Poway Auto Dealers Association - Lease AgreementSIXTH AMENDMENT TO PARKING FACILITY LEASE
This Sixth Amendment to the Parking Facility Lease is made and entered into
effective this 1St day of May 2018 (the "Effective Date"), by and between the City of
Poway, (the "City"), and the Poway Auto Dealers Association, LLC, a California Limited
Liability Company (the "Lessee").
RECITALS
1. The Poway Redevelopment Agency (the "Agency") and Lessee entered
into that certain "Parking Facility Lease," dated July 1, 2005 (the "Lease") by which
Agency and Lessee establish the terms and conditions for use of a parking facility on
real property that was, at that time, owned by the Agency located at 13875 Kirkham
Way, Poway, California (the "Facility") for a period of five years, and three additional
five-year options to extend the term; and
2. Agency and Lessee entered into that certain "First Amendment to Parking
Facility Lease," dated November 20, 2007, in order to amend the Lease to make minor
changes to the Lessee's requirement to provide security services at the Facility; and
3. Agency and Lessee entered into that certain "Second Amendment to
Parking Facility Lease," dated December 30, 2008, in order to amend the Lease to
allow the City of Poway (the "City") and Agency to use space in the Facility for
placement of a storage container housing the Red Cross emergency supplies; and
4. Agency and Lessee entered into that certain "Third Amendment to
Parking Facility Lease," dated April 9, 2010, in order to renew the Lease for an
additional five years and authorize the sublease of spaces within the Facility; and
5. Agency and Lessee entered into that certain "Fourth Amendment to
Parking Facility Lease" dated June 28, 2011, in order to reduce the number of leased
spaces to two -hundred and fifteen (215) parking spaces, which includes any subleased
space; and
6. On February 1, 2012, the Agency was dissolved by operation of law, and,
pursuant to California Health and Safety Code section 37173 the City of Poway became
the Successor Agency to the former Agency; and
7. As a result of the action taken prior to the dissolution of the Agency on
February 1, 2012, and in accordance with Health and Safety Code section 37173, the
Leased Premises and the Lease have been assigned to the Successor Agency; and
2
8. Successor Agency and Lessee entered into that certain "Fifth
Amendment to Parking Facility Lease" dated July 1, 2015, in order to extend the term
of the lease for five years beginning July 1, 2015; and
9. On December 8, 2016, the City purchased the Facility from the Successor
Agency; resulting in the Lease being assigned to the City, as affirmed in this Sixth
Amendment; and
10. Recital A of the Lease provides in part that the Agency plans to construct
a Parking Facility consisting of approximately 677 enclosed automobile parking spaces
and 41 unenclosed automobile parking spaces (the "Parking Facility") on that certain
real property owned by the Agency and located at 13875 Kirkham Way, Poway,
California (the "Site"), which was in fact constructed; and
11. The City intends to lease a portion of the westerly landscape area along
Kirkham Way of the Site for a cell tower. The area to be used will not result in the loss
of any of the 41 unenclosed automobile parking spaces. The City will coordinate with
the Lessee during the construction to the degree possible to ensure that there is no
disruption to the business activities of the Lessee; and
12. Section 3.2 of the Lease provides that the rent payable for each Lease
Year (the "Rent") shall be the sum of One Dollar ($1.00). Rent payments for each
Lease Year shall be made on or before the first day of each Lease Year; and
13. This Sixth Amendment To Parking Facility Lease (the "Sixth
Amendment") is necessary to amend the term of the LEASE to allow for the
modification of the Rent, to modify the term of the lease, to allow for the option of two
additional five (5) year periods beginning July 1, 2025 and to modify the use of
unenclosed area of the Parking Facility to allow the installation of a cell tower and other
appurtenances.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Section 1. Recital A of the LEASE is hereby replaced in its entirety to read
as follows:
The Agency constructed a Parking Facility (the "Facility") consisting of 718
automobile parking spaces, including 677 enclosed automobile parking
spaces located within the facility and 41 unenclosed automobile parking
spaces located outside the facility on that certain real property owned by the
Agency and located at 13875 Kirkham Way, Poway, California (the "Site").
The Site is shown on the Site Map attached to the original Lease as Exhibit
3
"A" and legally described in the legal description attached thereto as Exhibit
"B," both of which are incorporated herein by reference. The scope of
development of the Parking Facility is attached hereto as Exhibit "C" and
incorporated herein.
Section 2. The Lease is hereby amended to substitute the City of Poway, a
municipal corporation ("City") into The Lease for the Poway Redevelopment Agency
("Agency") to reflect the purchase of the Site by the City and assignment of the Lease
from the Agency to the City. All references to the "Agency" are hereby amended to
"City"
Section 3. Section 1 of the Lease, entitled "Lease of Parking Facility," is
hereby replaced in its entirety to read as follows:
City hereby leases the Parking Facility to the Lessee, for the term and upon the
terms and conditions set forth in this Lease, with the exception of those spaces
utilized by the Red Cross, as noted in the Second Amendment To Parking
Facility Lease, and with the exception of a portion of the Site generally located
in the landscape area along Kirkham Way as shown as Exhibit D — Potential Cell
Tower Location, to the Lease.
Section 4. Section 2.2 of the Lease, entitled "Expiration," is replaced to read as
follows:
The Initial Lease Term shall be from the period of the Effective Date through
June 30, 2025 (the "Initial Lease Term").
Section 5. Section 2.3 of the Lease, entitled "Option to Renew," is replaced in
its entirety to read as follows:
Lessee shall have the right to renew this Lease for iwo (2) additional periods of five
(5) years beginning July 1, 2025 by delivering to Lessor written notice of Lessee's
intent to renew not less than three (3) months prior to the expiration of the Lease
Term, or of the second extension period. Any such renewal shall be on the same
terms of the conditions of this Lease, except as amended in Section 3.2 of the
Lease.
Section 6. Section 3.2 of the Lease, entitled "Rent," is replaced in its entirety
to read as follows:
The rent payable for each Lease Year (the "Rent") shall be the sum of Three
Thousand Two Hundred Dollars ($3,200) per month. Rent payments for each
Lease Year shall be made quarterly in the amount of $9,600, on or before the first
day of each quarter. The initial quarterly payment will be prorated from the
Effective Date through June 30, 2018 and the first payment shall be due July 1,
2018. If the first Option to Renew is exercised in 2025, Rent shall increase to
Three Thousand Five Hundred Dollars ($3,500) per month. If the second Option
to Renew is exercised in 2030, Rent shall increase to Three Thousand Eight
Hundred Dollars ($3,800) per month and as shown in Exhibit E - Rent Schedule
attached to the LEASE.
Section 7. "Exhibit D — Potential Cell Tower Location" is hereby added the Lease,
a copy of which is attached to this Sixth Amendment as Attachment "1' .
Section 8. "Exhibit E — Rent Schedule" is hereby added the LEASE, a copy of
which is attached to this Sixth Amendment as Attachment "2."
Section 9. Except as otherwise amended by this Sixth Amendment, all other
terms and conditions of the Lease, as modified by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this SIXth
Amendment to be executed the day and year first above written.
CITY OF POWAY
Tina White, City Manager
Approved as to Form
Alan Fenstermacher, City Attorney
POWAY AUTO DEALERS
ASSOCIATION, LLC
Mark AbeKyo, President
5
Attachment 1 to SIXTH AMENDMENT
Exhibit D
Potential Cell Tower Location
Dashed area indicates potential location to be used by the City of Poway for Cell Tower
A
Attachment 2 to SIXTH AMENDMENT
Exhibit E
Rent Schedule
• Rent for the Period of the Effective Date through June 30, 2025 shall be $3,200
per month.
• Rent for the First Rent Renewal Period of July 1, 2025 — June 30, 2030 shall be
$3,500 per month.
• Rent for the Second Rent Renewal Period of July 1, 2030 -w June 30, 2035 shall
be $3,800 per month.
FIFTH AMENDMENT TO PARKING FACILITY LEASE
This FIFTH AMENDMENT to the PARKING FACILITY LEASE is made and entered into
effective this IST day of July, 2015, by and between the CITY OF POWAY, solely in its capacity as
successor agency to the POWAY REDEVELOPMENT AGENCY (the "SUCCESSOR AGENCY"),
and POWAY AUTO DEALERS ASSOCIATION, LLC, a limited liability company (the
"LESSEE").
111B[y110R
1. The POWAY REDEVELOPMENT AGENCY (the "AGENCY") and LESSEE
entered into that certain "PARKING FACILITY LEASE," dated July 1, 2005 (the "LEASE") by
which AGENCY and LESSEE establish the terms and conditions for use of a parking facility on real
property owned by the Agency located at 13875 Kirkham Way, Poway, California (the
"FACILITY"); and
2. AGENCY and LESSEE entered into that certain "FIRST AMENDMENT TO
PARKING FACILITY LEASE," (the "FIRST AMENDMENT") dated November 20, 2007, in order
to amend the LEASE to make minor changes to the Lessee's requirement to provide security services
at the FACILITY; and
3. AGENCY and LESSEE entered into that certain "SECOND AMENDMENT TO
PARKING FACILITY LEASE," (the "SECOND AMENDMENT") dated December 30, 2008, in
order to amend the LEASE to allow the CITY OF POWAY (the "CITY") and AGENCY to use
space in the FACILITY for placement of a storage container housing the Red Cross emergency
supplies; and
4. AGENCY and LESSEE entered into that certain "THIRD AMENDMENT TO
PARKING FACILITY LEASE," (the "THIRD AMENDMENT") dated April 9, 2010, in order to
renew the LEASE for an additional five years and authorize the sublease of spaces within the
FACILITY; and
5. AGENCY and LESSEE entered into that certain "FOURTH AMENDMENT TO
PARKING FACILITY LEASE" (the "FOURTH AMENDMENT") dated June 28, 2011, in order to
reduce the number of leased spaces to two -hundred and fifteen (215) parking spaces, which includes
any subleased space; and
6. On February 1, 2012, the AGENCY was dissolved by operation of law, and, pursuant to
California Health and Safety Code section 37173 the CITY OF POWAY became the SUCCESSOR
AGENCY to the former AGENCY; and
7. As a result of the action taken prior to the dissolution of the AGENCY on February 1,
2012, and in accordance with Health and Safety Code section 37173, the LEASED PREMISES and the
LEASE have been assigned to the SUCCESSOR AGENCY; and
8. Section 2.3 of the LEASE provides that the LESSEE may renew the LEASE for two
additional periods of five (5) years by delivering to the SUCCESSOR AGENCY (as Lessor) written
notice of LESSEE'S intent to renew not less than (3) months prior to the expiration of the LEASE
TERM; and
9. On March 17, 2015, LESSEE provided the SUCCESSOR AGENCY with written
notice of LESSEE's intent to renew the LEASE for an additional period of five (5) years as provided
by Section 2.3 of LEASE; and
10. This FIFTH AMENDMENT TO PARKING FACILITY LEASE (the "FIFTH
AMENDMENT") is necessary to amend the term of the LEASE for an additional five (5) year period
beginning July 1, 2015.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Section 1. Section 2.2 of the LEASE, entitled "Expiration," is amended to read as
follows:
If not earlier terminated, the initial Lease Term shall be for a period of five (5) years
from the Lease Commencement Date. In 2010 the Lease Term was extended for a second
term of five (5) years, and in 2015 the Lease Term was extended for a third term of five (5)
years, in each case by Lessee's exercise of its options to renew as allowed herein. The
expiration of the initial five (5) year term, the second five (5) year term, and the third five (5)
year term, plus the term of any subsequent renewal period (collectively, the "Lease Term')
shall be the "Expiration Date".
Section 2. Section 2.3, entitled "Option to Renew", of the LEASE is amended to read as
follows:
Lessee shall have the right to renew this Lease for one (1) additional period of five (5)
years by delivering to Lessor written notice of Lessee's intent to renew not less than three (3)
months prior to the expiration of the Lease Term, or of the second extension period. Any
such renewal shall be on the same terms of the conditions of this Lease.
Section 3. Except as otherwise amended by this FIFTH AMENDMENT, all other terms
and conditions of the LEASE, as modified by the FIRST AMENDMENT, the SECOND
AMENDMENT, the THIRD AMENDMENT, and the FOURTH AMENDMENT shall remain in full
force and effect.
(Signatures on Following Page)
IN WITNESS WHEREOF, the parties hereto have caused this FIFTH AMENDMENT to be
executed the day and year first above written.
CITY OF POWAY AS SUCCESSOR
AGENCY
By �rJ " `" `�� ► .
,,^ , Daniel Singer, Executive Director
APPROVED AS TO FORM:
Morg .Fo y, ity Att ney
POWAY AUTO DEALERS
ASSOCIATION, LLC
By
Mark Abel op, ident
FOURTH AMENDMENT TO PARKING FACILITY LEASE
This FOURTH AMENDMENT to the PARKING FACILITY LEASE is made and entered
into effective this 28`h day of June, 2011, by and between the POWAY REDEVELOPMENT
AGENCY, a public body, corporate and politic (the "AGENCY "), and POWAY AUTO DEALERS
ASSOCIATION, LLC, a limited liability company (the "LESSEE ").
RECITALS
1. AGENCY and LESSEE entered into that certain "PARKING FACILITY LEASE,"
dated July 1, 2005 (the "LEASE ") by which AGENCY and LESSEE establish the terms and
conditions for use of a parking facility on real property owned by the Agency located at 13875
Kirkham Way, Poway, California (the "FACILITY"); and
2. AGENCY and LESSEE entered into that certain "FIRST AMENDMENT TO
PARKING FACILITY LEASE," (the "FIRST AMENDMENT") dated November 20, 2007, in order
to amend the LEASE to make minor changes to the Lessee's requirement to provide security services
at the FACILITY; and
3. AGENCY and LESSEE entered into that certain "SECOND AMENDMENT TO
PARKING FACILITY LEASE," (the "SECOND AMENDMENT") dated December 30, 2008, in
order to amend the LEASE to allow the CITY OF POWAY (the "CITY ") and AGENCY to use
space in the FACILITY for placement of a storage container housing the Red Cross emergency
supplies; and
4. AGENCY and LESSEE entered into that certain "THIRD AMENDMENT TO
PARKING FACILITY LEASE," (the "THIRD AMENDMENT ") dated April 9, 2010, in order to
renew the LEASE for an additional five years and authorize the sublease of spaces within the
FACILITY; and
5. Section A of the LEASE describes the parking facility, which is the leased premises,
to include seven - hundred and eighteen (718) automobile parking spaces; and
6. AGENCY and LESSEE now wish to amend Section A of the LEASE to reduce the
number of leased spaces to two- hundred and fifteen (215) spaces, which includes any subleased
space; and
7. Section 27.11 of the LEASE provides that the LEASE can be amended by a written
agreement of the parties.
