CONTRACT 3607 Leasing Agreement3607.
LEASE OPTION AGREEMENT
THIS LEASE OPTION AGREEMENT ( "Agreement "), is entered into by the City of El
Segundo, a California Municipal Corporation ( "City"), and the El Segundo Unified School
District ( "District ") this 20 day of June, 2006 ( "Effective Date "). District and City are also
individually referred to herein as a "party" and collectively referred to herein as the "parties."
Capitalized terms used in this Agreement and not defined elsewhere have the meanings given
them on the attached Exhibit C.
RECITAL
Pursuant to Education Code Section 10900 et SeMc ., District and City are entering into this
Agreement for purposes of granting the City an option to lease from District the real property
described in Exhibit A hereto ( "Property ") with the Aquatic Improvements thereon.
The Parties agree as set forth below.
1. EXERCISE OF OPTION. The City shall have Sixty (60) days, from the date that the
applicable statute of limitations has expired with regard to the District's preparation and approval
of the environmental review pursuant to the California Environmental Quality Act for the
construction, operation and use of the Aquatic Improvements on the Real Property, to exercise its
option granted hereunder to lease the Property pursuant to the terms and conditions contained
herein. The City shall exercise its lease option by providing the District with written notice
within such sixty (60) day time period of its election to exercise its option. In the event the City
does not exercise its option this Agreement shall be deemed terminated and shall be of no further
force or effect.
2. LEASE OF PROPERTY. Subject to the City exercising its option to lease the property
pursuant to Section 1 hereof, and in consideration of the covenants and agreements set forth in
this Agreement and other good and valuable consideration, District leases the Property to City
and City leases the Property from District, upon and subject to the terms set forth in this
Agreement. Except as otherwise expressly set forth herein, City shall have sole possession and
control of the Property pursuant to the terms of this Agreement.
3. TERM. The term of this Agreement shall commence on the date that the District has
completed the Aquatic Improvements on the Property and delivered possession of the Property
and the Aquatics Improvements to the City ( "Commencement Date ") and continue for a forty
year period thereafter. In the event that the District has not commenced construction of the
Aquatic Improvements on or before January 1, 2010, and substantially completed the Aquatic
Improvements on or before January 1, 2012, this Agreement shall be deemed terminated and be
of no further force or effect. The District shall be solely responsible for the construction of the
Aquatic Improvements. The City shall have the right to terminate this Agreement at any time by
providing the District with twelve (12) months advance written notice of its intent to terminate
this Agreement.
4. RENT City shall pay District rent in the amount of one dollar ($1.00) per year.
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5. PERMITTED USE. City will use the Property for offering educational, recreational, and
competitive aquatic related activities to the public. The City shall have the right to, in its sole
discretion, determine the fees that it may charge to the public for use of the Property and Aquatic
Improvements and the fees shall be retained and controlled by the City. Notwithstanding the
foregoing, the District shall be allowed to utilize the Property and Aquatic Improvements based
upon a schedule agreed to by parties, in their respective sole discretion, on an annual basis. It is
contemplated that the District shall utilize the Property and Aquatic Facilities approximately 30
hours per week. It is contemplated that the District shall utilize the Property and Aquatic
Facilities for District students for District related physical education classes, water polo , and
swimming and diving teams and other competitive District aquatic activities.. The District may
charge fees for participants and spectators for such District activities, and the fees shall be the
retained and controlled by the District. The District shall be responsible for providing any
special equipment it needs its high school students' activities. In the event that the parties cannot
agree upon the schedule on or before April 1 of each year, then the City shall have the right to
establish the schedule for the next calendar year.
6. CONDITION OF PROPERTY. District represents and warrants that the Property and the
Aquatic Improvements are suitable for use by the public and that it has reviewed the
environmental condition of the Property and that there are no Hazardous Materials contained
thereon and that the District shall be solely responsible and liable for any claims arising from or
relating to Hazardous Materials being present on the site that were present on the site prior to the
Commencement Date or any defects that existed in the Property or the Aquatic Improvements
prior to the Commencement Date. In this connection, District agrees to defend, indemnify and
hold harmless the City, and its elected and appointed officials, officers, employees and agents
resulting from a breach of the representations and warranties contained in this Section 6.
