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HomeMy WebLinkAboutPalomar Airport Business Park; 1986-04-30;.' e 0 LEASE AGREEMENT CITY OF CARLSBAD GOVERNMENT OFFICES THIS LEASE AGREEMENT, made and entered into this / c day 1986, by and between PALOMAR AIRPORT BUSINESS PAF - ~ -' hereinafter referred to as "Lessor" and the CITY OF CARLSBAD, hereinafter referred to as 'Tity", whereby the parties hereto agree as follows: WITNESSETH: 1. ADMINISTRATION. This Lease Agreement (hereinafter referred to as "Lease") shall be administered on behalf of City by the City Manager, City 01 Carlsbad, hereinafter ref erred to as "City T s Lease Administr ator", and on bet of Lessor by Bernard W. Gilmore, Vice President. 2. DESCRIPTION. Lessor hereby leases to City that real property consisting of Building 144 of approximately 22,627 square feet of office spa( known as 2075 Las Palmas Drive, Carlsbad, California, 92008, described as Lo1 of Parcel Map 10061, as delineated on Exhibit "A", attached hereto and by th reference made a part hereof. Said real property (hereinafter referred to a: *'Demised Premises") is leased on a modified gross basis in accordance with tl terms and conditions hereinafter set forth. 3. TERM. This Lease Agreement is effective on the date first above - written. The term of this Lease shall commence upon the date of acceptance ( the Demised Premises by City. Said date shall be as specified in the letter acceptance issued by the City to the Lessor. terminate 48 months from the date of acceptance. The term of this Lease shall L 0 8 The date of acceptance of the Demised Premises by City's Lease Administr, whose acceptance shall not be unreasonably withheld, shall follow notice to ( from Lessor that the Demised Premises are approved for occupancy by the City Carlsbad, Building Department. Provided, however, if Lessor cannot deliver said facility in completed condition ready for occupancy within 120 days frm the date of execution her1 by City, City may terminate this Lease at City's option without any liability Lessor. Delays caused by events over hich Lessor shall have no control, including but not limited to acts of God, strikes or natural disaster, (but r including financial inability, or acts or omissions of Lessor's agents or contractors), shall not be included in said 120 day period. City shall have the option to extend this Lease upon expiration thereof 1 additional one (1) year periods up to a total of six (6) years upon the same terms and conditions as stated herein. The option may be executed by City bj giving written notice of exercise to Lessor at least sixty (60) days in advarl of the normal expiration of this Lease or any succeeding extension thereof. 4. EARLY TERMINATION. This Lease may be terminated by City at its sole option at any time after twelve (12) months from date of acceptance by first giving to Lessor no less than sixty (60) days prior written notice. event this Lease is terminated early by City, then City shall reimburse Lesso the sum equivalent to one-third (113) of the remaining monthly rent payments described in Section 6 of this agreement including any unamortized costs of tenant improvements. In the 5. HOLDING OVER. Any holding over by City after the expiration of the term of this Lease shall be construed to be a tenancy from month to month at monthly rental and on the terms and conditions specified herein so far as the -2 - 0 a same may be applicable. City to remove its equipment and fixtures. Such holding over shall include any time required bq 6. RENT. The base rent reserved for the first four (4) years of the te - of this Lease shall be the sum of Nineteen Thousand Five Hundred Seventy-Two Dollars ($19,572.00) per month. Rent shall be payable in arrears on the firs day of the month following the month in which rental was earned during the te If the first day of the term shall not be the first day of the month, the rental for the portion of the term occurring in the first and last calendar months of the term shall be appropriately prorated. Accrual of rent shall commence upon the date of acceptance of the Demised Premises by City. Installments of rent shall be paid by depositing City warrants in facilit of United States Postal Service addressed to the office of Lessor as stated j the "NOTICE" clause below. 7. TENANT IM,PROVEMENTS. Lessor shall furnish to the City detailed plar and specifications of desired tenant improvements within thirty (30) days of execution of this agreement. Lessor shall secure a minimum of three (3) writ bids from qualified independent contractors (hereinafter referred to as "Contractor") to accomplish the tenant improvements in accordance with the approved plans and specifications. City reserves the right to review, add, delete, modify, and otherwise approve the submitted bids prior to Lessor beginning the installation of the tenant improvements. City warrants that approval will not be unreasonably withheld. Lessor shall direct installation of the tenant improvements dilligently, a professional manner, and in accordance with approved plans and specificatic Lessor shall deliver the demised premises in completed condition ready for occupancy within ninety (90) days from the date of receipt of City's plans ar specific at ions for ten ant im pr ov eme nt s . -3- e 0 8. PAYMENT FOR TENANT -IMPROVEMENTS. Lessor agrees to construct tenant improvements required