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HomeMy WebLinkAboutPurissima Hills Water District (11)4v- TOWN OF LOS ALTOS HILLS June 2, 2004 Staff Report to the Town Council SUBJECT: Proposed Ground Lease between the Town of Los Altos Hills and the Purissima Hills Water District for the District Operations Center FROM: Maureen Cassingham, City Manager Ih` Recommendation: That the City Council approve the proposed ground lease with the Purissima Hills Water District which will permit the construction of the District's new Operations Center at the south end of the Town Hall site and the companion resolution authorizing the Mayor to execute same. Background: In May 1962, the Town and the District entered into a ground lease at the Town Hall site to permit the construction of their current offices. This lease expires on March 31, 2005. The District, like the Town, wishes to construct a new Operations Center on the south end of the Town Hall site. To this end, the Town and. District have been negotiating the proposed lease agreement before you this evening for over two years. The lease format is based on the 1997 agreement between the parties for the District's existing facility. Mutually acceptable key provisions are as follows: 1) The proposed location of the property to be leased is near the corner of Esperanza and Concepcion. The leased space is sufficient to accommodate the District's new Operations Center not to exceed 2000 square feet with adequate parking. The District is responsible for its own landscaping at the site. The District and the Town agree to coordinate facilities construction schedules to the extent possible so that they do not interfere with either their projects. However, in the event of scheduling conflicts, construction activities leading to the completion of the Town Hall project, which will commence in July 2004, and conclude in summer 2005 will take precedence. 2) The design of the District's new Operations Center will be compatible with the new Town Hall design. 3) Initial compensation for the new ground lease is $1750 per month with an annual adjustment based on the Consumer Price Index (CPI) for the San Francisco Bay Area. 4) The lease term is forty (40) years with automatic five (5) year renewals with thirty (30) month's advance written notice prior to termination. The new lease commences April 1, 2005. Discussion: The Town and the District have agreed to address the Town's use of the La Cresta tank site for emergency communications purposes in separate lease agreement which is also before the Council this evening. RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS APPROVING THE LEASE AGREEMENT BETWEEN THE TOWN OF LOS ALTOS HILLS AND PURISSIMA HILLS WATER DISTRICT FOR A PORTION OF THE TOWN HALL SITE TO CONSTRUCT A NEW DISTRICT OPERATIONS CENTER WHEREAS, on or about May 1, 1962, Town and District entered into a lease wherein Town leased to District a portion of the Town Hall Site belonging to Town on which District constructed improvements consisting of an office building and related facilities for its administrative functions and operational headquarters; and WHEREAS, the Town is constructing a new Town Hall and desires to modify the areas currently used by the Town and the District; and WHEREAS, the District desires to construct a new Operations Center on a different location of the Town Hall Site; and WHEREAS, the parties, both public agencies, have enjoyed a cooperative relationship over the years and wish to enter into a Lease Agreement for a portion of the Town Hall Site to permit the District's construction of its new Operations Center. NOW, THEREFORE BE IT RESOLVED, that the City Council of the Town of Los Altos Hills approves said lease agreement and authorizes the Mayor to execute same on behalf of the Town. Passed and Adopted this 2'd Day of June, 2004. Attest: City Cleric Mayor T,F,ASF This Lease Agreement ("Lease") is made and entered into on , 2004, by and between the TOWN OF LOS ALTOS HILLS, a municipal corporation, ("Town") and PURISSIMA HILLS WATER DISTRICT, a public agency, ("District"). RECITALS A. On or about May 1, 1962, Town and District entered into a lease wherein Town leased to District a portion of the Town Hall Site belonging to Town on which District constructed improvements consisting of an office building and related facilities for its administrative functions and operational activities. B. The Town is constructing a new Town Hall and desires to modify the areas currently used by the Town and the District. C. The District desires to construct a new Operations Center on a different location of the Town Hall Site. D. The parties, both public agencies, have enjoyed a cooperative relationship over the years and enter into this Lease in the same spirit of cooperation and public purpose, and in accordance with the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, it is mutually agreed by and between the parties as follows: 1. Premises. In consideration of the rent set forth herein and the faithful performance by District of the other terms, covenants, agreements, and conditions contained herein, Town hereby leases to District and District hereby leases from Town a portion of the Town Hall Site to be located as determined by the Town within the area more particularly described in Exhibit A attached hereto ("Premises") for the purpose of designing, constructing, using, maintaining, and repairing a building and related facilities for conducting District operations and administration of District activities ("Operations Center"). The Operations Center building will not exceed 2,000 square feet of floor space. The Premises also will include no more than 8 vehicular parking spaces to be located as determined by