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HomeMy WebLinkAboutC39460 - 1yr. Lease - Operation of Remote-Controlled RacetrackSTAFF REPORT CITY OF PALM DESERT COMMUNITY DEVELOPMENT DEPARTMENT MEETING DATE: November 14, 2019 PREPARED BY: Jennifer Nelson, Management Analyst REQUEST: Request for Authorization of a one (1) year lease agreement with Anthony Westergaard for the operation of a remote controlled (RC) racetrack on a vacant City -owned parcel (APN# 640-091-010). Recommendation By Minute Motion: Authorize the Mayor to execute a one (1) year lease agreement (Contract No. C39460) with Anthony Westergaard for the operation of a remote controlled (RC) racetrack on a vacant City -owned parcel located on Painters Path (APN# 640-091-010). Strategic Plan By allowing the usage of this vacant lot by remote controlled hobby enthusiasts, the City furthers its goals of continuing the high quality of life that our residents and visitors expect, and providing recreational opportunities pervasive in all public spaces. Background Analvsis Since 2013 the Palm Desert City Council has authorized lease agreements with the owners of the Palm Desert RC Raceway at an annual lease rate of one dollar ($1) per year. The Raceway is established on a vacant City lot located on Painters Path behind Desert Crossing Shopping Center (APN# 640-091-010, see attached vicinity map). The operators have continued to successfully operate the raceway providing a location for RC enthusiasts to enjoy their hobby in a location that does not present a public nuisance for commercial or residential property owners. The most recent operator, Jon Vandermolen assumed the lease from the previous operator, Chris Dolan, in April 2018. That agreement expired in June 2018. In August of 2019, Mr. Vandermolen turned the operations over to Anthony Westergaard who is requesting to lease the property to continue the traditional community RC racing events that are not only recreational in nature, but educational as well. The program is not being operated for profit but a $10.00 entry fee is being charged to assist with maintaining the race track equipment, providing lighting and other utilities to the premises and insurance costs. With only being open three (3) days a week, the applicant estimates bringing in approximately $600.00 a month but with monthly utilities costing over $200.00, insurance at 150.00 per month and possessory interest tax (amount unknown at this time), the applicant anticipates bringing in very little revenue, if any at all. Mr. Westergaard is willing to make that sacrifice to provide a great location for the community to experience the thrill of RC racing. At City Councils' request, the section below was added to the agreement: 11. ReDortina 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. This lease will establish the relationship between the operator and the City and provide for automatic renewal for one (1) year unless either party wishes to terminate the relationship. Fiscal Analvsis Other than minimal staff time to facilitate the agreement and observe 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 ASSISTANT CITY MANAGER ��W. Ha greaves Ryan Stendell City Attorn Director of Community anet M. Moore� Development Director of Finance City Manager, Lauri Aylaian: VENDOR: Anthony Westergaard P.O. Box 822 Twentynine Palms, CA. 92277 A Firestine Assistant City Manager ATTACHMENTS: Proposed lease agreement Contract No. C39460 Aerial vicinity map Letter of Intent for Usage Copy of Fictitious Business Name Statement (DBA) Copy of City of Palm Desert Business License CONTRACT NO. C39460 LEASE AGREEMENT This Lease Agreement ("Lease") is made and entered into as of this 14th day of November, 2019, by and between the City of Palm Desert, a Municipal Corporation ("Landlord") and Anthony Westergaard ("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 May 25, 2017 Landlord and Christopher Dolen entered into a lease for the Premises; and C. WHEREAS, on March 30, 2018 the lease agreement was assigned to Jonathan D. Vandermolen; and D. WHEREAS, on June 30, 2018 the lease expired and now Anthony Westergaard 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 October 10, 2019 (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. 2.2 Date of Lease and Leaal Effect. The terms, covenants and 1 CONTRACT NO. conditions of this Lease shall become legally binding on the Term Commencement Date. 