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PS 1033 C Street Lease Extension
,7 * SAN RA FA E L Agenda Item No: 4.e hi THE CITY WITH A MISSION Meeting Date: April 3, 2017 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Parking Services Prepared by: Jim Myhers City Manager Approval: TOPIC: EXTENSION OF A LEASE AGREEMENT TO PROVIDE SPACE FOR PARKING SERVICES DIVISION DURING PUBLIC SAFETY BUILDING CONSTRUCTION SUBJECT: Resolution of the San Rafael City Council approving and authorizing the City Manager to execute a Second Addendum to the existing commercial lease agreement, dated November 7, 2002, between the City of San Rafael and Gordon and Connie Wong, for office space at 1033 C Street, extending the lease term for two additional years through December 31, 2019, with an option for a month-to- month tenancy thereafter, to serve as the Parking Services Division offices during the construction of the Public Safety Building. RECOMMENDATION: Adopt the Resolution. BACKGROUND: In 2002, the City entered in to a fifteen year lease for office space at 1033 C Street for use by Fire Department staff and to serve as the City's Emergency Operations Center (EOC). The City made numerous tenant improvements to the building and city staff have occupied this building for fourteen years. The lease for 1033 C Street will expire this year on December 31, 2017. With the upcoming start of construction of the Public Safety Building, several departments need to relocate to new office space in order for the project to proceed. The Fire Department has arranged with the County of Marin for temporary office space at the County offices at 1600 Los Gamos. The temporary space at 1600 Los Gamos will house both staff currently housed at the EOC offices as well as Fire Department administrative staff currently housed at Fire Station 51 (which will be demolished to make way for the Public Safety Building). Fire department administrative staff moved to 1600 Los Gamos at the end of February so the 1033 C Street office space is now vacant. As part of the Public Safety Building construction project, staff from Parking Services also will be temporarily displaced until the new Public Safety Building is occupied and Parking Services staff can move in to space currently used by the Police Department. City staff explored various FOR CITY CLERK ONLY File No.: 2-9-25 Council Meeting: 04/03/2017 Disposition: Resolution 14300 SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paue: 2 options for temporary facilities for the Parking Services department including a temporary trailer and various options for leased space. After reviewing the options, it became apparent that the office space at 1033 C Street currently leased by the City would become available with the relocation of the Fire Department administrative staff to 1600 Los Gamos. Parking Services staff determined that the office space at 1033 C Street was a suitable size and configuration for their operations, would require minimal building improvements, maintains good access for the public, and provides a lease rate and terms beneficial to the city. ANALYSIS: The current lease rate the Fire Department pays for the 2,300 square feet building at 1033 C Street is $4,500.81 per month. After negotiation with the landlord, the parties have agreed upon a proposed two year lease extension which would keep the lease rate the same as the current rate through December 31, 2018. The lease amount for the second year will increase by 3% for a 2019 monthly rent amount of $4,635.83. Staff considers this short-term lease extension advantageous to the City to maintain ongoing Parking Services operations with a minimum amount of disruption. In addition, since the City is obligated to pay for the remaining ten months of the current lease, use of this space by Parking Services will be a cost savings versus other options during the remainder of the current lease. Should the Public Safety Building construction project take longer than anticipated, the parties have agreed the City will have the option to extend the lease on a month-to-month basis for up to two additional years, with a 3% annual increase in the monthly lease amount ($4,774.91 per month for 2020 and $4,918.16 per month for 2021). While the City does not anticipate lease payments beyond the proposed two year lease extension, the option to extend the lease on a monthly basis will provide needed flexibility should the construction project encounter unanticipated delays. FISCAL IMPACT: The total cost to extend the current lease agreement for two additional years will be $54,009.72 for the first year and $55,629.96 for the second year for a total cost of $109,639.68. Funding for this lease extension will be included in the upcoming 2017-18 Fiscal Year Budget and the subsequent 2018-19 budget. The funding source for the lease payments will be the Parking Services Enterprise Fund; therefore, there will be no impact to the General Fund. OPTIONS: 1. Adopt the Resolution 2. Do Not Adopt the Resolution 3. Provide Staff with Further Direction ACTION REQUIRED: Adopt the resolution approving and authorizing the City Manager to execute a Second Addendum to the Commercial Lease Agreement with Gordon and Connie Wong, extending the lease term for two additional years through December 31, 2019, with a month-to-month option thereafter, in a final form to be approved by the City Attorney. ATTACHMENT: Commercial Lease Agreement dated November 7, 2002, with Addendum. Second Addendum to the Commercial Lease Agreement RESOLUTION NO. 14300 RESOLUTION OF THE SAN RAFAEL CITY COUNCIL APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE A SECOND ADDENDUM TO THE EXISTING COMMERCIAL LEASE AGREMENT, DATED NOVEMBER 7, 2002, BETWEEN THE CITY OF SAN RAFAEL AND GORDON AND CONNIE WONG FOR OFFICE SPACE AT 1033 C STREET, EXTENDING THE LEASE TERM FOR TWO ADDITIONAL YEARS THROUGH DECEMBER 31, 2019, WITH AN OPTION FOR A MONTH-TO-MONTH TENANCY THEREAFTER, TO SERVE AS THE PARKING SERVICES DIVISION OFFICES DURING THE CONSTRUCTION OF THE PUBLIC SAFETY BUILDING WHEREAS, the City of San Rafael (the "City") is a municipal corporation that provides services to residents, businesses, and visitors; and WHEREAS, the City of San Rafael will soon start a major construction project for a new Police and Fire Department `Public Safety Building' on city -owned land along Fifth Avenue between C and D Streets; and WHEREAS, it is necessary to relocate the Parking Services Division offices from its current location to allow for the `Public Safety Building' project to proceed; and WHEREAS, the Fire Department Administrative staff recently vacated leased office space located at 1033 C Street, which is the subject of an existing Commercial Lease Agreement, dated November 7, 2002, between the City of San Rafael and Gordon and Connie Wong, with a lease term expiring on December 31, 2017 ; and WHEREAS, it is anticipated that the construction of the `Public Safety Building' will take approximately two years through the Fall of 2019; and WHEREAS, the City deems the current lease price of $4,500.81 per month with a 3% annual increase a suitable rent for the 2,300 square feet space at 1033 C Street formerly occupied by the Fire Department; and WHEREAS, the total rent for the two year lease extension for 1033 C Street will be $109,639.68 ($4,500.81 per month for 2018 and $4,635.83 per month for 2019), with funding to come from the Parking Services Enterprise Fund; and WHEREAS, the size and configuration of the space at 1033 C Street are well suited to the operational needs of the Parking Services Division and the building improvements required are minimal for the Parking Services Division to occupy the space; and WHEREAS, Gordon and Connie Wong are willing to execute a Second Addendum to the aforementioned Commercial Lease Agreement, extending the current lease terms with the City for a two year extension with a 3% annual increase after the first year of the extension, with the option for a month-to-month extension for up to two years thereafter, at a 3% annual increase in the monthly lease amount ($4,774.91 per month for 2020 and $4,918.16 per month for 2021). 