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2007-05-01; City Council; 401; 2787 State St Sowing Sisters Quilt Shop Lease
HOUSING AND REDEVELOPMENT COMMISSION - AGENDA BILL 1 401 5/01/07 H/RED ECDEV REPORT OUT THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT WITH THE CARLSBAD REDEVELOMENT PROPERTY AT 2787 STATE STREET- SOWING SISTERS QUILT SHOP DEPT. HEA CITY ATTY. CITY MGR. RECOMMENDED ACTION: Adopt Resolution No._439 authorizing the execution of the lease agreement between Beckie Biddle dba Sowing Sisters Quilt Shop and the Carlsbad Redevelopment Agency for lease of the property located at 2787 State Street for the purposes of operating a retail Quilt Shop. ITEM EXPLANATION: On November 20, 1987, the Carlsbad Redevelopment Agency assumed ownership of the property located at 2787 State Street. The site was acquired by the Redevelopment Agency with the intent of facilitating redevelopment of the site as well as other properties at the corner of State Street and Grand Avenue at a future date. Between 1998 and 2006, the Redevelopment Agency entered into several short-term lease agreements as a way to keep the property occupied and maintained until such time as redevelopment of the site occurs. The property currently consists of two separate spaces. The rear space is 6310 square feet in a warehouse configuration, and the front space has been historically used as a retail space of approximately 3100 square feet. The rear space was most recently leased in August 2006, to New Village Arts Theatre for use as a live theatre complex. The front retail space has been leased to Le Muse, a clothing/home decor retailer. However, recently the owner of Le Muse asked the Housing and Redevelopment Commission to approve early termination of their lease due to financial considerations. As a result, the Housing and Redevelopment Commission, authorized staff to prepare a settlement agreement and offer the 3100 square feet of retail space at the front of the property for lease to the public. The property was posted, advertised in the Multiple Listing Service and posted in LoopNet, a widely used commercial real estate website. As a result, the Agency received multiple offers which were presented to the Housing and Redevelopment Commission in closed session. The Housing and Redevelopment Commissions authorized finalization of negotiations and lease terms with Sowing Sisters Quilt Shop for lease of the retail space at 2787 State Street for the term May 1, 2007 through June 30, 2009. DEPARTMENT CONTACT: Cyntihia Haas 760-602-2732 chaas@ci.carlsbad.a.us or Debbie Fountain, 434-2935 dfoun@ci.carlsbad.caus FOR CITY CLERKS USE ONLY. COMMISSION ACTION: APPROVED DENIED CONTINUED WITHDRAWN AMENDED isr" D D D D CONTINUED TO DATE SPECIFIC CONTINUED TO DATE UNKNOWN RETURNED TO STAFF OTHER -SEE MINUTES D Dn n Page 2 " REPORT OUT THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT WITH THE CARLSBAD REDEVELOMENT PROPERTY AT 2787 STATE STREET - SOWING SISTERS QUILT SHOP" Sowing Sister's Quilt Shop sells quilting fabrics, materials, supplies and equipment, and has operated in the Carlsbad Village area for eight years. Their first location was 2956 Roosevelt Street. They are currently located at 2801 Roosevelt Street. Ms. Biddle is a member of the Carlsbad Village Business Association. FISCAL IMPACT: The proposed lease agreement reflects a market rate rent based on age, location, condition of the building, parking limitations, and duration of the lease term. The lease will result in total rental income of $148,668 for the twenty-six month term beginning May 1, 2007 and ending June 30, 2009. If optional one year extensions are granted by the Agency, additional revenue will be received for that period of time. The Agency will not incur any costs for tenant improvements or real estate brokerage fees as a result of entering into this lease agreement for the space. Rental income generated from this lease will be deposited into the Village Operations Fund. ENVIRONMENTAL IMPACT: The Planning Director has determined that the project is exempt from the California Environmental Quality Act, pursuant to Section 15301 of the CEQA Guidelines. Section 15301 exempts projects or activities that consist of leasing of existing public facilities involving no expansion of use. Lease of public property for operation of a retail establishment, with an existing use as a retail establishment, and no other plan for development of that property, is such an activity. Should the Agency or City decide to pursue development of the site at a future date, additional environmental review will be conducted. EXHIBITS: 1. Resolution No. 439 2. Lease Agreement between the Carlsbad Housing and Redevelopment Agency and Beckie Biddle dba Sowing Sisters Quilt Shop. 1 RESOLUTION NO. 439 2 A RESOLUTION OF THE HOUSING AND REDEVELOPMENT COMMISSION OF THE CITY OF 3 CARLSBAD, CALIFORNIA, AUTHORIZING EXECUTION OF THE LEASE AGREEMENT BETWEEN BECKIE BIDDLE DBA SOWING . SISTERS QUILT SHOP AND THE 5 CARLSBAD REDEVELOPMENT AGENCY TO LEASE AGENCY OWNED PROPERTY LCOATED AT 2787 STATE 6 STREET FOR THE PURPOSES OF OPERATING A RETAIL QUILT SHOP. 7 8 WHEREAS, the Carlsbad Redevelopment Agency assumed ownership) of the 9 State Street Building and related property located at 2787 State Street, originally known 10 as the Bauer Lumber Building; and 11 WHEREAS, the subject site was acquired by the Redevelopment Agency with 12 the intent of facilitating redevelopment of the site as well as other properties at the icorner of State Street and Grand Avenue; and j | 1<; WHEREAS, it is anticipated that it will be at least two years years before |u 16 redevelopment of the site will occur; and 17 WHEREAS, ther is a need within the community to make continued use of the 18 subject building/space for retail purposes until such time as redevelopment of the site j 19 Ioccurs; and j 20 WHEREAS, California Redevelopment Law permits the Agency to Rent, 21 maintain, manage, operate, repair and clear property purchased for the purpose of 22 redevelopment; and 23 WHEREAS, the Agency has determined that it is appropriate and necessary to 25 enter into the subject lease and extend use of the subject building/space for retail 26 purposes until such time as a redevelopment project may be implemented; and 27 /// 28 /// 1 WHEREAS, based on the current commercial rental market, age of the subject 2 building, parking limitations, and lease term available, a determination has been made 3 that the proposed leas provides for a market rental structure requiring no subsidy by the ; 4 Agency. 