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HomeMy WebLinkAboutReso 1986-12593 RESOLUTION NO. 12593 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING LEASE AGREEMENT WITH AMERICAN GOLF CORPORATION FOR THE MAINTENANCE AND OPERATION OF THE RESTAURANT AND BAR PREMISES AT THE CHULA VISTA MUNICIPAL GOLF COURSE, AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT The City Council of the City of Chula Vista does hereby resolve as follows: NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby approve that certain Lease Agreement between AMERICAN GOLF CORPORATION, a California corporation, and THE CITY OF CHULA VISTA, a municipal corporation, for the maintenance and operation of the restaurant and bar premises at the Chula Vista Municipal Golf Course, dated the 7~t~ day of .T?~7~j , 1986, a copy of which is attached hereto and incCrporated herein by reference as if set forth in full. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista be, and he is hereby authorized and directed to execute said Agreement for and on behalf of the City of Chula Vista. BE IT FURTHER RESOLVED that said Agreement shall be in effect from and after July 1, 1986. Presented by Approved as to form by E. R.CAsm~s, Assistant~ity ~ C-harles R. Gill, Assistant city Manager Attorney 1621a ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, this lOth dl~/ of July 19 ~' , by the following vote, to-wit: AYES: Councilmembers COX~ MoCANDL£SS~ CAM?BELL, MOORE NAYES: Counci 1 members NONE ABSTAIN: Councilmembers NONE ABSENT: Councilmembers MALCOLM Ch.lo V ,ta ATTES /~_ . ' ........ :""'" STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 12.595 ,and that the some has not been amended or repealed DATE D City Clerk crTY OF CHULA VISTA CC-660 7/16~86 LEASE AGREEMENT WITH AMERICAN GOLF CORPORATION, A CALIFORNIA CORPORATION~ AND THE CITY OF CHULA VISTA FOR THE MAINTENANCE AND OPERATION OF THE RESTAURANT AND BAR PREMISES AT THE CHULA VISTA MUNICIPAL GOLF COURSE THIS AGREEMENT, made and entered into this 1st day of July , 1986, by and between THE CITY OF CHULA VISTA, a municipal corporation, hereinafter called "Lessor", and AMERICAN GOLF CORPORATIONt a California corporation, hereinafter called "Lessee"; W I T N E S S E T H : WHEREAS, the City of Chula Vista entered into an interim lease agreement with American Golf Corporation on April 27, 1985 for the operation and maintenance of the restaurant facility located at the Chula Vista Municipal Golf Course, and WHEREAS, the City of Chula Vista sought and received proposals from qualified operators for a long term lease of the restaurant facility, and WHEREAS, the City of Chula Vista reviewed three proposals and determined that American Golf Corporation's proposal was the most beneficial for the City, and WHEREAS, the City Council desires to maintain the operation of the restaurant and bar in an efficient and profitable manner for the benefit of the City's residents, and WHEREAS, this Agreement supercedes the Interim Agreement of April 27, 1985 and memorializes the entire Agreement between the parties relating to the operation of the restaurant and bar. NOW, THEREFORE, IT IS MUTUALLY UNDERSTOOD AND AGREED by and between the parties hereto as follows: 1. LEASE PREMISES. For and in consideration of the rent hereinafter specified and all of the covenants, conditions and agreements hereinafter set forth, Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor (hereinafter the premises described below and as set forth on Exhibit "A" attached hereto, including any appurtenances thereto, shall be referred to as the "Leased Premises"): A. Those certain premises which include a restaurant, bar, golfer's lounge and banquet facilities. B. The Leased Premises also include a parking lot, the undivided use of which is shared with the golf professionals' shop and the golf course, the grounds immediately adjacent to the building, and all furniture, fixtures, equipment, smallware and paperware located in and on the portion of the building demised herein. C. The Leased Premises shall include, upon approval of construction plans by the Lessor, those portions of the golf course necessary for the modification of the parking as generally shown in Exhibit B, attached hereto. Said Exhibit may from time to time be amended by the mutual consent of the parties. 2. USE AND HOURS. Lessee shall use the Leased Premises for the operation of a restaurant, bar and banquet facility; and for no other purpose. The parties specifically agree that none of the uses contained in Section 19.58.024 of the Chula Vista Municipal Code, as that section exists on the date this Lease is entered, a copy of which is attached hereto and incorporated herein as Exhibit "A", shall be permitted on the premises. Lessee shall keep the restaurant and bar open for business during the customary hours of similar operation, but shall not remain open beyond the hours permitted by State law. Lessee shall not do, bring, or keep anything in or about the Leased Premises that will cause a cancellation of any insurance covering the Leased Premises, or violate any law or ordinance concerning the condition, use or occupancy of the Leased Premises. 