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Item # 31
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
August 20, 2024
TOPIC: License Agreement for the Use of City -Owned Parcels
AGENDA TITLE
License Agreement with K&C Logistics, LLC for their use of City -Owned East and West
Alton Avenue/SR-55 Freeway Parcel
RECOMMENDED ACTION
Authorize the City Manager to execute a license agreement with K&C Logistics, LLC for
use of real property owned by the City at the western terminus of Alton Avenue between
Standard Avenue and the SR-55 Freeway and at the eastern terminus of Alton Avenue
between Daimler Street and the SR-55 Freeway, for a three-year term beginning August
20, 2024 and expiring August 19, 2027, automatically entering into a month -to -month
renewal thereafter for an additional two years, for a total revenue amount of $1,590,640
(Agreement No. A-20024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The Public Works Agency (PWA) owns and manages two vacant lots for the purpose of
a future freeway overpass bridge. In the meantime, the City leases these lots to various
commercial users. On December 1, 2020, the City Council approved an exclusive
license agreement with K&C Logistics to utilize the City property located at the western
terminus of Alton Avenue and the SR-55 Freeway (Exhibit 1) in the amount of $4,400
per month for the use of the City -owned vacant lot. The property is 49,330 square feet,
with approximately 31,700 square feet net usable land area.
The City plans to construct a new overpass at the SR-55, linking the cities of Santa Ana
and Irvine at Alton Avenue. The subject property is included within the overpass project
area. However, construction is not expected to begin for another three to five years.
Thus, the property is expected to be available for uninterrupted use by the licensee until
construction commences. To allow for maximum scheduling flexibility, the agreement
includes a 60-day cancellation notice option.
Recently, the lot located in the eastern terminus of East Alton Avenue between
Standard Avenue and the SR-55 became vacant. City staff reached out to K&C
Logistics regarding the vacancy, whereby K&C Logistics expressed their interest in
License Agreement for the Use of City -Owned Parcels
August 20, 2024
Page 2
utilizing the eastern terminus (Exhibit 1) for additional storage of shipping equipment.
The property is 86,626 gross square feet, with approximately 66,546 net usable square
feet. In agreement with K&C Logistics, the City is moving forward with entering into a
new license agreement to include both the eastern and western terminus lots,
aggregating to approximately 98,246 square feet. The City took the opportunity to
update the annual lease and update to the current market rate, generating an increase
in revenue to a new monthly rate of $24,967.
Staff recommends approval of the recommended actions to award the license
agreement to K&C Logistics, LLC, generating an estimated revenue in the amount of
$1,590,640 over the period of three years (Exhibit 2). Revenue generated will be utilized
for maintenance and upkeep of vacant City parcels.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with the action.
FISCAL IMPACT
This agreement will result in revenue of $24,967 per month into the Select Street
Construction, Rental of Property revenue account (No. 05917002-57960). The
agreement will commence on August 20, 2024 and expire August 19, 2027. The
agreement will automatically renew each month thereafter for an additional two years
unless a notice to vacate the premises is provided by the City or Licensee.
Accounting
Fund
Accounting Unit
Fiscal Year
Unit - Account
Description
Amount
#
Account Description
Select Street
2024-25
05917002-57960
Select Street
Construction, Rental
$299,604
(Sept- Aug)
Construction
Of Property
Select Street
2025-26
05917002-57960
Select Street
Construction, Rental
$308,593
(Sept- Aug)
Construction
Of Property
Select Street
2026-27
05917002-57960
Select Street
Construction, Rental
$317,850
(Sept- Aug)
Construction
Of Property
Optional Extensions:
Select Street
2027-28
05917002-57960
Select Street
Construction, Rental
$327,385
(Sept- Aug)
Construction
Of Property
License Agreement for the Use of City -Owned Parcels
August 20, 2024
Page 3
Accounting
Fund
Accounting Unit,
Fiscal Year
Unit - Account
Description
Amount
Account Description
#
Select Street
2028-29
05917002-57960
Select Street
Construction, Rental
$337,208
(Sept- Aug)
Construction
Of Property
Total Contract Amount:
$1,590,640
EXHIBIT(S)
1. Location Map-West/East Alton Lot
2. License Agreement
Submitted By: Nabil Saba, P.E., Executive Director — Public Works Agency
Approved By: Alvaro Nunez, City Manager
EXHIBIT 2
LICENSE AGREEMENT
This LICENSE AGREEMENT ("Agreement") is dated as of August 20, 2024 ("Effective Date"),
and entered into by and between the CITY OF SANTA ANA, a charter city and municipal corporation
existing under the Constitution and laws of the State of California ("City"), and K&C Logistics, LLC
("Licensee").
