HomeMy WebLinkAbout07 C42260 Palm Desert RC Raceway Lease Auth
STAFF REPORT
CITY OF PALM DESERT
PUBLIC WORKS DEPARTMENT
MEETING DATE: October 14, 2021
PREPARED BY: Jennifer Nelson, Management Analyst
REQUEST: Authorize a one (1) year lease agreement with Anthony Westergaard
of Palm Desert RC Raceway for the operation of a remote-control
racetrack on a vacant City-owned parcel (APN 640-091-010).
Recommendation
By Minute Motion, authorize the City Manager to execute a one (1) year lease
agreement with Anthony Westergaard of Palm Desert RC Raceway for the
operation of a remote-control racetrack on a vacant City-owned parcel located on
Painters Path (APN 640-091-010).
Committee/Commission Recommendation
At the September 8, 2021, Parks and Recreation Commission meeting, the Commission
unanimously approved a recommendation requesting the City Council to enter into a one-
year lease agreement with Anthony Westergaard of Palm Desert RC Raceway for the
maintenance and operation of a remote-control RC track located at APN 640-091-010.
Strategic Plan
Allowing the usage of this vacant City-owned lot by remote control hobby enthusiasts
furthers the City’s goal of providing a high quality of life for residents and visitors through
recreational opportunities in public spaces.
Background Analysis
Since 2013, the Palm Desert City Council has authorized lease agreements with the
owners of the Palm Desert RC Raceway at an annual rate of one dollar ($1) per year.
The Raceway operates and maintains the City’s vacant lot located on Painters Path
behind Desert Crossing Shopping Center (APN 640-091-010), see attached vicinity map).
At this location, the Raceway provides RC enthusiasts a place to enjoy their hobby while
not presenting a public nuisance for commercial or residential property owners. In
November of 2019, Mr. Anthony Westergaard became the new owner of the company
and continued management of the property where RC racing events provide meaningful
recreation and educational activities.
October 14, 2021 -Staff Report
Palm Desert RC Raceway
Page 2 of 2
Due to the pandemic over the past year and the construction of the CV Link, raceway
events decreased. However, Mr. Westergaard remained diligent with scheduling activities
at the Raceway while following Covid guidelines. Now that CV Link construction is near
completion, raceway activities are starting to increase and Palm Desert RC Raceway
desires to continue to lease the City-owned property.
Fiscal Analysis
Other than minimal staff time to facilitate the agreement and observe the operation of the
facility, there are no costs incurred by the City. The lease agreement calls for the payment
of one dollar ($1) to the City annually and provides insurance levels of $2,000,000
combined single limit, with the City named as an additional insured.
LEGAL REVIEW DEPT . REVIEW FINANCIAL
REVIEW
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:Andy :Firestine
Robert W . Hargreaves Andy Firestine Janet M. Moore City Attorney Assistant City Manager Director of Finance
City Manager, L. Todd Hileman : L . Tolitvt t--t{Levi.tet V\,
VENDOR: Anthony Westergaard
188 Solana Street
San Jacinto, CA 92582
ATTACHMENTS : Proposed lease agreement
Aerial vicinity map
ASSISTANT
CITY MANAGER
:Andy :Firestine
Andy Firestine
Assistant City Manager
CITY COUNCIL_A.C TION
APPROVED __ i...._ ____ DENIED------
RECEIVED------OTHER _____ _
MEETING DATE 1~-'2--0 ~
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Original on File with City Clerk's Office
CONTRACT NO.
1
LEASE AGREEMENT
This Lease Agreement (“Lease”) is made and entered into as of this 14th day of
November, 2021, by and between the City of Palm Desert, a Municipal Corporation
(“Landlord”) and Anthony Westergaard, owner of PC Desert RC Raceway (“Tenant”), with
reference to the following facts:
RECITALS
A.WHEREAS, Landlord is the owner of a parcel of property (“Premises”),
described with particularity in Exhibit “A” attached hereto and incorporated
herein by this reference; and
B.WHEREAS, on November 14, 2019, Landlord and Tenant entered into a lease for
the Premises; and
C.WHEREAS, on November 14, 2020, per the agreement terms, the lease was
automatically renewed for one year; and
D.WHEREAS, on November 14, 2021, the lease will expire and the Tenant wishes
to enter into a new lease; and
E.WHEREAS, Tenant operates, a remote controlled (RC) car racetrack; and
F.WHEREAS, Tenant desires to lease from Landlord and Landlord desires to lease
to Tenant the Premises on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1.Leased Premises. Landlord leases to Tenant, and Tenant leases from
Landlord, for the term and upon all the terms and conditions in this Lease,
the Premises.