8. This FOURTH AMENDMENT TO PARKING FACILITY LEASE (the "FOURTH
AMENDMENT ") is necessary to amend the number of leased automobile parking spaces included in
Section A of the LEASE.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Section 1. Section A of the LEASE is amended to read as follows:
A. The Agency constructed a Parking Facility (the "Facility ") consisting of 718
automobile parking spaces, including 677 enclosed automobile parking spaces located within
the facility and 41 unenclosed automobile parking spaces located outside the facility on that
certain real property owned by the Agency and located at 13875 Kirkham Way, Poway,
California (the "Site "). Of the 718 automobile parking spaces available at the Facility,
Lessee is authorized to use up to 215 spaces or 30% of the Facility. The Site is shown on the
Site Map attached hereto as Exhibit "A" and legally described in the legal description
attached hereto as Exhibit `B ", both of which are incorporated herein by reference. The
scope of development of the Parking Facility is attached as Exhibit "C" and incorporated
herein.
Section 2. Except as otherwise amended by this FOURTH AMENDMENT, all other
terms and conditions of the LEASE and FIRST, SECOND, AND THIRD AMENDMENTS shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this FOURTH AMENDMENT
to be executed the day and year first above written.
POWAY REDEVELOPMENT AGENCY
Riley, Execia4ve Director
APPROVED AS TO FORM:
1bWi),-Az,
Morg L. of Age cy General Counsel
POWAY AUTO DEALERS
ASSOCIATION, LLC
By AeqK
Mark Abel o resident
Lj
THIRD AMENDMENT TO PARKING FACILITY LEASE
This Third Amendment to the Parking Facility Lease ( "Lease ") is entered
into this day of , , 2010 by, and between the POWAY
REDEV LOPMENT AGENCY ('Agency ") and POWAY AUTO DEALERS
ASSOCIATION, LLC, a California limited liability company ( "Lessee ").
WHEREAS, Agency and Lessee have entered into a Lease for a parking
facility on real property owned by the Agency, and located at 13875 Kirkham
Way, Poway, California (the "Site "); and
WHEREAS, section 2.3 of the current Lease provides that the Lessee may
renew the Lease for three additional period of five (5) years by delivering to
Lessor written notice of Lesse's intent to renew not less than three (3) months
prior to the expiration of the Lease term; and
WHEREAS, the parties wish to renew the Lease term for an additional 5
years as provided by section 2.3; and
WHEREAS, the parties wish to authorize the sublease of the parking
facility for the storage of used vehicles, motorcycles and motor homes; and
WHEREAS, section 27.11 of the Lease provides that the Lease can be
amended by a written agreement of the parties.
NOW, THEREFORE, the parties agree to amend the Lease as follows:
Section 2.3 of the Lease, entitled "Option to Renew" is amended to
read as follows:
Lessee shall have the right to renew this Lease for two additional periods
of five (5) years by delivering to Lessor written notice of Lessee's intent to
renew not less than three (3) months prior to the expiration of the Lease
Term. The first extension period begins July 1, 2010. Any such renewal
shall be on the same terms and conditions as this Lease.
2. Section 11 of the Lease, entitled "Assignment and Subletting" is
amended to read as follows:
Lessee shall not sell, assign, sublease, or otherwise transfer this Lease or
any right therein, nor make any total or partial sale, assignment, sublease,
or transfer in any other mode or form of the whole or any part of the
Parking Facility (each of which events is referred to in this Lease as an
"Assignment "), without prior written approval of Agency, which approval
may be given or withheld in the Agency's sole and absolute discretion, but
will not be unreasonably withheld. Any purported assignment without the
written consent of the Agency shall render this Lease absolutely null and
9 0
void and shall confer no rights whatsoever upon any purported assignee
or transferee.
The Agency agrees to authorize the sublease of the parking facility for the
storage of used vehicles, motor homes and motorcycles. Sublessees
must comply with all other terms and conditions contained within the
original lease.
Lessee shall secure the written approval of the Agency for each sublease
agreement executed.
3. All other terms and conditions in the original Lease remain in full
force and effect.
IN WITNESS WHEREOF, the Parties have caused this Amendment to be
signed and executed the day and year first above written.
Poway Redevelopment Agency Poway Auto Dealers Association, LLC
APPROVED AS TO FORM:
M
O&ACA-0 J-00,�.
Lisa A. Foster
Agency General Counsel
2
By:
Mark Abelk
President
SECOND AMENDMENT TO PARKING FACILITY LEASE
(Storage of Emergency Supplies)
This Second Amendment - to the Parking Facility Lease between the
POWAY REDEVELOPMENT AGENCY ( "Agency "), a public body, corporate and
politic, and POWAY AUTO DEALERS ASSOCIATION, LLC, a C lifomia limited
liability company ( "Lessee ") is entered into this SM day of Dember
2008.
WHEREAS, Agency and Lessee have entered into a Lease for the use by
the Lessee of the Agency's Parking Facility located at 13875 Kirkham Way,
( "Facility "); and
WHEREAS, the current Lease between the parties was entered into in
July 2005, and is for five year term, with three five -year options to renew; and
WHEREAS, the parties entered into a First Amendment to the Lease in
2007 to make minor revisions to the Lessee's requirements to provide security
services for the Facility; and
WHEREAS, the City of Poway ( "City ") has entered into an agreement with
the State of California and San Diego /Imperial Counties Chapter of the American
Red Cross ( "Red Cross "), in which the City agreed to make the Facility available
to the Red Cross for the purpose of storing equipment and supplies to be used to
provide emergency services to victims of disaster in the community; and
WHEREAS, the parties wish to amend the terms of the Lease to allow the
City /Agency to use, space in the Facility for placement of a storage container
housing the Red Cross emergency supplies; and
WHEREAS, because the storage of these supplies at the Facility is for the
public benefit, and in consideration for the indemnification to be provided to
Lessee .by the City /Agency as outlined below, the parties agree that the use of
the Facility to store the supplies will be at no cost to either party.
NOW, THEREFORE, the parties agree to amend the Parking Facility
Lease as follows:
Subsection 4.6 entitled "Storage of Emergency Supplies" is added
to Section 4, of the Lease, entitled "Use of the Parking Facility ", to
read as follows:
The City of Poway /Poway Redevelopment Agency is authorized under this
Lease to use spaces 127, 128 and 129 of the Facility (or any other area of
the Facility, as agreed upon in writing by the parties) for placement of a
seatainer containing emergency equipment and supplies belonging to the
0-400 - f0
San Diego Imperial Counties Chapter of the American Red Cross ( "Red
Cross "). The City's obligation to store the emergency supplies is
governed by a separate agreement between the City, the State of
California, and the Red Cross. Representatives from the City /Agency and
Red Cross shall be entitled to access the Facility in order to manage or
use the emergency equipment and supplies. Lessee shall have the right
to terminate the City /Agency's use of the Facility for storage of the
emergency supplies, by providing City /Agency with 90 days written notice
of termination. City and Agency shall hold Lessee and its officers,
employees and agents harmless from and against any cost, loss,
expense, injury, claim, action, cause of action, suit or liability resulting
from, arising out of, or arising in connection with the use of the Facility by
the City /Agency for storage of emergency supplies, except for such
matters which result from the negligence or willful misconduct of the
Lessee or its officers, employees or agents.
2. All other terms and conditions in the original Lease remain in full
force and effect.
IN WITNESS WHEREOF, the Parties have caused this Second
Amendment to be signed and executed the day and year first above
written.
Poway Redevelopment Agency/
City of Poway
By:
Rod Gould
Executive Director /City Manager
APPROVED AS TO FORM:
By: c. 0 clao-�
Lisa A. Foster
Agency General Counsel /City Attorney
Poway Auto Dealers' Association,
LLC
By: 4ee —
Mar b Coop
President
a
0 6
FIRST AMENDMENT TO PARKING FACILITY LEASE
This First Amendment to the Parking Facility Lease ( "Lease ") is entered
into this .21,,y day of 2007 by and between the POWAY
REDEVELOPMENT AGENCY ( "Agency ") and POWAY AUTO DEALERS
ASSOCIATION, LLC, a California limited liability company ( "Lessee ").
WHEREAS, Agency and Lessee have entered into a Lease for a parking
facility on real property owned by the Agency, and located at 13875 Kirkham
Way, Poway, California (the "Site "); and
WHEREAS, section 9 of the current Lease provides that the Lessee must
contract for guard services to monitor the parking facility, and that the services
must consist, at a minimum, of a single unarmed guard; and
WHEREAS, the parties wish to amend section 9 of the Lease to allow the
Lessee to provide security services for the parking facility by using an electronic
security system, rather than guard services; and
WHEREAS, section 27.11 of the Lease provides that the Lease can be
amended by a written agreement of the parties.
NOW, THEREFORE, the parties agree to amend the Lease as follows:
1. Section 9 of the Lease, entitled "Security Services" is amended to
read as follows:
Lessee agrees to provide, at its sole expense, security services for the
Parking Facility consisting of an electronic security system, of a type
approved by the Agency and the San Diego County Sheriffs Department.
Lessee and Agency shall meet on a quarterly basis to review the
effectiveness of the security system, and the security needs of the facility.
Lessee shall be solely responsible for any fines or fees associated with
false alarms at the facility. In the event that Lessee fails to provide
security services, cancels security services, or reduces the security
services to a level below the level acceptable to the Agency, Lessee will
be in breach of the Lease, and Agency may terminate the Lease at its sole
discretion.
2. All other terms and conditions in the original Lease remain in full
force and effect.
IN WITNESS WHEREOF, the Parties have caused this Amendment to be
signed and executed the day and year first above written.
?o
a
Poway Redevelopment Agency
By:
Rod Gould
Executive Director
APPROVED AS TO FORM:
Lisa A. Foster
Agency General Counsel
Poway Auto Dealers Association,
LLC
By: Ate
Mark Ikop
President
• 0
Auto Storage Facility (13875 Kirkham Way)
Management Plan
By and between
Poway Redevelopment Agency
and
Poway Auto Dealers Association LLC
The Poway Auto Dealers Association, LLC (the "Association "), has entered into a
Lease (the "Lease ") with the Poway Redevelopment Agency (the "Agency "), for the use of an
auto storage facility located at 13875 Kirkham Way in the Poway Business Park (the
"Facility "). As a tenant of the Agency -owned Facility, the Lease requires a mutually
acceptable Management Plan, which outlines the plans, procedures, and methods for
managing the Facility. The Agency and the Association agree to the following terms and
conditions and, pursuant to the Lease, the Association will remain in full compliance with the
terms of the Management Plan at all times. Material failure to do so will constitute a default
of the Lease terms, grounds for early Lease termination. The Agency and Association will
review the conditions and requirements contained in the Management Plan annually during
the term of the Lease. The purpose of the annual review is to assess the needs of both parties
and make modifications or revisions necessary for continued operation of the Facility.
1. Use of Facility
1.1 Point -of -Sale. California Sales and Use Tax Law requires a seller's
permit for each sales location. Before conducting sales at the Facility, the Association shall
first give notice to the California State Board of Equalization giving the address of the
Facility as a temporary sales location using the appropriate Board of Equalization form.
Thereafter, the Association shall separately state and report sales made at the Facility. Section
1802 of the Uniform Local Sales and Use Tax Regulations states that the place of sale is the
location where the principal negotiations are carried on and that it is immaterial that the order
must be forwarded elsewhere for acceptance, approval of credit, shipment, or billing.
1.2 Parking. Vehicles, including those stored inside the Facility, those
temporarily stored in the 41 parking spaces outside of the enclosed area of the Facility, those
belonging to employees parking temporarily on site, those belonging to employees of
contracted services, and those of customers attending auto sales events shall not be parked in
any manner that restricts access to the Facility, or hinders the flow of vehicle traffic
throughout the Facility, nor shall any such vehicles be parked on any public streets located
within the Poway Business Park.
1.3 Sales Events. As stated in the Lease, sales events will be allowed at
the Facility no more than four (4) times per year, with prior authorization from the Agency
and City of Poway (the "City ") through application by the Association for a Temporary Use
Permit (TUP). Sales events shall only be held during the weekend hours of Friday at 3:00
p.m. through Sunday at 9:00 p.m. and shall adhere to all City codes, ordinances, and
regulations. Sales events, if scheduled for a weekend immediately preceding or following a
holiday, may be eligible to extend the hours of operation to include the recognized holiday if
the actual holiday falls on either a Friday or Monday. Extended sales events to holidays is
subject to written request through the TUP process and Agency approval. The holidays for
possible sales event extension are as follows.
President's Day
Labor Day
Memorial Day
4d' of July
Included with the TUP application, the Association shall provide the Agency with a parking
plan to accommodate the vehicle inventory, employees staffing the sales event, anticipated
customer parking during the event, and the provision of Americans with Disabilities Act
(ADA) accessible sales and restroom areas. The TUP application shall also include direct
contact information for the Association members staffing the event.
1.4 Enclosed Parking Area. The enclosed parking area within the
Facility is for use by members of the Association for purposes of storing vehicle inventory
only. Parking spaces are to be allocated equally among all members according to the terms of
the Lease. The enclosed parking area may be considered as customer vehicle display for
purposes of accompanied site visits by authorized employees of the Association during
reasonable business hours and during sales events authorized by the Agency. At no time shall
any members of the Association or authorized services restrict access to the enclosed areas of
the Facility or hinder use of the Facility by any other members of the Association, the City,
and the Agency.
