Item 10 - Reso Approving New Lease Agreement with Hamburger Factory Inc & 1st Amendment Transferring Lease to Cheeseburgers in Poway LLCDATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
AGENDA RE PO RT City of Poway
August 1, 2023
Honorable Mayor and Members of the City Council
Audrey Denham, Director of Community Services ~
Audrey Denham, Director of Community Services
(858) 668-4585 or adenham@poway.org
CITY COUNCIL
Resolution Approving a New Lease Agreement with Hamburger Factory, Inc.,
and First Amendment Transferring the Lease to Cheeseburgers in Poway, LLC
The Hamburger Factory has been owned and operated by the Spear and Casse family since 1998. The
Spear family has decided to sell the Hamburger Factory to Cheeseburgers in Poway, LLC, owned by
Josh Arbenz. The City owns the land and building that houses the Hamburger Factory. Staff
recommends approving 1) the new Lease Agreement with Hamburger Factory, Inc.; and 2) the First
Amendment to transfer the lease to Cheeseburgers in Poway, LLC, doing business as the Hamburger
Factory. Staff has reviewed Josh Arbenz's Hamburger Factory business plan and determined he has
the financial wherewithal to operate the Hamburger Factory.
Recommended Action:
It is recommended the City Council adopt the Resolution Approving a New Lease Agreement with
Hamburger Factory, Inc. and the First Amendment to the Lease Agreement Transferring the Lease to
Cheeseburgers in Poway, LLC, and authorize the City Manager to execute all necessary documents
related to the Agreement.
Discussion:
In December 1986, the Poway Redevelopment Agency purchased a 5.5-acre parcel of land located at
14122 Midland Road for the development of Old Poway Park. The purchase included the building that
currently houses the Poway Heritage Museum and the Hamburger Factory restaurant. Title to this
property was later transferred to the City of Poway. In October 1989, the City of Poway entered into a
lease agreement with Joseph and Lisa Lucidi for the Hamburger Factory building. In January 1999, City
Council gave the Lucidis approval to assign their lease to Hamburger Factory, LLC. The lease was
amended in July 2004, and updated to reflect the new owners, Phil and Cleta Spear, had formed a
corporation, Hamburger Factory, Inc. In January 2011, a long-term lease was renegotiated with the
Spear family and approved by City Council.
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The Hamburger Factory is well known among Poway residents and is a long-time tradition for many.
The Spear and Casse family dedicated 25 years to the Poway community and their support goes
beyond serving great food. Many will remember the Spear and Casse family for their generous
donations and volunteer work across the community. After careful consideration and in coordination
with the City, the Spear family decided to sell the Hamburger Factory to Josh Arbenz, owner of
Cheeseburgers in Poway, LLC. The Spear family's decision to sell was made knowing Cheeseburgers
in Poway, LLC would continue to operate the Hamburger Factory as a family restaurant with strong
ties to the community.
Per the Lease Agreement (Attachment B), the City is responsible for vetting and approving the transfer
of the Lease Agreement. In the attached Hamburger Factory business plan (Attachment D), Josh
Arbenz outlines his plan for the restaurant including cost control, revenue growth, concept plans,
experience, and core values. Additionally,Josh Arbenz was required to demonstrate financial strength
and experience. Based on the Hamburger Factory business plan, review of profit and loss statements
and balance sheets for Josh Arbenz's existing businesses, staff determined he has the financial
wherewithal to operate the Hamburger Factory. Additionally, Dave Casse, President of Hamburger
Factory, Inc. submitted a letter supporting the transfer of the Lease Agreement to Cheeseburgers in
Poway, LLC (Attachment E).
Staff negotiated a new Lease Agreement with Hamburger Factory, Inc. The following is a summary of
significant changes made to the Lease Agreement:
1. Term -the initial term of the lease is 10 years. Upon mutual agreement, the term of this Lease
Agreement may be extended for one 10-year extension period and one 5-year extension
period for a total of 25 years.
2. Rent -rent will remain the same at $7,550 and will increase to $8,643 beginning July 1, 2025.
Beginning July 1, 2026, annual rent will be adjusted by the annual change in the Consumer
Price Index, not to exceed 5%.
3. Repayment of Poway Emergency Assistance Recovery (PEARL) Loan and Unpaid Rent -upon
sale of the Hamburger Factory business the current tenant is still responsible for paying the
PEARL loan and unpaid rent as described in the Lease Agreement.
4. Repair and Maintenance -Beginning August 1, 2024, the tenant will be responsible for interior
and exterior repair and maintenance of the building. The City's repair and maintenance
responsibilities will be limited to the grounds outside the building, air conditioning and heating
equipment, holiday lights, entrance signage on Midland Road and the fire riser located in the
Poway Heritage Museum.
Following approval of the Lease Agreement, City Council may approve the First Amendment
(Attachment C), which transfers the Lease Agreement to Cheeseburgers in Poway, LLC. The First
Amendment also ensures the responsibility of repayment of the PEARL loan and unpaid rent remains
with Hamburger Factory, Inc.
Environmental Review:
This action is not subject to review under the California Environmental Quality Act (CEQA).
Fiscal Impact:
Approval of this action would not result in an increase in lease revenue until July 1, 2025. At that time,
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the lease revenue paid to account 205020-74600 would increase by $13,111 annually. This action
would also result in a reduction in building maintenance expenses due to the transfer of most
maintenance requirements to the tenant.
Public Notification:
None.
Attachments:
A. Resolution
B. Lease Agreement
C. First Amendment to Lease Agreement
D. Hamburger Factory Business Plan
E. Hamburger Factory Letter of Support
Reviewed/Approved By:
Wendy serman
Assistant City Manager
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Reviewed By:
Alan Fenstermacher
City Attorney
Approved By:
Ch~
City Manager
August 1, 2023, Item #10
RESOLUTION NO. 23-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, APPROVING AN AMENDED LEASE
AGREEMENT WITH HAMBURGER FACTORY, INC., AND THE
FIRST AMENDMENT TRANSFERRING THE LEASE TO
CHEESEBURGERS IN POWAY, LLC
WHEREAS, the City of Poway (the "City") is the owner of the building at 14122 Midland
Road commonly referred to as the Hamburger Factory (the "Facility');
WHEREAS, City and Hamburger Factory, Inc. (the "Lessee") entered into that certain
Hamburger Factory Lease dated January 1, 2011;
WHEREAS, Lessee is in escrow to sell its business to Cheeseburgers in Poway, LLC (the
"New Lessee");
WHEREAS, City, Lessee, and New Lessee have negotiated the terms for an Amended
and Restated Lease Agreement with Hamburger Factory, Inc. (the "Amended Lease") included in
the staff report as Attachment B and a First Amendment to the Lease Agreement with Hamburger
Factory, Inc. (the "First Amendment") included in the staff report as Attachment C that will transfer
the Amended Lease to the New Lessee; and
WHEREAS, execution of the New Lease by the City and the Lessee is exempt from the
California Environmental Quality Act (CEQA) because the continuation/extension of a lease of
government property to a new lessee, without material physical changes, will not result in an result
in any direct or reasonably foreseeable impacts on the environment, and thus the project is
exempt under the Class 1, Class 2, Class 3 and Class 32 categorical exemptions (see, CEQA
Guidelines sections 15301 through 15303, 15332), as well as the so-called "common sense"
exemption set forth in Section 15061 (b)(3) of the CEQA Guidelines; and
WHEREAS, the California Surplus Land Act ("SLA") does not apply to the Amended
Lease, because the Facility was already been disposed by long term lease in 2011, and thus it is
not surplus land, nor does change of the operator of the Facility or extension of the term of the
Lease otherwise trigger the SLA.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: The foregoing recitals are true and correct, and incorporated into this
Resolution by this reference, as if fully set forth herein.
SECTION 2. The City Council hereby authorizes and directs the City Manager or
designee to 1) take all actions and to execute any and all documents, instruments, and
agreements necessary or desirable on behalf of the City, as approved by the City Manager and
City legal counsel, including, without limitation, the Lease Agreement with Hamburger Factory,
Inc., to implement and effectuate the lease of the Facility by City to the New Lessee, and to
effectuate all other actions approved by this Resolution, including, without limitation, approving
changes, implementations, or revisions to documents, instruments, and agreements as
determined necessary by the City Manager or designee and approved by City Attorney, and 2)
administer the City's obligations, responsibilities, and duties to be performed pursuant to this
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Resolution No. 23-
Page 2
Resolution and all documents, instruments, and agreements required by and for the lease of the
Facility by the City to the Lessee.
SECTION 2: This Resolution shall take effect upon the date of its adoption.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the
City of Poway, California on the 1st day of August, 2023, by the following vote, to wit:
AYES:
NOES:
ABSTAINED:
ABSENT:
DISQUALIFIED:
Steve Vaus, Mayor
ATTEST:
Carrie Gallagher, CMC, City Clerk
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LEASE AGREEMENT
This AMENDED AND RESTATED LEASE AGREEMENT (the "Lease") is entered into as
of August 1, 2023 (the "Effective Date"), by and between the City of Poway, a Municipal
Corporation (the "City"), and Hamburger Factory, Inc., a California Corporation (the
"Tenant"), collectively referred to herein as the "Parties".
RECITALS
WHEREAS, the City owns the property located at 14122 Midland Road, Poway,
California, as shown in the attached Exhibit "A" (the "Premises"), and is commonly
known as the Hamburger Factory (the "Hamburger Factory");
WHEREAS, on January 1, 2011, the City entered into the current Lease
Agreement ("Original Lease") with the Tenant;
WHEREAS, the Original Lease is over eleven (11) years old and will expire on
January 1, 2025;
WHEREAS, the Parties seek to enter into this amended and restated Lease,
which shall completely supersede the Original Lease, to define the roles and
responsibilities of the City and the Tenant, including the obligation for the payment of
all expenses;
WHEREAS, as set forth in more detail in Section 5 herein and unless specifically
indicated otherwise in this Lease, the Parties agree that the Lease is generally a "triple
net" lease, where Tenant is solely responsible for all utilities, taxes, insurance and
maintenance; and
WHEREAS, as of the Effective Date of this Lease, the Original Lease shall have
no further force and effect; ·
WHEREAS, for good and adequate consideration, the Parties desire to enter
into the Lease to allow continued operation of the Hamburger Factory by the Tenant.
