HomeMy WebLinkAboutReso 23-17 Approving a Land Lease Agreement with Hamcor, Inc. RESOLUTION NO. 23 — 17
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
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APPROVING A LAND LEASE AGREEMENT WITH HAMCOR, INC.
WHEREAS, in 2006, the City entered into a 10-year land lease agreement with Hamcor, Inc. to
use a remnant of public right-of-way for the purpose of displaying a single vehicle; and
WHEREAS, Hamcor, Inc. has requested a new land lease agreement to utilize the same
public right-of-way property for the same purpose; and
WHEREAS, Hamcor, Inc. would maintain the public right-of-way and be subject to an up-front
lease payment of$12,000, and subsequent annual lease payments of$1,500; and
WHEREAS, the term of the lease is 10 years with up to two, one-year extensions; and
WHEREAS, a clause has been added to the Lease that, if the property is required in order to
accommodate an expansion of the adjacent freeway on-ramp connecting Dougherty Road to 1-580,
the City may terminate the agreement; and
WHEREAS, the proposed lease will result in public benefit for the following reasons:
1. Display of the vehicle, along with any improvements and maintenance conducted on
the property, will provide a more aesthetically pleasing right-of-way;
2. Improvements made to the property will improve the value of the property;
3. The agreement will strengthen the City's relationship with Hamcor, Inc., resulting in a
more secure long-term sales tax revenue stream for the City.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin approves
the Land Lease Agreement with Hamcor, Inc. attached hereto as Exhibit A.
BE IT FURTHER RESOLVED that the City Manager is authorized to execute the Land Lease
Agreement substantially in the form attached hereto.
PASSED, APPROVED AND ADOPTED this 7t" day of March 2017, by the following vote:
AYES: Councilmembers Biddle, Goel, Gupta, Hernandez and Mayor Haubert
NOES:
ABSENT:
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ABSTAIN:
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ayor
ATTEST:
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City Clerk
Reso No. 23-17, Adopted 3/7/2017, Item No. 4.4 Page 1 of 1
LEASE AGREEMENT BETWEEN
THE CITY OF DUBLIN AND HAMCOR, INC.
For Property at the Terminus of Dublin Court
This Lease ("Lease") is made and entered into as of the 7th Day of March,2017, by and between
Hamcor, Inc., a California corporation and ("Lessee") and the City of Dublin, a municipal
corporation of the State of California ("Lessor" or the "City"). The Lessee and Lessor, are
together referred to as the"Parties."
RECITALS
A. City owns the property at the terminus of Dublin Court in the City of Dublin, shown on
the Site Map attached as Exhibit A(the"Premises").
B. Lessee entered into a lease agreement with City effective June 6, 2006, which expired
after a ten (10)year term in 2016.
C. Lessee desires enter into a new lease agreement to continue the display of a vehicle in
conjunction with the adjacent vehicle sales operation.
D. The Parties desire to enter into this Lease with respect to said Premises in accordance
with the terms and conditions set forth herein.
AGREEMENT
Now,therefore, it is mutually agreed as follows:
1. Premises. In consideration of the rent set forth herein and the faithful performance by
Lessee of the other terms, covenants, agreements, and conditions contained in this Lease, City
hereby leases to Lessee and Lessee hereby leases from City the Premises for the purpose of
displaying a single vehicle. Lessee acknowledges that the Premises is leased "as is"with respect
to title, that the Premises may be subject to certain public rights, and that its use of the
Premises may be limited by such public rights.
2. Term of Lease and Option. The term of this Lease is ten (10) years ("Term"),
commencing on March 7, 2017. At the end of the Term, City may agree to renew the Lease for
two (2) additional one-year terms upon provision of sixty (60) days' written notice from Lessee
to the City.
3. Use. In its use and operation of the Premises, Lessee shall comply with all applicable
statutes, ordinances, or regulations now or hereafter adopted by any federal, state, or county
governmental entity, and with all ordinances, regulations, policies, and guidelines now or
hereafter adopted by the City of Dublin,and applicable to Lessee's use of the Premises.
4. Rent.
a. Lessee shall:
(1) Upon execution of the Lease, pay to the City a single lump sum of Twelve
Thousand Dollars ($12,000) in lawful money of the United States in arrears
for use of the property between 2006 and 2016("Lump Sum Payment").
(2) Pay to the City rent in the amount of One Hundred Twenty Five Dollars
($125) per month, paid in a single lump sum of one thousand five hundred
dollars ($1,500)on or before April 1 of each year.
