09 Desk Item - Lease Agreement with Los Gatos-Saratoga Recreation
DATE: TO: FROM: COUNCIL AGENDA REPORT November 1,2004 MAYOR AND TOWN COUNCIL ORRY P. KORB, TOWN MEETING DATE: 11/1/04 AGENDA ITEM: 9 DESK ITEM SUBJECT: ADOPT A RESOLUTION
AUTHORIZING THE TOWN MANAGER TO EXECUTE A LEASE AGREEMENT WITH LOS GATOS-SARATOGA COMMUNITY EDUCATION AND RECREATION After the preparation of this agenda item, the Town received additional
comments from the Recreation Department to the proposed lease agreement. The comments concern indemnification and severance. Indemnification language shifts financial responsibility
for liability arising out of an agreement, including the cost of defending claims. The indemnification provision in the proposed lease agreement was questioned because it imposed liability
on the Recreation Department in instances where damages results from some negligence on the Town's part. The Recreation Department also recommended the addition of a severance provision
insuring that the Agreement remains in effect notwithstanding a challenge to any of it's individual provisions: After some discussion, the indemnification provision was modified to remove
the reference to negligence and a severability provision was added. The attached version reflects these changes. Attachment: Revised Lease Agreement by and Between the Town of Los Gatos
and Los Gatos. Saratoga Community Education and Recreation. PREPARED BY: ORRYP. KORB, TOWN ATTORNEY Reviewed by: OPK:LMB/wp [N:\ATYlRecreation.department.dsk.item.wpd
] Clerk File# 301-05
LEASE AGREEMENT BY AND BETWEEN THE TOWN OF LOS GATOS AND LOS GATOS-SARATOGA COMMUNITY EDUCATION AND RECREATION: This LEASE is entered into by and between the TOWN OF LOS GATOS, a municipal
corporation ofthe State of California, hereinafter referred to as "TOWN," and Los GatosSaratoga Community Education and Recreation, a Joint Powers Authority, hereinafter referred to
as "TENANT," this__day of , 2004. RECITALS WHEREAS, TOWN owns the premises and the structure, hereinafter referred to as "Building," located at 123 East Main Street, Los Gatos, California,
95030, and wishes to lease the Building to nonprofit community service organizations that will assist the TOWN in serving the needs of its residents; and WHEREAS, TENANT desires to use
the Building for the purpose of providing educational and recreational services to Los Gatos area residents; and WHEREAS, the TOWN recognizes the need and desirability of such a community
organization; and WHEREAS, the TOWN incurs operating costs and expenses in maintaining the Building which are due in part to tenant operations; and, WHEREAS, TENANT agrees to pay TOWN
for use of the Building. IT IS MUTUALLY AGREED by the parties as follows: 1. Leasing: TOWN hereby leases to TENANT, and TENANT hereby leases from TOWN, the property consisting of six
thousand four hundred seventy-nine square feet (6,479 s.f.) located at 123 East Main Street, Los Gatos, Santa Clara County, California, for exclusive use ofTENANT. 2. Term: The lease
term shall commence on October 1,2004, and extend through June 30, 2007 and continue from month to month thereafter, subject to the termination provisions set forth in this Lease. 3.