1.5 Unenclosed Parking Area. The Facility's unenclosed parking area
adjacent to Kirkham Way is to be used for the temporary unloading and storing of vehicles
according to the terms of the Lease. Temporary use of this area means vehicles will not be
stored in this area for more than eight (8) hours, and in no case shall any vehicle inventory be
held in this area over night -time hours, between the hours of 9:00 p.m. and 6:00 a.m. daily,
seven (7) days a week. The unenclosed area may be used for customer parking during
authorized sales events. The unenclosed area may be used for auto dealers located within
Poway who are not participating in the Poway Auto Dealers Association. At no time shall any
members of the Association or authorized services restrict access to the unenclosed areas of
the Facility or hinder use of the Facility by any other members of the Association, the City,
and the Agency.
1.6 Security Building. The Agency shall provide a security station where
designated, outside of the enclosed parking area, adjacent to Kirkham Way. The use of this
building is authorized by the Agency for security services only, including inventory-
monitoring systems, and other uses incidental to the Association's use of the Facility. The
Association shall not use this building for storage of landscape maintenance equipment or any
other items or equipment not directly associated with the security of the Facility. Use of the
security building as a sales office may be granted as part of an authorized sales event if the
proposed use(s) of the security building is specified, outlined, and included as part of an
annual Temporary Use Permit application for auto sales events. Violations of this section,
including the termination of security services required by the Lease or Management Plan may
result in the Agency's removal of the Security Building from the Facility or prohibiting the
Association from its use.
1.7 Violations and Sanctions. The Association shall provide to the
Agency accurate and current contact information for each member of the Association and the
preferred contact person(s) to notify in the event of any violations. Violations of the use of the
Facility, including the unenclosed (temporary) parking area, according to the terms of this
Management Plan, the Lease, Temporary Use Permits granted to the Association, Poway
Municipal Code, or terms of the Operating Agreement which relate directly to use of the
Facility, shall result in no less than the following sanctions by the Agency for failure to
maintain, secure, operate, and manage the Facility as agreed. Prior to the imposition of the
first sanction within any consecutive three hundred sixty-five (365) calendar day period,
reasonable efforts shall be made by the Association to resolve the violation to the Agency's
satisfaction, and the Agency shall allow a reasonable period of time for such resolution to
occur. The Agency reserves the right to impose sanctions for any violation it believes in its
sole and absolute discretion warrants immediate action or if prior repetitive violations are
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prevalent. Escalating sanctions will occur, regardless of the offending members involvement
with the preceding violation. The Agency reserves the right to terminate the Lease and evict
the Association either in accordance with the terms of the Lease or the terms of the
Management Plan at any time should any violation warrant such action, which is beyond the
routine sanctions specified below. At no time will the procedures and authority identified in
Section 4.5, Internal Dispute Resolution, hold precedence over the Agency's right to enforce
all terms and conditions and impose sanctions as needed for violations of the terms of the
Operating Agreement. Lease Agreement, and Management Plan.
First Violation: Written notice of violation and warning to the offending member of the
Association and the Association's identified contact person, with a copy of notice provided to
all members of the Association.
Second Violation: Written notice of violation and monetary fine of $100 to the violating
member of the Association, with a copy of notice provided to the Association's identified
contact person and all members of the Association. The notice of violation will include a
second warning issued to the Association regarding continued violations of its use of the
Facility and continued violations will result in the temporary removal of the offending
member of the Association for a period of one hundred eighty (180) calendar days.
Third Violation: Written notice of violation and monetary fine of $250 to the violating
member of the Association, with a copy of notice provided to the Association's identified
contact person and all members of the Association, and a removal of the violating member of
the Association from the Facility for a period of one hundred eighty (180) calendar days. The
notice of violation will include a third and final warning to the Association indicating
additional violations will result in the closure of the Facility.
Fourth Violation: Written notice of violation to all members of the Association, termination
of the Lease, and closure of the Facility within sixty (60) calendar days.
If such violations do not occur within three hundred sixty -five (365) calendar days of the
preceding violation, the sanction assessed to the member(s) of the Association will not
escalate. Failure to pay any fines assessed to members of the Association within thirty (30)
calendar days will constitute an additional violation.
1.8 Subletting Spaces. Only the Association is authorized to sublet
parking spaces within the enclosed area of the Facility under terms and conditions specified in
the Lease. A sub lessee, upon entering into a sublease agreement, shall be bound by the terms
of the Lease, the portions of the Operating Agreement relevant to them, and Management
Plan. Violations by a sub lessee will result in sanctions to the sub lessee and to the
Association, as specified in the sanctions outlined in Section 1.7.
2. Security
2.1 Security Services. The Association's provision of security services is
a requirement of the Lease. The Association shall provide to the Agency the name and direct
contact information for the security company hired to install electronic security equipment in
the Facility. In addition, the Association shall provide the Agency with the details regarding
the security plan and procedures that will be used for monitoring the Facility, both enclosed
and unenclosed (temporary) areas. Any proposed changes in security services shall be
provided to the Agency in writing no less than seven (7) calendar days prior to the action or
change.
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2.2 Access Control. The Association shall secure the Facility through
controlled access. Accordingly, only the Association members, property managers, security
service employees, the City, and the Agency will be provided with necessary keys, security
cards, or access codes necessary to enter the Facility. No other persons, companies, or
organizations shall be provided with the ability to access the Facility.
2.3 Facility Access to Public. The Association is allowed to grant access
to their employees requiring access to the Facility for business operations only, including
vehicle unloading and loading, vehicle inspections, vehicle washing, and security services.
All other access, beyond that of the Agency entering as owner of the Facility, is restricted to
customers accompanied by employees of the Association on official business or during
authorized sales events open to the public. No other public access is permitted at any time.
2.4 Facility Access to Agency. According to the terms of the Lease, the
Agency reserves the right to enter and inspect the Facility. Such access will normally occur
during reasonable business hours, with prior notice provided to the Association. In the event
of an emergency, maintenance conditions requiring immediate resolution, or violations of the
terms of the Lease, Operating Agreement, or Management Plan, the Agency reserves the right
to enter the Facility without prior notice.
3. Support Services.
3.1 Vehicle Washing. Rinsing, washing and detailing of vehicles
( "washing ") is an allowed activity within the enclosed areas of the Facility. Such washing will
occur during reasonable business hours, will not restrict access to the Facility or hinder use of
the Facility by any members of the Association, the City, and the Agency. Washing of
vehicles will be conducted using deionized water, with measures in place at the time of
washing to reduce the level of excess runoff to the storm drain system. The Association and
its members shall at all times comply with the City's Standard Urban Storm Water Mitigation
Plan Ordinance and all other local, regional, state and federal pollutant discharge
requirements. The Association shall provide to the Agency the name and direct contact
information for any person or company hired to perform vehicle washing services. Vehicle
washing service providers, their operating hours and procedures, shall be provided to the
Agency in writing no less than seven (7) calendar days prior to the Association taking
occupancy of the Facility. The Association will provide the Agency with written verification
of all services providers, including any changes in vehicle washing service providers, on no
less than a quarterly basis. Quarterly reporting concerning service providers is to coincide
with the scheduled review of security services specified in Section 3.4.
3.2 Landscape Maintenance. The Association's provision of landscaping
maintenance services is a requirement of the Lease. The Association shall provide to the
Agency the name and direct contact information for the landscape maintenance company
hired to maintain the landscaped areas of the Facility. Landscape maintenance shall occur
during reasonable business hours. Landscape maintenance service providers, their operating
hours and procedures, shall be provided to the Agency in writing no less than seven (7)
calendar days prior to the Association taking occupancy of the Facility. The Association will
provide the Agency with written verification of all services providers, including any changes
in landscape maintenance service providers, on no less than a quarterly basis. Quarterly
reporting concerning service providers is to coincide with the scheduled review of security
services specified in Section 3.4.
3.3 Property Maintenance. The Association's continued property
maintenance of the Facility is a requirement of the Lease. The Association shall provide to the
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Agency the name and direct contact information for property maintenance service hired to
maintain the enclosed and unenclosed parking areas of the Facility, including paved surfaces,
walls, gates, lighting, buildings, any infrastructure, and trash and debris removal. Property
maintenance shall occur according to the terms of the Lease during reasonable business hours.
Changes in property maintenance service providers, their operating hours and procedures,
shall be provided to the Agency in writing no less than seven (7) calendar days prior to the
action or change occurs. In the event an action has occurred by the service provider or its
employee warranting immediate termination, verbal notification shall be made to the Agency
within the forty-eight (48) hours following the action followed by a written notification to the
Agency within ten (10) calendar days.
3.4 Security Monitoring. In addition to the terms and conditions
specified in the Lease and Section 2 of the Management Plan, the Association shall continue
to provide security services in a manner and frequency mutually agreed upon by the
Association and Agency. Appropriate security levels will be reviewed and approved by the
Association and Agency no less than quarterly on or around the following dates each fiscal
year:
1 st Quarter - July 1
2nd Quarter - October 1
3rd Quarter - January 1
4th Quarter - April 1
No changes will occur in security services for the Facility without prior review and approval
of the Agency.
3.5 Audit Services. The Association's provision of audit services is a
requirement of the Lease. The Association shall provide to the Agency the name and direct
contact information for the reputable accounting firm hired to conduct regular audit services
regarding the Association's full and complete financial operations of the Facility. Audit
service providers, their operating hours and procedures, shall be provided to the Agency in
writing no less than seven (7) calendar days prior to the Association taking occupancy of the
Facility. The Association will provide the Agency with written verification of all services
providers, including any changes in audit service providers, on no less than a quarterly basis.
Quarterly reporting concerning service providers is to coincide with the scheduled review of
security services specified in Section 3.4. All members will be kept informed of all material
activity regarding the Facility and its operations.
3.6 Financial Services. The Association provision of an Operating and
Capital Reserve account is a requirement of the Lease. The Association will require financial
services for this activity as well as managing the collection of member contributions and
payment of monthly operating expenses. The Association shall provide to the Agency the
name and contact information for financial services provided for operation of the Facility,
including account numbers for the Operating and Capital Reserves. Financial service
providers, their operating hours and procedures, shall be provided to the Agency in writing no
less than seven (7) calendar days prior to the Association taking occupancy of the Facility.
The Association will provide the Agency with written verification of all services providers,
including any changes in financial service providers, on no less than a quarterly basis.
Quarterly reporting concerning service providers is to coincide with the scheduled review of
security services specified in Section 3.4.
4. Property Management. The Association will manage the Facility in
accordance with all terms and conditions specified in the Lease, Operating Agreement and
Management Plan. The Association may hire a property management company to perform all
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necessary services to remain in full compliance of all terms and conditions of the Lease,
Operating Agreement, and Management Plan. The Association shall provide to the Agency
the name and contact information for the member dealer responsible for property
management, unless such services are contracted out to a private management company. In
the event the Association does not hire a management company, the Association itself, or
through one of its members, shall perform the management services set forth in Section 4.1
below, shall designate a "Manager" or "Administrator" to perform those services, and shall
provide the Agency in writing of the name and contact information for such person prior to
that person's assumption of duties.
4.1 Property Management Company. If the Association elects to obtain
property management services, the Association shall provide to the Agency the name and
direct contact information for property management services and for the individual who will
serve as Manager or Administrator, a copy of the contract or agreement indicating the
management services to be provided, and the methods and procedures for managing the
Facility. At a minimum, the property management company shall manage:
1. All Facility service and maintenance agreements. Retain (subject to the
approval of the Agency and Association) and supervise all service providers,
including but not limited to landscape maintenance, vehicle washing, security
services, and facilities repairs and maintenance.
All annual reporting requirements to the Agency, including financial and
audit services, according to the terms of the Lease and this Management Plan.
Collection of member contributions to the Association, including monthly
operating expenses, capital contributions, and reserve account allocations,
and shall ensure that contributions are adjusted to account for any
fluctuations in the total number of members in the Association. Payment of
all taxes and operating expenses.
4. Adherence to all operating conditions and requirements.
5. An access control log, which is to contain no less than an accurate and
complete distribution record of Facility access codes, security cards, and
keys, the date they were distributed, the Association member receiving such
access to the Facility, and the member employee(s) or representative(s)
signing to confirm receipt. The same process shall be maintained to track
surrender of the same. The access control log shall be provided to the Agency
upon request.
6. The management and enforcement of any and all sublease agreements,
including direct contact information for any sub lessee.
7. The allocation of parking spaces within the enclosed areas at all times,
ensuring that all agreements among Association members and all subleases
for surplus parking spaces are monitored.
8. The monitoring of annual reserve requirements, ensuring that a process is in
place to achieve and maintain appropriate reserve funding levels, and
ensuring that proper procedures are followed for all withdrawals from either
reserve account.
9. The coordination of responses and resolution of all inquiries regarding any
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aspect of Facility operations and maintenance, and maintenance of a
complete and accurate listing of all secondary contacts, including but not
limited to services providers to the Association, Association members, and
emergency contacts.
10. The development and administration of an Emergency Plan for evacuating
inventory and personnel from the Facility in case of natural disaster or other
occurrences, which may force the closure of the Facility in order to ensure
public safety.
11. Any other day -to -day requirements of the Facility.
4.2 Emergency/Urgent Contact. The Association shall provide the
Agency with the name(s) and contact information for emergencies, including but not limited
to fire or earthquake, which may require immediate response by the Association regarding the
Facility. In addition, the Association shall provide the Agency with the name(s) and contact
information for any urgent issues that may arise and require immediate notification, including
but not limited to accidents or graffiti removal, or problems beyond the Agency's control,
including but not limited to planned power outages or water shut -off.
4.3 Emergency Plan. The Association shall create and adopt an
Emergency Plan no later than the first date of occupancy for evacuating all inventory and
personnel as a result of natural disaster or other occurrences, which may force closure of the
Facility in order to ensure public safety. The Emergency Plan shall be maintained throughout
the term of the Lease.
4.4 Reserve and Operating Account Management. The Association is
required to maintain an Operating Reserve and Capital Reserve, as specified in the terms of
the Lease. The Lease also provides for prior Agency approval for any withdrawals from either
reserve account. Agency approval may only be granted after a meeting of the Association to
obtain majority approval of the proposed expense followed by a written request to the Agency
indicating the proposed expense, its purpose, and the plan for restoring the reserve account to
its prior balance. Withdrawals from either reserve account without this procedure will be
deemed unauthorized and the Association will be deemed in breach of the Lease.
