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2016-06-28; City Council; 22323; AUTHORIZING EXECUTION OF AN AGRICULTURAL LEASE AGREEMENT FOR ONE-YEAR WITH KERRYYASUKOCHI dba REV RIVER FARMS, INC. FOR A PORTION OF APN: 210-090-17 LOCATED AT CANNON LAKE PARK
CITY OF CARLSBAD-AGENDA BILL 2 AB# 22,323 AUTHORIZING EXECUTION OFAN AGRICULTURAL DEPT. DIRECTOR g:{l- DATE. 6/28/16 LEASE AGREEMENT FOR ONE-YEAR WITH KERRY CITY ATTY. If; YASUKOCHI dba REV RIVER FARMS, INC. FOR A PORTION U--··· DEPT. City Manager OF APN: 210-090-17 LOCATED AT CANNON LAKE PARK CITY MGR. \. RECOMMENDED ACTION: Adopt a Resolution authorizing the City Manager to execute an Agricultural Lease Agreement for one- year with Kerry Yasukochi dba Rey River Farms Inc. for a portion of APN 210-090-17, commonly referred to as the Cannon Lake Park property. ITEM EXPLANATION: In 1976 Mr. and Mrs. W.P. Cannon donated 6.87 acres of land, commonly known as Cannon Lake Park, to the City of Carlsbad. The site is located south of Cannon Road and west of Avenida Encinas. The 6.87 acre Property is designated as a future park site; however, 3.01 acres are currently being leased for agricultural use ("Property"). Rey River Farmers, Inc. ("RRF") has operated under an agricultural lease on the Property continuously since 2005, with renewal of said lease in 2010 and 2013 respectively. The existing three-year lease, entered into in 2013, expires on June 30, 2016. Staff is recommending that the City Council authorize a new one-year agricultural lease agreement with RRF ("Agreement"). The new Agreement will provide for the c.ontinued agricultural use of the Property. The Agreement preserves the city's right to access the Property for the purpose of making repairs or developing municipal resources, including any trail improvements. Additionally, the Agreement includes a mutually non-exclusive termination provision, allowing either party to terminate the Agreement with 120-days notice. FISCAL IMPACT: The one-year lease agreement provides for a payment of two thousand eighty-three dollars and seventy-four cents ($2,083.74), an increase in rent of three (3) percent over the previous year. An Additional benefit to RRF's use of the Property is that the city will be relieved of the costs associated with maintaining the Property, as well as the erosion control-measures required along the Cannon Road. This will result in an approximate annual maintenance cost savings of $6,000. DEPARTMENT CONTACT: Curtis M. Jackson 760-434-2836 curtis.jackson@carlsbadca.gov FOR CLERK USE. t( COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC D DENIED D CONTINUED TO DATE UNKNOWN D CONTINUED D RETURNED TO STAFF D WITHDRAWN D OTHER-SEE MINUTES D AMENDED D REPORT RECEIVED D Item No. 2 - AB #22,323 June 28, 2016 Page 1 of 27 Rey River Farms, Inc. June 28, 2016 Page 2 of 2 ENVIRONMENTAL IMPACT: The proposed action is exempt from the California Environmental Quality Act (CEQA) per State CEQA Guidelines Section 15301 — Existing Facilities. Section 15301 exempts the leasing of public property involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. EXHIBITS: 1. Resolution authorizing the City Manager to execute an Agricultural Lease Agreement for one-year with Rey River Farms Inc. for a portion of APN 210-090-17 2. Location site map for the leased portion of APN 210-090-17 Item No. 2 - AB #22,323 June 28, 2016 Page 2 of 27 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 RESOLUTION NO. 2016-119 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGRICULTURAL LEASE AGREEMENT FOR ONE-YEAR WITH REV RIVER FARMS INC. FOR A PORTION OF APN 210-090-17 WHEREAS, the City Council of the City of Carlsbad has determined that it is in the best interest of the city to enter into an Agricultural Lease Agreement with Rey River Farms Inc. for a portion of APN 210-090-17; and WHEREAS, the City Council has further determined that it accepts the terms of the Agricultural Lease Agreement with Rey River Farms Inc.; and WHEREAS, the Lease Agreement will generate $2,083.74 in revenue for the city for a period of one year which is a 3 percent increase over the prior year. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. The City Manager is authorized to execute an Agricultural Lease Agreement with Rey River Farms Inc., which is attached hereto as Attachment A. ~II II II II II II II Item No. 2 - AB #22,323 June 28, 2016 Page 3 of 27 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 Regular Meeting of the City Council of the City of Carlsbad on the 28th day of June, 2016, by the following vote to wit: AYES: Hall, Wood, Schumacher, Blackburn, Packard. NOES: None. ABSENT: None. lerk (SEAL) Item No. 2 - AB #22,323 June 28, 2016 Page 4 of 27 CITY OF CARLSBAD AGRICULTURAL LEASE Item No. 2 - AB #22,323 June 28, 2016 Page 5 of 27 Lease Outline SECTION PARAGRAPH PAGE Section 1 USES 1.01 Premises 1 1.02 Uses 1 1.03 Deletion of Portion of Leased Premises 1 1.04 Related Council Action 1 1.05 Quiet Possession 2 1.06 Easements and Reservations 2 Section 2 TERM 2.01 Commencement 2 2.02 Holdover 2 2.03 Quitclaim and