5 6 NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment 7 Commission of the City of Carlsbad, California, as follows:8 9 1. That the above recitations are true and correct. 10 2. The Commission hereby determines that the building located at 2787 State Street, and owned by the Redevelopment Agency, shall continue to 19 benefit the redevelopment area through its continued use for retail purposes through a lease with Becky Biddle dba Sowing Sisters Quilt Shop for a 14 twenty-six month term beginning May 1, 2007 and ending June 30, 2009 15 according to the terms set forth in the attached lease agreement provided as 16 Exhibit 2, and hereby approves said lease agreement. 3. The Commission hereby authorizes the Chairman of the Housing and 19 Redevelopment Commission to execute the approved lease agreement 20 between the Carlsbad Redevelopment Agency and Beckie Biddle dba Sowing 2! Sisters Quilt Shop for lease of the property located at 2787 State Street, in 22 substantially the form presented to the Commission and subject to approval 23 of the City Attorney, who serves as legal Counsel to the Carlsbad 24 Redevelopment Agency. 25 26 27 " 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Special Meeting of the Housing and Redevelopment Commission of the City of Carlsbad on the 1st day of May, 2007, by the following vote to wit: AYES: Commission Members Lewis, Kulchin, Hall, Packard and Nygaard NOES: None ABSENT: None ATTEST: LL-RAYMOND R. PATCHETT, £ ^/ESTABLISHED\% ; "', ^ •• •• it $ RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Carlsbad City Clerks Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 MEMORANDUM OF LEASE This Memorandum of Lease , hereinafter "Memorandum", dated-^ffiny / 2007, between the CARLSBAD REDEVELOPMENT AGENCY, Lessor, and Beckil Biddle d.b.a Sowing Sisters Quilt Shop, Lessee, concerning the Leased Premises at 2787 State Street, Carlsbad CA 92008. For good and adequate consideration, Lessor leases the Leased Premises to Lessee, and Lessee hires for them from Lessor, for the term and on the provisions contained in the Lease dated XjLq/ixl ^3^'} 2007, the Memorandum of which is recorded by the San Diego County Recorder's Office, including without limitation provisions prohibiting assignment, subleasing, and encumbering said leasehold, as more specifically set forth in said Lease, which said lease is incorporated in this Abstract by this reference. The term of this lease is twenty-six (26) months, beginning May 1, 2007, and ending June 30, 2009. This Memorandum is not a complete summary of the Lease. Provisions in this Memorandum shall not be used in interpreting the Lease provisions. In the event of conflict between this Memorandum and other parts of the Lease, the other parts shall control. Execution hereof constitutes execution of the Lease itself. IN WITNESS WHEREOF, each of the undersigned has executed this Memorandum as of the dates set forth in the respective notary acknowledgements attached hereto. Executed at: Executed at: on: on: By LESSEE: ' _ ^ ^ a a /) By Name Printed: Kl^O^^^fT LV*->~+-* ^ '^/U^fX-Name Printed: Title: OuUf)€.C Title: City Manager. City of Carlsbad Address:<W*L \l b 8 QflftjL ljBi(UJ?^ Address: 1200 Carlsbad Village Drive " ' X^^ M_-n_-i_»i™-..r ^^^ f f"'--* Carlsbad. CA 92008 Telephone: (~]{fO T^O^l.^^/ Telephone: (760)434-2821 Facsimile: f?/jVl "9Jl/r) '7u>/P<7 Facsimile: (760)720-9461 Sowing Sisters 14 Carlsbad Redevelopment Agency Lease Agreement Federal ID No. APPROVED: BY: RONALD R. BALL CITY ATTORNEY DATE: Sowing Sisters 15 Carlsbad Redevelopment Agency Lease Agreement CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT j I State of California County of On I) I ss. 3&. 3£><f] . before me."fip Date " Name and Title of Officer (e.g., "Janetooe, Notary Publi » I y*-~ • \ "~^> I I Ipersonally appeared nev?£££A. (_&ed£«s) fet'glaJgj — • —• 'v^^rtw CommWon #1528315 SonDtogoCourty My Comm. Expiim Novri • Name(s) of Signer{s) D personally known to me •iTproved to me on the basis of satisfactory evidence to be the person(e) whose name(s} is/ate' subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hts/her/thetr authorized capacity(fes), and that by fcia/her/thetf signature^*) on the instrument the person^©)-, or the entity upon behalf of which the person(«) acted, executed the instrument. WITNESS my hand and official seal. Place Notary Seal Above OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Number of Pages:Document Date: Other Than Named Above: Capacity(ies) Claime Signer's Name: Individual Corporate Officer — Title(s): Partner — D Limited D General Attorney in Fact Trustee Guardian or Conservator Other: _ Signer Is Representing: © 1999 National Notary Associatton • 9350 De Solo Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nalionalnolary.org Prod. No. 5907 Reorder: Call Toil-Free 1-800-876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of On personally appeared before me, Namaand Titfefof Officer (e.g., "Jane Doe, Nota Publicf nd SHERRY A. FREISINGER | Commiulon # "\ 727044 I Notary Public - California | San Diego County ~ Place Notary Seal Above 'personally known to me D (or proved to