1 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Rafael does hereby authorize the City Manager to execute, on behalf of the City of San Rafael, a Second Addendum to the Commercial Lease Agreement with Gordon and Connie Wong, on the terms as provided herein, subject to approval as to form by the City Attorney, with funding to come from the Parking Services Enterprise Fund. I, ESTHER BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a meeting of the City Council of said City held on Monday, the 3rd day of April, 2017, by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Bushey, Gamblin, McCullough & Mayor Phillips None Colin 2 ESTHER BEIRNE, City Clerk 3 r A L I FO A Pit A COMMERCIAL LEASE AGREi_._ .ENT PE-) A S S O t_ t 4T 1 0 N (C.A.R. Form CL,P.evised 10/01) V r - rf OF PLEALTOAS'n Date (For reference only):--'-:; _7, 2002 Cordon and Cornle I.-onq ("Landlord") and City of San Rnf:al ('Tenant") agree as follows: 1. PROPERTY: Landlord rents to Tenant and Tenant rents from Landlord, the real property and Improvements described as: 1033 C. 8tzr_et, San Rnfeell, CA ("Premises"), which comprise approximately 2300 ngjl 1,; of the total square footage of rentable space in the entire property. See exhibit for a further description of the Premises. 2. TERM: The term shall be for 15 years and -0- months, beginning on (date) Decer-3or 20. 2002 ("Commencement Date"), (Check A or B): 0 A. Lease: and shall terminate on (date) D --camber 31, 2017 at 12:00 (—IAM ® PM. Any holding over after the term of this agreement expires, with Landlord's consent, shall create a month-to-month tenancy that either party may terminate as specified in paragraph 2B. Rent shall be at a rate equal to the rent for the Immediately preceding month, payable in advance. All other terms and conditions of this agreement shall remain in full force and effect. ❑ B. Month-to-month: and continues as a month-to-month tenancy. Either party may terminate the tenancy by giving written notice to the other at least 30 days prior to the Intended termination date, subject to any applicable local laws. Such notice may be given on any date. ❑ C. RENEWAL OR EXTENSION TERMS: See attached addendum 3, BASE RENT: A. Tenant agrees to pay Base Pent at the rate of (CHECK ONE ONLY:) ❑ 1) $ per month, for the term of the agreement. F1 2) $ per month, for the first 12 months of the agreement. Commencing with the 13th month, and upon expiration of each 12 months thereafter, rent shall be adjusted according to any increase in the U.S. Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor for All Urban Consumers ("CPI's for (the city nearest the location of the Premises), based on the following formula: Base Rent will be multiplied by the most current CPI preceding the first calendar month during which the adjustment is to take effect, and divided by the most recent CPI preceding the Commencement Date. In no event shall any adjusted Base Rent be less than the Base Rent for the month Immediately preceding the adjustment. If the CPI is no longer published, then the adjustment to Base Rent shall be based an an alternate index that most closely reflects the CPI. ❑ (3) $ per month for the period commencing and ending and $ per month for the period commencing and ending and $ per month for the period commencing and ending (4) In accordance with the attached rent schedule. (5) Other: S 600.00 oar =nth firat Year. Seo section 39 rat . B. Base Rent Is payable in advance on the 1st for U ) day of each calendar month, and is delinquent on the next day. C. if Commencement Date falls on any day other than the first day of the month, Base Rent for the first calendar month shall be prorated based on a 30 -day period. If Tenant has paid one full month's Base Rent In advance of Commencement Date, Base Rent for the second calendar month shall be prorated based an a 30 -day period. 4. RENT: A. Definition: ("Rent") shall mean all monetary obligations of Tenant to Landlord under the terms of this agreement, except security deposit. B. Payment: Rent shall be paid to (Name) Gordon 6 Connio rronq , at (address) 101 San 12loac ,1-.+a. San 1 anciaco Ca. 94127 or at any other location specified by Landlord in writing to Tenant. C. Timing: Base Rent shall be paid as specified In paragraph 3. All other Rent shall be paid within 30 days after Tenant Is billed by Landlord. 5. EARLY POSSESSION: Tenant Is entitled to possession of the Premises on December 20, 2002 If Tenant is In possession prior to the Commencement Date, during this time (i) Tenant is not obligated to pay Base Rent, and (it) Tenant U is ❑ Is not obligated to pay Rent other than Base Rent. Whether or not Tenant is obligated to pay Rent prior to Commencement Date, Tenant is obligated to comply with all other terms of this agreement. S. SECURITY DEPOSIT: A. Tenant agrees to ay Landlord $ 2, 600.00 as a security deposit. Tenant agrees not to hold Broker responsible for its return. (IF CHECKED ) I I If Base Rent increases during the term of this agreement, Tenant agrees to increase security deposit by the same proportion as the increase in Base Rent. B. All or any portion of the security deposit may be used, as reasonably necessary, to: () cure Tenant's default In payment of Rent, late charges, non -sufficient funds ("NSF') fees, or other sums due; (fi) repair damage, excluding ordinary wear and tear, caused by Tenant or by a guest or licensee of Tenant, (iii) broom clean the Premises, If necessary, upon termination of tenancy; and (iv) cover any other unfulfilled obligation of Tenant. SECURITY DEPOSIT SHALL NOT BE USED BY TENANT IN LIEU OF PAYMENT OF LAST MONTH'S RENT, If all or any portion of the security deposit is used during tenancy, Tenant agrees to reinstate the total security deposit within 5 days after written notice is delivered to Tenant. Within 30 days after Landlord receives possession of die Premises, Landlord shall: (t) fumish Tenant an itemized statement indicating the amount of any security deposit received and the basis for Its disposition, and (ii) return any remaining portion of security deposit to Tenant. However, if the Landlord's only claim upon the security deposit is for unpaid Rent, then the remaining portion of the security deposit, after deduction of unpaid Rent, shall be returned within 14 days after the Landlord receives possession. C. No interest will be paid on security deposit, unless required by local ordinance. The copyright laws of the United States (Title 17 U.S. Code) forbid the Landlord and Tenant acknowledge receipt of a copy of this unauthorized reproduction of this form, or any portion thereof, by photocopy page,s machine or any other means, Including facsimile or computerized formats. Landlord's Initia s ( ) ( [Yl.r %) Copyright © 1998-2001, CALIFORNIA ASSOCIATION OF REALTORS®, Tenant's Initials ( ) ( ) EMWH WG INC. ALL RIGHTS RESERVED OPPO0.n1NRY Reviewed by CL -11 REVISED 10101 (PAGE 1 of 6) Broker or Des gnee Dam COMMERCIAL LEASE AGREEMENT (CL -11 PAGE 1 OF 6) 1 aurel PrnPLIIIL ,.i._ramenlo Street . San FranU5CO CA 94118 III........ I I; U, 11'`U 1.,. 11;017111-1 D",...—ALI A,,;I— IY;111;r./rV Premises I.'a3 C. sL=c2nt. San safari. _ Dale i`ro7=17mr 7. 3003 7.'PAYMENTS- PAYMENT (� TOTAL DUE RECEIVED BALANCE DUE DUE DATE A. Rent- From L-/21/2002 To 1.9/31/2002 $ 066.67 $ $ 866.67 Date Dale B. Security Deposit ......................... $2,600.00 $ $2,600.00 C. Other: !11103 Rant $ 2,600.00 $ $2,600.00 Category D. Other- S $ $ Category E. Total: •••.•••.•..••..••.•.••.••.•••.... $ 6,066.67 $ $ 6,066.67 8. PARKING: Tenant is entitled to unreserved and reserved vehicle parking spaces. The right to parking 0 is 0 is not included in the Base Rent charged pursuant to paragraph 3. If not included in the Base Rent, the parking rental fee shall be an additional S per month. Parking spaces) are to be used for parking operable motor vehicles, except for trailers, boats, campers, buses or trucks (other than pick-up trucks). Tenant shall park in assigned space(s) only. Parking space(s) are to be kept clean. Vehicles leaking oil, gas or other motor vehicle fluids shall not be parked in parking spaces or on the Premises. Mechanical work or storage of inoperable vehicles is not allowed in parking space(s) or elsewhere on the Premises. No overnight parking is permitted. 9. ADDITIONAL STORAGE: Storage is permitted as follows: The right to additional storage space 0 is (] is not included in the Base Rent charged pursuant to paragraph 3. If not included in Base Rent, storage space shall be an additional $ per month. Tenant shall store only personal property that Tenant owns, and shall not store property that is claimed by another, or in which another has any right, title, or interest. Tenant shall not store any improperly packaged food or perishable goods, flammable materials, explosives, or other dangerous or hazardous material. Tenant shall pay for, and be responsible for, the clean-up of any contamination caused by Tenant's use of the storage area. 10. LATE CHARGE; INTEREST; NSF CHECKS: Tenant acknowledges that either late payment of Rent or issuance of a NSF check may cause Landlord to incur costs and expenses, the exact amount of which are extremely difficult and impractical to determine. These costs may include, but are not limited to, processing, enforcement and accounting expenses, and late charges imposed on Landlord. If any installment of Rent due from Tenant Is not received by Landlord within 5 calendar days after date due, or if a check Is returned NSF, Tenant shall pay to Landlord, respectively, S son sec. 39 (b) as late charge, plus 10% interest per annum on the delinquent amount and $25.00 as a NSF fee, any of which shall be deemed additional Rent. Landlord and Tenant agree that these charges represent a fair and reasonable estimate of the costs Landlord may incur by reason of Tenant's late or NSF payment. Any late charge, delinquent interest, or NSF fee due shall be paid with the current Installment of Rent. Landlord's acceptance of any late charge or NSF fee shall not constitute a waiver as to any default of Tenant. Landlord's right to collect a Late Charge or NSF fee shall not be deemed an extension of the date Rent Is due under paragraph 4, or prevent Landlord from exercising any other rights and remedies under this agreement, and as provided by law. 11. CONDITION OF PREMISES: Tenant has examined the Premises and acknowledges that Premise is clean and in operative condition, with the following exceptions: Items listed as exceptions shall be dealt with in the following manner: 12. ZONING AND LAND USE: Tenant accepts the Premises subject to all focal, state and federal laws, regulations and ordinances ("Laws"). Landlord makes no representations or warranty that Premises are now or in the future will be suitable for Tenant's use. Tenant has made its own investigation regarding all applicable Laws. 13. TENANT OPERATING EXPENSES: Tenant agrees to pay for all utilities and services directly billed to Tenant. 14. PROPERTY OPERATING EXPENSES: A. Tenant agrees to pay Its proportionate share of Landlord's estimated monthly property operating expenses, including but not limited to, common area maintenance, consolidated utility and service bills, Insurance, and real estate taxes, based on the ratio of the square footage of the Premises to the total square footage of the rentable space in the entire property. tenants obligation to be 298 of total property tam duo for fiscal yoar. OR B.E] (If checked) Paragraph 14 does not apply. 15. USE: The Premises are for the sole use as Mire niapatch center and city Administrative offices. No other use is permitted without Landlord's prior written consent. If any use by Tenant causes an increase in the premium on Landlord's existing property insurance, Tenant shall pay for the increased cost. Tenant will comply with all Laws affecting its use of the Premises. 16. RULES/REGULATIONS: Tenant agrees to comply with all rules and regulations of Landlord (and, If applicable, Owner's Association) that are at any time posted on the Premises or delivered to Tenant. Tenant shall not, and shall ensure that guests and licensees of Tenant do not, disturb, annoy, endanger, or interfere with other tenants of the building or neighbors, or use the Premises for any unlawful purposes, Including, but not limited to, using, manufacturing, selling, storing, or transporting illicit drugs or other contraband, or violate any law or ordinance, or committing a waste or nuisance on or about the Premises. 17. MAINTENANCE: A. Tenant OR 0 (If checked, Landlord) shall professionally maintain the Premises including heating, air conditioning, electrical, plumbing and water systems, if any, and keep glass, windows and doors in operable and safe condition. Unless Landlord is checked, If Tenant falls to maintain the Premises, Landlord may contract for or perform such maintenance, and charge Tenant for Landlord's cost. B. Landlord ORO (If checked, Tenant) shall maintain the roof, foundation, exterior walls, common areas and The copyright laws of the United States (Title 17 U.S. Code) forbid the Landlord and Tenant acknowle a receipt of a copy of this unauthorized reproduction of this form, or any portion thereof, by photocopy page. machine or any other means, including facsimile or computerized formats. Landlord's Initials ( ) ( (• L✓ ) Copyright © 1996-2001, CALIFORNIA ASSOCIATION OF REALTORS®, Tenant's Initials( #)( ) rcuuxoumc INC. ALL RIGHTS RESERVED. I Reviewed by OPPORTUNITY CL -11 REVISED 10101 (PAGE 2 of 6) 1 BrokerorDesignee Data ?romises J O.d3 C. .7br—f , .7–'n 8afaeZ. G —Date r aw.^,: bear 7, 200-- -18. ALTEP.ATIONS: Tenant shall not make any alterations in or about the Premises, including installation u, trade fixtures and signs, without Landlord's pr'or written consent, which shall not be unreasonably withheld. Any alterations to the Premises shall be done according to Law and with required permits Tenant shall give Landlord advance notice of the commencement date of any planned alteration, so that Landlord, at its option, may post a Notice of Nan -Responsibility to prevent potential liens against Landlord's interest in the Premises. Landlord may also require Tenant to provide Landlord with lien releases from any contractor performing work on the Premises. 