7. MAINTENANCE . The City shall provide normal and routine maintenance with regard to
Property and Aquatic Facilities, including maintaining proper water quality of the pool, keeping
the pool, pool deck area, restrooms and parking lot areas clean and maintaining the safety
equipment for the Aquatic Facilities The City may close the pool from time to time for purposes
of carrying out such normal and routine maintenance or for public health purposes. The City
shall not be obligated to replace or make major repairs to the Aquatic Facilities. To the extent
that replacement or major repairs to the Aquatic Facilities become necessary, the parties shall
meet and discuss how to fund the replacement or repair of the Aquatic Facilities. The parties
intend that they will use their respective best efforts to keep the Aquatic Facilities in good repair
while protecting the parties rights under this Agreement. It is contemplated that an amendment
to this agreement may be necessary with regard to major repairs to ensure that the City's
investment in the repairs is commensurate with assurances respecting the City's rights under this
Agreement. However, neither party shall be obligated to fund the replacement or repair of the
Aquatic Facilities absent a subsequent agreement being reached by the parties.
8. UTILITIES. The City shall pay the gas, electric and water utility costs incurred with regard
to the Property and Aquatic Facilities. The District as part of the construction of the Aquatic
Facilities shall cause these utilities to be metered separately from the other utilities utilized on
the adjacent District property.
Lease Option Agreement with ESUSD - Final
05/04/2006
3607.
9. OPERATION. The City shall be allowed to operate the Aquatic Facilities between the hours
of 6 a.m. and 10 p.m. The City shall provide adequate staffing and supervision for purposes of
safely operating the pool for the programs and activities that it conducts on the Property. The
City shall determine on an annual basis the amount that it will budget for programs and activities
that will be conducted on the Property. The City shall control and regulate the use of the parking
lot which is located on the property and that is considered an Aquatic Improvement.
Notwithstanding the foregoing, the City shall not supervise the District's use of the pool for its
high school activities and the District shall be solely responsible for the supervision and the
safety of the individuals involved in such activities. Both the City and District shall conduct
their respective programs and activities on the property in compliance with all Laws.
10. INDEMNIFICATION. (a) To the maximum extent permitted by law, District agrees to
defend, indemnify and hold harmless the City and its elected and appointed officials, officers,
employees and agents from and against any and all liabilities, losses, damages, injuries, actions,
claims, lawsuits, costs and expenses (including attorneys' fees and costs) of any kind or character
to any person or property arising from, related to or caused by the negligent or wrongful
misconduct of the District and its elected and appointed officials, officers, employees and agents
relating to District's construction or use of the Property and the Aquatic Facilities.
(b) To the maximum extent permitted by law, City agrees to defend, indemnify and hold
harmless the District and its elected and appointed officials, officers, employees and agents from
and against any and all liabilities, losses, damages, injuries, actions, claims, lawsuits, costs and
expenses (including attorneys' fees and costs) of any kind or character to any person or property
arising from, related to or caused by the negligent or wrongful misconduct of the City and its
elected and appointed officials, officers, employees and agents relating to City's use of the
Property and the Aquatic Facilities.
The indemnification provisions set forth above shall survive the termination of this Agreement.
11. WARRANTIES. City and District each acknowledge and represent that it is duly organized,
validly existing and in good standing and has the right, power and authority to enter into this
Agreement and bind itself hereto through the party set forth as signatory for the Party below.
12. QUIET POSSESSION. So long as City keeps, observes and fully satisfies all covenants,
obligations and agreements of City under this Agreement, District shall take no action that would
interfere with the City's quiet possession and use of the Property during the term of this
Agreement.
13. DAMAGE OR DESTRUCTION. If any Casualty damages or renders any portion of the
Property or the Aquatic Facilities City shall have no obligation to either restore the Property to
the condition it was in prior to the Casualty. City may terminate this Agreement in the case of
damage or destruction of the Property.