(3) All payments shall be made to City of Dublin and delivered by hand or mailed
to 100 Civic Plaza, Dublin, California 94568, or such other address as shall be
designated in writing by City.
5. Use Restrictions. The Lessee is granted exclusive use of the Leased Premises. The
Leased Premises shall only be used displaying a single vehicle. Access is permitted 24-hours per
day, 7 days per week. Lessee shall not use or allow the use of the Leased Premises for any
unlawful purpose. Lessee shall comply with all use restrictions set forth in Exhibit B. Failure to
comply with any of the use restrictions shall be deemed a material default.
6. No Assignment, Sublease, or Use by Other Persons. Lessee agrees not to assign,
sublease, or otherwise transfer the Lease or any right, interest, or privilege connected
therewith, without first obtaining City's written consent. Any such assignment or subletting
without such consent shall be void, and shall, at the option of City, be deemed a material
breach of this lease.
7. Improvements. Lessee agrees that any alterations, additions or improvements made to
the Premises ("Improvements") shall be subject to prior approval by City, and the full cost for
such Improvements shall be borne by Lessee. Lessee shall pay for all utility service necessary to
design, install and use the Improvements.
8. Maintenance. Lessee shall, at its sole cost and expense, keep and maintain the Premises
in good and sanitary order,condition,and repair. Lessee's responsibility includes the following:
a. Waste. Lessee shall perform, at its sole expense, all custodial maintenance of the
Premises, which maintenance shall include but not be limited to trash removal,
washing surfaces, and general cleaning,and shall be performed to the satisfaction of
the City Manager and/or his or her designee.
b. Quiet Conduct. Lessee shall not commit, or suffer to be committed, any waste upon
the Premises, or any nuisance, or other act or thing which may disturb the quiet
enjoyment of the property owners in the vicinity. City reserves the right to request
documentation regarding any of the above information at any time or for any
reason.
c. Repair. Lessee shall, at its sole cost, keep and maintain the Premises, the
Improvements, and every part thereof, in good order, condition, and repair. Lessee
shall pay City for the repair or replacement of any City property which shall be lost,
damaged, or stolen as the result of Lessee's use of the Premises,with the exception
of normal wear and tear to Premises.
d. Damage and Destruction. In the event of destruction by fire, casualty or other cause
which shall render more than fifty percent (50%) of the Premises unusable, Lessee
shall have the option of reconstructing the Improvements, or terminating this Lease.
Lessee shall provide City written notice of its intention to reconstruct the
Improvements within sixty(60) days of such destruction. Failure to provide notice to
the City within such time shall automatically terminate this Lease.
9. Insurance. Lessee shall at its own cost and expense maintain and keep in force during
the term of the Lease comprehensive broad form general public liability insurance against all
claims and liability for personal injury, death, or property insurance arising out of the use of
property of City. Such insurance shall provide coverage in a single limit of not less than One
Million Dollars ($1,000,000) per occurrence with an aggregate limit of Two Million Dollars
($2,000,000). Said insurance shall name the City of Dublin, its officers, agents and employees,
as additional insureds. A certificate of such insurance shall be delivered to City prior to
occupation of the Premises by Lessee, and shall provide that City shall be notified in writing no
less than thirty (30) days in advance of cancellations of said insurance. Lessee shall carry full
replacement insurance coverage or agree to repair, replace, restore to operational use within
sixty (60) days or as soon as reasonably possible as agreed in writing by City. Failure to do so
will result in default of the Lease.
10. Attorneys' Fees. If any action at law or in equity shall be brought to recover any rent
under this Lease, or for or on account of any breach of or to enforce or interpret any of the
covenants, terms, or conditions of this Lease, or for the recovery of the possession of the
Premises, the prevailing party shall be entitle to recover from the other party as a part of the
prevailing party's costs, reasonable attorneys' fees, the amount of which shall be fixed by the
Court and shall be made a part of any judgment rendered.