3. FIXTURES AND IMPROVEMENTS. A. The Leased Premises include all of the fixtures necessary for the successful operation of a restaurant and bar facility. Said fixtures, as more particularly described in attached Exhibit C, are the property of Lessor and shall remain the property of the Lessor upon termination of this lease and any extensions. If any of the fixtures described in Exhibit C are in need of replacement or upgrading, Lessee shall, at Lessee's sole cost, replace the item(s) with new identical or substantially similar fixtures. Lessee acknowledges that this obligation to replace fixtures includes upgrades of equipment that may be necessary over the term of this Lease and the extended terms. Said replacement or upgrades shall be the property of Lessor upon termination of this lease and any extensions. Lessee understands that the intent of this section is for Lessor to have all the fixtures necessary for the successful operation of a restaurant and bar facility upon vacation of the Leased Premises by Lessee without additional cost to Lessor. The fixtures described in this subsection may not be used as security or collateral for any debt or prospective debt of Lessee. -2- B. Lessee's machines, equipment, trade fixtures and other installations of the type commonly installed in and removed by tenants from improvements, not specified in subsection A, which are installed by Lessee in or on the Leased Premises shall not be deemed to be part of the realty even though they are attached to the floor, walls or roof of the building(s) or to outside pavements, so long as they can be removed without structural damage to said improvements and provided that if such removal, at Lessee's option, of any such installation results in nonstructural damage to any part(s) of the building(s), pavement or premises, Lessee shall repair such damage and restore said damaged part(s) of said building(s), pavement or premises to as good a condition as the same were in at the commencement of this Lease, reasonable wear and tear excepted. 4. TERM OF LEASE. A. The term of this lease shall be for a period of ten (10) years commencing July 1, 1986 If Lessee complies with its lease obligations and responsibilities, Lessee will have the option to extend the term of this lease, at the conclusion of the initial ten year term, for two (2) additional ten (10) year terms. Said extensions will be at the rental rate specified by Section 5. The total term of the lease and the two optional extensions shall not exceed thirty (30) years. The right to exercise these options is dependent upon Lessee not being in default on the date the option periods are to commence and Lessee must give Lessor written notice of its intention to exercise such options not less than one hundred eighty (180) days prior to the end of the lessee term then in effect. B. Notwithstanding any provision to the contrary, Lessee may, during the initial three years, provide 180 day written notice to Lessor of its intent to terminate the Lease. Said termination is at the sole discretion of Lessee. Lessee's rights pursuant to this subsection shall be extinguished on June 30, 1989 5. RENTAL PAYMENTS. A. Lessee agrees to pay to Lessor as monthly rental for the Leased Premises, without setoff, an amount equal to the sum of the following: (1) A sum equal to six percent (6%) of the monthly gross sales until the point in time during the lease year when total gross sales derived from the operation of the Leased Premises totals five hundred thousand dollars ($500,000), and -3- (2) A sum equal to seven percent (7%) of the gross sales in excess of five hundred thousand dollars (~500,000), but less than one million dollars ($1,000,000) derived from the annual operation of the Leased Premises, and (3) A sum equal to nine percent (9%) of the gross sales in excess of one million dollars ($1,000,000) derived from the annual operation of the Leased Premises. Lessee shall submit to Lessor a statement of gross sales each month indicating the gross sales made in the Leased Premises during the preceding calendar month and the total gross sales accumulated for the lease year to date. When the accumulated total gross sales for the lease year to date reaches ~500,000, the seven percent (7%) of gross sales shall become effective and when the accumulated total gross sales for the lease year to date reaches $1,000,000, the nine percent (9%) of gross sales shall become effective for the purpose of computing the monthly rental payment. All sums due shall be delinquent on the fifteenth day of each month and subject thereafter to a penalty of two percent (2%) each month or fraction of each month, if unpaid. Penalty amount is compensation for additional accounting and administrative costs which will be incurred by Lessor. B. Commencing July 1, 1989 , the monthly rental payment shall be the greater of Subsection A or the established minimum monthly rent. (1) The minimum monthly rent beginning July 1, 1989 , shall be determined by increasing the sum of $4,000 by the percentage increase in the San Diego Area Consumer Price Index (CPI) for All Urban Consumers as compiled by the U.S. Department of Labor, Bureau of Labor Statistics for the latest twenty-four (24) month period for which statistics are available. In no event shall the amount of increase exceed an average of 6% per year. Said minimum monthly rent shall be in effect for all monthly rent payments throughout the subsequent three lease years. (2) Commencing July 1, 1992 and every three years thereafter, the minimum monthly rent shall be adjusted by increasing the previously established minimum monthly rent by the same proportion of increase in the CPI for the latest thirty-six (36) month period for which statistics are available. The parties agree that the proportional increase shall not exceed an average of 6% per year. The minimum monthly rent established by this procedure shall remain in effect for the subsequent three years. -4- C. "Gross Sales Defined". The term "gross sales" as used in this lease shall include the entire gross sales of every kind and nature from sales and services made in the Leased Premrses whether for credit or cash, in every department operating in the Leased Premises, whether by Lessee or by others, including all sales from vending devices and payments from pay telephone. "Gross sales" shall not include any rebates or refunds to customers or sales taxes accounted for and paid to a governmental