RECITALS
A. The City owns real property at the western and eastern terminus of Alton Avenue between
Standard Avenue and the SR-55 Freeway in the City of Santa Ana, as particularly described in Exhibit A,
attached hereto and incorporated by reference (collectively, the "License Area").
B. The License Area is part of a planned road improvement project to be constructed by
the City where such construction is anticipated to begin within three to five years of the date of this
Agreement.
C. Licensee is a logistical and transportation services company that desires to use and access
the License Area for parking of its vehicles. City desires to allow Licensee the exclusive use of and access
to the Property for this purpose alone ("Permitted Uses").
D. The City has agreed to grant Licensee a license to use the License Area, on the terms and
conditions set forth in this Agreement.
NOW THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. License. The City hereby grants to Licensee an exclusive license for the right to enter and
use the License Area on the date first written above, for the Permitted Uses described in Recital C, upon
the terms and conditions set forth herein ("License"), subject to Licensee's performance of all of its
obligations under this Agreement. This License shall remain in effect for a three (3) year term from the
Effective Date. Upon the expiration of the three (3) year term, this Agreement shall continue on a month -
to -month basis. The License may be terminated by the City or Licensee at any time upon sixty (60) days
written notice. In no case shall the maximum term of this Agreement exceed five years without the prior
written consent of the City. This Agreement is intended and shall be construed only as a revocable license
to use the License Area and not as a lease or grant of any possessory or other interest.
2. Compliance with Laws. Licensee shall cause all activities of Licensee under this
Agreement and all activities on the License Area to be performed in compliance with all applicable federal,
state, and local laws, ordinances, and regulations, and permits.
3. Best Management Practices and Clean Up. At its sole cost, Licensee shall clean up and
install, implement, and maintain Best Management Practices (BMPs) to reduce stormwater pollution from
the License Area as outlined below.
Within seven (7) days of occupying the License Area, the Licensee shall:
(a) Remove old and/or damaged sediment control BMPs from the License Area and install
new sediment control BMPs along the entire perimeter of the License Area.
Appropriate sediment control BMPs include straw wattle, gravel bag berm, or silt
fence. Licensee shall install sediment control BMPs per the SE-5, SE-6, or SE-1 details
Page 1 of 6
provided in the California Stormwater Quality Association (CASQA) Stormwater
BMP Handbook for Construction.
(b) Install tracking control BMPs at the vehicle access point to the License Area. Licensee
shall install tracking control BMPs per the TC-1 detail provided in the California
Stormwater Quality Association (CASQA) Stormwater BMP Handbook for
Construction.
(c) Install a fence, if required, and Green Screen.
Throughout the duration of the License Agreement, the Licensee shall:
a) Cover all stockpiles that are not actively being used or scheduled to be used within a
seven (7) day period. Additionally, all stockpiles shall be covered prior to the onset
of precipitation. Licensee shall ensure that stockpile coverings are installed securely
to protect from wind and rain. Stockpiles shall not be taller than the property's fence
height.
b) Maintain effective Tracking control BMPs to prevent sediment tracking off -site from
the License Area.
c) Maintain effective Sediment control BMPs along the entire perimeter of the License
Area, at all adjacent storm drain inlets, and on all non -active slopes, as appropriate.
d) Sweep the street, sidewalk, and parkway adjacent to the License Area as -needed so
the public right-of-way remains clean and free of dirt.
e) Use a dumpster or appropriate waste receptacle to discard of all trash and debris.
Dumpsters and waste receptacles shall be covered prior to the onset of precipitation.
f) Implement Wind Erosion Control BMPs (dust control), as appropriate, per the WE-1
detail provided in the California Stormwater Quality Association (CASQA)
Stormwater BMP Handbook for Construction.
g) Remove graffiti on the fence or green screen within one (1) day of notification by the
City.
h) Repair vandalism to fence or green screen within one (1) day of notification by the
City.
Remove weeds or vegetation growing within License Area or around perimeter within
seven (7) days of notification by the City.
Within fourteen (14) days of vacating the License Area, the Licensee shall clean up the License
Area as outlined below:
a) Remove all trash, debris, sediment, stockpiles, and construction materials from the
License Area.
b) Remove old and/or damaged sediment control BMPs from the License Area and
install new sediment control BMPs along the entire perimeter of the License Area.
