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HomeMy WebLinkAbout25C - AGMT FIFTH ST PARKING LEASEREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 5, 2018 CLERK OF COUNCIL USE ONLY: TITLE: APPROVED AGREEMENT WITH EAST END ❑ As Recommended PARTNERS LP FOR PARKING LEASE AT ElAs Or Amended dinance on 1 sl ng 300 EAST FIFTH STREET E] Ordinance on 2nd Reading (STRATEGIC PLAN NO. 3,413) ❑ Implementing Resolution ❑ Set Public Hearing For A r CID�JkANAGER RECOMMENDED ACTION CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute an agreement with East End Realty Partners, LP for a minimum of thirty-six (36) parking spaces and a maximum of forty-eight (48) parking spaces in the City owned parking structure located at 300 East Fifth Street for an initial six months period, at a monthly rate of $1,620 per month. After the initial six months period, the agreement shall be for a subsequesnt period of ten years, with two additional ten-year extensions, at a minimum monthly rate of $2,160, subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION East End Realty Partners, LP (Developer) is working on a project for the construction of residential units on the second floor of the existing building at 201 East Fourth Street, commonly known as the Fourth Street Market. The developer is proposing to convert the second story of the building that is currently vacant to 24 studio units, ranging in size from 473 to 820 square feet; the project will be known as "401 North Bush Street Apartments." However, providing on-site parking for the project is not possible without a complete demolition of the existing building. Due to the current site configuration and improvements, the developer must rely on an off-site parking structure to provide parking for the residents of the project. On January 22, 2018, the Planning Commission approved Variance No. 2018-01 to allow off-site parking and a reduction in required off-street parking. Prior to exercising the rights conferred by the variance the applicant must comply with the conditions of approval which include entering into a long term parking lease agreement for the life of the residential project for off-site parking within a half mile radius of the project site prior to the building permit issuance. The developer is proposing to lease parking spaces from the City parking structure immediately to the north at 300 East Fifth Street. The parking structure contains approximately 700 spaces, with only a portion to be reserved for exclusive use for the residential project and the remainder 25C-1 Agreement with East End Partners, LP June 5, 2018 Page 2 accessible to the public. Access from the parking structure is provided directly to the second floor of the building via a pedestrian walkway that leads into the hallway of the residential building. At this point, the construction plans for the apartment project are being reviewed by the Planning and Building Agency and permit issuance is expected to be during the summer of 2018. The effective date of the parking lease will be take place thirty days after the issuance of the Certificate of Occupancy. The long-term parking lease agreement is for a minimum of 36 parking spaces at a monthly rate of $2,160 ($60/space). Should more parking be necessary in the future, the developer has the ability to lease an additional 12 spaces in the structure. During the term of the parking agreement, the City reserves the right to adjust the monthly rates of the agreement in the event of an increase in the number of parking stalls leased or an increase in rates for the general public as determined by the City. STRATEGIC PLAN ALIGNMENT Approval of these items assists the City in meeting Goal #3 — Economic Development, Objective #4 (continue to pursue objectives that shape downtown Santa Ana into a thriving, culturally diverse, shopping, dining, and entertainment destination), Strategy B (create a comprehensive program to manage parking that includes innovative strategies to provide parking, create revenue and enhance accessibility in the downtown). FISCAL IMPACT Funds received will be deposited into the Parking Operations - Spurgeon Structure revenue account (no. 02710002-53904) as follows: 25C-2 Fiscal Year Account Amount FY 2018-19* 02710002-53904 $1,620" FY 2019-20 02710002-53904 $25,920 FY 2020-21 02710002-53904 $25,920 FY 2021-22 02710002-53904 $25,920 FY 2022-23 02710002-53904 $25,920 FY 2023-24 02710002-53904 $25,920 FY 2024-25 02710002-53904 $25,920 FY 2025-26 02710002-53904 $25,920 FY 2026-27 02710002-53904 $25,920 FY 2027-28 02710002-53904 $25,920 FY 2028-29 02710002-53904 $25,920 Total $260,820 25C-2 Agreement with East End Partners, LP June 5, 2018 Page 3 "NOTE: Parking revenue is subject to approval of the project. The amount noted for FY 2017-18 is an estimate only. Monthly revenue is subject to change depending on quantity of spaces leased and their current pricing. APPROVED AS TO FUNDS AND ACCOUNT: Minh Thai Francisco Gutierrez Executive Director Executive Director Planning and Building Agency Finance and Management Services Agency AR Exhibits: 1. Map — parking space layout 2. Parking lease agreement with East End Realty Partners, LP 25C-3 25C-4 i Bush treeN ,il I r I ` C _- 1.0 to- =. n . _�II n tow T-- TN., (u, f H - _ . - i n �- -- - ' rr-- 300 E. Fifth Street 7- �: —� - - '-_ n n x }�. I Parking Structure J y 2nd Floor, west �..f_ -:y - '-.:— i n... I space layout E 5C� 3' rA r+ (�D (D rt 25C-6 LONG TERM PARKING LEASE AGREEMENT BETWEEN THE CITY OF SANTA ANA EAST END REALTY PARTNERS, LP THIS LEASE AGREEMENT ("Agreement" or "Lease") is made and entered into this 5th day of June, 2018, by and between the City of Santa Ana, a charter city and municipal corporation, duly organized and exiting under the constitution and laws of the State of California, herein referred to as "Landlord", and East End Realty Partners, LP, herein referred to as "Tenant". RECITALS: A. The City of Santa Ana desires to provide long term parking for Tenant at the City owned parking structure located at 300 E. 5d' Street (the "Parking Structure"). City will provide for parking spaces on the 2"d floor of the Parking Structure. City will provide up to 48 parking spaces, with a minimum number of 36 parking spaces for the Tenant. Landlord and Tenant will mutually agree to the location of one (1) handicapped parking space on the west side of the parking structure as designated pursuant to Exhibit A of this Agreement. B. Tenant represents that the purpose of this Agreement is to provide parking for residents at the housing project known as "401 N. Bush Street