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 and repair, after thirty (30) days' prior written notice, Landlord 2 CONTRACT NO. 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 property, including property of Tenant, sustained in, on or about CONTRACT NO. 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 anyone in the Premises (other than Landlord or its agents, 2 CONTRACT NO. 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 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 Reauirements. 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 5 CONTRACT NO. 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 If to Tenant: Anthony Westergaard P.O. Box 822 Twentynine Palms, CA 92277 Any party may change its address for receiving notice by written notice given to the others named above. 12.3 Entire A2reement/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 3 CONTRACT NO. 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 Attornev'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 Countemarts. 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 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: Anthony Westergaard ATTEST: Rachelle D. Klassen, City Clerk City of Palm Desert, California LANDLORD: CITY OF PALM DESERT, a municipal corporation Susan Marie Weber, Mayor Approved as to Form: Robert Hargreaves City Attorney 7 CONTRACT NO. DESCRIPTION OF PREMISES APN No. 640-091-010, vacant property behind the Desert Crossings Shopping Center. 7- FRED WARING OR' E:3 Sent from my iPhone Begin forwarded message: From: Westergaard CIV Anthony Date: September 23, 2019 at 2:29:13 PM PDT To: anthony westergaard Subject: Letter or Use Palm Desert Rc Raceway Good afternoon, A couple weeks ago now I purchased Palm Desert Rc Raceway located in the heart of Palm Desert California. The site will be ran by myself and my wife with our 5 year old son by our side. Currently I am a government employee working on the Marine Corps Base in 29 Palms. I was in the Marine Corps for 8 years and after serving enrolled in school where I achieved my bachelor's degree in Business Management with a concentration in project management. The population of Palm Desert is 53,000+ people. The location of the track poses a lot of potential to get new people into the hobby and maybe even into racing. The track is right off Hwy 1 I 1 which would benefit the city of Palm desert in attracting travelers to spend money in local Palm Desert shops and hotels. This Hwy connects Palm Springs, Palm Desert and Desert Hot Springs. The track is surrounded by a world famous hiking trail called The bump and grind that overlooks the track. This trail attracts hundreds of people on a daily basis which results in people walking directly past the Rc track. This track has a lot of potential if promoted and managed correctly. Previously owners have just been present. We are coming on board with the motivation to expand the industry and promote brands that support us. We are looking to be a recreational area for the community to bring their kids, family and friends. We would like to rehabilitate the facility and be a beneficial area to the community. We have taken some notes over the years on what is expected. Along with what goes over and beyond when owning a track. I have been to a lot of tracks all over the United States and a few out of the country in which we have seen a lot of potentially progressive details. At every track we see things that are better or worse. We would like to take these and apply them to Palm Desert Rc Raceway. For example RENTALS. This gives people the opportunity to try out the vehicles before making a expensive commitment without knowing what to expect. We want to make it possible for the consumer to keep their vehicle going for the day at the track and have a good time. Getting the hobby into the public eye and expanding are the key goals. We are promoting a track that is going to put fun back into the hobby and a place where you can bring the family out and have a blast. Thank you, Anthony Westergaard PETER ALDANA y' COUNTY OF RIVERSIDE Mail To: P.O. Box 751. Riverside, CA 92502-0751— (951) 486-7000 ASSESSOR -COUNTY CLERK -RECORDER 4 Y +'•�,.. OFFICE OF THE COUNTY CLERK FICTITIOUS BUSINESS NAME STATEMENT COUNTY CLERK'S FILING STAMP