me on the basis of satisfactory evidence) to be the personj^fwhose namej£) is/are subscribed to the within instrument and acknowledged to me that x£te?she/th/e# executed the same in rjisTher/tbelr authorized capacity(iek), and that by bJsVher/thplf signature]^) on the instrument the person^), or the entity upon behalf of which the personte) acted, executed the instrument. WITNESS my hand and official seal. Signatured OPTIONAL 7 of Notary Public Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) OtherTtian Named Above: . Number of Pages: Capacity(ies) Claimed Signer's Name: D Individual D Corporate Officer — Title(s): D Partner — D Limited D General D Attorney in Fact D Trustee D Guardian or Conservator D Other: Signer Is Representing: RIGHT THUMBPHINT OF SIGNER Top of thumb here Signer's Name: D Individual D Corporate Officer —Title(s): D Partner — D Limited D General D Attorney in Fact Imstee D Guardian or Conservator D Other:. Signer Is Representing^ RIGHT THUMBPRINT OF SIGNER Top of thumb here ^S^^to^S^^W^© 2006 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth. CA 91313-2402 Item No. 5907 v609 Reorder: Call Toil-Free 1-800-876-6827 CARLSBAD REDEVELOPMENT AGENCY LEASE TO BECKIE BIDDLE dba. SOWING SISTERS QUILT SHOP OF PROPERTY LOCATED AT 2787 STATE STREET CARLSBAD, CALIFORNIA 92008 LEASE AGREEMENT THIS LEASE AGREEMENT, made and entered into this 24th day of April 2007, by and between the Carlsbad Redevelopment Agency, hereinafter called "Lessor", and Beckie Biddle, a sole proprietor, d.b.a. Sowing Sisters Quilt Shop called "Lessee", without reference to number or gender, for a portion of the property located at 2787 State Street, Carlsbad, California, 92008. WITNESETH: WHEREAS, the Carlsbad Redevelopment Agency is the owner of the real property located at 2787 State Street, Carlsbad, California, 92008; and WHEREAS, the property consists of two separate leased spaces including a rear theatre space and a front retail space; and WHEREAS, Lessee desires use of said retail space ("Leased Premises") totaling approximately 3100 square feet to operate a business (as defined below); NOW, THEREFORE, it is understood and agreed by and between the parties hereto as follows, to wit: TO HAVE AND TO HOLD said Leased Premises for the term of this lease and upon the conditions as follows: 1. TERM: The term of the lease shall be for a period of twenty six months commencing on May 1, 2007, and ending on June 30, 2009. Lessee shall be entitled to conduct business prior to commencement date. Upon the expiration of this lease, Lessee may request and the Lessor may grant, at it sole discretion and option, additional (1) year periods, upon the same terms and conditions stated herein, notwithstanding the renegotiation of monthly lease payments. Lessee must exercise this option in writing at least 120 days prior to the lease terms expiration. 2. RENT: (a) As and for the rent, Lessee agrees to pay to Lessor the sum of five thousand five hundred eighty dollars ($5580.00) per month for the first year. On or before May 1, 2007, the first payment of $5580.00 per month will be paid and all subsequent payments shall be payable in advance on or before the first day of each and every month during the term of this Agreement. (b) Rent shall be delivered to the Finance Department of the City of Carlsbad at 1635 Faraday Avenue, Carlsbad, California, 92008. The designated place of payment and filing may be changed at any tune by Lessor upon ten (10) days written notice to Lessee. Lessee assumes all risk of loss if payments are made by mail. Sowing Sisters 2 Carlsbad Redevelopment Agency Lease Agreement (c) In the event Lessee is delinquent in remitting the rent due in accordance with the rent provisions of this lease, then the rent not paid when due shall bear interest at the rate of Ten Per Cent (10%) per annum from the date due until paid. Provided, however, that the Executive Director of Carlsbad Redevelopment Agency shall have the right to waive for good cause any interest payment upon written application of Lessee for any such delinquency period. (d) Lessee agrees to pay four percent (4%) annual increases in monthly lease payments beginning in the 13th (May 2008) and 25th (May 2009) months of the lease term. The lease rate for May 2008 shall be five thousand eight hundred and three dollars ($5803.00) and the rate for May 2009 shall be six thousand thirty five dollars ($6035.00) (e) Lessee agrees to pay a Security Deposit in the amount of one month's rent or five thousand five hundred and eighty dollars ($5580.00) to be paid upon execution of this lease agreement. Lessee shall submit the Security Deposit in the form of a bank or cashier's check simultaneously, and or in conjunction with the signed lease agreement. Lessor shall not cash nor deposit said Security Deposit until the lease agreement is signed by Lessor, resulting in the full execution of this agreement. Security Deposit shall be held in an interest bearing account in which upon expiration of this lease, Lessee shall retain all interest accrued over said lease term. Lessor shall not be required to keep the Security Deposit separate from it's general accounts. If Lessee fails to pay Rent, or otherwise defaults under this lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of said Security Deposit, Lessee shall within ten (10) days after written request therefore deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional moneys with Lessor so that the total amount of the Security Deposit shall at all time bear the same proportion to the increased Base Rent as initial Security Deposit bore to the initial "Base Rent" 3. USE: Lessee agrees that the Leased Premises shall, be used only and exclusively for retail quilting fabric, supplies and equipment and quilting classes and for no other purposes whatsoever without the written consent of Lessor. 