11. Indemnification. Lessee agrees to defend, indemnify and hold harmless City, its officers,
elected or appointed officials, employees, agents, and volunteers from and against any and all
claims, damages, losses, expenses, fines, penalties, judgments, demands and defense costs
(including, without limitation, actual, direct, out-of-pocket costs and expenses and amounts
paid in compromise or settlement and reasonable outside legal fees arising from litigation of
every nature or liability of any kind or nature including civil, criminal, administrative or
investigative) arising out of or relating (directly or indirectly)to the Lease, including(a) any act,
error, failure to act, or negligence of Lessee or of its officers, employees, agents, invitees,
guests, licensees, or any of them (including failure to comply with any applicable laws, rules,
regulations, orders, decrees) and (b) any breach or default in performance of any obligation on
Lessee's part to be performed under the Lease. Lessee will conduct all defenses at its sole cost
and expense and City shall reasonably approve selection of Lessee's counsel. Lessee will have
no obligation to defend or indemnify City from a claim if it is determined by a court of
competent jurisdiction that such claim was caused by the sole negligence or willful misconduct
of City.This indemnity shall apply to all claims and liability regardless of whether any insurance
policies of Lessee, its affiliates or any other parties are applicable thereto. The policy limits of
any insurance of Lessee, its affiliates or other parties are not a limitation upon the obligation of
Lessee including without limitation the amount of indemnification to be provided by Lessee.
12. Default. The occurrence of any of the following shall constitute a default by
Lessee:
a. Failure to pay lump sum upon execution of the Lease
b. Failure to pay rent when due;
c. Abandonment and vacation of the Premises by failing to occupy the Premises at any
time during the term;
d. Changing the use described in Section 3 without prior written consent of Licensor;or
e. Failure to perform any other provision of the Lease.
13. Waiver. The waiver by City of any breach of any term, covenant, or condition shall not
be deemed to be a waiver of such term, covenant, or condition or any subsequent breach of
the same or any other term, covenant, or condition.The subsequent acceptance of rent by City
shall not be deemed to be a waiver of any preceding preach by Lessee of any term, covenant, or
condition of the Lease, other than the failure of Lessee to pay the particular rent so accepted,
regardless of City's knowledge of such preceding breach at the time of acceptance of such rent.
14. Partial Invalidity. If any one or more terms, provisions, covenants, or conditions of this
Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason
whatsoever by a court of competent jurisdiction, the finding or order or decree of which
becomes final, none of the remaining terms, provisions, covenants and conditions of this Lease
shall be affected thereby, and each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
15. Termination. Either party may terminate this Lease without cause by providing written
notice to the other party three hundred sixty-five (365) calendar days' in advance of the
proposed termination date. If Lessee commits a Default pursuant to Section 12 however, City
shall provide written notice to Lessee explaining the Default, identifying the particular section
of the Lease that has been violated. Lessee shall then have thirty (30) days to correct the
Default. If, by the end of the thirty (30) day time period, Lessee fails to correct the Default to
the satisfaction of the City Manager or his or her designee, the City may terminate the Lease
upon thirty (30) days written notice. Upon such early termination, City shall refund any portion
of the annual rent payment associated with the period of time following termination.
However, in the event that an approved City project requires that the Premises be used in
conjunction with road widening improvements, City is permitted to exercise early termination
of the Lease,with sixty(60)days written notice to Lessee.
16. Expiration;Termination. At the expiration or earlier termination of the term,
Lessee shall surrender to Landlord the possession of the Premises. Surrender or removal of
improvements, fixtures, trade fixtures, and improvements shall be as directed in provisions of
this Lease on ownership of improvements at termination. Lessee shall leave the surrendered
Premises and any other property in good and broom-clean condition except as provided to the
contrary in provisions of this Lease on maintenance and repair of improvements. All property
that Lessee is required to surrender shall become Landlord's property at termination of the
Lease. All property that Lessee is not required to surrender but that Lessee does abandon shall,
at Landlord's election, become Landlord's property at termination.
If Lessee fails to surrender the Premises at the expiration or sooner termination
of this, Lease, Lessee shall defend and indemnify Landlord from all liability and expense
resulting from the delay or failure to surrender, including, without limitation, claims made by
any succeeding Lessee founded on or resulting from Lessee's failure to surrender.
This Lease shall terminate without further notice at expiration of the term. Any
holding over by Lessee after expiration shall not constitute a renewal or extension or give
Lessee any rights in or to the Premises except as otherwise expressly provided in this Lease.
17. Notices. Any notice or demand under the terms of this Lease or under any statue
must or may be given or made by Licensee or City shall be in writing and shall be given or made
by a letter, memorandum, e-mail or fax and addressed to the respective parties as follows:
To City: City of Dublin
Attn: City Manager
100 Civic Plaza
Dublin, CA 94568
To Lessee: Hamcor, Inc.