4.5 Internal Dispute Resolution. In addition to violations and sanctions
identified in Section 1.7, which is in full force and effect at all times regardless of disputes
between members of the Association, the Association may conduct its own internal dispute
resolution process in which disputes arising between members. of the Association shall be
resolved by the Association. The Association will be responsible for all decisions of hiring,
firing, and contracting (e.g. service agreements), and all disputes with members concerning
such matters shall be resolved by the Association, unless final Agency approval or
authorization of the proposed action/resolution is required by the terms of the Operating
Agreement, Lease Agreement, or Management Plan. All internal issues brought to the
Administrator or Manager that involve liability, adequate performance of contracts,
compliance with provisions of the Lease, or violations of the Lease or Operating Agreement
shall be brought to the Association and dealt with by the Association. The Association will
designate one person who shall function as a "President" and who will be the primary point of
contact for the Manager or Administrator. All matters regarding the performance or
nonperformance of a member shall be brought to the President for handling and resolution by
the Association in accordance with the Operating Agreement.
4.6 Dispute Resolution. Disputes arising between the Association and
the City or Agency shall be settled through good faith negotiations. If such negotiations are
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unable to result in a mutually acceptable resolution, both parties agree to enter into binding
arbitration with an arbitrator that is mutually acceptable to both parties. The Association shall
designate a member to serve as a point of contact as well as a representative for negotiations
and arbitration. The City or Agency shall designate a point of contact as well as a
representative for negotiations and arbitration. The appointed representatives for both parties,
the Association and City or Agency, shall determine a mutually acceptable arbitrator who is
knowledgeable, experienced and skilled in matters concerning real estate and issues between
public agencies and private associations.
Approved: Approved:
City of Poway /Redevelopment Agency Poway Auto Dealers Association, LLC
B By: C4*
Rod Gould Markop resident
Executive Director Poway Auto Dealers Association, LLC
Date: l //� �� �% Date:
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PARKING FACILITY LEASE
This PARKING FACILITY LEASE (this "Lease ") is entered into as of Zyr y ,
2005, by and between the POWAY REDEVELOPMENT AGENCY, a public body, corporate and
politic (the "Agency "), and POWAY AUTO DEALERS ASSOCIATION, LLC, a California
limited liability company (the " Lessee ").
RECITALS
A. The Agency plans to construct a Parking Facility consisting of approximately 677
enclosed automobile parking spaces and 41 unenclosed automobile parking spaces (the "Parking
Facility ") on that certain real property owned by the Agency and located at 13875 Kirkham Way,
Poway, California (the "Site "). The Site is shown on the Site Map attached hereto as Exhibit "A"
and legally described in the Legal Description attached hereto as Exhibit `B ", both of which are
incorporated herein by reference. The scope of development of the Parking Facility is attached
hereto as Exhibit "C" and incorporated herein.
B. The Lessee is a limited liability company formed by the properly licensed franchise
auto dealers located within the City of Poway, who sell cars, vans, trucks, jeeps, and motorhomes
(the "Dealers "). Each Dealer is a member of the Lessee with equal voting rights under the Lessee's
Operating Agreement.
C. The Agency and the Lessee desire to enter this Lease in order to: (i) lease the .
Parking Facility to the Lessee, (ii) address the Lessee's allocation of Parking Spaces in the Parking
Facility (the "Parking Spaces ") among the Dealers, and (iii) provide for the Lessee.to perform
certain maintenance and operating responsibilities in consideration therefor.
NOW, THEREFORE, Lessee and the Agency agree as follows:
1. Lease of Parking Facility. Agency hereby leases the Parking Facility to the Lessee,
for the term and upon the terms and conditions set forth in this Lease.
2. Term of Lease.
2.1 Commencement. The term of this Lease ( "Lease Term ") shall commence
upon the date of completion of the Parking Facility, as evidenced by the City's issuance of a
Certificate of Occupancy for the Parking Facility (the "Lease Commencement Date ").
2.2 Expiration. If not earlier terminated, the Initial Lease Term shall be a period
of five (5) years from the Lease Commencement Date. The Lease Term may be extended by
exercise of the option to renew provided for herein. The expiration of the initial five (5) year period,
plus the term of any renewal periods (collectively, the "Lease Term ") shall be the "Expiration Date ".
2.3 Option to Renew. Lessee shall have the right to renew this Lease for three
additional periods of five (5) years by delivering to Lessor written notice of Lessee's intent to renew
not less than three (3) months prior to the expiration of the Lease Term, or of the first extension
period. Any such renewal shall be on the same terms and conditions as this Lease.
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2.4 Lease Year. The Lease Term shall be divided into sequential "Lease Years"
which shall each extend from July 1 to June 30. The first Lease Year shall commence on
Jut-Y 1 , 2005.
3. Rent.
3.1 Net Lease. It is the intent of the parties hereto that the rent provided herein
shall be absolutely net to Agency and that Lessee shall pay all costs, taxes, charges, and expenses of
every kind and nature against the Parking Facility which may arise or become due during the Term,
and which, except for execution hereof, would or could have been payable by Agency.
3.2 Rent. The rent payable for each Lease Year (the "Rent ") shall be the sum of
One Dollar ($1.00). Rent payments for each Lease Year shall be made on or before the first day of
each Lease Year.
4. Use of the Parking Facility.
4.1 Use. The Lessee shall, throughout the term hereof, use the Parking Facility
as a facility for the parking and/or storage of new cars, vans, trucks, jeeps, and motorhomes
(collectively, the "Vehicle Inventory "), which are held for sale in connection with the Dealers'
business operations in Poway. The temporary offloading and parking area shall be used exclusively
by new auto and motorhome dealerships in Poway, whether or not they are Dealers, for the purpose
of offloading vehicles and parking offloaded vehicles for not more than eight hours prior to transfer
to the dealership. In no event shall that area be used for overnight parking or storage, nor shall any
charge be made for use of that area. Lessee shall apply for a Temporary Use Permit ( "TUP ") at least
once a year seeking approval from the City of Poway to conduct up to four sales events per year at
the Site, and all such sales events shall constitute a permitted. use hereunder when the TUP is issued.
Lessee hereby covenants and agrees that Lessee and all of its Members shall conduct all sales under
the TUP within the City limits of Poway and to cause all sales to be made from 13875 Kirkham Way
or from Member Dealers located within the City of Poway, with procedures identified in the
Management Plan to ensure of this action. In addition, Lessee's permitted activities on the Site shall
include the cleaning and preparation of the Vehicle Inventory for sale.
4.2 Management. Lessee shall manage or cause the Parking Facility to be
managed in accordance with the terms of this Lease and in a prudent and businesslike manner,
consistent with other comparable high quality parking facilities and auto storage facilities in San
Diego County, California. The Lessee shall submit for the approval of the Agency a detailed
"Management Plan" which sets forth in detail the rules and regulations for the Lessee's use of the
Parking Facility and manner of enforcement, procedures for vehicle detailing services, security and
overnight monitoring procedures, sanctions for abuse of the temporary offloading and parking area,
and other matters relevant to the Lessee's management of the Parking Facility. The management of
the Parking Facility shall be in compliance with the Agency - approved Management Plan at all times.
The Lessee may from time to time submit proposed amendments to the Management Plan, which
shall also be subject to the prior written approval of the Agency. If the Parking Facility is not
managed in accordance with the Management Plan and such defaults are not cured within the time
set forth herein after written notice thereof has been provided by the Agency to the Lessee, Agency
shall have the authority to require the Lessee to hire a Property Manager to execute the Management
Plan under the direction of Lessee. Lessee shall have the right to remove the Property Manager after
six months and resume management itself, if Lessee is in compliance with all material terms of this
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Lease. In the event that Lessee fails to manage the Parking Facility in all material respects in
accordance with the Management Plan after exhaustion of the remedies by Agency set forth
hereinabove, Agency shall have the right to declare Lessee's default of this Lease, or, in the
alternative, to designate a Property Manager for the balance of the Lease Term. Notwithstanding the
foregoing, Lessee shall use its best efforts to correct any defects in management at the earliest
feasible time and, if necessary, to replace the Property Manager, if one has been hired.
4.3 Only Lawful Uses Permitted. Lessee shall not knowingly use the Parking
Facility for any purpose that is in violation of any law, ordinance or regulation of any federal, state,
county or local governmental agency, body or entity. Furthermore, Lessee shall not maintain, permit
or commit any nuisance or unlawful conduct (as now or hereafter defined by any applicable statutory
or decisional law) on the Parking Facility or Site, or any part thereof.
4.4 Allocation Among Dealers. The Parking Spaces shall be divided equally
among the Dealers. The Dealers may, from time to time, trade or shift the number of Parking Spaces
among them as their individual needs fluctuate. The Lessee shall specify the mechanism for these
reallocations in Lessee's Operating Agreement. If a new Dealer joins the Lessee, each Dealer shall
relinquish a proportionate number of Parking Spaces to accommodate the addition of the new Dealer.
If there are Parking Spaces which are not allocated, the Dealer(s) whose spaces are available may
offer them to the Lessee who will then take reasonable steps to identify one or more suitable short-
term subtenants. Subtenant lease payments to Lessee shall be assessed to subtenant at a cost no more
than the actual operating cost per space to Lessee plus a 10% fee for contract administration.
4.5 Early Termination. If the number of member Dealers (as defined) declines
below five (5), or if utilization of the Parking Facility is less than 40% for any period longer than one
hundred eighty (180) days, each party reserves the right to terminate the Lease agreement.
Notwithstanding this right, both parties agree to negotiate in good faith as to whether this right
should be exercised in light of mutual intent of the parties entering into this Lease and whether those
original purposes are being fulfilled. If the Lessee subleases more than 25% of the total allocable
parking spaces contained within the Parking Facility for a period more than 12 months in any five (5)
year period, the Agency reserves the right to terminate the Lease agreement.
In the event of early termination of the Lease agreement, Lessee shall vacate the Parking Facility
within sixty (60) days. All Operating and Capital reserves held by the Lessee shall remain the
property of the Lessee. Lessee shall only be required to fund operating expenses, including but not
limited to taxes or other property assessments, landscape maintenance, security services, utilities
services to Site, and general property maintenance through the date Lessee vacates the Parking
Facility. Lessee shall execute any and all documents reasonably required by the Agency in
connection with such termination, including but not limited to a quitclaim deed.
5. Operating Budget. In advance of each lease year, Lessee shall annually submit to
the Agency no later than June 1, a proposed one -year operating budget (the "Operating Budget ") for
the Parking Facility, subject to approval by the Agency. The Operating Budget shall include a
detailed and itemized description of all operating expenses to be incurred by the Lessee pursuant to
its operation and maintenance of the Parking Facility(the "Operating Expenses "). The Operating
Budget shall also include the cost of an annual audit of the Operating expenses to be performed on
behalf of Agency. Operating Expenses in the Operating Budget may be reduced commensurately
with the Lessee's retention of, the 10% administrative fee collected from the non - Dealer subtenant
users of Parking Spaces.
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5.1 Annual Repetition of Management/Sublessor Duties.
Within ninety days after the expiration of each Lease Year, Lessee shall
undertake the following sequence of activities:
(a) Submit to the Agency the actual Operating Expenses for the previous
year, and a tabulation of actual Operating Expenses collected. In no case shall the amount collected
be more than the total operating expenses plus 10% for any subtenant lease agreements.
(b) Prepare and submit to the Agency an Operating Budget and allocation
of per space operating expenses for the coming year subject to Agency approval pursuant to Section
5.
(c) The Agency shall give notice to the Lessee of any change in the
number or identity of the Dealers. In the event the number of Dealers is more or less than nine, the
number of Parking Spaces allocable to each Dealer pursuant to Section 4.4 shall be revised
accordingly.
(d) Allocate Parking Spaces pursuant to Section 4.4.
6. Taxes.
6.1 Lessee's Obligations.
(a) Real Property Taxes. Lessee shall pay before delinquency all real
property taxes, general and special taxes, and general and special assessments levied and/or assessed
against the Site and Parking Facility (the "Real Property Taxes "). Pursuant to Health and Safety
Code Section 33673, the Site is required to be assessed and taxed in the same manner as privately
owned property. Agency shall provide notice to the San Diego County Assessor within thirty (30)
days of the commencement of this Lease as required by Health and Safety Code Section 33673.1.
Lessee shall pay or cause to be paid, before any fine, penalty, interest or cost may be added thereto
for the nonpayment thereof, all real estate taxes which may be levied against any and all interests in
the Site and the Parking Facility during the Term, and not merely the assessed value of the leasehold
interest in the Site and Parking Facility; provided, however, that Lessee may apply for and receive
any applicable exemption from the payment of property taxes and assessments.
(b) Personal Property Taxes. Lessee shall pay before delinquency all
taxes, assessments, license fees, and other charges that are levied and assessed against personal
property installed or located in, on, or about the Site, including any personal property created,
installed, or located in, on or about the Site as part of the Lessee's operation and management of the
Parking Facility (the "Personal Property Taxes "). Lessee shall not be responsible for the payment of
personal property taxes levied on any Vehicle Inventory or other personal property stored within the
Parking Facility by the Dealers or any subtenant of the Parking Spaces, which shall be payable by the
owners of such Vehicle Inventory and personal property.
(c) Substitute and Additional Taxes. If at any time during the Term,
the State of California or any political subdivision of the state, including, without limitation, any
county, city, city and county, public corporation, district, or any other political entity or public
corporation of this state, levies or assesses against Lessee a tax, fee, or excise on (i) rents, (ii) the
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square footage of the Parking Facility, (iii) the act of entering into this Lease, or (iv) the occupancy
of Lessee, or levies or assesses against Lessee any other tax, fee, or excise, however described,
including, without limitation, a so- called value added tax, as a direct substitution in whole or in part
for, or in addition to, any Real Property Taxes, Lessee shall pay before delinquency that tax, fee, or
excise (the "Substitute and Additional Taxes ").