2.Term of Lease.
2.1 Term. The term of this Lease shall be for one (1) year,
commencing on November 14, 2021 (the “Term Commencement
Date”). The term will be automatically extended annually for an
additional one (1) year unless either party gives thirty days’ notice
of termination prior to the expiration of the then current term.
Attachment A
CONTRACT NO.
2
2.2 Date of Lease and Legal Effect. The terms, covenants and
conditions of this Lease shall become legally binding on the Term
Commencement Date.
3. Rent. During the term of this Lease and any extension thereof, Tenant
shall pay Landlord $1.00 per year as minimum yearly rent.
4. Utilities & Maintenance; Improvements; Condition of Premises.
4.1 Provided by Landlord. Landlord shall provide neither services nor
maintenance for the Premises.
4.2 Provided by Tenant. Except as otherwise provided in this Lease,
Tenant shall pay any and all expenses required and keep and
maintain the Premises and every part thereof in and about the
Premises in good order, condition and repair, normal wear and tear
excepted. Tenant shall be responsible for general upkeep of the
Premises and shall provide service therefore. Tenant shall also
inspect and provide reasonable daily upkeep for the grounds of
which the Premises are a part, to the extent that such areas are used
by Tenant. Tenant shall not make or cause to be made any
alterations, additions, or improvements to or of the Premises or any
part thereof without the prior written consent of Landlord. Tenant
shall keep the Premises free and clear of any liens or
encumbrances which may arise from such work, materials
furnished or obligations incurred by or for Tenant
4.3 As-Is Condition. Tenant warrants and agrees that Tenant has
inspected the Premises. Tenant agrees to take possession of the
Premises in an AS-IS condition (which exists on the Term
Commencement Date) and Tenant further agrees that Landlord
shall have no responsibility for any repairs or improvements to the
Premises, prior to, or as a condition of, Tenant's occupation of the
Premises. Landlord makes no representations regarding the
condition, status, compliance with laws or suitability for a
particular purpose for Tenant's use.
4.4 Condition Upon Surrender. Upon expiration or sooner termination
of this Lease, Tenant shall surrender the Premises to Landlord in as
good condition as when received, ordinary wear and tear and
damage by fire, earthquake, or act of God excepted, and including
any repairs or improvements made by Tenant. The Tenant shall, at
its sole cost and expense, remove from the Premises all of its
movable trade fixtures and equipment, and such other items the
Tenant has installed or placed on the Premises, and the Tenant
shall repair all damage to the improvements resulting from such
removal. If Tenant fails to maintain the Premises in good order
Attachment A
CONTRACT NO.
3
and repair, after thirty (30) days’ prior written notice, Landlord
may, at its option, make such repairs, and Tenant shall pay the
reasonable cost thereof as additional rent hereunder within ten (10)
days after receipt of a written statement therefor. In the event the
giving of thirty (30) days’ prior notice may result in additional
damage to the Premises, Landlord may make such repairs, at
Tenant's expense, without thirty days' prior written notice.
5. Taxes.
5.1 Landlord Taxes. Landlord shall have no responsibility for
payment of any real property taxes and assessments levied and
assessed against the land of which the Premises are a part.
5.2 Tenant Taxes. Tenant agrees to pay, before delinquent, all real and
personal property taxes levied or assessed on Tenant’s property
located on the Premises, at Tenant’s sole cost and expense, if any.
5.3 Revenue & Taxation Code Section 107.6. Possessory Interest Tax.
Tenant recognizes and understands that this Lease may create a
possessory interest subject to property taxes and that, in the event
that a possessory interest is created, Tenant shall be responsible for
payment of any taxes levied against such possessory interest.
6. Insurance and Indemnification.
6.1 Landlord’s Insurance. Landlord shall obtain and maintain, at
Landlord’s sole cost and expense, insurance in such coverages and
in such amounts as Landlord determines, in Landlord’s sole
discretion.