agency. D. Statement of Gross Sales. Within fifteen (15) days after the end of each calendar month of the term hereof, commencing with the fifteenth day of the month following the commencement of this lease agreement as hereinafter provided, and ending with the fifteenth day of the month next succeeding in the last month of the term of this lease agreement, Lessee shall furnish to Lessor a statement in writing, certified by Lessee to be correct, showing the total gross sales made in the Leased Premises during the preceding calendar month. Lessee shall keep (a) full and accurate books of account and records in accordance with Generally Accepted Accounting Principals consistently applied, including, without limitation, a sales journal, general ledger, and all bank account statements showing deposits of gross sales revenue, (b) all cash register receipts with regard to the gross sales, credits, refunds and other pertinent transactions made from or upon the Leased Premises and (c) detailed original records of any exclusions or deductions from gross sales. Such books, receipts and records shall be kept for a period of two (2) years after the close of each calendar year and shall be available for inspection and audit by Lessor and its representatives at the Leased Premises at all times during regular business hours. In addition, upon request of Lessor, Lessee agrees to furnish to Lessor a copy of Lessee's state and local sales and use tax returns. The receipt by Lessor of any statement or any payment of rental under this Lease, for any period, shall not bind it as to the correctness of this statement or the payment. The Lessor shall, within two (2) years after the receipt of any such statements, be entitled to an audit of such gross sales. Such audit shall be conducted by Lessor or by certified public accountant to be designated by Lessor during normal business hours at the principal place of business of Lessee. If it shall be determined as a result of such audit that there has been a deficiency in the payment of any such rental, then such deficiency shall become immediately due and payable with interest at the maximum lawful rate from the date when said payment should have been made. In addition, if any of Lessee's statements shall be found to have understated gross sales by more than two percent (2%) and if Lessor is entitled to any additional rental as a result of any said understatement, or if such audit -5- shows that Lessee has failed to maintain the books of account and records required by this section so that Lessor is unable to verify the accuracy of Lessee's statement, then Lessee shall pay to Lessor all reasonable costs and expenses (including reasonable auditor and attorney fees) which may be incurred by Lessor in conducting such audit and collecting such underpayment, if any. 6. TAXES. During the term of this lease agreement, Lessee shall pay, prior to delinquency, all taxes assessed against all personal property of Lessee contained within the Leased Premises. Lessee shall be solely responsible for all real property taxes and general and special assessments levied against the Leased Premises. Lessee shall be responsible for any possessory interest taxes if applicable. Lessee agrees to pay all taxes not later than ten (10) days before the taxing authority delinquency date. 7. PARKING AND COMMON FACILITIES. A. Lessee agrees to furnish adequate parking facilities for the needs of the patrons of Lessee arising out of the operation of the Leased Premises during the full term of this lease agreement or any extension thereof. Lessee shall be jointly responsible with the operator of the Municipal Golf Course for the repair and maintenance of the parking lot including lighting and lighting standards in said parking lot and adjacent entryway and shall assume its share of the maintenance. Lessee agrees to maintain adequate security on the Leased Premises and Lessor has no responsibility with respect to the safety and security of users of the Leased Premises and that Lessee specifically indemnifies, holds harmless and will defend Lessors against any claims relating to the security issue. B. In addition to the obligations and responsibilities specified in Subsection A, Lessee shall be responsible for any modifications to the building located on the Leased Premises. 8. ALTERATIONS/MODIFICATIONS. Lessee shall not make, or suffer to be made, any alterations to the Leased Premises that affect the exterior or interior of the Leased Premises of any structural, mechanical or electrical component of the facility and appurtenances without the prior written consent of City which shall not be unreasonably withheld. Said alterations or modifications shall include, but not be limited to: landscaping, signs, parking, structural additions and antennas of any type. -6- 9. LESSEE'S RESPONSIBILITY TO PROTECT LESSOR FROM MECHANIC'S LIENS. Lessee agrees: (1) to pay for all labor and services performed for, and for all materials used by and furnished to, Lessee or any contractor employed by Lessee with respect to the premises, whether or not such labor, service, or materials were related to trade fixtures or other works of improvement; (2) to indemnify and hold Lessor and the premises harmless and free from liabilities, liens, claims, encumbrances, and judgments created or suffered by reason thereof. In the event that any claim of lien be filed against the premises, or any action affecting the title to such property be commenced, Lessee shall forthwith give the Lessor written notice thereof. Nothing herein shall prevent Lessee from contesting in good faith the validity of any lien, claim, encumbrance, or judgment, provided, in the case of mechanics' or material men's liens, Lessee obtains and records appropriate bonds as provided by law to remove the recorded liens created thereby. 