Surrender of LESSEE'S Interest 3 2.04 Termination of Lease 3 Section 3 RENT 3.01 Time and Place of Payment 4 3.02 Rent 4 3.03 Delinquent Rent 4 Section 4 ASSIGNMENT 4.01 Time is of the Essence; Provisions Binding on Successors 4 4.02 Assignment and Subletting 4 4.03 Defaults and Remedies 5 4.04 Eminent Domain 6 Section 5 INSURANCE 5.01 Insurance 7 Section 6 IMPROVEMENTS/ALTERATIONS/REPAIRS 6.01 Acceptance of Premises 9 6.02 Entry and Inspection and Channel Maintenance 9 6.03 Maintenance 10 6.04 Improvements/Alterations 10 6.05 Utilities 10 6.06 Landscape and Landscape Irrigation 11 6.07 Liens 11 6.08 Taxes 11 6.09 Signs 11 6.10 Ownership of Improvements and Personal Property 12 Item No. 2 - AB #22,323 June 28, 2016 Page 6 of 27 SECTION PARAGRAPH PAGE Section 7 GENERAL PROVISIONS 7.01 Notices 13 7.02 Compliance with Law 13 7.03 CITY Approval 14 7.04 Agricultural Provisions 14 7.05 Agricultural Operations 14 7.06 Noxious Weeds, Pests 14 7.07 Employee Housing Prohibited 14 7.08 Nondiscrimination 15 7.09 Partial Invalidity 15 Section 8 WARRANTY 8.01 Warranty 15 Section 9 RELOCATION WAIVER 9.01 Relocation Waiver 15 Section 10 ENTIRE UNDERSTANDING 15 Section 11 SIGNATURES PAGE 16 Section 12 EXHIBITS Exhibit A Exhibit B Item No. 2 - AB #22,323 June 28, 2016 Page 7 of 27 CITY OF CARLSBAD AGRICULTURAL LEASE THIS LEASE AGREEMENT is executed between THE CITY OF CARLSBAD, a municipal corporation, hereinafter called "CITY", and REY RIVER FARMS INC. , hereinafter called "LESSEE". SECTION 1: USES 1.01 Premises. CITY hereby leases to LESSEE and LESSEE leases from CITY a portion of that certain real property situated in the City of Carlsbad, County of San Diego, State of California, described in Exhibit "A" attached hereto and by this reference made part of this agreement. The portion of said real property to be leased by City to LESSEE is roughly delineated on Exhibit "B", attached hereto and by this reference made a part of this agreement, and is hereinafter called the "premises" or "leased premises". 1.02 Uses. It is expressly agreed that the premises, consisting of approximately 3.01 ACRES , is leased to LESSEE solely and exclusively for the purposes of growing crops and for such other related or incidental purposes as may be first approved in writing by the City Manager and for no other purpose whatsoever. LESSEE covenants and agrees to use the premises for the above specified purposes and to diligently pursue said purposes throughout the term hereof. Failure to continuously use the premises for said purposes, or the use thereof for purposes not expressly authorized herein, shall be grounds for termination by CITY. 1.03 Deletion of Portion of Leased Premises. In the event any portion of the leased premises is not used by LESSEE for agriculture use, then CITY may, at CITY'S option, delete that portion of the leased premises not used by LESSEE from Section 1.01, Premises, hereof. Provided, however, Section 3, RENT, hereof, shall be adjusted downward by the City Manager on an equitable basis. 1.04 Related Council Actions. By the granting of this lease, neither CITY nor the Council of CITY is obligating itself to any other governmental agent, board, commission, or agency with regard to any other discretionary action relating to development or operation of the premises. Discretionary action includes, but is not limited to rezoning, variances, environmental clearances or any other governmental agency approvals, which may be required for the development and operation of the leased premises. 1 Item No. 2 - AB #22,323 June 28, 2016 Page 8 of 27 1.05 Quiet Possession. LESSEE, paying the rent and performing the covenants and agreements herein, shall at all times during the term peaceably and quietly have, hold and enjoy the premises. If CITY for any reason cannot deliver possession of the premises to LESSEE at the commencement of the term, or if during the lease term LESSEE is temporarily dispossessed through action or claim of a title superior to CITY'S, then and in either of such events, this lease shall not be voidable nor shall CITY be liable to LESSEE for any loss. A proportionate reduction of the minimum or flat rate rent for the period or periods during which LESSEE is prevented from having the quiet possession of all or a portion of the premises shall be determined by the City Manager of City and proved to Lessee in writing. 1.06 Easements and Reservations. a. CITY hereby reserves all rights, title and interest in any and all subsurface natural gas, oil, minerals and water on or within the premises. CITY reserves the right to grant and use easements or to establish and use rights-of-way over, under, along and across the leased premises for utilities, thoroughfares, or access as it deems advisable for the public good. c. CITY has the right to enter the premises for the purpose of making repairs to or developing municipal resources and services. However, CITY will reimburse LESSEE for damages, if any, to the personal property of Lessee, trade fixtures, alterations or utility installations, including crops, located on the leased premises resulting from CITY exercising the rights reserved in this section. Such reimbursement may include a reduction in the rent proportionate to the amount of damage as determined by CITY. CITY will pay the costs of maintenance and repair of all CITY installations made pursuant to these reserved rights. SECTION 2: TERM 2.01 Commencement. Regardless of the date of execution by the City, the term of this agreement shall be ONE (1) YEAR commencing on July 1, 2016 and terminating June 30, 2017. 