HomeMy WebLinkAboutC39690 - Lease Palm Desert Community Center CONTRACT NO. C39690
STAFF REPORT
CITY OF PALM DESERT
COMMUNITY DEVELOPMENT DEPARTMENT
MEETING DATE: December 12, 2019
PREPARED BY: Ryan Stendell, Director of Community Development
REQUEST: Consideration for approval of a lease agreement between the City of
Palm Desert and the Desert Recreation District for the Palm Desert
Community Center building located at 43900 San Pablo Avenue
(APN 622-250-016).
Recommendation
By Minute Motion:
1. Authorize the Mayor to execute a lease agreement between the City of
Palm Desert and the Desert Recreation District (DRD).
2. Authorize the City Attorney to make non-substantive changes to the
agreement prior to final execution.
Strategic Plan
Parks and Recreation Priority No. 1:Prepare for the financial requirements of maintaining
existing parks to the highest level of service. Planning efforts shall also address future
costs of replacement and growth of the Parks Capital Improvement fund.
As recommended, this action provides a partner agency (DRD) with the ability to make
substantial improvements to an aging facility within Civic Center Park.
Background Analysis
In 1988, the City and DRD (then the Coachella Valley Recreation and Parks District),
entered into a series of agreements that helped effectuate the creation of the Civic Center
Park and Palm Desert Community Center. Since that time, the DRD has occupied the
Palm Desert Community Center offering recreation programming and services to the
community. The original lease agreement was created under the former Redevelopment
Agency and has since expired. Since then, City staff has been working collaboratively
with the DRD towards two goals: an updated agreement for the building and an
agreement that could facilitate a potential expansion.
December 12, 2019 - Staff Report
Lease Agreement: City of Palm Desert and the DRD
Page 2 of 3
Discussion
This report is intended to briefly describe both the draft lease agreement and a project
improvement agreement (Exhibit "B" to the draft lease agreement), which describes how
a potential remodel could occur in the future.
Lease Agreement:
Staff worked with the City Attorney's office and the DRD to draft a new lease for an initial
term of 25 years, with up to five, five-year extensions. Article 5 of the draft lease
agreement includes the following:
• 5.1 Payment of Expenses: The lease agreement requires the DRD to pay all costs
and expenses for the operations, management, and maintenance of the premises.
• 5.2 City Improvements: The draft lease obligates the City to fund major
improvements on the building, and includes the replacement of HVAC systems,
roofing, and foundation repairs.
• 5.3 District Improvements: Defines the DRD's ability to design to fund a remodel
of the interior of the building.
• 5.4 Improvement Project: Acknowledges that Sections 5.2 & 5.3 could be achieved
more economically as one project managed by the DRD. This section also refers
to Exhibit "B" as how to accomplish that goal.
Project Improvement Agreement:
The Project Improvement Agreement has been drafted to clearly identify the roles and
responsibilities for the contemplated remodel. This agreement does not bind the City
Council to any future expenditures beyond those listed in Section 5.2 and defines that the
DRD will manage all aspects of the project. Finally, the agreement does provide for the
City to approve the remodel prior to commencing with the project.
Fiscal Analysis
The proposed lease agreement requires the DRD to pay all expenses of operating the
building and annual rent payment of $1 . The lease agreement also obligates the City to
fund certain deferred maintenance items (HVAC, roof, & foundation repairs), which staff
has intentionally deferred to align with the proposed remodel. Costs associated with
Section 5.2 of the draft lease agreement will come back to the City Council for approval
at a later date. Funds for this future request are available in the Building Maintenance
Reserve Fund.
December 12, 2019 - Staff Report
Lease Agreement: City of Palm Desert and the DRD
Page 3 of 3
LEGAL REVIEW DEPT. REVIEW FINANCIAL ASSISTANT CITY
REVIEW MANAGER
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Robert W. Hargreaves Ryan Stendell et Moore Andy Firestine
City Attorney Dir. of Community Development Director of Finance sistant City Manager
City Manager, Lauri Aylaian: — l
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APPLICANT: Desert Recreation District
45305 Oasis Street
Indio, California, 92201
ATTACHMENT: Lease Agreement Contract No. C39690
Vicinity Map
CONTRACT NO. C39690
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is entered into as of January 1, 2020 ("Term
Commencement Date"), by and between the CITY OF PALM DESERT, a California municipal
corporation ("Lessor") and the DESERT RECREATION DISTRICT, a California special district
("Lessee"). Lessor and Lessee are sometimes referred to individually as "Party" and collectively as
"Parties."
RECITALS
WHEREAS, Lessee previously owned certain real property in the City of Palm
Desert, California, consisting of two (2) parcels of approximately thirty two (32) acres, including a
recreation building and other improvements ("District Property"); and,
WHEREAS, the City of Palm Desert and the former Redevelopment Agency own a
civic center site of approximately sixty three (63) acres on the northeast corner of Fred Waring
Drive and San Pablo Avenue ("Civic Center Property"); and,
WHEREAS, pursuant to an Exchange Agreement and Transfer Instructions dated
October 13, 1988, an Agreement for Cooperation dated October 13, 1988, and a Lease Agreement
dated 1990, Lessee conveyed District Property to Lessor as consideration for the continued lease of
operational facilities for Lessee on the Civic Center Property and a long term lease of a community
recreation building constructed by Lessor for Lessee on the Civic Center Property ("Palm Desert
Community Center"); and,
WHEREAS, the leased premises are located at 43900 San Pablo Avenue, Palm
Desert, California 92260 ("Premises"), as legally described in Exhibit "A" attached hereto and
incorporated herewith, and include all improvements located thereon, including capital
improvements to the Premises as of the Term Commencement Date and as added or upgraded
pursuant to the provisions of this Lease, including the City Improvements as defined in Section 5.2,
along with the existing recreation building with dressing and activity rooms, reception area, storage,
other usable space, and associated landscaping ("Improvements"); and,
WHEREAS, the Parties now wish to provide for the amendment and extension of
their previous lease agreement and address future improvements and ongoing repairs to the Premises
on the terms and conditions set forth in this Lease; and,
WHEREAS, upon the terms and conditions set forth hereinafter, Lessor desires to
lease the Premises to Lessee, and Lessee desires to lease the Premises from Lessor for the specific
use and purpose of providing a recreation center ("Specific Use"); and,
NOW THEREFORE, in consideration of the above recitals and of the mutual
covenants hereinafter contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
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ARTICLE 1
TERM OF LEASE
1.1 Term. The "Term" of this Lease shall be twenty-five (25) years, commencing on
January 20, 2020 (the "Term Commencement Date") with an option to renew the Lease at the
Parties' mutual discretion for five (5), five (5)-year terms, unless terminated earlier by Lessor or
Lessee (subject to terms herein).
1.2 Date of Lease and Legal Effect. The terms, covenants, and conditions of this Lease
shall become legally binding on the Term Commencement Date.
1.3 Termination. The Parties may not terminate this Lease during the first twenty five (25)
years of the Term or during any of the five (5)-year renewals. With a minimum six (6) months' notice
either Party may terminate this Lease prior to any subsequent renewal date. This provision shall not
apply in the event of a breach of the Lease or the mutual written agreement of the Parties.