10. MAINTENANCE OF PREMISES. A. Lessee agrees to assume full and complete responsibility to maintain the Leased Premises in first class condition. Responsibility to maintain in first class condition shall include, but not be limited to the fixtures and their replacements specified in attached Exhibit "C"; the maintenance of all air conditioning units, including the necessary replacement thereof; and the maintenance of all drainage, waste and vent pipes inside of the building. Lessee shall promptly and diligently repair, restore, alter, add to, remove, and replace, as required, all fixtures, improvements and landscaping of Leased Premises. Any repair, restoration, alteration, addition, removal, maintenance, replacement and other act of compliance under this section (hereafter collectively referred to as "Restoration") shall be completed by Lessee whether or not funds are available from insurance proceeds. The Restoration shall repair or restore to the condition existing immediately prior to the date of the damage or destruction. B. First Class Condition Defined. "First class condition and repair", means Restoration which is necessary to keep the Leased Premises, including landscaping, fixtures and improvements, in efficient and attractive condition. 11. INSURANCE. During the term of this lease or any extension thereof, Lessee shall obtain liability, fire and worker's compensation insurance coverages from responsible and solvent corporations authorized to issue such policies in California with a financial rating of at least a B+ XIII status as rated in the most recent edition of Best's Insurance Reports. Not more frequently than every 3 years, if, in the opinion -7- of Lessor, the amount of public liability, property damage, products liability or liquor liability coverages at that time appears inadequate, then Lessee shall increase the insurance coverage as required by Lessor. Provided however, if Lessee, for whatever reason, disagrees with Lessor's increased insurance coverage requirements, then the parties shall each appoint a representative to a three member panel which shall determine the adequacy of the coverage. The third member of the panel shall be chosen by the representatives appointed by the parties. In the event the two representatives are unable to agree on a third member within thirty (30) days, the Lessor may appoint the third member. The decision of the three member panel as to the adequacy of the insurance shall be binding on the parties. A. Liability Coverage. Liability coverage shall be provided that protects the parties to this lease against loss or liability by law for injury to or death of any person or damage to property arising from the use of the Leased Premises in the following amounts: At least TWO HUNDRED FIFTY THOUSAND DOLLARS (~250,000) property damage; ONE MILLION DOLLARS ($1,000,000) for injury or death to any one person in any one accident; and a single limit liability policy of FIVE MILLION DOLLARS (~5,000,000) per occurrence. Such policy shall include "products" liability and liquor liability coverage. B. Fire and extended coverage, in a form at least as broad as the standard insurance services office special extended coverage endorsement, covering all improvements or additions made by Lessee on the demised premises, such insurance to be in an amount equal to ninety percent (90%) of replacement value of all such improvements with the policy or policies containing a loss payable endorsement(s) in favor of the parties hereto as their respective interests may appear. "Full replacement value" shall be determined by Lessor at the time said improvements are initially insured and shall be redetermined annually thereafter throughout the term of this Lease. Said redeterminations of full replacement value shall be based upon the annual percentage increase, if any, in the Consumer Price Index as specified in Section 5. In the event such index is not then in existence, the adjustment shall be made on the basis of such other comparable, generally accepted index as may then be available, the selection of which is mutually acceptable to Lessor and Lessee. It shall be Lessor's responsibility to obtain said redeterminations. Lessee shall be promptly notified of the results of said redetermination and Lessee shall immediately thereafter adjust the amount of the insurance coverage to correspond with each redetermination of full replacement value. Said policy or -8- policies shall be procured, filed with the Lessor and approved by the Lessor and shall provide therein that the same shall not be subject to cancellation except after delivery of written notice by registered mail to the City Attorney of the City of Chula Vista at least thirty (30) days prior to the effective date of any such cancellation. A certificate or certificates evidencing the issuance of such policy or policies, showing the inclusive dates of coverage, bearing an original signature(s) of an authorized representative of the respective carrier or carriers and containing thereon the above thirty day notice provision, shall be filed with the Clerk of the City Council. C. Worker's Compensation. Lessee shall maintain a policy of Worker's Compensation Insurance to cover Lessee's employees and shall provide Social Security coverage for such employees. D. Insurance Certificates Filed with City Clerk. Lessee shall file the above named policies or certificates thereof with the City Clerk of the City of Chula Vista. The Risk Manager may, at any time, require Lessee to replace any such policy or certificate with another policy or certificate. All policies shall list the City of Chula Vista as an additional insured and all policies shall provide for thirty (30) days notice in writing to the Lessor in advance of cancellation, lapse or reduction in coverage. E. Lessee Self-Insurance. Lessee represents that it is self-insured for vandalism and malicious mischief and shall be obligated to pay all costs associated with necessary repairs. 