2.02 Holdover. Any holding over by LESSEE after expiration or termination shall not be considered as a renewal or extension of this lease. The occupancy of the premises after the expiration or termination of this agreement constitutes a month-to-month 2 Item No. 2 - AB #22,323 June 28, 2016 Page 9 of 27 tenancy, and all other terms and conditions of this agreement shall continue in full force and effect; provided, however, CITY shall have the right to apply a reasonable increase in rent to bring the rent to fair market value and to terminate the holdover tenancy at will upon thirty (30) days written notice to LESSEE. If at expiration of the thirty (30) day time period LESSEE still has crops growing, LESSEE shall be permitted to continue raising and tending the crops and shall be permitted to harvest the crops. The right to harvest the crops shall not extend the term of the lease except that the provisions of this lease, other than the extension provision shall apply. The right to raise, tend and harvest shall apply only to crops planted before notice to terminate has been given. 2.03 Quitclaim and Surrender of LESSEE'S Interest. At termination of this lease for any reason, LESSEE shall execute, acknowledge and deliver to CITY, within five (5) days after written CITY demand, a valid and recordable quitclaim deed covering all of the premises. The premises shall be delivered free and clear of all liens and encumbrances, and in a decent, safe and sanitary condition. At the expiration or earlier termination of this lease, LESSEE shall surrender the premises to CITY free and clear of all liens and encumbrances, except those liens and encumbrances which existed on the date of execution hereof, and in a decent, safe and sanitary condition. If LESSEE fails or refuses to deliver the required deed, the CITY may prepare and record a notice reciting LESSEE'S failure to execute this lease provision and the notice will be conclusive evidence of the termination of this lease and all LESSEE'S rights to the premises. 2.04 Termination of Lease. Either party may terminate this lease at any time upon 120 days notice to the other. If at expiration of the 120 day time period LESSEE still has crops growing, LESSEE shall be permitted to continue raising and tending the crops and shall be permitted to harvest the crops. The right to harvest the crops shall not extend the term of the lease except that the provisions of this lease, other than the extension provision shall apply. The right to raise, tend and harvest shall apply only to crops planted before notice to terminate has been given. SECTION 3: RENT 3 Item No. 2 - AB #22,323 June 28, 2016 Page 10 of 27 3.01 Time and Place of Payment. Rent is due annually. Checks should be made payable to the City of Carlsbad and mailed or delivered to the Finance Department, 1635 Faraday Avenue, Carlsbad, California 92008. The place and time of payment may be changed at any time by CITY upon thirty (30) days written notice to LESSEE. Mailed rental payments shall be deemed paid upon the date such payment is postmarked by the postal authorities. If postmarks are illegible, the payment shall be deemed paid upon actual receipt by the Finance Department. LESSEE assumes all risk of loss and responsibility for late payment charges if payments are made by mail. 3.02 Rent. a. Rent Amount. The rent is TWO THOUSAND EIGHTY THREE AND 74/100 ($2,083.74) annually. c. Upon termination pursuant to Section 2.04 of this lease, the annual rent may be pro-rated as required. 3.03 Delinquent Rent. If LESSEE fails to pay the rent when due, LESSEE will pay in addition to the unpaid rents, five percent (5%) of the delinquent rent. If the rent is still unpaid at the end of fifteen (15) days, LESSEE shall pay an additional five percent (5%) [being a total of ten percent (10%)1. Acceptance of late charges and any portion of the late payment by CITY shall in no event constitute a waiver of LESSEE default with respect to late payment, nor prevent CITY from exercising any of the other rights and remedies granted in this lease. SECTION 4: ASSIGNMENT 4.01 Time is of the Essence; Provisions Binding on Successors. Time is of the essence for all of the terms, covenants and conditions of this lease and, except as otherwise provided herein, all of the terms, covenants and conditions of this lease shall apply to, benefit and bind the successors and assigns of the respective parties, jointly and individually. 