19. GOVERNMENT IMPOSED ALTERATIONS: Any alterations required by Law as a result of Tenant's use shall be Tenant's responsibility. Landlord shall be responsible for any other alterations required by Law. 20. ENTRY: Tenant shall make Premises available to Landlord or Landlord's agent for the purpose of entering to make Inspections, necessary or agreed repairs, alterations, or improvements, or to supply necessary or agreed services, or to show Premises to prospective or actual purchasers, tenants, mortgagees, lenders, appraisers, or contractors. Landlord and Tenant agree that 24 hours notice (oral or written) shall be reasonable and sufficient notice. In an emergency, Landlord or Landlord's representative may enter Premises at any time without prior notice. 21. SiGNS: Tenant authorizes Landlord to place a FOR SALE sign on the Premises at any time, and a FOR LEASE sign on the Premises within the 90 (or ❑ ) day period preceding the termination of the agreement. 22. SUBLETTIN GIASSIGNM ENT: Tenant shall not sublet or encumber all or any part of Premises, or assign or transfer this agreement or any interest In It, without the prior written consent of Landlord, which shall not be unreasonably be withheld. Unless such consent is obtained, any subletting, assignment, transfer, or encumbrance of the Premises, agreement, or tenancy, by voluntary act of Tenant, operation of law, or otherwise, shall be null and void, and, at the option of Landlord, terminate this agreement. Any proposed sublessee, assignee, or transferee shall submit to Landlord an application and credit Information for Landlord's approval, and, if approved, sign a separate written agreement with Landlord and Tenant. Landlord's consent to any one sublease, assignment, or transfer, shall not be construed as consent to any subsequent sublease, assignment, or transfer, and does not release Tenant of Tenant's obligation under this agreement. 23. POSSESSION: If Landlord is unable to deliver possession of Premises on Commencement Date, such date shall be extended to the date on which possession is made available to Tenant. However, the expiration date shall remain the same as specified in paragraph 2. If Landlord is unable to deliver possession within 60 (or❑ ) calendar days after agreed Commencement Date, Tenant may terminate this agreement by giving written notice to Landlord, and shall be refunded all Rent and security deposit paid. 24. TENANTS OBLIGATIONS UPON VACATING PREMISES: Upon termination of agreement, Tenant shall: (7 give Landlord all copies of all keys or opening devices to Premises, including any common areas; (ii) vacate Premises and surrender it to Landlord empty of all persons and personal property; (H)i vacate all parking and storage spaces; (iv) deliver Premises to Landlord In the same condition as referenced in paragraph 11; (v) clean Premises; (vi) give written notice to Landlord of Tenant's forwarding address; and, (vii) All improvements Installed by Tenant, with or without Landlord's consent, become the property of Landlord upon termination. Landlord may nevertheless require Tenant to remove any such improvement that did not exist at the time possession was made available to Tenant. 25, BREACH OF CONTRACT/EARLY TERMINATION: In event Tenant, prior to expiration of this agreement, breaches any obligation In this agreement, abandons the premises, or gives notice of tenant's Intent to terminate this tenancy prior to its expiration, In addition to any obligations established by paragraph 24, Tenant shall also be responsible for lost rent, rental commissions, advertising expenses, and painting costs necessary to ready Premises for re -rental. Landlord may also recover from Tenant: (I) the worth, at the time of award, of the unpaid Rent that had been earned at the time Of termination; (11) the worth, at the time of award, of the amount by which the unpaid Rent that would have been earned after expiration until the time of award exceeds the amount of such rental loss the Tenant proves could have been reasonably avoided; and (iii) the worth, at the time of award, of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided. Landlord may elect to continue the tenancy in effect for so long as Landlord does not terminate Tenants right to possession, by either written notice of termination of possession or by reletting the Premises to another who takes possession, and Landlord may enforce all Landlord's rights and remedies under this agreement, including the right to recover the Rent as it becomes due. 26, DAMAGE TO PREMISES: If, by no fault of Tenant, Premises are totally or partially damaged or destroyed by fire, earthquake, accident or other casualty, Landlord shall have the right to restore the Premises by repair or rebuilding. If Landlord elects to repair or rebuild, and is able to complete such restoration within 90 days from the date of damage, subject to terms of this paragraph, this agreement shall remain in full force and effect. If Landlord is unable to restore the Premises within this time, or if Landlord elects not to restore, then either Landlord or Tenant may terminate this agreement by giving the other written notice. Rent shall be abated as of the date of damage. The abated amount shall be the current monthly Base Rent prorated on a 30 -day basis. If this agreement is not terminated, and the damage is not repaired, then Rent shall be reduced based on the extent to which the damage interferes with Tenant's reasonable use of Premises. If damage occurs as a result of an act of Tenant or Tenant's guests, only Landlord shall have the right of termination, and no reduction in Rent shall be made. 27. HAZARDOUS MATERIALS: Tenant shall not use, store, generate, release or dispose of any hazardous material on the Premises or the property of which the Premises are part However, Tenant is permitted to make use of such materials that are required to be used in the normal course of Tenant's business provided that Tenant complies with all applicable Laws related to the hazardous materials. Tenant is responsible for the cost of removal and remedlation, or any clean-up of any contamination caused by Tenant. 28. CONDEMNATION: If all or part of the Premises is condemned for public use, either party may terminate this agreement as of the date possession is given to the condemner. All condemnation proceeds, exclusive of those allocated by the condemner to Tenant's relocation costs and trade fixtures, belong to Landlord. 29. INSURANCE: Tenant's personal property, fixtures, equipment, inventory and vehicles are not insured by Landlord against loss or damage due to fire, theft, vandalism, rain, water, criminal or negligent acts of others, or any other cause. Tenant is to carry Tenant's own property Insurance to protect Tenant from any such less. In addition, Tenant shall carry liability insurance In an amount of not less than $ see see. 39 (a) . Tenant's liability insurance shall name Landlord and Landlord's agent as additional insured. Tenant, upon Landlord's request, shall provide Landlord with a certificate of Insurance establishing Tenant's compliance. Landlord shall maintain liability insurance insuring Landlord, but not Tenant, In an amount of at least S aoe aec. 39 (o) , plus property insurance in an amount sufficient to cover the replacement cost of the property. Tenant is advised to carry business interruption insurance In an amount at least sufficient to cover Tenant's complete rental obligation to Landlord, Landlord is advised to obtain a policy of rental loss insurance. Both Landlord and Tenant release each other, and waive their respective rights to subrogation against each other, for loss or damage covered by insurance. The copyright laws of the United States (Titre 17 U.S. Code) forbid the Landlord and Tenant acknowledge receipt of a copy of this unauthorized reproduction of this form, or any portion thereof, by photocopy page, machine or any other means, including facsimile or computerized formats. Landlord's Initials Copyright © 1998-2001, CALIFORNIA ASSOCIATION OF REALTORS®, Tenants Initials INC. ALL RIGHTS RESERVED,orrowrueirr Reviewed by CL -11 REVISED 10/01 (PAGE 3 of 6) I Broker or Designee Date COMMERCIAL LEASE AGREEMENT (CL -11 PAGE 3 OF 6) Premises L0:,3 r �i:s:.rye_ .Sam 7rt£�•31. _ Date 7. 