Apartments" (the "Project"). Tenant, and its successors and assigns, shall comply with the terms and conditions of Resolution No. 2018-04 containing the variance (the "Variance") for reduction in parking for the Project. NOW THEREFORE, in consideration of the respective and mutual covenants and promises hereinafter contained and made, and subject to all terms and conditions hereof, the parties hereto agree as follows: ARTICLE 1— TERM OF LEASE Section 1.01 Lease Area and Use (Landlord) (a) Landlord hereby leases to Tenant and Tenant hereby leases and hires from Landlord the exclusive reserved use of the "Lease Area", as herein described and shown in general in Exhibit A, attached hereto and incorporated herein by reference, for the purpose of providing parking spaces for Tenant's designated and assigned residents ("Residents") of the Project and for no other purpose. (b) Landlord shall restrict the use of the Lease Area for the exclusive use of the Tenant's designated and assigned Residents to the use of the delineated parking spaces every day during the term of this Agreement. (c) Landlord shall post signs specifying such restrictions on the walls facing the restricted spaces, in accordance with Santa Ana Municipal Code Section 36-147. v16LT2 Section 1.02 Lease Area and Use (Tenant) (a) In accordance with and for the Compensation set forth in Section 1.04(a), Tenant agrees to purchase a minimum of 36 monthly passes for parking in the Parking Structure for each calendar month during the Term and to distribute the passes to its designated and assigned residents at 401 N. Bush Street. Any future changes to the minimum number of required parking spaces must be reviewed by the City Attorney and Planning Manager as this requires revision of the conditional use permit ("CUP") which requires approval of the Planning Commission and the City Council. (b) The exclusive reserved use rights of Tenant as to the Lease Area shall be subject and subordinate to the prior and paramount right of Landlord to use the Parking Structure in its entirety for public purposes to which it presently is and may, at the option of Landlord, be devoted. Tenant undertakes and agrees to use the Lease Area and to exercise its rights under this Lease at all times in such manner as will not unreasonably interfere with the full use and enjoyment of the Parking Structure by Landlord for public purposes. (c) Subject to the provisions in Section 7.01, shquld parking spaces within the Lease Area of the Parking Structure become unavailable, the City will work with Tenant to provide reserved parking spaces at the closest City lot where parking is available. (d) Tenant hereby acknowledges that tifle to the Property is vested in Landlord and agrees never to assail or resist the same, and further agrees that Tenant's use and occupancy of Lease Area shall be based solely upon the use rights herein given. (e) As of the commencement date for this Agreement, Tenant acknowledges that Landlord has not installed electric vehicle (`BV") charging stations at the parking structure. Tenant will not, nor will it allow its residents to set up, install or maintain any form of unauthorized EV charging stations at the assigned locations specified in Exhibit Al Should the Landlord, or the City, choose to install EV charging stations during the term of this Agreement, use of the charging stations may be allowed, if available. Section 1.03 Term (a) This Agreement shall commence thirty (30) days after the issuance by City to Tenant of a Certificate of Occupancy for the Project and continue for ten -(10) years _from -the date of issuance. At the Landlord's sole discretion, Tenant may be granted .up to two (2) additional ten (10) year extensions of this Agreement, subject to a written agreement signed by both parties and approval by the City Council. Provided Tenant has been in good standing throughout the Term hereof including extensions granted to Tenant, Landlord will consider and negotiate in good faith the granting of additional extensions, subject to a written agreement signed by both parties and approval by the City Council. Earlier termination of this Lease shall be in conformance with Section 5.02. 25C-8 Section 1.04 Compensation/Consideration (a) Except during the initial six (6) months of the Term, Tenant shall pay to Landlord monthly compensation in the amount of $60 per space or the then current market rate as amended by the City from time to time ("Compensation") for the purchase of parking passes pursuant to Section 1.02(a) enabling use of the Lease Area. (b) For the initial six (6) months, compensation shall be $1,620 per month. (c) Compensation will be due on or before the 10' of each month, payable to "The City of Santa Ana" and remitted to: Finance and Management Services; City of Santa Ana, 20 Civic Center Plaza (M-17), P.O. Box 1988, Santa Ana, CA 92702. A late charge of ten percent (10%) shall be applied if any payment hereunder remains unpaid. In addition, one and a half percent (1 %2%) interest per month shall be added for each month that payment hereunder remains unpaid following such written notice. (d) During the Term of this Agreement, Landlord reserves the right to adjust the monthly rates in the event of an increase in rates foi:the general public at the Parking Structure as determined by the City. (e) Any holding over after the expiration of the Term or Renewed Term, with the consent of Landlord, shall be construed to be an extension from month-to-month at two (2) times the compensation herein specified and shall otherwise be consistent with the conditions herein specified, so far as applicable. City will grant to Tenant a 30 -day grace period after the expiration of the Agreement for Tenant to remove any remaining residents or parking pass holders. If the holdover term continues past the 30 -day period; Tenant will be responsible for payments to the City for the grace period. / (f) Upon Tenant paying the Compensation provided hereunder, and observing and performing all of the covenants, conditions and obligations on Tenant's part to be observed and performed hereunder, Tenant shall have the quiet right of exercise of its exclusive reserved use rights for the entire term hereof, subject to all the provisions of this Agreement. (g) Upon the expiration or termination of this Agreement, Tenant shall surrender the Lease Area in good and clean condition, ordinary wear and tear excepted. Section 1.05 Reserved Use Rights; Non -Possessory Interest Subject Tenant's exclusive reserved use rights as to the Lease Area, Landlord retains full ownership of the Lease Area and Tenant will not acquire any interest, whether temporary, permanent, irrevocable, possessory or otherwise, by reason of this Agreement or by the exercise of the exclusive reserved use rights given herein. Tenant will make no claim to any such interest. Any violation of this provision will immediately void and terminate this Agreement. 