4.02 Assignment and Subletting. LESSEE shall not assign this lease, or any interest therein, and shall not sublet the premises or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person, except employees, agents and guests of LESSEE, to use or occupy the premises or any part thereof, without the prior 4 Item No. 2 - AB #22,323 June 28, 2016 Page 11 of 27 written consent by the City Manager in each instance. Such consent by the City Manager shall not be unreasonably withheld. A consent to assignment, subletting, occupation or use by any other person shall not be deemed to be a consent to any subsequent assignment, subletting, occupation or use by another person. Any such assignment or subletting without such consent shall be void, and shall, at the option of CITY, terminate this lease. This lease shall not, nor shall any interest therein, be assignable, as to the interest of LESSEE, by operation of law, without the written consent of the City Manager. "Assignment", for the purposes of this clause shall include any transfer of any ownership interest in this lease by LESSEE or by any partners, principals, or stockholders, as the case may be, from the original LESSEE, its general partners or principals. Approval of any assignment or sublease shall be conditioned upon the assignee or sublessee agreeing in writing that it will assume the rights and obligations thereby assigned or subleased and that it will keep and perform all covenants, conditions and provisions of this agreement which are applicable to the rights acquired. 4.03 Defaults and Remedies. a. Default. In the event that: (1) LESSEE shall default in the performance of any covenant or condition required by this lease to be performed by LESSEE and shall fail to cure said default within thirty (30) days following written notice thereof from CITY; or if any such default is not curable within thirty (30) days, shall fail to commence to cure the default(s) within said thirty-day period and diligently pursue such cure to completion; or (2) LESSEE shall voluntarily file or have involuntarily filed against it any petition under any bankruptcy or insolvency act or law; or (3) LESSEE shall be adjudicated a bankrupt; or (4) LESSEE shall make a general assignment for the benefit of creditors; b. Abandonment by LESSEE. Even though LESSEE has breached the lease and abandoned the property, this lease Item No. 2 - AB #22,323 June 28, 2016 Page 12 of 27 shall continue in effect for so long as CITY does not terminate this lease, and CITY may enforce all its rights and remedies hereunder, including but not limited to the right to recover the rent as it becomes due, plus damages. c. Waiver. Any CITY waiver of a default is not a waiver of any other default. Any waiver of a default must be in writing and be executed by the City Manager in order to constitute a valid and binding waiver. CITY delay or failure to exercise a remedy or right is not a waiver of that or any other remedy or right under this lease. The use of one remedy or right for any default does not waive the use of another remedy or right for the same default or for another or later default. CITY'S acceptance of any rents is not a waiver of any default preceding the rent payment. CITY and LESSEE specifically agree that the property constituting the premises is CITY-owned and held in trust for the benefit of the citizens of the City of Carlsbad and that any failure by the City Manager or CITY staff to discover a default shall not result in an equitable estoppel, but CITY shall at all times, subject to the applicable statute of limitations, have the legal right to require the cure of any default when and as such defaults are discovered or when as the City Council directs the City Manager to take action or require the cure of any default after such default is brought to the attention of the City Council by the City Manager or by any concerned citizen. 4.04 Eminent Domain. If all or part of the premises is taken through condemnation proceedings or under threat of condemnation by any public authority with the power of eminent domain, the interests of CITY and LESSEE (or beneficiary or mortgagee) will be as follows: a. In the event the entire premises are taken, this lease shall terminate on the date of the transfer of title or possession to the condemning authority, whichever first occurs. b. In the event of a partial taking, if, in the opinion of CITY, the remaining part of the premises is unsuitable for the lease operation, this lease shall terminate on the date of the transfer of title or possession to the condemning authority, whichever first occurs. c. In the event of a partial taking, if, in the opinion of CITY, the remainder of the premises is suitable for continued lease operation, this lease shall terminate in regard to the portion taken on the date of the transfer of title or possession to the Item No. 2 - AB #22,323 June 28, 2016 Page 13 of 27 condemning authority, whichever first occurs, but shall continue for the portion not taken. The minimum rent shall be equitably reduced to reflect the portion of the premises taken. d. Award. All monies awarded in any such taking shall belong to CITY, whether such taking results in diminution in value of