RPVCCA_CC_SR_2014_08_19_L_PV_on_the_Net_Building_Lease_TerminationCITY OF RANCHO PALOS VERDES
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
HONORABLE MAYOR & cr~y~~UNCIL MEMBERS
DAN LANDON, IT MANAGE~
AUGUST 19, 2014
TERMINATION OF PALOS VERDES ON THE NET
OFFICE AND STORAGE SPACE LEASE
CAROLYNN PETRU, ACTING CITY MANAGER<?€)
RECOMMENDATION
Authorize the Acting City Manager to sign the Notice of Termination of Lease regarding
the modular building used by Palos Verdes on the Net ("PVNET") for office and storage
space on the Civic Center property, adjacent to the Community Development
Department, at 30940 Hawthorne Blvd.
BACKGROUND
In 1996, the City Council authorized a lease with PVNET for a use of the building next to
the City Community Development building (see attached Exhibit B) to provide community
technology education and community services. In light of the community services
provided, the lease merely required reimbursement for utility expenses. PVNET began
providing the City with day-to-day IT services in 1998, and the City Council approved an
extension and amendment of the original lease for offices and storage space associated
with the ongoing support and maintenance of the information technology ("IT') system at
City Hall in the same building. The lease was amended in 2006 to include an automatic
annual renewal provision unless the City notified PVNET in writing of an intent to
terminate the agreement.
In 2006, the City Council approved a ground lease with PVNET to allow the "Annex"
modular building to be located in the City maintenance yard in exchange for the donation
of audio and video equipment purchased by PVNET to the RPVtv cable studio operation.
The Annex is used to conduct computer training for the Palos Verdes community, to
operate the PVNET internship program, and PVNET's support of the City's GIS system.
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TERMINATION OF PVNET OFFICE AND STORAGE SPACE LEASE
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DISCUSSION
It is expected that the RFP competitive process for IT services will include some on-site
staffing requirements in order to provide timely resolution to high and urgent priority IT
trouble tickets. The current PVNET office and storage space building is located in close
proximity to City Hall and would be an ideal location for on-site staffing by IT independent
contractors. Staff recommends the use of the current PVNET office and storage space
building for the vendor selected by City Council as a result of the competitive process for
IT services. In addition, termination of the lease could provide the City with other options
including additional office space for other City functions/needs in the future.
The terms of both of the PVNET leases require the City to notify PVNET by September
1st of an intent to terminate, and the notice to vacate before December 31st of the
following year. While City staff feels there is ample reason to warrant termination the
lease on the office and storage space building to facilitate the IT Services RFP, staff does
not recommend termination of the ground lease for the Annex building as PVNET intends
to continue its use of this facility to support its community non-profit activities and
programs. In addition, whereas the office and storage space building is owned by the
City, the Annex is similar to the Peninsula Senior facility in that the buildings are owned
by the Tenant.
CONCLUSIONS
Staff recommends that City Council approve the termination of the lease of the PVNET
office and storage space at the Civic Center in order to accommodate any changes
resulting from the IT Services RFP process.
FISCAL IMPACT
No fiscal impacts have been identified at this time, although there may be costs
associated with modifying the subject office and storage building to suit the City's needs
once the IT Services RFP process has been completed.
Attachments :
Exhibit A -Notice of Termination of Lease
Exhibit B -Location of PVNET office and storage space map
Exhibit C -1996 Lease
Exhibit D -2006 Amendment
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CITY OF
August20,2014
Mr. Ted Vegvari, President and Director
Palos Verdes on the Net
30940 Hawthorne Boulevard Suite 101
Rancho Palos Verdes, CA 90275
Dear Mr. Vegvari,
RANCHO PALOS VERDES
BY PERSONAL DELIVERY
Subject: NOTICE OF TERMINATION OF THE OFFICE AND STORAGE SPACE LEASE
As you know, the City of Rancho Palos Verdes is currently preparing to issue a Request For Proposal
(RFP) for Information Technology services. In preparation for the RFP process, there are several initial
steps the City must take, including regaining the use of the City-owned building located at 30940
Hawthorne Boulevard, Rancho Palos Verdes, California, 90275 ("the Building") that PVNET has leased
and occupied since 1996. The subject of this notice of termination of lease is the building known as the
PVNET "Office and Storage Space" (see attached drawing).