6.2 Tenant’s Insurance. Tenant shall obtain and maintain, at Tenant’s
sole cost and expense, broad-form comprehensive public liability
insurance with limits of not less than One Million Dollars
($1,000,000) per person and $1,000,000 each occurrence, insuring
any and all liability of Tenant with respect to the Premises, and
property damage liability insurance with a limit of not less than
$1,000,000 each accident or $2,000,000 combined single limit, and
Tenant shall name Landlord as an additional insured, at Tenant’s
sole cost and expense.
6.3 Indemnification. Except for the sole negligence of Landlord,
Tenant shall defend, indemnify and keep and hold Landlord,
including Landlord's officers, officials, agents, employees and
volunteers, their successors and assigns, harmless from any and all
costs, liability, damage or expense (including costs of suit and fees
and expenses of legal services) claimed by anyone by reason of
injury to or death of persons, or damage to or destruction of
Attachment A
CONTRACT NO.
4
property, including property of Tenant, sustained in, on or about
the Premises or arising out of Tenant's use or occupancy thereof.
6.4 Assumption of Risk/Waiver of Claims. To the extent permitted by
law, Tenant assumes any and all risk of loss, damage or injury of
any kind to any person or property which is in, on or about the
Premises. Tenant’s assumption of risk shall include, without
limitation, loss or damage caused by defects within the Premises or
any fixture therein, accident, fire or other casualty on the Premises.
To the extent permitted by law, Tenant hereby waives all claims
and demands against Landlord, its respective officials, officers,
employees, volunteers and agents for injury to persons or damage
to property arising for any reason.
Tenant has been advised by its legal counsel concerning the
content and effect of California Civil Code Section 1542, which
provides:
A general release does not extend to claims that the creditor
or releasing party does not know or suspect to exist in his
or her favor at the time of executing the release and that, if
known by him or her, would have materially affected his or
her settlement with the debtor or released party.
Tenant hereby waives the benefits of California Civil Code Section
1542 and all other state or federal statutes or judicial decisions of
similar effect. The provisions of this Section shall survive the
termination of this Lease.
7. Permitted Use; Compliance with Laws.
7.1 Tenant shall use the Premises solely for the purposes of operating a
remote controlled car race track. Tenant is responsible for
compliance with all local, State, and Federal laws. The only
vehicles permitted on the site are small remote-controlled vehicles
on the race track. Tenant will take necessary measures to ensure
that dust is not generated on the site that is blown onto adjoining
property.
7.2 Hazardous Materials. Tenant shall not cause or permit any
Hazardous Materials, as defined below, to be brought upon, kept,
used, discharged, deposited or leaked in or about the Premises by
Tenant or any of Tenant's agents or by anyone in the Premises
(other than Landlord or its agents, employees or contractors). If
Tenant breaches the obligations stated in the preceding sentence, or
if the presence of any Hazardous Material on the Premises caused
or suffered or permitted by Tenant or any of Tenant's agents or by
Attachment A
CONTRACT NO.
5
anyone in the Premises (other than Landlord or its agents,
employees or contractors) results in contamination of the Premises,
or if contamination of the Premises by any Hazardous Material
otherwise occurs for which Tenant is legally liable, then Tenant
shall indemnify, defend and hold Landlord harmless from any and
all claims, damages, costs, liabilities and expenses (including,
without limitation, diminution in value or use of the Premises,
attorneys' fees, consultant fees and expert fees) which arise during
or after the term as a result of such contamination. This
indemnification shall include, without limitation, costs incurred in
connection with any investigation of site conditions or any clean-
up, remedial, removal or restoration work on or under the
Premises. “Hazardous Material” means any hazardous or toxic
substance, material or waste which is or becomes regulated by any
local, state or federal governmental authority or by common law
decisions, including without limitation (i) all chlorinated solvents,
(ii) petroleum products or by-products, (iii) asbestos and
(iv) polychlorinated biphenyls
Attachment A
CONTRACT NO.
6
8. Landlord’s Right to Enter Premises. Landlord reserves, and shall at any
and all times have, the right to enter the Premises upon reasonable notice
to Tenant to inspect same, to submit the Premises to prospective tenants,
to post notices of non-responsibility, and to repair the Premises.