4. EARLY TERMINATION: Lessee or Lessor shall have a right to terminate lease by first giving ninety (90) days written notice to the other party 5. IMPROVEMENTS: Lessee may, at its own expense, make additional interior alterations or changes in the Leased Premises or cause to be built, made or installed thereon any structures, machines, appliances, utilities, signs or other improvements necessary or desirable for the use of said premises and may alter and repair any such structures, machines or other improvements; provided, however, that no alterations and changes shall be made and no structures, machines, appliances, utilities, signs or other improvements shall be made, built or installed, and no major repairs thereto shall be made except upon obtaining prior approvals from Lessor and all necessary permits from Sowing Sisters 3 Carlsbad Redevelopment Agency Lease Agreement 9) the City of Carlsbad. Such installation will be solely at the expense of Lessee and the work performed with proper City of Carlsbad permits. Lessee will be permitted to paint the exterior of the premises in accordance with standards acceptable to Lessor and with prior approval of Lessor. Lessee shall be responsible for manufacturing and installation of signage in accordance with the signage regulations set forth within the Carlsbad Village Redevelopment Master Plan and Design Manual. Lessee further agrees that no banners, pennants, flags, eye-catching spinners or other advertising devices, nor any temporary signs shall be permitted to be flown, installed, placed, or erected on the premises except in accordance with the City of Carlsbad Village Redevelopment Master Plan and Design Manual. 6. OWNERSHIP; REMOVAL; SURRENDER/RESTORATION: (a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereafter provided, all alterations and utility installations made by Lessee shall be the property of the Lessee. Unless otherwise instructed per Paragraph 6(b) hereof, all Lessee owned alterations and utility installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the premises. (b) Removal. By delivery to Lessee of written notice from Lessor not later than sixty (60) days prior to the end of the term of this Lease, Lessor may require that any or all Lessee owned alterations or utility installations be removed upon the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee owned alterations or utility installations made without Lessor's consent. (c) Surrender/Restoration. Lessee shall surrender the premises by the expiration date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear expected. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Lessee shall repair any damage occasioned by the installation, maintenance or removal of trade fixtures, Lessee owned alterations and/or utility installations, furnishings, and equipment installed by or for Lessee and by the removal, replacement, or remediation or any soil, material or groundwater contaminated with hazardous substance (as defined in Paragraph 23) by Lessee. Trade fixtures shall remain the property of Lessee and shall be removed by Lessee. The failure by Lessee to timely vacate the premises pursuant to this Paragraph 6 (c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 32 below. 7. PARKING: Lessee understands there is no private parking available on the subject property. Lessee further understands that execution of this lease agreement in no way constitutes the granting of exclusive use of public parking adjacent to the property. Lessor shall be responsible for processing the necessary approvals to provide for a "no parking" zone to the rear of the building to designate a loading zone in front of the existing delivery door. Sowing Sisters Carlsbad Redevelopment Agency Lease Agreement 8. RIGHT TO ENTER PROPERTY: Upon execution of this lease agreement, Lessee shall be granted access to the premises to initiate, construct and complete the Tenant/building improvements as outlined in the Improvements Paragraph 5 of this lease. All tenant improvements shall be complete prior to occupancy of the building. 9. REPRESENTATIONS & INDEMNITIES OF BROKER RELATIONSHIPS: Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder in connection with this Lease, and that no person, firm, broker or finder is entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the Lessee and/or Lessor, including any costs, expenses, or attorney's fees reasonably incurred with respect thereto. Any and all broker's commissions shall be paid by Lessee. 10. WAIVER OF RELOCATION BENEFITS: Lessee understands this lease agreement is entered into for a specified period of time in order to provide interim use of the property, until such time as the Lessor chooses to develop the property in accordance with the Carlsbad Village Redevelopment Master Plan. Lessee therefore agrees to waive any and all relocation benefits defined in the California Relocation Assistance Law (Government Code, Section 7260, et. seq.). 11. LIENS: Lessee agrees that it will at all times hold Lessor free and harmless and indemnify it against all claims for labor or materials in connection with improvements, repairs, or alterations on the Leased Premises, including the costs of defending against such claims, and reasonable attorney's fees incurred therein. In the event that any lien or levy of any nature whatsoever is filed against the lease premises or the leasehold interests of the Lessee there, the Lessee shall, upon written request of Lessor, deposit with Lessor a bond conditioned for the payment in full of all claims upon which said lien or levy has been filed. Such bond shall be acknowledged by Lessee as principal and by a corporation, licensed by the Insurance Commissioner of the State of California to transact the business of a fidelity and surety insurance company, as surety. Lessor shall have the right to declare this lease in default in the event the bond required by this paragraph has not been deposited with the Lessor within ten (10) days after written request has been delivered to Lessee. 