ARTICLE 2
RENT
2.1 Base Rent. During the term of this Lease, Lessee shall pay to Lessor for each year
from the Term Commencement Date One Dollar ($1.00) ("Base Rent"). The Base Rent owing for
the full term of the Lease shall be payable in advance of the Term Commencement Date.
ARTICLE 3
USE OF PREMISES AND COMPLIANCE WITH LAW
3.1 Use and Continuous Operation Covenant. Lessor's primary purpose for entering into
this Lease is to provide for the operation of the Premises for the general public for the usual and
customary services and facilities provided by the Desert Recreation District, including athletic
facilities, recreational programs, and activities. Lessee shall routinely report to the City of Palm
Desert's Parks and Recreation Commission at its regular meetings, but not less than once a year, a
schedule of the availability of all facilities and of all programs and activities to be conducted on the
Premises, including the time, date, and duration of such programs and activities. The concept of
wholesome, affordable family recreation shall he promoted. Should the Lessee wish to substantially
change programs and activities available at the facility, Lessee will provide Lessor an explanation of
the changes desired and agrees to meet and confer with Lessor with the goal of mitigating any
Lessor concerns regarding those desired changes.
3.2 Fees and Charges. The Lessee shall he responsible for setting fees and charges for
participation in its various programs and activities conducted on the Premises or for use of the
Premises provided. It is the Lessor's and Lessee's goal to permit participation by all socio-economic
groups in the programs and activities conducted on the Premises. Reasonable cost of operation shall
include, but not be limited to, all direct or indirect costs, such as overhead and amortization of
capital improvements as otherwise allowed by law. The Lessee's schedule of fees under this Section
3.2 shall be submitted to the Lessor for prior written approval and any substantial changes to or
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deviations from such schedule thereafter must be approved in writing by the Lessor. Lessor's
consent to any fees or charges will not be unreasonably withheld.
3.3 Reports and Records. The Lessee shall maintain accurate records of the costs and
revenues associated with operation of the Premises and the various programs and activities
conducted on the Premises. Such records shall be available to Lessor for inspection upon request.
3.4 Parking. The Lessor shall make available and maintain at acceptable standards
sufficient public parking to serve the Premises within the Palm Desert Civic Center area,
specifically including handicapped and bicycle parking. Lessee acknowledges it does not have
exclusive use of the entire parking area.
3.5 Compliance with Law. Except as otherwise provided in Section 3.5.1 and Article 5
hereof as Lessee's specific obligations, Lessee, at Lessee's expense, shall promptly comply with all
present and future laws, ordinances, orders, rules, regulations, and requirements of all governmental
authorities having jurisdiction affecting the Premises (or the cleanliness, safety, occupancy, and use
of the same), whether or not any such law, ordinance, order, rule, substantial or unforeseen, or
ordinary or extraordinary, or shall necessitate structural changes of the Improvements or interfere
with the use and enjoyment of the Premises. If any governmental license or permit shall be required
for the proper and lawful conduct of the Premises, Lessee shall procure and thereafter maintain such
license or permit at its sole cost and expense and shall submit the same for inspection by Lessor.
3.5.1 Notwithstanding the provisions of Section 3.5, the Parties acknowledge that
the Premises require a new roof and HVAC system, and repair of the Foundation. Lessor will be
responsible for the cost of such major repairs, as provided in Article 5, below. The provisions of
Section 3.5 shall not be construed to require Lessee to make those City Improvements at its
expense.
3.6 Hazardous Substances. Lessee shall ensure that there shall not be kept, used, or sold
in, upon or about the Premises any hazardous or toxic materials, chemicals, gasoline, petroleum
distillate or other petroleum products, or any other substance or material of any explosive,
inflammable, hazardous, toxic, or radioactive nature which may endanger or damage any part of the
Premises, its occupants or invitees, or present any unusual fire, explosion or other damaging or
dangerous hazard, or present the possibility of contamination by toxic or hazardous waste.
3.7 Nondiscrimination. Lessee covenants and agrees for itself, its agents and assigns, and
all persons or entities claiming under or through it and this Lease is made and accepted upon and
subject to the following conditions:
That there shall be no discrimination against or segregation of any person, or group of persons on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
those bases are defined in Sections 12926, 12936.1, subdivision (m) and paragraph (1) of subdivision
(p) of Section 12955 and Section 12955.2 of the Government Code, in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the Premises nor shall the Lessee, itself or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy, of
lessees, sublessees, sublessee or vendees in the Premises.
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3.8 Liens. Lessee shall keep the Premises, including the Improvements, and the furniture,
fixtures and equipment ("FF&E") and any and all parts thereof, free from any and all liens arising
out of any work performed, materials furnished or obligations incurred by or for Lessee, and agree to
cause to be discharged of record any mechanics' or materialmen's lien within twenty (20) calendar
days after the lien has been filed or within ten (10) calendar days after receipt of written request from
Lessor, whichever shall be the sooner. Lessee shall give Lessor at least fifteen (15) calendar days
written notice prior to commencing or causing to be commenced any work on the Premises (whether
prior or subsequent to the commencement of the Term), so that Lessor shall have reasonable
opportunity to file and post notices of non-responsibility for Lessee's work. Lessor may condition its
consent to work upon Lessee posting lien and material and/or completion bonds in amounts as may
be necessary to cover the anticipated cost of such work and potential overruns. Lessee shall
reimburse Lessor for any and all costs and expenses which may be incurred by Lessor by reason of
the filing of any such liens and/or removal of same, such reimbursement to be made within ten (10)
calendar days after receipt by Lessee from Lessor of a statement setting forth the amount of the
costs and expenses.
3.9 CASp Disclosure. Lessee caused the Premises to be inspected by a Certified Access
Specialist ("CASp") (as defined in California Civil Code section 1938) in 2011 and will cause an
additional inspection during 2019.
ARTICLE 4
OWNERSHIP OF IMPROVEMENTS
During the Term of this Lease, all Improvements and FF&E that are provided by
Lessee or purchased or paid for by Lessee shall remain the property of Lessee. During the Term of
this Lease, all Improvements and FF&E that are provided by Lessor or purchased or paid for by
Lessor shall remain the property of Lessor.
ARTICLE 5
EXPENSES AND IMPROVEMENTS
5.1 Payment of Expenses. Lessee shall pay all of the costs and expenses for the
operation, management, and maintenance of the Premises. Such expenses shall include, without
limitation, the following: (i) expenses incurred by Lessee in connection with the Premises for general
maintenance, painting, lighting, cleaning, security, fire protection; (ii) subject to Section 3.5.1 and this
Article, all charges, surcharges and other levies imposed by, and all costs (whether or not capital in
nature) of compliance with the requirements of any federal, state, or local governmental agency
regulating use of the Premises; and (iii) the actual cost of minor repairs to the Premises. As used
herein, "minor repairs" means those repairs excluding the replacement of the roof, HVAC system, and
repair of the Foundation as provided in Section 5.2 below, and includes interior modifications to
improve the ability to provide recreational services. Minor repairs further include those needed for the
ongoing upkeep and maintenance of the Premises after completion of Lessor's City Improvements.