NOW, THEREFORE, the City and Tenant hereby agree as follows:
ARTICLE I
Section 1.01
DESCRIPTION OF LEASED PREMISES
Description
City leases to Tenant and Tenant leases from City the Premises situated at 14122
Midland Road, Poway, California, consisting of approximately 5,280 square-feet, which
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ATTACHMENT B
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includes 1,493 square-feet of patio area, 3,575 square-feet of dining/kitchen area, and
212 square-feet of storage area, as shown in Exhibit "A". Also included as part of the
Premises is 273 square-feet of trash enclosure.
ARTICLE II
Section 2.01
COMMON AREAS
Tenant's Non-Exclusive Right to Use Common Areas
Common Areas, include, but are not limited to, all parking spaces adjacent to the
Premises, the boardwalk area adjacent to the Premises, outdoor park restrooms, grass
lawn areas, and all park amenities. Common Areas are used by others who are entitled
to use the Common Areas including the public using nearby public property and facilities,
subject to City's rights set forth in Section 2.02. Tenant and its authorized representatives
and invitees shall have the nonexclusive right to use the parking spaces adjacent to the
Premises. The Common Areas are generally shown in the attached Exhibit C.
Section 2.02 City's Maintenance and Management
City shall maintain the Common Areas in good condition at all times. City shall have right
to:
a. Establish and enforce reasonable rules and regulations applicable to Tenant
concerning the maintenance, management, use and operation of the Common
Areas.
b. Temporarily close any of the common areas for maintenance purposes. Except
in the case of emergencies, Tenant will be given a minimum of 24-hour notice.
c. Select a person to maintain and operate any of the Common Areas if at any
time City determines that the best interests of all parties will be served by
having any of the Common Areas maintained and operated by that person.
City shall have the right to negotiate and enter into a contract with that person
on such terms and conditions and for such period of time as City deems
reasonable and proper, both as to service and as to cost.
d. Make changes to the Common Areas, including, without limitation, changes in
the location of driveways, entrances, exits, vehicular parking spaces, parking
area, or the direction of the flow of traffic following written notice to Tenant.
e. Control program hours and special events without the consent of Tenant. All
park, recreation programming, and facility related concerns and coordination
should be addressed by Tenant with the Community Services Director or
designee. The City and Tenant shall meet quarterly to discuss Lease
administration.
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f. Close parking lots, including the parking lot adjacent to the Premises, for
special events. Tenant shall be given a minimum of forty-five (45) days' notice.
g. The Director of Community Services or designee shall be the point of contact
for the City. Both Parties shall designate, in writing, one point of contact
responsible for Lease administration. Both Parties are responsible for
promptly notifying the other party if there are changes in the point of contact.
ARTICLE Ill
Section 3.01
TERM
Primary Term
The term ("Term") of this lease shall be for a period of ten (10) years commencing August
1, 2023, and expiring, unless terminated or extended per Section 3.02 prior to the
expiration of the Term, on the tenth anniversary of the date the Term commences.
Section 3.02 Extended Term
Provided Tenant shall not then be in default hereunder, the Tenant and City, upon mutual
agreement, may extend the Term of this Lease for one (1) ten-year extension period and
one (1) five-year extension period, upon the same terms and conditions herein contained,
except for the minimum monthly rent, upon delivery by Tenant to City of its written notice
of such election at least sixty (60) days prior to the expiration of the current Term. The
minimum monthly rent during the extended term shall be subject to adjustment annually
as set forth in Section 4.02 herein.
ARTICLE IV
Section 4.01
RENT
Rent
Subject to adjustments as hereinafter set forth, Tenant shall pay to City monthly rent,
without deduction, setoff, prior notice, or demand, the sum of seven thousand, five
hundred fifty dollars ($7,550) per month in advance on the first day of each month,
commencing on the date the term commences. Effective July 1, 2025, Tenant shall pay
to City monthly rent, without deduction, setoff, prior notice, or demand, the sum of eight
thousand, six hundred, forty-three dollars ($8,643) per month in advance on the first day
of each month and continuing for a twelve (12) month period . The Parties agree that this
rent represents fair market value for the occupation of the Premises. Monthly rent for the
first month or portion of it shall be paid on the day the term commences. Monthly rent for
any partial month shall be prorated at the rate of one-thirtieth (1 /30) of the rent per day.
Section 4.02 Annual Rent Adjustment
a. Beginning on July 1, 2026 and annually thereafter rent shall increase each July by
the annual change in the Consumer Price Index -All Urban Consumers, San
Diego-Carlsbad (2021 = 319.761), as published by the United States Bureau of
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Labor Statistics, subject to rounding to the nearest whole dollar and not to exceed
five percent (5%). If the index is discontinued or revised during the term, such other
government index or computation with which it is replaced shall be used in order
to obtain substantially the same result as would be obtained if the index had not
been discontinued or revised.
b. The City is responsible for calculating the rent increases annually and provide
notice of the rent increase to Tenant by March 1. In the event that the City fails to
provide notice of the rent increase to Tenant by March 1, Tenant shall continue to
pay rent at the rate payable in the previous month until notice is received. Within
fifteen (15) days after Tenant's receipt of the notice, Tenant shall pay to City any
and all arrearage due between July 1 and the date of payment of the arrearage.
City's failure to provide notice of the rent increase shall not constitute waiver
thereof and City may, at any time during the term of the Lease, adjust the rent as
provided herein, give notice of the rent increase to Tenant, and demand that
Tenant pay the arrearage as provided herein.
Section 4.03 Repayment of PEARL Loan
To help Poway businesses, in 2020, the City established the Poway Emergency
Assistance Recovery Loan ("PEARL Loan") program using City funds to provide bridge
loans while businesses were waiting for state and federal relief funds. Tenant was the
recipient of a fifty thousand dollars ($50,000) PEARL Loan. Under the terms of the signed
promissory note, repayment was not due until the City declared an end to the ongoing
local emergency related to the COVID-19 pandemic, at which point Tenant has 90 days
to repay the PEARL Loan interest free. If the PEARL Loan is not repaid within 90 days,
interest will accrue, and Tenant will have three (3) years total to repay the PEARL Loan .
In alignment with the County of San Diego ending its declaration of emergency, the City
declared an end to the ongoing local emergency at its February 21, 2023, City Council
meeting. To repay the PEARL Loan without interest, the City must receive full payment
from the Tenant no later than May 22, 2023. If Tenant is unable to repay the loan in full
by May 22, 2023, the loan can be paid over three (3) years with interest, for a total
repayment amount of fifty-two thousand, three hundred forty-six dollars and sixteen cents
($52,346.16).
Section 4.04 Repayment of Unpaid Rent
To help the Tenant during the COVID-19 pandemic the City temporarily suspended
monthly rent payments. The Tenant has ninety-eight thousand, one hundred fifty-five
dollars and twenty cents ($98,155.20) in unpaid rent. The City and Tenant verbally agreed
that the Tenant is responsible for paying fifty percent (50%) of unpaid rent or forty-nine
thousand, seventy-seven dollars and sixty cents ($49,077.60). The remaining balance of
unpaid rent in the amount of forty-nine thousand seventy-seven dollars and sixty cents
($49,077.60) will be forgiven by the City due to the unprecedented economic impact of
the pandemic on Tenant's business, which provided public benefits generally and a
benefit to the City as its landlord by remaining in business, which it could not have done
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had full rent been demanded during this time period. Tenant shall repay the $49,077.60
of back rent owed to the City on or before July 1, 2025.
Section 4.05 Late Payment
Tenant shall pay City a late payment charge equal to five percent (5%) of the monthly
rent for any rent not paid within thirty (30) days after receipt of notice from City to Tenant.
Any amounts not paid within the previously mentioned thirty (30) day period shall bear
interest until paid at the lesser of the rate of two percent (2%) per month or the highest
rate permitted by law.
Section 4.06 Relocation Assistance
Tenant hereby acknowledges and agrees that Tenant shall not incur any right, interest,
or claim in or to any benefits or assistance arising under Government Code Section 7260,
et seq. or any other federal, state or local law, rule, or regulation relating to or arising from
Tenant's relocation from the Premises or the termination of this Lease. To the extent
Tenant is eligible for such benefits Tenant hereby voluntarily and expressly waives each
and every right, title or interest in and to such benefits.
ARTICLE V UTILITIES AND TAXES
Section 5.01 Utilities
Tenant shall make all arrangements for and pay for all utilities and services furnished to
or used by Tenant, including, without limitation, water, sewer, gas, electricity, cable,
telephone service, trash collection and for all connection charges other than City initiated
charges. Tenant shall provide electricity for the exterior holiday lights that are located on
tenant's electric meter.
Section 5.02 Personal Property Taxes
Tenant shall pay before delinquency all taxes, assessments, license fees and other
charges that are levied and assessed against Tenant's personal property installed or
located in or on the Premises, and that become payable during the term. On demand by
City, Tenant shall furnish City with satisfactory evidence of these payments.
Section 5.03 Possessory Interest Taxes
This lease may result in a taxable possessory interest and be subject to the payment of
property taxes. Tenant agrees to and shall pay before delinquency all taxes and
assessments of any kind assessed or levied upon Tenant or the Premises by reason of
this Lease or of any buildings, machines, or other improvements of any nature whatsoever
erected, installed or maintained by Tenant or by reason of the business or other activities
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of Tenant upon or in connection with the Premises. Such taxes and assessments shall
be in addition to Rent.
ARTICLE VI
Section 6.01
USE AND OCCUPANCY
Use .