14. DEFAULT AND RIGHT TO CURE.
(a) Events of Default. The occurrence of any of the following constitutes an "Event
of Default" by City under this Agreement. District and City agree that the notices required by
Lease Option Agreement with ESUSD - Final 05/04/2006
36 0 7 • ..~
this Section 17 are intended to satisfy any and all notice requirements imposed by the Laws and
are not in addition to any such requirements.
i. Failure to Pay Rent. City fails to pay any Additional Rent amount as and
when due and such failure is not cured within fifteen (15) days after District notifies City of
City's failure to pay Additional Rent when due.
ii. Failure to Perform. City breaches or fails to perform any of City's non -
monetary obligations under this Agreement and such breach or failure is not cured within fifteen
(15) days after District notifies City of City's breach or failure; provided that if City is not able
through the use of commercially reasonable efforts to cure such breach or failure within a fifteen
(15) day period, City's breach or failure is not an Event of Default if City commences to cure
such breach or failure within the fifteen (15) day period and thereafter diligently pursues the cure
and effects the cure within a period of time that does not exceed an additional sixty (60) days
after the expiration of the initial fifteen (15) day period.
(b) Remedies. Upon the occurrence of any Event of Default, District may at any time
and from time to time, without notice or demand, as its sole remedy, file an action for specific
performance.
(c) District's Default. District will be in deemed to be in default and breach of this
Agreement if District fails to perform any term or condition under this Agreement within forty -
five (45) days after receipt of written notice from City that specifies a specific failure by District
under this Agreement. No such failure, however, will be deemed to exist if District has
commenced to cure the default within such period and provided such efforts are prosecuted to
completion with reasonable diligence. Delay in curing a default will be excused if it is due to
causes beyond the reasonable control of District.
(d) No Waiver. No failure by either District or City to insist upon the performance of
any provision of this Agreement or to exercise any right or remedy upon a breach or default
hereof constitutes a wavier of any such breach or default. Any such waiver may be made only
by a writing signed by the Party providing the waiver. One or more waivers by a Party is not to
be construed as a wavier by that Party of a subsequent breach or default of the same provision.
15. ASSIGNMENT /SUBLEASE. Neither the District or the City may transfer its interest under
this Agreement without the consent of the other party, which consent may be withheld in the
party's sole discretion.
16. NOTICES. Any notice to be given or other document to be delivered by any Party to the
other or others hereunder, and any payments between the Parties, may be delivered in person to
an officer of any Party, or may be deposited in the United States mail in the State of California,
duly certified or registered, return receipt requested, with postage prepaid, or by federal Express
or other similar overnight delivery service or by facsimile transmission with a copy sent via U.S.
Mail and addressed to the Party for whom intended, as follows:
Lease Option Agreement with ESUSD - Final
05/04/2006
To District:
With a copy to:
To City:
with a copy to:
1
El Segundo Unified School District
641 Sheldon Street
El Segundo, CA 90245
Facsimile No.: (310) 640 -8272
Atkinson, Andelson, Loya, Rudd & Romo
17871 Park Plaza Drive, Suite 200
Cerritos, CA 90703
Attn: Andreas C. Chialtas, Esq.
City of El Segundo
350 Main Street
El Segundo, CA 90245
Attention: City Manager
Facsimile No.: (310) 322 -7137
Jenkins and Hogin
1230 Rosecrans Avenue, Suite 110
Manhattan Beach, CA 90266
Attention: Mark D. Hensley, Esq.
Telephone No.: (310) 643 -8448
Facsimile No.: (310) 643 -8441
Any Party hereto may from time to time, by written notice to the other, designate a different
address which shall be substituted for the one above specified. Unless otherwise specifically
provided for herein, all notices, payments, demands or other communications given hereunder
shall be in writing and shall be deemed to have been duly given and received (i) upon personal
delivery, (ii) as of the third business day after mailing by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as set forth above, (iii) the immediately
succeeding business day after deposit with Federal Express or other equivalent overnight
delivery system or (iv) upon transmission by facsimile.
17. MISCELLANEOUS.
(e) Amendment; Waiver. This Agreement cannot be amended, modified or revised
unless done in writing and signed by an authorized agent of the District and an authorized agent
of the City. No provision may be waived except in a writing signed by both Parties.
(fl Recording. A memorandum of this Agreement shall be recorded.
Lease Option Agreement with ESUSD - Final
05/04/2006
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(g) Entire Agreement. This Agreement and the exhibits attached hereto, all being a
part hereof, constitute the entire agreement of the Parties hereto with respect to the leasing of the
Property and Aquatic Improvements to the City and will supersede all prior offers, negotiations
and agreements.
(h) Governing Law. This Agreement will be governed by the laws of the State of
California and the venue for all legal and equitable actions shall be the Los Angeles County
Superior Court.