5.2 City Improvements. Lessor shall fund the following necessary major improvements
and repairs to the Premises: replacement of the entire roof and associated repairs; replacement of
the HVAC and associated ducting; and repair of the Foundation as determined to be necessarily
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structurally ("City Improvements"). The repairs to be done by Lessor must either occur before or at
generally the same time as those to be performed by Lessee.
5.3 District Improvements. Lessee may design and fund a new front lobby, reconfigured
weight room and office area, and a new preschool area to the rear of the Premises with an enclosed
play area ("District Improvements"). As part of such work, Lessee may request and Lessor shall
grant an additional area of the Civic Center Property and Exhibit "A" shall be amended
accordingly.
5.4 Improvements Project. The Parties agree that economic efficiency and continued
service to the public support the performance of both City and District Improvements as one project
("Project"), with one bid process and prime contractor. Lessor and Lessee each will bear its own
costs. Lessee shall be the lead agency for the design and construction of the City and District
Improvements and repairs provided in Section 5.2 and 5.3 as set out in Exhibit "B" attached and
incorporated as if fully set forth herein.
ARTICLE 6
MAINTENANCE OF LEASED PREMISES
6.1 Lessee's Obligations for Maintenance.
6.1.1 Lessee's Obligations. Lessee shall be responsible for minor repairs, herein
described as "District Improvements," at Lessee's expense without cost to Lessor, and shall
maintain in good order, condition, quality, and repair, the Premises and every part thereof, and any
and all appurtenances thereto wherever located, and all other repairs, replacements, renewals, and
restorations, ordinary and extraordinary, foreseen and unforeseen.
6.1.2 Standard of Maintenance. Subject to Section 3.5.1, Lessee shall keep and
maintain the Premises, including the Improvements thereon, and all FF&E, in a clean, sanitary, and
safe condition in accordance with the laws of the State of California and in accordance with all
directions, rules, and regulations of the health officer, Fire Marshal, building inspector, or other
property officials of the governmental agencies having jurisdiction, and Lessee shall comply with all
requirements of laws and ordinances affecting the Premises and the Improvements, all at the sole
cost and expense of Lessee. At the time of the expiration of the tenancy created herein, Lessee shall
surrender the Premises and the Improvements thereon in the same order, condition, and repair as
when received, reasonable wear and tear excepted.
6.1.3 Lessor's Substitute Performance. In the event Lessee fails,refuses, or neglects
to commence and complete promptly and adequately any of Lessee's obligations pursuant to this
Section, or to remove any lien, to pay any cost or expense relating to the matters described in
Section 3.8, Lessor may, but shall not be required to, make or complete any such repairs, remove
such lien, or pay such cost and expense, and Lessee shall reimburse Lessor for all costs and expenses
of Lessor thereby incurred within fifteen (15) calendar days after receipt by Lessee from Lessor of a
statement setting forth the amount of such costs and expenses which shall be deemed to be
additional rent and subject to the same consequences as herein provided for failure to pay rent. If
reasonably possible under the circumstances, Lessor shall give Lessee written notice fifteen (15)
calendar days prior to commencement of any substitute performance. Any failure by Lessor to give
such notice, however, shall not prejudice Lessor's rights hereunder or alter Lessee's obligations
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hereunder. Lessor's rights and remedies shall be in addition to any and all other rights and remedies
provided under this Lease or at law.
6.2 Lessor's Obligations For Maintenance. Lessor shall maintain, repair, and replace the
parking areas located adjacent to the Premises.
ARTICLE 7
INSURANCE AND INDEMNITY
7.1 Lessee's Insurance.
7.1.1 Types. Lessee, at no cost and expense to Lessor, shall procure and keep in full
force and effect during the Term or cause to he procured and kept in full force and effect for the
mutual benefit of Lessor and Lessee, insurance policies or self-insurance meeting the minimum
requirements set forth below or such greater requirements that are generally obtained from time to
time for properties, improvements, activities, and operations similar to those on the Premises in the
Southern California area.
Commercial general liability insurance with respect to the Premises and the operations
of or on behalf of Lessee or its agents, officers,directors, and employees in,on or about the Premises
in an amount not less than Three Million Dollars ($3,000,000) per occurrence combined single limit
for bodily injury,personal injury, death and property damage, Three Million Dollars ($3,000,000) in
aggregate subject to such increases in amount as Lessor may reasonably require from time to time.
Coverage shall include, but not be limited to personal injury liability,premises and operation, blanket
contractual, cross liability,severability of interest, broad form property damage, and independent
contractors. Lessee shall cause Lessor and its officers, employees, and agents to be named as
additional insureds on such policy or policies.
Worker's compensation coverage as required by the laws of the State of California
together with employer's liability coverage.
With respect to the Improvements, FF&E, and other items of personal property
located on or in the Premises, insurance against fire, flood, extended coverage, vandalism and
malicious mischief, and such other additional perils, hazards and risks as now are or may be included
in standard "all risk" forms in general use in Riverside County, California, for an amount equal to
not less than the full current actual replacement cost thereof.
Such insurance shall include endorsements for the leasehold improvements, inflation
coverage, plate glass, business interruption, sprinkler leakage and changed conditions. Lessor shall
be an additional insured under such policy or policies and such insurance shall contain a
replacement cost endorsement.
Standards. All policies of insurance required to be carried by Lessee under this Lease
shall be written by responsible and solvent insurance companies authorized to do business in the State
of California and rated no less than A VII by A.M. Best's Key Rating Guide. With Lessor's prior
written approval of the insurance coverage, any insurance required of Lessee hereunder may be
furnished by Lessee under any blanket policy carried by Lessee. A copy of each paid-up policy
evidencing such insurance (appropriately authenticated by the insurer) or a certificate of the insurer
(if approved by Lessor), certifying that such policy has been issued, providing the coverage
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required by this Section and containing provisions specified herein, shall be delivered to Lessor prior
to the date Lessee is given possession of the Premises or as Lessor may otherwise require, and
upon renewals, not less than thirty (30) days prior to the expiration of such coverage. Lessor may,
at any time, and from time to time, inspect and/or copy any and all insurance policies required to be
procured by Lessee hereunder. In no event shall the limits of any policy be considered as limiting
the liability of Lessee under this Lease.
Specific Provisions in Policy. Each policy evidencing insurance required to be carried
by Lessee pursuant to this Article shall contain the following provisions or clauses:
a provision that the insurer will not cancel or materially change the coverage provided
by such policy without first giving Lessor thirty (30) days prior written notice; and
a waiver by the Lessee's insurer of any right to subrogation against Lessor, its agents,
employees or representatives which arises or might arise by reason of any payment under such policy
or policies or by reason of any act or omission of Lessor, its agents, employees or representatives.
If the services provided in relation to this Agreement relate in any way to minors,
then this policy shall also include an endorsement for abuse and sexual molestation covering
damages arising out of actual or threatened physical abuse, mental injury, sexual molestation,
negligent: hiring, employment, supervision, investigation, reporting to proper authorities, and
retention of any person for whom Lessee is responsible including, but not limited to, its employees
and volunteers. Coverage shall be written on an occurrence basis in an amount of not less than
$1,000,000 per occurrence, with an annual aggregate limit not less than $3,000,000.