Tenant shall use the Premises for the purposes of operating and conducting a restaurant
and for no other use without City's consent.
Section 6.02 Hours of Operation
Tenant shall operate its business only during the following days and between the following
hours:
Sunday-Thursday:
Friday and Saturday:
7 am-9 pm
7 am-10 pm
Section 6.03 Compliance with Law
Tenant shall comply with, and conform to, all laws and regulations, municipal, state and
federal, and any and all requirements and orders of any municipal, state, or federal court
or authority, present or future, in any way relating to the use or occupancy of the leased
Premises throughout the entire term of this Lease and any extension or renewal thereof.
Section 6.04 Licenses, Permits, Etc.
Tenant represents and declares to City that it has all licenses, permits, qualifications, and
approvals of whatever nature that are legally required to operate the restaurant business
located on the Premises professionally. Tenant represents and warrants to City that
Tenant shall, at its sole cost and expense, keep in effect at all times during the term of
this Agreement, any license, permit, or approval which is legally required for Tenant to
practice its profession .
Section 6.05 Restriction of Tenant's Use
Tenant agrees, in using the leased Premises:
a. Not to commit any waste or suffer any waste to be committed upon the
leased Premises .
b. Not to commit any public or private nuisance or any other act or thing, which
might or would disturb the quiet enjoyment of any occupant of nearby
property.
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c. Not to burn refuse or other materials in or about the leased Premises, or
permit any activity or activities, which might cause unreasonable annoyance
to any occupant or nearby property.
d. Not to overload, or permit the overloading of, any floor in the buildings
located upon the leased Premises.
e. Not to keep, use, sell, or offer for sale on the leased Premises, any article,
or conduct any activity thereon, which may be prohibited by the standard
form of fire insurance policy, and if Tenant does keep, use, sell or offer for
sale any such article, or if any acts are performed on the leased Premises
by Tenant which increase the rate of fire insurance premiums upon the
leased Premises, Tenant agrees to pay to City the amount of increase in
fire insurance and premiums attributable thereto on demand.
f. Not to place, construct, or maintain any sign, advertisement, awning, banner
or other exterior decoration on the exterior of the leased Premises or in the
immediate vicinity thereof, without obtaining City's prior written consent and
all applicable City permits.
g. Tenant will be allowed two business designation signs on the exterior of the
leased Premises, currently located on the roof and restaurant entrance, and
one business designation sign on Midland Road at the park entrance, in
accordance with the City's sign ordinance. Business designation signs must
be approved by the City and be consistent with other park signage.
h. The Tenant will prohibit smoking of a tobacco product inside and outside
the restaurant, except in areas designated by the City, and otherwise
comply with all applicable smoking laws and ordinances currently in effect.
Tenant will ensure that signage is displayed in public view. Tenant's
employees will comply with all applicable smoking laws and ordinances and
will smoke in designated smoking areas only.
i. All uses of the Leased Premises shall be in compliance with all applicable
ordinances, resolutions, statutes, rules, regulations and laws of the City of
Poway, and any Federal, State, or local government agency or competent
jurisdiction.
j. Tenant shall not have exclusive selling rights to types of food and beverage
items sold at the Farmers Market and special events.
ARTICLE VII TRADE FIXTURES
Section 7.01 Installation
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Tenant may install in and affix to the leased Premises such fixtures and equipment as
Tenant deems desirable.
Section 7.02 Removal
Not later than the expiration or termination of this Lease, Tenant is required to surrender
possession of the leased Premises to City. Tenant may, and if prior to the expiration of
such time City gives written notice requiring Tenant to do so, Tenant shall remove and
properly dispose of all trade fixtures installed in the leased Premises by Tenant. The
removal of such trade fixtures shall be effected solely at the expense of Tenant and in the
manner satisfactory to City and without injury or damages to the leased Premises or the
building, and Tenant covenants to repair immediately, at Tenant's expense, any injury or
damage caused by such removal.
ARTICLE VIII ACCEPTANCE OF LEASED PREMISES AS-IS
Section 8.01 Acceptance of Leased Premises As-ls
Tenant currently occupies the leased Premises and has examined and inspected and
knows the condition of the leased Premises and every part thereof and agrees to accept
the same in their present condition. Tenant waives any right or claim against City for any
cause, directly or indirectly, arising out of the condition of the leased Premises,
appurtenances thereto, the improvements thereon, and the equipment thereof.
ARTICLE IX
Section 9.01
ALTERATIONS, REPAIRS AND IMPROVEMENTS
Tenant's Installations, Additions and Improvements
a. Tenant shall make no installations, additions, or improvements in or to the
leased Premises except as otherwise authorized in the Lease, or structural
alterations or changes either to the interior or exterior of the buildings located
on the leased Premises, or in the bearing walls, supports, beams, or
foundation, without first obtaining the written consent of the City. All applicable
City permits and approvals must be obtained prior to the installation of any
additions or improvements.
b. Plans and specifications showing such proposed installations, additions, or
improvements and alterations and changes, shall be submitted to City for
approval upon the application for such written consent.
c. All installations, additions, or improvements, and alterations and changes
made, with the written consent of City, shall be made under the supervision of
an architect or engineer satisfactory to City. Work shall be inspected and
permitted by the City as required. All architects, engineers and contractors
must be approved by the City, and must maintain insurance coverage deemed
acceptable by the City.
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d. If during the term of this Lease any additions, alterations, or improvements in
or to the leased Premises, as distinguished from repairs, are required by any
government authority or any law, ordinance, or governmental regulation
because of the use to which the leased Premises are put by Tenant and not by
reason of the character or structure of the building, they shall be made and paid
for by Tenant.
Section 9.02 Tenant's Repair and Maintenance Responsibilities
a. Tenant agrees during the term thereof, and any extension or renewal thereof, to
keep and maintain the leased Premises in good order, condition, and repair,
including, without limiting the foregoing:
i. Plumbing lines and plumbing fixtures and drains beginning at the point of
entry into the building,
ii. Natural gas lines beginning at the point of entry into the building,
iii. Sewage facilities within the leased Premises and from the building to the
two grease traps,
iv. Fixtures,
v. Signage
vi. Interior walls and wall finishes, including restroom partitions,
vii. Floors, doors, windows, and plate glass,
viii. Ceilings and exhaust equipment, including roof mounted,
ix. Interior building appliances and similar equipment,
x. And lighting fixtures, bulbs, and ballasts on the interior.
b. Tenant agrees during the term thereof, and any extension or renewal thereof,
Tenant shall maintain in good working order two exterior grease traps necessary
for Tenant's business operations. Grease traps should be cleaned in accordance
with the City's FOG (Fat, Oil, Grease) Program requirements included as Exhibit
"B". Tenant shall pressure wash, adhering to the Best Management Practices
contained in the City's Jurisdictional Runoff Management Plan (JRMP), the
boardwalk area between the kitchen door and outdoor public restrooms, the
boardwalk area at the front entrance of the Premises where eating is permitted,
and the dumpster area a minimum of once every three months, or as deemed
necessary by City. Tenant shall keep the trash enclosure, and any other exterior
areas affected by Tenant's business operations, clean and free from grease and
debris. Tenant shall be responsible for ensuring that the interior of the Premises
is kept free of insects and rodents. Tenant shall keep outdoor areas free of
restaurant equipment and supplies. Tenant shall keep upstairs attic area clear and
accessible.
c. Beginning August 1, 2024, the Tenant agrees during the term thereof, and any
extension or renewal thereof, to keep and maintain the leased Premises in good
order, condition, and repair, including, without limiting the foregoing:
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i. Plumbing lines and plumbing fixtures and drains beginning at the regulator
and including the regulator,
ii. Natural gas lines beginning at the San Diego Gas and Electric meter,
iii. Exterior walls and wall finishes,
iv. Lighting fixtures, bulbs, and ballasts on the exterior,
v. Roof,
vi. Security alarms and monitoring systems,
vii. Electrical facilities including main breaker, electrical panel, and circuit
breakers starting at the San Diego Gas and Electric meter,
viii. And trash enclosure fencing and gate.
d. Beginning August 1, 2024, Tenant shall inspect, test, maintain, and monitor fire
protection systems, fire monitoring systems, fire extinguishers, fire alarm system,
and fire sprinklers, pipes, and related systems within the Premises, in accordance
with municipal, state and federal laws. Tenant shall inspect, test, and maintain
cooking suppression systems including any Ansul Fire Suppression Systems.
e. The City may at times require the Tenant to make repairs to the leased Premises
during the time of the Lease. These repairs will be made within thirty (30) days of
any written request for the reason of aesthetics or five (5) days for health and safety
reasons. If the repairs are not made within the stated timeframe, the City may
make the repairs and charge the costs to the Tenant.
f. If during the term of the Lease the Tenant makes any changes to equipment or
leased Premises, that create health or safety issues, or other building repair and
maintenance issues, the Tenant shall be solely responsible for the cost of repairing
the equipment or leased Premises, including all City expenses. If needed the City
will determine the corrective action, and repair work may be completed by City or
an outside contractor and Tenant shall reimburse City for all costs.
Section 9.03 City's Repair and Maintenance Responsibilities
a. Upon commencement of this Lease, and ending July 31, 2024, the City agrees
during the term thereof, to maintain the following:
i. Exterior of the building,
ii. Grounds outside the building,
iii. Air conditioning and heating equipment including thermostats,
iv. Christmas lights on exterior of building,
v. Sewer lines leaving the building beginning after the two grease traps located
on the west and south sides of the building,
vi. Interior electrical facilities, with exception of the lighting fixtures, bulbs, and
ballasts,
vii. Entrance signage at corner of Midland Road and Temple Street,
viii. Fire protection systems, fire monitoring systems, fire extinguishers, fire
alarm system, and fire sprinklers, pipes, and related systems within the
Premises.