SEE REVERSE SIDE FOR FEES AND INSTRUCTIONS FILED CLERK'S USE ONLY County of Riverside - USE BLACK INK ONLY - Peter Aldana MUST BE TYPED OR PRINTED S N 19 29444J Assessor -County Clerk -Recorder INITIAL CROSS OUTS Fee ipt R-201912968 NO WHITE OUT ALLOWED catnatents: 09/19/2019 11:58 AM Fee: $58.00 THE FOLLOWING PERSON(S) IS (ARE) DOING BUSINESS AS: Page 1 of 1 Ia. Fictitious Business Name (ismore than one busioess name at some address - Attach Supplemental Sheet) PALM DESERT R/C RACEWAY lb. List COMPLETE Physical Business Address (No P.O. Boxes or Postal Facilities) I ic. Name of County (where business is located) 72440 P�TET pATHe RALPI DESERT, CA 92260 RNERSIDE Mailing(fill fferent then business address- optional) PO BOX 822, TWENTYNINE PALMS, CA 92277 2a. Registrant Information (individual, Corp., LLC, Gen. Partner, etc.) 2b. Registrant Information (Individual, Corp., LLC, Gen. Partner, etc.) ANTHONY -- WESTERGAARD If individual•spell out first, middle and last names (use dash if no middle name) If individual -spell out first, middle and last names (use dash if oo middle name) 3939 PINTO MTN RD xestaence Aaaress tsr t.orp. of Lt.,- emer tree pnystcet saaress of ine uorp.rs.s t-) Residence Address (if Corp. or LLC enter the physical address of the Corp./LLCj TWENTYNINE PALMS A 22277 City Mate zip City List State ofCorpJLLC. Must be registered in Colifomial 2c. Registrant information (individual, Corp., LLC, Gen. Partner, etc.) If individual -spell out first, middle and last names (use dash if no middle name) State Zip iList State of CorpjLLC. Must be registered in California I 2d. Registrant information (Individual, Corp., LLC, Gen. Partner, etc.) If individual -spell out fast, middle and last names (use dash If no middle name) Residence Address (if Corp. or LLC enter the physical address of the Corp./LLC) Residence Address (ifCorp. or LLC enter the physical address of the Corp./LLC) City State Zip City List State ofCorpJLLC. Must be registered in California State Zip List State of CorpJLLC. Must be registered in California I 3. This business is conducted by: (If More Than four Registrants - Attach Addelond Shoat Shoving Owner Informatlon) ® Individual ❑ Married Couple ❑ Trust ❑ Corporation ❑ General Partnership ❑ A Limited Partnership ❑ Co-partners ❑ Joint Venture ❑ Limited Liability Company ❑ Limited Liability Partnership ❑ An Unincorporated Associgoon - other than a oartnershlo ❑ State or Local Reaistered Domestic Partnership 4. ® Registrant has not yet begun to transact business under the fictitious name(s) listed above. ❑ Registrant commenced to transact business under the ficti8ous business name(s) listed above on I declare that all the Information in this statement Is true and correct. (A registrant who declares as true any material matter pennant to Section 17913 of the Business and Professions Code, that the registrant knows to he false, Is guilty of a misdemeanor punishable by a fine not to exceed one thousand dollars ($1,000}) S. Signature(s) (Only one is required) Typed or Pdnted Name(s) ANTHONY WESTERGAARD If Limited Liability Company/Corporation, Title OUD BY: A THIS STATEMENT WAS FILED WITH THE COUNTY CLERK OF RIVERSIDE COUNTY ON DATE INDICATED BY FILE STAMP ABOVE NOTICE -IN ACCORDANCE WITH SUBDIVISION (a) OF SECTION 17920, A FICTITIOUS BUSINESS I HEREBY CERTIFY THAT THIS COPY IS A CORRECT COPY NAME STATEMENT GENERALLY EXPIRES AT THE END OF FIVE YEARS FROM THE DATE ON WHICH IT WAS FILED IN THE OFFICE OF THE COUNTY CLERK, EXCEPT, AS PROVIDED iN OF THE ORIGINAL STATEMENT ON FILE IN MY OFFICE. SUBDIVISION (b) OF SECTION 17920, WHERE IT EXPIRES 40 DAYS AFTER ANY CHANGE IN THE PETER ALDANA FACTS SET FORTH IN THIS STATEMENT PURSUANT TO SECTION 17913 OTHER THAN A CNANGE IN THE RESIDENCE ADDRESS OF A REGISTERED OWNER. A NEW FICTITIOUS BUSINESS NAME STATEMENT MUST BE FILED BEFORE THE EXPIRATION. THE FILING OF THIS RIVERSIDE COUNTY CLERK STATEMENT DOES NOT OF ITSELF AUTHORIZE THE USE IN THIS STATE OF A FICTITIOUS BUSINESS NAME IN VIOLATION OF THE RIGHTS OF ANOTHER FEDERAL, STATE OR COMMON Bye , Deputy LAW (SEE SECTION 14411 ET SEQ.. BUSINESS AND PROFESSIONAL CODE). ACR silo (Rw. 17/2017) Auttable In Ntemate famats I 3+ ) " F 4 7A Z I "P*, 7 : "> In T' } p "t , , " 4- , 'i t K." I-, 'b �a�b ;,; 0Y 4 - A 04 6u) ,040 LU c= c: 0, V) z < u ui u < C= "0 U- V) LU w CIO ;� z E 10 C-2 z W CO ch LU w Z