Primary/noncontributing. Coverage provided by Lessee shall be primary and any
insurance or self-insurance procured or maintained by Lessor shall not be required to contribute
with it. The limits of insurance required herein may be satisfied by a combination of primary and
umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to
contain a provision that such coverage shall also apply on a primary and non-contributory basis for
the benefit of Lessor before the Lessor's own insurance or self-insurance shall be called upon to
protect it as a named insured.
Enforcement of contract provisions (non estoppel). Lessee acknowledges and
agrees that any actual or alleged failure on the part of the Lessor to inform Lessee of non-
compliance with any requirement imposes no additional obligations on the Lessor nor does it waive
any rights hereunder.
Prohibition of undisclosed coverage limitations. None of the coverages required
herein will be in compliance with these requirements if they include any limiting endorsement of
any kind that has not been first submitted to Lessor and approved of in writing.
Separation of Insureds. A severability of interests provision must apply for all
additional insureds ensuring that Lessee's insurance shall apply separately to each insured against
whom claim is made or suit is brought, except with respect to the insurer's limits of liability. The
policy(ies) shall not contain any cross-liability exclusions.
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Pass Through Clause. Lessee agrees to ensure that its subconsultants,
subcontractors, and any other party involved with the project who is brought onto or involved in the
project by Lessee, provide the same minimum insurance coverage and endorsements required of
Lessee. Lessee agrees to monitor and review all such coverage and assumes all responsibility for
ensuring that such coverage is provided in conformity with the requirements of this section. Lessee
agrees that upon request, all agreements with consultants, subcontractors, and others engaged in the
project will be submitted to Lessor for review.
Self-insured retentions. Any self-insured retentions must be declared to and
approved by Lessor. Lessor reserves the right to require that self-insured retentions be eliminated,
lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these
specifications unless approved by Lessor.
Additional insurance. Lessee shall also procure and maintain, at its own cost and
expense, any additional kinds of insurance, which in its own judgment may be necessary for its
proper protection. Lessee's personal property, fixtures, equipment, inventory and vehicles are not
insured by Lessor against loss or damage due to fire, theft, vandalism, rain, water, criminal or
negligent acts of others, or any other cause.
Lessor's Substitute Performance. In the event that Lessee fails to procure, maintain
and/or pay for at the times and for the durations specified in this Section 7.1, any insurance required
by this Section, or fails to carry insurance required by law or governmental regulation, Lessor may
(but without obligation to do so) at any time or from time to time, after 3 days written notice to
Lessee, procure such insurance and pay the premiums therefor, in which event Lessee shall repay
Lessor all sums so paid by Lessor together a 10% handling charge, plus interest thereon as
provided elsewhere herein, within fifteen (15) days following Lessor's written demand to Lessee for
such payment.
Covenant to Indemnify and Hold Harmless. Lessee shall indemnify,defend, protect
and hold harmless Lessor, its officers, public officials,contractors, volunteers, attorneys, agents and
employees, and save them from and against any and all claims,actions, losses, damages, liabilities,
and expenses, including attorneys' fees, in connection with the loss of life,bodily injury and/or
damage to property arising from or out of or in connection with any occurrence in, upon or at the
Premises, or the occupancy or use by Lessee of the Premises or any part thereof, or arising from or
out of Lessee's failure to comply with any provision of this Lease or otherwise occasioned wholly
or in part by any act or omission of Lessee, its officers, public officials,contractors, volunteers,
attorneys, Agents and employees, servants, invitees or licensees,excepting that the foregoing
indemnification and hold harmless provision shall not apply in the event of any uninsured willful or
actively negligent misconduct on behalf of Lessor or any of its agents, representatives, or employees,
or in the event any such claims,actions, losses, damages, liability, costs, or expenses arise out of
a breach by Lessor of its obligations under this Lease.
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If Lessor is made a party to any litigation commenced by or against Lessee, then
Lessee shall indemnify,protect, defend and hold Lessor harmless and shall pay all costs, expenses and
reasonable attorneys' fees incurred or paid by Lessor in connection with such litigation. Lessor may,
at its option, require Lessee to assume Lessor's defense in any action covered by this Section 7.2
through counsel selected by Lessor and reasonably satisfactory to Lessee. Except for that arising
from the failure to make major repairs as defined herein, Only as provided in this Lease, Lessee, as
a material part of the consideration to Lessor, hereby assumes all risk of damage to property or
injury to persons in, upon or about the Premises and Improvements from any cause whatsoever,
and Lessee hereby waives all its claims in respect thereof against Lessor excepting only damage or
injury arising out of(i) the uninsured willful or actively negligent misconduct of Lessor or any of its,
public officials,contractors, volunteers, attorneys, agents and employees, or (ii) a breach by Lessor of
its obligations under this Lease.
Waiver of Subrogation. Each party hereto does hereby waive, remise, release and
discharge the other party hereto and any officers, public officials,contractors, volunteers, attorneys,
agents and employees of such other party, of and from any liability whatsoever hereafter arising from
loss or damage for which Lessee has purchased a policy of"all risk" insurance. Lessee shall, upon
obtaining the policy of"all risk" insurance required hereunder, give notice to the insurance carrier or
carriers that the foregoing mutual waiver of subrogation is contained in this Lease.
Exemption of Lessor from Liability. Except as provided herein and as arising from the
failure to make major repairs, Lessor shall not be liable for injury or damage to the person or goods,
wares, merchandise or other property of Lessee, Lessee's officers, public officials,contractors,
volunteers, attorneys, agents and employees, invitees,customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas,
water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether
said injury or damage results from conditions arising upon the Premises, from other sources or
places, and regardless of whether the cause of such damage or injury or the means of repairing the
same is accessible or not.
ARTICLE 8
UTILITY CHARGES
Lessee shall pay all charges for gas, water, sewer, electricity, telephone, security and
other utility services used on or in the Premises together with any taxes or penalties thereon.
ARTICLE 9
ALTERATIONS AND ADDITIONS
Without Lessor's prior written consent, which consent may be withheld or granted in
Lessor's sole discretion, except as provided in Articles 5 or 6 or as needed to make minor repairs as
required under this Lease, Lessee shall not have the right to make major changes or alterations to the
Premises or the Improvements whether structural or non-structural, systemic or non-systemic. If
Lessor approves any alterations or additions, then before the commencement of any work, Lessee
shall pay the amount of any increased premiums on insurance policies provided for hereunder.
Except as otherwise provided in Article 5, Lessor shall in no event be required to make any
72500.00916\32481443.1 -9-
alterations, rebuilding, replacement, changes, additions or improvements or repairs to the Premises.
If Lessee wishes to make any alteration or addition, or make any repairs to the Premises which
would result in an alteration or addition to the Premises not otherwise addressed in this Lease, Lessee
shall submit to Lessor for its approval documentation which describes the desired repairs, including
floor plans, building sections, building materials and components, samples of proposed exterior
building materials, and the like, to the extent relevant to the particular repair. All changes,
alterations, rebuilding, replacements, additions, improvements and repairs to the Premises made by
Lessee shall be deemed to have attached to the realty and to have become the property of Lessor
upon the expiration of the Term or the sooner termination of this Lease.