25C-9 Section 1.06 Non -Recording Neither party shall record this Agreement. ARTICLE 2 —UTILITIES Section 2.01 Utilities Landlord shall pay for all electricity, gas, water, sewer and janitorial services furnished to the Lease Area for the use, operation and maintenance of the Lease Area during the Term of this Agreement, or any extension thereof, and for the removal of garbage and rubbish from the Lease Area during the Term of the Agreement, or any extension thereof. ARTICLE 3 — ACCESS AND MAINTENANCE Section 3.01 Tenant's Access i (a) Landlord shall provide access to the Lease Area -to Tenant and its designated and assigned residents twenty-four (24) hours a day, seven (7) days a week. Tenant shall permit entry by Landlord to the Lease Area; provided, however, that except in the case of emergencies, Landlord shall give Tenant twenty-four (24) hours' notice prior to entry into the Lease Area. Landlord represents and warrants that it has full rights of ingress and egress to and from the Lease Area. Tenant's exercise of its access rights shall not cause undue inconvenience to Landlord. (b) Tenant shall be required.to make any repairs to the Lease Area occurring from damages caused by Tenant, its designated and assigned residents, employees, agents, contractors„and subcontractors. Tenant shall, at its sole cost and expense, maintain and repair the Lease Area and Tenant's equipment including, but not limited to, th/removal of all trash, debris, graffiti, as well as any special intensive cleaning. If Tenant causes any damage to the Property, to the Lease Area or to access roadways or other nearby facilities, it shall properly repair same as specified by Landlord. (c) Upon the expiration or termination of this Agreement, Landlord shall approve in writing the surrender of the Lease Area by Tenant only after being satisfied that Lease Area has been left in good and clean condition, less ordinary wear and tear. (d) Quiet Enjoyment. Upon Tenant paying the Lease fee reserved hereunder, and observing and performing all of the covenants, conditions, and provisions on Tenant's part to be observed and performed hereunder, Tenant shall have quiet possession of its Lease Area for the entire term hereof, subject to all the provisions of this Lease. 25C-10 Section 3.02 Alterations; Liens Tenant shall make no alterations to the Lease Area and will not permit any mechanics' or materialmen's or other liens to stand against the Lease Area by reason of any use or occupancy by Tenant, or any person or resident claiming under Tenant. ARTICLE 4 — INDEMNITY AND INSURANCE Section 4.01 Indemnification, Defense, Hold Harmless. Tenant agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, contractors, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Tenant, its residents, subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims -for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Tenant further agrees to indemnify,- hold harmless, and pay all costs for the defense of the City, including fees and costs forApecial counsel to be selected by the City, regarding any action by a third party challenging- the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Section 4.02 Insurance i In addition to the Tenant's covenant to indemnify and hold harmless Landlord, Tenant shall obtain and furnish to Landlord, a policy of general public liability insurance, commercial general liability insurance including motor vehicle coverage covering the Lease Area and Tenant's equipment. The policy shall indemnify Tenant and Landlord, their officers, agents and employees, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Lease Area and Tenant's equipment; and shall provide coverage in not less than the following amount: combined single limit bodily injury, personal injury and property damage, liability, of $3,000,000 per occurrence. The City also requires an Additional Insured Endorsement, as attached and incorporated herein as Exhibit B. The policy shall name Landlord, its agents, officers, employees and volunteers as Additional Insureds, and shall specifically provide that any insurance coverage which may be applicable to the Lease Area and Tenant's equipment shall be deemed excess coverage and that Tenant's insurance shall be primary. Under no circumstances shall the above-mentioned insurance contain a "deductible" or any other similar form of limitation on the required coverage. Tenant is required to give the Landlord no less than forty-five (45) days' notice of cancellation or reduction in coverage. No cancellation provision in any insurance policy shall 25C-11 be construed in derogation of the continuous duty of Tenant to furnish insurance during the term of this Agreement. Section 4.03 Property Insurance Tenant shall provide to Landlord, before entering the Lease Area, and shall maintain in force during the entire term of this Agreement, property insurance with extended coverage endorsements thereon, on the Lease Area in an amount equal to the full replacement cost and/or value thereof, this policy shall contain a replacement cost endorsement naming Tenant as the insured and shall not contain a co-insurance penalty provision. The policy shall contain a special endorsement that such proceeds shall be used to repair or rebuild any such improvements so damaged or destroyed; and if not so used, such proceeds shall be paid to Landlord. The proceeds of any such insurance payable to Landlord shall be used for rebuilding or repair as necessary to restore the Lease Area at the discretion of Landlord. The policy shall name Landlord as an Additional Insured. The policy or policies shall also contain the following endorsements: / The insurer will not cancel or reduce the insured's coverage without thirty (30) days prior written notice to Landlord;: and 2. Landlord will not be responsible for premiums or assessments on the policy. A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with Landlord prior to the execution of this Agreement. At least thirty (30) days prior to the expiration of any such policy, a signed and complete certification of insurance showing that coverage has been renewed, shall be filed with Landlord. Section 4.04 Certificates of Insurance; Additional Insured Endorsements Prior to execution of this