the Town within the area shown on the drawing attached as Exhibit B. 2. Term of Lease. The term of this Lease is forty (40) years beginning on 2005, and ending on , 2045. The Lease term will be extended automatically for successive five (5) year periods ("Renewal Terms"), unless Town provides the District with at least thirty (30) months advance written notice that the Lease term will not be extended. All Renewal Terms will be on the same terms and conditions of this Lease. The Town may not terminate the Lease during the original 40 -year term, except for material breach of a material term of this Lease and failure of the District to cure the breach within thirty (30) days from the date the District receives written notice of the breach from the -1- 1088930.4 Town, or such longer period of time as agreed to by the parties if it is not feasible for District to cure the breach within the 30 -day period. The District may terminate this Lease at any time with one year advance written notice to the Town. 3. Rent and Other Obligations of Parties. a. District shall: (1) Pay to Town as rent in advance on the first day of each calendar month of the term of this Lease, without deduction, offset, prior notice or demand the sum of One Thousand Seven Hundred Fifty Dollars ($1,750) in lawful money of the United States. The rent will be adjusted annually on the anniversary date of the term of this Lease, as set forth in Section 2, by the Consumer Price Index (CPI) for all urban consumers of the San Francisco Bay Area. The rent shall be paid to Town at 26379 Fremont Road, Los Altos Hills, California 94022, Attention City Clerk or such other address as shall be designated in writing by Town. The District will commence payment of the rent on the first day the District occupies the newly constructed Operations Center building, and at that time the District's obligation to pay rent under the 1997 Lease for the District's existing facility ($500 per month) will cease and the 1997 Lease will terminate automatically. (2) Maintain, at its sole cost and expense, the landscaping around the Operations Center constructed by District upon the Premises. (3) Pay to Town no later than 30 days after the Town provides the District with an invoice for an amount equal to fifteen percent (15%) of the cost of maintaining the portion of the Town Hall Site driveway from the entrance at Fremont Road to the turn to the south to the District Operations Center, which is used in common by District and Town, as shown on the drawing attached as Exhibit C. The Town shall provide the District with at least 30 days advance written notice of work that will be done to maintain the driveway other than routine maintenance. The District will be solely responsible for maintaining the portion of the parking area to the south of the shared driveway, and the Town will be solely responsible for maintaining the portion of the parking area to the north of the shared driveway. The District and the Town will coordinate and cooperate regarding the shared use of available parking spaces as may be necessary for activities at either the Town Hall or Operations Center. (4) Ensure that the external architectural schematic design of the Operations Center is compatible with the new Town Hall external architectural schematic design. The District shall provide for Town approval architectural drawings and designs depicting the Operations Center prior to commencing construction. The Town shall have 30 days in which to provide the District with comments on the architectural drawings and designs and the District shall use its best efforts to address the Town's comments in the final construction plans and specifications. The District and Town will coordinate and cooperate in good faith in determining whether the exterior of the District's Operations Center building is architecturally compatible with the new Town Hall. -2- 1088930.4 (5) Construct all improvements in compliance with the Town Municipal Code and all permits, approvals, and authorizations required therein including, but not limited to, any required conditional use permit. b. Town shall: (1) Allow the use of the Premises for District purposes as described in Paragraph 4 and for reasonable vehicular and foot access to and around the Premises for such purposes during all hours of each day of the week. (2) Cooperate with District in obtaining any and all permits, approvals, and authorizations as may be necessary for the design, construction, use, maintenance, and repair of the new District Operations Center building. All permits, approvals, and authorizations will be obtained at the sole cost and expense of the District. C. District and Town will coordinate, to the extent possible, the construction schedules for the new Town Hall and the new Operations Center building in a manner that does not interfere with either the District's or the Town's construction projects and activities. If, however, it is not possible or feasible to coordinate the construction schedules for these two projects, the construction activities of the new Town Hall will take precedence. In such event, the Town will coordinate and cooperate with the District to minimize the impact the construction of the Town Hall will have on the construction of the Operations Center building. 