ARTICLE 10
DAMAGE OR DESTRUCTION; CASUALTY LOSS AND RESTORATION
10.1 Non-Termination. Except as provided herein, no destruction or damage to the
Improvements or the Premises by fire, windstorm, or other casualty whether insured of uninsured
shall entitle Lessee to terminate this Lease. Lessor and Lessee agree that the terms of this Lease shall
govern the effect of any damage to or destruction of the Premises and the Improvements with
respect to the termination of this Lease and hereby waive the provisions of any present or future
statute to the extent it is inconsistent herewith.
10.2 Repair of Damage.
10.2.1 Obligation to Repair Damage Due to Casualty Covered by Insurance. If the
Premises are partially destroyed or rendered partially un-leasable by fire or other casualty required to
be insured against by Lessee, Lessee shall promptly proceed to obtain insurance proceeds. The
Premises shall be deemed partially destroyed if the cost of reconstruction exceeds fifty percent (50%)
of the replacement cost of the Improvements. Upon adjustment of the loss and delivery of funds,
Lessor shall commence taking the steps necessary to begin reconstruction and shall complete the
same as soon as possible so that Lessee may continue in occupancy.
10.2.2 Obligation to Repair Damage Due to Casualty Not Covered by Insurance or
Following a Total Destruction. If the Premises are totally or partially destroyed or rendered wholly
un-leasable by a casualty not required to be insured against by Lessee, then either Lessee or Lessor
shall have the right to terminate this Lease. Lessee may provide alternative sites for the programs
provided before the loss so that they may continue to serve the residents of the City and Lessor shall
provide reasonable compensation therefor.
10.3 Continued Operations. During any period of repair, Lessee may, to the extent it is
safe or Lessee is able to do so, continue, or cause the continuation of, the operation of its Specific
Use on the Premises and use of the Premises by the Lessee to the extent reasonably practicable.
However, irrespective of the continued operation during such period of repair, the rent and other
charges payable hereunder shall not be deferred and shall not be abated. Upon completion of such
repair and restoration, Lessee shall promptly refixture and restock the Improvements and all FF&E,
if necessary, substantially to the condition prior to the casualty, or as otherwise required by this
Lease, whichever is greater, and shall reopen if closed by the casualty.
10.4 Assignment of Insurance Proceeds. If for any reason this Lease is terminated by
reason of a casualty, all insurance proceeds covering the Improvements, the Premises, or the FF&E,
72500.00916\32481443.I -10-
and any personal property used in the operation of the Premises, shall be the property of Lessor, and
Lessee hereby assigns such insurance proceeds to Lessor.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
11.1 Lessor's Consent Required. Notwithstanding any provision herein to the contrary,
Lessee agrees and covenants (which covenants shall be binding upon the successors and assigns of
Lessee) that Lessee shall not, either voluntarily or by operation of law, assign, sell, encumber, pledge
or otherwise transfer all or any part of Lessee's leasehold estate hereunder, or permit the Premises to
he occupied by anyone other than Lessee, Lessee's employees or invitees, or sublet the Premises, or
any portion thereof, without Lessor's prior written' consent. No assignment, whether voluntary or
involuntary, by operation of law, under legal process or proceedings, by receivership, in bankruptcy,
or otherwise, and no subletting shall be valid or effective without such prior written consent, and at
Lessor's election, shall constitute a default. Lessor's consent to any proposed transfer of Lessee's
leasehold estate will not be unreasonably withheld.
11.2 Lessee Remains Obligated. No subletting or assignment, even with the consent of
Lessor, shall relieve Lessee of its obligation to pay rent and to perform all of its other obligations
hereunder. The acceptance by Lessor of any payment due hereunder from any person or entity other
than Lessee shall not be construed as a waiver by Lessor of any provision of this Lease or as a
consent to any assignment or subletting. Consent by Lessor to an assignment of the Lease or to a
subletting of the Premises shall not operate as a waiver or estoppel to the future enforcement by
Lessor of its rights pursuant to this Lease to approve other assignments or sublettings.
ARTICLE 12
DEFAULT
12.1 Events of Default. The word "default," as used in this Section, shall mean and include
any one or more of the following events or occurrences:
12.1.1 The failure by Lessee to make any payment of Base Rent, additional rent, or
other payment required to be made by Lessee hereunder, when due and the continuance of such
failure for a period of ten (10) calendar days after Lessor has given Lessee written notice specifying
the same;
12.1.2 The failure of Lessee to perform any other term, condition, covenant or
agreement of this Lease not previously described, and the continuation of such failure for a period
of thirty (30) calendar days after Lessor shall have given Lessee written notice specifying the same,
or in the case of a situation in which the default cannot reasonably be cured within thirty (30)
calendar days, if Lessee shall not promptly, within thirty (30) calendar days after receipt of such
notice, commence to remedy the situation by a means that can reasonably be expected to remedy
the situation within a reasonable period of time, and diligently pursue the same to completion;
12.1.3 The abandonment by Lessee of the Premises or a substantial portion thereof;
12.2 Remedies.
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12.2.1 General. In the event of any default by Lessee, including the expiration of any
applicable cure period, Lessor may terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender
possession of the Premises to Lessor.
12.2.2 In such event Lessor shall be entitled to recover from Lessee:
12.2.2.1 The worth at the time of award of the unpaid rent which had been
earned at the time of termination;
12.2.2.2 The worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award exceeds the amount of
such loss that Lessee proves could have been reasonably avoided;
12.2.2.3 The worth at the time of award of the amount by which the unpaid
rent for the balance of the Term after the time of award exceeds the amount of such loss that Lessee
proves could be reasonably avoided; and
12.2.2.4 Any other amount deemed necessary and/or allowable by applicable
statute or decision to compensate Lessor for all the detriment proximately caused by Lessee's failure
to perform its obligations under this Lease or which, in the ordinary course of events, would be likely
to result therefrom, including, but not limited to, the cost of recovering possession of the Premises,
expenses of reletting, expenses of restoring the Premises to the condition required hereunder (if
applicable), reasonable attorneys' fees, and any other reasonable costs.
12.2.2.5 The "worth at the time of award" of the amounts referred to in the
subparagraphs, above, shall be computed by allowing interest at a rate equal to ten percent (10%)
from the dates such amounts accrued to Lessor until the date of payment by Lessee.
12.3 Cumulative Remedies. Except as may be specifically provided herein, the rights and
remedies reserved to Lessor and Lessee herein, including those not specifically described, shall be
cumulative and, except as provided by California statutory or case law in effect at the time, either
Lessor or Lessee may pursue any or all of such rights and remedies at the same time or otherwise.
12.4 Lessor's Non-Waiver. No delay or omission of Lessee or Lessor to exercise any right
or remedy shall be construed as a waiver of any right or remedy or of any default by Lessee or
Lessor hereunder. The acceptance by Lessor of rent or any other charge hereunder shall not be a
waiver of any preceding breach or default by Lessee of any provision hereof, other than the failure
of Lessee to pay the particular rent accepted, regardless of Lessor's knowledge of such preceding
breach or default at the time of acceptance of such rent, or a waiver of Lessor's right to exercise any
remedy available to Lessor by virtue of such breach or default. The acceptance of any payment from
a debtor in possession, a trustee, a receiver or any other person acting on behalf of Lessee or
Lessee's estate shall not waive or cure a default under this Section.