Lease Fees a. Rent: Upon commencement of the lease term, the rent shall be One Thousand One Hundred Thirty-Three Dollars and Eighty-Three Cents ($1,133.83) per month. Said rent is calculated
according to the agreed-upon rate of One Hundred Seventy-Five Thousandths of a Dollar ($0.175) per square foot, multiplied by the square footage occupied by the TENANT, for a total of
Thirteen Thousand Six Hundred Five Dollars and Ninety Cents ($13,605.90) for the lease year. On each July 1 following the commencement of the lease term, the rent amount shall be increased
by a percentage equal to the percentage increase, if any, in the Consumer Price Index (CPI) -All Urban Consumers, for the San FranciscoOakland-San Jose, CA area, from the June the previous
year to the June
immediately previous. b. Landscaping Services: The Town shall provide weekly landscaping services for the Building, consisting ofmaintenance ofthe lawn, trees, shrubbery, and irrigation
system. Upon commencement of the lease term, TENANT shall pay the Town Two Hundred Dollars and No Cents ($200.00) to TOWN for these services.. Additional services requested by TENANT,
such as new plantings, may be performed at TOWN's discretion, at an additional price to be agreed upon by TOWN and TENANT. On each July 1 following the commencement of the lease term,
the landscaping services fee shall be increased by a percentage equal to the percentage increase, if any, in the Consumer.Price Index (CPI) -All Urban Consumers, for the San Francisco-Oakland-San
Jose, CA area, from the June the previous year to the June immediately previous. c. Payment: Payment of rent and landscaping serVices fee shall be due and payable on the first day of
each month. Payment shall be made payable to "Town of Los Gatos," and mailed to: Town of Los Gatos, Accounts Receivable, P.O. Box 697, Los Gatos, CA, 95031. Should the rent payment be
thirty-one (31) or more days in arrears, a late·fee of Fifty Dollars and No Cents ($50.00) per day shall be assessed for each day payment remains outstanding, in addition to the amount
of rent and landscaping services fee due. 4. Possessory Interest Property Tax: Pursuant to Revenue and Taxation Code section 107.6, TENANT is hereby notified that the property interest
created by its lease may be subject to property taxation due to TENANT's possessory interest in the Building. In such an event; TENANT is liable under this Lease for payment of such
property tax. 5. Use of Premises: TENANT shall use said premises only fOf the purpose of providing educational and recreational services to Los Gatos area residents, and in connection
therewith, shall comply with all governmental laws and regulations. Anticipated uses included recreational and informational activities, social events, and informal gatherings. No alcohol
may be served on the premises at any time without the prior written consent of the TOWN. 6. Signs: TENANT shall not place or permit to be placed in, upon, about or outside of said premises
or any part of the building any sign without the prior written consent of the TOWN. All existing signs at the time of the commencement of this Agreement are considered approved at the
signing of this lease Agreement. 7. Illegality Clause: TENANT shall not use the premises or suffer or permit anything to be done in or about the premises or the property which will be
in conflict with any law, statute, zoning restriction, ordinance or governmental law, rule, regulation or requirement of public authority now in force or which may hereafter be enforced.
TENANT shall not commit any private or public nuisance or any other act or thing which might or would disturb the quiet enjoyment of surrounding property. TOWN at its option may terminate
this Lease by giving ten (10) days written notice of its election
to terminate for any and all violations of the provisions contained herein. 8. Entry: TENANT shall permit TOWN, its agents or assigns to enter the premises at any time to inspect the
premises or make repairs. 9. Assignment and Sub-Leasing: The terms and conditions of this Lease are based upon the unique and specific services to be offered by the TENANT and the TENANT's
record of service in the community. TENANT shall neither assign this Lease, nor sublet the . whole Of any part thereof, without the prior written consent ofTOWN. 10. Utilities: TENANT
shall pay for all utilities including, but not limited to, water, gas, and electricity; but not including garbage removal and recycling services. TOWN shall contract for garbage removal
and recycling services for Building, at no charge to TENANT. 11. Maintenance: TENANT shall maintain the interior of said premises. TENANT shall not make any structural alterations to
the premises without the prior written consent of the TOWN. TOWN shall maintain the exterior of said premises and the grounds thereof, as agreed to in section 3 above. However, if repair
is necessary due to the action or negligence of TENANT, its agents, assigns or clients, TENANT shall obtain those repairs at its own expense or pay the TOWN to repair at a charge to
the TENANT of time and one-half for services rendered, and for the actual cost of materials. 12. Abandonment: IfTENANT abandons or vacates the premises for any period in excess of thirty