Agreement, Tenant shall furnish to Landlord certificates of insurance and additional insured endorsements to each of Tenant's insurance policies, evidencing the foregoing insurance coverages as required by this Agreement; these certificates shall: provide the name and policy number of each carrier and policy; 2. shall state that the policy is currently in force; and shall promise to provide that such policies will not be canceled, suspended, voided, reduced in coverage or in limits, or modified without thirty (30) days prior written notice of Landlord; and 4. If Tenant self -insures, Licensee shall provide proof of self-insurance including the following: "Tenant represents to Landlord and Landlord acknowledges that Tenant self -insures in the ordinary course of its business. Notwithstanding any other provision contained 25C-12 herein to the contrary, the insurance obligations of Tenant set forth in this Lease may be satisfied by endorsements to existing excess/umbrella policies written by companies of recognized standing showing a self-insurance retention of not less than the public liability requirement." Tenant shall maintain the foregoing insurance coverages in force throughout the term of this Agreement. The requirement for carrying the foregoing insurance coverages shall not derogate from the provisions for indemnification of Landlord by Tenant under the Agreement. Landlord or its representatives shall at all times have the right to demand the original or a copy of all these policies of insurance, which Tenant shall provide within fifteen (15) days of Landlord's request. ARTICLE 5 —TERMINATION RIGHTS Section 5.01 Termination in the Event of Casualty or Condemnation/ (a) In the event of any damage, destruction or condemnation of the Parking Structure or the Lease Area, which renders the Lease Area unusable, inaccessible or inoperable in Landlord's reasonable good faith. judgment, Tenant shall have the right, but not the obligation, to terminate the Agreement with respect to all or the inaccessible/unusable portion of the Lease Area by giving written notice to Landlord within thirty (30) days after such damage, destruction or condemnation. If Tenant does not elect to terminate,,then Landlord shall repair the damage and, to the extent Tenant's use of the Lease Area is rendered unavailable, Compensation shall be abated on proportional basis until Landlord's repairs have been completed. If Landlord's repairs to the Lease Area have not been completed within ninety (90) days from the date of the/damage, destruction or condemnation, Tenant shall again have the right to terminate this Agreement upon thirty (30) days' notice to Landlord, unless all -repairs are completed within such 30 -day period. (b) In the event,.of condemnation, unless Tenant is allowed by the condemning authority to'continue its use of the Lease Area, this Agreement shall terminate as of the date title to the Property vests in the condemning authority or Tenant is required to cease its use, whichever is earlier. If any property described herein or hereinafter added hereto is taken in eminent domain, the entire award shall be paid to Landlord. (c) Subject to the provisions of Section 8.01, and if Tenant opts to not terminate this Agreement pursuant to Section 5.01, with respect to some or all of the parking spaces within the Lease Area, the City will work with Tenant to provide reserved parking spaces at the closest City owned lot where parking is available at rates charged to Tenant at the time of the event. If the parties cannot mutually agree upon a replacement location, the parties retain their right to terminate this Agreement. 7 25C-13 Section 5.02 Additional Termination Rights (a) This Agreement may be terminated on fifteen (15) days prior written notice as follows: (1) by either party upon a default of any covenant or term hereof by the other party, which default has been noticed and is not cured within thirty (3 0) days of receipt of written notice of default, provided that the grace period for any monetary default is only ten (10) days from receipt of notice; or (2) by Tenant if Tenant is unable to occupy and utilize the Lease Area due to any action of the Interstate Commerce Commission or the Department of Transportation; or (3) by Tenant upon thirty (30) days written notice in the event recurring disputes arise over whether maintenance, repair or property damage claims or claims for personal injury (in each case whether or not insured), are in fact attributable to or caused by actions of Tenant's designated and assigned residents. (b) Landlord shall have at its sole discretion the option of terminating this Agreement if Tenant loses its ownership interests or is unable to maintain its interests in the property at 401 N. Bush Street. Tenant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, leases, approvals, waivers, and exemptions as would enable compliance with the foregoing. Said inability shall be cause for immediate termination of this Agreement. ARTICLE 6 — ASSIGNMENT, ABANDONMENT, DEFAULT, INSOLVENCY Section 6.01 Assignment Unless approved in writing by the Landlord, Tenant will not assign, transfer or sell this Agreement or any rights hereunder in whole or iii part (except for use of parking passes by Residents), and any attempt to do so will be void and confer no right upon any third party. Subsequent owners of the Project must expressly assume the obligations of Tenant and will negotiate with the City as to future issues related to this Agreement, including as to approved locations for substitute parking within one-half mile of the Project which will comply with the Variance in the event this Agreement expires or is terminated.. Tenant shall have the right to enter into contractual agreements with independent contractors acting as agents, package deliverers, telegraphic, monetary or other transmittal operators. Section 6.02 Abandonment by Tenant Should Tenant breach this Agreement by abandoning the Lease Area prior to the expiration of the Term or Renewal Term, Landlord may: (a) Continue this Lease in effect by not terminating Tenant's rights to use the Lease Area, in which event Landlord shall be entitled to enforce all of its rights and remedies under this Agreement, including the right to recover the Compensation specified in this Agreement as it becomes due under this Agreement; or 25C-14 (b) Terminate this Agreement and Tenant's rights to use the Lease Area and recover from Tenant: (i) the worth at the time of award of unpaid Compensation which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid Compensation which