the leasehold or the fee or both; provided, however, LESSEE shall be entitled to any award attributable to the taking of or damages to LESSEE'S then remaining leasehold interest in installations or improvements of LESSEE, including crops. CITY shall have no liability to LESSEE for any award not provided by the condemning authority. e. Transfer. CITY has the right to transfer CITY'S interests in the premises in lieu of condemnation to any authority entitled to exercise the power of eminent domain. If a transfer occurs, LESSEE shall retain whatever interest it may have in the fair market value of any improvements placed by it on the premises in accordance with this lease so long as such rights do not unreasonably or substantially interfere with LESSEE'S operations. f. No Inverse Condemnation. The exercise of any CITY right under this lease shall not be interpreted as an exercise of the power of eminent domain and shall not impose any liability upon CITY for inverse condemnation. SECTION 5: INSURANCE 5.01 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-V". 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 7 Item No. 2 - AB #22,323 June 28, 2016 Page 14 of 27 will apply separately under this lease or the general aggregate will be twice the required per occurrence limits. CITY shall be named as an additional insured entitled to primary coverage. 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 $5,000.00 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. 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 CITY evidencing the existence of the necessary insurance policies shall be kept on file with CITY during the entire term of this lease. All insurance policies shall be primary coverage, and will name CITY as an additional insured, protect CITY against any legal costs in defending claims and will not terminate without thirty (30) days written notice to CITY. e. CITY 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 CITY, the insurance provisions in this lease do not provide adequate protection for CITY and/or for members of the public using the leased premises, CITY may require LESSEE to obtain insurance sufficient in coverage, form and amount to provide adequate protection. CITY'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. CITY shall notify LESSEE in writing of changes in the insurance requirements and, if LESSEE does not deposit certificates/endorsements evidencing acceptable insurance Item No. 2 - AB #22,323 June 28, 2016 Page 15 of 27 policies with CITY incorporating such changes within thirty (30) days of receipt of such notice, this lease shall be in default without further notice to LESSEE, and CITY 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. 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 CITY 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. SECTION 6: IMPROVEMENTS/ALTERATIONS/REPAIRS 6.01 Acceptance of Premises. 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 agrees it is relying solely on such independent inspection, tests, investigations, and observations in making this lease. LESSEE further acknowledges that the premises are in the condition called for by this lease: that CITY has performed all work with respect to the premises, and that LESSEE does not hold CITY responsible for any defects in the premises. 6.02 Entry and Inspection and Channel Maintenance. CITY reserves and shall always have the right to enter said premises for the purpose of viewing and ascertaining the condition of the same, or to protect its interests in the premises, or to inspect the operations conducted thereon. LESSEE shall maintain the premises and 9 Item No. 2 - AB #22,323 June 28, 2016 Page 16 of 27 remove all non-agricultural vegetation and debris on a regular basis. In the event that such entry or inspection by CITY discloses that said premises are not in a decent, safe, healthy, visually appealing and sanitary condition, LESSEE agrees to perform necessary maintenance work within seven (7) days written notice to LESSEE. CITY shall have the right, after ten (10) days written notice to LESSEE, to have any necessary maintenance work done at the expense of LESSEE, and LESSEE hereby agrees to pay promptly any and all costs incurred by CITY in having such necessary maintenance work done, in order to keep said premises in a decent, safe, healthy, visually appealing and sanitary condition. Further, if at any time CITY determines that said premises are not in a decent, safe, healthy, visually appealing, and sanitary condition, CITY may its sole discretion, without additional notice, require LESSEE to file with CITY a faithful performance bond to assure prompt correction of any condition which is not decent, safe, healthy, visually appealing and sanitary. Said bond shall be in an amount adequate in the opinion of the CITY to correct the said unsatisfactory condition. The rights reserved in this section shall not create any obligations on CITY or increase obligations elsewhere in this lease imposed on CITY. 6.03 Maintenance. Except as hereinafter provided, LESSEE agrees to assume full responsibility and cost for the operation and maintenance of the premises throughout the term. LESSEE will perform all such repairs and replacements necessary to maintain and preserve the premises in a decent, safe, healthy, visually appealing, and sanitary condition satisfactory to CITY and in compliance with all applicable laws. Appropriate codes and standards of CITY, state and federal agencies shall be observed in all maintenance, repairs and replacements on the premises. 