Appropriate sediment control BMPs include straw wattle, gravel bag berm, or silt
fence. Licensee shall install sediment control BMPs per the SE-5, SE-6, or SE-1
details provided in the California Stormwater Quality Association (CASQA)
Stormwater BMP Handbook for Construction.
c) Remove Tracking Control BMPs from the License Area.
d) Cover the surface of the entire License Area with two (2) inches of three-quarter
(3/4) inch diameter gravel.
License Area clean up shall be completed to the sole satisfaction of the City no later than the times
specified in the License as stated in paragraph 1 above, and the License shall be extended to such time for
the limited purpose of allowing the clean up to be completed.
Page 2 of 6
4. Damage. In the event that Licensee damages any portion of the License Area or the
improvements or equipment therein, Licensee shall immediately repair the damage at Licensee's sole cost.
Alternatively, the City may, at its election, repair the damage in which case Licensee shall reimburse the
City for its cost within fifteen (15) days of receipt of written demand from City.
5. Licensee Parties. Licensee, together with its employees, subcontractors, agents,
representatives, and all persons entering the License Area, by or through or at the direction of Licensee, are
collectively referred to herein as the "Licensee Parties." Licensee shall be responsible for the Licensee
Parties and shall cause the Licensee Parties to comply with the terms of this Agreement.
6. Fee. As consideration for this Agreement, Licensee shall pay City a monthly license fee
of $24,967.03. License fees for any partial month shall be pro -rated. Payment shall be made payable to the
City of Santa Ana, in advance for each month, no later than the 101}i of the prior month, at the following
address: Public Works Agency, City of Santa Ana M-21, Administrative Services Manager, 20 Civic Center
Plaza, PO Box 1988, Santa Ana, CA 92702. A late charge of ten percent (10%) shall be applied to any
payment hereunder due but unpaid after the 101}i of the month. The consideration for this License shall be
subject to a CPI adjustment annually utilizing the most recently published annual average, on the
anniversary of the Effective Date during the term hereof.
7. AS -IS Condition. City makes no representation or warranty of any kind as to the condition
of the License Area or any other matter relating to Licensee's use of the License Area. Licensee hereby
disclaims and waives any and all objections to the physical and other characteristics and conditions of the
License Area. Licensee acknowledges and agrees that the use of the License Area will be on the basis of
Licensee's own investigation of the condition of the License Area. The license to use the License Area
shall be granted on an "AS -IS," "WITH ALL FAULTS" basis, without representation or warranty
expressed or implied by City, or by operation of law. City expressly disclaims, which Licensee hereby
acknowledges and accepts, any implied warranty of condition or fitness for a particular purpose or use.
Licensee's use of the License Area shall be subject to the License Area being in a usable and safe condition
at the time of Licensee's use and Licensee shall be responsible for determining whether the License Area
is in such condition. In connection therewith, in the event that the License Area or access thereto is damaged
or obstructed or the use by Licensee is otherwise impaired, prevented or limited, City shall have no
obligation or duty to repair the damage or rectify the condition to make the License Area usable or safe.
Insurance.
8.1 Licensee shall maintain commercial general liability insurance which shall
include, but not be limited to, protection against claims arising from bodily and personal injury, including
death resulting therefrom and damage to property, resulting from any act or occurrence arising out of
Licensee's use of the Property, including, without limitation, acts involving vehicles.
8.2 The amounts of insurance shall be not less than the following: single limit coverage
applying to bodily and personal injury, including death resulting therefrom, and property damage, in the
total amount of $2,000,000 per occurrence and $5,000,000 in the aggregate. Such insurance shall (a) name
the City, its City Council, its officers, employees, agents, volunteers and representatives as additional
insured(s); (b) be primary and not contributory with respect to insurance or self-insurance programs
maintained by the City; and (c) contain standard separation of insureds provisions.
8.3 Licensee shall maintain business automobile liability insurance, or equivalent
form, with a combined single limit of not less than $5,000,000 per occurrence. Such insurance shall include
coverage for owned, hired and non -owned automobiles.
Page 3 of 6
8.4 Pursuant to state law, Licensee is required to be insured against liability for
worker's compensation or to undertake self-insurance. Prior to commencing the performance of services
under this Agreement, Licensee agrees to obtain and maintain any employer's liability insurance with limits
not less than $1,000,000 per accident.