(i) Severability. If any covenant, term, provision, condition or agreement of this
Agreement is, to any extent, held invalid or unenforceable, the remaining portion thereof and all
other covenants, terms, provisions, conditions and agreements of this Agreement will not be
affected by such holding, and will remain valid and in force to the fullest extent permitted by
law.
0) Attorneys' Fees. If either District or City commences any litigation or judicial
action to determine or enforce any of the provisions of this Agreement, the prevailing Party in
any such litigation or judicial action is entitled to recover all of its costs and expenses (including,
but not limited to, reasonable attorneys' fees, costs and expenditures) from the non - prevailing
Party.
(k) Joint Draftins. This Agreement shall be construed as though it was jointly drafted
and the doctrine than any ambiguity contained in a contract shall be construed against the party
whose counsel drafted the contracted is expressly waived by each of the parties hereto.
(1) Third Party Beneficiaries. Nothing in this Agreement shall be construed to confer
any right upon any person that is not a signatory to this Agreement.
Lease Option Agreement with ESUSD - Final 05/04/2006
3607
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed.
"DISTRICT"
By: \,_ _.
Chris Powell, President
Approved as to
C. Chialtas, District Counsel
"CITY"
By:
Kelly McDowell, Mayor
Attest:
Cindy Mo en, City �Cleerk�
Approved as rm:
Mark Hensley, City Attorney
Lease Option Agreement with ESUSD - Final 05/04/2006
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
[To be attached]
Exhibit A
05/04/2006
EXHIBIT "A"
LEGAL DESCRIPTION
PARCEL 1:
3607
ORDER NO. 5103347 -67
LOTS 1 THROUGH 18 INCLUSIVE, IN BLOCK 86, OF EL SEGUNDO, IN THE CITY OF EL
SEGUNDO, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 20, PAGES 22 AND 23 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY; TOGETHER WITH THAT VACATED ALLEY 15.00 FEET WIDE,
ADJOINING THE SOUTHERLY LINE OF LOTS 1 THROUGH 6 IN BLOCK 86, AND THAT
VACATED ALLEY 20 FEET WIDE ADJOINING THE EASTERLY LINE OF LOTS 7 THROUGH 12
IN BLOCK 86; AND THE WESTERLY LINE OF LOTS 13 THROUGH 18 IN BLOCK 86, AS
SHOWN ON MAP OF EL SEGUNDO, AS PER MAP RECORDED IN BOOK 20 PAGES 22 AND 23
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. SAID
VACATION WAS ADOPTED BY THE CITY COUNCIL OF CITY OF EL SEGUNDO IN D:59 -108,
FILED ON MAY 29, 1930.
PARCEL 2:
LOTS 1 THROUGH 12 INCLUSIVE, IN BLOCK 87, OF EL SEGUNDO, IN THE CITY OF EL
SEGUNDO, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 20 PAGES 22 AND 23 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY; TOGETHER WITH THAT VACATED ALLEY 15.00 FEET WIDE,
ADJOINING THE SOUTHERLY LINE OF LOTS 4 THROUGH 6 IN BLOCK 87, AND THE WEST
HALF OF EUCALYPTUS DRIVE 60.00 FEET WIDE ADJOINING LOT 1 OF BLOCK 87 OF EL
SEGUNDO; AND STANDARD STREET 60.00 FEET WIDE ADJOINING THE EASTERLY LINE OF
LOTS 1, 13 THROUGH 18 IN BLOCK 86, AND THE WESTERLY LINE OF LOTS 6 THROUGH
12 IN BLOCK 87, AS SHOWN ON MAP OF EL SEGUNDO, AS PER MAP RECORDED IN BOOK
20 PAGES 22 AND 23 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY. SAID VACATION WAS ADOPTED BY THE CITY COUNCIL OF CITY OF EL
SEGUNDO IN D:59 -108, FILED ON MAY 29, 1930.
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EXHIBIT B
DEPICTION OF AQUATIC FACILITIES
[To be attached]
Exhibit B
05/04/2006
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EXHIBIT C
DEFINITIONS
"Aquatic Facilities" mean the following physical improvements that District is required to
construct on the Property: two pools, necessary pump, filter and maintenance equipment,
restroom and locker facilities, administrative office space, storage space, concrete pool decking,
a parking lot adjacent to the swim complex, and appropriate fencing and landscaping.