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b. Beginning August 1, 2024, the City agrees during the term thereof, and any
extension or renewal thereof, to maintain the following:
i. Grounds outside the building,
ii. Air conditioning and heating equipment including thermostats,
iii. Christmas lights on exterior of building,
iv. Sewer lines leaving the building beginning after the two grease traps located
on the west and south sides of the building,
v. Electrical equipment up to the main service disconnect,
vi. Entrance signage at corner of Midland Road and Temple Street,
vii. And the fire riser.
c. Upon commencement of this Lease, City shall be responsible for ensuring the
exterior of the building is free of insects and rodents and City shall be responsible
for removing graffiti from exterior of the building.
d. City has the sole discretion to determine when repair and maintenance projects
shall be completed based on available funding and resources. City shall not
unreasonably delay repair and maintenance projects. If during the term of the
Lease, the City has planned capital improvements to the building that will result
in the need to close public access to the building for a period of time, the City and
Tenant shall coordinate closures to minimize business disruptions, except in
emergency situations where repairs need to be made immediately. The City shall
make every effort to avoid closing public access to the Premises for planned
capital improvements.
Section 9.04 Mechanic's Liens
a. Tenant agrees to pay promptly for all labor done or materials furnished for any
work or repair, maintenance, improvements, alterations, or addition done by
Tenant in connection with the leased Premises, and to keep and to hold the
leased Premises free, clear, and harmless from all liens that could arise by
reason of any such work. If any such lien shall at any time be filed against the
leased Premises, Tenant shall either cause the same to be discharged of
record within twenty (20) days after the date of filing the same, or if Tenant, in
its discretion and in good faith, determines that such lien should be contested,
Tenant shall furnish such security as may be necessary or required to prevent
any foreclosure proceedings against the leased Premises during the pendency
of such contest. If Tenant shall fail to discharge such lien within such period,
or fails to furnish such security, then in addition to any other right or remedy,
City may, but shall not be obligated to discharge the same, either by paying the
amount claimed to be due or by procuring the discharge of such lien by deposit
in court, or by giving security or in such other manner as is or may be prescribed
by law. Tenant shall repay to City on demand all sums disbursed or deposited
by City pursuant to the foregoing provisions hereof, including City's costs,
expenses, and reasonable attorney's fees incurred by City in connection
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therewith. Nothing contained herein shall imply any consent or agreement on
the part of City to subject City's interest in the leased Premises to liability under
any mechanic's lien law.
b. City shall at all times have the right to post and to keep posted on the leased
Premises notices provided for under the laws of the State of California for the
protection of the leased Premises from mechanic's liens or liens of a similar
nature.
Section 9.05 Prevailing Wage
Tenant shall be solely responsible, expressly or impliedly and legally and financially, for
determining and effectuating compliance with all applicable federal, state and local public
works requirements, prevailing wage laws, and labor laws and standards, and City makes
no representation, either legally and/or financially, as to the applicability or non-
applicability of any federal, state and local laws to any of the Tenant's work on the
Premises. Tenant expressly, knowingly and V(?luntarily acknowledges and agrees that
City has not previously represented to Tenant or to any representative, agent or affiliate
of Tenant, or any contractor(s) or any subcontractor(s), in writing or otherwise, in a call
for bids or otherwise, that any anticipated work on the Premises under this Section 19 is
(or is not) a "public work," as defined in Section 1720 of the Labor Code or under the
Davis-Bacon Act, 40 U.S.C. Section 3141, et seq., and the regulations promulgated
thereunder set forth at 29 CFR Part 1 (collectively, "Davis-Bacon"). Tenant knowingly
and voluntarily agrees that Tenant shall have the obligation to provide any and all
disclosures or identifications as and to the extent required by Labor Code Section 1781
and/or by Davis-Bacon, as the same may be amended from time to time, or any other
similar law or regulation. Tenant shall indemnify, protect, pay for, defend and hold
harmless City from and against any and all loss, liability, damage, claim, cost, expense
and/or "increased costs" (including reasonable attorney's fees, court and litigation costs,
and fees of expert witnesses),which results or arises in any way from any of the following:
(i) the noncompliance by Tenant or its contractor with any applicable local, state and/or
federal law or regulation, including, without limitation, any applicable federal and/or state
labor laws or regulations (including, without limitation, if applicable, the requirement to
pay state and/or federal prevailing wages and hire apprentices); (ii) the implementation
of Section 1781 of the Labor Code and/or of Davis-Bacon, as the same may be amended
from time to time, or any other similar law or regulation; and/or (iii) failure by Tenant to
provide any required disclosure or identification as required by Labor Code Section 1781
and/or by Davis-Bacon, as the same may be amended from time to time, or any other
similar law or regulation. It is agreed by the Parties that, in connection with any work on
hit Premises, including, without limitation, any and all public works (as defined by
applicable law or regulation), Tenant shall bear all risks of payment or non-payment of
prevailing wages under applicable federal, state and local law or regulation and/or the
implementation of Labor Code Section 1781 and/or by Davis-Bacon, as the same may
be amended from time to time, and/or any other similar law or regulation. The foregoing
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indemnity shall survive termination of this Agreement and shall continue after completion
of the construction and development of the Project.
Section 9.06 Damage or Destruction by Fire or Other Casualty
a. Should the building in which the leased Premises are located be damaged by
fire or other casualty, then if damage is so slight as not to interfere substantially
with Tenant's use of the leased Premises, Tenant shall notify City. The Tenant
shall immediately undertake to make repairs to the building and improvements
and restore the same to substantially the same condition as they were in
immediately preceding such damage or destruction . Such work shall be done
as rapidly as conditions permit and there shall not be abatement of rent.
b. Should there be total or substantial destruction in such building and
improvements so that the leased Premises are rendered unusable, either in
whole or in part, either party shall have the right to terminate this Lease by
mutual agreement of both parties.
c. Unless the parties to the Lease can and do agree forthwith upon the extent and
amount of such damage or destruction, the parties shall mutually agree to the
selection of a certified architect, registered engineer, or licensed building
contractor who shall determine such matters, and the determination of such
architect, engineer or contractor shall be final and binding upon the parties to
this Lease.
d. Tenant shall repair or rebuild such building and improvements to substantially
the same condition that they were in immediately preceding such damage or
destruction, unless both parties agree to the termination of the Lease.
e. Tenant, at its sole expense, shall procure and maintain a policy or policies of
business interruption insurance in sufficient amounts to cover the Annual
Minimum Rent hereunder for a period of not less than one (1) year during any
casualty loss and restoration of the Premises while this Lease remains in force .
ARTICLEX
Section 10.01
CONDEMNATION
Total Condemnation
If during the term thereof there shall be a "total taking" by a public authority under the
power of eminent domain, then the leasehold estate of Tenant in the leased Premises
shall cease and terminate as of the date actual physical possession thereof shall be taken .
"Total taking" is defined to be the taking of the entire leased Premises under the power of
eminent domain or taking of so much of the leased Premises as to prevent or substantially
impair the conduct of Tenant's business therein.
Section 10.02 Partial Condemnation
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If, during the term hereof there shall be a partial taking of the leased Premises, this Lease
shall terminate as to the portion of the leased Premises taken upon the date which actual
possession of the portion of the leased Premises is taken pursuant to eminent domain
proceedings, but this Lease shall continue in force and effect as to the remainder of the
leased Premises. The rental payable by Tenant for the balance of the term shall be
abated in the ratio that the square footage of the floor area of the leased Premises taken
bears to the total floor area of the leased Premises at the time of such taking. "Partial
taking" is defined to be the taking of only a portion of the leased Premises under the power
of eminent domain, which does not constitute a "total taking" as defined above in Section
10.01.
ARTICLE XI
Section 11.01
SUBORDINATION
Liens to Which Lease is Subordinate
a. This Lease, at City's option, shall be subordinate to any ground lease, mortgage,
deed of trust, or any other hypothecation or security now or hereafter placed upon
the real property of which the Premises are a part, and to any and all advances
made on the security thereof, and to all renewals, modifications, consolidations,
replacements, and extensions thereof. Notwithstanding such subordination,
Tenant's right to quit possession of the Premises shall not be disturbed if Tenant
is not in default, and so long as Tenant shall pay the rent and observe and perform
all of the provisions of this Lease, unless this Lease is otherwise terminated
pursuant to its terms. If any mortgagee, trustee, or ground lessor shall elect to
have this Lease prior to the lien of its mortgage, deed of trust or ground lease, and
shall give written notice thereof to Tenant, this Lease shall be deemed prior to such
mortgage, deed of trust, or ground lease, whether this Lease is dated prior or
subsequent to the date of said mortgage, deed of trust, or ground lease, or the
date or recording thereof.
b. Tenant agrees to execute any documents required to effectuate an attornment, a
subordination , or to make this Lease prior to the lien of any mortgage, deed of
trust, or ground lease, as applicable. Tenant's failure to execute such documents
within twenty (20) days after written demand shall constitute a material default by
Tenant hereunder, or, at City's option , City shall execute such documents on
behalf of Tenant as Tenant's attorney-in-fact. Tenant does hereby make,
constitute and irrevocably appoint City as Tenant's attorney-in-fact and in Tenant's
name, place, and stead, to execute such documents in accordance with paragraph
11.01.
Section 11.02 Statement of Modifications
Tenant shall at any time, and from time to time, upon not less than twenty (20) days prior
written request by City execute, acknowledge and deliver to City a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if there shall have
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been modifications, that the Lease is in full force and effect as modified and stating the modification or modifications), and the dates to which the fixed rent and other charges or payments have been paid in advance. It is expressly understood and agreed that any
such statement delivered pursuant to this paragraph may be relied upon by City, or by any prospective purchaser, mortgagee, assignee of any mortgagee, or the trustee or beneficiary of any deed of trust placed upon the leased Premises.