(d) Transfer Tax. If a transfer tax is payable to any governmental
agency or agencies as a result of this Lease, Lessee shall pay such transfer tax when it is due (the
"Transfer Tax ").
6.2 Lessee's Right to Contest. During the Term of this Lease, and so long as
Agency is not in default under this Lease, Lessee shall not contest the amount of any Real Property
Taxes levied on or against the Site; provided, however, that the foregoing shall not prohibit Lessee
from contesting the amount of taxes, assessments, fees or charges which may be imposed or levied
on or against the Site based on clerical errors pursuant to California Revenue and Taxation Code
Sections 4831 through 4835 or successor or similar statutes; or based on errors or omissions in the
determination of base year value (not involving the exercise of the assessor's judgment as to value)
pursuant to California Revenue and Taxation Code Section 51.5 or successor or similar statutes.
6.3 Agency Not Obligated. Agency shall have absolutely no obligation, express
or implied, to pay any (i) Real Property Taxes, (ii) Personal Property Taxes, (iii) Transfer Taxes, or
(iv) Substitute and Additional Taxes.
7. Utilities and Services. Agency, at its sole cost and expense, shall furnish to the
Parking Facility the necessary infrastructure to provide the Site with water, electricity, sewer, and all
other utilities required for Lessee's use thereof, including but not limited to sufficient electricity to
the Site to provide adequate security lighting in all areas. Agency shall indemnify and hold Lessee
harmless from and against any liability or damages resulting from, arising out of or connected with,
the provision of or failure to provide the Site with such infrastructure. Agency shall not be liable for
damages caused by loss of infrastructure or service interruptions beyond the Agency's control.
Lessee shall indemnify and hold Agency harmless from and against any liability or damages
resulting from, arising out of, or connected with the failure to pay any charges incurred for such
utility services. Lessee shall pay the ordinary monthly fees for the use of water, electricity, sewer and
all other utilities provided to the Parking Facility.
8. Maintenance, Repairs, Alterations, Improvements, and Replacements. Lessee
shall, at its sole cost and expense, at any time and from time to time during the Term, make any
alterations, improvements or replacements in, on, to or of the improvements, in whole or in part,
which may be necessary or desirable to keep the Parking Facility in good and safe condition and
repair. Any alterations, improvements or replacements which are likely, in good engineering
judgment, to require closure of all or any significant portion of the Parking Facility for more than ten
(10) days shall be subject to Agency approval. Lessee shall comply with the following standards
( "Maintenance Standards ") in the maintenance of the Parking Facility:
(a) The Parking Facility and all the equipment thereon shall be
maintained in a condition consistent with other first class parking facilities within San Diego County.
(b) The driveways, access ways to and from public streets, landscaping
and lighting and every other aspect of the Parking Facility shall be maintained in good operating
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order and condition and reasonably clean and neat and free from dirt, trash, debris, and graffiti, and
in such a manner that the condition thereof does not constitute a nuisance and does not unreasonably
interfere with the use and enjoyment of the Parking Facility.
(c) The Parking Facility shall be re- striped and repainted as often as
necessary, but in no event shall the Parking Lot be re- striped and repainted less than every three (3)
years. In addition, the light standards shall be repainted as necessary in order to ensure that they are
maintained in good condition and in order to prevent peeling, cracking, and rusting, and the light
fixtures shall be replaced as needed.
(d) Cracked and damaged concrete and asphalt shall be patched and/or
replaced as soon as possible after such cracking/damage occurs.
(e) Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning;
trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road
conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials;
control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for
support of trees.
(f) Clean -up maintenance shall include, but not be limited to:
maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition;
maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or
unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to
mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the
maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are
properly disposed of by maintenance workers.
(g) All maintenance work shall conform to all applicable federal and state
Occupational Safety and Health Act standards and regulations for the performance of maintenance.
(h) Any and all chemicals, unhealthful substances, and pesticides used in
and during maintenance shall be applied in strict accordance with all governing regulations.
(i) Lessee shall set aside in a separate interest - bearing trust account a
sum no less than three (3) months Operating Expenses, to be determined through the Agency's
annual review and approval of the Operating Budget. (the "Operating Reserve "). Interest earned on
funds in the Operating Reserve shall remain in the Operating Reserve. Notwithstanding the
foregoing, however, Lessee shall not be obligated to place any further amounts in the Operating
Reserve whenever the balance of the Operating Reserve equals or exceeds the current year budget for
operating expenses (the "Operating Reserve Threshold Amount"). Lessee may withdraw from the
Operating Reserve those amounts exceeding the current year budget for operating expenses. Lessee
shall provide, on not less than an annual basis during the term of this Lease, evidence reasonably
satisfactory to Agency Executive Director or designee of compliance herewith. Lessee shall retain
such amount in the Operating Reserve to cover shortfalls between Parking Facility income and actual
Parking Facility operating expenses. Withdrawals from the Operating Reserve shall not be used for
funding sales events or any costs associated with such events held at the Parking Facility. Upon
making disbursements from the Operating Reserve, Lessee shall replenish the Operating Reserve to
the Operating Reserve Threshold Amount as quickly as possible, but in no event later than twelve
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(12) months from the disbursement. If Lessee cannot replenish the Operating Reserve to the level
required herein through a single month's deposit, Lessee shall develop and follow a plan for
restoring the required balance. No expenditures shall be made from the Operating Reserve without
prior authorization of the Agency.
(j) Lessee shall also set aside on a monthly basis into a separate interest -
bearing trust account Five Hundred Dollars ($500.00) (the "Capital Replacement Reserve "). Such
amounts shall be analyzed at the end of every five -year period during the Term, and revised, if
necessary, by mutual agreement of the parties hereto as needed to cover anticipated repairs and
replacement. Interest earned on funds in the Capital Replacement Reserve shall remain in the Capital
Replacement Reserve. Lessee shall not be obligated to place any further amounts in the Capital
Replacement Reserve whenever the balance of the Capital Replacement Reserve equals or exceeds
Thirty Thousand Dollars ($30,000.00). Funds in the Capital Replacement Reserve shall be used only
for capital replacements to the Parking Facility fixtures and equipment, which are normally
capitalized under generally accepted accounting principles. As capital repairs and improvements of
the Parking Facility become necessary, the Capital Replacement Reserve shall be the first source of
payment therefore. The non - availability of funds in the Capital Replacement Reserve does not in any
manner relieve Lessee of the obligation to undertake necessary capital repairs and improvements and
to continue to maintain the Parking Facility in the manner prescribed in this Section 8. Lessee, as an
expense of the Parking Facility, shall submit to Agency on not less than an annual basis a budget and
an accounting for the Capital Replacement Reserve. No expenditures shall be made from the Capital
Replacement Reserve without prior authorization of the Agency.
9. Security Services. Lessee agrees to contract for guard services to monitor the
Parking Facility. Such security services shall be reviewed between the Lessee and Agency on a
quarterly basis to determine the optimum hours of operation, security needs of the Parking Facility,
and the need to control the Operating Budget. At a minimum, security services will consist of a
single, unarmed, guard. In the event Lessee fails to provide, cancels security services, or reduces the
hours of Site security below a level deemed acceptable to the Agency, Lessee will be in breach of
Lease and Agency may at its sole discretion remove the guard station or terminate the Lease.
10. Indemnity and Insurance.
10.1 General Indemnification. Lessee shall be solely responsible for the
operation and maintenance of the Site, including without limitation the Parking Facility. Lessee
shall indemnify, defend (with counsel reasonably acceptable to Agency) and hold Agency and its
officers, employees, agents, representatives and volunteers harmless from and against any loss, cost,
expense, injury, claim, action, cause of action, suit, proceeding, damage, liability, deficiency, fine,
penalty, or punitive damage (including, without limitation, reasonable attorneys' fees and court
costs), and liability resulting from, arising out of, or arising in connection with (i) the operation
and/or maintenance of the Site, including without limitation the Parking Facility from and after the
Lease Commencement Date, (ii) the presence, release, use, generation, discharge, storage or disposal
of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous
Materials to or from, the Site from and after the Lease Commencement Date, or (iii) the violation, or
alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license
relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous
Materials on, under, in or about, to or from, the Site from and after the Lease Commencement Date,
except for such matters which result from the negligence or willful misconduct of the Agency or its
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officers, employees, agents, representatives or volunteers, or which arise out of conduct or practices
which were required of Lessee by Agency under this Lease.
10.2 Insurance. Throughout the Term of this Lease, Lessee shall, at Lessee's
sole cost and expense, obtain and keep in force at all times the following insurance:
(a) insurance against loss or damage to the Parking Facility resulting
from fire, lightning, vandalism, malicious mischief and such perils ordinarily defined as "extended
coverage" and such other perils as Lessee and the Agency may agree should be insured against, if
such insurance is available from reputable insurers. Such insurance shall be maintained in an amount
not less than the full insurable value of the Parking Facility, subject to a deductible clause in the
amount of Five Thousand Dollars ($5,000) or less, and shall contain an inflation guard endorsement.
(b) public liability insurance against claims for bodily injury or death, or
damage to property occurring upon, in or about the Site, such insurance to afford protection to a limit
of not less than One Million Dollars ($1,000,000) combined single limit bodily injury and property
damage with not greater than Five Thousand Dollars ($5,000.00) deductible;
(c) Worker's compensation insurance having limits not less than those
required by California law, issued by a responsible carrier authorized under the laws of the State of
California to insure employers against liability for compensation under the Worker's Compensation
Insurance and Safety Act now in force in California, or any act hereafter enacted as an amendment or
supplement thereto or in lieu thereof, such worker's compensation insurance to cover all persons
employed in connection with the Site and to cover full liability for compensation under any such act
aforesaid, based upon death or bodily injury claims made by, for, or on behalf of any person
incurring or suffering injury or death during or in connection with the Site or the business of Master
Lessee with respect to the Site.
10.3 Insurance Companies. Insurance required to be maintained by Lessee shall
be written by companies licensed to do business in the State of California and which have a Best's
"General Policyholders Rating" reasonably acceptable to the Agency, generally A -N or better.
10.4 Certificates of Insurance. Lessee shall deliver to Agency certified copies of
policies of insurance or other evidence of coverage reasonably satisfactory to the Agency, for all
insurance required to be maintained by Lessee hereunder. The certificates shall contain all
customary endorsements reasonably requested by Agency, including but not limited to, the
following:
(a) It is agreed that this policy shall not be cancelled, non - renewed,
expire, or reduced in scope of coverage until after thirty (30) days' prior written notice has been
given to the Risk Management Office of the Agency.
(b) The City of Poway and Poway Redevelopment Agency are specified
as additional insured under insurance policies evidenced by this Certificate.
(c) Insurance evidenced by this Certificate is primary insurance and any
insurance maintained by the Poway Redevelopment Agency shall only provide coverage in excess of
the insurance evidenced by this Certificate.
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(d) Insurer waives all rights of subrogation against the Poway
Redevelopment Agency, its officers, employees, agents and representatives, which may or could
arise from or during the Term of, any lease, sublease or other agreement between the Agency and the
insured."
(e) Lessee shall, not later than fifteen (15) business days prior to
expiration of any policy, deliver to Agency certificates of renewal.
(f) If Lessee fails to maintain the insurance required to be maintained
hereunder, the Agency, following ten (10) days written notice to Lessee, shall have the right to
procure and maintain such insurance and such amount shall be deemed Rent payable by the Lessee
to the Agency which shall be immediately due and payable. Lessee may satisfy some or all of the
insurance requirements set forth herein by obtaining extensions of coverage held by Dealers, in lieu
of new policies.
11. Assignment and Subletting. Lessee shall not sell, assign, sublease, or otherwise
transfer this Lease or any right therein, nor make any total or partial sale, assignment, sublease, or
transfer in any other mode or form of the whole or any part of the Parking Facility (each of which
events is referred to in this Lease as an "Assignment "), without prior written approval of Agency,
which approval may be given or withheld in the Agency's sole and absolute discretion. Any
purported assignment without the prior written consent of Agency shall render this Lease absolutely
null and void and shall confer no rights whatsoever upon any purported assignee or transferee.
12. Notices. All notices, consents, demands, approval and other communications (the
"Notices ") that are given pursuant to this Lease shall be in writing to the appropriate party and shall
be deemed to have been fully given when delivered, including delivery by commercial delivery
service, or if deposited in the United States mail, certified or registered, postage prepaid, when
received or refused. All notices shall be addressed as follows:
To Agency: Poway Redevelopment Agency
13325 Civic Center Drive
Poway, California 92064
Attn: Executive Director
To Lessee: Mary Cross, Property Manager
Cross Business Services
13514 Mora Circle
Poway, CA, 92064
With cony to (which cony shall not constitute the giving of Notice to Lessee):
Pauline H. G. Getz
Getz & Associates
13025 Danielson St., Suite 107
Poway, CA 92064
Addresses for Notices may be changed from time to time by Notice to all other parties.
Notwithstanding that Notices shall be deemed given when delivered, the non - receipt of any Notice as
the result of a change of address of which the sending party was not notified shall be deemed receipt
of such Notice.
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13. Waiver. No waiver of any default under this Lease shall constitute or operate as a
waiver of any subsequent default hereunder, and no delay, failure or omission in exercising or
enforcing any right, privilege or option under this Lease shall constitute a waiver, abandonment or
relinquishment thereof or prohibit or prevent any election under or enforcement or exercise of any
right, privilege or option hereunder. No waiver of any provision hereof by Lessee or Agency shall
be deemed to have been made unless and until such waiver shall have been reduced to writing and
signed by Lessee or Agency, as the case may be. The receipt and acceptance by Agency of Rent
with knowledge of any default under this Lease shall not constitute or operate as a waiver of such
default. Failure by Lessee or Agency, as the case may be, to enforce any of the terms, covenants or
conditions of this Lease for any length of time or from time to time shall not be deemed to waive or
decrease the right of either to insist thereafter upon strict performance by the other.
14. Recordation. This Lease shall not be recorded, except that the parties shall execute a
recordable Memorandum of Lease in the form of Exhibit "D" attached hereto and incorporated
herein by reference.