4. Use. The Premises are leased to District for the purpose of designing, constructing, using, maintaining and repairing its Operations Center, including offices and related facilities, and for the operation and administration of the activities of District ("District Purposes"). The District may use equipment on the Premises for District Purposes. The District owns the improvements it constructs on the Premises until the expiration of the term or Renewal Terms, or the early termination of this Lease. District will not use, nor permit the Premises, or any part thereof, to be used, for other than District Purposes without the written consent of Town. 5. Additional Buildings and Improvements. During the term of this Lease and any Renewal Terms, District may construct additional buildings or improvements on the Premises or may make alterations or additions to the existing building that expand the square foot usage of the Operations Center building only in compliance with Town ordinances and if Town gives its prior approval in writing of the plans and specifications for such additional buildings, improvements, alterations, or additions (collectively, "Additions"). Town agrees that it will not unreasonably witl-Alold its approval. Any Additions made to the Operations Center building or parking lot are agreed to be fully depreciated over a ten-year period by the straight-line method. If for any reason, other than default or early termination of this Agreement by District, District vacates the Premises prior to the full depreciation of an Addition constructed or installed by District, Town shall pay District the undepreciated value of the Addition. District shall provide Town with documentation substantiating the cost of the Addition and resulting depreciation and -3- 1088930.4 payment will be made within sixty (60) days of the latter of District's vacation of the Premises or provision of such documentation. (For purposes of this provision, Addition is defined as those projects costing over $1,000.00 to construct, design and/or install.) Additions will be owned by the District until expiration of the term or Renewal Terms, or early termination of this Lease. District may make any modifications or alterations that do not extend the square foot usage of the Operations Center building, such as modifying the interior of the Operations Center building, without the Town's approval. 6. Waste; Quiet Conduct. District shall not commit, or suffer to be committed, any waste upon the Premises, or any nuisance, or other act or thing which may disturb the quiet enjoyment of any other users of the Premises or the Town Hall Site, or the property owners in the vicinity. 7. Utilities. District shall pay for all water, gas, heat, light, power, telephone service, and all other service supplied to the Premises. 8. Repair. District shall, at its sole cost, keep and maintain the Premises, Operations Center building, and other facilities, and every part thereof, in good and sanitary order, condition, and repair. 9. Damage and Destruction. In the event of destruction by fire, casualty or other cause which shall render more than fifty percent (50%) of the Premises unusable, District shall have the option of reconstructing the Operations Center building, and other facilities on the Premises, or terminating said Lease. District shall provide Town written notice of its intention to reconstruct the Operations Center within 60 days of such destruction. Failure to provide notice to the Town within such time shall automatically terminate this Lease. If District desires to reconstruct the Operations Center, and other facilities on the Premises, District shall immediately commence clean-up of the Premises and construction activities. The Operations Center, and other facilities on the Premises, shall be rebuilt in the size and style and pursuant to the procedures contained in Paragraphs 3.a.(4) and 5. During the time that the Premises are unusable, the Town agrees to abate any rental payment due under this Lease. Should the District determine not to construct the Operations Center building and facilities, this Lease shall immediately terminate as of the date of such fire, casualty or other cause and any insurance proceeds received by the District for the Operations Center building due to such fire, casualty or other cause shall first be used to restore the Premises to the condition it was in prior to the execution of this Lease and then to pay off any loans or other indebtedness the District may have incurred in connection with the construction of the Operations Center building and other District improvements located on the Premises. All remaining insurance proceeds shall be paid over to the Town. In the event District determines to reconstruct the Operations Center building and facilities, all insurance proceeds will be retained by the District and the Premises shall be restored substantially to the pre -casualty condition at District's sole expense. 10. Compliance with Law and Applicable Rules and Regulations. District shall, at its sole cost and expense, comply with all of the requirements of all Town, State and Federal authorities now in force, or which may hereafter be in force, pertaining to the Premises and shall faithfully observe in the use of the Premises all Town ordinances, and State and Federal statutes in 1088930.4 now in force or which may hereafter be in force. The judgment of any court of competent jurisdiction, or the admission of District in any action or proceeding against District whether Town be a party thereto or not, that District has violated any such ordinance or statute in the use of the Premises shall be conclusive of that fact as between Town and District. 11. Abandonment of Premises, Title to Improvements. District shall not vacate or abandon the Premises at any time during the term; and if District shall abandon, vacate, or surrender the Premises, or be dispossessed by process of law, or otherwise, any personal property belonging to District and left on the Premises shall be deemed to be abandoned, at the option of Town, except such property as may be mortgaged to Town. Upon termination of use of the Premises by District for any reason, including but not limited to abandomnent of the Premises or the termination of this Lease, then in such event, but not until such time, any and all structures and appurtenances placed upon the Premises by District shall vest in and become the property of the Town without payment of any nature by Town therefor, except such payment as is due and owing pursuant to the provisions of Section 5 of this Agreement for undepreciated value of Additions. 