2002 30. TENANCY STATEMENT (ESTOPPEL CERTIFICATE): Tenant shall execute and return a tenancy statement (estoppel certificate), delivered to Tenant by Landlord or Landlord's agent, within 3 days after Its receipt. The tenancy statement shall acknowledge that this agreement is unmodified and in full force, or in full force as modified, and state the modifications. Failure to comply with this requirement: (I) shall be deemed Tenant's acknowledgment that the tenancy statement is true and correct, and may be relied upon by a prospective lender or purchaser; and (ii) may be treated by Landlord as a material breach of this agreement. Tenant shall also prepare, execute, and deliver to Landlord any financial statement (which will be held in confidence) reasonably requested by a prospective lender or buyer, 31. LANDLORD'S TRANSFER: Tenant agrees that the transferee of Landlord's interest shall be substituted as Landlord under this agreement, Landlord will be released of any further obligation to Tenant regarding the security deposit, only If the security deposit is returned to Tenant upon such transfer, or If the security deposit is actually transferred to the transferee. For all other obligations under this agreement, Landlord is released of any further liability to Tenant, upon Landlord's transfer. 32. SUBORDINATION: This agreement shall be subordinate to all existing liens and, at Landlord's option, the lien of any first deed of trust or first mortgage subsequently placed upon the real property of which the Premises are a part, and to any advances made on the security of the Premises, and to all renewals, modifications, consolidations, replacements, and extensions, However, as to the lien of any deed of trust or mortgage entered into after execution of this agreement, Tenant's right to quiet possession of the Premises shall not be disturbed If Tenant is not in default and so long as Tenant pays the Rent and observes and performs all of the provisions of this agreement, unless this agreement Is otherwise terminated pursuant to its terms. If any mortgagee, trustee, or ground lessor elects to have this agreement placed in a security position prior to the lien of a mortgage, deed of trust, or ground lease, and gives written notice to Tenant, this agreement shall be deemed prior to that mortgage, deed of trust, or ground lease, or the date of recording. 33. TENANT REPRESENTATIONS; CREDIT: Tenant warrants that all statements in Tenant's financial documents and rental application are accurate. Tenant authorizes Landlord and Broker(s) to obtain Tenant's credit report at time of application and periodically during tenancy in connection with approval, modification, or enforcement of this agreement Landlord may cancel this agreement: (i) before occupancy begins, upon disapproval of the credit report(s); or (ii) at any time, upon discovering that Information in Tenant's application is false. A negative credit report reflecting on Tenant's record may be submitted to a credit reporting agency, if Tenant falls to pay Rent or comply with any other obligation under this agreement. 34. DISPUTE RESOLUTION: A. MEDIATION: Tenant and Landlord agree to mediate any dispute or claim arising between them out of this agreement, or any resulting transaction, before resorting to arbitration or court action, subject to paragraph 34B(2) below. Paragraphs 34B(2) and (3) apply whether or not the arbitration provision is initialed. Mediation fees, if any, shall be divided equally among the parties involved. If for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action. THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED. B, ARBITRATION OF DISPUTES: (1) Tenant and Landlord agree that any dispute or claim in Law or equity arising between them out of this agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration, including and subject to paragraphs 3413(2) and (3) below. The arbitrator shall be a retired judge or justice, oran attorney with at least 5 years of real estate transactional law experience, unless the parties mutually agree to a different arbitrator, who shall render an award in accordance with substantive California Law. In all other respects, the arbitration shall be conducted in accordance with Part III, Title 9 of the California Code of Civil Procedure. Judgment upon the award of the arbitrator(s) may be entered in any court having jurisdiction. The parties shall have the right to discovery in accordance with Code of Civil Procedure §1283.05. (2) EXCLUSIONS FROM MEDIATION AND ARBITRATION: The following matters are excluded from Mediation and Arbitration hereunder: (1) a judicial or non -judicial foreclosure or other action or proceeding to enforce a deed of trust, mortgage, or Installment land sale contract as defined In Civil Code §2985; (if) an unlawful detainer action; (iii) the filing or enforcement of a mechanic's lien; (iv) any matter that is within the jurisdiction of a probate, small claims, or bankruptcy court; and (v) an action for bodily Injury or wrongful death, or for latent or patent defects to which Code of Civil Procedure 5337.1 or §337.1.5 applies. The filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other provisional remedies, shall not constitute a violation of the mediation and arbitration provisions. (3) BROKERS: Tenant and Landlord agree to mediate and arbitrate disputes or claims Involving either or both Brokers, provided either or both Brokers shall have agreed to such mediation or arbitration, prior to, or within a reasonable time after the dispute or claim is presented to Brokers. Any election by either or both Brokers to participate in mediation or arbitration shall not result In Brokers being deemed parties to the agreement. "NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RiGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY." "WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATIOM OF DISPUTES' PROVISIOt4 TO NEUTRAL ARBITRATION." I Landlord's Initials / / (� 6 , Tenant's Initials 1 Ji The copyright laws of the United States (Title 17 U.S. Code) forbid the Landlord and Tenant acknowled a receipt of a copy of this unauthorized reproduction of this form, or any portion thereof, by photocopy page. / machine or any other means, including facsimile or computerized formats. Landlord's Initials ( ) (! �✓ } Copyright ® 1998-2001, CALIFORNIA ASSOCIATION OF REALTORS®, Tenant's Initials ( ) ( ) INC. ALL RIGHTS RESERVED. OFFOR unaw Reviewed by CLAI REVISED 10101 (PAGE 4 of 6) Broker or Designee Date COMMERCIAL LEASE AGREEMENT (CL -11 PAGE 4 OF 6) '119511256 /i•X Premise. -.i 33 c. :ri:-crt. Ian f2afanl- c Date 7. 20u? 35. JOINT AND INDIVIDUAL OBLIGATIONS: If there Is more than one Tenant, each one shall be Individually and completely responsible for the performance of all obligations of Tenant under this agreement, jointly with every other Tenant, and Individually, whether or not in possession. 36. NOTICE: Notices may be served by mail, facsimile, or courier at the following address or location, or at any other location subsequently designated: Landlord,c-onion 5 Connie F7onq Tenant: C_Iof- Sabia6CL-2_l— -Et`o11olmC ewlp�/).Latl 101 San JL ago Avenua r37 1—I FIf/� Avell U.IL Sa--z : rancia co Ca- 9412 7 F' h!✓t r.