12. Hold Harmless. Lessee shall hold the Lessor harmless from all damages arising out of any damage or liability of any kind for any injury to or death of persons, or for any damage to property occurring in, on or about the Leased Premises except that Lessee shall not be liable for any damage, liability, injury or death occasioned by the active negligence or wilful act of Lessor or its designated agents, servants, or employees, unless covered by insurance Lessee is required to provide. Lessee's obligations under this section to indemnify and hold Lessor harmless shall be limited to the sum that exceeds the amount of insurance proceeds, if any, received by Lessor. 13. Mutual Waiver of Subrogation Rights. Lessor and Lessee hereby waive any rights each may have against the other on account of any loss or damage occasioned to Lessor or Lessee, as the case may be, to their respective property, the Leased Premises, its contents arising from or connected to any risk insured against under any insurance policies carried by the parties and in force at the time of any such loss or damage; and -9- the parties each, on behalf of their respective insurance companies insuring the property of either Lessor or Lessee against any such loss, waive any right of subrogation that either may have against the other, as the case may be. Each party shall cause each insurance policy obtained by it to provide that the insurance company waives all rights of recovery by way of subrogation against either party in connection with any damage covered by any policy. 14. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS. A. If, during the term of the Lease, Lessee's improvements on the demised premises are partially or totally destroyed from a risk covered by the insurance described in Section 11 herein, Lessee shall restore the premises to substantially the same condition as they were in immediately before destruction; provided, however, that Lessee shall not be required to expend for such restoration an amount greater .than the insurance proceeds it recovers as a result of such partial or total destruction. Lessee shall be responsible for the rental payment during any period when business is interrupted. B. Lessee shall be obligated and responsible for the repair and reconstruction of the Leased Premises. Said obligation shall include, but not be limited to destruction of the premises due to flood, earthquake or other calamities. Lessee expressly assumes the risk of "Acts of God". Lessee waives the provisions of Civil Code §1932(2) and Civil Code §1933(4) with respect to any destruction of the Leased Premises. 15. UTILITIES. Lessee shall pay before delinquency all charges for water, gas, heat, electricity, power, telephone service and all other services of utilities used in, or upon the Leased Premises by Lessee during the terms of this lease agreement. 16. ENTRY AND INSPECTION. Lessee shall permit the Lessor, its agents and/or employees to enter into and upon the Leased Premises at all reasonable times. 17. ASSIGNMENT/SUBLEASES. Lessee shall not assign or sublease this lease a§reement or any interest therein, or any right or privilege appurtenant thereto, without obtaining the written consent of the Lessor. If Lessee obtains Lessor's consent, Lessee shall have the right to assign or sublet its interest in this Lease, but Lessee shall not be released from liability. 18. LIQUOR LICENSE. Lessee shall maintain a valid liquor license at all times. -10- 19. ATTORNEY FEES. If at any time after the commencement of this Lease, either Lessor or Lessee institutes any action or proceeding against the other relating to the provisions of this Lease, or any default hereunder, the nonprevailing party in such action or proceeding shall reimburse the prevailing party for the reasonable expenses of attorney fees and all costs and disbursements incurred therein by the prevailing party including, without limitation, any such fees, costs or disbursements incurred on any appeal from such action or proceeding. Subject to the provisions of local law, the prevailing party shall recover all such fees, costs or disbursements as costs taxable by the court or arbiter in the action or proceeding itself without the necessity for a cross-action by the prevailing party. 20. SURRENDER OF PREMISES; HOLDING OVER. Upon the date of termination of the term of this Lease, Lessee shall surrender to Lessor the Leased Premises and all of Lessee's improvements and alterations in good condition (except for ordinary wear and tear occurring after the last necessary maintenance made by Lessee). Lessee may remove fixtures owned by Lessee pursuant to Sec. 3. If Lessee fails to surrender the Leased Premises to Lessor on the termination date of this Lease, Lessee shall hold Lessor harmless from all damages resulting from Lessee s failure to surrender the Leased Premises, including, without limitation, claims made by a succeeding tenant resulting from Lessee's failure to surrender the Leased Premises. If Lessee, with Lessor's consent, remains in possession of the Leased Premises after expiration or termination of the Lease term, such possession by Lessee shall be deemed to be a month-to-month tenancy terminable on 30 days notice given at any time by either party. All provisions of this Lease, except those relating to Lease term and options to extend shall apply. 