12. Assignment or Subletting. District shall not assign this Lease, or any interest therein, and shall not sublet the Premises or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person (the agents and servants of District excepted) to occupy or use the Premises, or any portion thereof, without the written consent of Town. One assignment, subletting, occupation, or use by another person or entity shall not be deemed to be a consent to any subsequent assignment, subletting, occupation or use by another person or entity. Any such assignment or subletting without such consent shall be void, and shall, at the option of Town, be deemed a material breach of this Lease. This Lease shall not, nor shall any interest therein, be assignable as to the interest of District, by operation of law, without the written consent of Town. Without limiting the foregoing, it is specifically agreed that Town's withholding its consent shall be reasonable if District wishes to assign, sublet, or transfer the Premises to a non-public agency, as the conditions of this Lease are based on District's status as a public agency. 13. Attorneys' Fees. If any action at law or in equity shall be brought to recover any rent under this Lease, or for or on account of any breach of or to enforce or interpret any of the covenants, terms, or conditions of this Lease, or for the recovery of the possession of the Premises, the prevailing party shall be entitled to recover from the other party as a part of prevailing party's costs, reasonable attorneys' fees, the amount of which shall be fixed by the Court and shall be made a part of any judgment rendered. 14. Ownership of Added Improvements. The Operations Center building constructed on the Premises, and all Additions or improvements hereafter constructed upon the Premises, upon termination or expiration of this Lease, but not before that time, shall be the property of Town and shall become a part of the Premises. District agrees that it will not remove or destroy any buildings or improvements constructed on the Premises. -5- 1088930.4 15. Notices. All notices to be given to District and Town must be given in writing either personally or by depositing the same in the United States mail, postage prepaid, and addressed to District or Town at the address below: District: Purissima Hills Water District 26375 Fremont Road Los Altos Hills, CA 94022 Attention: General Manager Town: Town of Los Altos Hills 26379 Fremont Road Los Altos Hills, CA 94022 Attention: City Manager 16. Waiver. The waiver by Town of any breach of any term, covenant, or condition shall not be deemed to be a waiver of such term, covenant, or condition or any subsequent breach of the same or any other term, covenant, or condition. The subsequent acceptance of rent by Town shall not be deemed to be a waiver of any preceding breach by District of any term, covenant, or condition of this Lease, other than the failure of District to pay the particular rental so accepted, regardless of Town's knowledge of such preceding breach at the time of acceptance of such rent. 17. Indemnity. Each party shall indemnify, save harmless, and defend the other party and its employees, agents, and elected officials against any and all lawsuits, claims, demands, liabilities, losses, and expenses, including attorneys' fees and administrative expenses, that may arise, or be alleged to have arisen, out of or in connection with the indemnifying party's use and improvement of the Premises including performance of, or failure to perform, any obligation pursuant to this Lease, whether or not due or claimed to be due in whole or in part to the active, passive, or concurrent negligence or fault of the indemnifying party, except to the extent caused by the sole negligence of the other party, as the case may be, including, without limitation lawsuits, claims, demands, liabilities, losses, and expenses for or on account of bodily injury or death sustained by any person or persons related to the indemnifying party's obligations with respect to the recreational facilities, or injury or damage to, or loss or destruction of, any property therein. The indemnification obligations of the indemnifying party under this Paragraph shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the indemnifying parry under workers' compensation acts, disability benefit acts or other employee benefit acts. I Me 1088930.4 IN WITNESS WHEREOF, the parties hereto have executed this Lease by their duly authorized representatives in the Town of Los Altos Hills, State of California, as follows: By Town this day of , 2004; and By District this day of , 2004. ATTEST: TOWN OF LOS ALTOS HILLS, a Municipal Corporation By: City Clerk Mayor ATTEST: PURISSIMA HILLS WATER DISTRICT, A Public Agency By: Secretary President of the Board 693076-2 -%- 1088930.4 EXHIBIT A All of that certain real property situated in the Town of Los Altos Hills, County of Santa Clara, State of California, more particularly described as follows: [Insert new Property Description for the new location to be used by District, including parking area] -1- 1088930.4 tr' N u w ` J EXHIBIT B [Insert Drawing showing the District parking spaces] -1- 1088930.4 EXHIBIT C [Insert Drawing showing shared obligation for driveway maintenance] 6E 1088930.4