15. Covenant of Quiet Enjoyment. Upon Lessee observing and performing all of the
covenants, conditions and provisions on Lessee's part to be observed and performed hereunder,
Lessee shall peaceably hold and quietly enjoy the Parking Facility for the entire Term hereof without
hindrance, molestation or interruption by Agency or any party claiming under or through Agency.
16. Damage and Destruction. If the Parking Facility is materially and substantially
damaged or destroyed by fire or other casualty, Agency shall have the prerogative, at its sole
discretion, either to (a) repair or rebuild the Parking Facility (or any portion of it) and diligently
pursue the same to completion, or (b) not to repair or rebuild the Parking Facility or Project (or any
portion of it). Agency shall, by written notice to Lessee, make its election whether to repair and
rebuild the Parking Facility or Project within ninety (90) days after the date of the fire or other
casualty. In the event that Agency elects not to repair or rebuild, this Lease shall terminate as of the
date of the fire or other casualty and Lessee shall pay any Rent required to be paid hereunder
through the date of termination. If Lessee or the Members have insurance coverage that would
provide for the repair or replacement of the damage or destruction to the Parking Facility, then
Lessee may choose in its discretion to make such repairs or replacements and this Lease shall
continue in full force and effect. The provisions of the Lease, including this Section, constitute an
express agreement between Lessee and Agency with respect to any and all damage to, or destruction
of, all or any part of the Project constituting the Parking Facility, and Lessee and Agency agree that
Sections 1932(2) and 1933(4) of the California Civil Code shall have no application to this Lease or
any damage or destruction to the Parking Facility.
17. Compliance with the Law.
Lessee agrees, at its sole cost and expense, to comply and use commercially
reasonable methods to secure compliance by all contractors, Dealers and other occupants of the
Parking Facility with all the requirements now in force, or which may hereafter be in force, of all
municipal, county, state and federal authorities, pertaining to the Parking Facility, as well as
operations conducted thereon, and to faithfully observe and secure compliance by all contractors,
Dealers and other occupants of the Parking Facility with all applicable county and municipal
ordinances and state and federal statutes now in force or which may hereafter be in force, and to pay
before delinquency all taxes, assessments, and fees, if any, assessor levied upon Lessee or the
Parking Facility, including the land and any buildings, structures, machines, appliances or other
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improvements of any nature whatsoever, erected, installed or maintained by Lessee or by reason of
the business or other activities of Lessee upon or in connection with the Parking Facility. Lessee
shall use good faith efforts to prevent or Dealers or other occupants from maintaining any nuisance
or other unlawful conduct on or about the Property, and shall take such actions as are reasonably
required to abate any such violations by Dealers or other occupants of the Parking Facility. The
judgment of any court of competent jurisdiction, or the admission of Lessee or any sublessee or
permittee in any action or proceeding against them, or any of them, whether Agency be a party
thereto or not, that Lessee, sublessee or permittee has violated any such ordinance or statute in the
use of the Parking Facility shall be conclusive of that fact as between Agency and Lessee, or such
sublessee or permittee.
18. Entry and Inspection.
Agency reserves and shall have the right during reasonable business hours (except in cases of
emergency), upon twenty -four (24) hours prior notice (except in cases of emergency) to Lessee by
the Executive Director of Agency or designee, to enter the Parking Facility for the purpose of
viewing and ascertaining the condition of the same, or to protect its interests in the Parking Facility
or to inspect the operations conducted thereon. Agency and /or its agents shall have the right, upon
reasonable request during Lessee's normal business hours, to examine, copy and audit, for a period
of up to three (3) years after the close of each Lease Year, any and all of the books and records
preserved by Lessee.
19. Right to Maintain.
In the event that the entry or inspection by Agency pursuant to Section 17 hereof discloses
that the Parking Facility is not in a decent, safe, and sanitary condition, Agency shall have the right,
after thirty (30) days written notice to Lessee (except in case of emergency, in which event no notice
shall be necessary), to have any necessary maintenance work done for and at the expense of Lessee
and Lessee hereby agrees to pay promptly any and all costs incurred by Agency in having such
necessary maintenance work done in order to keep the Parking Facility in a decent, safe and sanitary
condition, provided that the Agency delivers such notice which is required hereunder. The rights
reserved in this Section shall not create any obligations on Agency or increase obligations elsewhere
in this Lease imposed on Agency. Agency reserves the right to notify the Lessee of visible
conditions requiring immediate resolution including, but not limited to, graffiti and other acts of
vandalism as well as trash and debris.
20. Events of Default and Remedies.
20.1 Events of Default by Master Lessee. The occurrence of any one (1) or more
of the following shall constitute an event of default hereunder:
(a) Lessee shall abandon or surrender the Parking Facility; or
(b) Lessee shall fail or refuse to pay, within twenty (20) days of notice
from Agency that the same is due, any installment of rent or any other sum required by this Lease to
be paid by Lessee; or
(c) Lessee shall fail to materially perform any covenant or condition of
this Lease and any such failure shall not be cured within thirty (30) days following the service on
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Lessee of a written notice from Agency specifying the failure complained of, or if it is not reasonably
practicable to cure or remedy such failure within such thirty (30) day period, then Lessee shall not be
deemed to be in default if Lessee shall commence such cure within such thirty (30) day period and
thereafter diligently prosecute such cure to completion; then such event shall constitute an event of
default under this Lease.
20.2 Remedies of Agency.
In the event of any such default as described in Section 19, Agency may, at its option:
(a) Terminate this Lease and immediately regain possession of the
Parking Facility by written notice thereof to Lessee;
(b) Correct or cause to be corrected said default and charge the costs
thereof (including costs incurred by Agency in enforcing this provision) to the account of Lessee,
which charge shall be due and payable within thirty (30) days after presentation by Agency of a
statement of all or part of said costs;
(c) Correct or cause to be corrected said default and pay the costs thereof
(including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance;
(d) Exercise its right to maintain any and all actions at law or suits in
equity to compel Lessee to correct or cause to be corrected said default;
(e) Have a receiver appointed to take possession of Lessee's interest in
the Parking Facility, with power in said receiver to administer Lessee's interest in the Parking
Facility, to collect all funds available to Lessee in connection with its operation and maintenance of
the Parking Facility; and to perform all other consistent with Lessee's obligation under this Lease as
the court deems proper; or
(f) Maintain and operate the Parking Facility, without terminating this
Lease.
20.3 Damages. Damages which Agency recovers in the event of default under this
Lease shall be those which are then available under applicable California case and statutory law to
lessors for leases in the State of California including, but not limited to, any accrued but unpaid rent
and the worth at the time of award of the amount by which the unpaid rent for the balance of the term
of this Lease after the date of award exceeds the amount of such rental loss for the same period that
Master Lessee proves could be reasonably avoided.
20.4 Rights and Remedies are Cumulative. The remedies provided by this
Section 20 are not exclusive and shall be cumulative to all other rights and remedies possessed by
Agency. The exercise by Agency of one or more such rights or remedies shall not preclude the
exercise by it, at the same or different times, of any other rights or remedies for the same default or
any other default by Lessee.
20.5 No Waiver. Any failures or delays by either party in asserting any of its
rights and remedies as to any default shall not operate as a waiver of any default or of any such rights
or remedies, or deprive either such party of its rights to institute and maintain any actions or
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proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies for
the same default or any other default by the other party.
21. Estoppel Certificates. Lessee and Agency shall, respectively, from time to time,
but in no event more frequently than once every six (6) months during the Lease Term, within fifteen
(15) days after written request by the other, deliver to the requesting party or to a prospective
purchaser, mortgagee or holder of a mortgage, an executed and acknowledged statement in writing
certifying (a) that this Lease is unmodified and in full force and effect (or if there has been any
modifications thereof that the same is in full force and effect as modified, and stating the nature of
the modification or modifications); (b) that to its knowledge the requesting party is not in default
under this Lease (or if any such default exists, the specific nature and extent thereof); and (c) the date
to which Rent has been paid in advance, if any.
22. Force Majeure. In addition to specific provisions of this Lease, delay in
performance by any party hereunder shall not be a default where, and only to the extent, such delays
or defaults are due to causes (other than financial inability) beyond the reasonable control or without
the fault of the party claiming an extension of time to perform, which may include, without
limitation: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of
God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; shortages of
transportation or materials; unusually severe weather; or acts of civil disobedience (collectively,
"Force Majeure "). An extension of time for any such cause shall be for the period of the enforced
delay and shall commence to run from the time of the commencement of the cause, if notice by the
party claiming such extension is sent to the other party within thirty (30) days of the commencement
of the cause, or from the date of the notice thereof, if notice by the party claiming such extension is
sent to the other party later than thirty (30) days after the commencement of the cause.
23. Attorneys' Fees. In the event that any action or proceeding is brought by Lessee
against Agency or by Agency against Lessee arising out of this Lease or arising out of any dispute
under the terms of this Lease, the prevailing party in such action or proceeding shall be entitled to
recover its costs and reasonable attorneys' fees, charges and disbursements in connection with such
action or proceeding.
24. Joinder. Lessee and Agency respectively agree that upon requ'6st of the other each
shall promptly join in any instruments of conveyance, dedication, grant of easement or license, or
other instrument as shall be reasonably necessary or convenient to provide public utility service
and/or public roadway access to the Parking Facility or any portion or portions thereof.
25. Representations and Warranties of Lessee.
25.1 Organization of Lessee. Lessee represents and warrants that Lessee is a
limited liability company, duly authorized and validly existing and in good standing under the laws
of the State of California and authorized to do business in the State of California, and has all requisite
power and authority to carry on its business as now and whenever conducted, and to enter into and
perform its obligations under this Lease. Lessee represents, warrants and agrees that each member
of the Lessee currently has and shall continue to have equal voting rights pursuant to the operating
agreement of the Lessee, that each Dealer with appropriate business licenses will be permitted to be
a member, and that no used auto dealers not associated with a Dealer shall be members of the
Lessee. Lessee further represents and warrants that Lessee has complied with all laws and
regulations concerning its organization, existence and ability to transact business in the State of
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California, and that Lessee has the right and power to operate and maintain the Parking Facility as
contemplated in this Lease, and that Lessee has, or at all appropriate times shall have properly
obtained, all permits, licenses and approvals necessary to occupy, and operate the Site, and any
improvements thereon (as the case may be) and in so doing has, or shall have (as appropriate)
complied with all other applicable statutes, laws, regulations and ordinances (as the case may be).
25.2 Authority to Perform. Lessee represents that Lessee has full right, power
and authority to execute and deliver this Lease, and to perform the undertakings of Lessee contained
in this Lease. This Lease constitutes a valid and binding obligation of Lessee which is legally
enforceable in accordance with its terms.
25.3 No Conflicts. Lessee represents and warrants that, to the best of its
knowledge, none of the undertakings of Lessee contained in this Lease violates any applicable
statute, law, regulation or ordinance or any order or ruling of any court or governmental entity, or
conflicts with, or constitutes a breach or default under, any agreement by which Lessee is, or the Site
and the improvements thereon, are bound or regulated.
25.4 No Violation. Lessee is not in violation of any statute, law, regulation or
ordinance, or of any order of any court or governmental entity the effect of which would prohibit
Lessee from performing its obligations hereunder with respect to the Site.
26. Representations and Warranties of Agency.
26.1 Organization of Agency. Agency represents and warrants that Agency is a
public body, corporate and politic, and has all requisite power and authority to enter into and perform
its obligations under this Lease.
26.2 Authority to Perform. Agency represents and warrants that Agency has full
right, power and authority to execute and deliver this Lease, and to perform the undertakings of
Agency contained in this Lease. This Lease constitutes a valid and binding obligation of Agency
which is legally enforceable in accordance with its terms.
26.3 No Conflicts. Agency represents and warrants that none of the undertakings
of Agency contained in this Lease conflicts with, or constitutes a breach or default under, any
agreement by which Agency is bound or regulated.
26.4 No Violation. Agency is not in violation of any statute, law, regulation or
ordinance, or of any order of any court or governmental entity the effect of which would prohibit
Agency from performing its obligations hereunder.
26.5 No Knowledge. Agency has no knowledge of any Substitute and Additional
Taxes which may be, or are reasonably being, contemplated or proposed and which would have a
material affect on the Operating Expenses of Lessee.
26.6 TUP. Agency agrees to support the issuance of a TUP for the conduct of
sales events on the site each year during the term hereof as long as Lessee is not in material breach of
this Lease.
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27. Miscellaneous.
27.1 Conflict of Interest. No member, official or employee of Agency shall have
any direct or indirect interest in this Lease, nor participate in any decision relating to this Lease
which is prohibited by law.
27.2 Financial Statement; Inspection of Books And Records. Lessee shall
submit to the Agency on an annual basis, not later than June 1 of each year during the term of this
Lease, a financial statement for the operation of the Parking Facility, which is prepared by a certified
public accounting firm. In addition, Agency shall have the right (at Lessee's office, upon not less
than forty-eight (48) hours' notice, and during normal business hours) to inspect the books and
records of Lessee pertaining to the Parking Facility as pertinent to the purposes of this Lease.
27.3 Warranty Against Payment of Consideration. Lessee warrants that it has
not paid or given, and will not pay or give, any third person any money or other consideration for
obtaining this Lease.
27.4 Nonliability of Agency Officials and Employees. No member, official,
employee, consultant, agent, or representative of Agency shall be personally liable to Lessee, or any
successor in interest thereto, in the event of any default or breach by Agency or for any amount
which may become due to Lessee, or on any obligation under the terms of this Lease.
27.5 Time of Essence. Time is of the essence of each and every term and
provision of this Lease.
27.6 Relationship. The relationship between the parties hereto shall at all times
be deemed to be that of landlord and tenant. The parties do not intend nor shall this Lease be deemed
to create a partnership or joint venture.
27.7 Transactions with Affiliates. Lessee shall not have the right to enter into
transactions with subsidiaries, affiliates and other related entities for the purpose of leasing space,
providing cleaning, maintenance and repair services, insurance policies and other purposes related to
the use and development of the Parking Facility, except as set forth herein. Lessee may contract with
one or more entities which may be related to a Member or with which a Member may have a pre-
existing relationship for the provision of detailing services at the Parking Facility. .