(30) days, TOWN may, at its option, terminate this Lease and take possession of the property. 13. Insurance: TENANT shall procure and maintain with a reputable insurance company, insurance
as set forth in Exhibit A, attached, and incorporated herein by reference. 14. Property Insurance: TOWN mayor may not choose to obtain property insurance for the Building. However, TENANT
is solely responsible for obtaining insurance to protect any personal property that it may choose to place in the Building under this Lease, and the TOWN shall not provide such insurance
on this Lease. 15. Destruction ofPremises: a. If the structures on the leased premises are destroyed to an extent ofmore than fifty percent (50%) of the total floor area existing prior
to the destruction, either party is entitled to terminate this Lease Agreement and TOWN is under no obligation to repair, replace, or restore any portion of the leased premises. Termination
ofthis Lease shall be by giving written notice of the termination to either party no later than ninety (90) days after the event causing the damage or destruction. The termination shall
be effective on the date specified in the notice. Upon termination of the Lease Agreement pursuant to this section, all insurance
proceeds payable because of the damage or destruction of the structures on the leased premises shall be paid to and be the property ofTOWN. b. If because of the destruction or damage
to the leased premises, the leased premises are entirely unsuitable or inadequate for the use specified in Paragraph 5 above, all monthly rent shall temporarily abate effective the date
of the destruction or damage. If the damage or destruction to the leased premises only makes a portion of the leased premises unsuitable or inadequate for such use, then the monthly
rent shall only be abated so that the rent then due and payable shall be an amount equivalent to the floor area of the structures on the leased premises usable for the use specified
divided by the total floor area of all structures prior to the damage or destruction, and then multiplied by the monthly rent in effect just prior to the damage or destruction. c. Under
no circumstances does the TOWN have any obligation to provide the TENANT with an alternative property to conduct its operations. d. TENANT agrees to fully cooperate with the TOWN in
investigating the cause of any damage or destruction of the leased premises, and in permitting and allowing any repair or reconstruction to occur. 16. Indemnification: TENANT shall indemnify,
save harmless, and defend TOWN from all liability from loss, damage, or injury to persons or property in any manner arising out of or incident the performance of this Lease, including
without limitation all consequential damages. 17. Severability: The provisions ofthis Lease are declared to be severable, and if any provision is invalidated by any court, the remaining
provisions shall not be affected and shall be fully enforceable, unless such enforcement would be unreasonable or would frustrate the purposes. of this Lease. 18. Surrender of Premises:
TENANT shall promptly surrender said premises to TOWN at the expiration of the term of this Lease, or any sooner termination thereof, in the same condition it was received, in good order
and repair, reasonable wear and tear and damage by the elements excepted. 19. Termination: Either party may terminate this Lease without cause one hundred and eighty (180) days advance
written notice. Such termination notice shall be sent to: TOWN Debra J. Figone, Town Manager Town of Los Gatos P.O. Box 949 Los Gatos, CA 95031 TENANT Steve Rauwolf, Executive Director
Los Gatos-Saratoga Community Education & Recreation 123 East Main Street Los Gatos, CA 95030
20. Scope of Lease: This Lease constitutes the entire agreement between the parties. This Lease may not be modified except by an agreement in writing signed by the party against whom
the enforcement of any waiver, change, modification or discharge is sought. The covenants and conditions in the Lease shall bind the successors in interest ofthe party. 21. Disputes:
In any dispute between the parties over this Lease, the prevailing party shall be entitled to costs and attorney's fees. 22. Equal Access and Opportunity: TENANT warrants that it shall
comply with all applicable regulations and laws governing equal access to its programs and equal employment opportunity. Neither TENANT nor any of its officers, employees, volunteers,
or agents shall discriminate in the employment in or access to any of TENANT's programs because of race, color, national origin, ancestry, physical or mental disability, marital status,
sex, sexual orientation, or age unless based on a bona fide occupational qualification defined under the California Fair Employment and Housing Act.
IN WITNESS WHEREOF, the parties have executed this Lease this__day of _______, 2004. TOWN OF LOS GATOS Debra 1. Figone, Town Manager APPROVED AS TO CONTENT: Regina A. Falkner, Comni.unity
Services Director APPROVED AS TO FORM: Orry P. Korb, Town Attorney ATTESTED TO: Marian V. Cosgrove, Town Clerk LOS GATOS-SARATOGA COMMUNITY EDUCATION AND RECREATION Steve Rauwolf, Executive
Director