8.5 Certificates of Insurance: Additional Insured Endorsements. Prior to execution of
this Agreement, Licensee shall furnish to City certificates of insurance and, if applicable, additional insured
endorsements to each of Licensee's insurance policies, evidencing the foregoing insurance coverages as
required by this Agreement. These certificates shall:
a. provide the name and policy number of each carrier and policy;
b. shall state that the policy is currently in force; and
c. 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 City.
Licensee shall maintain the foregoing insurance coverages in force throughout the term of this
Agreement. City or its representatives shall at all times have the right to demand the original or a copy of
all these policies of insurance, which Licensee shall provide within five (5) days of City's request.
9. Indemni1y. Licensee shall indemnify, defend, and hold harmless City, and its respective
agents, representatives, employees, subsidiaries and affiliates ("Covered Parties") from and against any
and all actions, suits, claims, demands, judgments, losses, expenses, or liabilities, injuries and damages to
persons and property, including death, arising out of or related to Licensee's use of the License Area, the
entry by any Licensee Party on the License Area or surrounding property, or Licensee's breach or default
in the performance of any of its obligations under this Agreement; provided, however, that Licensee will
not be obligated to indemnify the Covered Parties from any claims arising solely from the gross negligence
or willful misconduct of a Covered Party. If any action or proceeding is brought against any Covered Party
by reason of any such claim, Licensee, upon receipt of written notice from Covered Party, shall defend the
same at Licensee's expense with legal counsel reasonably acceptable to Covered Party. Payment shall not
be a condition precedent to recovery under any indemnification in this Agreement, and a finding of liability
or an obligation to indemnify shall not be a condition precedent to the duty to defend. The provisions of
this Section 10 shall survive the termination or expiration of this Agreement.
10. Miscellaneous.
10.1 Entire Agreement, Waiver and Amendments. This Agreement incorporates all of
the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and
previous agreements between the parties with respect to the subject matter of this Agreement. All waivers
of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the party
to be charged. Any amendment or modification to this Agreement must be in writing and executed by the
appropriate authorities of the City and Licensee.
10.2 Severability. If any term, provision, covenant, or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of
the Agreement shall continue in full force and effect, unless and to the extent the rights and obligations of
one or both parties has been materially altered or abridged by such holding.
10.3 No Assignment. Licensee shall not assign or transfer or otherwise convey any
interest in this Agreement to any party without the express prior written consent of City, which consent
may be withheld in City's sole and absolute discretion.
Page 4 of 6
10.4 Applicable Law. This Agreement shall be construed and enforced in accordance
with the internal laws of the State of California.
10.5 Litigation Expenses. If either party to this Agreement commences an action
against the other party to this Agreement arising out of or in connection with this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees, expert witness fees, costs of investigation, and
costs of suit from the losing party.
10.6 Authority. The persons executing this Agreement on behalf of the parties hereto
represent and warrant to the other party that they are duly authorized to execute and deliver this Agreement
on behalf of such party, and by so executing this Agreement, said party is formally bound to the provisions
of this Agreement.
10.7 Notices. Any notices, requests, or approvals given under this Agreement from one
party to another shall be in writing and shall be personally delivered or deposited with the United States
Postal Service for mailing, postage prepaid, by certified mail, return receipt requested, to the addresses of
the other party as stated in this section, and shall be deemed to have been received at the time of personal
delivery or three (3) days after the deposit for mailing. Notices shall be sent to:
If to Licensor: K&C Logistics, LLC If to City: Clerk of the City Council
Attn: Kadir Koc - President City of Santa Ana
1700 E. Garry Avenue, Suite 214 20 Civic Center Plaza (M-30)
Santa Ana, CA 92705 P.O. Box 1988
Santa Ana, CA 92702-1988
11. Execution in Counterpart. This Agreement may be executed in several counterparts, and
all so executed shall constitute one agreement binding on both of the parties hereto, notwithstanding that
both parties are not signatories to the original or the same counterpart.
[Signatures on the following page]
[This space intentionally left blank]
Page 5 of 6
IN WITNESS WHEREOF, City and Licensee have entered into this Agreement as of the day and
year lust written above.
CITY OF SANTA ANA
Alvaro Nunez
Acting City Manager
APPROVED AS TO FORM
Sonia R. Carvalho
City Attorney
��c r;ia
JUse Montoya
Assistant City Attorney
RECOMMENDED FOR APPROVAL
Digitally signed by Nabil
Saba
Nabil S a b a Date: 2024.08.06 13:45:46
-07'00'
Nabil Saba
Executive Director
Public Works Agency
Jennifer L. Hall
City Clerk
LICENSEE
13y:
A��
Kadir Koc
President
Page 6 of 6
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