27.8 Consent of Parties. Whenever consent or approval of either party is
required, unless expressly provided to the contrary that party shall not unreasonably withhold such
consent or approval.
27.9 Successors. This Lease shall be binding on and inure to the benefit of the
parties and their permitted successors and assigns.
27.10 Real Estate Brokers; Finders. Each party represents that it has not had
dealings with any real estate broker, finder, or other person, with respect to this Lease in any manner.
Each party shall indemnify and hold harmless the other party from all damages resulting from any
claims that may be asserted against the other party by any broker, finder, or other person, with whom
the other party has or purportedly has dealt.
15
27.11 Interpretation of Lease.
(a) This Lease, including the Operating Agreement and Management
Plan referred to herein, contains all the agreements of the parties and cannot be amended or modified
except by written agreement.
(b) If any term of provision of this Lease or the application thereof to any
persons or circumstances shall to any extent be invalid and unenforceable, the remainder of this
Lease, or the application of such term of provision to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this
Lease shall be valid and shall be enforced to the extent permitted by law.
(c) The headings to the various articles and sections of this Lease have
been inserted for convenient reference only and shall not to any extent have the effect of modifying,
amending or changing the expressed terms and provisions of this Lease.
(d) This Lease may be executed in counterparts, each of which shall be
deemed an original and all of which when taken together shall constitute one and the same
instrument.
27.12 Nondiscrimination. Lessee and Agency covenant by and for themselves,
their successors and assigns, and all persons claiming under or through each of them, and this Lease
is made and accepted upon and subject to the following conditions:
"That there shall be no discrimination against or segregation
of any person or group of persons on account of race, color,
creed, religion, sex, marital status, ancestry or national origin
in the leasing, subleasing, transferring, use, occupancy, tenure
or enjoyment of the land herein leased nor shall the lessee
itself, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, sublessees, subtenants or
vendees in the land herein leased."
27.13 Governing Law. This Lease shall be construed and interpreted in
accordance with the laws of the State of California.
16
IN WITNESS WHEREOF, Lessee and Agency have executed this Lease by their duly
authorized representatives as of the date first hereinabove written.
'-ATTEST:
'.L. Di Shea, CMC,
Agency Secretary
APPROVED AS TO FORM:
-�
- 6t-
Stephen ckis,
Agency General Counsel
AGENCY:
POWAYREDEVELOPMENT AGENCY, a
public body, corporate and politic
MA
SIR . _
LESSEE:
POWAY AUTO ]
LLC, a California
am
17
Alan Sweetow, President
Poway Auto Dealers Association, LLC
EXHIBIT "A"
SITE MAP
AUTO STORAGE FACILITY
13875 Kirkham Way
APN: 323.501 -02
7
4'
3
C
Si
R 4
S
EXHIBIT `°B"
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY
OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:
PARCEL 4 OF CERTIFICATE OF COMPLIANCE BOUNDARY ADJUSTMENT NO. 99 -10, IN A
DOCUMENT RECORDED NOVEMBER 3, 1999 AS FILE NO. 1999 - 0735323 OF OFFICIAL
RECORDS, BEING MORE PAR71CULARLY DESCRIBED AS FOLLOWS:
THAT PORTION OF LOTS 1 AND 2 OF SECTION 30, TOWNSHIP 14 SOUTH, RANGE I WEST,
OF THE SAN BERNARDWO BASE AND MERIDIAN, TOGETHER WITH PARCEL 2 OF PARCEL
MAP NO. 16103, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
FILED IN THE OFFICE OF THE SAN DEW COUNTY RECORDER MAY 31, 1990 AS FILE NO.
90.296630 OF OFFICIAL RECORDS, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWESTERLY CORNER OF SAID PORTION Ol»'LOT I Of SECTION
30, COMMON WITH SECTION 25 OF TOWNSHIP 14, SOUTH, RAM 1 WEST OF THE SAN
BERNARDINO MERIDIAN; THENCE ALONG 1TIE NORTHERLY LW OF SA1I7 PORTION OF
LOT jjff SECTION 30 AND THEN .ALONG THE SOUTHERLY LINE OF PARCEL "B" OF
CERTIFICATE OF
SE " "I'r MM 20, 19% AS DOC. # 199"8C M OF OFFICIAL RECORDS, MM i8 °x5'31"
EAST { RECORD: NORTH 88"'15'21" VAT, PER PARCEL MAP NO. 5750, ii THE CITY OF
POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN TIRE OFFICE. OF THE
SAN DIEGO COUNTY RECORDER MARCH 31, 1977 AS FILE NO. 77- 118248 OF OFFICIAL
RECORDS, NORTH SV15'43" WEST PER SAID MAP NO. 16103) 6.00 FEET TO THE
SOUTHWESTERLY CORNER OF SAID PARCEL "B"'; THENCE CONTINUING ALONG SAID
LINE, SOUTH 88 015'31" EAST 1187.71 FEET TO THE NORTHWESTERLY CORNER OF SAID
PARCEL 2 OF PARCEL MAP NO 16103; TiIENCE CONTINUING ALONG SAID LINE, SOUTH
88°15'31" EAST 300.19 FEET TO THE NORTHEASTERLY CORNER OF SAID PARCEL 2;
THENCE LEAVING. SAID LINE, ALONG THE EASTERLY LINE OF SAID PARCEL 2, COMMON
WTTH PARCEL 1 OF SAID PARCEL MAP No. 5750, SOUTH 00°17'20" EAST, (RECORD NORTH
00"16'2$" WEST PER SAID PARCEL MAP NO. 5750, NORTH 00 °17133" WEST, PER SAID
PARCEL MAP No. 16103) 667.75 FEET" TO THE SOUTHEASTERLY CORNER OF SAID PARCEL
2, COMMON WITH PARCEL 1 OF SAID PARCEL MAP NO.' 16103; THENCE ALONG THE
SOUTHERLY LINE OF SAID PARCEL 2 COMMON WITH SAID PARCEL 1; SOS 59°47148"
WEST (RECORD NORTH 59°47'36" EAST PER SAD PARCEL MAP NO 16103) 346.11 FEET TO
THE MOST SOUTHERLY CORNER OF SAID PARCEL 2, COMM N WITH SAID PARCEL 1;
THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 1 OF FARM MAP NO. 16103 AND
ALONG THE EASTERLY LINE OF SAID PORTION OF LOTS 1 AND 2 OF SECTION 30, SOUTH
00 °17'20" EAST (RECORD NORTH 00°17'33" WEST PER SAID PARCEL MAP NO. 16103) 465.00
FEET TO A POINT ON THE NORTHWESTERLY LINE OF THE RIGHT -OF -WAY OF BEELER
CANYON ROAD PER.CITY RESOLUTION NO. 203562 RECORDED SEPTEMBER 14, 1971, AS
DOC, NO. 207577, BOOK 1971 OF OFFICIAL RECORDS; THENCE ALONG SAID LINE SOUTH
78 013'57" WFST 540.29 FEET (RECORD- NORTH 78 °13'45" EAST, PER SAID PARCEL-MAP,NO.
16103), THENCE SOUTH 63 046'04" WEST° (RECORD NORTH 03045'52" EASTM SA,1D PARCEL
MAP M. 16103)786.75 FEET TO A POINT ON THE WESTERLY LI14E, OF SAID PORTION OF
LOT 2 OF SECTION 30; THENCE LEAVING SAM RIGHT OF WAY OF BEELER. CANYON
J
ROAD, ALONG THE WBS MY LINE OF SAID PORTION OF LOT 2 AND TIM ALONG THE
WBST ny LM Op SAID PORTION OF LOT I OF SBCIION 30, COMM WrM SAID
SAN 25, NORTH 01TS'I7" EAST (IMCORID NOM01°05105" BASF PER SAM Pte.
MAP NO. 16103; NO $M'544" BAST Pik SAID PARIM MAP NO. 57A IMM PICT TO
THE POWrOF BEG Tyr
• 0
Auto Storage Facility (13875 Kirkham Way)
Management Plan
By and between
Poway Redevelopment Agency
and
Poway Auto Dealers Association LLC
The Poway Auto Dealers Association, LLC (the "Association "), has entered into a
Lease (the "Lease ") with the Poway Redevelopment Agency (the "Agency "), for the use
of an auto storage facility located at 13875 Kirkham Way in the Poway Business Park
(the "Facility "). As a tenant of the Agency -owned Facility, the Lease requires a mutually
acceptable Management Plan, which outlines the plans, procedures, and methods for
managing the Facility. The Agency and the Association agree to the following terms and
conditions and, pursuant to the Lease, the Association will remain in full compliance with
the terms of the Management Plan at all times. Material failure to do so will constitute a
default of the Lease terms, grounds for early Lease termination. The Agency and
Association will review the conditions and requirements contained in the Management
Plan annually during the term of the Lease. The purpose of the annual review is to assess
the needs of both parties and make modifications or revisions necessary for continued
operation of the Facility.
1. Use of Facility
1.1 Point -of -Sale. California Sales and Use Tax Law requires a
seller's permit for each sales location. Before conducting sales at the Facility, the
Association shall first give notice to the California State Board of Equalization giving the
address of the Facility as a temporary sales location using the appropriate Board of
Equalization form. Thereafter, the Association shall separately state and report sales
made at the Facility. Section 1802 of the Uniform Local Sales and Use Tax Regulations
states that the place of sale is the location where the principal negotiations are carried on
and that it is immaterial that the order must be forwarded elsewhere for acceptance,
approval of credit, shipment, or billing.
1.2 Parking. Vehicles, including those stored inside the Facility, those
temporarily stored in the 41 parking spaces outside of the enclosed area of the Facility,
those belonging to employees parking temporarily on site, those belonging to employees
of contracted services, and those of customers attending auto sales events shall not be
parked in any manner that restricts access to the Facility, or hinders the flow of vehicle
traffic throughout the Facility, nor shall any such vehicles be parked on any public streets
located within the Poway Business Park.
1.3 Sales Events. As stated in the Lease, sales events will be allowed
at the Facility no more than four (4) times per year, with prior authorization from the
Agency and City of Poway (the "City ") through application by the Association for a
Temporary Use Permit (TUP). Sales events shall only be held during the weekend hours
of Friday at 3:00 p.m. through Sunday at 9:00 p.m. and shall adhere to all City codes,
ordinances, and regulations. Sales events, if scheduled for a weekend immediately
preceding or following a holiday, may be eligible to extend the hours of operation to
include the recognized holiday if the actual holiday falls on either a Friday or Monday.
Extended sales events to holidays is subject to written request through the TUP process
and Agency approval. The holidays for possible sales event extension are as follows.
President's Day
Labor Day
Memorial Day
0 of July
Included with the TUP application, the Association shall provide the Agency with a
parking plan to accommodate the vehicle inventory, employees staffing the sales event,
anticipated customer parking during the event, and the provision of Americans with
Disabilities Act (ADA) accessible sales and restroom areas. The TUP application shall
also include direct contact information for the Association members staffing the event.
1.4 Enclosed Parking Area. The enclosed parking area within the
Facility is for use by members of the Association for purposes of storing vehicle
inventory only. Parking spaces are to be allocated equally among all members according
to the terms of the Lease. The enclosed parking area may be considered as customer
vehicle display for purposes of accompanied site visits by authorized employees of the
Association during reasonable business hours and during sales events authorized by the
Agency. At no time shall any members of the Association or authorized services restrict
access to the enclosed areas of the Facility or hinder use of the Facility by any other
members of the Association, the City, and the Agency.
1.5 Unenclosed Parking Area. The Facility's unenclosed parking
area adjacent to Kirkham Way is to be used for the temporary unloading and storing of
vehicles according to the terms of the Lease. Temporary use of this area means vehicles
will not be stored in this area for more than eight (8) hours, and in no case shall any
vehicle inventory be held in this area over night -time hours, between the hours of 9:00
p.m. and 6:00 a.m. daily, seven (7) days a week. The unenclosed area may be used for
customer parking during authorized sales events. The unenclosed area may be used for
auto dealers located within Poway who are not participating in the Poway Auto Dealers
Association. At no time shall any members of the Association or authorized services
restrict access to the unenclosed areas of the Facility or hinder use of the Facility by any
other members of the Association, the City, and the Agency.
1.6 Security Building. The Agency shall provide a security station
where designated, outside of the enclosed parking area, adjacent to Kirkham Way. The
use of this building is authorized by the Agency for security services only, including
inventory- monitoring systems, and other uses incidental to the Association's use of the
Facility. The Association shall not use this building for storage of landscape maintenance
equipment or any other items or equipment not directly associated with the security of the
Facility. Use of the security building as a sales office may be granted as part of an
authorized sales event if the proposed use(s) of the security building is specified,
outlined, and included as part of an annual Temporary Use Permit application for auto
2
sales events. Violations of this section, including the termination of security services
required by the Lease or Management Plan, may result in the Agency's removal of the
Security Building from the Facility or prohibiting the Association from its use.
1.7 Violations and Sanctions. The Association shall provide to the
Agency accurate and current contact information for each member of the Association and
the preferred contact person(s) to notify in the event of any violations. Violations of the
use of the Facility, including the unenclosed (temporary) parking area, according to the
terms of this Management Plan, the Lease, Temporary Use Permits granted to the
Association, Poway Municipal Code, or terms of the Operating Agreement which relate
directly to use of the Facility, shall result in no less than the following sanctions by the
Agency for failure to maintain, secure, operate, and manage the Facility as agreed. Prior
to the imposition of the first sanction within any consecutive three hundred sixty -five
(365) calendar day period, reasonable efforts shall be made by the Association to resolve
the violation to the Agency's satisfaction, and the Agency shall allow a reasonable period
of time for such resolution to occur. The Agency reserves the right to impose sanctions
for any violation it believes in its sole and absolute discretion warrants immediate action
or if prior repetitive violations are prevalent. Escalating sanctions will occur, regardless
of the offending members involvement with the preceding violation. The Agency
reserves the right to terminate the Lease and evict the Association either in accordance
with the terms of the Lease or the terms of the Management Plan at any time should any
violation warrant such action, which is beyond the routine sanctions specified below. At
no time will the procedures and authority identified in Section 4.5, Internal Dispute
Resolution, hold precedence over the Agency's right to enforce all terms and conditions
and impose sanctions as needed for violations of the terms of the Operating Agreement,
Lease Agreement, and Management Plan.