"Casualty" means any physical loss, destruction or damage to property which is caused by fire,
windstorm, hail, lightning, vandalism, theft, explosion, collision, accident, flood, earthquake,
collapse, or any other peril.. "Casualty" does not include any waste or excessive or unreasonable
wear and tear caused by the City
"Hazardous Materials" means any of the following, in any amount: (a) any petroleum or
Petroleum product, asbestos in any form, urea formaldehyde and polychlorinated biphenyls; (b)
any radioactive substance; (c) any toxic, infectious, reactive, corrosive, ignitable or flammable
chemical or chemical compound; and (d) any chemicals, materials or substances, whether solid,
liquid or gas, defined as or included in the definitions of "hazardous substances," "hazardous
wastes," "Hazardous materials," .. extremely hazardous wastes
," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants," "solid waste," or words of similar import in any federal,
state or local statute, law, ordinance or regulation now existing or existing on or after the
Effective Date as the same may be interpreted by government offices and agencies, including,
without limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and other
chlorinated solvents, (ii) oil or any petroleum products or fractions thereof ' (iii)
asbestos, (iv) polychlorinated bi hen is , (v) fl ammable explosives, (vi)
urea formaldehyde, (vii) radioactive
materials and waste, and (viii) infectious waste. It is the intent of the Parties hereto to construe
the term "Hazardous Materials" in its broadest sense.
"Hazardous Materials Laws" means any federal, state or local laws, ordinances, codes,
statutes, regulations, administrative rules, policies and orders, and other authority, existing now
or in the future, which classify, regulate, list or define hazardous substances, materials, wastes
contaminants, pollutants and/or the Hazardous Materials, including without limitation the
following statutes and regulations, and any other legal authority, regulations, or policies relating
to or implementing such statutes and regulations:
Federal. Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ( "CERCLA" or "Superfund "), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ( "SARA "), 42 U.S.C. § 9601 et
seq.; Resource Conservation and Recovery Act of 1976 ( "RCRA "), 42 U.S.C. §
6901 et seq.; Clean Water Act ( "CWA "), 33 U.S.C. § 1251 et seq.; Clean Air Act
( "CAA "), 42 U.S.C. § 78401 et seq.; Toxic Substances Control Act ( "TSCA "), 15
U.S.C. § 2601 et seq.; The Refuse Act of 1899, 33 U.S.C. § 407; Occupational
Safety and Health Act ( "OSHA "), 29 U.S.C. § 651 et seq.; Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq.; United States Department of
Transportation Table (49 CFR 172.101 and amendments thereto) and the
Exhibit C
05/04/2006
Environmental Protection Agency Table (40 CFR Part 302 and amendments
thereto);
California. Carpenter- Presley - Tanner Hazardous Substance Account Act
( "California Superfund "), Cal. Health & Safety Code § 25300 et seq.; California
Hazardous Waste Control Act, Cal. Health & Safety Code Sections 25100 et seq.;
Porter - Cologne Water Quality Control Act ( "Porter - Cologne Act "), Cal. Water
Code § 13000 et seq.; Hazardous Waste Disposal Land Use Law, Cal. Health &
Safety Code § 25220 et seq.; Safe Drinking Water and Toxic Enforcement Act of
1986 ( "Proposition 65 "), Cal. Health & Safety Code § 25249.5 et seq.; Hazardous
Substances Underground Storage Tank Law, Cal. Health & Safety Code § 25280
et seq.; California Hazardous Substance Act, Cal. Health & Safety Code § 28740
et seq.; Air Resources Law, Cal. Health & Safety Code § 39000 et seq.;
Hazardous Materials Release Response Plans and Inventory, Cal. Health & Safety
Code §§ 25500- 25541; Toxic Pits Cleanup Act of 1984 ( "TCPA "), Cal. Health &
Safety Code §§ 25208- 25208.17;
Other Laws and Regulations. All other regulations promulgated pursuant to said
foregoing laws or any amendments or replacement thereof, provided such
amendments or replacements shall in no way limit the original scope and/or
definition of Hazardous Materials defined herein as of the execution date of this
Agreement.
"Laws" means any law, regulation, rule, order, statute or ordinance of any governmental or
private entity in effect on or after the Effective Date and applicable to the Property or the use or
occupancy of the Property, including, without limitation, Hazardous Materials Laws.
Exhibit C
05/04/2006