ARTICLE XII INDEMNITY AND INSURANCE
Section 12.01 Responsibility for Acts of Tenant
a.City shall not be liable at any time for any cause of action, claim, administrativeor governmental action, loss, damage, or injury to any property or person, at
any time, (”Claims”) arising out of any act or omission of Tenant, or Tenants’
occupancy or use of the leased Premises or any part thereof , or directly orindirectly from any state or condition of the leased Premises or any part thereofduring the Term of this Lease. Tenant expressly assumes all risks of anyClaims arising out of its use or occupancy of the Premises, or the condition of
the Premises during the Term of this Lease.
b.Notwithstanding any provisions of this Lease to the contrary and irrespectiveof the limits of any insurance carried by Tenant for the benefit of City, Tenantagrees to fully protect, indemnify, and hold City harmless from any and all
Claims, damages or liabilities of whatsoever nature arising under the terms of
this Lease, or arising out of or in connection with the operation carried on byTenant on, or its use or occupancy of, the leased Premises, or any challengeto or governmental or administrative action relating to the City’s approval of thisLease, including all of the City’s attorneys’ fees and litigation expenses incurred
in defense thereof.
Section 12.02 Insurance
Tenant shall obtain, at its own cost and expense, and maintain in full force and effect, the
following types and amounts of insurance during the term of this agreement:
a.Property Insurance Coverage. Tenant shall possess property insurance,
including fire and extended coverage insurance, covering Tenant's personal
property, including removable trade fixtures, located in the Property, on a
replacement cost basis. Tenant must also have business interruption expense
or similar coverage as part of their property insurance policy or under a
separate form sufficient to cover rental payments in the event of business
interruption.
b.General Liability Insurance. Tenant shall possess a policy or policies of
comprehensive general liability insurance with respect to the Premises with
coverage of not less than Two Million Dollars ($2,000,000) per occurrence,
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with a minimum aggregate amount of Four Million Dollars ($4,000,000)
combined single limit coverage of bodily injury, property damage or
combination thereof. An excess, or umbrella policy is also acceptable to
provide the aggregate amount of coverage.
c. Workers' Compensation Insurance. Tenant shall possess workers'
compensation insurance as required by law. Tenant shall also provide
employer's liability coverage in the minimum amount of One Million Dollars
($1,000,000) per accident or disease and must also provide a waiver of
subrogation in favor of City.
d. Automobile Liability. Tenant shall possess automobile insurance to include
owned, hired, and non-owned vehicles with a minimum coverage amount of
One Million Dollars ($1,000,000), combined single limit.
e. Liquor Liability. Tenant shall possess liquor liability insurance to extend
coverage to drunk driving accidents, assault and battery claims,
accusations of sexual assault, and any other claims associated, with a
minimum coverage amount of One Million Dollars ($1,000,000) per
occurrence.
f. Additional Insurance Requirements. All liability insurance shall include, but not
be limited to, personal injury, cross liability, and severability of interest clauses,
products/completed operations, broad form property damage, independent
contractors, and owned, non-owned and hired vehicles. All insurance policies
shall be an admitted surety, or an insurance company listed by the State Insurance
Commissioner, and shall have a rating in the latest AM Best Rating Guide of a minimum
of "A-" and a minimum of Class VI.
g. If Tenant maintains broader coverage and/or higher limits than the minimums
required herein, the City requires and shall be entitled to the broader coverage
and/or higher limits maintained by the Tenant.
h. City shall maintain physical damage insurance coverage for the Premises
during the entire term hereof in a coverage amount of City's determination. City
shall be the sole loss payee and, in the event of a total loss of the Premises,
shall at its sole discretion determine whether to utilize any insurance proceeds
to rebuild the Premises or to terminate the Lease as per section 9.06 of this
Lease. Tenant shall have no rights to any proceeds or payments resulting from
City's physical damage insurance coverage. Tenant also acknowledges that
said policy of insurance shall not insure Tenant's personal or business
property, nor Tenant's trade fixtures or equipment. Tenant shall have no rights
to any proceeds or payments resulting from City's insured coverage of boiler
and machinery under City's physical damage insurance coverage.
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Section 12.03 Endorsements
Endorsements shall be obtained so that each liability policy contains the following three
provisions:
a. Additional Insured. (Not required for Professional Errors and Omissions
Liability Insurance or Workers' Compensation.) "City of Poway and its elected
and appointed boards, officers, agents, and employees are additional insureds
with respect to this subject project and contract with City."
b. Notice. "Said policy shall not terminate, nor shall it be canceled, until thirty (30)
days after written notice is given to City."
c. Primary Coverage. "The policy provides primary coverage to City and its
elected and appointed boards, officers, agents, and employees. It is not
secondary or in any way subordinate to any other insurance or coverage
maintained by City."
Section 12.04 Insurance Certificates
Tenant shall provide City certificates of insurance and their endorsements showing the
insurance coverages described in the paragraphs above, in a form and content approved
by City, prior to beginning work under this Agreement.
Section 12.05 Indemnification
Tenant shall immediately defend, indemnify and hold the City, its elected and appointed
officers, employees and agents, harmless from all Claims and liability whatsoever, or for
any injury to or death of persons or damage to property of Tenant or any other person,
occurring during the Term of this Lease arising from any of the following: (i) the use,
occupancy or enjoyment of the Premises, or Tenant's operations thereon, by Tenant or
Tenant's customers, employees, contractors, subcontractors, invitees, permittees, and
assignees, or (ii) Tenant's negligence or intentional misconduct, including any breach of
this Lease beyond any applicable notice and cure period, or (iii) liens, claims and
demands related to Tenant's use of the Premises, or (iv) the City's approval of this Lease.
Except to the extent arising due to City's negligence or intentional misconduct, Tenant
shall in all cases accept any tender of the defense of any action or proceeding arising out
of the foregoing in which City is named or made party and shall defend the City as provided
herein with counsel chosen by the City. Tenant shall not be liable for such damage or injury
to the extent and in the proportion that the same is ultimately determined to be attributable
to the negligence or misconduct of the City or its officers, employees, agents or
representatives, or the City's failure to perform its obligations pursuant to this Lease.
Tenant's obligation to indemnify shall include reasonable attorneys' fees and investigation
costs and all other reasonable costs, expenses and liabilities incurred by City. This
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indemnity provision shall apply to all claims that accrued, or injuries that occurred, prior
to Tenant vacating the Premises, regardless of when such claims or injuries were
discovered.
Section 12.06 Exemption of City from Liability
Lessee agrees that City shall not be liable for injury to Lessee's business or any loss of
income therefrom or for damage to the goods, wares, merchandise or other property of
Lessee, Lessee's employees, invitees, customers or any person in or about the
Premises, nor shall City be liable for personal injury to Lessee's employees, agents or
contractors, 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; sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or
from any other cause relating to the physical condition or location of the Premises, or
utility services provided thereto.
Section 12.07 Assumption of Risk
Except for injuries to persons caused by the willful misconduct of City, and not covered
by insurance maintained, or required by this Lease to be maintained, by Tenant: (a)
Tenant hereby assumes the risk of any and all injury and damage to the personnel
(including death) and property of Tenant, including its employees, contractors and
subcontractors, in or about the Premises; and (b) the Parties hereby agree that the City is
not to be liable for any injury ordamage which may be sustained by the person, goods or
property of Tenant or its employees, contractors, subcontractors in or about the Premises,
whether said damage or injury results from conditions arising within the Premises or from
other sources.
ARTICLE XIII
Section 13.01
ASSIGNMENT AND SUBLEASING
City's Consent Required
a. Tenant shall not assign, mortgage, or hypothecate this Lease in whole or in part,
not sublet all or any part of the leased Premises, without the prior written consent
of City in each instance . This prohibition against assigning or subletting shall be
construed to include a prohibition against any assignment or subletting by
operation of law. City's consent will not unreasonably be withheld. Tenant agrees
to reimburse City for any out-of-pocket expense and fees involved with any Lease
Assignment or Sublease.
b. If Tenant sells the Hamburger Factory business, prior to the sale the buyer shall
provide to the City a proposal to operate the business and demonstrate financial
strength and experience. If approved by the City, the Lease may be assigned to
the buyer. Upon sale of the Hamburger Factory business Tenant shall payoff the
PEARL Loan per section 4.03 and unpaid rent per section 4.04.
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Section 13.02 No Waiver
The consent by City to any assignment or subletting shall not constitute a waiver of the
necessity for such consent to any subsequent assignment or subletting. If this Lease be
assigned, or if the leased Premises or any part thereof be sublet or occupied by anybody
other than Tenant, City may collect rent from the assignee, subtenant, or occupant, and
apply the new amount collected to the rent herein reserved, but no such assignment,
subletting, occupancy, or collection shall be deemed a waiver of this covenant, or a
release of Tenant from the further performance by Tenant of covenants on the part of
Tenant.
Section 13.03 Liability of Tenant
Notwithstanding any assignment or sublease, Tenant shall remain fully liable on this
Lease and shall not be released from performing any of the terms, covenants, and
conditions of this Lease.
ARTICLE XIV
Section 14.01
DEFAULT AND REMEDIES
Tenant's Insolvency, Bankruptcy, or Dissolution
a. This Lease shall be deemed repudiated and breached by Tenant if, during the
term of this Lease:
i. A petition to have Tenant adjudicated as bankrupt, or a petition for
reorganization or arrangement under any of the laws of the United States
relating to bankruptcy be filed by Tenant, or be filed against Tenant, and if
so filed against Tenant, not be dismissed within ninety (90) days from the
date of such filing.
ii. The assets of Tenant or the business conducted by Tenant on the leased
Premises be assumed by a trustee or other person pursuant to any judicial
proceedings.
iii. Tenant becomes insolvent or makes an assignment for the benefit of
creditors, or commits any act of bankruptcy.
b. Tenant expressly agrees that City may at its election terminate this Lease in
the event of the occurrence of any of the contingencies hereinabove described
by giving not less than ten (10) days written notice to Tenant and when so
terminated, City may re-enter the leased Premises, and the leasehold interest
created by this Lease shall not be treated as an asset of Tenant's estate. It is
further expressly understood and agreed that City shall be entitled upon such
re-entry, notwithstanding any other provisions of this Lease, to exercise such
rights and remedies, and to recover from Tenant as damages for loss of the
bargain resulting from such breach, and not as a penalty, such amounts as are
specified in Section 14.03, unless any statute or rules or law governing the
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proceeding in which such damages are to be proved shall lawfully limit the
amount of such claims capable of being so proved, in which case City shall be
entitled to recover as and for liquidated damages, the maximum amount which
may be held under any such statute or rule of law.