To that end, this letter is to notify Palos Verdes on the Net ("PVNET", "Tenant") that the City ("Lessor"),
pursuant to the terms in the lease agreement entered into on October 1, 1996, as amended by
Amendments No. 2, 3 and 4, is hereby delivering written notice to Tenant to cease its occupancy and use
of the Building and to quit and deliver possession of the Building to Landlord on or before December 31,
2015.
We remind you of your obligation to comply with all provisions of the Lease until the final date of
occupancy noted above and to leave the premises at the end of your tenancy in a clean condition and
otherwise in the same condition as when your lease of the Building commenced. Any contents left on
premises at the end of the lease will be considered property of the Lessor, and any disposal cost will be
billed to the Tenant, unless prior written arrangements have been made with the Rancho Palos Verdes
City Manager or his or her designee.
The City appreciates and values the long-term relationship that has existed between the City and PVNET.
Thank you in advance for your cooperation in this transition. If you have any questions, please feel free
to contact me at (310) 544-5203.
Sincerely,
Carolynn Petru
Acting City Manager
30940 HAWTHORNE BOULEVARD/RANCHO PALOS VERDES WWW.PALOSVERDES.COM/RPV L-3
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LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") dated as of October 1, 1996, is
entered into by and between the CITY OF RANCHO PALOS VERDES ("Landlord"),
and Palos Verdes on the Net ("Tenant").
RECITALS:
A. Landlord is the owner of certain improved and unimproved real property
which is not currently needed for City purposes and which Landlord desires to lease to
Tenant.
B. . Tenant desires to lease a portion of such real property owned by Landlord
upon the terms and conditions set forth in this Lease.
NOW, THEREFORE, Landlord and Tenant agree as follows:
1. DESCRIPTION OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the following portions of that certain real property commonly known as
Recreation and Parks Building at the Rancho Palos Verdes Civic Center (the
"Premises"), located at 30940 Hawthorne Boulevard, Rancho Palos Verdes, California:
All areas within said building with the exception of two enclosed offices which are
indicated in cross-hatch on Exhibit "A". The Premises have been inspected by Tenant
and Tenant hereby acknowledges that, except as specifically set forth in herein, Tenant
is entering into this Lease after such inspection of the Premises and with full awareness
of the conditions and character of the Premises and without reliance upon any
representation as to the condition or character of the Premises which may have been
made by representatives of Landlord. Tenant hereby accepts the Premises "AS IS",
except that Landlord specifically agrees to repair the roof of the Premises and to
maintain said roof in good condition throughout the term of this Lease, in accordance
with the requirements of Section 7(b) hereof.
2. USE
Tenant shall only have the right to use the Premises for the operation of a
community telecommunication center under the name Palos Verdes on the Net. In
addition, Tenant is authorized to allow the names "Computer Technology Center" and
"Community Computer Technology Center" to be used to refer to the Premises. Tenant
shall not use the Premises for any purpose which is unrelated to the purposes set forth
in this paragraph.
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Tenant shall not use the Premises or permit anything to be done in or
about the Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter become effective.
Tenant shall promptly comply with all laws, ordinances, rules, regulations and
requirements of governmental or quasi-governmental authorities having jurisdiction over
Tenant's use or operation of the Premises.
Under no circumstances shall Tenant be allowed to keep or bring on the
Premises or permit any other person to bring onto the Premises any Hazardous
Materials. "Hazardous Materials" shall mean (a) any oil, petroleum, petroleum product,
flammable substances, explosives, radioactive materials, hazardous wastes or
substances, toxic wastes or substances or any other materials or pollutants which
(i) pose a hazard to the Premises or to persons on or about the Premises or (ii) cause
the Premi~es to be in violation of any law; (b) asbestos in any form which is or could
become friable, urea formaldehyde foam insulation, transformers or other equipment
which contain dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty (50) parts per million; (c) any chemical, material or substances defined as or
included in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," or "toxic
substances" or words of similar import under any applicable law; and (d) any other
chemical, material or substance, exposure to which is prohibited, limited or regulated by
any governmental authority or which could pose a hazard to the health and safety of the
users of the Premises or the owners and/or occupants of property adjacent to or
surrounding the Premises.
3 . ACCESS TO PREMISES
(a) Landlord hereby grants to Tenant access to the Premises. Tenant
may operate its facility as much as twenty-four (24) hours per day, seven days a week .
(b) Landlord reserves the right to enter the Premises upon reasonable
notice to Tenant during Tenant's posted business hours. Landlord may enter the
Premises at other times and without notice to Tenant in the event of an emergency or
physical disaster.