12.5 Lessor's Reentry. Lessee hereby irrevocably consents to Lessor's peaceable reentry,
if Lessor so elects, to the Premises upon the occurrence of any of the events of default specified
above, including the expiration of any applicable cure period.
12.6 Lessor's Advances. In the event of any default by Lessee in the payment of money or
default by Lessee in the performance of Lessee's obligations required under this Lease, and the
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expiration of any period expressly provided for herein for Lessee to cure said default after the
delivery of notice by Lessor, in addition to the other remedies herein granted to Lessor, Lessor may,
but shall not be obligated to do so, and without waiving or releasing Lessee from any obligations of
this Lease make any payment and perform any other act on Lessee's part to be made or performed as
provided in this Lease. All sums paid by Lessor and all necessary incidental costs, together with
interest thereon at the rate of ten percent (10%) per annum from the date of the payment by Lessor
shall be payable by Lessee to Lessor on demand. The sums shall be deemed to be additional rent and
subject to the same consequences as herein provided for failure to pay rent.
12.7 Default by Lessor. Lessor shall not be deemed to be in default in the performance of
any obligation required to he performed by it hereunder unless and until it has failed to perform such
obligation within thirty (30) calendar days after written notice by Lessee to Lessor specifying in
reasonable detail the nature and extent of any such failure; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) calendar days are required for its performance,
then Lessor shall not he deemed to he in default if it shall commence such performance within such
thirty (30) calendar day period and thereafter diligently prosecutes the same to completion.
12.8 Legal Expenses and Collection Costs. If either Party incurs any expense, including
actual costs of collection, reasonable attorneys' fees, expenses of discovery, preparation for
litigation, expert witness fees and litigation expenses and costs, in connection with any action or
proceeding instituted by either Party by reason of any default or alleged default of the other Party
hereunder, the party prevailing in such action or proceeding shall be entitled to recover its reasonable
expenses from the other Party. For purposes of this provision, in any unlawful detainer or other
action or proceeding instituted by Lessor based upon any default or alleged default by Lessee
hereunder, Lessor shall be deemed the prevailing party if(a)judgement is entered in favor of Lessor
or (b) prior to trial or judgement Lessee shall pay the rent and charges claimed by Lessor, or
eliminate the condition(s), cease the act(s) or otherwise cure the omission(s) claimed by Lessor to
constitute a default by Lessee hereunder.
ARTICLE 13
HOLDING OVER
This Lease shall terminate and become null and void without further notice upon the
expiration of the Term herein specified, and any holding over by Lessee after such expiration shall
not constitute a renewal or extension hereof or give Lessee any rights under this Lease, except when
in writing signed by both Parties hereto. If Lessee holds over at the Premises, Lessee shall be liable
to Lessor for the fair rental value of the Premises during such period.
ARTICLE 14
ACCESS BY LESSOR
In addition to the right of Lessor to reserve use of the Premises under Article 3,
Lessor and its agents, contractors, servants, and employees of Lessor shall have the right, after
reasonable notice to Lessee, to enter the Premises during normal business hours to (a) examine the
Premises, to perform any obligations of Lessor or to exercise any right or remedy reserved to Lessor
72500.00916\32481443.1 -13-
in this Lease; (b) exhibit the Premises to prospective purchasers, mortgagees or lessees of Lessor's
interest therein; (c) make such repairs as Lessor may be entitled to make after a default by Lessee
under Article 12, above; and (d) take all materials into and upon the Premises that may be required in
connection with such repairs, provided that any such entry shall be performed in such a manner that
does not unreasonably interfere with Lessee's use of the Premises. If Lessor exercises its rights of
entry in compliance with this Article 14, such entry shall not constitute a constructive or actual
eviction of Lessee, in whole or in part, and the rent and other charges hereunder shall not abate while
any such repairs are being made. If, during the last month of the Term, Lessee shall have removed all
or substantially all of Lessee's property therefrom, Lessor may immediately enter and alter, renovate
and redecorate the Premises without elimination or abatement of rent or other charges and without
other compensation and such action shall have no effect upon this Lease. Nothing herein contained,
however, shall be deemed or construed to impose upon Lessor any obligation, responsibility or
liability whatsoever for the care, supervision or repair of the Premises.
ARTICLE 15
LESSEE'S OBLIGATIONS AT THE END OF THE TERM
Upon the expiration or sooner termination of this Lease, if the Lessee has faithfully
and fully performed all of the terms, conditions, and covenants of this Lease to be performed by the
Lessee, but not otherwise, the Lessee shall, at its sole cost and expense, remove from the Premises
all of its movable trade fixtures and equipment, and such other items the Lessee has installed or
placed on the Premises, and the Lessee shall repair all damage to the Improvements resulting from
such removal. The Lessee shall thereupon surrender the Premises and the Improvements in the same
condition as they were when the Improvements were first completed, reasonable wear and tear and
damage by any casualty excepted, clean and free of debris. The Lessee shall repair any damage to
the Improvements occasioned by the installation or removal of the Lessee's trade fixtures,
furnishings and equipment. If the Lessee has not fully and faithfully performed all terms, conditions,
and covenants of this Lease to be performed by the Lessee, the Lessee shall nevertheless remove its
personal property from the Premises in the manner aforesaid within fifteen (15) calendar days after
receipt of written direction to do so from the Lessor. In the event the Lessee shall fail to remove any
of its personal property as provided herein, the Lessor may, but is not obligated, at the Lessee's
expense and with interest at the highest rate then allowed to be charged by non-exempt lenders under
the usury laws of the State from the date of payment by the Lessor, remove all such personal
property not so removed and repair all damage to the Improvements resulting from such removal
and may, but is not obligated to, at the Lessee's expense, store the same in any public or private
warehouse, and the Lessor shall have no liability to the Lessee for any loss or damage to the Lessee's
property caused by or resulting from such removal. To the extent that Lessor has provided the major
repairs, and subject to reasonable wear and tear, the Lessee shall leave the airlines, power panels,
electrical distribution systems, lighting fixtures, space heaters, air conditioning, plumbing and fencing
on the Premises in good operating condition.
ARTICLE 16
QUIET ENJOYMENT
Upon payment by Lessee of the rents provided herein, and upon the observance and
performance of all of the covenants, terms, and conditions on the part of Lessee to be performed
hereunder, Lessor covenants and warrants that Lessee may peaceably and quietly hold and enjoy the
72500.00916\32481443.1 -14-
Premises for the Term.
ARTICLE 17
TAXES
Lessee shall be responsible for, and agrees to pay, as additional rent, prior to
delinquency, any and all real estate or property taxes and assessments, special assessments,
possessory interest taxes, levies, fees, and other governmental charges of every kind or nature
(hereinafter collectively called "Taxes") in the event such Taxes are levied or assessed by municipal,
county, state, federal, or other taxing or assessing authorities or governmental agencies or entities
upon, against, or with respect to (i) the Premises or any portion thereof; (ii) all fixtures, equipment,
and any other property of any kind owned by Lessee or placed, installed, or located within, upon, or
about the Premises for which Lessor might be assessed or which might become a lien on the Premises
if not paid by Lessee; (iii) all alterations, additions, and improvements of whatsoever kind or nature,
if any, made to the Premises or the Improvements; (iv) rentals or other charges payable by Lessee to
Lessor (other than state and federal income taxes applicable to Lessor); and (v) any other interest in
the Premises (including the leasehold interest created by this Lease), irrespective of whether any of
the items described in clauses (i) through (v) above are assessed as real or personal property, and
irrespective of whether any of such items are assessed to or against Lessor, Lessee or any other
person.