Section 14.02 Default
The occurrence of any of the following shall constitute a material default and breach of
this Lease by Tenant:
a. Any failure by Tenant to pay the rent or to make any other payment required to
be made by Tenant under this Lease (when that failure continues for ten (10)
days after written Notice to Quit or Pay Rent is given by City to Tenant),
specifically including the back rent owed and repayment of the PEARL loan,
pursuant to the terms and conditions set forth hereinabove
b. The abandonment or vacation of the Premises by Tenant (the absence of
Tenant from or the failure by Tenant to conduct business on the Premises for
a period in excess of fourteen (14) consecutive days, shall constitute an
abandonment or vacation for purposes of this Lease).
c. A failure by Tenant to observe and perform any other provisions of this Lease
to be observed or performed by Tenant, when that failure continues for ten (10)
days after written notice of Tenant's failure is given by City to Tenant; provided,
however, that if the nature of the default is such that it cannot reasonably be
cured within a ten (10) day period, Tenant shall not be deemed to be in default
if Tenant commences that cure within the ten (10) day period and thereafter
diligently prosecutes it to completion.
d. Tenant's bankruptcy, insolvency, or dissolution as provided in Section 14.01
above.
Section 14.03 Remedies
On any breach, default, or abandonment, City may exercise any of the following rights:
a. Immediately re-enter and remove all persons and property from the leased
Premises, storing _ the personal property in a public warehouse or elsewhere at
the cost of, for the account of, and at the risk of Tenant. In the event of any
such re-entry by City, City may make any repairs, additions, or improvements
in, to, or upon the leased Premises which may be necessary or convenient;
provided, however, that City shall be entitled to recover from Tenant the
expense of such repairs or alterations only to the extent necessary to restore
the building to the condition it was in on the commencement of the term of the
Lease, reasonable wear and tear excepted. In such instance, the Lease will
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be terminated, and City will be entitled otherwise to recover all damages
allowable under the law of this Lease.
b. To collect by suit or otherwise each installment of rent or other such sum as it
becomes due hereunder, or to enforce, by suit or otherwise, any other term or
provision hereof on the part of Tenant required to be kept or performed, it being
specifically agreed that all unpaid installments of rent or other sums shall bear
interest at the highest legal rate from the due date thereof until paid .
c. Terminate this Lease, in which event Tenant agrees to immediately surrender
possession of the leased Premises, and to pay to City, in addition to any other
remedy City may have, all damages City may incur by reason of Tenant's
default, including the cost of recovering the leased Premises.
Section 14.04 No Waiver of Default
City's or Tenant's failure provide notice of any default or breach of covenant on the part
of City or Tenant shall not be, or be construed as, a waiver thereof, nor shall any custom
or practice which may grow up between the parties in the course of administering this
instrument be construed to waive or to lessen the right of City or Tenant to insist upon the
performance by City or Tenant of any term, covenant, or condition hereof, or to exercise
any rights given City or Tenant on account of any such default. A waiver of a particular
breach, or default, shall not be deemed to be a waiver of the same or any other
subsequent breach or default. The acceptance of rent hereunder shall not be or
construed to be, a waiver of any term, covenant, or condition of this Lease.
Section 14.05 Remedies Cumulative
The rights, powers, elections, and remedies of City contained in this Lease shall be
construed as cumulative and no one of them is or shall be considered exclusive of the
other or exclusive of any rights or remedies allowed by law, and the exercise of one or
more rights, power, elections, or remedies shall not impair City's right to exercise any
other.
Section 14.06 City's Rights to Cure Default
If Tenant shall be in default in the performance of any covenant on its part to be performed
under this Lease, then, after notice and without waiving or releasing Tenant from the
performance thereof, City may, but shall not be obligated so to do, perform any such
covenant, and in exercising any such right, pay necessary and incidental costs and
expenses in connection therewith. All sums so paid by City, together with interest thereon
at the rate of ten percent (10%) per annum, shall be deemed additional rent and shall be
payable to City on the next date that rent is owed under the terms of this Lease.
ARTICLE XV CITY'S GENERAL PROTECTIVE PROVISIONS
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Section 15.01 Surrender at End of Term
Tenant shall peaceably give up and surrender the leased Premises and every part thereof
to City at the termination of the Term of this Lease in substantially as good a condition
and repair as at the commencement of the Term.
Section 15.02 No Merger-Termination of Subtenancies
The voluntary or other surrender of this Lease by Tenant, or mutual termination thereof,
shall, at the option of City, terminate all of any existing subleases or subtenancies, or
may, at the option of City, operate as an assignment to City of any or all subleases or
subtenancies.
Section 15.03 Release of City After Sale
In the event of a sale or conveyance by City of the leased Premises, City shall be released
from any future liability upon any of the covenants or conditions, expressed or implied, in
favor of Tenant, and in such event, successor in interest to City will assume all of City's
rights and responsibilities under this Lease.
Section 15.04 City's Right to Inspect
City shall be entitled, at all reasonable times, to go on the leased Premises for the purpose
of inspecting the leased Premises, or for the purpose of inspecting the performance by
Tenant of the terms and conditions of this Lease, or for the purpose of posting and
keeping posted thereon notices of non-responsibility for any construction, alteration, or
repair thereof, as required or permitted by any law or ordinance.
ARTICLE XVI
Section 16.01
GENERAL PROVISIONS
Conditions and Covenants
All of the provisions of this Lease shall be deemed as running with the land, and construed
to be "conditions" as well as "covenants" as though the words specifically expressing or
imparting covenants were used in each separate provision.
Section 16.02 No Waiver of Breach
No failure by either City or Tenant to insist upon the strict performance by the other of any
covenant, agreement, term, or condition of this Lease, or to exercise any right or remedy
consequent upon a breach thereof, shall constitute a waiver of any such breach or of such
covenant, agreement, term, or condition. No waiver of any breach shall affect or alter this
Lease, but each and every covenant, condition, agreement, and term of this Lease shall
continue in full force and effect with respect to any other existing or subsequent breach.
Section 16.03 Time of Essence
22 8/1/2023
27 of43 August 1, 2023, Item #10
Time is of the essence of this Lease and of each provision.
Section 16.04 Computation of Time
The time in which any act provided by this Lease is to be done is computed by excluding
the first day and including the last, unless the last is a Saturday, Sunday, or holiday, and
then it is also excluded. The term "holiday" shall mean all holidays specified in Sections
6700 and 6701 of the Government Code.
Section 16.05 Unavoidable Delay -Force Majeure
If either party shall be delayed or prevented from the performance of any act required by
this Lease by reason of Acts of God, strikes, lockouts, labor troubles, inability to procure
materials, restrictive governmental laws, or regulations or other cause, without fault and
beyond the reasonable control of the party obligated (financial inability excepted),
performance of such act shall be excused for the period of the delay; and the period for
the performance of any such act shall be extended for a period equivalent to the period
of such delay, provided, however, nothing in this section shall excuse Tenant from the
prompt payment of any rental or other charge required of Tenant except as may be
expressly provided elsewhere in this Lease.
Section 16.06 Successors in Interest
Each and all of the covenants, conditions, and restrictions in this Lease shall inure to the
benefit of and shall be binding upon the successors in interest of City, and subject to the
restrictions of Article XIII, the authorized encumbrancers, assignees, transferees,
subtenants, licensees, and other successors in interest of Tenant. The Tenant's interest
in this Lease Agreement shall not be transferred or sold to any other party without the
approval of the City.
Section 16.07 Entire Agreement
This Lease contains the entire agreement of the parties with respect to the matters
covered by this Lease, and no other agreement, statement or promise made by any party,
or to any employee, officer, or agent of any party, which is not contained in this Lease
shall be binding or valid . This lease will supersede all prior leases between Tenant and
City related to this property.
Section 16.08 Partial Invalidity
If any term, covenant, condition or provision of this Lease is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall
remain in full force and effect, and shall in no way be affected, impaired, or invalidated.
Section 16.09 Relationship of Parties
23 8/1/2023
28 of 43 August 1, 2023, Item #10
Nothing contained in this Lease shall be deemed or construed by the parties or by any
third person to create the relationship of principal and agent, or of partnership or of joint
venture, or of any association between City and Tenant, and neither any provisions
contained in this Lease nor any acts of the parties shall be deemed to create any
relationship between City and Tenant, other than the relationship of City and Tenant.
Section 16.10 Interpretation and Definitions
The language in all parts of this Lease shall in all cases be simply construed according to
its fair meaning and not strictly for or against City or Tenant.
Unless otherwise provided in this Lease, or unless the context otherwise requires, the
following definitions and rules of construction shall apply to this Lease:
a. In this Lease, the neuter gender includes the feminine and masculine, and the
singular number includes the plural, and the word "person" includes
corporation, partnership, firm, or association whenever the context so requires.
b. "Shall," "will," and "agrees" are mandatory; "may" is permissive.
c. The captions contained herein are for convenience and reference only, and the
words contained therein shall in no way be held to explain, modify, amplify, or
aid in the interpretation, construction, or meaning of the provisions of this
Lease.
d. All references to the term of this Lease shall include any extensions of such
term.
e. Leased Premises shall include the improvements to the land and outside eating
areas.
f. Parties shall include the City and Tenant named in this Lease.
g. As used herein, the word "sublessee" shall mean and include in addition to a
sub lessee and subtenant, a licensee, concessionaire, or other occupant or user
of any portion of the leased Premises or buildings or improvements thereon.