12. LEASE ENCUMBRANCE: Lessee understands and agrees that it cannot encumber the lease, leasehold estate and the improvements thereon by a deed of trust, mortgage or other security instrument. If any deed of trust, mortgage or other security instrument that encumbers the lease, leasehold estate and the improvements thereon is entered into by Lessee, Lessor shall have the right to declare this lease in default. 13. ASSIGNMENT-SUBLEASE: Lessee shall not assign or transfer the whole or any part of this lease or any interest therein, nor sublease the whole or any part of the Leased Premises, nor contract for the management or operation of the whole or any part Sowing Sisters 5 Carlsbad Redevelopment Agency Lease Agreement of the Leased Premises, nor permit the occupancy of any part thereof by any other person or business entity, nor permit transfer of the lease by merger, consolidation or dissolution, without obtaining prior consent of Lessor, in each instance. 14. DEFAULT: It is mutually understood and agreed that if any default be made in the payment of rental herein provided or in the performance of the covenants, conditions, or agreements herein (any covenant or agreement shall be construed and considered as a condition), or should Lessee fail to fulfill in any manner the uses and purposes for which said premises are leased as above stated, and such default shall not be cured within or ten (10) days after written notice thereof if default is in the performance of the use obligation provisions pursuant to Paragraph 16 of this lease, or thirty (30) days after written notice thereof if default is in the payment of rent, or in the performance of any other covenant, condition and agreements (any covenant or agreement shall be construed and considered as a condition), Lessor shall have the right to immediately terminate this lease; and that in the event of such termination, Lessee shall have no further rights hereunder, the Lessee shall thereupon forthwith remove all personal property from said premises and shall have no further right to claim thereto, and Lessor shall immediately thereupon, without recourse to the courts, have the right to reenter and take possession of the Leased Premises. Lessor shall further have all other rights and remedies as provided by law, including without limitation the right to recover damages from Lessee in the amount necessary to compensate the Lessor for all the detriment proximately caused by the Lessee's failure to perform his obligations under the lease or which in the ordinary course of things would be likely to result there from. In the event of the termination of this lease pursuant to the provisions of this paragraph, Lessor shall have any rights to which it would be entitled in the event of the expiration or sooner termination of this lease. 15. BANKRUPTCY: In the event Lessee becomes insolvent, makes an assignment for the benefit of creditors, files a petition in bankruptcy or becomes the subject of a bankruptcy proceeding, reorganization, arrangement, insolvency, receivership, liquidation, or dissolution proceedings, or in the event of any judicial sale of Lessee's interest under this lease, Lessor shall have the right to declare this lease in default. 16. USE OBLIGATION: Lessee shall actively and continuously use and operate the premises for the limited particular exclusive use as expressly provided for in the Use Paragraph 3 of this lease, except for failure to so use caused by acts of God. Lessee, however, shall not and is expressly prohibited from using the premises for any other purpose or use whatsoever, whether it is purported to be in addition to or in lieu of the particular exclusive use expressed in said Use Paragraph 3. 17. MAINTENANCE AND REPAIR: As part of the consideration for the leasing thereof, Lessee agrees to assume full responsibility for the interior operation, maintenance, including painting, and repair of the premises, throughout the term and without expense to the Lessor. Lessee will perform all interior maintenance, repairs and replacements, including glass, necessary to maintain and preserve the premises in a good, safe, healthy and sanitary condition satisfactory to Lessor and in compliance with all applicable laws. Sowing Sisters 6 Carlsbad Redevelopment Agency Lease Agreement 11 Lessee further agrees to provide approved containers for trash and garbage and to keep premises free and clear of rubbish and litter, or any other fire hazards. Lessor shall be responsible for all exterior maintenance, including roof repairs. Notwithstanding, Lessor shall not be required at any time to maintain or to make any improvements or repairs whatsoever on or for the benefit of the Leased Premises. For the purpose of keeping the premises in a good, safe, healthy and sanitary condition, Lessor shall have the right but not the duty, to enter, view, inspect, determine the condition of and protect its interests in, the premises. If inspection discloses that the premises are not in the condition described, Lessee must perform the necessary maintenance work within ten (10) days after written notice from Lessor. Further, if at any time during the term of the lease for the premises Lessor determines that the premises are not in the condition described; Lessor may require Lessee to file and pay for a faithful performance bond, to assure prompt correction without additional notice. The amount of this bond shall be adequate, in Lessor's opinion, to correct the unsatisfactory condition. The rights reserved in this section shall not create any obligations or increase any obligations for Lessor elsewhere in this Lease. 