ARTICLE 18
FORCE MAJEURE
In the event the performance by either Party of any of its obligations hereunder is
delayed by reason of the act or neglect of the other Party, act of God, stormy or inclement weather,
strike, labor dispute, boycott, lockout or other like defensive action by such Party, inability to obtain
labor or materials, governmental restrictions, riot, insurrections, war, catastrophe, casualty, act of the
public enemy, or any other cause (financial inability excepted), whether similar or dissimilar, beyond
the reasonable control of the Party from whom such performance is due, the period for the
commencement or completion thereof shall he extended for a period equal to the period during
which performance is so delayed.
ARTICLE 19
MISCELLANEOUS
19.1 Assumption of Risk, Waiver, and Lessor's Non-liability. To the maximum extent
allowed by law, except for Lessor's or Lessor's officers, employees, and agents willful or actively
negligent acts, Lessee 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. Lessee'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 maximum extent allowed by law, except for Lessor's
willful or actively negligent acts, Lessee hereby waives all claims and demands against Lessor, its
respective officials, officers, employees, volunteers and agents for injury to persons, damage to
property or any other interest of Lessee sustained by Lessor or any person claiming to be Lessee
resulting from any occurrence on or about the Premises.
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19.2 Notices. All notices, demands, or other writings to be made, given or sent hereunder,
or which may be so given or made or sent by either Lessor or Lessee to the other shall be deemed to
have been given when in writing and personally delivered or if mailed on the third (3rd) day after
being deposited in the United States mail, certified or registered, postage prepaid, and addressed to
the respective Parties at their addresses set forth below:
To Lessor: To Lessee:
City of Palm Desert Desert Recreation District
73-510 Fred Waring Drive 45-305 Oasis Street
Palm Desert, California 92260 Indio, California 92201
Attn: City Manager Attn: General Manager
19.3 Relationship of Parties. Nothing contained herein shall be deemed or construed by
the Parties hereto, nor by any third party, as creating the relationship of principal and agent or of
partnership or of joint venture between the Parties hereto, it being understood and agreed that
neither the method of computation of rent, nor any other provision contained herein, nor any acts of
the Parties herein, shall be deemed to create any relationship between the Parties hereto other than
the relationship of Lessor and Lessee.
19.4 Accord and Satisfaction. No payment by Lessee or receipt by Lessor of a lesser
amount than the rent or other charges herein stipulated shall be deemed to be other than on account
of the earliest due stipulated rent or other charges, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent or other charges be deemed an
accord and satisfaction, and Lessor shall accept such check or payment without prejudice to
Lessor's right to recover the balance of such rent or other charges or pursue any other remedy in
this Lease provided.
19.5 Time of Essence. Time is hereby expressly declared to be of the essence of this
Lease and of each and every term, covenant, and condition hereof which relates to a date or period
of time.
19.6 Remedies Cumulative. The remedies herein given to Lessor and Lessee shall be
cumulative and are given without impairing any other rights or remedies given Lessor and Lessee
by statute or law now existing or hereafter enacted, and the exercise of any one remedy by Lessor or
Lessee shall not exclude the exercise of any other remedy.
19.7 Effect of Invalidity. If any term or provision of this Lease or the application thereof
to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of its terms and provisions to persons and circumstances other than
those to which it has been held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. No
acquisition by Lessor of all or any of the interest of Lessee in or to the Premises or the
Improvements, and no acquisition by Lessee of all or any interest of Lessor in or to the Premises
shall constitute or work a merger of the respective interest, unless expressly provided for.
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19.8 Successors and Assigns. This Lease and the covenants and conditions contained
herein shall be binding upon and inure to the benefit of and shall apply to the successors and assigns
of Lessor and to the permitted successors and assigns of Lessee, and all references in this Lease to
"Lessee" or "Lessor" shall be deemed to refer to and include all permitted successors and assigns of
such Party.
19.9 Entire Agreement. This Lease and the Exhibits hereto contain the entire agreement
of Lessor and Lessee with respect to the matters covered hereby, and no other agreement, statement
of promise made by either Lessor or Lessee which is not contained herein, shall be valid or binding.
No prior agreement, understanding, or representation pertaining to any such matter shall he
effective for any purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by Lessor and Lessee.
19.10 Interest on Past-Due Obligations. Any amount due from Lessee to Lessor hereunder
which is not paid when due (including, without limitation, amounts due as reimbursement to Lessor
for costs incurred by Lessor in performing obligations of Lessee hereunder upon Lessee's failure to
so perform) shall bear interest at the rate of ten percent (10%) from the date due until paid, unless
otherwise specifically provided herein, but the payment of the interest shall not excuse or cure any
default by Lessee under this Lease.
19.11 Controlling Law. This Lease shall be governed by and construed in accordance with
the laws of the State of California.
19.12 Specific Performance. Nothing contained in this Lease shall be construed as or shall
have the effect of abridging the right of either Lessor or Lessee to obtain specific performance of
any and all of the covenants or obligations of the other Party under this Lease.
19.13 Survival of Indemnities and Warranties. 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 judgement 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. The representations, warranties, and covenants of the Parties contained
herein shall survive the termination of this Lease without regard to any investigation made by the
Parties.
19.14 Severability. If any provision of this Lease is held to be invalid or void by a court of
competent jurisdiction, the balance of the provisions shall, nevertheless, remain in full force and
effect.
19.15 Counterparts. This Lease may be executed in multiple counterparts each of which
shall be deemed an original.
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19.16 Recitals Incorporated. The recitals shown on the first page of this Lease are hereby
incorporated into the Lease, and the Parties agree to the truth and accuracy of the facts contained
therein.
[Signature provision on following page.]
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IN WITNESS WHEREOF, the Parties hereto have executed this Lease as of the Term
Commencement Date.
LESSEE LESSOR
DESERT RECREATION DISTRICT, CITY OF PALM DESERT,
A California special district A California municipal corporation
By: By:
Kevin Kalman Lauri Aylaian
General Manager City Manager
Dated: Dated:
ATTEST:
By:
Rachelle Klassen
City Clerk
APPROVED AS TO FORM: APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By: By:
Betsy Martyn, Esq. Robert Hargreaves, Esq.
City Attorney
72500.00916\32481443.1 -19-
EXHIBIT"A"
Legal Description
That certain real property situated in the City of Palm Desert, County of Riverside, State of California, as
described as follows:
43900 San Pablo Avenue(APN: 622-250-016)
PARCEL 4 OF PARCEL MAP NO. 37347, IN THE CITY OF PALM DESERT,COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 245, PAGES 100 THROUGH
110, INCLUSIVE,OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDED OF SAID
COUNTY.