Section 16.11 Attorney's Fees
Should either party commence any legal action or proceeding against the other arising
out of this Lease the prevailing party shall be entitled to an award of reasonable attorney's
fees.
Section 16.12 Interest
24 8/1/2023
29 of43 August 1, 2023, Item #10
The total of rent payments, which are five (5) or m·ore days late, shall be assessed a late
payment penalty of five percent (5%) thereof each calendar month that such payment is
late.
Section 16.13 Modifications
This Lease is not subject to modification except in writing executed by all parties thereto.
Section 16.14 Notices
a. All notices, demands, or requests from one party to another may be personally
delivered or sent by mail, certified or registered, postage prepaid, to the
addresses stated in this section, and shall be deemed to have been given at
the time of personal delivery, or at the end of the second full day following the
date of mailing.
b. All rents and other sums payable by Tenant to City, or notices, demands, or
requests from Tenant to City, shall be delivered in person, or mailed to City at:
City of Poway
Attn: Community Services
P.O. Box 789
Poway, CA 92074
c. All notices, demands, or requests from City to Tenant shall be given to Tenant
at the leased Premises.
d. Each party shall have the right, from time to time, to designate a different
address by written notice given in conformity with this section .
Section 16.15 Holding Over
In the event that Tenant shall hold over after expiration of the term of this Lease with
consent, expressed or implied, of City, such holding over shall be deemed merely a
tenancy from month-to-month, on the same terms, covenants, and conditions so far as
applicable as herein contained until such tenancy is terminated in a manner prescribed
by law.
ARTICLE XVII
Section 17.01
EXECUTION
Entire Lease
This Lease shall constitute the entire understanding between City and Tenant relating to
the terms and conditions of the Lease.
25 8/1/2023
30 of43 August 1, 2023, Item #10
IN WITNESS WHEREOF, the parties hereto have duly executed this Lease on the
date first above written.
CITY OF POWAY HAMBURGER FACTORY, INC.
Chris Hazeltine, City Manager
Name and Title
ATTEST:
By:
Carrie Gallagher, CMC City Clerk
APPROVED AS TO FORM:
Alan Fenstermacher, City Attorney
26 8/1/2023
31 of 43 August 1, 2023, Item #10
w N
0 -,,
.i:,. w r 1 r-
1-,.,,
30.66 r ~~ <( U) 1 ~~ 1-N
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~9.00
12~1
I -7
TRASH ENCLOSURE II-ZS
_l 273SF
7'.Zt
37.7,
37.7'
l PATIO AREA JO.ZS
1,493 SF
=a
3L67
-45.:13
DINING/ KITCHEN
3,575 SF
~9-99
NOTES:
1. ALL DIMENSIONS IN FEET.
2. ALL DIM. TO OUTSIDE FACE
OF BUILDING.
3. TRASH ENCLOSURE NOT
SHOWN IN CORRECT
LOCATION, SHOWN FOR AREA
PURPOSES ONLY.
4. ALL INTERIOR WALLS NOT
SHOWN.
5. PATIOAREA: 1,493.tS.F.
6. DINING/KITCHEN AREA:
3574.lS.F.
7. STORAGE AREA: 212.0S.F.
8. TRASH ENCLOSURE AREA:
272.8S.F.
9. NOT TO SCALE.
10. TOTAL SQUARE FOOTAGE
OF PA TIO, DINING AND
STORAGE JS: 5,280 SF.
HAMBURGER
FACTORY
EXHIBIT A
NOV. 30, 2010
SHEET1 OF1
~ >-'• O"' >-'• ..-t-
> August 1, 2023, Item #10
EXHIBIT B
City of Poway
Public Works, Wastewater Division
FOG Program for Food Establishment Wastewater Discharge
Maintenance of Grease Removal Equipment (GRE)
The City of Poway's Industrial Wastewater Pretreatment Program (Chapter 13.05 of the
Poway Municipal Code) requires that GRE (Grease Removal Equipment: grease traps
and interceptors) be maintained in efficient operating condition by periodic removal of
the accumulated grease and solid food waste. The cleaning interval varies with the
amount of food preparation/clean-up activities and with the facility's housekeeping
procedures. This interval must be determined by each facility, but will be mandated by
the City when maintenance is found to be unsatisfactory. On the back of this page are
acceptable grease and oil levels for different size grease traps and interceptors.
Methods
Two maintenance methods are approved by the City of Poway:
1. Manual Removal of Grease. This consists of skimming out accumulated grease
and oil and removing solids that have settled at the bottom. None of the
removed material can be disposed of in the sewer or storm drain system.
Collected material can be put in a grease-recycling barrel if the barrel is
specifically designated to hold grease trap waste. If applicable, you must ensure
that your grease recycler or waste hauler accepts grease trap waste. Any of the
material that is disposed of in the trash must be in a container and may not be
over 50% liquid.
2. Pumping. You may hire a pumping service to empty your GRE. If you have a
grease interceptor, pump all grease, oil, and food matter from each chamber and
sample box including solids or sludge at the bottom of each chamber, specifically
at the bottom of all standpipes. The City requires a complete pump out at each
cleaning.
Additional Information
Bacterial products may help to reduce cleaning frequency. However, high
temperature, high or low pH level, sanitizers and other cleaning products render them
ineffective. Bacterial products may also cause the accumulated grease to "fluff-up" or
take more space in your GRE than if left alone. These products are not to be
substituted instead of Methods 1 or 2.
33 of 43 August 1, 2023, Item #10
Maintenance of GRE
Page 2
Enzyme products are never allowed because they keep grease and oil suspended in
the water, which causes them to pass through your grease trap or interceptor. They
may also contribute to the corrosion of your GRE.
IN ALL CASES, FACILITY OPERATORS ARE SOLELY RESPONSIBLE FOR PROPER
GRE MAINTENANCE.
Summary
GRE collects grease that would otherwise enter the sewer lines and cause blockages
and overflows. Methods 1 and 2 are the best ways of disposing grease. Bacteria may
reduce the frequency of manual cleaning or pumping , but it does not eliminate the need
for manual cleaning or pumping.
A record of the dates, methods and identity of the people/company cleaning GRE must
be kept at the facility and be available for review at any time. During facility inspections,
all GRE will be required to be opened and will be examined for proper maintenance.
The maximum grease and/or oil levels, including any solids or sludge that has
accumulated on the bottom of your grease trap or grease interceptor, are as follows :
Grease Trap/Grease Interceptor 25% Capacity Standard
The 25% rule is used to determine when a grease trap/grease interceptor (or oil
separator) is full.
"The total depth of the floating grease layer plus the settle-able solids layer cannot
exceed 25% of the total liquid depth of the interceptor."
Determination is made by taking a core sample with a Sludge Judge or Dipstick Pro.
The device is lowered slowly through the fats , oils, and grease layer all the way to the
bottom through the solids layer of the trap/interceptor and then capped or plugged and
slowly removed and set aside to rest. This allows the captured FOG to collect at the top
of the device while the solids settle at the bottom.
A measurement is taken, typically in inches, from the top of the FOG layer to the bottom
of the device, which represents the tanks total water column. Then the FOG and solids
layers are each measured, also typically in inches, and added together. If the combined
FOG and solids layers are equal to or greater than 25% of the total water column, then
the interceptor is considered full. At no time should there be visible grease or oil in the
sample box.
https://powaycity-my.sharepoint.com/personal/adenham_poway_org/Documents/Hamburger Factory/FOG Program.doc
34 of43 August 1, 2023, Item #10
Exhibit C
35 of 43 August 1, 2023, Item #10
FIRST AMENDMENT TO LEASE AGREEMENT BETWEEN THE CITY OF
POWAY AND HAMBURGER FACTORY, INC.
This FIRST AMENDMENT TO LEASE AGREEMENT BETWEEN THE CITY OF
POWAY AND THE HAMBURGER FACTORY, INC. ("First Amendment") is made and
entered into effect this 1st day of August, 2023, by and between the City of Poway, a
Municipal Corporation (the "City"), Hamburger Factory, Inc., a California Corporation (the
"Tenant"), and Cheeseburgers in Poway, LLC., a California Corporation (the "New
Tenant"), collectively referred to herein as the "Parties".
RECITALS
WHEREAS, City owns the property located at 14122 Midland Road, Poway,
California, commonly known as the Hamburger Factory (the "Hamburger Factory");
WHEREAS, City and Tenant entered into that certain AMENDED AND
RESTATED LEASE AGREEMENT (the "Lease") dated August 1, 2023, by which City
and Tenant established their respective roles and responsibilities in the leasing of the
Hamburger Factory;
WHEREAS, Tenant has represented it is selling its business to New Tenant, who
wishes to have the Lease transferred to it under the same terms and conditions; and
WHEREAS, this First Amendment is necessary to transfer responsibilities of the
Lease from Tenant to New Tenant.
NOW, THEREFORE, the Parties hereby agree as follows:
1. Contingent upon completion of the sale of Tenant's business to New Tenant,
all instances of Hamburger Factory, Inc., in the Lease shall be changed to Cheeseburgers
in Poway, LLC, with the exception noted below in Item 2.
2. Responsibility for all repayment requirements listed in Sections 4.03, 4.04,
and 13.01 shall remain with Tenant and shall not transfer to New Tenant.
3. Except as otherwise amended by this First Amendment, all other terms and
conditions of the Lease shall remain in full force and effect.
[Remainder of Page Left Intentionally Blank]
36 of 43 ATTACHMENT C August 1, 2023, Item #10
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed the day and year first above written.