18. TAXES AND UTILITIES: This Lease may result in a taxable possessory interest. Lessee shall be solely responsible for payment of property taxes associated with its occupancy of the Leased Premises, if any apply. Lessee agrees to and shall pay before delinquency all its pro-rata share of the possessory taxes and assessments of any kind assessed or levied upon Lessee or the Leased Premises by reason of this lease or of any structures, machines, or other improvements of any nature whatsoever erected, installed or maintained by Lessee, or by reason of the business or other activities of Lessee upon or in connection with the Leased Premises. Lessee shall also pay any fees imposed by law for licenses or permits for any business or activities of Lessee upon the Leased Premises or under this lease, and shall pay before delinquency any and all charges for utilities at or on the Leased Premises. If Lessee fails to pay said possessory taxes, Lessor may declare default in accordance with Paragraph 14. Lessee shall be responsible for payment of all utilities, including but not limited to security alarm, trash, water, gas and electricity. 19. CONFORMANCE WITH RULES AND REGULATIONS: Lessee agrees that in all activities on or in connection with the Leased Premises and in all uses thereof, including the making of any alterations or changes and the installation of any machines or other improvements, it will abide by and conform to all ordinances, rules and regulations prescribed by the City of Carlsbad, including, but not limited to, sign regulations and requirements for outdoor display set forth within the Carlsbad Village Redevelopment Master Plan and Design Manual, and any applicable laws of the State of California and Federal Government, as any of the same now exist or may hereafter be adopted or amended. 20. NON-DISCRIMINATION: Lessee agrees not to discriminate against any person or class of persons by reason of sex, color, race, religion, or national origin. If the use provided for in this lease allows the Lessee to offer accommodations or services to Sowing Sisters 7 Carlsbad Redevelopment Agency Lease Agreement the public, such accommodations or services shall be offered by the Lessee to the public on fair and reasonable terms. 21. PARTIAL INVALIDITY: If any term, covenant, condition, or provision of this lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby. 22. HOLD HARMLESS: Lessee shall defend, indemnify, and hold harmless Lessor, its officers and employees from liability, damage, and expense of any kind, including reasonable attorney's fees, arising from all claims or causes of action of any kind including but not limited to injury to or death of any person or persons, including Lessee, its employees, and invitees resulting directly or indirectly from granting and performance of this lease or arising from the use and operation of the Leased Premises or any defect in any part thereof. 23. HAZARDOUS SUBSTANCES: The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the premises, (ii) regulated or monitored by any government authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the premises during the term of this Lease, by or for Lessee, or any third party. 24. SUCCESSORS IN INTEREST: Unless otherwise provided in this lease, the terms, covenants and conditions herein shall apply to and bind the heirs, successors, executors, administrators, and assigns of all the parties hereto, all of whom shall be jointly and severally liable hereunder. 25. EASEMENTS: Lessee shall defend, indemnify, and hold harmless Lessor, its officers and employees from liability, damage, and expense of any kind, including reasonable attorney's fees, arising from all claims or causes of action of any kind including but not limited to injury to or death of any person or persons, including Lessee, its employees, and invitees resulting directly or indirectly from granting and performance of this lease or arising from the use and operation of the Leased Premises or any defect in any part thereof. Sowing Sisters Carlsbad Redevelopment Agency Lease Agreement 26. INSURANCE: Lessee shall obtain and maintain for the duration of this lease agreement and any and all amendments, insurance against claims for injuries to persons or damage to property which may arise out of or in connection with use of the subject building and provision of services by Lessee. The insurance will be obtained from an insurance carrier admitted and authorized to do business in the State of California. The insurance carrier is required to have a current Best's Key Rating of not less than "A-VII". The policies for said insurance shall, as a minimum, provide the following forms of coverage: (a) Comprehensive General Liability - (covering premises and operations in the amount of not less than One Million Dollars ($1,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. If the submitted policies contain aggregate limits, general aggregate limits will apply separately under this lease or the general aggregate will be twice the required per occurrence limits. (b) Property Insurance - Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, trade fixtures, alterations and utility installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000.00 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property and trade fixtures as well as alterations and utility installations. Lessor will be responsible for providing coverage for the structure itself, exclusive of the items required to be covered by Lessee's insurance policy. (c) Business Interruption - Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the premises as a result of such perils. (d) Evidence of Insurance - Certificates and endorsements in a form acceptable to Lessor evidencing the existence of the necessary insurance policies shall be kept on file with Lessor during the entire term of this lease. All insurance policies shall be primary