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HomeMy WebLinkAboutAgenda Report - January 19, 2022 C-10AGENDA ITEM o • CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Adopt Resolution Authorizing City Manager to Execute a Lease Agreement with Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin for 100 East Pine Street MEETING DATE: January 19, 2022 PREPARED BY: Public Works Director RECOMMENDED ACTION: Adopt resolution authorizing City Manager to execute lease agreement with Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin for 100 East Pine Street. BACKGROUND INFORMATION: On May 28, 2002, the City entered into a lease agreement with Lodi Adopt -A -Child for the property located at 100 East Pine Street. The annual rent was established at $1.00 per year with provision that Lodi Adopt -A -Child would pay for various building improvements. Since the original lease was approved, it is estimated that Lodi Adopt -A -Child invested over $250,000 in building improvements. At the August 5, 2009 Council meeting, Council authorized the extension of this lease through May 28, 2020. The lease agreement (since expired), is currently on a month-to-month basis. During the May 20, 2020 Council meeting, staff received direction from City Council to establish an arrangement that would suit the needs of both Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin since both non-profit organizations expressed interest in occupying the 100 E. Pine Street location. City staff met with both Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin and was successful in establishing the terms of a co -lessee arrangement in which both organizations could successfully utilize the building. The term of the lease agreement will be for 10 years and both co -lessees agree to pay rent at a fair market price. The rental price of $1,140 per month is based on approximately 912 square feet of daily operational space at $1.25 per square foot. This per square foot price is consistent with other lease agreements of City owned properties. Staff recommends Council adopt a resolution authorizing the City Manager to execute a Lease Agreement with Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin for 100 East Pine Street. FISCAL IMPACT: The proposed lease will provide annual rental revenue to the General Fund in the amount of $13,680. The current lease generated $1.00 per year. FUNDING AVAILABLE: Not applicable. U'___� Charles E. Swimley, Jr. Public Works Director CES/RAY/cd APPROVED: Steve Schwabauer Stephen Schwabauer, City Manager \\cvcfilv02\pubwks$\WP\COUNCIL\2022\CC_ 100 E Pine Lease.doc 12/20/2021 LEASE AGREEMENT FOR USE OF CITY PROPERTY LOCATED AT 100 EAST PINE STREET, LODI, CALIFORNIA BY LODI ADOPT -A -CHILD, A CALIFORNIA NON-PROFIT 501(c)(3) COMMUNITY-BASED ORGANIZATION AND COMMUNITY PARTNERSHIP FOR FAMILIES OF SAN JOAQUIN, A CALIFORNIA NON-PROFIT 501(c)3 COMMUNITY-BASED ORGANIZATION THIS LEASE AGREEMENT, hereinafter "Agreement", is made and entered into this day of 2021, by and between the CITY OF LODI, a municipal corporation, hereinafter "Owner", and LODI ADOPT -A -CHILD FOUNDATION, a Calilfornia non-profit 501(c)(3) community- based organization and COMMUNITY PARTNERSHIP FOR FAMILIES OF SAN JOAQUIN, a California non-profit 501(c)3 community-based organization, hereinafter collectively "Co -Lessees." 1. PROPERTY: That for and in consideration of the rents to be paid, and the covenants to be faithfully kept and performed by said Co -Lessees, said Co -Lessees do hereby lease from Owner, the property and the improvements located at 100 East Pine Street, Lodi, California for the combined operation of Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin, more particularly described as follows: Building Location: 100 East Pine Street, Lodi, California, recorded in the Recorders Office, County of San Joaquin, State of California as Lots 1, 2, and 3 in Block 27 City of Lodi, according to the official Map thereof filed in Volume 2 of Maps, Page 12, San Joaquin County Records. Building consists of 6,849 square feet with approximately 5,259 square feet of space on the first floor, and 1,480 square feet of basement space, plus 2,184 square feet of parking space, located at the southeast corner of Pine and Main Streets. 2. OPERATION: This Agreement is expressly conditioned on the continued combined charitable operations of Lodi Adopt -A -Child's and Community Partnership for Families of San Joaquin. Should Owner have any questions as to the level of charitable operations by one or both of the Co -Lessees, after reviewing the State of California's Department of Justice internet web address and/or the Co -Lessees internet web addresses, Owner shall put forth the concerns in writing to be reviewed at the next regularly scheduled Board of Directors meeting for each Co -Lessee, which shall answer the concerns to the satisfaction of Owner in writing within forty-five (45) days of that Board of Directors meeting. In the event that such operations are then determined not to be at a level acceptable to the Owner, City may immediately terminate this Agreement with thirty (30) days written notice and without further obligation to Co -Lessees. 3. TERM: The term of this Agreement shall be for a period of ten (10) years, commencing upon the date first written above, and terminating upon its tenth anniversary. This Agreement may be extended by mutual agreement, and with City Council approval, for an additional term to be determined in the sole discretion of City Council. 4, RENT: In consideration of this Agreement, Co -Lessees agree to pay to Owner as rent for the demised premises one thousand one hundred forty dollars ($1,140.00) per month for the entire term of this Agreement. Rental price based on approximately 912 square feet of operational space at $1.25 per square foot. Rent distribution shall be based on approximate annual usage of operational space, whereby the Community Partnership for Families of San Joaquin is responsible for 70% of the monthly lease payment and the Lodi Adopt -a -Child is responsible for Lease Agreement AdoptAChild_Partnership for Families 1 12/20/2021 30% of the monthly lease payment. Rent payments shall be directed to theCity of Lodi, Attn: Public Works Department, P. 0. Box 3006 Lodi California 95241-1910, for processing and shall be paid without prior notice or demand. Operational space is defined as space specifically used for conducting the primary function(s) of Co -Lessees and consists of but is not limited to office and administrative functions. 5. USE: The property shall be used solely for the purpose of carrying on the business of the Lodi Adopt -A -Child and the Community Partnership for Families of San Joaquin, in joint fashion. Use of the property, or any portion thereof, for any other program, or by another person or entity must be approved in writing by the City Manager, such approval may withhold in the sole and absolute discretion of the City Manager. Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin will submit a list of the expected users for each upcoming year, but shall not be limited to only those organizations listed if prior permission is received from the City Manager. Uses other than occasional must be approved by the City Manager. 6. ORDINANCES AND STATUTES: It is further understood and agreed by Co -Lessees that Cc - Lessees must compiy with all present and Future laws, ordinances, rules, and regulations promulgated by any governmental authority of competent jurisdiction regulating this type of business during the tenancy and any extension thereof. Co -Lessees shall use and occupy said premises in a quiet, lawful, and orderly manner. 7. REMEDIES ON DEFAULT: Should Co -Lessees fail to pay any part of the rents herein specified at the times or in the manner herein provided, or fail to comply with or perform any other of the terms and provisions of this Agreement on the part of Co -Lessees to be performed or complied with, then, and in that event, Owner may exercise any and all remedies provided by law or equity by reason of such default, including the right, at Owner's option, of terminating this Agreement. In any of such events, Owner shall be entitled to the immediate possession of said premises, and, at its option, may enter into and upon said premises without notice to Lessee and exclude Lessee and all persons and all property therefrom, and by process of law or otherwise take and resume possession of said premises. Each and all of Owner's remedies shall be construed as cumulative and no one of them as exclusive of the other or as exclusive of any remedy provided by law or equity. 8. RELATIONSHIP OF PARTIES: It is understood and agreed that the relationship between the parties is that of landlord and tenant and not as a party or agent of Owner. If required by any governmental authority of competent jurisdiction, Co -Lessees shall each carry Worker's Compensation Insurance. Co -Lessees shall observe all laws and regulations applicable to employers in the State of California. 9. BUILDING MAINTENANCE: Except for repairs necessitated by acts of God, Co -Lessees are fully responsible for all repairs and maintenance costs associated with the property. The Co -Lessees are responsible to see that all building systems are kept in good working condition and properly maintained. The exterior of the building, adjacent sidewalks, and on-site parking lot must be kept clean, neat, and graffiti -free. All landscaped areas must be properly maintained, and any exterior signage must be kept in good repair and working order. Owner shall be responsible for all structural maintenance and repair, except that necessitated by the acts of Co -Lessees. All pest control work shall be performed at the expense of Co -Lessees. 10. TENANT IMPROVEMENTS: All tenant improvements must be approved by Owner prior to those improvements being made, and must pass all governing agency permitting and licensing requirements. With the exception of any and all building permit fees, which shall be waived by Owner, Co -Lessees shall perform, at their sole cost and expense, all improvements set forth in Lease Agreement AdoptAChild_Partnership for Families 2 12/20/2021 Exhibit "A". All such improvements, less any unattached furniture and fixtures, shall become the property of the Owner at the conclusion of this Agreement. All material containing asbestos will be removed at the Owner's expense, and will be coordinated with Co -Lessees to be performed within forty-five (45) days of the date of this Agreement. Co -Lessees shall repair and maintain the parking lot on the premises in compliance with existing laws and regulations. 11. TRADE FIXTURES: Any and all improvements made to the Property during the term hereof shall belong to the Owner, except trade fixtures of the Co -Lessees, if any. Co -Lessees man, upon termination hereof, remove all trade fixtures, but shall repair or pay Owner for all repairs caused by damage to the Property occasioned by the removal of such trade fixtures. 12. SIGNS: Co -Lessees shall not construct any projecting sign or awning without prior written consent of Owner which consent shall not be unreasonably withheld. It is agreed that Co - Lessees will post "Hours of Operation" signs on the doors of the Property. All signs and locations of signs must be approved by the City of Lodi Public Works Director. All costs associated with the purchase, installation, and maintenance of signs shall be the responsibility of Co -Lessees. 13. ROOF REPAIR AND MAINTENANCE: Owner will replace the roof at its expense, when necessary. Owner shall further maintain the roof at its expense during the term of this Agreement. 14. ABANDONMENT OF PROPERTY: Neither Co -Lessee shall vacate or abandon the property at any time during the term hereof, and if either Co -Lessee shall abandon or vacate the Property, or be dispossessed by process of law, or otherwise, any personal property belonging to the abandoning Co -Lessee left upon the property shall be deemed to be abandoned, at the option of Owner. 15. DESTRUCTION OF THE PROPERTY: In the event of a partial destruction of the property during the term hereof, from any cause, Owner shall forthwith repair the same, provided that such repairs can be made within sixty (60) days under existing governmental laws and regulations, but such partial destruction shall not terminate this Agreement, except that Co -Lessees shall be entitled to a proportionate reduction of rent while such repairs are being made, based upon the extent to which the making of such repairs shall interfere with the business of Co -Lessees on the property. If such repairs cannot be made within sixty (60) days, Owner, at its option, may make the same within a reasonable time, this Agreement continuing in effect with the rent proportionately abated as aforesaid, and in the event that Owner shall not elect to make such repairs which cannot be made within sixty (60) days, this Agreement may be terminated at the option of either City of Co -Lessees. In the event that the building in which the property may be situated is destroyed to an extent of not less than one-third of the replacement costs thereof, Owner may elect to terminate this Agreement whether the property be injured or not. A total destruction of the building located on the property shall terminate this Agreement. In the event of any dispute between Owner and either Co -Lessee with respect to the provisions this Paragraph 15, the matter shall be settled by arbitration in such a manner as the parties may agree upon, or if they cannot agree, in accordance with the rules of the American Arbitration Association. 16. ASSIGNMENT AND SUBLETTING: Co -Lessees shall not assign, encumber, convey, or otherwise hypothecate this Agreement, in whole or any part, without first obtaining the written consent of Owner, which Owner may withhold in its sole and absolute discretion. Any assignment or subletting without consent of Owner shall be void and, at the option of Owner, may terminate the Agreement. 17. ENTRY BY OWNER/INSPECTION OF PREMISES: With not less than twenty-four (24) hours written notice to any member of the Board of Directors for either Co -Lessee, Owner shall have Lease Agreement AdoptAChild_Partnership for Families 3 12/20/2021 the right at all reasonable times during the term of this Agreement to enter said property for the purpose of examining or inspecting the same, including all improvements thereon. 18. TERMINATION OF AGREEMENT: This Agreement may be terminated at any time, with or without cause, by Co -Lessees upon thirty (30) days written notice. This Agreement may also be terminated by Owner on the terms set forth in Paragraph 2. Upon termination of this Agreement, Co -Lessees agree to quit and surrender the property in a peaceable manner and Owner shall have the right to remove Co -Lessees and all others occupying through or under this Agreement. 19. SURRENDER OF PREMISES: Co -Lessees shall, at the termination of this Agreement, or upon the earlier termination hereof for any reason, or upon the extension of the term herein set forth, quit and surrender said property in good order, condition, and repair, reasonable wear and tear and acts of God or fire excepted. 20. FEES: With the exception of any and all building permit fees, which shall be waived by the Owner, Co -Lessees shall pay all license fees, or other fees or taxes, or possessory interest taxes levied by any governmental agency which may be imposed upon the business of Co -Lessees or its sub Lessee(s), if any, conducted upon the property. To the extent that Lessee is exempt from any of the referenced fees or taxes, it is the obligation of the Co -Lessees to secure the exemption. If any of the above charges are assessed against the property, and because of said assessment the Owner pays the same, which Owner will have the right to do regardless of the validity of any such levy, the Co -Lessees, upon demand, will repay to Owner all taxes and other assessments so levied against Owner which are due by the Co -Lessees. 21. UTILITIES/MISCELLANEOUS COSTS: Co -Lessees shall be responsible during the term of this Agreement or any extension thereof for all utility costs, including water, sewer, refuse, gas and electricity used upon said property during the term hereof. Co -Lessees to be responsible for all other costs associated with running the facility, including but not limited to program supplies, transportation, food service, licensing, telephone, security systems, cable television, cleaning and janitorial expenses. 22. MECHANIC'S LIEN: Co -Lessees agrees to keep said property 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 property. 23. INDEMNITY/PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE: Co -Lessees agree to indemnify and save harmless Owner, its officers, agents, and employees from and against all claims of whatever nature arising from any act, omission, or negligence of Co -Lessees or Co - Lessee's contractors, licensees, agents, servants, or employees, or arising from any accident, injury, or damage whatsoever caused any person, or to the property of any person, occurring during the term thereof, in or about the demised premises where such accident, damage, or injury, including death, results, or is claimed to have resulted, from any act or omission on the part of Co -Lessee or Co -Lessee's agents or employees. This indemnity and hold harmless agreement shall include indemnity against all costs and expenses, including attorney's fees incurred in or in connection with any such claim or proceeding brought thereon and the defense thereof. Co -Lessees agree to maintain in full force during the term hereof a policy of public liability insurance under which Lessee is named as insured, and containing an additional named insured endorsement naming Owner, its officers, agents, and employees as an additional insured, and under which the insurer agrees to indemnify and hold Co -Lessees and Owner, its officers, agents, and employees harmless from and against all costs, expenses, and liability arising out of, or based Lease Agreement AdoptAChild_Partnership for Families 4 12/20/2021 upon, any and all property damage, or damages for personal injuries, including death, sustained in accidents occurring in or about the premises, where such accident, damage, or injury, including death, results, or is claimed to have resulted, from any act or omission on the part of Co -Lessee or Co -Lessee's agents or employees. The minimum limits of such insurance shall be $1,000,000.00 (One Million Dollars). In addition to the additional named insured endorsement on Co - Lessee's policy of insurance, said insurance policy shall be endorsed to include the following language: "Insurance as is afforded by the endorsement for additional insureds shall apply as primary insurance. Any other insurance maintained by the City of Lodi or its officers, agents, and employees shall be excess only and not contributing with the coinsurance afforded by this endorsement." To the maximum extent permitted by insurance policies which may be owned by Owner or Co -Lessees, Owner and Co -Lessees, for the benefit of each other, waive any and all rights of subrogation which might otherwise exist. A duplicate or certificate of said public liability and property damage insurance policy containing the above -stated required endorsements shall be delivered to Owner within ten (10) days after the issuance and each renewal of said policy. This paragraph, and all other provisions of this Agreement, shall apply and be construed as applying to any sub -Lessee of this Agreement. Any cancellation of insurance, or notice of intent thereof, must be forwarded immediately to the City of Lodi, Attn: Risk Manager, P. 0. Box 3006, Lodi, CA 95241. 24. BANKRUPTCY, RECEIVERSHIP, AND INSOLVENCY: If either Co -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 Owner may, without notice or demand, terminate this Agreement and forthwith reenter and repossess the properties, and remove all persons therefrom, and under no circumstances shall this Agreement be assignable or transferable by operation of law. 25. ATTORNEY'S FEES: In each suit brought for the recovery of any rent due hereunder, or for the recovery of the possession of said demised premises, or for the breach, or to restrain the breach of any of the terms, conditions, or covenants of this Agreement, the prevailing party shall be entitled to a reasonable sum as and for attorney's fees and costs therein, the amount of which shall be determined by the court in such suit and added to and become a part of the judgment therein. 26. WAIVER: Failure of Owner to insist upon performance of any of the terms or conditions of this Agreement 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 Co -Lessees' obligations to such future performance shall continue in full force and effect. The receipt by Owner 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. 27. NOTICES: Any notice which either party may or is required to give, shall be given personally or by mailing the same, postage prepaid, to Co -Lessees at the premises, or Owner at the address shown below, or at such other places as may be designated by the parties from time to time as provided herein. Lease Agreement AdoptAChild_Partnership for Families 5 12/20/2021 OWNER City of Lodi P.O. Box 3006 Lodi, CA 95241 Co -Lessees 28. ACCEPTANCE OF PREMISES: Co -Lessees has examined the property and the improvements thereon, and knows the conditions thereof, and accept possession thereof in their current condition. 29. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between Co -Lessees and Owner, and no representation or agreement, unless expressed herein, shall be binding on wither Co -Lessees or Owner. IN WITNESS WHEREOF, Owner and Lessee have executed this Agreement on the date and year first above written. OWNER: CITY OF LODI, a municipal corporation sy STEPHEN SCHWABAUER, City Manager Attest: JENNIFER CUSMIR, City Clerk Approved as to Form: JANICE MAGDICH, City Attorney Lease Agreement AdoptAChild_Partnership for Families 6 CO-LESSES: LODI ADOPT -A -CHILD FOUNDATION, a nonprofit 501(c)3 community-based organization LI► CRAIG TROXCLAIR, President COMMUNITY PARTNERSHIP FOR FAMILIES OF SAN JOAQUIN, a California nonprofit 501(c)3 community-based organization 0 MEREDITH BAKER, Executive Director 12/20/2021 RESOLUTION NO. 2022-20 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT WITH LODI ADOPT -A -CHILD AND COMMUNITY PARTNERSHIP FOR FAMILIES OF SAN JOAQUIN FOR 100 EAST PINE STREET WHEREAS, on May 28, 2002, the City entered into a lease agreement with Lodi Adopt - A -Child for the property located at 100 East Pine Street; and WHEREAS, the annual rent was established at $1.00 per year with provision that Lodi Adopt -A -Child would pay for various building improvements and it is estimated that Lodi Adopt - A -Child invested over $250,000 in building improvements; and WHEREAS, on August 5, 2009, Council authorized the extension of this lease through May 28, 2020 and is currently on a month-to-month basis; and WHEREAS, City staff met with both Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin to discuss a co -lease agreement with a term of 10 years and both co - lessees agree to pay rent at a fair market price of $1,140, based on approximately 912 square feet of daily operational space at $1.25 per square foot; and WHEREAS, staff recommends authorizing the City Manager to execute a Lease Agreement with Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin for 100 East Pine Street. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize the City Manager to execute a Lease Agreement with Lodi Adopt -A -Child and Community Partnership for Families of San Joaquin for 100 East Pine Street; and BE IT FURTHER RESOLVED, pursuant to Section 6.3q of the City Council Protocol Manual (adopted 11/6/19, Resolution No. 2019-223), the City Attorney is hereby authorized to make minor revisions to the above -referenced document(s) that do not alter the compensation or term, and to make clerical corrections as necessary. Dated: January 19, 2022 I hereby certify that Resolution No. 2022-20 was passed and adopted by the City Council of the City of Lodi in a regular meeting held January 19, 2022 by the following vote: AYES: COUNCIL MEMBERS — Hothi, Khan, Kuehne, Nakanishi, and Mayor Chandler NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS — None [ 7/! PAMELA M. FARRIS Assistant City Clerk 2022-20