First Violation: Written notice of violation and warning to the offending member
of the Association and the Association's identified contact person, with a copy of notice
provided to all members of the Association.
Second Violation: Written notice of violation and monetary fine of $100 to the
violating member of the Association, with a copy of notice provided to the Association's
identified contact person and all members of the Association. The notice of violation will
include a second warning issued to the Association regarding continued violations of its
use of the Facility and continued violations will result in the temporary removal of the
offending member of the Association for a period of one hundred eighty (180) calendar
days.
Third Violation: Written notice of violation and monetary fine of $250 to the
violating member of the Association, with a copy of notice provided to the Association's
identified contact person and all members of the Association, and a removal of the
violating member of the Association from the Facility for a period of one hundred eighty
(180) calendar days. The notice of violation will include a third and final warning to the
Association indicating additional violations will result in the closure of the Facility.
Fourth Violation: Written notice of violation to all members of the Association,
3
•
termination of the Lease, and closure of the Facility within sixty (60) calendar days.
If such violations do not occur within three hundred sixty -five (365) calendar days of the
preceding violation, the sanction assessed to the member(s) of the Association will not
escalate. Failure to pay any fines assessed to members of the Association within thirty
(30) calendar days will constitute an additional violation.
1.8 Subletting Spaces. Only the Association is authorized to sublet
parking spaces within the enclosed area of the Facility under terms and conditions
specified in the Lease. A sub lessee, upon entering into a sublease agreement, shall be
bound by the terms of the Lease, the portions of the Operating Agreement relevant to
them, and Management Plan. Violations by a sub lessee will result in sanctions to the sub
lessee and to the Association, as specified in the sanctions outlined in Section 1.7.
2. Security
2.1 Security Services. The Association's provision of security
services is a requirement of the Lease. The Association shall provide to the Agency the
name and direct contact information for the security company hired to monitor the
Facility. In addition, the Association shall provide the Agency with the hours of security
monitoring, the names of authorized security guards on -site at the Facility, and
procedures for monitoring the Facility, both enclosed and unenclosed (temporary) areas.
Any changes in security services including but not limited to termination of authorized
security guards, changes in security service providers, their operating hours and
procedures, shall be provided to the Agency in writing no less than seven (7) calendar
days prior to the action or change occurs. In the event an action has occurred by the
service provider or its employee warranting immediate termination, verbal notification
shall be made to the Agency within the forty-eight (48) hours following the action
followed by a written notification to the Agency within ten (10) calendar days.
2.2 Access Control. The Association shall secure the Facility through
controlled access. Accordingly, only the Association members, property managers,
security service employees, the City, and the Agency will be provided with necessary
keys, security cards, or access codes necessary to enter the Facility. No other persons,
companies, or organizations shall be provided with the ability to access the Facility.
2.3 Facility Access to Public. The Association is allowed to grant
access to their employees requiring access to the Facility for business operations only,
including vehicle unloading and loading, vehicle inspections, vehicle washing, and
security services. All other access, beyond that of the Agency entering as owner of the
Facility, is restricted to customers accompanied by employees of the Association on
official business or during authorized sales events open to the public. No other public
access is permitted at any time.
2.4 Facility Access to Agency. According to the terms of the Lease,
the Agency reserves the right to enter and inspect the Facility. Such access will normally
occur during reasonable business hours, with prior notice provided to the Association. In
4
•
the event of an emergency, maintenance conditions requiring immediate resolution, or
violations of the terms of the Lease, Operating Agreement, or Management Plan, the
Agency reserves the right to enter the Facility without prior notice.
3. Support Services.
3.1 Vehicle Washing. Rinsing, washing and detailing of vehicles
( "washing ") is an allowed activity within the enclosed areas of the Facility. Such
washing will occur during reasonable business hours, will not restrict access to the
Facility or hinder use of the Facility by any members of the Association, the City, and the
Agency. Washing of vehicles will be conducted using deionized water, with measures in
place at the time of washing to reduce the level of excess runoff to the storm drain
system. The Association and its members shall at all times comply with the City's
Standard Urban Storm Water Mitigation Plan Ordinance and all other local, regional,
state and federal pollutant discharge requirements. The Association shall provide to the
Agency the name and direct contact information for any person or company hired to
perform vehicle washing services. Vehicle washing service providers, their operating
hours and procedures, shall be provided to the Agency in writing no less than seven (7)
calendar days prior to the Association taking occupancy of the Facility. The Association
will provide the Agency with written verification of all services providers, including any
changes in vehicle washing service providers, on no less than a quarterly basis. Quarterly
reporting concerning service providers is to coincide with the scheduled review of
security services specified in Section 3.4.
3.2 Landscape Maintenance. The Association's provision of
landscaping maintenance services is a requirement of the Lease. The Association shall
provide to the Agency the name and direct contact information for the landscape
maintenance company hired to maintain the landscaped areas of the Facility. Landscape
maintenance shall occur during reasonable business hours. Landscape maintenance
service providers, their operating hours and procedures, shall be provided to the Agency
in writing no less than seven (7) calendar days prior to the Association taking occupancy
of the Facility. The Association will provide the Agency with written verification of all
services providers, including any changes in landscape maintenance service providers, on
no less than a quarterly basis. Quarterly reporting concerning service providers is to
coincide with the scheduled review of security services specified in Section 3.4.
3.3 Property Maintenance. The Association's continued property
maintenance of the Facility is a requirement of the Lease. The Association shall provide
to the Agency the name and direct contact information for property maintenance service
hired to maintain the enclosed and unenclosed parking areas of the Facility, including
paved surfaces, walls, gates, lighting, buildings, any infrastructure, and trash and debris
removal. Property maintenance shall occur according to the terms of the Lease during
reasonable business hours. Changes in property maintenance service providers, their
operating hours and procedures, shall be provided to the Agency in writing no less than
seven (7) calendar days prior to the action or change occurs. In the event an action has
occurred by the service provider or its employee warranting immediate termination,
verbal notification shall be made to the Agency within the forty-eight (48) hours
•
following the action followed by a written notification to the Agency within ten (10)
calendar days.
3.4 Security Monitoring. In addition to the terms and conditions
specified in the Lease and Section 2 of the Management Plan, the Association shall
continue to provide security services in a manner and frequency mutually agreed upon by
the Association and Agency. Appropriate security levels will be reviewed and approved
by the Association and Agency no less than quarterly on or around the following dates
each fiscal year:
1 st Quarter - July 1
2nd Quarter - October 1
3rd Quarter - January 1
4th Quarter - April 1
No changes will occur in security services for the Facility without prior review and
approval of the Agency.
3.5 Audit Services. The Association's provision of audit services is a
requirement of the Lease. The Association shall provide to the Agency the name and
direct contact information for the reputable accounting firm hired to conduct regular audit
services regarding the Association's full and complete financial operations of the Facility.
Audit service providers, their operating hours and procedures, shall be provided to the
Agency in writing no less than seven (7) calendar days prior to the Association taking
occupancy of the Facility. The Association will provide the Agency with written
verification of all services providers, including any changes in audit service providers, on
no less than a quarterly basis. Quarterly reporting concerning service providers is to
coincide with the scheduled review of security services specified in Section 3.4. All
members will be kept informed of all material activity regarding the Facility and its
operations.
3.6 Financial Services. The Association provision of an Operating
and Capital Reserve account is a requirement of the Lease. The Association will require
financial services for this activity as well as managing the collection of member
contributions and payment of monthly operating expenses. The Association shall provide
to the Agency the name and contact information for financial services provided for
operation of the Facility, including account numbers for the Operating and Capital
Reserves. Financial service providers, their operating hours and procedures, shall be
provided to the Agency in writing no less than seven (7) calendar days prior to the
Association taking occupancy of the Facility. The Association will provide the Agency
with written verification of all services providers, including any changes in financial
service providers, on no less than a quarterly basis. Quarterly reporting concerning
service providers is to coincide with the scheduled review of security services specified
in Section 3.4.
4. Property Management. The Association will manage the Facility in
accordance with all terms and conditions specified in the Lease, Operating Agreement
0
• 0
and Management Plan. The Association may hire a property management company to
perform all necessary services to remain in full compliance of all terms and conditions of
the Lease, Operating Agreement, and Management Plan. The Association shall provide
to the Agency the name and contact information for the member dealer responsible for
property management, unless such services are contracted out to a private management
company. In the event the Association does not hire a management company, the
Association itself, or through one of its members, shall perform the management services
set forth in Section 4.1 below, shall designate a "Manager" or "Administrator" to perform
those services, and shall provide the Agency in writing of the name and contact
information for such person prior to that person's assumption of duties.
4.1 Property Management Company. If the Association elects to
obtain property management services, the Association shall provide to the Agency the
name and direct contact information for property management services and for the
individual who will serve as Manager or Administrator, a copy of the contract or
agreement indicating the management services to be provided, and the methods and
procedures for managing the Facility. At a minimum, the property management company
shall manage:
1. All Facility service and maintenance agreements. Retain (subject to the
approval of the Agency and Association) and supervise all service
providers, including but not limited to landscape maintenance, vehicle
washing, security personnel, and facilities repairs and maintenance.
2. All annual reporting requirements to the Agency, including financial and
audit services, according to the terms of the Lease and this Management
Plan.
3. Collection of member contributions to the Association, including monthly
operating expenses, capital contributions, and reserve account allocations,
and shall ensure that contributions are adjusted to account for any
fluctuations in the total number of members in the Association. Payment
of all taxes and operating expenses.
4. Adherence to all operating conditions and requirements.
5. An access control log, which is to contain no less than an accurate and
complete distribution record of Facility access codes, security cards, and
keys, the date they were distributed, the Association member receiving
such access to the Facility, and the member employee(s) or
representative(s) signing to confirm receipt. The same process shall be
maintained to track surrender of the same. The access control log shall be
provided to the Agency upon request.
6. The management and enforcement of any and all sublease agreements,
including direct contact information for any sub lessee.
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r i
7. The allocation of parking spaces within the enclosed areas at all times,
ensuring that all agreements among Association members and all
subleases for surplus parking spaces are monitored.
8. The monitoring of annual reserve requirements, ensuring that a process is
in place to achieve and maintain appropriate reserve funding levels, and
ensuring that proper procedures are followed for all withdrawals from
either reserve account.
9. The coordination of responses and resolution of all inquiries regarding any
aspect of Facility operations and maintenance, and maintenance of a
complete and accurate listing of all secondary contacts, including but not
limited to services providers to the Association, Association members, and
emergency contacts.
10. The development and administration of an Emergency Plan for evacuating
inventory and personnel from the Facility in case of natural disaster or
other occurrences, which may force the closure of the Facility in order to
ensure public safety.
11. Any other day -to -day requirements of the Facility.
4.2 Emergency/Urgent Contact. The Association shall provide the
Agency with the name(s) and contact information for emergencies, including but not
limited to fire or earthquake, which may require immediate response by the Association
regarding the Facility. In addition, the Association shall provide the Agency with the
name(s) and contact information for any urgent issues that may arise and require
immediate notification, including but not limited to accidents or graffiti removal, or
problems beyond the Agency's control, including but not limited to planned power
outages or water shut -off.
4.3 Emergency Plan. The Association shall create and adopt an
Emergency Plan no later than the first date of occupancy for evacuating all inventory and
personnel as a result of natural disaster or other occurrences, which may force closure of
the Facility in order to ensure public safety. The Emergency Plan shall be maintained
throughout the term of the Lease.
4.4 Reserve and Operating Account Management. The Association
is required to maintain an Operating Reserve and Capital Reserve, as specified in the
terms of the Lease. The Lease also provides for prior Agency approval for any
withdrawals from either reserve account. Agency approval may only be granted after a
meeting of the Association to obtain majority approval of the proposed expense followed
by a written request to the Agency indicating the proposed expense, its purpose, and the
plan for restoring the reserve account to its prior balance. Withdrawals from either
reserve account without this procedure will be deemed unauthorized and the Association
will be deemed in breach of the Lease.
8
4.5 Internal Dispute Resolution. In addition to violations and
sanctions identified in Section 1.7, which is in full force and effect at all times regardless
of disputes between members of the Association, the Association may conduct its own
internal dispute resolution process in which disputes arising between members of the
Association shall be resolved by the Association. The Association will be responsible for
all decisions of hiring, firing, and contracting (e.g. service agreements), and all disputes
with members concerning such matters shall be resolved by the Association, unless final
Agency approval or authorization of the proposed action/resolution is required by the
terms of the Operating Agreement, Lease Agreement, or Management Plan. All internal
issues brought to the Administrator or Manager that involve liability, adequate
performance of contracts, compliance with provisions of the Lease, or violations of the
Lease or Operating Agreement shall be brought to the Association and dealt with by the
Association. The Association will designate one person who shall function as a
"President" and who will be the primary point of contact for the Manager or
Administrator. All matters regarding the performance or nonperformance of a member
shall be brought to the President for handling and resolution by the Association in
accordance with the Operating Agreement.
4.6 Dispute Resolution. Disputes arising between the Association
and the City or Agency shall be settled through good faith negotiations. If such
negotiations are unable to result in a mutually acceptable resolution, both parties agree to
enter into binding arbitration with an arbitrator that is mutually acceptable to both parties.
The Association shall designate a member to serve as a point of contact as well as a
representative for negotiations and arbitration. The City or Agency shall designate a
point of contact as well as a representative for negotiations and arbitration. The
appointed representatives for both parties, the Association and City or Agency, shall
determine a mutually acceptable arbitrator who is knowledgeable, experienced and
skilled in matters concerning real estate and issues between public agencies and private
associations.
Approved:
City of Poway/Redeve ment Agency
By•
J es L. Bowersox,
cutive Director
Date: _ 7 �(,v IoS'
Approved:
Poway Auto Deale
By:
Alan Sweetow, President
Poway Auto Dealers Association, LLC
Date: 711 8 Q_5
E