coverage, and will name Lessor as an additional insured, protect Lessor against any legal costs in defending claims and will not terminate without ten (10) days written notice to Lessor. Sowing Sisters Carlsbad Redevelopment Agency Lease Agreement (e) Lessor shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the Lessor, the insurance provisions in this lease do not provide adequate protection for Lessor and/or for members of the public using the Leased Premises, Lessor may require Lessee to obtain insurance sufficient in coverage, form and amount to provide adequate protection. Lessor's requirements shall be reasonable but shall be designed to assure protection from and against the kind and extent of risk, which exist at the time a change in insurance is required. (f) Lessor shall notify Lessee in writing of changes in the insurance requirements and, if Lessee does not deposit certificates/endorsements evidencing acceptable insurance policies with Lessor incorporating such changes within thirty (30) days of receipt of such notice, this lease shall be in default without further notice to Lessee, and Lessor shall be entitled to all legal remedies. (g) The procuring of such required policies of insurance shall not be construed to limit Lessee's liability hereunder, nor to fulfill the indemnification provisions and requirements of this lease. Notwithstanding said policies of insurance, Lessee shall be obligated for the full and total amount of any damage, injury, or loss caused by negligence or neglect connected with this lease or with the use or occupancy of the Leased Premises. (h) Lessee agrees not to use the premises in any manner, even if use is for purposes stated herein, that will result in the cancellation of any insurance Lessor may have on the premises, or on adjacent premises, or that will cause cancellation of any other insurance coverage for the premises, or adjoining premises. Lessee further agrees not to keep on the premises or permit to be kept, used, or sold thereon, anything prohibited by any fire or other insurance policy covering the premises. Lessee shall, at its sole cost and expense, comply with any and all requirements, in regard to premises, of any insurance organization necessary for maintaining fire and other insurance coverage at reasonable cost. 27. WARRANTIES-GUARANTEES-COVENANTS: Lessor makes no warranty, guarantee, covenant, including but not limited to covenants of title and quiet enjoyment, or declaration of any nature whatsoever concerning the condition of the Leased Premises, including the physical condition thereof, or any condition which may affect the Leased Premises, and it is agreed that Lessor will not be responsible for any loss, damage or costs which may be incurred by Lessee by reason of any such condition or conditions. 28. DAMAGE TO OR DESTRUCTION OF PREMISES: In the event of damage to or Sowing Sisters 10 Carlsbad Redevelopment Agency Lease Agreement \ ^ destruction by fire, the elements, acts of God, or any other cause, of the improvements located within the demised premises Lessee shall, within ninety (90) days, commence and diligently pursue to completion the repair, replacement, or reconstruction of improvements necessary to permit full use and occupancy of the demised premises for the purposes required by this lease. Repair, replacement or reconstruction of improvements within the demised premises shall be accomplished in a manner and according to plans approved by Lessor; provided, however, Lessee shall not be obligated to repair, reconstruct or replace the improvements following their destruction in whole or substantial part except to the extent the loss is covered by insurance required to be carried by Lessee pursuant to Paragraph 26 of this Lease (or would be covered whether or not such required insurance is actually in effect). If Lessee elects not to restore, repair or reconstruct as herein provided, then the Lease shall terminate. 29. QUITCLAIM OF LESSEE'S INTEREST UPON TERMINATION: Upon termination of this lease for any reason, including but not limited to termination because of default by Lessee, Lessee shall execute, acknowledge and deliver to Lessor within thirty (30) days after receipt of written demand thereof a good and sufficient deed whereby all right, title and interest of Lessee in the demised premises is quitclaimed to Lessor. Should Lessee fail or refuse to deliver the required deed to Lessor, Lessor may prepare and record a notice reciting the failure of Lessee to execute, acknowledge and deliver such deed and said notice shall be conclusive evidence of the termination of this lease and of all right of Lessee or those claiming under Lessee in and to the demised premises. 30. PEACEABLE SURRENDER: Upon the expiration of this lease or sooner termination or cancellation thereof, as herein provided, Lessee will peaceably surrender said premises to Lessor in as good condition as said premises were at the date of this lease, ordinary wear and tear expected. If the Lessee fails to surrender the premises at the expiration of this lease or the earlier termination or cancellation thereof, Lessee shall defend and indemnify Lessor from all liability and expense resulting from the delay or failure to surrender, including, without limitation, any succeeding Lessee's claims based on Lessee's failure to surrender. 