would have been earned after termination until the time of award exceeds the amount of such compensation loss that Tenant proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid Compensation for the balance of the current Term after the time of award exceeds the amount of such compensation loss that Tenant proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent. Section 6.03 Unlawful Detainer Should Tenant default in the performance of any of the terms, conditions, or obligations contained in this Agreement, after any applicable notice and cure period, Landlord may, in addition to the remedies specified in Section 6.02 of this Lease, re-enter and regain possession of the Lease Area in the manner provided by the laws of unlawful detainer of the State of California then in effect. i Section 6.04 Insolvency of Tenant The insolvency of Tenant as evidenced by a receiver being appointed to take possession of all or substantially all of the property of Tenant, or the making of a general assignment for the benefit of creditors by Tenant, or the filing of a petition in bankruptcy shall terminate this Agreement and entitle Landlord to re-enter and regain possession of the Lease Area. Section 6.05 Cumulative Remedies The remedies given to Landlord in this Agreement shall not be exclusive, but shall be cumulative and in addition to all remedies now and hereafter allowed by law. Section 6.06 Waiver of Breach The waiver by Landlord of any breach by Tenant of any of the provisions of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach by Tenant either of the same or another provision of this Agreement. (continued on next page) 25C-15 ARTICLE 7—HAZARDOUS MATERIALS Section 7.01 At the time of execution of this Lease, Landlord warrants that the Lease Area is clean and contains no known hazardous materials. Tenant represents and warrants that it will comply with all environmental laws during the term of this Lease; its use of the Lease Area herein will not generate any hazardous substance, and it will not store or dispose on the Lease Area nor transport to or over the Lease Area any hazardous substance. Tenant further agrees to clean-up and remediate any hazardous substance on the Lease Area and Property, and hold Landlord harmless from and indemnify Landlord against any release of any such hazardous substance and any damage, loss, or expense or liability resulting from such release including all attorneys' fees, costs and penalties incurred as a result thereof. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term by any federal, state or local environmental law, regulation or rule presently in effect or promulgated in the future, as such laws, regulations or rules may be amended from time to time; and it shall be interpreted to include, but not be limited to, any substance which after release into.,the environment will or may reasonably be anticipated to cause sickness, death or disease. ARTICLE 8 — MISCELLANEOUS Section 8.01 Force Majeure— Unavoidable Delays Should the performance of any act required by this Agreement to be performed by either Landlord or Tenant be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act will be extended for a period equivalent to the period of delay, and performance of the act during the period of delay will be excused, provided, however, that nothing contained in this section shall excuse the prompt payment of Compensation by Tenant as required by this Agreement or the performance of any act rendered difficult solely because of the financial condition of the party, Landlord or Tenant, required to perform the act. Section 8.02 Notice Any written notice or required submittals, given under the terms of this Agreement, shall be delivered personally, or sent via facsimile transmission, electronic mail (e-mail) or mailed, certified mail, postage prepaid, addressed to the party concerned as follows: To Landlord: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) 10 25C-16 P.O. Box 1988 Santa Ana, CA 92702-1988 Facsimile (714) 647-6956 With courtesy copies to: and, Executive Director—Finance & Management Services Agency City of Santa Ana 20 Civic Center Plaza (M-17) P.O. Box 1988 Santa Ana, CA 92702 Facsimile (714) 647-5414 City Attorney City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, CA 92702 Facsimile (714) 647-6515 To Tenant: East End Realty Partners, LP Attn: Irving M. Chase 129 W. Wilson St., SteA00 Costa Mesa, CA 92627 Facsimile (949) 722-8855 A party may change its address by giving notice in writing to the other party. Thereafter, any notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the new address. If sent by mail; any notice, tender, demand, delivery, or other communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, any notice, tender, demand, delivery, or other communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. Section 8.03 Contract Administrator The Executive Director of the Finance & Management Services Agency, or his/her designee, shall be City's Lease Administrator for this Agreement and all approval and notices required to be given herein shall be so directed and addressed. 11 25C-17 Section 8.04 Compliance with Laws Tenant shall at Tenant's own cost and expense comply with all statutes, ordinances, regulations, and requirements of all governmental entities, including federal and state, county and municipal, relating to Tenant's use and occupancy of the Lease Area, including the rules and regulations provided for the Parking Structure. The designated and assigned Residents to the Lease Area shall comply with local municipal codes, statutes, ordinances, rules and regulations related to use of a public parking structure, including the rules and regulations provided for and posted at the Parking Structure, now in force or hereinafter enacted. Any vehicle which does not comply with the terms of this Section may be subject to towing and removal as provided by the municipal code. The judgment of any court of competent jurisdiction, or the admission by a Resident in a proceeding brought against such Resident by any government entity, that Resident has violated any such statute, ordinance, regulation, or requirement shall be conclusive as between Landlord and such Resident, and as between Landlord and Tenant shall be considered grounds for termination of this Agreement by Landlord. Section 8.05 Binding on Heirs and Successors This Agreement shall be binding on and shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of the parties hereto. /The provisions of this Section shall not be deemed to be a waiver of any of the conditions against