21. TERMINATION A. Lessor shall have the right to terminate this Lease Agreement in its entirety and all rights ensuring therefrom upon thirty (30) days written notice if any one or more of the following events shall occur: (1) Lessee shall fail to pay the rental payments required under this Lease within thirty (30) days after receipt of written notice from Lessor regarding the non-payment of such rental payments; -11- (2) Lessee shall permit to continue for a period of fourteen (14) days after written notice from Lessor to correct, the existence of unsanitary conditions or practices, disrepair of buildings, structures, equipment or facilities, unsafe and hazardous practices, or untidy and unsightly condition in, on or about the demised premises; provided, however, that if Lessee shall forthwith upon receipt of said notice proceed to correct the condition complained of, then Lessee shall have a reasonable time in which to correct should the nature of the work be such as to require more than five (5) days; (3) Lessee shall fail to keep, perform or observe each and every other promise, covenant, condition and agreement set forth in this Lease Agreement on its part to be kept, performed or observed within fifteen (15) days after receipt of written notice of default thereunder from Lessor except where fulfillment of Lessee's obligation requires activity over a period of time and Lessee shall have commenced to perform whatever may have been required for fulfillment within seven (7) days after receipt of such notice and continues such performance without interruption except for causes beyond its control; (4) In the event Lessee files for bankruptcy; assigns to any creditor or has a lien placed on any right or property hereunder and such lien is not removed in 90 days; fails to provide the Statement of Gross Sales or if said statement understates gross sales by 6%. (5) Lessee shall voluntarily abandon, desert, vacate or discontinue its operation of the business herein authorized in this Lease Agreement; (6) Permanent loss of liquor license shall be cause for termination. Two or more suspensions and/or fines by the Alcoholic Beverage Control Commission within any 12 month period shall be deemed a "permanent loss of liquor license". B. Notwithstanding the above, Lessor has the right to terminate this Lease, upon the giving of six (6) months notice in writing to Lessee, if the Chula Vista City Council adopts any ordinance finding that substantially all of the demised premises are required for purposes of constructing public streets or drainage facilities for the Sweetwater River Flood Plain consistent with any flood plan adopted for the Sweetwater River Flood Plan. -12- C. Nothing in this Section 21 shall require Lessee to observe or conform to any governmental authority's requirements or to pay any tax, lien, claim, charge or demand so long as the validity or enforceability thereof shall be contested in good faith to the extent appropriate unless in Lessor's judgment the performance of Lessee's obligations are being materially and adversely affected. D. No acceptance by Lessor of rentals, in whole or in part, for any period or periods after a default of any of the terms, covenants and conditions to be performed, kept or observed by Lessee, other than a default in the payment rentals as set forth in Section 21 hereof, shall be deemed a waiver of any right on the part of Lessor to terminate this Lease Agreement on account of such default. E. No waiver by Lessor of any default on the part of Lessee in the performance of any of the terms, covenants, or conditions hereof to be performed, kept or observed by Lessee shall be or be construed to be a waiver by Lessor of any other or subsequent default in performance of any of such terms, covenants and conditions. F. No act by Lessor other than giving notice to Lessee shall terminate this Lease. Acts of maintenance, efforts to relet the premises, or the appointment of a receiver on Lessor's initiative to protect Lessor's interest under this Lease shall not constitute a termination of Lessee's right to possession. On termination, Lessor has the right to recover from Lessee: 1. The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; 2. The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of the loss of rent that Lessee proves could have been reasonably avoided; and 3. Any other amount, and court costs, necessary to compensate Lessor for all detriment proximately caused by Lessee's default. The worth, at the time of the award, "as used in 1 and 2 of this paragraph, is to be computed by allowing interest at the maximum rate an individual is permitted by law to charge. "The worth, at the time of the award," as referred to in 3 of this paragraph, is to be computed by discounting the amount at th~ discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus 1%. G. In the event Lessee is prevented from occupying or using the demised premises, or is prevented from conducting or operating its business on said premises by final action, order or ruling of any governmental authority, federal, state or municipal, then Lessee may, at its option, cancel this Lease by written notice to Lessor, and said Lease shall be and become cancelled and terminated thirty (30) days after the receipt by Lessor of such notice. 22. LESSOR'S RIGHT OF RE-ENTRY. Lessor shall, as an additional remedy, upon the giving of written notice of termination as provided in Section 21 hereof, have the right to re-enter the demised premises and every party thereof on the effective date of termination without further notice of any kind, and may regain and resume possession either with or without the institution of summary or legal proceedings or otherwise. Such re-entry or regaining or resumption of possession, however, shall not in any manner affect, alter, or diminish any of the obligations of Lessee under this Lease and Agreement, and shall in no event constitute an acceptance or surrender. 23. WAIVER OF REDEMPTION AND DAMAGES. Lessee hereby waives any and all rights of redemption granted by or under any present or future law, or statute, arising in the event Lessor obtains or retains possession of the demised premises in any lawful manner. Lessee further agrees that in the event the manner or method employed by Lessor in re-entering or regaining possession of the demised premises gives rise to a cause of action in Lessee in forceable entry and detainer under the laws of the State of California, then the total amount of damages to which Lessee shall be entitled to in any such action shall be the sum of $1.00 and Lessee agrees that the provisions of this Section 24 may be filed in any such action as its stipulation fixing the amount of damages to which it would be entitled therein. 24. LESSOR'S RIGHT TO RELET. Lessor, upon termination or cancellation pursuant to Section 21 hereof, or upon re-entry, regaining or resumption of possession pursuant to Section 22 hereof, may occupy the demised premises or may lease the same to others, and shall have the right to permit any person, firm or corporation to enter upon the demised premises and use the same. Such leasing to or occupation by others may be only a part of the demised premises, or the whole thereof together with other space, and for a period of time the same as or different from the balance of the term hereunder remaining, and on terms and conditions the same as or different from those set forth in this Lease Agreement. Lessor shall also, upon termination or cancellation pursuant to Section 21, or upon its re-entry, -14- regaining or resumption of possession pursuant to Section 22, have the right to repair or to make such structural or other changes in the demised premises as are necessary in its judgment to maintain the suitability thereof for uses and purposes similar to those granted under this Lease Agreement. In the event either of any leasing to others, or any actual use and occupancy by Lessor, except as specified in subparagraph B of Section 21, there shall be charged to the account of Lessee all expenses, costs and disbursements incurred or paid by Lessor in connection therewith. No such leasing to others shall be or be construed to be an acceptance of surrender. If Lessor elects to relet the premises as provided in this paragraph, rent that Lessor receives from reletting shall be applied to the payment of: First, any indebtedness from Lessee to Lessor other than rent due from Lessee; Second, all costs, including for maintenance, incurred by Lessor in reletting; Third, rent due and unpaid under this Lease. After deducting the payments referred to in this paragraph, any sum remaining from the rent Lessor receives from reletting shall be held by Lessor and applied in payment of future rent as rent becomes due under this Lease. In no event shall Lessee be entitled to any excess rent received by Lessor. If, on the date rent is due under this Lease, the rent received from the reletting is less than the rent due on that date, Lessee shall pay to Lessor, in addition to the remaining rent due, all costs, including for maintenance, Lessor incurred in reletting that remain after applying the rent received from the reletting as provided in this paragraph. 25. LESSOR'S RIGHTS NON-EXCLUSIVE. Lessor's rights to terminate to Lease, re-enter, regain possession of and relet the Leased Premises are not exclusive, but are cumulative in addition to any remedies now or later allowed by law. 26. NONDISCRIMINATION AND AFFIRMATIVE ACTION PROGRAM. Lessee, in its operations at Chula Vista, for itself, its personal representatives, successor in interest and assigns, as part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that: (1) no person on the grounds of race, color or national origin shall be excluded from participation, denied the benefits of or be otherwise subjected to discrimination in the use of the facilities covered by this Lease; (2) that in the construction of any improvements on, over or under the premises authorized to be utilized herein and the furnishing of services thereon, no person on the grounds of race, color or national origin shall be excluded from participation in, -15- denied the benefits of or otherwise be subjected' to discrimination, and (3) that Lessee shall use said premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 2, Nondiscrimination in Federally-Assisted Programs of the department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. Lessee agrees that Lessor has the right to take such action against Lessee as the United Stated Government may direct to enforce this covenant. In addition, Lessee, during the term of this Lease, agrees not to discriminate in its employment practices against any employee or applicant for employment because of the employee's or applicant's race, religion, national origin, ancestry, sex, age or physical handicap. 27. RENTAL PAYMENT/NOTICE. A. All rental payments specified in Section 5 shall be paid to the City of Chula Vista, Department of Finance, 276 Fourth Avenue, Chula Vista, California 92010, or to such other address as the City may designate by written notice to Lessee. B. Any written notice required by this Lease or by operation of law shall be sent to the following location unless otherwise specified in writing: City of Chula Vista Department of Finance 276 Fourth Avenue Chula Vista, California 92010 American Golf Corporation 641 North Sepulveda Blvd. Los Angeles, California 90049 28. ENTIRE AGREEMENT. This Lease contains the entire agreement between the parties hereto and said Lease shall not be modified in any respect except by formal, written amendment. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and year first hereinabove set forth. LESSOR: THE CITY OF LESSEE: AMERICAN GOLF CHULA VISTA COc~RPORA~N Mayor of~th~ David G. Price Chula Vista Chairman of Board and Chief Executive Officer 0314a -1 6- EXHIBIT lg.58.020 Accessory buildings. A. An accessory building may be erected detached from the principal building, or, except when a stable, may be erected as an integral part of the principal building or it may be attached thereto by a breezeway or similar structure. B. Any accessory building attached to the main building shall be made structurally a part of the main building and shall comply in all respects with the requirements of this title applicable to the main building. Unless attached, an accessory building in an R zone shall be at least six feet from any dwelling existing or under construction on the same lot or any adjacent lot. Except in the R-3-T zone, the following shall apply: 1. No building may occupy any portion of a required yard except that a detached garage or carport, covered patio enclosed on not more than two sides, or other accessory one-story building, may disregard any rear or side yard requirements if located in the rear thirty percent of the lot, or back of the front seventy feet of the lot; 2. An accessory building or covered patio located seventy feet or less from the front property line shall have the same side yard as that required for the main building, regardless of whether said accessory building is detached from the main building; 3. A covered patio, detached garage or carport, or other accessory one-story building may cover an area not to exceed thirty percent except as allowed for parking structures in multiple-family zones (See Section 19.28.100), of the area of any required rear yard, except that no accessory building in a rear yard shall be required to have less than four hundred square feet. 4. A covered patio or detached accessory building located in the rear thirty percent of the lot, or back of the front seventy feet of the lot, shall be located either on a property line or not less than three feet from such line. C. All accessory buildings shall be considered in the calculation of lot coverage; garden shelters, greenhouses, storage shelters and covered patios shall be permitted as accessory buildings, provided that these uses are not equipped for use as living quarters. {Ord. 1356 § 1 {part), 1971: Ord. 1212 § 1 {part), 1969: prior code § 33.901(B)(1); Ord. 2124 § VII.) 19.58.024 Adult-oriented recreation businesses. A. The following described businesses are deemed to be adult-oriented recreation businesses, and shall only be permitted in the C-T zone: 1. Adult bookstores; 2. Adult motion picture theaters; 3. Adult mini-motion picture theaters; 4. Cabarets; S. Coin-operated adult entertainment facilities; 6. Massage parlors; 7. Body painting studios; 8. Dance halls; 9. Model studios; 10. Sexual encounter studios and rap parlors; ll. Narcotic or drug paraphernalia shop. 897 (R 12/85) B. Location Requirements. An adult-oriented recreation business shall only be located in the C-T zone, and no such business shall be located within five hundred feet of residentially zoned territo~, which is located upon the same street or streets, or is within five hundred feet of residentially zoned or residentially used properties as measured along street right-of-ways from the proposed location to the bounda~ line of said residentially zoned or used properties, or is located within five hundred feet measured radially of any building site containing a school, park, church or playground. Furthermore, no adult-oriented recreation business shall be located within one thousand feet of another adult-oriented recreation business. C. Specific Standards-View of Interior from Public Way. All building openings, entries and windows from adult entertainment establishments shall be located, covered or screened in such a manner as to prevent a view into the interior from any public or semipublic area, including public sidewalks, streets, arcades, hallways or passageways, of any material which has as its primary or dominant theme matter depicting, illustrating, describing or relating to specified sexual activities or specified anatomical areas, or of drug paraphernalia, as defined in this code. Further, such businesses may not have signs, graphics, or window displays which in any way present, depict, illustrate or describe any such material. {Ord. 1954 § 1 (part), 1981: Ord. 1855 § 1, 1979.) 19.58.030 Agricultural processing plants. Agricultural processing plants in an A zone, which process agricultural products produced on the premises or within a contiguous agricultural area, shall be so located as to provide convenient trucking access with a minimum of interference to normal traffic and shall provide parking and loading spaces. Proponent shall show that adequate measures shall be taken to control odor, dust, noise and waste disposal so as not to constitute a nuisance, and shall show that the proposed source of water will not deprive others of normal supplyr {Ord. 1356 § 1 (part), 1971: Ord. 1212 § 1 {part), 1969: prior code § 33.g01(B)(2).) 19.58.040 Amusement and entertainment facilities. Amusement and entertainment facilities such as bowling alleys, dancehalls, amusement parks and other similar recreational facilities shall be subject to the following development standards: A. All structures shall maintain a minimum setback of twenty feet from any residential zone; B. Ingress and egress from the site shall be designed so as to minimize traffic congestion and hazards; c. Adequate controls or measures shall be taken to prevent offensive noise and vibration from any indoor or outdoor activity onto adjacent properties or uses; D. Amusement arcades or centers shall also be subject to the following: 1. Game play {except mechanical rides) by minors is prohibited during normal school hours seven-thirty a.m. and three p.m.* and between the hours of ten p.m. and six a.m. prior to a school day, except when accompanied by an adult twenty-one years of age or older; 898 /; ,'