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HomeMy WebLinkAbout2006 CON SD Joint Labor Relations Com. - LeaseLEASE By and between the CITY OF NATIONAL CITY and SAN DIEGO JOINT PORT LABOR RELATIONS COMMITTEE This Lease, made and entered into this 7`h day of July, 2006 by and between the City of National City ("City"), hereinafter designated as "Lessor," and San Diego Joint Port Labor Relations Committee (comprised of the International Longshore & Warehouse Union — Local No. 29 and the Pacific Maritime Association), hereinafter designated as "Lessee." RECITALS Lessee is desirous of leasing from Lessor, and Lessor is desirous of leasing to Lessee, certain real property identified as the western portion of the building located at 200 East 12th Street in National City, California for the use described in Section 4 below more fully described as Lessee's exclusive use of a 4,300 square feet area on Exhibit "A" as Office Use. NOW, THEREFORE, the parties hereto agree as follows: 1. Legal Status Of Lessee. Lessee warrants that it is a legal mutual benefit corporation, incorporated under the laws of the State of California. 2. leased Premises. Lessor does hereby lease, demise and let to Lessee the real property situated in the City of National City, County of San Diego, State of California, commonly described as western portion (4,300 square feet) of the building located (the "Leased Premises") at 200 East 12th Street in National City, California (the "Building"), otherwise known as the former National City Library building (San Diego County Assessor's Parcel number 560-100-03). The approximate configuration and location of the Leased Premises is shown on Exhibit A attached hereto and incorporated herein by reference. 3. Condition of Leased Premises. Lessor shall deliver the Leased Premises and the Building to Lessee in a clean condition and warrants that the existing mechanical, electrical, doors, plumbing, lighting, heating, ventilation and air conditioning systems, exterior paved surfaces, landscaping and hardscaping and all improvements constructed to facilitate Lessee's occupancy and Use of Leased Premises and Building, including, without limitation the Lessee Improvements (as defined in Exhibit B) shall be in good operating condition as of the Commencement Date (as defined in Section 6 below) and comply with all building and regulatory laws and codes, including, without limitation, Americans with Disability Act ("ADA"). 4. Use. The Leased Premises are leased to Lessee by Lessor for the following purposes: (i) a dispatch hall and meeting place for the Longshore and Warehouse Union; (ii) general office and administrative uses; and (iii) ancillary uses consistent with the uses specified in clauses (i) and (ii). 5. Assignment & Subletting. This Lease shall not be assigned, sublet, hypothecated, leveraged, or transferred without the prior written consent of the Lessor; provided however, Lessee may assign or Page 1 of 9 sublet this Lease to an affiliate of Lessee without the prior written consent of Lessor. 6. Term. The initial term of this Lease shall be twenty (24) months ("Term"), beginning on the date which is the later of (i) August 31, 2006; or (ii) ten (10) days after Lessor has completed all of the Lessee improvements (`Lessee Improvements") as described in and in accordance with that certain Work Letter attached to this Lease as Exhibit B and incorporated herein by reference, and Lessor has delivered possession of the Leased Premises to Lessee (the "Commencement Date") . The Lessor hereby grants the Lessee the options (collectively "Options") to extend the Term of this Lease for three (3) additional twelve (12) month periods commencing when the Term expires and each twelve (12) month period thereafter. To exercise any Option, Lessee must be current on all financial obligations including; Rent and Liability Insurance. Lessee's payment of Rent during the first calendar month of an Option shall constitute exercising such twelve (12) month extension in term for such Option. Non- payment of Rent beyond thirty (30) calendar days of the first month of any Option shall constitute a waiver of all remaining Options. Lessee acknowledges that the use of the Leased Premises is temporary and agrees to use good faith efforts to seek alternative premises to the Leased Premises for the use set forth herein; provided, however, notwithstanding the foregoing or anything to the contrary contained herein (i) nothing in this paragraph shall create any liability or obligation on the part of Lessee; and (ii) Lessor shall have no right to terminate this Lease prior to the expiration of the Term (as extended by the Options) for failure of Lessee to seek or otherwise find alternative premises to the Leased Premises. I44 � <• Lessee to initial here & g-2$- °Iodate Lessee to initial here &v7`94-U6 date 7. Termination and Lessee Default. This Lease may be terminated by the Lessee, (with or without cause) upon one hundred and twenty (120) days written notice to Lessor. The Lease may be terminated by the Lessor upon the occurrence of one or more of the following defaults ("Defaults") and the failure of Lessee to cure any such Defaults within any applicable grace period: (7.1) The failure of Lessee to make any payment of Rent or provide reasonable evidence of insurance, or to fulfill any obligation of Lessee under this Lease which endangers or threatens life or property, where such failure continues for a period of ten (10) business days following written notice from Lessor. (7.2) A failure by Lessee to perform any of the obligations of Lessee Lease (other than those described in subparagraph 7.1), where such failure continues for a period of thirty (30) a days after written notice from Lessor; provided, however, that if the nature of Lessee's failure to perform is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Default if Lessee commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. 8. Lessor Remedies upon a Lessee Default. If Lessee is in Default and has failed to cure such Default within any applicable grace period, Lessor may, at its option, perform such duty or obligation giving rise to the Default on behalf of Lessee, including but not limited to the obtaining of reasonably required insurance policies, or government licenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee within ten (10) days of receipt of invoice therefore. If any check given to Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. In the event of a Default which Lessee has failed to cure within any applicable grace period, Lessor may, with or without further notice or demand and without limiting Lessor in the exercise of Page 2 of 9 any right or remedy which Lessor may have by reason of such Default; terminate the Lessee's right to possession of the Leased Premises by any lawful means, continue the Lease, and/or pursue any other remedy now or hereafter available under the laws or judicial decision of the State of California. 9. Lessor Default. Lessor shall be in default under this Lease ("Lessor Default") if Lessor fails to perform any of the obligations of Lessor under this Lease and such failure continues for a period of thirty (30) a days after written notice from Lessee; provided, however, that if the nature of Lessor's failure to perform is such that more than thirty (30) days are reasonably required for its cure, then it shall not he deemed to be a Lessor Default if Lessor commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. The rights and remedies of Lessee upon a Lessor Default shall be cumulative and upon a Lessor Default Lessee may pursue any and all rights and remedies at law or in equity, whether at the same time or otherwise. 10. Rent. Lessee shall pay a Rent for the Leased Premises of One and 25/100 Dollars ($1.25) per rentable square foot for approximately 4,300 square feet of rentable space, or Five Thousand Three Hundred Seventy Five and No/100 Dollars ($5,375.00) per month for the term of this lease, payable on the first (1s`) day of each month commencing on the Commencement Date. The Rent includes consideration for maintenance, utility expenses, insurance, management, capital repairs and upgrades and property taxes to be incurred by the Lessor. Payment of Rent after the fifth (5th) day of each month shall require an additional payment of One Hundred and no/100 Dollars ($100.00) in addition to the outstanding Rent. Lessor and Lessee agree that the rentable space of the Leased Premises for all purposes under this Lease shall be 4,300; provided, however, that, at any time during the term of this Lease Lessee may at Lessee's expense, cause its architect to re -measure the Leased Premises in accordance with the Applicable Measurement Standards (as defined below). Upon completion of any such re - measurement, Lessor and Lessee shall, at the request of either party, confirm the rentable space in writing. As used herein, "Applicable Measurement Standards" means the ANSI/BOMA Z-65.1 1996 Standard Method of Measuring Floor Area in Office Buildings. 