31. WAIVER: Any waiver by Lessor of any breach by Lessee of any one or more of the covenants, conditions, or agreements of this lease shall not be nor be construed to be a waiver of any subsequent or other breach of the same or any other covenant, condition or agreement of this lease, nor shall any failure on the part of Lessor to require or exact full and complete compliance by Lessee with any of the covenants, conditions, or agreements of this lease be construed as in any manner changing the terms hereof or to prevent Lessor from enforcing the full provisions hereof. The subsequent acceptance of rent hereunder by Lessor shall not be deemed to be waiver of any preceding breach by Lessee of any term, covenant, or condition of this lease, other than the failure of Lessee to pay the particular rental so accepted, regardless of Lessor's knowledge of such preceding breach at the time of acceptance of such rent. Sowing Sisters 11 Carlsbad Redevelopment Agency Lease Agreement 32. NO RIGHT TO HOLD OVER: Lessee has no right to retain possession of the premises or any part thereof beyond the expiration or termination of this lease. In the event that Lessee holds over, then the Base Rent shall be increased to two hundred percent (200%) of the Base Rent applicable during the month immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 3 3. ACCEPTANCE OF PREMISES: Lessor shall warrant the following upon occupancy: (a) Structural integrity of the building; (b) Roof of premises is free of any leaks; (c) Electrical is in good working order; and (d) Plumbing is in good working order. Lessee shall be entitled to have independent tests performed prior to execution of this lease to satisfy Lessee that the premises are in the condition warranted. By signing this Lease, Lessee represents and warrants that it has independently inspected the premises and made all tests, investigations and observations necessary to satisfy itself of the condition of the premises. Lessee further acknowledges that premises are in the condition called for by this Lease, and that Lessee does not hold Lessor responsible for any defects in premises. 34. QUIET POSSESSION: Lessee will at all times during the terms of this Lease occupy the premises quietly and not commit any act, waste or nuisance which disturbs the quiet enjoyment of the property for the Lessor, public, any neighbor or other tenant of Lessor. 35. ENTIRE UNDERSTANDING: This lease contains the entire and only understanding and agreement of the parties, and Lessee, by accepting the same, acknowledges that there is no other written or oral understanding or agreement between the parties with respect to the demised premises and that this lease supersedes all prior negotiations, discussions, obligations and rights, of the parties hereto. No waiver, modification, amendment or alteration of this lease shall be valid unless it is expressly in writing and signed by authorized persons of the parties hereto. Each of the parties to this lease acknowledges that no other party, nor any agent or attorney of any other party, has made any promise, representations, waiver or warranty whatsoever, expressed or implied, which is not expressly contained in writing in this lease, and each party further acknowledges that it has not executed this lease in reliance upon any collateral promise, representation, waiver or warranty, or in reliance upon any belief as to any fact not expressly recited in this lease. 36. TIME IS OF THE ESSENCE: Time is of the essence of each and all of the terms and provisions of this lease and this lease shall insure to the benefit of and be binding upon the parties hereto and any successors of Lessee as fully and to the same extent as though specifically mentioned in each instance, and all covenants, stipulations and agreements in this lease shall extend to and bind any assigns and sublessee of Lessee. Sowing Sisters 12 Carlsbad Redevelopment Agency Lease Agreement \ —j 37. NOTICES: Notices given or to be given by Lessor or Lessee to the other may be personally serviced upon Lessor or Lessee or any person hereafter authorized by either in writing to receive such notice or may be served by certified letter addressed to the appropriate address hereinafter set forth or to such other address as Lessor and Lessee may hereafter designate by written notice. If served by certified mail, forty-eight (48) hours after deposit in the U.S. Mail, service will be considered completed and binding on the party served. TO LESSEE Beckie Biddle Sowing Sisters Quilt Shop 2787 State Street Carlsbad, California 92008 TO LESSOR Carlsbad Redevelopment Agency Housing & Redevelopment Director 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 LESSEE: BECKIE BIDDLE OWNER SOWING SISTERS QUILT SHOP BY JRMAN OF CARLSBAD REDEVELOPMENT AGENCY DATE: Note: Signature of Lessee must be Notarized. APPROVED AS TO FORM AND LEGALITY: BY: y^l Rt^NALD R. BALL ^ITY ATTORNEY DATE: DATE: Sowing Sisters Carlsbad Redevelopment Agency Lease Agreement 13 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT I I! i [ I \ iI. State of California *S0uW D iCounty of o )ss On in\3.00*7 . before me, I Date Name and Title of Officer personally appeared Kg-log/CC^X. C~%Xj(X*i&i~~ *5 tg*£t (gj ^ Namefs) of Signer(s) ame and Title of Officer (e.g., "J^ne Doe, Notary Public") i* • • + uSV* CommMon #1528316 Notary PuMte-CoWomta MyComm.ExpJM«Nov23.200e D personally known to me S proved to me on the basis of satisfactory evidence to be the person(*) whose name(s) is/afe- subscribed to the within instrument and acknowledged to me that-he/she/they executed the same in -bis/her/their authorized capacity(*es), and that by fo+e/her/their signature(») on the instrument the person(-s), or the entity upon behalf of which the person(-s) acted, executed the instrument. WITNESS my hand and official seal. Place Notary Seal Above SignfflCre of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date:M . Number of Pages:. r(s) Other Than Named Above: ed by SignerCapacity(ies Signer's Name: D Individual D Corporate Officer — Title(s): D Partner — ~ Limited D General D Attorney in Fact D Trustee D Guardian or Conservator D Other: l-i!li-iH 1 1 HI 1MRPRIWT Top of thumb here Signer Is Representing: I I I I I I i 1999 National Notary Association • 9350 De Solo Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll-Free 1-800-876-6827