� tq'� I / o c7 &a_1 &,Lk) ef) 9y90,� Notice is deemed effective upon the earliest of the following: (i) personal receipt by either party or their agent; (h) written acknowledgement of notice; or (iii) 5 days after mailing notice to such location by first class mail, postage pre -paid. 37. WAIVER. The waiver of any breach shall not be construed as a continuing waiver of the same breach or a waiver of any subsequent breach. 38. INDEMNIFICATION: Tenant shall indemnify, defend and hold Landlord harmless from all claims, disputes, litigation, judgments and attorney fees arising out of Tenant's use of the Premises. 39. OTHER TERMS AND CONDITIONSISUPPLEMENTS: A) Rant for the first vear to be $2600.00 per month thereafter a 40 annual rort increase for the term of the lease. T.3) Rogardina Section 10. Tenant shall pay lanlord 6$ of rho monthly runt as lata charge. C) Ragardina Soction 24. Sea o::hibit A. List of equipaent and improva=,mnt not eub-loct to this provision. Anv loaYa caused to the roof during nolo-in construction, alterations and modifications te-4 1 be the responrlbiity of the tenant to correct. D) Recrard mq Section 26. LESSLE R0C0:1STRUC2!I0?7. Notvithatan.dinq anv other provision of this Section if theme in a cl—age or destruction for which Lessor has the richt to torziUmate this Lease, Lessor shall not terminate this Lease until it has given the Leasea writton notice of the oroposod termination. Within 60 dans after racaipt of the termination not±co, Lanaeo notifies Lossor in writing that Zcaseo Trill ropair the demean and destruction with Leesee Davina coots of repair in excess of insurance nrocaeds. If Lesson ai7e such notice thin Zensa aav not bo taminatad b; reason of the danago or destruction and Leasco aha11 proceed diligontly to repair the destruction. W Regarding Section 29. In lieu of the insurance Leasee is rgeuirad to obtain under Section 29, Zasnae =v =Could® for protaction acainat the riaka for which insurance would othervisa be reauired under those aoetions throuch participation in loiat powers agonciea forced for the purpose of pooling risks of nevaral ao7or7imant aaancieo.P. This lease is conditional on current tenant being out by 22119102. The following ATTACHED supplements lexh[bits are incorporated in this agreement: Z. Zist of Lrquitw.ant and ztmrovementa -a. Addnndn-i to Co,=cial Lease Acr=aamont. 40. ATTORNEY FEES: In any action or proceeding arising out of this agreement, the prevailing party between Landlord and Tenant shall be entitled to reasonable attorney fees and costs from the non -prevailing Landlord or Tenant, except as provided in paragraph 34A. 41. ENTIRE CONTRACT: Time is of the essence. All prior agreements between Landlord and Tenant are incorporated in this agreement, which constitutes the entire contract. It Is Intended as a final expression of the parties' agreement, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. The parties further Intend that this agreement constitutes the complete and exclusive statement of its terms, and that no extrinsic evidence whatsoever may be introduced in any judicial or other proceeding, If any, Involving this agreement. Any provision of this agreement that Is held to be Invalid shall not affect the validity or enforceability of any other provision In this agreement. This agreement shall be binding upon, and Inure to the benefit of, the heirs, assignees and successors to the parties. 42. BROKERAGE: Landlord and Tenant shall each pay to Broker(s) the fee agreed to, if any, in a separate written agreement. Neither Tenant nor Landlord has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker (individual or corporate), agent. finder, or other entity, other than as named in this agreement, in connection with any act relating to the Premises, Including, but not limited to, Inquiries, introductions, consultations, and negotiations leading to this agreement. Tenant and Landlord each agree to indemnify, defend and hold harmless the other, and the Brokers specified herein, and their agents, from and against any costs, expenses, or liability for compensation claimed inconsistent with the warranty and representation in this paragraph 42. 43, AGENCY CONFIRMATION: The following agency relationships are hereby confirmed for this transaction: Listing Agent: Laurel Broporties (Print Firm Name) Is the agent of (check one): 0 the Landlord exclusively; or ❑ both the Tenant and Landlord. Selling Agent: I (Print Firm Name) (if not same as Listing Agent) is the agent of (check one): ❑ the Tenant exclusively; or ❑ the Landlord exclusively; or ❑ both the Tenant and Landlord. Real Estate Brokers are not parties to the agreement between Tenant and Landlord The copyright laws of the United States (Title 17 U.S. Code) forbid the Landlord and Tenant acknowledge receipt of a copy of this unauthorized reproduction of this form, or any portion thereof, by photocopy page. �? machine or any other means, Including facsimile or computerized formats. Landlord's Initials ( ) ( - W) Copyright © 1998-2001, CALIFORNIA ASSOCIATION OF REALTORS®, Tenant's Initials () ( ) INC. ALL RIGHTS RESERVED. [DoiWWRC 7FPORI1111IiY Reviewed by CL -11 REVISED 10101 (PAGE 5 of 6) Broker or Designee Date COMMERCIAL LEASE AGREEMENT (CL -11 PAGE 5 OF 61 r8ill?i6 /r +. PI'emises. 103y C. = trnot, San RaZaal. C Date Niromb-ir 7. 2002 Landlord and Tenant acknowledge and agree that Brokers: (I) do not guarantee the condition of the Premises; (ii) cannot verify representations made by others; (Iii) will not verify zoning and land use restrictions; (iv) cannot provide legal or tax advice; (v) will not provide other advice or information that exceeds the knowledge, education or experience required to obtain a real estate license. Furthermore, if Brokers are not also acting as Landlord in this agreement, Brokers: (vi) do not decide what rental rate a Tenant should pay or Landlord should accept; and (vii) do not decide upon the length or other terms of tenancy. Landlord and Tenant agree that they will seek legal, tax, insurance, and other desired assistance from appropriate professionals. Tenant (Print name) Address /,'LI ;'l (S 1 4 c City I Tenant (Print name) Address Landlord (7rYfQ) i� �/ yU (owner or agent wl authorityto enter Into this agreement) Address / / dtl G �S �'V c— Landlord ln.U�/v�� lrrJ eW C. (owner or agent with authority to enter Into this agreement) Address /o // t _1 /",v fTLG�s:o dvF— Date 12 / r. Id ' State 4 � Zip I qll lj ^ - is-( L' Date State Zip Date 1/'_77—/O -Z'- State C/r Zip ¢ /Z/ Date // State 111-4 / Z Zip Agency relationships are confirmed as above. Real estate brokers. who are not also Landlord In this agreement are not a party to the agreement between Landlord and Tenant. Real Estate Broker (Leasing Firm) By (Agent) Address Telephone Fax Real Estate Broker (Listing Firm) laurol Properties By (Agent) Address Telephone Fax Date City State Zip E-mail Date City State Zip E-mail THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (C AR ) NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRA14SACTIONS IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. This form Is available for use by the entire real estate industry. It is not Intended to Identify the user as a REALTOR®. REALTORS Is a registered collective membership mark which may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® who subscribe to Its Code of Ethics Publishad and Oistributad try. REAL ESTATE BUSINESS SERVICES, INC. a subsfcfary of the CALIFORNIA ASSOCIATION OF REALTORS© I Reviewed by ' 525 South Vitgtl Avenue, Lm Angalas, Califomla 9=0 � CLA 1 REVISED 10101 (PAGE 6 OF 6) Broker or Oeslgnee Data o COMMERCIAL LEASE AGREEMENT (CL -11 PAGE 6 OF 6) ovr"onlWaa r'r ADDENDUM TO COMMERCUL LEASE AGREEMENT Reference is made to that certain "Commercial Lease Agreement" (the Agreement") dated October 7, 2002. in respect of 1033 "C" Street, San Rafael, California ("the Property") by and between Gordon and Connie Wong ("Landlord") and City of San Rafael" ("Tenant"). The Agreement is incorporated by this reference herein. The Agreement is amended only as is specifically set for herein. In all other respects it is intended that the Agreement shall continue in full force and effect as is set forth therein, unless otherwise amended in a separate signed writing. 