11. Inflation Adjustment. The monthly Rent shall be adjusted for inflation (measured by the preceding 12 month period) on July 1, 2007, July I, 2008, July 1, 2009, and July 1, 2010. The Consumer Price Index (U — All Urban Consumers) of the Bureau of Labor Statistics of the United States Department of Labor, for the Urban Area of Los Angeles, Riverside and Orange Counties shall be the inflationary index applied to each yearly adjustment in Rent ("CPI"). In no event shall the annual CPI increase be less than three (3) percent or more than five (5) percent of the Rent for the preceding year. The monthly Rent shall be indexed for inflation by the following formula which shall apply to the Term and the Options: July 1, 2006 thru June 1, 2007 - (Year 1 Rent) July 1, 2007 thru June 1, 2008 - (Year 2 Rent) July 1, 2008 thru June 1, 2009 - (Year 3 Rent) July 1, 2009 thru June 1, 2010 - (Year 4 Rent) July 1, 2010 thru June 1, 2011 - (Year 5 Rent) $5,375.00 per month Year 1 rnonthly Rent plus CPI increase per month Year 2 monthly Rent plus CPI increase per month Year 3 monthly Rent plus CPI increase per month Year 4 monthly Rent plus CPI increase per month 12. Maintenance and Repair. Lessor shall provide, at Lessor's own expense, routine services, maintenance and repair including: landscaping, windows, lighting, HVAC, all mechanical and electrical systems, plumbing, painting of all public areas, and all exterior paved areas including hardscaping and parking. Lessor will be responsible for repair of improvements located on the Leased Premises, except the Lessee shall be responsible for cleaning/janitorial service of the Leased Premises. Lessee shall keep the Leased Premises in as good order, condition and repair as reasonable use and wear thereof will permit. Page 3 of 9 (12.1) Repairs by Lessor. Lessor shall be required to make such repairs or replacements to the Leased Premises as may be required for normal maintenance and operation, which shall include the repairs and/or replacements to all structural portions of the Building and all walls, floors, corridors, windows, HVAC, mechanical electrical, plumbing, paving and parking, exterior windows, and other structures and equipment within and serving the Leased Premises, and such additional maintenance as may be necessary because of damages by persons other than Lessee, its agents, employees, invitees, or visitors, all in accordance with standard practices for similar commercial buildings in the San Diego, California area. Without limiting the foregoing, Lessor shall provide adequate lighting in the parking area servicing the Building. Notwithstanding anything to the contrary set forth herein, if Lessor is required to make repairs or take other corrective action in the Leased Premises by reason of Lessee's negligent acts or negligent failure to act reasonably, Lessor shall have the right to recover from Lessee the cost of the repairs or other work. If Lessor fails to promptly make any repairs or replacements required under this Section 12.1 after ten (10) days of written notice from Lessee, Lessee may, at its option, make such repairs or replacements, and Lessor shall reimburse the cost thereof to the Lessee within ten (10) days of written demand. (12.2) Repairs by Lessee. Lessee agrees to repair or replace any damage or injury done to the Leased Premises, or any part thereof, caused by Lessee or Lessee's agents, employees, invitees, or visitors, at Lessee's own cost and expense. If Lessee fails to make such repairs or replacements promptly, Lessor may, at its option, make such repairs or replacements, and Lessee shall repay the cost thereof to the Lessor as additional rent within ten (10) days of written demand. However, for any repair work, other than repair work in emergency situations, costing over Five Hundred and no/100 Dollars ($500,00) to be performed by Lessee or Lessee's agents, Lessee shall not perform such repair work without Lessor's prior written consent; which consent shall not be unreasonably withheld, delayed or conditioned. Any repairs or replacements in or to the Leased Premises, other than repair work in emergency situations, which would require an expenditure exceeding Five Thousand and no/100 Dollars ($5,000.00) and which constitute a "public project" under Section 20161 of the California Public Contract Code, shall be contracted for/by Lessor and let to the lowest responsible bidder after notice, (12.3) Waste. Lessee shall not commit waste (property abuse, destruction, or damage) beyond normal wear and tear of property improvements on the Leased Premises. 13. Improvements, Alterations, and Additions. Lessee shall not make or allow to be made any major alterations or physical additions in or to the Leased Premises which affect the structure or any other improvements without first obtaining the written consent of Lessor which shall not be unreasonably withheld, conditioned or delayed. All work shall be done by contractors approved by Lessor. Lessor's approval or consent shall not be unreasonably withheld, conditioned or delayed. Any alterations or physical additions in or to the Leased Premises, other than repair work in emergency situations, which would require an expenditure exceeding Five Thousand and no/100 Dollars ($5,000), and which constitute a "public project" under Section 20161 of the California Public Contract Code, shall be contracted for/by Lessor and let to the lowest responsible bidder after notice. Any and all such alterations, physical additions, or improvements, when made to the Leased Premises by Lessee, shall at once become the property of Lessor and shall be surrendered to Lessor upon the termination of this Lease by lapse of time or otherwise; provided, however, this clause shall not apply to movable equipment or furniture owned by Lessee. Any Lessee improvements, alterations or additions shall comply with all government, local building code, permitting and Page 4 of 9 competitive bidding requirements. Lessee shall give Lessor written notice five (5) days prior to employing any laborer or contractor to perform major work on the Leased Premises so that Lessor may post a notice of non -responsibility if allowed by law. Lessee shall not be required to remove alterations, physical additions, or improvements upon termination of this Lease. 14. Utilities. Lessor will be responsible payment of the following utilities; including electric, gas, sewer, trash and water. Lessee understands that it is responsible for the proper disposal of debris in the designated trash receptacles provided by the Lessor. No trash is to be placed in front of or on the sides of the container nor should any trash be placed on top of the lids. Lessee further understands that it will be billed accordingly for not disposing of trash in the proper manner, which includes breaking down all boxes and containers prior to being placed in the trash bins as shown on Exhibit A. 15. Parking. Lessee shall have exclusive use of fourteen (14) parking spaces between the hours of 6:00 am to 7:30 am (Pacific Standard Time) and 2:00 pm to 3:00 pm (Pacific Standard Time), Monday through Sunday (shown as "General Membership Spaces" in Exhibit A). Lessee shall have exclusive use of six (6) parking spaces between the hours of 5:00 am and 6:00 pm (Pacific Standard Time), Monday through Sunday (shown as "Office Spaces" in Exhibit A). Lessee shall also have access to auxiliary parking between the hours of 6:00 am to 7:30 am (Pacific Standard Time) and 2:00 pm to 3:00 pm (Pacific Standard Time), Monday through Sunday, as shown in Exhibit C. 16. Mailings & Noticing. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by overnight mail (Federal Express or the like); or sent by registered or certified mail, postage prepaid, return receipt requested; or sent by ordinary mail, postage prepaid; or telegraphed or cabled; or delivered or sent by telex, telecopy, facsimile, fax or email; and, shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if sent by overnight mail, the business day following its deposit in such overnight mail facility, (iii) if mailed by registered, certified or ordinary mail, three (3) days (five (5) days if the address is outside the State of California) after the date of deposit in a post office, mailbox, mail chute, or other like facility regularly maintained by the United States Postal Service, (iv) if given by telegraph or cable, when delivered to the telegraph company with charges prepaid, or (v) if given by telex, telecopy, facsimile, fax or email, when sent. Any payment, notice, request, demand, direction or other communication delivered or sent as specified above shall be directed to the following persons: To the Lessor: To the Lessee: City Manager, City of National City 1243 National City Boulevard National City, California 91950-4397 President, International Longshore & Warehouse Union — Local No. 29 200 East 12th Street National City, California 91950 Pacific Maritime Association 555 Market Street San Francisco, California 94105 Attn: General Counsel 17. Inspection. Lessor, by and through its proper officers, reserve and shall always have the right, upon reasonable notice and at a reasonable time, to enter the Leased Premises for the purpose of viewing and Page 5 of 9 ascertaining the conditions of the same and the operation and maintenance thereof. 18. Non -Discrimination. Lessee agrees that there shall be no discrimination against or segregation of any person or group of persons, because of race, color, creed, national origin, sex, sexual orientation; ancestry, marital status, physical handicap, or medical condition, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Leased Premises, nor shall Lessee, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of Lessees, lessees, subleases, sublessees, or vendees in the Leased Premises. 19. Indemnification. Lessee agrees to indemnify, defend and hold harmless Lessor and the Community Development Commission of the City of National City from all liability, loss, cost, claims, demands, suits and defense costs (collectively "Liabilities") arising out of Lessee's failure to observe or comply with any laws in any material respect or the negligence or willful misconduct of Lessee in or about the Building or any portion thereof. Lessor agrees to indemnify, defend and hold harmless Lessee from all Liabilities arising from Lessor's failure to observe or comply with any laws in any material respect or the negligence or willful misconduct of Lessor in or about the Building or any portion thereof. 20. Lessee Insurance. Lessee shall take out and maintain, throughout the period of this Lease, commercial general liability insurance with minimum limits of One Million Dollars (S1,000,000.00) combined single limit per occurrence, covering all bodily injury and property damage arising out of this Lease. This policy shall name Lessor the City of National City, the Community Development Commission of the City of National City, and their officers, agents, and employees as additional insured, and shall constitute primary insurance as to Lessor, its officers, agents and employees, so that any other policies held by Lessor shall not contribute to any loss under said insurance. Said policy shall provide for thirty (30) days' prior written notice to Lessor of cancellation or material change. The certificate and endorsements for the insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificate and endorsements are to be received and approved by Lessor before this Agreement is signed. If the required insurance coverage is provided on a "claims made" rather than "occurrence" form, Lessee shall maintain such insurance coverage for three (3) years after expiration of the tens (and any extensions) of this Lease. If Lessee does not keep any required insurance policy in full force and effect at all times during the term of this Lease, Lessor may elect to treat the failure to maintain the requisite insurance as a breach of the contract and terminate this Lease forthwith. Prior to commencement of this Lease, Lessee shall furnish Lessor certificates of insurance evidencing the insurance requirements by this clause. 21. Lessor Insurance. Lessor shall take out and maintain, throughout the period of this Lease, insurance on the Building with responsible insurers, on an "all risk" or "special form" basis, insuring the Building and the Lessee Improvements that have been installed by Lessor pursuant to the Work Letter (Exhibit B), in an amount equal to at least ninety percent (95%) of the replacement cost thereof, excluding land, foundations, footings and underground installations. Lessor may, but shall not be obligated to, carry insurance against additional perils and/or in greater amounts. Prior to commencement of this Lease, Lessor shall furnish Lessee certificates of insurance evidencing the insurance requirements by this clause. Page 6 of 9 22. Waiver. The failure or omission of Lessor to terminate this Lease for any violations of any of its terms, conditions, or covenants shall in no way be deemed to be a consent by Lessor to such violation and shall in no way bar, stop or prevent Lessor from terminating this Lease thereafter, either for such or for any subsequent violation of any such term, condition or covenant. 23. Signs. Lessee agrees that no sign, advertisement, or notices shall be inscribed, painted or affixed on or to any part or portion of the outside of the Leased Premises except to be of such type and color, size and style, and in such place as may be approved by Lessor, which consent shall not be unreasonably withheld, conditioned or delayed. Any additional signage or changes to existing signage after the Commencement Date will require the Lessee to pay for and obtain all regulatory approvals (permits) for the Leased Premises. 24. Waiver of Relocation Assistance. In consideration for the execution of this Lease by Lessor, Lessee hereby waives any claim for relocation assistance benefits to which it may otherwise be entitled under federal, state, or local law or regulations, upon vacation of the Leased Premises. 25. Americans with Disabilities Act. Subject to Section 3, upon commencement of Lease with regards to Lessee's Use and Section 12 of this Lease, Lessee shall comply, at its sole cost, with requirements of ADA which provides for the removal of architectural barriers that prevent equal access to disabled persons on the interior of the Leased Premises. Through the duration of the Lease, Lessor shall comply, at its sole cost, with requirements of the ADA which provides for the removal of architectural barriers that prevent equal access to disabled persons on the exterior of the Leased Premises. Lessee was provided a Due Diligence Summary Report by Reyes Architects documenting ADA conditions 26. Compliance with Environmental and Other Laws. Lessee shall not engage in activities upon the Leased Premises, or any portion thereof, for the purpose of or anyway involving the handling, manufacturing, treatment, storage, use, transportation, spillage, leakage, dumping, discharge or disposal (whether legal or illegal, accidental or intentional) or any hazardous or toxic substances, materials or wastes, or any wastes regulated under any local, state or federal law; provided, however, normal quantities and use of those hazardous or toxic substances or materials customarily used in the conduct of general office activities, such as copier fluids and cleaning supplies, may be used and stored by Lessee at the Leased Premises. Lessee shall be, and remain for the term of this Lease, in full compliance with all applicable laws governing the use and occupancy of the Leased Premises including, without limitation, the handling, manufacturing, treatment, storage, disposal, discharge, use, and transportation of hazardous or toxic substances, materials or wastes, and any wastes regulated under any local, state or federal law. Lessee has been advised that no digging or excavation at the site will be authorized without appropriate environmental oversight. In addition, Lessee has been advised that this site may have been constructed with building materials that at this time are considered hazardous substances. Lessee was provided a Due Diligence Summary Report by Reyes Architects documenting hazardous materials conditions. 27. Obstruction, Except as permitted by this Lease, Lessee shall not place, install, maintain, or allow any combustible materials in buildings, structures, or other improvements upon the Leased Premises and shall not cause or allow the surface elevation therein to be changed in any way whatsoever, without Lessor prior written approval. 28. Quiet Possession. Subject to Lessee's full and timely performance of all of Lessee's obligations Page 7 of 9 under this Lease, Lessee shall have the quiet possession of the Leased Premises throughout the Term (as the same may be extended by the Options) as against any persons or entities lawfully claiming by, through or under Lessor. 29, No Encumbrances. Lessor hereby warrants and represents that no part of the Building is subject to any mortgage, deed of trust, ground lease, underlying lease or like encumbrance affecting any part of the Building or any interest of Lessor therein ("Encumbrance") and Lessor covenants that during the Term (as the same may be extended by the Options) no part of the Leased Premises will be subject to any Encumbrance. 30. Entire Agreement. This Lease supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between the parties as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent or representative of any party hereto shall be of any effect unless it is in writing and executed by the party to be bound thereby. 31. Construction. The parties acknowledge and agree that (i) each party is of equal bargaining strength; (ii) each party has actively participated in the drafting, preparation and negotiation of this Lease; (iii) each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Lease; (iv) each party and such party's counsel and advisors have reviewed this Lease; (v) each party has agreed to enter into this Lease following such review and the rendering of such advice; and (vi) any rule or construction to the effect that ambiguities are to he resolved against the drafting party shall not apply in the interpretation of this Lease, or any portions hereof, or any amendments hereto. 32. Attomev's Fees. In the event either party places the enforcement of this Lease, or any part thereof, or the collection of any rent due, or to become due hereunder, or recovery of the possession of the Leased Premises in the hands of an attorney, or files suit upon the same, the nonprevailing (or defaulting) party shall pay the other party's reasonable attorney's fees and court costs, in any proceeding, whether at trial, or appeal therefrom, or on any petition for review, or in bankruptcy. 33. Punitive and Consequential Damages. Notwithstanding anything herein to the contrary, in no event shall Lessor he liable to Lessee for any punitive or consequential damages or damages for loss of business by Lessee nor shall Lessee be liable to Lessor for any punitive or consequential damages or damages for loss of business by Lessor. // // 1/ /1 Signature Page to Follow Page 8 of 9 IN WITNESS WHEREOF, this Lease is executed by the City of National City, pursuant to resolution authorizing the City Manager to execute the same for and on behalf of said City, and by San Diego Joint Port Labor Relations Committee. LESSOR: City of National City By: APPROVED AS TO FORIVI: By: George Eiser, III, City Attorney LESSEE San Diego Joint Port Labor Relations Committee By: International Longshore & Warehouse Union Local No. 29 By: By: Pacific Maritime Association Page 9of9 By: Its: Exhibit A (Site Plan) 7/25/2006 SITE PLAN TOTAL AREA 4.24? SO. FEET 7 OFFICE SPACES MARTIN LUTHER KING CENTER 14 GENERAL MEMEBERSHIP SPACES �wcsr.A+,area marches° ♦ partners International "n JAR xR B,na nero w. me OM o- w.B Mar. CUBIT CONSTELLATION PROPERTY MANAGEMENT INC. exv PRELIMINARY TENDER PMA ILWU PROPOSED SPACE PLAN NATIONAL CITY, CALIFORNIA SITE P-Af SITE PLAN MOOS EXHIBIT B WORK LETTER — LESSEE IMPROVEMENTS This Work Letter is made part of that certain Lease dated as of Judy 7 , 2006 ("Lease") by and between City of National City ("Lessor,") and San Diego Joint Port Labor Relations Committee (comprised of the International Longshore & Warehouse Union — Local No. 29 and the Pacific Maritime Association) ("Lessee."). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Lease. 1. General Contractor. Lessor and Lessee acknowledge that the Lessee Improvements will be considered a "public project" under Section 20161 of the California Public Contract Code, and shall be contracted for/by Lessor and let to the lowest responsible bidder after notice. The lowest responsible bidder shall be the agreed general contractor (the "Contractor") for the construction of the Lessee Improvements (as defined below). Lessor shall cause Contractor to complete construction of the initial improvements to the Leased Premises in accordance with the following terms and provisions of this Exhibit B (the "Work Letter"), promptly, in a good and workmanlike manner and in compliance with all applicable laws. It is understood that the intention of both parties is that Lessor and Lessor's Contractor is to construct the Leased Premises and all of the Lessee Improvements on behalf of Lessee at no cost to Lessee. 2. Plans. (a) Conceptual Space Plans. Lessee's architect shall provide input in a timely manner to the draft space plans with the goal of completing an agreed conceptual space plan (the "Conceptual Space Plan") by no later than July 15, 2006 (the "Conceptual Space Plan Deadline"). The Conceptual Space Plans shall show the proposed improvements to be constructed in the Leased Premises. Lessee and Lessor shall respond promptly to any reasonable objections by either party to the draft space plan. (b) Final Space Plans. Lessee's architect shall provide input in a timely manner to the Conceptual Space Plan with the goal of completing an agreed final space plan (the "Final Space Plan") by no later than July 30, 2006 (the "Final Space Plan Deadline") substantially all of the improvements which Lessee desires to be constructed in the Leased Premises. Lessee and Lessor shall respond promptly to any reasonable objections by either party to the draft space plan. The Space Plans, as finally approved in writing by Lessor and Lessee, shall be referred to herein as the "Final Space Plans." (c) Permit Set / Working Drawings. On or before September 28„ 2006 (the "Final Drawing Deadline"), Lessor shall furnish to Lessee for Lessee's written approval (which shall not be unreasonably withheld, delayed or conditioned) working plans and specifications (the "Working Drawings") prepared by Lessor's Architect for substantially all of the improvements, including any proposed structural work, mechanical, electrical, plumbing or HVAC requirements, and shall contain such detail and specifications as would permit the Contractor to obtain all necessary governmental permits for construction of the improvements and to secure multiple bids from qualified contractors to perform the work and shall show improvements which substantially conform to applicable building codes and legal requirements. Lessee shall respond to the Working Drawings within five (5) working days of its receipt thereof. Lessee shall not unreasonably withhold its approval to the Working Drawings and the improvements set forth thereon. Lessor shall respond promptly to any reasonable objections of Lessee to the Working Drawings and shall resubmit appropriately revised Working Drawings prepared by Lessor's Architect within ten (10) working days of Lessor's receipt of Lessee's objections. Such resubmitted Working Drawings S545653.4 shall clearly indicate which portions of the plans remain unchanged from the previously submitted plans. Lessee shall respond to revised Working Drawings within three (3) working days of receipt thereof, unless such revised Working Drawings include material revisions to structural, mechanical, electrical, or life safety components, in which event Lessee shall respond within five (5) working days of receipt thereof. Lessee and Lessor shall reasonably collaborate and agree on commercial quality grade lighting, carpet, paint and other design and finish related details. Where there is conflict between Lessee and Lessor as to the quality of finishes to be used in constructing the Lessee Improvements the Lessee's current leased premises shall serve as a benchmark. The Working Drawings, as approved in writing by Lessee, as revised by Lessor from time to time with Lessee's written approval in accordance with the following provisions of this Work Letter, are hereinafter called the "Final Plans", and the improvements to be performed in accordance with the Final Plans are hereinafter called the "Lessee Improvements". Notwithstanding anything to the contrary contained herein, Lessor and Lessee agree that the Lessee Improvements shall include and incorporate, without limitation, each of the items specified in Schedule 1 attached hereto and incorporated herein by reference. (d) Approval. Lessee's approval of any item reviewed by Lessee under this Work Letter shall merely indicate Lessee's consent to the proposed work shown thereon, and in no event shall such consent by Lessee be deemed to constitute a representation by Lessee that the work called for therein complies with applicable building codes or other legal requirements, nor shall such consent release Lessor from Lessor's obligation to supply Working Drawings that do so substantially conform to applicable building codes and legal requirements. (e) Construction Documents. Lessor shall provide copies to Lessee of Construction Documents prepared by Lessor's Architect prior to commencing any of the works or making changes to any of the works. 3. Lessee's Representative. For the purposes of this Work Letter, Lessee's representative shall be Brian McPherson of Cole Project Management and Bryce Mason of KBM Partners or such other representative(s) designated by Lessee from time to time ("Lessee's Representatives"). 4. Cooperation. Lessor and Lessee and their respective contractors, consultants and representatives, shall communicate and cooperate with each other to the end that the Lessee Improvements are constructed in an expeditious manner, having due regard for minimizing disturbance of other Lessees and park visitors in the area. Lessor and Lessee shall cooperate with each other to resolve any space planning or other issues that are raised by applicable local, state or federal building codes during the planning, permit or construction process. Lessor shall keep Lessee informed regarding the progress of the work, and Lessor and Lessee's Representative shall hold construction meetings with frequency reasonably satisfactory to Lessee. 5. Lessor's Work. In addition to Lessor's sole responsibility for payment of all expenses related to the construction of the Final Space Plan incorporating the Demolition Work and Lessee Improvements, Lessor shall, at Lessor's sole cost and expense, perform all work necessary to cause the restroom facilities in the Leased Premises to comply with applicable laws and codes regarding handicap access and use (using Building standard plans and finishes) to the extent such work is required in connection with the Lessee Improvements (collectively, "Lessor's Work). 2 6. Construction. (a) Construction Operations Fee. Lessor acknowledges and agrees that no construction management or administration fee shall be charged by Lessor to Lessee in connection with the demolition or construction of the Lessee Improvements. (b) Preconstruction Services. Lessor shall cause Lessor's Contractor to perform the following preconstruction services: Participate in a reasonable number of construction meetings and provide to Lessee an estimated schedule for the construction of the Lessee Improvements including providing Lessee weekly updates to any schedule changes or complications related to the construction of the Lessee Improvements. Lessor shall cause Lessor's Contractor to use reasonable care in preparing these schedules and weekly updates. (c) Schedule of Values. Upon approval of the Final Plans and selection of a Contractor and approval of the schedule, and after securing all necessary permits, Lessor shall cause Contractor to provide a detailed line item schedule of values for the Lessee Improvements ("Schedule of Values"). The Schedule of Values shall include all items included in Schedule 1 attached hereto. (d) Commencement of Construction; On -going Obligations. Upon approval of the Final Plans and selection of a contractor and approval of the schedule, and after securing all necessary permits, Lessor shall cause Contractor to promptly commence and diligently pursue to completion construction of the Lessee Improvements. Lessor's Contractor shall update the project schedule weekly, and Lessee shall be provided on a weekly basis a reasonably thorough report on its progress on the Lessee Improvements showing impact to schedule and estimated impact to the anticipated completion date. 7. Changes. If Lessee shall desire any change in or to the Final Plans (a "Change"), Lessee shall submit to Lessor for Lessor's review and written request including illustrations prepared by Lessee's Architect incorporating the requested Change. Lessor shall not unreasonably withhold or delay its approval of the revised Working Drawings, provided, however, that Lessor shall have at least three (3) business days after receipt of the revised Working Drawings to review any proposed Change. If Lessor fails to approve or disapprove a requested Change which is not a Material Change within the three (3) business day period specified above, Lessor shall be deemed to have approved such proposed Change. If Lessor approves any proposed Change, then together with such approval, if practicable, and if not practicable as soon thereafter as is practicable, Lessor' Contractor shall give Lessee Lessor's estimated delay (if any) which would result from incorporating such Change. If, following Lessee's review of the estimated delays, Lessee desires Lessor to incorporate the Change into the Lessee Improvements, then Lessor and Lessee shall execute a change order for such Change on Lessor's Contractor's standard form therefore, and the term "Final Plans" shall thereafter be deemed to refer to the Working Drawings as so revised and approved. If a Change will increase the cost of an item (an "Item Change") in the Budget by more than 10%, the cost over that percentage, plus the Contractor mark-up (not to exceed 4%) shall be borne by Lessee (the "Lessee Overcharge"). If the accumulation of Item Changes increases the total Cost of the Lessee Improvements by more that 5%, Lessee shall pay the total Lessee Overcharge. The Lessee shall pay to Lessor within fourteen (14) days of payment by Lessor to Contractor for the Lessee Overcharge. 8. Substantial Completion. "Substantial Completion" of the Lessee Improvements shall be deemed to have occurred when (i) the Lessee Improvements have been completed pursuant to the Final Plans, subject only to the completion or correction of Punch List Items, and (ii) Lessor has obtained all approvals and permits from the appropriate governmental authorities required for the legal occupancy of the Leased Premises for Lessee's intended use. Punch List Items shall mean 3 incomplete or defective work or materials in the improvements, of a nonmaterial nature, called for in the Final Plans which do not materially impair Lessee's use of the Leased Premises for the conduct of Lessee's business therein. Upon notice from Lessor that the Lessee Improvements have been Substantially Completed, Lessor and Lessee shall tour the Leased Premises and prepare a joint list of Punch List items. Lessor shall cause Lessor's Contractor to diligently pursue the Punch List Items to completion to Lessee's reasonable satisfaction, and Lessee shall reasonably cooperate with and accommodate Lessor's Contractor in connection therewith. Within one month after upon Substantial Completion of the project, Lessor shall cause Lessor's Architect to deliver to Lessee a set of "as -built" drawings for the Lessee Improvements. 9. Cost of Improvements. The cost of the construction and installation of the Lessee Improvements shall be borne entirely by Lessor, except for any Lessee Overcharge, including but no limited to; Improvements. (a) Lessor shall pay the entire cost of Lessor's Work. (b) Lessor shall pay for all of the construction and installation of the Lessee 10. Vendor Entry During Construction Period. Notwithstanding anything to the contrary in the Lease or this Work Letter, Lessee may, prior to the Substantial Completion of the Lessee Improvements, and during and in conjunction with the construction of the Lessee Improvements, permit Lessee's vendors to enter the Leased Premises for the purpose of installing telephones, electronic communication or related equipment, security or audio/visual equipment, and furniture systems and equipment. Such early access to the Leased Premises and such installation shall be permitted only to the extent that Lessor determines that such early access and installation activities will not delay Lessor's Contractor's completion of the construction of the Lessee Improvements, provided that Lessor's Contractor shall use reasonable good faith efforts to reasonably integrate the work to be completed by Lessee's Vendors into Lessor's Contractor's scheduling and planning such that the Lessee Improvements and the work to be completed by Lessee's Vendors will be completed in an efficient manner. Lessee's Vendor will be responsible for any damage Vendor during Lessee's installation activities. 11. Addresses for Notices and Deliveries. For the purposes of this Work Letter (i) notices, submittals and deliveries to Lessor shall be made to. Lessor's Representative at the addresses set forth below, (ii) notices, submittals and deliveries to Lessee shall be made to Lessee's Representative at the address set forth below, and (iii) notices, submittals and deliveries to either pay may be made via facsimile transmissions with answerback confirmation at the respective facsimile numbers set forth below. Facsimile transmissions received after 6:00 P.M. shall be deemed to have been given the following business day. (a) Lessee's Representative: Cole Project Management Brian McPherson 153 Kearny Street San Francisco, CA 94108 Fax: (415) 393-8008 (b) Lessor's Representative: City of National City David Parsons 1243 National City Boulevard National City, CA 91950 Fax: (619) 336-4286 4 SCHEDULE (LESSEE IMPROVEMENTS DETAIL) The following are a list of items Lessee shall receive as part of the Lessee Improvements: • All "New Construction" materials to be new and of commercial grade. ■ New Commercial Grade floor finishes to be installed throughout space (Carpet, VCT ETC.) All sub -flooring to be prepared to meet code and industry standards prior to the installation of any new finishes. PMA to have input on selection of all colors. • All walls to be new construction or repaired to like new condition with smooth surface to receive new paint. • All walls to receive at least one (1) coat of primer and two (2) coats of commercial grade paint. PMA to have input on all paint colors. • Exterior lighting shall be sufficient to appropriately illuminate all parking areas and walkways. Lights to be operated on timers for illumination during all evening and early morning hours. • Ceiling at Great Hall to be maintained at the existing elevation at minimum (except where necessary to facilitate lighting fixtures), including the vaulted area at the front/center of the space. • All ceiling tile to be replaced with new White acoustic tile. • All existing Gypsum Board ceilings to be replaced or repaired to like new condition with smooth surface to receive paint. • All Gypsum Board ceilings to receive at lease one (1) coat of primer and two (2) coats of commercial grade ceiling paint • All exterior doors to be replaced or repaired to like new condition with operable and appropriate Code compliant locking hardware. All exterior doors should be metal and installed in hollow metal frames. • All exterior doors to be finished with Exterior Grade finish on all exterior exposures. All interior exposures should be finished to compliment the surrounding interior space. • All interior doors and frames to be new or in like new condition with appropriate code compliant locking hardware. ■ All interior doors to have locking hardware and be keyed to the same master pin configuration. LL to distribute 2 keys for each door and 2 master keys upon move in. • All interior doors and frames to be finished with appropriate commercial grade finish complimenting the surrounding areas. • All toilet room partitions, fixtures, and accessories to be new commercial grade. ■ Interior lighting to provide adequate distribution of light for standard office environment. • All interior light fixtures and lamps to be new or in like new and code compliant condition. • Power distribution — 120 v AC power to be distributed throughout the space to meet code and provide no less than 6 Watts per Rentable Square Foot power to operate standard office equipment PMA to have input on placement of all outlets. • Telephone / Data cabling distribution — Category 5e cable to be distributed throughout the space to standard complement of four (4) drops per location to provide adequate access for installation of business computers and phones. All cable to be landed in existing Communications Room on appropriate Punch Down blocks. PMA to have input on location of all jacks. • Landlord to provide live telephone circuit at Communications room. • All interior and exterior windows shall be in operable condition and replaced where broken. 1 • Security: o The building and windows shall be secured in an appropriate manner to resist access by vandals as reasonably agreed by PMA. o "Teller window" at Dispatch Counter to be constructed of tamper proof materials and be designed in such a way as to prevent access from the Great Hall. • HVAC- Landlord to provide adequate Heating Ventilation and Air Conditioning to reasonably support Tenants Use during the Term per the Lease. ■ All work to be done in a professional and workman like manner by qualified contractors. 2 Exhibit C (Auxiliary Parking) 7/25/2006 jjeoroiir, 900E gb^ n(seI 1 Nt00®C l tadoJuJ 900E RESOLUTION NO. 2006 — 213 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A LEASE AGREEMENT WITH THE SAN DIEGO JOINT PORT LABOR RELATIONS COMMITTEE FOR THE USE OF THE WESTERN PORTION OF THE FORMER NATIONAL CITY LIBRARY BUILDING LOCATED AT 200 EAST 12TH STREET FOR OFFICE USE FOR A TERM NOT TO EXCEED FIVE (5) YEARS WHEREAS, the City desires to assist the San Diego Joint Port Labor Relations Committee in finding a suitable temporary office and dispatch facility; and WHEREAS, the San Diego Joint Port Labor Relations Committee desires to lease from the City certain office space at the former National City Library building located at 200 East 12th Street to service as a temporary office and dispatch facility; and WHEREAS, the City desires to assist the Community Development Commission of the City of National City (CDC) who is engaged in activities necessary to execute and implement the Redevelopment Plan for the National City Redevelopment Project and the National City Downtown Specific Plan; and WHEREAS, the Lease Agreement will facilitate the re -use of an underutilized property; and WHEREAS, the relocation of the San Diego Joint Port Labor Relations Committee will assist the CDC in implementing the Redevelopment Plan and the Downtown Specific Plan; and WHEREAS, lease revenue will provide needed funding to the City's general fund for community benefits. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute a Lease Agreement with the San Diego Joint Port Labor Relations Committee for the use of the western portion of the former National City Library building located at 200 East 12th Street for office use, for a term not to exceed five (5) years. Said Lease Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 3rd clay of October, 2006. ATTEST: Mic ael Dalla, C. Clerk Nick APPROVED AS TO FORM: George H. Eiser, III City Attorney Passed and adopted by the Council of the City of National City, California, on October 3, 2006, by the following vote, to -wit: Ayes: Councilmembers Inzunza, Morrison, Natividad , Parra, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: NICK INZUNZA Mayor of the City of National City, California City of the ity National City, California Jerk By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2006-213 of the City of National City, California, passed and adopted by the Council of said City on October 3, 2006. City Clerk of the City of National City, California By: Deputy City of National City, California COUNCIL AGENDA STATEMENT MEETING DATE October 3, 2006 AGENDA ITEM NO. 20 ITEM TITLE Resolution — APPROVING A LEASE WITH THE SAN DIEGO JOINT PORT LABOR RELATIONS COMMITTEE FOR USE OF THE WESTERN PORTION OF THE FORMER NATIONAL CITY LIBRARY BUILDING (200 EAST 12TH STREET) FOR OFFICE USE AND AUTHORIZING THE MAYOR TO EXECUTE THE LEASE. PREPARED BY DEPARTMENT Community Development Commissio CDC Staff x4250 EXPLANATION Relocation of the International Longshore & Warehouse Union ("ILWU") Local No. 29 office at 41 East 12th Street will be necessary to develop the Revolution 2 project by the Constellation Property Group ("Developer"). The existing lease expires October 31, 2011 and the Developer has asked the City for assistance in finding a temporary relocation site for the ILWU, so development of the Revolution 2 site can proceed. On May 16, 2006 the City Council authorized the City Manager to negotiate a lease for the former National City Public Library building at 200 East 12th Street, as a temporary location for the ILWU, while a permanent location is found. The ILWU would occupy the western portion (approximately 4,300 square feet) of the Library building, while leaving the remaining portion (18,000 square feet) available for the phased development of the proposed Arts Center. Proposed terms of the lease will include; lease length, revenue, maintenance, parking, property taxes and inflationary adjustments to the market rent. Environmental Review The proposed agreement is exempt from CEQA review. Financial Statement Staff estimates the City will receive approximately $130,000 during the initial 2-year term of the proposed lease and $340,000 - the lease runs for a 5-year total term. There are no extensions proposed beyond the maximum 5-year term of the lease. Account No. STAFF RECOMMENDATION Adopt the Resolution authorizing the Mayor to execute the market rate lease, not to exceed 5 years in length for City property (200 East 12th Street) with the San Diego Port Labor Relations Committee. BOARD / COMMISSION RECOMMENDATION None. ATTACHMENTS 1. Background Report 2. ILWU Space Plan 3. Lease Agreement Resolution No. a n ,•)(2 2. I A-200 (9/80) RESOLUTION NO. 2006 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A LEASE AGREEMENT WITH THE SAN DIEGO JOINT PORT LABOR RELATIONS COMMITTEE FOR THE USE OF THE WESTERN PORTION OF THE FORMER NATIONAL CITY LIBRARY BUILDING LOCATED AT 200 EAST 12TH STREET FOR OFFICE USE FOR A TERM NOT TO EXCEED FIVE (5) YEARS WHEREAS, the City desires to assist the San Diego Joint Port Labor Relations• Committee in finding a suitable temporary office and dispatch facility; and WHEREAS, the San Diego Joint Port Labor Relations Committee desires to lease from the City certain office space at the former National City Library building located at 200 East 12th Street to service as a temporary office and dispatch facility; and WHEREAS, the City desires to assist the Community Development Commission of the City of National City (CDC) who is engaged in activities necessary to execute and implement the Redevelopment Plan for the National City Redevelopment Project and the National City Downtown Specific Plan; and WHEREAS, the Lease Agreement will facilitate the re -use of an underutilized property; and WHEREAS, the relocation of the San Diego Joint Port Labor Relations Committee will assist the CDC in implementing the Redevelopment Plan and the Downtown Specific Plan; and WHEREAS, lease revenue will provide needed funding to the City's general fund for community benefits. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute a Lease Agreement with the San Diego Joint Port Labor Relations Committee for the use of the western portion of the former National City Library building located at 200 East 12th Street for office use, for a term not to exceed five (5) years. Said Lease Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 3rd day of October, 2006. Nick Inzunza, Mayor ATTEST: APPROVED AS TO FORM: Michael Dalla, City Clerk George H. Eiser, III City Attorney ATTACHMENT 1 BACKGROUND REPORT The Revolution 2 development will require the demolition of a two-story office building at 41 East 12th Street to accommodate the twenty-two story mixed -use residential project with 2.47residential condominium units, over 10,000 square feet of retail space with a transit plaza. Leases for the remaining tenants of the existing office building have all expired except for the ILWU, which exercised a 5-year lease extension option, until October 31, 2011. The Developer has asked the City for assistance in finding a temporary relocation site for the ILWU, so development of the Revolution 2 site can proceed. The National City Community Development Commission ("CDC") assessed its properties holdings and called local brokers to ascertain the availability of replacement office space for the ILWU as a suitable location. After eliminating CDC and available market properties it was determined that the former National City Library at 200 East 12th Street ("Library") might serve as a temporary location for the ILWU, while a permanent facility is found. On May 16, 2006 the City Council (Resolution 2006-95) authorized the City Manager to negotiate a market rate lease with an initial term of two (2) years and three (3) 1-year extensions for a total potential lease term of no longer than five (5) years. The attached lease addresses the following issues: -Maintenance and repairs to be performed by the City. -Tenant improvementsLto be installed by the City pursuant to the work letter attached to the lease. -Parking spaces reserved exclusively for the lessee. G6otiditions for the three (3) 1-year extensions. -Initial rent of $5,375 per month with inflationary adjustments for market rate rent of between 3 and 5 percent. -Possessary interest taxes and utilities to be paid by the City.. CDC and City staff met with the National City Public Arts Committee to discuss the proposed lease of the Library and identify shared -use issues with respect to the Library building having a dual use as an Arts Center and ILWU office for up to 5 years. Benefits to the City of leasing the western portion of the Library to the ILWU include: • Proceeding with the Revolution 2 project as catalyst redevelopment for Downtown National City. • Allows Arts Center project to move forward in a phased fashion. • Providing an immediate occupant for a property that suffers from vagrancy and vandalism. • Provides revenue ($150,000 to $400,000) from a facility, where there is currently none. 2 ATTACHMENT 2 ILWU SPACE PLAN FUTURE ARTS CENTER AREA KI TCHEN COM 114 OFFICE OFFICE 102 OFFICE 103 STORAGE 104 14€ D OMEN 0 00 MEN 101 STORAGE J STO 113 1-4ALL lime' HALL 105 D ISPATCH COUNTER 105 GREAT HALL 100 MEETINC ROOM 110 STORAGE LEASE By and between the CITY OF NATIONAL CITY and SAN DIEGO JOINT PORT LABOR RELATIONS COMMITTEE This Lease, made and entered into this 76 day of July, 2006 by and between the City of National City ("City"), hereinafter designated as "Lessor," and San Diego Joint Port Labor Relations Committee (comprised of the International Longshore & Warehouse Union — Local No. 29 and the Pacific Maritime Association), hereinafter designated as "Lessee." RECITALS Lessee is desirous of leasing from Lessor, and Lessor is desirous of leasing to Lessee, certain real property identified as the western portion of the building located at 200 East 12th Street in National City, California for the use described in Section 4 below more fully described as Lessee's exclusive use of a 4,300 square feet area on Exhibit "A" as Office Use, NOW, THEREFORE, the parties hereto agree as follows: 1. Legal Status Of Lessee. Lessee warrants that it is a legal mutual benefit corporation, incorporated under the laws of the State of California. 2. Leased Premises. Lessor does hereby lease, demise and let to Lessee the real property situated in the City of National City, County of San Diego, State of California, commonly described as western portion (4,300 square feet) of the building located (the "Leased Premises") at 200 East 12th Street in National City, California (the "Building"), otherwise known as the former National City Library building (San Diego County Assessor's Parcel number 560-100-03). The approximate configuration and location of the Leased Premises is shown on Exhibit A attached hereto and incorporated herein by reference. 3. Condition of Leased Premises. Lessor shall deliver the Leased Premises and the Building to Lessee in a clean condition and warrants that the existing mechanical, electrical, doors, plumbing, lighting, heating, ventilation and air conditioning systems, exterior paved surfaces, landscaping and hardscaping and all improvements constructed to facilitate Lessee's occupancy and Use of Leased Premises and Building, including, without limitation the Lessee Improvements (as defined in Exhibit B) shall be in good operating condition as of the Commencement Date (as defined in Section 6 below) and comply with all building and regulatory laws and codes, including, without limitation, Americans with Disability Act ("ADA"). 4. Use. The Leased Premises are leased to Lessee by Lessor for the following purposes: (i) a dispatch hall and meeting place for the Longshore and Warehouse Union; (ii) general office and administrative uses; and (iii) ancillary uses consistent with the uses specified in clauses (i) and (ii). 