9. Assignment and Subleasing. Tenant shall not assign, mortgage, or
hypothecate this Lease in whole or in part, nor sublet all or any part of the
Premises, without the prior written consent of Landlord in each instance,
which consent may be withheld, reasonably or otherwise, in Landlord’s
sole and absolute discretion.
10. Termination. Either party hereto may terminate this Lease upon thirty
(30) days’ prior written notice to the other party.
11. Reporting and Accounting Requirements. At all times during the term of
this lease, Tenant shall maintain books and records sufficient to evaluate
the revenue generation of the facility. Tenant shall make available to City
such books and records upon request.
12. No Waiver of Breach. No failure by either Landlord or Tenant to insist
upon the strict performance by the other of any covenant, agreement, term
or condition of this Lease or to exercise any right or remedy consequent
upon a breach thereof, shall constitute a waiver of any such breach or of
such covenant, agreement, terms, or condition. No waiver of any breach
shall affect or alter this Lease, but each and every covenant, condition,
agreement, and term of this Lease shall continue in full force and effect
with respect to any other then existing or subsequent breach.
12.1 Time is of the Essence. Time is of the essence of this Lease, and
of each provision.
12.2 Notices. All notices and other communications hereunder shall be
in writing and shall be delivered in person or sent by registered or
certified mail, postage prepaid, commercial overnight courier (such
as Express Mail, Federal Express, etc.) with written verification of
receipt or by facsimile. A notice shall be deemed given: (a) when
delivered by personal delivery (as evidenced by the receipt); (b)
three (3) days after deposit in the mail if sent by registered or
certified mail; (c) one (1) business day after having been sent by
commercial overnight courier as evidenced by the written
verification of receipt; or (d) on the date of confirmation if faxed.
If to Landlord: City of Palm Desert
Attention: City Manager
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attachment A
CONTRACT NO.
7
If to Tenant: Anthony Westergaard
188 Solana Street
San Jacinto, CA 92582
Any party may change its address for receiving notice by written
notice given to the others named above.
12.3 Entire Agreement/Amendment. This Lease contains the entire
agreement of the parties with respect to the matters covered by this
Lease, and no other agreements, statements, or promise made by
any party, or to any employee, officer, or agent of any party, which
is not contained in this Lease shall be binding or valid. This Lease
may not be modified except by written instrument duly executed
by the parties hereto or their successors in interest.
12.4 Survival of Indemnities. The obligations of the indemnifying party
under each and every indemnification and hold harmless provision
contained in this Lease shall survive the expiration or earlier
termination of this Lease to and until the last to occur of (a) the last
date permitted by law for the bringing of any claim or action with
respect to which indemnification may be claimed by the
indemnified party against the indemnifying party under such
provision or (b) the date on which any claim or action for which
indemnification may be claimed under such provision is fully and
finally resolved, and, if applicable, any compromise thereof or
judgment or award thereon is paid in full by the indemnifying
party and the indemnified party is reimbursed by the indemnifying
party for any amounts paid by the indemnified party in
compromise thereof or upon judgment or award thereon and in
defense of such action or claim, including reasonable attorneys’
fees incurred.
12.5 Headings. The subject headings of the sections and paragraphs of
this Lease are included for purposes of convenience only and shall
not affect the construction or interpretation of any of its provisions.
12.6 Attorney’s Fees. Should either party commence any legal action
or proceeding against the other based on this Lease, the prevailing
party shall be entitled to an award of attorney’s fees.
12.7 Counterparts. This Agreement may be executed in any one or
more counterparts, and all so executed shall constitute one and the
same instrument.
12.8 Governing Law, Venue. This Agreement shall be construed and
governed by the laws of the State of California. If any action is
brought to interpret or enforce any term of this Lease, the action
Attachment A
CONTRACT NO.
8
shall be brought in a state or federal court situation in the County
of Riverside, State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives on the date first above written.
TENANT: LANDLORD:
CITY OF PALM DESERT, a municipal corporation
________________________________ ___________________________________
Anthony Westergaard Kathleen Kelly, Mayor
ATTEST: Approved as to Form:
________________________________
Norma I. Alley, City Clerk Robert Hargreaves
City of Palm Desert, California City Attorney
Attachment A
8
EXHIBIT “B”
DESCRIPTION OF PREMISES
APN No. 640-091-010, vacant property behind the Desert Crossings Shopping Center.
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