Attn: President
4321 Toyota Drive
Dublin, CA 94568
Such notice or demand shall be deemed to have been given or made when sent.
18. Possessory Interest. Lessee recognizes and understands that this Lease may create a
possessory interest subject to property taxation and Lessee may be subject to the payment of
property taxes levied on such interest.
19. No Joint Venture or Partnership. Nothing in this Lease is intended to create a joint
venture or partnership between Lessor and Lessee.
20. Lease in Multiple Copies. This Lease may be executed in multiple copies, and each
executed copy shall be deemed an original.
21. Modifications. Lessee agrees that the terms of this Lease constitute the entire Lease
between Lessee and Lessor regarding the Leased Premises. However, this Lease may be
modified by written agreement of the parties. This Lease supersedes any prior agreement
between the Parties related to the Leased Premises,written or oral.
22. Binding on Successors.The terms contained in this Lease shall, subject to the provisions
as to assignment, apply to and bind the heirs,successors,executors,administrators, and assigns
of the Parties.
23. Governing Law: This Lease, and all matters relating to this Lease, shall be governed by
the laws of the State of California, or other applicable and superseding federal law, in force at
the time any need for interpretation of this Lease or any decision or holding concerning this
Lease arises.
24. Entire Agreement. The Lease constitutes the entire agreement between Lessee and City
relating to the subject matter hereof and shall not be modified or rescinded in any manner
except by an amendment executed by both Parties. Other than as expressly provided herein,
both Lessee and City agree that no prior or contemporaneous oral representations form a part
of their agreement. Additional or different terms inserted in the Lease by City, or deletions
thereto, whether by alterations, addenda, or otherwise, shall be of no force and effect, unless
expressly consented to by City in writing. The provisions of the Lease supersede all
contemporaneous oral agreements and all prior oral and written quotations, communications,
agreements and understandings of the Parties with respect to the subject matter of the Lease.
IN WITNESS WHEREOF, the Parties have executed the Lease as of the Effective Date set forth
above.
LESSEE, Hamcor, Inc.
C
By: Harold E. Cornelius
Its: President
CITY, City of Dublin
By: Christopher L. Foss
Its: City Manager
ATTEST:
By: Caroline Soto
Its: City Clerk
APPROVED AS TO FORM:
By: John Bakker
Its: City Attorney
2785787.1
Exhibit A
Diagram of Premises
Dublin Station CalTrans
Shopping Center Property
United Rentals
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Dublin Nissan
Hamcor,Inc. Hamcor,Inc. Project Area
Auto Dealership Auto Dealership
Site Site
Project Area
Exhibit B
Use Restrictions
1. Use.The Premises shall be used solely for the display of a single vehicle.
2. Noise.No loudspeakers or amplified music shall be permitted to project out of the vehicle on
display nor shall any loudspeakers or amplified music be used on the Premises.
3. Sales Activities Prohibited.No activities associated with vehicle sales shall take place on the
Premises.
4. Prevention of Nuisance Activities.Lessee shall control all activities on the Premises so as not to
create a nuisance to surrounding businesses.
5. Site Maintenance.Lessee shall be responsible for maintaining the Premises in a clean and litter
free condition at all times.
6. Signage Prohibited. No signage(temporary or permanent)shall be place within the vehicle
display area nor shall any signage(temporary or permanent) be placed on the vehicle on display.
Any other signage must comply with the City's Sign Regulations as set forth in Section 8.84 of
the Municipal Code.
7. Vehicle Rotators/Lifts Prohibited. No vehicle rotator or lift shall be used at any time to display
the vehicle.
8. Permits Required.Building permits are required for all electrical work pursuant to the Dublin
Municipal Code.
9. Landscape Maintenance.Lessee shall install and maintain all landscaping and other plant
materials installed.The irrigation system(s)to serve these landscaped areas shall be connected
to the Lessee's private on-site irrigation system.
10. Damage/Repairs. Lessee shall be responsible for the repair of any damaged pavement,curb&
gutter,sidewalk,or other public street facility resulting from use of the Premises.
11. Permanent Fencing.The Lessee shall maintain all fencing on the Premises.
12. Theft Prevention Program. Lessee shall work with the Dublin Police Department on an on-going
basis to establish an effective theft prevention program for the site.
13. Graffiti. Lessee shall keep the Premises of graffiti vandalism at all times.
2785805.1