1. (a) Conditioned on Tenant's full and faithful performance hereunder, during the term hereof Landlord shall not sell all or any portion of Landlord's interest in the Property without fust offering that interest in the Property to Tenant for Tenant's purchase. The sole exception to this shall be a conveyance or transfer by gift; bequest, or inheritance After conveyance or transfer by gift, bequest or inheritance, the right of first refusal granted in this Addendum shall remain in effect against the person holding title or any other interest so conveyed or transferred in the Propert} (b) Before Landlord sells the Property, Landlord shall offer ("First Offer") to sell the Property to Tenant in writing and on terms and conditions substantially identical to those proposed for the sale of the Property to a third party. The First Offer shall set forth the material terms and conditions of the proposed sale of the Property (c) Tenant shall have thirty (30) days from delivery (which may be accomplished by messenger, fax, email or United State mail) of the First Offer to accept the First Offer ("Acceptance Period") by delivering to Landlord the written and signed Acceptance on or before 5:00 p.m. on the last day of die Acceptance Period. If Tenant fails to accept the First Offer on or before the last day of die Acceptance Period, the First Offer shall be deemed to be rejected. (d) If Tenant responds to the First Offer with anything other than an unequivocal, unconditional acceptance or rejection, the right of first refusal shall terminate and the response shall be deemed an offer to purchase the Property on the terms and conditions in the response ("Counter Offer"). Landlord shall be entitled to accept or reject the Counter Offer in Landlord's sole discretion. If the Counter Offer is rejected, Landlord shall have no further obligations under this, the Right of First Refusal, provision of die Agreement, at any time (e) If Tenant accepts the First Offer, Tenant shall have thirty (30) days following the Acceptance of the First Offer ("Closing Period") to consummate the purchase of the Property pursuant to the terms and conditions of the First Offer. If Tenant fails to consummate the purchase of the Property within the Closing Period, any earnest money paid by Tenant pursuant to the Acceptance shall be paid to Landlord as Landlord's liquidated damages. and the Agreement to purchase the Property between Landlord and Tenant shall be terminated. After that termination, Landlord shall be free to enter into an agreement concerning the sale of the Property with any third party on whatever terms Landlord may choose without further obligation under the terms of this, the Right of First Refusal, portion of the Agreement at any time. 2. (a) Conditioned on Tenant's full and faithful performance hereunder, Landlord hereby grants Tenant one (1) consecutive option to extend the term of the Agreement on the same terms. conditions and provisions as contained in the Agreement, except as otherwise provided herein, for a consecutive period of five (5) years commencing on the expiration of the initial term of the Agreement. This option to extend shall be exercisable by written notice from Tenant to Landlord of Tenant's intention to exercise its election for said option given not later than the date which is one hundred twenty (120) days prior to the expiration of the initial term of the Agreement, time being of the essence. If Tenant fails to timely give notice of its intent to exercise this option it shall expire. (b) If this option to extend is timely and properly exercised by Tenant the rent during the option period shall be one hundred percent (100010) of the prevailing market rate in effect as of the date of the delivery of Tenant's notice of Tenant's exercise of the option. Within thirty (30) days of the date of Landlord's receipt of Tenant's notice Landlord shall give Tenant written notice of the Prevailing Market Rate, as reasonably determined in good faith by Landlord. (c) The term "Prevailing Market Rate" shall mean the then prevailing annual rental rate per square foot of rentable area for commercial space in comparable buildings near to the Property which have been built out for occupancy, are comparable in area and location to the Property, are being leased for a duration comparable to the option period and for terms commencing on or about the option period commencement date. The determination of the Prevailing Rate may take into consideration any other market factors that would reasonably affect its determination. (d) Not later than sixty (60) days after Landlord's notice to Tenant of the applicable Prevailing Market Rate, Tenant shall timely notify Landlord of Tenant's election (i) to accept Landlord's determination of the Prevailing Market Rate; (ii) to have the Prevailing Market Rate determined by the "appraisal" procedure hereinafter described; or (iii) to not exercise Tenant's option to extend, time being of the essence. If Tenant fails to notify Landlord within said sixty (60) day period of Tenant's election, Tenant shall be deemed to have accepted Landlord's determination of the then Prevailing -Market Rate and to have waived its rights to an "appraisal' thereof and Tenant shall be bound by that determination. (e) If Tenant has elected to have an "appraisal" of the amount of the then Prevailing Market Rate (based upon the aforesaid definition), then the following shall be utilized to make and implement such election: (i) Not later that ten (10) days after Tenant's notice to have such an "appraisal" of the then Prevailing Market Rate, Landlord and Tenant shall each designate, by written notice given to the other party setting forth the designated person's address, a qualified appraiser who shall have had at lease five (5) year's experience relevant to the appraisal of commercial space in the Nlarin County area ("the Appraisers"). Each of the Appraisers shall submit to Landlord and Tenant, within sixty (60) days after lus or her appointment, a written determination of the Prevailing Market Rate on the relevant date set forth above with respect to the Property. (ii) If the lower of the two appraiser' determinations is not less than ninety-five percent (95%) of the other determination, then the average of the two determinations shall be deemed to be the Prey ailing Market Rate and conclusive and binding on the parties. If such not be the case, then the Appraisers shall mutually select a third Qualified and impartial Appraiser who shall also have had at least five (5) years experience relevant to the appraisal of commercial space in Marin County (the "Third Appraiser"). The Third Appraiser shall issue a determination of said Prevailing Market Rate within sixty (60) days of his or her appointment and that determination shall be deemed to be the Prevailing Market Rate and shall be conclusive and binding on the parties. (iii) The cost of paying the Third Appraiser shall be borne equally