City of Poway, a California
municipal corporation
Chris Hazeltine, City Manager
ATTEST:
Carrie Gallagher, CMC, City Clerk
37 of 43
Hamburger Factory, Inc., a California
corporation
Name and Title
Cheeseburgers in Poway, LLC., a
California corporation
Name and Title
APPROVED AS TO FORM:
Alan Fenstermacher, City Attorney
August 1, 2023, Item #10
Hamburger Factory Business Plan and Background of Josh Arbenz
The Hamburger Factory Family Restaurant is a Poway gem and institution, having been in
business approximately 40 years. That sort of longevity is extremely rare in the restaurant
business. The Hamburger Factory has a loyal following, a unique, large, and versatile space,
and employee loyalty almost unheard of (multiple employees with over 15, some over 20 years
on staff). The current ownership group has long been respected and established strong ties in
the community. This is a solid starting point for a new owner.
The restaurant took a big hit in 2020 due to COVID, as did most. On the positive side, revenues
bounced back to near pre COVID levels fairly quickly. Unfortunately, those numbers had been
fairly flat over the past several years. My plan is to leverage the existing strengths of
Hamburger Factory and implement simple yet tried and true changes to improve on an already
proven concept.
Cost Control
1. Reduce Controllable Prime Costs (mostly labor and food)
Goal: Reduce to industry standard: <65%
"'·
38 of 43 ATTACHMENT D August 1, 2023, Item #10
Labor: Despite revenue increases in both 2021 and 2022 coming out of COVID, Hamburger
Factory's labor cost jumped two points to 43.85% of revenue. An increase is expected given
continued minimum wage increases. That said, the industry standard is 28-33% ... my other 3
restaurants average 31 %. I am conservatively estimating we can lower the labor rate to 33% by
using our existing and proven model of budgeting labor based on projected sales.
While we do not plan to reduce the number of total staff, we do plan on increasing the efficiency
of existing staff. We will be investing in a new POS system (Toast) that will increase efficiency,
partly by implementing server handheld devices which will eliminate documenting customer
orders twice.
Food: On the food cost side, even though revenue has increased back to pre COVID levels,
food cost increased over 2 points. This is due in part to inflationary effects on food costs but
with diminishing ownership presence and oversight, waste/loss is likely up and portion control,
employee meals, and purchasing are likely less efficient.
In order to bring food costs in line with industry standards (25-30% of revenue), 1 of 3 things
needs to happen ... 1.) portions need to be reduced, 2.) prices need to increase, or 3.) better
prices need to be negotiated with food suppliers. Likely all 3 will need some adjustment and
that process has already begun. I have already negotiated improved pricing from my main food
supplier.
The menu at Hamburger Factory is exhaustive with dozens of items. I plan to focus on world
class burgers, fries, and great milkshakes, and certainly some variety for the whole family, but I
plan to eliminate 30% of the menu ... specifically the least popular and relevant items. Reducing
ingredients and menu items will decrease waste and spoilage and eliminate inefficiencies.
The following are practices utilized at my other stores that will be implement at Hamburger
Factory:
• Efficiently manage staffing levels. We are rigorous about this at my other stores. We
set a weekly budget for projected revenue and associated staffing. We do not staff at
higher than 35% of projected sales.
• Reduce food costs by pricing menu items 3 to 4x their cost. Modify food portions if
necessary to minimize price increases.
• Evaluate all food vendors and pricing on a regular basis.
Summary: Prime Costs at 65% or less are the makings of a financially healthy restaurant. I am
extremely confident this is achievable.
Revenue Growth
Goal: Maintain existing clientele, which is composed of a majority of senior citizens, while also
attracting younger patrons and young families with children, and grow catering and event
channels.
39 of 43 August 1, 2023, Item #10
Concept: I would describe the existing theme of Hamburger Factory as charming, historic,
americana. I believe a lot of people like it. I also believe there's room for improvement,
especially in attracting younger families and patrons. My plan is to continue to embrace
Poway's 'the City in the Country' motto along with the park's railroad theme, but a more modern
version of it. ..
• For starters, deep clean the restaurant. The bathroom is specifically notable but overall
the restaurant is not particularly clean. Cleaning up the restaurant will bring in or bring
back customers who have experienced this and stopped coming.
• Reduce the clutter: Hamburger Factory's interior is very charming, it's also a bit dated.
We will paint some of the side walls white and eliminate some of the wall decor that
doesn't apply so the space is less dark and busy ... not a total facelift, just a modernized
version of a classic. We will also conduct maintenance where improvements are
needed.
• Improve the staff, morale, and customer service. I used to come to this restaurant as a
kid. It had a great vibe because of friendly staff, fun music, and a great theme. They
have some great staff who genuinely care about the customer experience, but customer
service needs to be prioritized and constantly managed. I'm not sure that's happening
presently. Happy, energetic, accommodating staff brings back customers and this will
be highly prioritized.
• Modernize the menu. I plan to freshen up the menu by creating a new design with chef
inspired burgers, creative and unique dishes, proven menu items from our other stores,
while keeping the existing items the locals love.
• Improve digital presence: My other stores have professional and modern websites with
professional photography connected to our POS system for easy ordering for takeout or
delivery services. We also are highly engaged on social media platforms like lnstagram
and Facebook.
• Promote San Diego sports. I have no interest in becoming a sports bar, but I want
moms and dads who's kids play sports and that love San Diego sports to see
Hamburger Factory as a family friendly place to bring the kids, watch the Padres or their
favorite team on TV, and have a beverage while their kids play in the park or in the game
room . We will also upgrade the television's and sound system, not to be louder, but to
have better sound quality and improve the overall ambience.
• Network: Poway has a small town feel even though it isn't that small! Most of my high
school friends are back in Poway. When I talk to them about Hamburger Factory, most
of them don't go to Hamburger Factory anymore. All of them have kids on sports teams
and involved with school, church, etc. I will use my connections in Poway to sponsor
teams, do promotions with my existing network and work to grow it, and invite teams and
community groups to host their events and team parties at Hamburger Factory.
• I believe I will be able to generate buzz simply because it's a new owner of a Poway
institution. Being a Poway High grad will work in my favor (especially at the beginning)
with the community and regulars.
Summary: Revenue growth is more difficult to predict and plan for than controllable costs,
however, my experience has demonstrated that top line growth is tied to putting out a great
product. We place the majority of our resources and emphasis on 3 things:
40 of 43 August 1, 2023, Item #10
1. The People: we are in the hospitality business. We need to hire and keep exceptional
people that will represent our core values to guests every time they visit.
2. The Menu: The menu needs to look good on paper, in pictures, and on the calculator
(food cost)
3. The Space: Guests want to enjoy great food and service in a clean, attractive, and fun
environment.
Hamburger Factory's existing following is enough to sustain, but I believe bolstering the
customer base is very achievable given the changes and emphasis listed above.
Experience
After graduating Poway High in 1998 I attended Cal Poly, SLO, where I earned a bachelors in
Speech Communication and a Masters in Business Administration.
I spent nearly 10 years in the software business as a Salesperson, Sales Manager, and
Business Unit Manager. It was during this tenure that I began researching and exploring my
desire to get into the restaurant business.
In 2014, I quit my corporate job and purchased Stratford at the Harbor in Oceanside. I operated
that business as the day to day manager for five years. Since purchasing Stratford at the
Harbor our revenues have nearly doubled.
In 2018 I purchased Pier View Coffee Co. in Oceanside. I remodeled the interior and
modernized the concept and revenues have also nearly doubled since that time.
In 2021 I purchased Stratford Ct. Cafe in Del Mar and revenues are up nearly 50% in two years.
All 3 stores have either 4 or 4.5 stars on Yelp and Google. Here are their websites:
www.stratfordattheharbor.com
www.stratfordcourtcafe.com
www.pierviewcoffeeco.com
Our Core Values
The following are the core values we emphasize with existing staff and during the hiring
process: Integrity, Respect, Teamwork, Consistency, Accountability, Kaizen (constant
improvement), and Hospitality. My goal is that myself and each staff member lives out these
core values, and I believe these have been a major factor in the growth and health of our
business.
Scale
In order to effectively manage and oversee 3 restaurants and now 4, I have in place a talented
management team who will play a large role in ensuring Hamburger Factory has the resources
to succeed. I believe my industry experience and qualified team will put us in an excellent
position to ensure Hamburger Factory performs at its full potential.
41 of 43 August 1, 2023, Item #10
I am thrilled to be the new owner of Hamburger Factory. Because there exists so much history,
I see it not only as a great opportunity, but also a huge responsibility. The residents of Poway
should have a great restaurant space to bring family and friends, feel a warm and welcoming
environment, and experience a modern menu made up of old favorites and fun new flavors.
And most important. .. it's called the Hamburger Factory, so we will ensure they get a world
class burger!
I can't wait to get started.
42 of 43 August 1, 2023, Item #10
July 17, 2023
Stave Vaus
Mayor, City of Poway
13325 Civic Center Dr
Poway, CA 92064
RE: Transfer of Lease Agreement between the City of Poway and The Hamburger Factory
Dear Mayor Vaus,
It is my pleasure to write this letter of support of the transfer of lease agreement between the City of
Poway and The Hamburger Factory.
For the past 25+ years, The Hamburger Factory and its ongoing relationship with the City of Poway have
been the focal point and pride of the Spear and Casse family. After careful consideration of the mutual
interests of our family and the city, we have decided to sell our business to Mr. Josh Arbenz who will
acquire and operate it as Cheeseburgers in Poway, LLC d.b.a. Hamburger Factory. This decision was
considered very carefully to ensure that the legacy of The Hamburger Factory and its unique tie to the
City of Poway is both understood and carried into the future of the business. We are honored to have
been a part of such a wonderful community as both residents and business owners and are confident
that Mr. Arbenz will successfully carry the future of the business forward.
We fully support and appreciate the Council's approval to transfer the current lease agreement to Mr.
Arbenz to facilitate the successful sale transaction of The Hamburger Factory.
Sincerely,
1r71:-----·, /' ~ ,, ~ (~~:-:-:-L,,,, ----(.___.,.
David Casse
President, The Hamburger Factory Inc.
43 of43 ATTACHMENT E August 1, 2023, Item #10