4 . TERM OF LEASE
Subject to the provisions of Paragraph 5 herein and the right of either
party to terminate this Lease at any time upon ninety (90) days advance written notice,
the term of this Lease shall be for a period of two (2) years, commencing upon January
1, 1997, (the "Commencement Date") and terminating on December 31, 1998.
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5. BASE RENT
The Tenant shall pay no rent to Landlord for the use of Premises during
the term of this lease, other than the charge for electricity set forth in Section 6 hereof.
In exchange for the use of the Premises, Tenant shall provide a complimentary
membership to Landlord which will allow all officers and employees of Landlord to use
the community telecommunication center.
6. UTILITIES
Tenant shall pay the sum of $200.00 per month to Landlord for electricity.
Telephone and/or additional utilities shall be furnished at Tenant's sole cost and
expense, subject to the approval of Landlord. Water shall be provided by Landlord.
7. MAINTENANCE OF PREMISES
(a) Tenant's Obligations.
Except as provided in subsection (b) hereof, Tenant shall at Tenant's sole
cost and expense keep and maintain the Premises, including the improvements
thereon, in a safe, clean and good condition and repair, ordinary wear and tear and
damage by casualty excepted. Tenant shall be responsible for all custodial and
cleaning services at the Premises, and for any repairs or maintenance necessitated or
caused by Tenant's use of the Premises. Except as provided herein, Landlord shall not
be liable or have responsibility for any repairs or to perform any maintenance to the
Premises, including the improvements thereon. Landlord shall have no obligation to
alter, remodel, improve, repair, decorate, or paint the Premises or any part thereof,
except as specifically required by this Lease or to the extent caused by Landlord's use
thereof.
(b) Landlord's Obligations
(i) Landlord shall maintain the roof, structural, electrical, heating,
venting, and plumbing at the Premises; provided, however, Tenant shall be responsible
for any damage to the Premises or any repairs to the Premises occasioned by Tenant's
use of the Premises (i.e., Tenant shall be responsible for maintenance or repairs to
plumbing and electrical systems to the extent such maintenance or repairs are required
due to Tenant's use of the Premises). Any damage to the Premises arising out of
Tenant's use of the Premises shall be paid by Tenant.
(ii) Prior to the Commencement Date of this Lease, Landlord shall
make available to Tenant the two offices located on the Premises that currently are
being used as storage space by Landlord's Recreation and Parks Department.
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(iii) In the event of any breach of Landlord's obligations to repair or
maintain the premises as required by Section 7(b) of this Lease, after reasonable
written notice from Tenant, Tenant may make or cause such repair or maintenance to
be made, and Landlord shall promptly reimburse Tenant for all such sums expended
therefor.
8. AL TERA TIONS TO PREMISES
Except as specifically set forth herein, no structural changes, alternations,
repairs, additions, remodeling or improvements shall be built or made to or upon the
Premises by Tenant without the prior written consent of Landlord. Landlord specifically
consents to the following alterations, subject to approval of any exterior improvements
by Landlord's Department of Planning Building and Code Enforcement, which approval
shall not be unreasonably withheld:
(a) Tenant may install improvements including, without limitation, a
security system, to provide for the safety of the computer and telecommunications
equipment, software and other items kept on the Premises.
(b) Tenant may install lighted signage on the side of the building, either
facing the parking lot or the street, and other signs at both entrances to the building.
Such signage shall be at the sole expense of Tenant and shall comply with all
applicable City standards and regulations.
(c) Tenant may install such cabling and wiring as may be necessary or
desirable in furtherance of the purposes of this Lease and Tenant's use of the
Premises.
9. TAXES AND NON-USE PAYMENTS
This Lease may create a possessory interest which may be subject to the
payment of property taxes levied on such interest. In the event of the foregoing, Tenant
shall pay and discharge prior to their due date all taxes and assessments imposed by
any duly-constituted authority upon such a use or possessory interest of Tenant,
whether the same be assessed to Landlord or to Tenant. Any such taxes or
assessment paid by Tenant to Landlord under the provisions hereof will be remitted by
Landlord to the appropriate taxing agency in a timely manner, and the payment of such
taxes or assessments by Tenant to Landlord shall fully discharge Tenant from its
obligation to pay the same. In the event that Landlord shall pay any such taxes or
assessments, Tenant shall be obligated to reimburse Landlord therefor.