between Landlord and Tenant. The cost of paying each of the first two appraisers shall be borne solely by the party appointing such appraiser (iv) If Tenant becomes obligated to pay Rent with respect to the option period hereunder prior to when the applicable Prevailing Market rate has been determined in accordance with the foregoing, Tenant shall commence paying Rent utilizing Landlord's determination of the Prevailing Market Rate. Following determination of the applicable Prevailing Market Rate in accordance with the foregoing, Landlord and Tenant shall, by a cash payment within thirty (30) days of the date of such determination, adjust between themselves the difference, if any, between the Rent paid by Tenant pursuant to the foregoing sentence and the Rent actually owed by Tenant pursuant to the terms of the Agreement for that time period. (0 Tenant shall not have any option to extend the Term of The Agreement beyond the expiration of the first five (5) year option period described above. L� c� �i Landlord i Authorizell-agent' for Tenant /�/ Second Addendum to the Commercial Lease Agreement This Second Addendum to that certain "Commercial Lease Agreement" ("Agreement") dated October 7, 2002, with respect to 1033 "C" Sheet, San Rafael, California (AP No. 011-205-05) ("Property"), is entered into as of the 4 t n day of April, 2017, by and between Connie Wong, who became the sole owner of the Property by a Deed recorded on March 20, 2006 as Marin County Recorder Document No. 06-016842 ("Landlord") and the City of San Rafael ("Tenant"). This Second Addendum amends the Agreement only as is specifically set forth herein. In all other respects it is intended that the Agreement, including the Addendum thereto, shall continue in full force and effect. The Agreement shall be amended as follows: 1. Paragraph 2 is amended to provide that the specified term of the Lease shall be extended from its current termination date of December 31, 2017, for an additional two (2) year period beginning on January 1, 2018 and terminating on December 31, 2019. 2. Paragraphs 3.A.5 and 39 are amended to provide that the rent during 2018 shall be $4,500.81 per month (the same as during 2017), and that the rent during 2019 shall be $4,635.83 per month (a 3% increase over the 2017 and 2018 monthly rate). 3. Paragraph 4.13 is amended to read as follows: "Payment: Rent shall be paid to Connie Wong, at 435 China Basin Street #543, San Francisco, CA 94158." 4. Paragraph 15 is amended to read as follows: "USE: The Premises are for the sole use as City Administrative offices." 5. Paragraph 36 is amended to change the addresses for giving Notice as follows: Landlord: Connie Wong Tenant: City of San Rafael -Economic Development Dept. 435 China Basin Street #543 1400 5"' Avenue San Francisco, CA 94158 San Rafael, CA 94901 6. Tenant shall have the option of extending the term of this Lease beyond the December 31, 2019 termination date on a month-to-month basis up through December 31, 2021, by giving written notice to Landlord at least 30 days before such termination date of Tenant's exercise of its option. Following such an extension, Tenant may terminate the month-to-month tenancy by giving written notice to the Landlord at least 30 days prior to the intended termination date, and such notice may be given at any date. In the case of such a month-to-month tenancy, rent shall be _ $4,774.91 per month during 2020 (a 3% increase over the 2019 rate) and $4,918.16 per month during 2021(a 3% increase over the 2020 rate). 7. All other terms of the Agreement not specifically amended as provided herein shall remain in effect. C_ C,/ 8. Tenant shall not be responsible for any claims of a broker's fee becoming payable due to the execution of this Second Addendum, or the extension of the term of the Agreement as provided herein, and Landlord shall indemnify and hold harmless Tenant from any such claims. . WHEREFORE, the parties have executed this Second Addendum by entering their signatures below, signifying their agreement to its terms and conditions. Landlord: LIP Connie Wong T nant: J chutz, City ger, City of San Rafael ATTEST: Esther C. Beirne, City Clerk APPROVED AS TO FORM: Aert F. Epstein, City Attorney 2 CONTRACT ROUTING FORM INSTRUCTIONS: Use this cover sheet to circulate all contracts for review and approval in the order shown below. TO BE COMPLETED BY INITIATING DEPARTMENT PROJECT MANAGER: Contracting Department: Parking Services Project Manager: Jim Myhers Extension: Click here to enter text. Contractor Name: 2nd addendum Commercial Lease 1033 C St Contractor's Contact: Gordon/Connie Wong Contact's Email: Gordon Wong <gwong10318@gmail.com> ❑ FPPC: Check if Contractor/Consultant must file Form 700 Step RESPONSIBLE DESCRIPTION COMPLETED REVIEWER Date of Council approval DEPARTMENT DATE Check/Initial 1 Project Manager a. Email PINS Introductory Notice to Contractor Click: here to ❑ Attorney with printed copy of this routing form enter a date. 6 City Attorney Review and approve hard copy of signed b. Email contract (in Word) & attachments to City Click: here to agreement Atty c/o Laraine.Gittens@cityofsanrafael.org enter a date. ❑ 2 City Attorney a. Review, revise, and comment on draft agreement Click: here to 8 City Manager/ Mayor and return to Project Manager enter a date. ❑ 9 City Clerk Attest signatures, retains original agreement and b. Confirm insurance requirements, create Job on Click: here to forwards copies to Project Manager 14 PINS, send PINS insurance notice to contractor enter a elate. ❑ 3 Project Manager Forward three (3) originals of final agreement to Click here to ❑ contractor for their signature enter a date. 4 Project Manager When necessary, * contractor -signed agreement ❑ N/A agendized for Council approval *PSA > $20,000; or Purchase > $35,000; or Or ❑ Public Works Contract > $125,000 4/3/2017 Date of Council approval PRINT CONTINUE ROUTING PROCESS WITH HARD COPY 5 Project Manager Forward signed original agreements to City 3/30/17 Attorney with printed copy of this routing form 6 City Attorney Review and approve hard copy of signed "YA A 7 er i 1i agreement 7 City Attorney Review and approve insurance in PINS , and bonds fL (for Public Works Contracts) 8 City Manager/ Mayor Agreement executed by Council authorized official `1 9 City Clerk Attest signatures, retains original agreement and v forwards copies to Project Manager 14 ROUTING SLIP / APPROVAL FORM INSTRUCTIONS: Use this cover sheet with each submittal of a staff report before approval by the City Council. Save staff report (including this cover sheet) along with all related attachments in the Team Drive (T:) --> CITY COUNCIL AGENDA ITEMS 4 AGENDA ITEM APPROVAL PROCESS 4 [DEPT - AGENDA TOPIC] Agenda Item # Date of Meeting: 4/3/2017 From: Jim Myhers Department: Parking Services Date: 3/23/2017 Topic: EXTENSION OF A LEASE AGREEMENT TO PROVIDE SPACE FOR PARKING SERVICES DIVISION DURING PUBLIC SAFETY BUILDING CONSTRUCTION Subject: Resolution of the San Rafael City Council authorizing execution of a two year extension to an existing lease agreement between the City of San Rafael and Gordon and Connie Wong for office space at 1033 C Street for Parking Services offices during construction of the Public Safety Building. Type: ® Resolution ❑ Ordinance ❑ Professional Services Agreement ❑ Other: APPROVALS ® Finance Director Remarks: approved - MM 2/24/2017 ® City Attorney Remarks: Approved with changes to the Staff Report and Resolution. ETD. 2/27/17 ® Author, review and accept City Attorney / Finance changes Remarks: Reviewed and accepted 2/27/17 ® City Manager Remarks: