodi facilities, is required to carry a policy of
Comprehensive General Liability insurance.
2. A duplicate or certificate of insurance shall be delivered to the City 30 DAYS prior
to the use of City facilities.
NOTE: The WOW agrees and stipulates that any insurance coverage provided
to the City of Lodi shall provide for a claims period following termination of
coverage which is as lease consistent with the claims period or statutes of
limitations found in the California Tort Claims Act (California Govt. Code § 810, et
seq.).
"Claims made" coverage requiring the insured's to give notice of any potential
liability during a time period shorter than that found in the Tort Claims Act shall
be unacceptable.
3. Each insurance certificate shall contain satisfactory evidence that each carrier is
required to give the City of Lodi immediate notice of the cancellation or reduction
in coverage of any policy during the effective period of the use of the City's
facilities.
4. Each insurance certificate shall state on its face or as an endorsement, the
location or and a description of the function that it is insuring.
5. If the City has not approved the insurance certificate and appropriate application
or permit prior to the commencement of any portion of the function, the City's
facilities will not be allowed to be utilized, and any contract or agreement entered
into will become null and void.
6. Provided the lease agreement or contract does not prohibit a subtenant, all
provisions of these requirements shall apply to and be construed as applying to
any subtenant of the The WOW.
7. All requirements herein provided shall appear either in the body of the insurance
policies or as endorsements and shall specifically bind the insurance carrier.
8. In each and every instance, the City of Lodi must be named as an additional
insured on the face of the insurance certificate or as an endorsement attached to
the insurance certificate. (The City of Lodi, its Elected and Appointed Boards,
Commissions, Officers, Agents and Employees, must be named the additional
insured, not Hutchins Street Square, Parks and Recreation, or another individual
or department).
9. The address of the City of Lodi must be shown along with number 8 above, (i.e.
Additional Insured, City of Lodi, its Elected and Appointed Boards, Commissions,
Officers, Agents and Employees, 221 W. Pine Street, Lodi, Ca. 95240) This
must be the street address NOT the post office box.
10. In addition to the Additional Names Insured Endorsement on The WOW's policy
of insurance, said insurance policy shall be endorsed to include the following
language or reasonable facsimile:
"Such insurance as is afforded by the endorsement for the Additional Insured's
shall apply as primary insurance. Any other insurance maintained by the City of
Lodi or its officers and employees shall be excess only and not contributing with
the coinsurance afforded by this endorsement."
11. The combined single limits for bodily injury and property damage shall not be
less than $1,000,000 each occurrence. If alcohol is to be consumed or sold at
the The WOW's event, then liquor liability coverage must be provided.
12. The Policy effective date and expiration date must coincide with and span the
date(s) of the event being insured.
13. If the limits of coverage are not the amounts specified in Section 10 and 11
above and/or if the City is not named as an additional insured on the insurance
certificate, not in conformance with the requirements of paragraph 2 above, the
City will not accept the insurance certificate, and a corrected certificate must be
furnished to the City prior to any use of City facilities.
14. If a corrected insurance certificate and appropriate application or permit is not
received by the City of Lodi prior to the use of City facilities, the City will not allow
the facilities to be used, and any agreement or contract entered into will become
null and void.
RESOLUTION NO. 2006-150
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING
THE CITY MANAGER TO EXECUTE AGREEMENT WITH THE
WORLD OF WONDERS SCIENCE MUSEUM FOR OPTION TO
LEASE AND SUBSEQUENT LEASE OF RETAIL SPACE IN THE
LODI STATION PARKING STRUCTURE
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to execute Lease Option Agreement and subsequent Lease
Agreement between City of Lodi and World of Wonders (WOW) Science Museum, for
retail space located in the Lodi Station Parking Structure; and
BE IT FURTHER RESOLVED that the WOW Science Museum shall pay a
monthly rental fee to the City in the amount of $1,000 per month, which is the equivalent
of $1.25 per square foot per month for the estimated 800 square foot museum store;
and
BE IT FURTHER RESOLVED that the WOW Science Museum's monthly rental
payment shall increase by 2.5% per year, except if the rate of inflation exceeds 6.5%, in
which case the payment shall increase by 50% of the rate of inflation; and
BE IT FURTHER RESOLVED that pursuant to Federal Transit Administration
regulations, rent revenues will only benefit the City Transit Fund and not be incorporated
into the City of Lodi General Fund.
Dated: August 2, 2006
I hereby certify that Resolution No. 2006-150 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held August 2, 2006, by the
following vote:
AYES: COUNCIL MEMBERS — Beckman, Hansen, Johnson, Mounce,
and Mayor Hitchcock
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None '
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