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10. HOLD HARMLESS
Tenant hereby agrees to indemnify and hold Landlord, its officers,
directors, employees, representatives, agents and affiliates, harmless against and from
any and all claims of damages or injury arising from Tenant's use of the Premises, or
from the conduct of any activity, work, or thing done, permitted or suffered by Tenant in
the Premises, the improvements at the site and the parking area, and shall further
indemnify and hold harmless Landlord against and from any and all claims, costs,
damages, liabilities, or obligations arising from any breach or default in the performance
of any obligation on Tenant's part to be performed under the terms of this Lease, or
arising from any act, neglect, fault, or omission of the Tenant, or of its agents,
employees, visitors, invitees, or licensees within the scope of such employment or in
furtherance of the business purposes of tenant, and from and against all costs,
attorneys' fees, expenses, and liabilities incurred in or about any such claim or any
action or proceeding brought thereon; and in case any action or proceeding be brought
against Landlord by reason of such claim, Tenant, upon notice from Landlord, shall
defend the same at Tenant's expense by counsel reasonably satisfactory to and
approved by both parties. Tenant shall use its best efforts to keep the Premises free of
any mechanics' liens arising from work performed to the Premises by Tenant, and in the
event of the foregoing, Tenant shall immediately pay any amounts owing and obtain a
release of any such lien.
11. INSURANCE
Tenant shall, at all times during the term hereof and at its own cost and
expense, procure from an "A" rated insurance carrier that is admitted to do business in
the State of California, and continue in force a general liability insurance policy for
bodily injury and property damage, adequate to protect Tenant and Landlord against
liability for injury to or death of any person, arising in connection with Tenant's use of
the Premises. Such insurance at all times shall be in an amount of not less than a
combined single limit of One Million Dollars ($1,000,000), insuring Tenant and Landlord
against any and all liability of the insured with respect to the Property. Tenant shall
provide Landlord with an endorsement naming Landlord as an additional insured, and
such insurance policy shall not be cancelable by the insurance company without
providing Tenant and Landlord with at least 30 days prior written notice.
12. ASSIGNMENT AND SUBLETIING
Tenant shall not voluntarily or by operation of law license, transfer,
mortgage, sublet or otherwise encumber all or any part of Tenant's interest in this
Lease or in the Premises without Landlord's written consent, and any attempt to do so
shall be wholly void. No subletting or assignment shall relieve Tenant of any obligations
to be performed by Tenant hereunder. The acceptance of payments by Landlord from
any other person shall not be deemed to be waiver by Landlord of any provision of this
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Lease or to be a consent of any assignment, subletting or other transfer and shall not
be deemed to constitute consent to any subsequent assignment, subletting or other
transfer.
13. DEFAULT
(a) Defaults. Any of the following events shall constitute a default under
this Lease by Tenant:
(i) Failure by Tenant to make any payment required by this
Lease when the same is due, and the continuance of such failure for a period of ten
(10) days after written notice thereof from Landlord.
(ii) Failure by Tenant to observe or perform any covenant,
condition, or provision in this Lease not already specifically mentioned in this Section,
where such failure continues for thirty (30) days after written notice from Landlord
notifying Tenant of such failure; provided, however, that if the nature of Tenant's default
is such that more than thirty (30) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commenced to cure such default within
said thirty (30) day period and thereafter diligently prosecutes such cure to completion.
(b) Termination of Lease and Remedies. In the event of any default by
Tenant, Landlord may promptly or at any time thereafter, upon written notice and
demand, and without limiting Landlord in the exercise of any other right or remedy
which Landlord may have by reason of such default or breach, terminate Tenant's right
to possession of the Premises by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. In such event, Landlord shall be entitled to recover from Tenant:
(i) Any amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of events would be likely to result therefrom.
(c) Nonwaiver. Nothing contained in this Section shall constitute a waiver
of Landlord's right to recover damages by reason of Landlord's efforts to mitigate
damages to it caused by Ten ant's default; nor shall anything in this Section adversely
affect Landlord's right, as provided in this Lease, to indemnification against liability for
damage to persons or property occurring prior to the termination of this Lease.
14. DAMAGE AND DESTRUCTION
In the event of destruction of or damage to the Premises, Landlord shall
have the sole option of either repairing the premises or terminating this Lease as of the
date of the destruction or damage.
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15. MISCELLANEOUS
(a) Non-Waiver. The failure of Landlord to insist upon strict performance
of any of the terms, conditions or covenants of this Lease shall not be deemed a waiver
of any right or remedy Landlord may have and shall not be deemed a waiver of any
right or remedy for subsequent breach or default of the terms, conditions, or covenants
herein contained.