6.04 Improvements/Alterations. No improvements, structures, or installations shall be constructed on the premises, and the premises may not be altered by LESSEE without prior written approval by the City Manager. This provision shall not relieve LESSEE of any obligation under this lease to maintain the premises in a decent, safe, healthy, and sanitary condition, including structural repair and restoration of damaged or worn improvements. CITY shall not be obligated by this lease to make or assume any expense for any improvements or alterations. 6.05 Utilities. LESSEE agrees to order, obtain and pay for all utilities and service and installation charges in connection with the development and operation of the leased premises. Item No. 2 - AB #22,323 June 28, 2016 Page 17 of 27 6.06 Landscape and Landscape Irrigation. The City reserves the right to install ornamental landscaping and landscape irrigation along a 10 foot perimeter of the property boundary from the edge of the public right of way. LESSEE agrees to pay for the water required to sufficiently irrigate the landscaping along the perimeter. The water will be sourced from the existing premises water meter and paid for as part of LESSEE'S existing utilities. Ongoing maintenance of the landscaping will be provided by LESSEE. LESSEE agrees to maintain ornamental landscaping, keep it free of weeds and debris and pruning any dead growth from the landscaping on a monthly basis. LESSEE shall not alter the landscaping irrigation without prior written consent of the CITY. 6.07 Liens. LESSEE shall at all times save CITY free and harmless and indemnify CITY against all claims for labor and materials in connection with operations, improvements, alterations, or repairs on or to the premises and the costs of defending against such claims, including reasonable attorney's fees. If improvements, alterations, or repairs are made to the premises by LESSEE or by any party other than CITY, and a lien or notice of lien is filed, LESSEE shall within five (5) days of such filing either: a. take all actions necessary to record a valid release of lien, or b. file with CITY a bond, cash, or other security acceptable to CITY sufficient to pay in full all claims of all persons seeking relief under the lien. 6.08 Taxes. LESSEE agrees to pay, before delinquency, all taxes, assessments, and fees assessed or levied upon LESSEE or the premises, including the land, any buildings, structures, machines, equipment, appliances, or other improvements or property of any nature whatsoever erected, installed or maintained by LESSEE or levied by reason of the business or other LESSEE activities related to the leased premises, including any licenses or permits. LESSEE recognizes and agrees that this lease may create a possessory interest subject to property taxation, and that LESSEE may be subject to the payment of taxes levied on such interest, and that LESSEE shall pay all such possessory interest taxes. LESSEE further agrees that payment for such taxes, fees and assessments will not reduce any rent due CITY. 6.09 Signs. LESSEE agrees not to erect or display any banners, pennants, flags, posters, signs, decorations, marquees, awnings, or similar devices or advertising without the prior written consent of Item No. 2 - AB #22,323 June 28, 2016 Page 18 of 27 CITY. If any such unauthorized item is found on the premises, LESSEE agrees to remove the item at its expense within 24 hours notice thereof by CITY, or CITY may thereupon remove the item at LESSEE'S cost. 6.10 Ownership of Improvements and Personal Property. a. Any and all improvements, trade fixtures, structures and installations or additions to the premises now existing or constructed on the premises by LESSEE shall at lease expiration or termination be deemed to be part of the premises and shall become, at CITY'S option, CITY'S property, free of all liens and claims except as otherwise provided in this lease. b. If CITY elects not to assume ownership of all or any improvements, trade fixtures, structures and installations, CITY shall so notify LESSEE thirty (30) days prior to termination or one-hundred-eighty (180) days prior to expiration, and LESSEE shall remove all such improvements, structures and installations as directed by CITY at LESSEE'S sole cost on or before lease expiration or termination. If LESSEE fails to remove any improvements, structures, and installations as directed, LESSEE agrees to pay CITY the full cost of any removal. c. LESSEE-owned machines, appliances, equipment (other than trade fixtures), and other items of personal property shall