assignment set forth herein. In the event Landlord's successor or assign obtains title to the Parking Structure upon foreclosure of a deed of trust or other collateral security instrument, or by reason of Landlord's bankruptcy or insolvency and resulting forced sale, this Agreement shall survive and continue and the successor shall honor this Agreement and Tenant shall attorn to said successor. Section 8.06 Partial Invalidity Should any provision of this Agreement be held by a court of competent jurisdiction to be either invalid, void, or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect unimpaired,b"y the holding, so long as the reasonable expectations of the parties hereto are not materially impaired. Section 8.07 Waste or Nuisance Tenant shall not commit or permit the commission by Residents of any waste on the Lease Area. Tenant shall not maintain, commit, or permit the maintenance or commission of any nuisance as defined in Section 3479 and/or Section 3480 of the California Civil Code on the Parking Structure or Lease Area; and Tenant shall not use or permit the use of the Lease Area for any unlawful purpose. Section 8.08 Time of Essence Time is expressly declared to be of the essence in this Agreement. 12 25C-18 Section 8.09 Governing Law This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. Section 8.10 Survival Terms and conditions of this Agreement which by their sense and context survive the termination or expiration of this Agreement, shall so survive. Section 8.11 Conflict of Interest Tenant covenants that it presently has no interest and shall not have interests, direct or indirect, which would conflict in any manner with performance of its obligations under this Agreement as specified herein. i Section 8.12 Attorney's Fees In the event suit is brought by either party to enforce the terms and provisions of this Agreement or to secure the performance hereof, each party shall -bear its own attorney's fees. Section 8.13 Exclusivity and Amendment This Agreement constitutes the entire agreement and understanding between Landlord and Tenant respecting the Lease Area, the leasing of the Lease Area to Tenant, or the Lease Term herein specified, and correctly sets forth,the obligations of Landlord and Tenant to each other as of its date. Any agreements or representations between the parties respecting the Lease Area or its leasing which are not expressly set forth in this instrument are null and void. This Agreement or any part of it may not be changed, altered, modified, limited or extended orally or by any Agreement between the parties, unless such Agreement is expressed in writing, signed and acknowledged by Landlord and Tenant, or their successors in interest. Section 8.14 Captions Captions used in this Agreement are for ease of reference only and shall not affect the construction or interpretation of this Agreement. Section 8.15 Non -Discrimination Tenant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or mental or physical disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, 13 25C-19 termination or other employment related activities. Tenant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first written above. ATTEST: MARIA HUIZAR Clerk of the Council APPROVED AS TO FORM: Sonia Carvalho City Attorney - BY Lisa Storck Assistant City Attorney RECOMMENDED FOR APPROVAL: Francisco Gutierrez, Executive Director Finance & Management Services Agency CITY OF SANTA ANA RAUL GODINEZ II City Manager FA I EAST END REALTY PARTNERS, LP By: East End Realty Partners GP, LLC Its: General Partner Irving M. Chase Manager 14 25C-20 GJ GJ L LL W O O M z I� Exhibit B RESOLUTION NO. 2018-04 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA ANA APPROVING VARIANCE NO. 2018-01 AS CONDITIONED TO ALLOW OFF-SITE PARKING AND A REDUCTION IN REQUIRED OFF- STREET PARKING FOR THE PROPERTY LOCATED AT 201 EAST FOURTH STREET BE IT RESOLVED. BY THE PLANNING COMMISSION OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The Planning Commission of the City of Santa Ana hereby finds, determines and declares as follows: A. East End Realty Partners LP ("Applicant') is requesting approval of Variance No. 2018-01 to allow for off-site parking and reduced off-street parking for a multi -family project of 24 residential studio units proposed at 201 East Fourth Street. B. Section 41-2011 (d) of Specific Development No. 84 (SD No. 84/Transit Zoning Code) establishes the off=street parking standard for the conversion of an existing building to a new use in the Downtown land use district. Pursuant to Santa Ana Municipal Code requirements, a minimum of 2.15 spaces per unit (52 spaces) are required. The Applicant is requesting a variance to allow for 1.5 spaces per unit (36 spaces) and to allow for off-site parking at the parking structure located to the north at 300 East Fifth Street, C. Section 41-2005 establishes that variance applications shall be subject to Santa Ana Municipal Code Chapter 41, Article V. D. On January 22, 2018, the Planning Commission held a duly noticed public hearing on Variance No. 2018-01. E. The Planning Commission of the City of Santa Ana determines that the following findings, which must be established in order to grant this variance pursuant to Santa Ana Municipal Code Section 41-638, have been established for Variance No. 2018-01 to allow off-site parking and a reduction in required off-street parking for the subject property: 1. That because of special circumstances applicable to the subject property, including size, shape, topography, location or surroundings, that the strict application of the zoning ordinance is found to deprive the subject property of privileges not otherwise at variance with the intent and purpose of the provisions of this Chapter. Resolution No. 2018-04 Page 1 of 8 25C-22 71 The project site has .special circumstances that warrant approval of a variance. When the building was constructed in 1986, it was developed as part of Fiesta Marketplace, a redevelopment plan featuring a master planned retail, commercial and entertainment center that utilized public parking structures to meet parking demands. At the time that the building was constructed the Transit Zoning Code development standards were not in place. To comply with the current development standards for off-street parking, the existing building would have to be demolished to provide on- site parking. This would result in the demolition of a major community amenity, known as Fourth Street Market, and would be a significant burden on the property owner. The building is located in the core of Downtown Santa Ana, an environment that is pedestrian -oriented due to the close proximity of places to live and work and connections to an intricate transportation network with various modes of transportation available such as rail, bus, and bicycle. In addition, the proposed Fixed Guideway (OC Streetcar) route is along Fourth Street and will increase transportation options for residents as it will provide direct access to the Santa Ana Regional Transportation Center, a regional rail line,' and 18 Orange County Transit Authority bus routes. There are a variety of retail, service, eating and entertainment establishments and parks within walking distance of the site further reducing the need for a vehicle and creating a site that prime for transit -oriented development. As a result, special circumstances exist that support a variance for off-site parking and reduced off-street parking. 