5. Assignment & Subletting. This Lease shall not be assigned, sublet, hypothecated, leveraged, or transferred without the prior written consent of the Lessor; provided however, Lessee may assign or Page 1 of 9 sublet this Lease to an affiliate of Lessee without the prior written consent of Lessor. 6. Term. The initial term of this Lease shall be twenty (24) months ("Term"), beginning on the date which is the later of (i) August 31, 2006; or (ii) ten (10) days after Lessor has completed all of the Lessee improvements (`Lessee Improvements") as described in and in accordance with that certain Work Letter attached to this Lease as Exhibit B and incorporated herein by reference, and Lessor has delivered possession of the Leased Premises to Lessee (the "Commencement Date") . The Lessor hereby grants the Lessee the options (collectively "Options") to extend the Term of this Lease for three (3) additional twelve (12) month periods commencing when the Term expires and each twelve (12) month period thereafter. To exercise any Option, Lessee must be current on all financial obligations including; Rent and Liability Insurance. Lessee's payment of Rent during the first calendar month of an Option shall constitute exercising such twelve (12) month extension in term for such Option. Non- payment of Rent beyond thirty (30) calendar days of the first month of any Option shall constitute a waiver of all remaining Options. Lessee acknowledges that the use of the Leased Premises is temporary and agrees to use good faith efforts to seek alternative premises to the Leased Premises for the use set forth herein; provided, however, notwithstanding the foregoing or anything to the contrary contained herein (i) nothing in this paragraph shall create any liability or obligation on the part of Lessee; and (ii) Lessor shall have no right to terminate this Lease prior to the expiration of the Term (as extended by the Options) for failure of Less e to seek or otherwise find alternative premises to the Leased Premises. Less Lessee to initial here & 0.iodate iJ/l Lessee to initial here athi-U4eredate 7. Termination and Lessee Default. This Lease may be terminated by the Lessee, (with or without cause) upon one hundred and twenty (120) days written notice to Lessor. The Lease may be terminated by the Lessor upon the occurrence of one or more of the following defaults ("Defaults") and the failure of Lessee to cure any such Defaults within any applicable grace period: (7.1) The failure of Lessee to make any payment of Rent or provide reasonable evidence of insurance, or to fulfill any obligation of Lessee under this Lease which endangers or threatens life or property, where such failure continues for a period of ten (10) business days following written notice from Lessor. (7.2) A failure by Lessee to perform any of the obligations of Lessee Lease (other than those described in subparagraph 7.1), where such failure continues for a period of thirty (30) a days after written notice from Lessor; provided, however, that if the nature of Lessee's failure to perform is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Default if Lessee commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. 8. Lessor Remedies upon a Lessee Default. If Lessee is in Default and has failed to cure such Default within any applicable grace period, Lessor may, at its option, perform such duty or obligation giving rise to the Default on behalf of Lessee, including but not limited to the obtaining of reasonably required insurance policies, or government licenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee within ten (10) days of receipt of invoice therefore. If any check given to Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. In the event of a Default which Lessee has failed to cure within any applicable grace period, Lessor may, with or without further notice or demand and without limiting Lessor in the exercise of Page 2 of 9 any right or remedy which Lessor may have by reason of such Default; terminate the Lessee's right to possession of the Leased Premises by any lawful means, continue the Lease, and/or pursue any other remedy now or hereafter available under the laws or judicial decision of the State of California. 9. Lessor Default. Lessor shall be in default under this Lease ("Lessor Default") if Lessor fails to perform any of the obligations of Lessor under this Lease and such failure continues for a period of thirty (30) a days after written notice from Lessee; provided, however, that if the nature of Lessor's failure to perform is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Lessor Default if Lessor commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. The rights and remedies of Lessee upon a Lessor Default shall be cumulative and upon a Lessor Default Lessee may pursue any and all rights and remedies at law or in equity, whether at the same time or otherwise. 10. Rent. Lessee shall pay a Rent for the Leased Premises of One and 25/100 Dollars ($1.25) per rentable square foot for approximately 4,300 square feet of rentable space, or Five Thousand Three Hundred Seventy Five and No/100 Dollars ($5,375.00) per month for the term of this lease, payable on the first (1S`) day of each month commencing on the Commencement Date. The Rent includes consideration for maintenance, utility expenses, insurance, management, capital repairs and upgrades and property taxes to be incurred by the Lessor. Payment of Rent after the fifth (5`'') day of each month shall require an additional payment of One Hundred and no/100 Dollars ($100.00) in addition to the outstanding Rent. Lessor and Lessee agree that the rentable space of the Leased Premises for all purposes under this Lease shall be 4,300; provided, however, that, at any time during the term of' this Lease Lessee may at Lessee's expense, cause its architect to re -measure the Leased Premises in accordance with the Applicable Measurement Standards (as defined below). Upon completion of any such re - measurement, Lessor and Lessee shall, at the request of either party, confirm the rentable space in writing. As used herein, "Applicable Measurement Standards" means the ANSUBOMA Z-65.1 1996 Standard Method of Measuring Floor Area in Office Buildings. 11. Inflation Adjustment. The monthly Rent shall be adjusted for inflation (measured by the preceding 12 month period) on July 1, 2007, July 1, 2008, July 1, 2009, and July I, 2010. The Consumer Price Index (U — All Urban Consumers) of the Bureau of Labor Statistics of the United States Department of Labor, for the Urban Area of Los Angeles, Riverside and Orange Counties shall be the inflationary index applied to each yearly adjustment in Rent ("CPI"). In no event shall the annual CPI increase be less than three (3) percent or more than five (5) percent of the Rent for the preceding year. The monthly Rent shall be indexed for inflation by the following formula which shall apply to the Term and the Options: July 1, 2006 thru June 1, 2007 - (Year 1 Rent) $5,375.00 per month July 1, 2007 thru June 1, 2008 - (Year 2 Rent) Year 1 monthly Rent plus CPI increase per month July 1, 2008 thru June 1, 2009 - (Year 3 Rent) Year 2 monthly Rent plus CPI increase per month July 1, 2009 thru June 1, 2010 - (Year 4 Rent) Year 3 monthly Rent plus CPI increase per month July I, 2010 thru June 1, 2011 - (Year 5 Rent) Year 4 monthly Rent plus CPI increase per month 12. Maintenance and Repair. Lessor shall provide, at Lessor's own expense, routine services, maintenance and repair including: landscaping, windows, lighting, HVAC, all mechanical and electrical systems, plumbing, painting of all public areas, and all exterior paved areas including hardscaping and parking. Lessor will be responsible for repair of improvements located on the Leased Premises, except the Lessee shall be responsible for cleaning/janitorial service of the Leased Premises. Lessee shall keep the Leased Premises in as good order, condition and repair as reasonable use and wear thereof will permit. Page 3 of 9 (12.1) Repairs by Lessor. Lessor shall be required to make such repairs or replacements to the Leased Premises as may be required for normal maintenance and operation, which shall include the repairs and/or replacements to all structural portions of the Building and all walls, floors, corridors, windows, HVAC, mechanical electrical, plumbing, paving and parking, exterior windows, and other structures and equipment within and serving the Leased Premises, and such additional maintenance as may be necessary because of damages by persons other than Lessee, its agents, employees, invitees, or visitors, all in accordance with standard practices for similar commercial buildings in the San Diego, California area. Without limiting the foregoing, Lessor shall provide adequate lighting in the parking area servicing the Building. Notwithstanding anything to the contrary set forth herein, if Lessor is required to make repairs or take other corrective action in the Leased Premises by reason of Lessee's negligent acts or negligent failure to act reasonably, Lessor shall have the right to recover from Lessee the cost of the repairs or other work. If Lessor fails to promptly make any repairs or replacements required under this Section 12.1 after ten (10) days of written notice from Lessee, Lessee may, at its option, make such repairs or replacements, and Lessor shall reimburse the cost thereof to the Lessee within ten (10) days of written demand. (12.2) Repairs by Lessee. Lessee agrees to repair or replace any damage or injury done to the Leased Premises, or any part thereof, caused by Lessee or Lessee's agents, employees, invitees, or visitors, at Lessee's own cost and expense. If Lessee fails to make such repairs or replacements promptly, Lessor may, at its option, make such repairs or replacements, and Lessee shall repay the cost thereof to the Lessor as additional rent within ten (10) days of written demand. However, for any repair work, other than repair work in emergency situations, costing over Five Hundred and no/100 Dollars ($500.00) to be performed by Lessee or Lessee's agents, Lessee shall not perform such repair work without Lessor's prior written consent; which consent shall not be unreasonably withheld, delayed or conditioned. Any repairs or replacements in or to the Leased Premises, other than repair work in emergency situations, which would require an expenditure exceeding Five Thousand and no/100 Dollars ($5,000.00) and which constitute a "public project" under Section 20161 of the California Public Contract Code, shall be contracted for/by Lessor and let to the lowest responsible bidder after notice. (12.3) Waste. Lessee shall not commit waste (property abuse, destruction, or damage) beyond normal wear and tear of property improvements on the Leased Premises. 