be removed by LESSEE by the date of the expiration or termination of this lease. Any said items which LESSEE fails to remove will be considered abandoned and become CITY'S property free of all claims and liens, or CITY may, at its option, remove said items at LESSEE'S expense. d. If any removal of such personal property by LESSEE results in damage to the remaining improvements on the premises, LESSEE agrees to repair all such damage. e. Any necessary removal by either CITY or LESSEE which takes place beyond said expiration or termination thereof shall require LESSEE to pay rent to CITY at the rate in effect immediately prior to said expiration or termination. f. Notwithstanding any of the foregoing, in the event LESSEE desires to dispose of any of its personal property used in the operation of said premises upon expiration or termination of Item No. 2 - AB #22,323 June 28, 2016 Page 19 of 27 this lease, then CITY shall have the first right to acquire or purchase said personal property. SECTION 7: GENERAL PROVISIONS 7.01 Notices. a. Any notice required or permitted to be given hereunder shall be in writing and may be served personally or by United States mail, postage prepaid, addressed to LESSEE at the leased premises or at such other address designated in writing by LESSEE; and to CITY as follows: City Manager 1200 Carlsbad Village Drive Carlsbad CA 92008 Copies to: Steve Hodges Public Works General Services 405 Oak Avenue Carlsbad CA 92008 Or to any mortgagee, trustee, or beneficiary as applicable, at such appropriate address designated in writing by the respective party. Contact for Lessee: Kerry Yasukochi P. 0. Box 189 San Luis Rey, CA 92068 760-757-5914 b. Any party entitled or required to receive notice under this lease may by like notice designate a different address to which notices shall be sent. 7.02 Compliance with Law. LESSEE shall at all times in the construction, maintenance, occupancy and operation of the premises comply with all regulations of CITY, County, State and Federal Governments at LESSEE'S sole cost and expense. In addition, LESSEE shall comply with any and all notices issued by the City Manager or his authorized representative under the authority of any such law, statute, ordinance, or regulation. 13 Item No. 2 - AB #22,323 June 28, 2016 Page 20 of 27 7.03 CITY Approval. The approval or consent of CITY, wherever required in this lease, shall mean the written approval or consent of the City Manager unless resolution by the City Council is required in the City Manager's discretion. 7.04 Agricultural Provisions. LESSEE shall use standard agricultural practices in growing; tending and harvesting said crops and shall not use the property in such a manner as to constitute a nuisance to adjoining property owners or lessees. LESSEE shall comply with the following requirements: a. Only drip type irrigation shall be used. b. All plastic material and debris shall be completely removed from the property at the completion of the lease. c. No aerial application of pesticides or fertilizers shall be permitted. d All pesticide applications shall be approved and supervised by the county agricultural office, with all necessary permits obtained from county in advance. A complete record of fertilization and pesticide application must be kept and made available upon request by CITY. e. Access roads shall be limited to those approved by the Municipal Property Manager and shall not cause erosion problems. 7.05 Agricultural Operations. LESSEE agrees to abide by the conditions for agricultural operations set forth herein. Failure of LESSEE to cease or cure any unauthorized practice within thirty (30) days after written notice to do so shall constitute at the option of CITY, an immediate termination of the lease. 7.06 Noxious Weeds, Pests. LESSEE shall take proper corrective action, to the satisfaction of CITY, to prevent the infestation of noxious weeds and pests. 7.07 Employee Housing Prohibited. LESSEE shall not provide housing for employees or any other persons on the property. LESSEE shall not permit LESSEE'S employees or any other persons to reside upon the property in any way. 7.08 Nondiscrimination. LESSEE agrees not to discriminate in any manner against any person or persons on account of race, marital status, sex, religious creed, color, ancestry, national origin, age or Item No. 2 - AB #22,323 June 28, 2016 Page 21 of 27 physical handicap in LESSEE'S use of the premises, including, but not limited to the providing of goods, services, facilities, privileges, advantages, and accommodations, and the obtaining and holding of employment. 