2. That the granting of a variance is necessary for the preservation and enjoyment of one or more substantial property rights. The granting of the variance is -necessary for the preservation and enjoyment of substantial property rights. To develop 24 multi -family housing units the Transit Zoning Code requires a total of 52 parking spaces (2 per unit and .15 guest spaces per unit). The Transit Zoning Code does not stratify parking by bedroom count, therefore a development such as the proposed project with all studio units is subject to the same standards as a development with two or three bedroom units. The prescribed parking ratio creates a substantial burden for the developer as they are proposing studio units, but are subject to the same requirements as larger or mixed Resolution No. 2018-04 Page 2 of 8 25C-23 multi -family developments. In addition, cities with similar downtown environments such as Long Beach and Los Angeles require one space per studio unit instead of the 2.15 spaces required by the Transit Zoning Code. Allowing a reduction in parking for the studio units will support continued development in the downtown area. Therefore, granting of the variance is necessary for the preservation and enjoyment of substantial property rights and will preserve the property owner's right to develop on the site with a use that is allowed in the zoning district and will assist in revitalizing the area, which preserves the property owner's right to upgrade and develop their property. 3. That the granting of.a variance will not be materially detrimental to the public welfare or injurious to surrounding property. Granting the variance will not be detrimental to the public welfare or injurious to the surrounding properties. The public parking structure contains approximately 700 spaces, only a portion of which would be reserved for exclusive use for the residential project and the remainder would remain accessible to the public. Typically, the parking structure is at 40 percent capacity on weekdays and 60 percent capacity during weekends, leaving approximately 245 stalls available for the public during maximum capacity use. Therefore, there will be minimal impacts to the public or surrounding properties. The parking ratio of 1.5 spaces per unit will provide one space per unit with 12 extra spaces which is appropriate for a development of all studio units. Providing an excess of parking can encourage solo driving anal dependency on a vehicle, which is opposite of several of the goals and policies of Transit Zoning Code and General Plan. The building and site have been designed to comply with all applicable development standards except for open space standards. The site improvements such as the new facade and amenities will enhance this property as well as the surrounding properties. The exterior has been designed to be compatible with the surrounding properties. The residential development will make a substantial capital investment in the site, thereby enhancing this property and the surrounding properties. 4. That the granting of a variance will not adversely affect the General Plan of the City. Resolution No. 2018-04 25C-24 Page 3 of 8 The project will not adversely affect the General Plan as the residential use is a permitted use in the District Center land use designation. In addition, the project is consistent With several goals and policies of the General Plan, including Goal 1 to promote a balance of land uses to address basic community needs, Goal 2 to promote land uses which enhance the City's economic and fiscal viability. Goal 3 to preserve and improve the character and integrity of existing neighborhoods, Goal 4 to protect and enhance development sites and districts which are unique community assets that enhance the quality of life, and Goal 5 to ensure that the impacts of development are mitigated. The project is also consistent with Housing Element Policy 2.1 to strengthen Santa Ana's core as a vibrant mixed-use and mixed income environment by capitalizing on the government center, arts district, historic downtown, transit -oriented housing and diverse neighborhoods, Housing Element Policy 2.4 to facilitate diverse types, prices and sizes of housing including transit -oriented housing, Land Use Element Policy 1.1 to promote medium density housing in and around the downtown area, Policy 1.5 to maintain and foster a variety of residential land uses in the City, Policy 2.4 to support pedestrian access between commercial uses and residential neighborhoods that are in close proximity, Policy 2.7 support projects that contribute to the redevelopment and revitalization of the center City urban areas, Policy 3.5 to encourage new development that is compatible in scale, and consistent with the architectural style and character of the neighborhood and Urban Design Element Policy 1.5 to encourage- projects that include enhanced architectural forms, textures, colors and materials. The development is consistent with these goals and policies and has been designed to provide architectural and visual interest to the site and adjacent community. Section 2. In accordance with the California Environmental Quality Act the recommended action is exempt from further review per Section 15332. This Class 32 exemption allows infill development provided it is consistent with the General Plan and zoning code; the project site is less than five acres, surrounded by urban uses, does not have any noise or traffic impacts, and can be served by existing utilities. The proposed conversion of the second floor of the existing building to 24 studio units has been found by the City's development review agencies to not create any adverse impacts. The building is located on a site that is