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Exhibit"B"
Project Improvements Agreement
The Parties (individually referred to as "City" and "District") agree as follows as the
design, plans, specifications, public works bidding process and project management for the Improvements
set out in Article 5 of the Lease.
1. City Responsibility.
a. City will pay for the cost of HVAC replacement, new roof and
foundation repair as set out in Section 5.2 of the Lease("City Improvements").
2. District Responsibility.
a. District shall pay to reconfigure the Premises' interior ("District
Improvements").
b. District shall pay for the Project design (including City and District
Improvements), if required, including plans, specifications, public works bidding process, and Project
management for as set out in Sections 5.3 and 5.4 of the Lease.
(i) The Project design shall be subject to review and reasonable
approval by City prior to the commencement of any construction, and shall be finalized in consultation
with City. Upon approval of the Project design by the District and City, funds shall be authorized and
budgeted by City for payment for construction associated with the Project.
(ii) District shall issue a request for proposals for the construction
management services for the Project and contract with the successful firm for these management services
or shall determine itself to provide such services. District shall bear the cost of such management services.
(iii) District shall seek bids for the construction of the Project.
(a) The format used for all bids solicited by District for the
Project shall require itemization sufficient to allow quantities of each bid item to be easily discernible. If
requested by City prior to the award of the bid, it shall be the responsibility of District to determine what,
if any, portion of the work is an enhancement to any specifications by City for City Improvements, for
which there shall be no City reimbursement.
(b) The District shall use bidding procedures as required by
state law for both parties.
c. Upon review and approval of the apparent low bidder costs by City,
District shall contract with the successful bidder for the construction of the Project. The City Foundation
Improvements shall be Phase 1 of the Project and the City HVAC and roof repair along with the District
Improvements shall be Phase 2.
3. Payment Obligations: Notwithstanding any other provisions herein, neither
District nor City shall be obligated for any monetary contributions that have not been approved and
budgeted for this Project. The budget for this Project will be based on the Engineer's Estimate, and
approved by City and District based on the lowest responsive bid received. Should the lowest responsive
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72500.00916\32481443.1
bid be in excess of the City or District approved Project budget for the City Improvements or District
Improvements, City and District each shall have the option of funding the difference between the
budgeted amount and the lowest responsive bid, rebidding the Project, or terminating the Project and
cooperative agreement.
a. Project cost payment incurred by District shall be made as follows:
District shall be responsible for initial payment of all covered costs as they are incurred. Following
payment of such costs, District shall submit invoices to City requesting reimbursement. Each invoice
shall be accompanied by detailed contractor invoices, or other demands for payment addressed to District,
and documents evidencing District's payment of the invoices or demands for payment. District shall also
submit a Project Completion Report, in a form acceptable to City, with each statement. District shall
submit invoices not more often than monthly and not less often than quarterly.
b. Upon receipt of an invoice from District, City may request additional
documentation or explanation of the costs for which reimbursement is sought. Undisputed reimbursement
amounts shall be paid by City to District within thirty (30) calendar days. Any disputes between the
District and City on Project Costs shall be negotiated between the District Manager and City Manager.
4. Final Report:
a. Upon completion of the Project, a final report of costs shall be provided.
If a review of that report indicates to the Parties' mutual satisfaction that either City or District has
provided payment in an amount in excess of that allocated to that entity, District shall either reimburse
City for the excess or ineligible payments within thirty (30) calendar days' notification by City or shall
bill City for the overage paid by District.
b. Prior to any final payment to District by City, a final report shall be
submitted to City by District containing a record of all payments made for the Project and the source of
funds of all such payments, together with a record of all change orders,cost over-runs, and other expenses
incurred. Final payment will thereafter be paid by City within thirty (30) calendar days in accordance with
its rules, regulations and policies concerning Project cost determination and expense eligibility for the
Project.
(i) District shall maintain an accounting of all funds received from
City pursuant to this Lease in accordance with generally accepted accounting principles. District agrees to
keep all contracts and records for a period of not less than three (3) years from the date a notice of
completion is recorded by the District for the Project. The District may keep the records in either
electronic or hard copy format. District shall permit City, at any reasonable time, upon reasonable notice,
to inspect any records maintained in connection with the Project. City shall have no duty to make any
such inspection and shall not incur any liability or obligation by reason of making or not making any such
inspection.
5. Use of Original Documents:
a. City shall allow District access to and use of all original documents,
designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared in the
course of the planning, approval and construction of the Project. Any copies of said originals obtained by
District may be used, reused, or destroyed by District without the permission of City, unless otherwise
provided by law.
-22-
72500.009 16\32481443.1
b. The District shall allow City access to and use of all original documents,
designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared in the
course of the planning, approval and construction of the City Improvements. Any copies of said originals
obtained by City may be used, reused, or destroyed by City without the permission of the District, unless
otherwise provided by law.
6. Relationship of the Parties; Indemnification: This agreement is for funding
purposes only and nothing herein shall be construed so as to constitute City as a party to the construction
or a partner or joint-venturer with District as to the Project. The District shall assume the defense of,
indemnify and hold harmless, City, its member agencies, and their respective officers, directors, agents,
employees, servants, attorneys, and volunteers, and each and every one of them, from and against all
actions, damages, claims, losses and expenses of every type and description to which they may be
subjected or put by reason of or resulting from the actions or inactions of the District related to the Project
or taken in the performance of this agreement or any agreement entered into by District with reference to
the Project. City shall assume the defense of, indemnify and hold harmless the District, its officers,
directors, agents, employees, servants, attorneys, and volunteers, and each of them, from and against all
actions, damages, claims, losses, and expenses of every type and description to which they may be
subjected or put by reason of or resulting from (a) the actions or inactions of City related to the Project or
taken in the performance of this agreement; or (b) litigation concerning compliance with environmental
laws specific to and not associated with the Project prior to any subsequent incorporation into the Project.
7. City Additional Insured: District agrees to include in its contract specifications
and bid documents a requirement that all prime contractors shall name City and its member agencies as
"also insured" on all liability insurance coverage required by District on each contract. District will
provide a copy of the Insurance Certificate to City, depicting City and its member agencies as "also
insureds," within 30 days of signing a contract with the prime contractor.
8. Disputes: Any dispute concerning a question of fact arising under this agreement
that is not disposed of by voluntary negotiations between the Parties shall be decided by decided jointly
by the District Manager and Executive Director. However, no action in accordance with this Section shall
in any way limit any Party's rights and remedies through actions in a court of law with appropriate
jurisdiction. Neither the pendency of dispute nor its consideration by City will excuse the District from
full and timely performance in accordance with the terms of this agreement.
9. Warranty: The District and City mutually warrant that all aspects of the Project
shall be undertaken in compliance with all applicable local, state and federal rules, regulations, laws and
policies. The Parties will execute and deliver to each other such further documents and do other acts and
things as are reasonably requested in order to comply fully with all applicable requirements and to affect
fully the purposes of this agreement.
-23-
72500.00916\32481443.1
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Legend
1:10,391
- Circulation Network - Streets
fl City Boundary
A-
El Parcels(11/2019)
...EL ..
2015 III Red Band_l Notes
701,1
. Green Band_2 .. Blue. Band_3