(b) Resolution of Problems.
1. The Senior Administrative Analyst in the City Manager's
Office shall report any problems or complaints to the Director of the Palos Verdes on
the Net. The Director shall be responsible for seeking a solution to any major or
frequently reported problem.
2. In the event problems are not resolved, the Senior
Administrative Analyst and/or City Manager shall meet with the Director to review the
situation and propose an appropriate solution.
(c) End of Term. At the end of the term, Tenant shall return the Premises
to Landlord in a similar condition as received, ordinary wear and tear and damage by
casualty (where not caused by Tenant) excepted.
(d) Holding Over. Should Tenant, with or without Landlord's written
consent, hold over after the termination of this Lease, such possession by Tenant shall
be deemed to be a month-to-month tenancy terminable by thirty (30) days' notice given
at any time, upon each and all of the terms herein provided as may be applicable to a
month-to-month tenancy, and any such holding over shall not constitute an extension of
this Lease.
(e) Attorney's Fees. In the event of any litigation between Tenant and
Landlord to enforce any provision of this Lease or any right of either party hereto, or to
secure a judicial determination of any right or obligation of either party hereto, the
unsuccessful party in such litigation shall pay to the successful party reasonable costs
and expenses, including reasonable attorney's fees, incurred therein. Moreover, if
either party hereto without fault is made a party to any litigation instituted by or against
any other party to this Lease, such other party shall indemnify Landlord or Tenant, as
the case maybe, against and save it harmless from all costs and expenses, including
reasonable attorneys' fees, incurred by it in connection therewith.
(f) Headings. The section captions contained in this Lease are for
convenience and do not in any way limit or amplify any term or provision of this Lease
and shall have no effect on its interpretation.
(g) Entire Agreement. This Lease and any exhibits and or addenda
attached hereto constitute the entire agreement between the parties hereto with respect
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to the subject matter hereof, and no prior agreement or understanding pertaining to any
such matter shall be effective for any purpose. No provision of this Lease may be
amended or supplemented except by an agreement in writing signed by the parties
hereto or their successors in interest.
(h) Quiet Possession. Upon complying with all the terms and
conditions hereof, Tenant shall have quiet possession of the Premises for the entire
term hereof, subject to all of the provisions of this Lease.
(i) No Obligation to Construct Improvements. Except as specifically
provided herein, neither party hereto shall have any obligation whatsoever to construct
any improvements, modifications, alterations, or additions to the Premises or to modify
any portions of the Premises. If either party shall be deemed by law to be required to
construct any improvements, modifications, alterations, or additions to the Premises,
whether the reason is to comply with seismic safety requirements, the Americans with
Disabilities Act, or any other purpose, then either Landlord or Tenant shall have the
right to terminate this Lease in lieu of constructing such improvements, modifications,
alterations or additions.
16. EXHIBITS
All exhibits attached hereto are hereby incorporated herein by this
reference as if set forth herein in their entirety.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as
of the date first written above.
Palos Verdes on the Net ("TENANr') By ~
Title : &i.~;J{
CITY OF RANCHO PALOS VERDES
("LAND LO
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Exhibit "A"
Recreation and Pa~s Building
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AMENDMENT NO. 4
TO
LEASE AGREEMENT
BETWEEN
CITY OF RANCHO PALOS VERDES AND PALOS VERDES ON THE NET
FOR
OFFICE AND STORAGE SPACE
The CITY OF RANCHO PALOS VERDES, hereinafter referred to as "Landlord", and
PALOS VERDES ON THE NET, hereinafter referred to as "Tenant", mutually agree to
amend the existing Lease Agreement that originally was entered into on October 1,
1996, as follows:
Section 1: Section 4, entitled 'Term of Lease," is hereby amended to read as follows :
"TERM OF LEASE. The term of this Lease shall be extended to June 20, 2009. This
Lease shall automatically renew from year to year thereafter, unless on or before
September 1st of each year, either party notifies the other party in writing that the party
wishes to terminate or amend this Lease. If such notice is given, the lease shall be
terminated on December 31st of the year following the year when the written notice is
given."
Except as amended hereby, all other terms and conditions of the original lease
agreement, as previously amended by the First, Second and Third Amendments shall
remain in full force and effect. ·
CITY OF RANCHO PALOS VERDES
Date: '1-12 ... 0~ ----------
ATTEST:
897684-1
PALOS VERDES ON THE NET
By:~
Title: 'JJif'..cTiJ,..
Date: "1 /11+/e> c;
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