7.09 Partial Invalidity. If any term, covenant, condition or provision of this lease is found invalid, void or unenforceable by a court of competent jurisdiction, the remaining provisions will remain in full force and effect. SECTION 8: WARRANTY 8.01 Warranty. The CITY does not warrant that the premises are suitable for the agricultural purposes for which they are leased. SECTION 9: RELOCATION WAIVER 9.01 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. LESSEE therefore agrees to waive any and all relocation benefits defined in the California Relocation Assistance Law (Government Code, Section 7260, et, seq.) after having the opportunity to consult with legal counsel about potential entitlements. SECTION 10: ENTIRE UNDERSTANDING 10.01 Entire Understanding. This lease contains the entire understanding of the parties. LESSEE, by signing this agreement, aggress that there is no other written or oral understanding between the parties with respect to the leased premises. Each party has relied on its own examination of the premises, advice from its own attorneys, and the warranties, representations, and covenants of the lease itself. Each of the parties in this lease agrees that no other party, agent, or attorney of any other party has made any promise, representation, or warranty whatsoever which is not contained in this lease. The failure or refusal of any party to inspect the premises, and obtain legal or other advice relevant to this transaction constitutes a waiver of any objection, contention, or claim that might have been based on these actions. No modification, amendment, or alteration of this lease will be valid unless it is in writing and signed by all parties. SECTION 11: SIGNATURES 11.01 Signatures Appear on Next Page 15 Item No. 2 - AB #22,323 June 28, 2016 Page 22 of 27 IN WITNESS WHEREOF, this Lease Agreement is executed by CITY, acting by and through its City Manager or his designee, and by LESSEE, acting by and through its lawfully authorized officers. Date 1/ [/ ,., " Prin{e!f~=~e J 1 ~L ~ "' "~ o-cJ1-' APPROVED as to form this _2.qth day of _..:;.,.CJ,).:!\J\:...1>1!Y\.....lo:.P~_,<::....f,--4<~:::::.....:::::0_l~lp--/ By~ City AttOffieY 16 Item No. 2 - AB #22,323 June 28, 2016 Page 23 of 27 State of California County of On Vlay Date personally appeared before me, rry H. Here Insprt Name and Title of the Officer a CA 46C4LC, Name(s) of Signer(s) Crral 677 Signature Signature of Notary Public Named Above: CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 s‘teAl. TA. ss.1 ss.• svteRteRarstVii`C. svt•Ag sN..11/-4Z44-"Ate. l'AR/Ikt/31(.. A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. who proved to me on the basis of satisfactory evidence to be the person( 4 whose name(s) is/are- subscribed to the within instrument and acknowledged to me that he/sliekhey executed the same in his/hcrAhoir authorized capacity(ies), and that by his/her/their signatureKon the instrument the person), or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. DORI D. HARRIS Commission # 2132621 Notary Public - California E lz : :4:1 Tr‘ !at _t t$: to. My Comm, Expires Dec 1, 2019 Place Notaiy Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Capacity(ies) Claimed by Signer(s) Signer's Name: 0 Corporate Officer — Title(s): 0 Partner — El Limited 0 General E Individual Attorney in Fact 0 Trustee 0 Guardian or Oontervator El Other: Signer Is Representing: Signer' ame: orporate Officer — Title(s): El Partner — Li Limited 0 General II Individual Li Attorney in Fact 11 Trustee PI Guardian or Conservator El Other: Signer Is Representing: • •• ' • •• • • ••_.• ©2014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907 Item No. 2 - AB #22,323 June 28, 2016 Page 24 of 27 EXHIBIT "A" LEGAL DESCRIPTION All that portion of Lot "H" of the Rancho Agua Hedionda, in the City of Carlsbad, County of San Diego, State of California, according to Partition Map thereof No. 823, filed in the office of the County Recorder of said County, November 16, 1896 described as follows: Beginning at the most Northerly comer of Lot 163 of Terramar Unit No. 5, according to Map thereof No. 3371 filed in the Office of the County Recorder of said County; thence along the Easterly prolongation of the Northerly boundary of said Terramar Unit No. 5 North 59°21'10" East 2.00 feet to the TRUE POINT OF BEGINNING; thence continuing along said Easterly prolongation of said Northerly boundary of Terramar Unit No. 5 North 59°21'10 East 226.92 feet to a point on the Westerly Right of Way of the Atchiso Topeka and Santa Fe Railway Company as said right of Way was established on September 22, 1948; thence along said Right of Way North 23°06'00" West 937.82 feet to a point; thence South 66054'10" West 103.1 1 feet to the beginning of a tangent 3042 foot radius curve concave Northerly; thence Westerly along the arc of said curve through a central angle of 5032'30A a distance of 294.2 feet, a radial from said point bears North 17033'20" West; thence South 37035'34" East 95.63 feet; thence South 30°38'50" East 535.00 feet; thence South 38033'38" East 21 8.10 feet; thence South 30038'50" East 150.00 feet to the TRUE POINT OF BEGINNING. 17 Item No. 2 - AB #22,323 June 28, 2016 Page 25 of 27 ', Item No. 2 - AB #22,323 June 28, 2016 Page 26 of 27 LOCATION MAP *LJA-z401- 0 CD A portion of APN 210-090-17-00 Rey River Farms Lease Property , PROJECT NAME EXHIBIT Rey River Farms Lease Property 2 Path: Dffransoortation Dedartment\Streets \ Laurel Weber\Rev River Farms.mxd VICINITY MAP Item No. 2 - AB #22,323 June 28, 2016 Page 27 of 27