not designated by federal, state, or local agencies to be an environmental resource of hazardous or critical concern. The cumulative impact of this project will not be significant as the building is existing and the property is already served by roads and utilities, and will not create any adverse impacts such as noise, traffic, or safety concerns. There is no reasonable possibility that the project will have a Resolution No. 2018-104 Page 4 of 8 25C-25 significant effect on the environment due to iunUsual circumstances. The project is not located within a highway officially designated as a state scenic highway and will not result in damage to scenic resources. The project is not located on a site which is included on any list compiled pursuant to Section 65962.5 of the Government Code, As a result, Categorical Exemption Environmental Review No. 2017-67 will be filed for this project. Section 3. The Applicant agrees to indemnify, hold harmless, and defend the City of Santa Ana, its officials, officers, agents, and employees, from any and all liability, claims, actions or proceedings that may be brought arising out of its approval of this project, and any approvals associated with the project, including, without limitation, any environmental review or approval, except to the extent caused by the sole negligence of the City of Santa Ana, Section 4. The Planning Commission of the City of Santa Ana after conducting the public hearing hereby approves Variance No. ,2018-01 as conditioned in Exhibit A attached hereto and incorporated herein, for the project located at 201 East Fourth Street. This decision is based upon the evidence submitted at the above said hearing, which includes, but is not limited to: the Request for Planning Commission Action dated January 22, 2018, and exhibits attached thereto; and, the public testimony, written and oral, all of which are incorporated herein by this reference. ADOPTED this 22nd day of January, 2018. AYES: Commissioners: ALDERETE, BACERRA, CONTRERAS-LEO, MENDOZA VERINO (5) NOES: Commissioners: ABSENT: Commissioners: NGUYEN (1) ABSTENTIONS: Commissioners: MCLOUGHLIN (1) APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney Lisa Storck Assistant City Attorney Mark McLoughlin Chairperson 25C-26 P,esohition No. 2018-04 Page 5 of 3 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, SARAH BERNAL, Recording Secretary, do hereby attest to and certify the attached Resolution No. 2018-04 to be the original resolution adopted by the Planning Commission of the City of Santa Ana on January 22, 2018. Date: Recording Secretary City of Santa Ana 25C-27 Resolution No. 2018-04 Page 6 of 8 EXHIBIT A Conditions of Approval Variance No. 2018-01 is approved subject to compliance, to the reasonable satisfaction of the Planning Manager, with all applicable sections of the Santa Ana Municipal Code, the California Administrative Code, the California Building Standards Code and all other applicable regulations. The Applicant must comply in full with each and every condition listed below prior to exercising the rights conferred by this variance. I. The Applicant must remain in compliance with all conditions listed below throughout the life of the variance. Failure to comply with each and every condition may result in the revocation of the variance: 1. All proposed site improvements must conform to the Site Plan Review approval of DP No. 2017-24. 2. Prior to building permit issuance the Applicant shall record an easement, covenant and agreement in a form acceptable to the City Attorney to establish and approve a cross lot line easement and access for the ingress/egress stairwell between the buildings of 201 East Fourth Street and 219 East Fourth Street. 3. Prior to building permit issuance the Applicant shall finalize all pending lot fine adjustments on the property. 4. Prior to issuance of a building permit the Applicant shall enter into a long-term parking lease agreement for the life of the residential project for off-site parking, within a half mile radius of the project site as measured from the property line boundary, in a form acceptable to the City Attorney for a minimum of at least 36 parking spaces (1.5 spaces per unit). Any future changes to the agreements must be reviewed by the City Attorney and Planning Manager, 5. Prior to approval of Certificate of Occupancy, all on-site improvements shall be made in accordance with the submitted plans. II. The following are requirements that shall be addressed and/or approved by the Police Department prior to issuance of a building permit: 1. Submitted plans must indicate that all structures and parking lots comply with the provisions of Chapter 8, Article II, Division 3 of the Santa Ana Municipal Code (Building Security Ordinance). All applicable sections must be printed verbatim on the submitted set of plans. Resolution No. 2013-04 25C-28 ?age' of 3 III. Th_- following are requirements that shall be addressed and/or aooroved by the Public Works Agency prior to issuance of a building permit: 1. A Master -Meter of appropriate size, shall be placed in the sidewalk area, adjacent to the curb line, along the property's frontage in the public right-of- way, 2. Private water meters shall be installed within the property (upon connection to the proposed public Master -Meter) in order to allow individual residential units to be served separately for their domestic water needs. 3. Prior to submittal into Building plan check, depict and note the approximate location for all existing and new wet and dry utilities, mains and laterals (i.e. electric, gas, water, fire, sewer, storm drain, etc.). 4. Prior to submittal into Building plan check, depict and note that all utilities (existing and new) will be a minimum of 10 feet away from the driveways top of the "X". 5. Prior to submittal into Building plan check, depict and note replacement of damaged sidewalk and driveway on Bush Street on all construction plans. 6. Prior to submittal into Building plan check, depict construction of a minimum 8 -inch private sewer lateral within this site, to connect the proposed project to the existing City sewer system in 4th Street. 7. Prior to submittal into Building plan check, begin review process of surface street improvement and utility plans by making the initial submittal of the listed plans and maps, and paying the required fees. 8. The site plan shall be designed to allow for the safe and efficient access of trash vehicles to trash receptacles to the satisfaction of.the Public Works Agency and waste service provider. Resolution No. 2018-04 Page 8 of 8 25C-29 25C-30