by the City for the use of the leased premises. A tent improvement allowance of $15.00 per square foot is included in the base rent described by Section 6 of this agreement. Following installation of the ten; improvements, the base rent payable monthly by City to Lessor shall be adjust at the rate of $0.0263 per square foot per month of leased premises for each dollar greater than or less than the aforementioned $15.00 per square foot credit. The final cost of tenant improvements following installation shall be limited to the sum equivalent to the total amount of payments to the tenant improvements contractor including all progress payments and retentions. Citj shall not be responsible for Lessor's incidental expenses including but not limited to legal fees, bonding and insurance requirements, contract administration, travel and per-diem expenses, and other related costs. 9. COST OF LIVING AD3USTMENT. Should City elect to exercise the optior extend this Lease as described in Section 3 of this agreement, the monthly bt rent provided for in Section 6 of this agreement shall be adjusted to reflect any increase or decrease in the purchasing power of the dollar. Beginning wj the first month and ending with the twelfth month for each one (1) year extension of this Lease, the adjustment in the base rent shall be the averagc monthly consumer price index as herein defined for the first full calendar quarter immediately preceding the commencement of the term of this Lease in comparison to the last full calendar quarter of this Lease or extension thert The consumer price index which shall be used as the source for such index numbers, shall be that published by the U.S. Department of Labor, Bureau of Labor Statistics, "Consumer Price Index for all Urban Consumers", for the Sal Diego Metropolitan Area (1967=100). In the event that indexes are not publi: -4- 0 0 for the San Diego area, then another comparable index or source of such information generally recognized as authoritative shall be substituted by agreement of the parties. If the parties should not agree, such source of infomration shall be determined by arbitration pursuant to the provisions of California Code of Civil Procedure. Notwithstanding the above cost of living formula, the adjustment for each one (1) year extension of this Lease in no event shall be less than three (3) percent nor more than five (5) percent in any twelve (12) month period. IO. PURCHASE OPTION. Lessor warrants that it holds legal and equitable title to the Demised Premises. Lessor offers an option to City to purchase t Qemised Premises for the sum of One Million Three Hundred Fifty Thousand Doll ($1,350,000.00) plus any unamortized costs of tenant improvements as describe in Section 8 of this agreement if the option is exercised during the first ye of this agreement. If the option is exercised during the second year of this agreement, the purchase price shall be One Million Four Hundred Sixty Thousanl Dollars ($1,460,000.00). Title to the Demised Premises offered by Lessor to City shall be free of all liens, encumbances, obligations, and restrictions o any kind. Said option shall be open and available to City for a period of tw (2) years following the date of acceptance of the Demised Premises by City as described in Section 3 of this agreement. Lessor agrees not to revoke or otherwise alter the terms and conditions of this offer during the course of ti option period. City may exercise this option by notifying Lessor in writing l any time prior to the expiration of the option. All incidental costs related to the purchase of the Demised Premises by C. during the option period including but not limited to escrow fees, brokerage commissions, insurance fees, guarantees and other forms of security, and all - 5- 0 0 other expenses related to the transaction shall be the sole responsibility of the Lessor. of this agreement. This lease will terminate upon close of sale except for Section 11. RE-PURCHASE' OPTION. Lessor offers an option to City to re-purchase Demised Premises for the sum of One Million Three Hundred Fifty Thousand Doll ($1,350,000.00) if City elects to exercise its purchase option during the fir year of this agreement as described in Section 10 of this agreement. Said re purchase option shall be open and available to City for a period of four (4) years following the close of escrow of City's purchase of the Demised Premise from Lessor. Lessor agrees not to revoke or otherwise alter the terms and conditions of this offer during the course of the option period. City may exercise this re-purchase option by giving Lessor notice in writing as hereinafter provided at anytime prior to the expiration of the option. The City shall give Lessor one hundred eighty (180) days notice of the City's intention to exercise the option to have the Lessor re-purchase the Demised Premises. During the one hundred eighty (180) day notice period, CiQ and Lessor agree to jointly market the Demised Premises through a third party jointly selected by City and Lessor. If during this notice period, the Demisc Premises is sold for a sum greater than One Million Three Hundred Fifty Thousi Dollars ($1,350,000.00) the City and Lessor shall divide equally any sales proceeds, less marketing and related incidental closing costs, in excess of Or Million Three Hundred Fifty Thousand Dollars ($1,350,000.00). All incidental costs related to the re-purchase of the Demised Premises bj lessor during the option period including but not limited to escrow fees, brokerage commissions, insurance fees, guarantees and other forms of security, and all other expenses related to the transaction shall be the sole responsibility of the City. -6 - a 0 12. DEVELOPMENT OF PARKING FACILITIES WITHIN UTILITY EASEMENT. A utili easement exists across the southern portion of the property occupied by the Demised Premises as indicated in attached Exhibit "A1'. City to develop additional tenant parking facilities within and around said utility easement. It is understood by the parties to this agreement that al: costs related to the development of the aforementioned tenant parking facilil shall be the sole responsibility of City. Lessor agrees to all 13. USE. The Demised Premises shall be used for office space for City': Community Development Department, but City reserves the right to use the Dem. Premises for any permitted use. - 14. UTILITIES. City shall pay for all utilities necessary for the use 2 enjoyment by City of the Demised Premjses, except water and sewer, which shal be paid for by Lessor. 15. 3ANITORIAL SERVICES AND TRASH REMOVAL. City shall furnish at its sc expense all janitorial and trash removal services which may be requried by it occupancy and use of the Demised Premises. Such services shall be provided a the level necessary to maintain the Demised Premises in a clean and orderly condition. 16. REPAIRS TO MAINTENANCE. Subject to the provisions of the DAMAGE OR DESTRUCTION clause hereof, and except for damage caused by any negligent or intentional. act or mission of City, its agents, employees, or invitees, Less( at Lessor's expense, shall keep the entire interior and exterior of the Demisc Premises in good order, in a clean, healthful and wholesome condition and repair, including any required eradication of pests and trash removal related exterior building and landscape maintenance. Lessor shall make repairs requii under this clause within a reasonable time after receipt of written notice of the need for such repairs. City agrees by taking possession of the Demised - 7- 0 0 Premises as herein set forth that such Demised Premises are then in a tenatak and good condition and that City will take good care of the Demised Premises the same will not be altered, repaired or changed without the written conseni Lessor. 17. NONPERFORMANCE OF SERVICES BY LESSOR. If Lessor fails to provide satisfactory repair and/or maintenance services to the Demised Premises as hereinabove set forth, City may notify Lessor in writing; and if Lessor does instigate measures to provide satisfactory service and to remedy the unsatisfactory conditions within five (5) working days after such notice has been mailed or delivered by City, City may provide the utilities, trash remov landscape maintenance, repair and/or maintenance services necessary to remedy the unsatisfactory condition and assure satisfactory service, or have others so, and abate an amount equal to the cost thereof from the rent thereafter payable. 18. BUILDING AND SAFETY REQUIREMENTS. During the full term of this Leas! Lessor agrees to maintain the Demised Premises in compliance with all applical building codes, statutes, and orders as they are applicable on the date of th Lease, and as they may be subsequently amended. Lessor further agrees to maintain the Demised Premises as a "safe place o employment", as the term is used in the California Occupational Safety and Health Act, where the provisions of such Acts are applicable on the date of tj Lease. Test procedures for fire extinguishing systems as set forth in Appendj G of the Uniform Fire Code (1976) shall be the responsibility of Lessor. In the event Lessor neglects, fails or refuses to maintain said Demised Premises as aforesaid, City may, notwithstanding any other termination pr ov isions contained herein : A. Terminate this Lease; or -8- 0 a B. At City's sole option, cure any such default by performance of , act, including payment of money, and subtract the cost thereof plus reasonab: administrative costs from the rent. Conditions caused solely by City and not subject to the control of Lessoi are excluded from this provision. 19. INSTALLATION AND ALTERATION. City may install any and all fixtures improvements necessary or desirable for City's use of the Demised Premises fc the above described purposes but shall make no permanent alterations in, or additions to, said Demised Premises without the written consent of Lessor, wt consent shall not be unreasonably withheld. Such fixtures or equipment installed by City shall remain the property of City and at the option of Citj may be removed at or before termination of this Lease or extention thereof 01 may be abandoned to Lessor and any damage to the Demised Premises occasioned such removal shall be repaired by City upon request by Lessor within thirty ( days of the termination of this Lease or any extension thereof. expiration of this Lease or the sooner termination thereof as herein provided except in the event of destruction of the property as provided for in the DAM OR DESTRUCTION clause hereof, City shall deliver possession of the Demised Premises to Lessor in the same condition it enjoyed at the beginning of this Lease, or as altered, ordinary wear and tear and damage by the elements excepted. Upon the 20. DAMAGE OR DESTRUCTION. In the event that the Demised Premises shoul be partially damaged by fire or any other cause during the term of this Lease extension thereof, other than through the fault or negligence of City, repair shall be made by Lessor, at its sole expense, and with all reasonable dispatc' and City shall be allowed a reduction of rent in proportion to the ratio of t damaged area to the entire Demised Premises. Such reduction of rent shall -9- 0 e continue during the time required for Lessor to make such repairs. If, in tl opinion of City's Lease Administrator, City can use and occupy the Demised Premises without substantial inconvenience, there shall be no reduction of r( In the event the damage amounts to the substantial destruction of the Demisec Premises or cannot be repaired in ninety (YO) days, this Lease may be termin by either party at its option by giving written notice of intention to the ot party within thirty (30) days following said destruction; if this Lease is nc so terminated, City shall not be liable for any rent until repairs and reconstruction have been made by Lessor, subject to the approval of City's LC Administrator, so that the Demised Premises are again ready for occupancy. 21. SIGNS. City may erect any signs necessary to identify City's occup; of the Demised Premises during the term hereunder subject to approval of Less Signs shall be removed by City upon termination of this Lease after receipt b City of a written request by Lessor. In the event Lessor does not request removal of signs within thirty (30) days of termination of this Lease, City shall be under no obligation to remove said signs. I___ 22. QUIET POSSESSION. Lessor for itself, its heirs, devises, successors assigns, convenants and agrees that City, upon payment of the rental reserved and the compliance with all the terms and conditions of this Lease may lawful peacefully and quietly have, hold, use, occupy and e4oy the Demised Premises and each part thereof during the term of this Lease or any extensions thereof without hindrance or interruption from Lessor, its heirs, devises, successors assigns. Lessor has and reserves the right at any reasonable time to enter u the Premises to inspect said Demised Premises or to perform any of the obligations imposed by this Lease, but in so entering shall conduct itself so to minimally interfere with City's use and enjoyment of the Demised Premises. -__u_ -1 0- e e 23. NOTICE. Any notice or notices given by Lessor or City to the other be personnaly served upon Lessor or City or any person hereafter authorized writing to receive such notice, or may be served by depositing the same in tl United States Mail, postage prepaid, addressed to the appropriate address hereinafter set forth or to such oither address as Lessor or City may hereaf. designate by written notice. TO: CITY TO: LESSOR - City of Carlsbad Palmar Airport Business Park City Manager 1120 Sycamore Avenue 1200 Elm Avenue Suite A Carlsbad, CA 92008 Vista, CA 92083 24. INSURANCE. Lessor shall maintain throughout the term of this Lease fire insurance and extended coverage on the Demised Premises to the extent oi 90% of replacement value of improvements located on the Demised Premises. Included in the policy or policies of insurance shall be a standard waiver 01 rights of subrogation against City by the insurance company issuing said polj or policies. 25. EMINENT DOMAIN. If any part of the Demised Premises shall be taken condemned for a public or quasi-public use and a part thereof remains which i the opnion of the City's Lease Administrator, is adequate to permit City to continue the uses stated in the USE clause above, this Lease shall, as to the part os taken, terminate as of the date legal possession shall be taken by ti- condemnor, and the rent payable hereunder shall be adjusted so that City shal be required to pay for the remainder of the term only such portion of such re as the value to City of the part remaining after the condemtion bears to the value of the entire Demised Premises at the date of condemnation. If such condemnation takes all the Demised Premises, or such part thereof that there does not, in the opinion of City's Lease Administrator, remain a portion -1 1- 0 0 adequate for City's use hereunder, this Lease shall thereupon terminate. part or all of the Demised Premises is taken or condemned, the compensation awarded upon such condemnation or taking shall go to Lessor or City as their respective interests may appear. If 26. SEVERABILITY. The invalidity of any portion of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof. 27. TIME OF ESSENCE. Time is expressly declared to be of the essence 01 this Lease and of each, every and all of the covenants and conditions herein 28. ARBITRATION. If the parties hereto should not agree as to the term. and provisions of this Lease, such disagreement shall be determined by arbitration pursuant to the provisions of the California Code of Civil Procedure. 29. ENTIRE AGREEMENT. This Lease contains the entire agreement between parties hereto and no term or provision hereto may be changed, waived, discharged or terminated unless the same be in writing executed by both partj her et0 . IN WITNESS WHEREOF, we have hereunto set our hands and seals. CITY OF CARLSBAD .A d* eA/b BY l/ L5T-----p 7 Mayor .i .. - ATTEST: ,'APPROVED AS TO -1 2- I 0 (\I 4 E-l H m H 0 90- f/7 0 (\I 4 E+ H H m 090-f/?