13. Improvements, Alterations, and Additions. Lessee shall not make or allow to be made any major alterations or physical additions in or to the Leased Premises which affect the structure or any other improvements without first obtaining the written consent of Lessor which shall not be unreasonably withheld, conditioned or delayed, All work shall be done by contractors approved by Lessor. Lessor's approval or consent shall not be unreasonably withheld, conditioned or delayed. Any alterations or physical additions in or to the Leased Premises, other than repair work in emergency situations, which would require an expenditure exceeding Five Thousand and no1100 Dollars ($5,000), and which constitute a "public project" under Section 20161 of the California Public Contract Code, shall be contracted for/by Lessor and let to the lowest responsible bidder after notice. Any and all such alterations, physical additions, or improvements, when made to the Leased Premises by Lessee, shall at once become the property of Lessor and shall be surrendered to I.,essor upon the termination of this Lease by lapse of time or otherwise; provided, however, this clause shall not apply to movable equipment or furniture owned by Lessee. Any Lessee improvements, alterations or additions shall comply with all government, local building code, permitting and Page 4 of 9 competitive bidding requirements. Lessee shall give Lessor written notice five (5) days prior to employing any laborer or contractor to perform major work on the Leased Premises so that Lessor may post a notice of non -responsibility if allowed by law. Lessee shall not be required to remove alterations, physical additions, or improvements upon termination of this Lease. 14. Utilities. Lessor will be responsible payment of the following utilities; including electric, gas, sewer, trash and water. Lessee understands that it is responsible for the proper disposal of debris in the designated trash receptacles provided by the Lessor. No trash is to be placed in front of or on the sides of the container nor should any trash be placed on top of the lids. Lessee further understands that it will be billed accordingly for not disposing of trash in the proper manner, which includes breaking down all boxes and containers prior to being placed in the trash bins as shown on Exhibit A. 15. Parking. Lessee shall have exclusive use of fourteen (14) parking spaces between the hours of 6:00 am to 7:30 am (Pacific Standard Time) and 2:00 pm to 3:00 pm (Pacific Standard Time), Monday through Sunday (shown as "General Membership Spaces" in Exhibit A). Lessee shall have exclusive use of six (6) parking spaces between the hours of 5:00 am and 6:00 pm (Pacific Standard Time), Monday through Sunday (shown as "Office Spaces" in Exhibit A). Lessee shall also have access to auxiliary parking between the hours of 6:00 am to 7:30 am (Pacific Standard Time) and 2:00 pm to 3:00 pm (Pacific Standard Time), Monday through Sunday, as shown in Exhibit C. 16. Mailings & Noticing. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by overnight mail (Federal Express or the like); or sent by registered or certified mail, postage prepaid, return receipt requested; or sent by ordinary mail, postage prepaid; or telegraphed or cabled; or delivered or sent by telex, telecopy, facsimile, fax or email; and, shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if sent by overnight mail, the business day following its deposit in such overnight mail facility, (iii) if mailed by registered, certified or ordinary mail, three (3) days (five (5) days if the address is outside the State of California) after the date of deposit in a post office, mailbox, mail chute, or other like facility regularly maintained by the United States Postal Service, (iv) if given by telegraph or cable, when delivered to the telegraph company with charges prepaid, or (v) if given by telex, telecopy, facsimile, fax or email, when sent. Any payment, notice, request, demand, direction or other communication delivered or sent as specified above shall be directed to the following persons: To the Lessor: To the Lessee: City Manager, City of National City 1243 National City Boulevard National City, California 91950-4397 President, International Longshore & Warehouse Union — Local No. 29 200 East 12th Street National City, California 91950 Pacific Maritime Association 555 Market Street San Francisco, California 94105 Attn: General Counsel 17. Inspection. Lessor, by and through its proper officers, reserve and shall always have the right, upon reasonable notice and at a reasonable time, to enter the Leased Premises for the purpose of viewing and Page 5of9 ascertaining the conditions of the same and the operation and maintenance thereof. 18. Non -Discrimination. Lessee agrees that there shall be no discrimination against or segregation of any person or group of persons, because of race, color, creed, national origin, sex, sexual orientation; ancestry, marital status, physical handicap, or medical condition, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Leased Premises, nor shall Lessee, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference in the selection, location, number, use, or occupancy of Lessees, lessees, subleases, sublessees, or vendees in the Leased Premises. 19. Indemnification. Lessee agrees to indemnify, defend and hold harmless Lessor and the Community Development Commission of the City of National City from all liability, loss, cost, claims, demands, suits and defense costs (collectively "Liabilities") arising out of Lessee's failure to observe or comply with any laws in any material respect or the negligence or willful misconduct of Lessee in or about the Building or any portion thereof. Lessor agrees to indemnify, defend and hold harmless Lessee from all Liabilities arising from Lessor's failure to observe or comply with any laws in any material respect or the negligence or willful misconduct of Lessor in or about the Building or any portion thereof. 20. Lessee Insurance. Lessee shall take out and maintain, throughout the period of this Lease, commercial general liability insurance with minimum limits of One Million Dollars ($1,000,000.00) combined single limit per occurrence, covering all bodily injury and property damage arising out of this Lease. This policy shall name Lessor the City of National City, the Community Development Commission of the City of National City, and their officers, agents, and employees as additional insured, and shall constitute primary insurance as to Lessor, its officers, agents and employees, so that any other policies held by Lessor shall not contribute to any loss under said insurance. Said policy shall provide for thirty (30) days' prior written notice to Lessor of cancellation or material change. The certificate and endorsements for the insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificate and endorsements are to be received and approved by Lessor before this Agreement is signed. If the required insurance coverage is provided on a "claims made" rather than "occurrence" form, Lessee shall maintain such insurance coverage for three (3) years after expiration of the terns (and any extensions) of this Lease. If Lessee does not keep any required insurance policy in full force and effect at all times during the term of this Lease, Lessor may elect to treat the failure to maintain the requisite insurance as a breach of the contract and terminate this Lease forthwith. Prior to commencement of this Lease, Lessee shall furnish Lessor certificates of insurance evidencing the insurance requirements by this clause. 21. Lessor Insurance. Lessor shall take out and maintain, throughout the period of this Lease, insurance on the Building with responsible insurers, on an "all risk" or "special form" basis, insuring the Building and the Lessee Improvements that have been installed by Lessor pursuant to the Work Letter (Exhibit B), in an amount equal to at least ninety percent (95%) of the replacement cost thereof, excluding land, foundations, footings and underground installations. Lessor may, but shall not be obligated to, carry insurance against additional perils and/or in greater amounts. Prior to commencement of this Lease, Lessor shall furnish Lessee certificates of insurance evidencing the insurance requirements by this clause. Page 6 of 9 22. Waiver. The failure or omission of Lessor to terminate this Lease for any violations of any of its terms, conditions, or covenants shall in no way be deemed to be a consent by Lessor to such violation and shall in no way bar, stop or prevent Lessor from terminating this Lease thereafter, either for such or for any subsequent violation of any such term, condition or covenant. 23. Signs. Lessee agrees that no sign, advertisement, or notices shall be inscribed, painted or affixed on or to any part or portion of the outside of the Leased Premises except to be of such type and color, size and style, and in such place as may be approved by Lessor, which consent shall not be unreasonably withheld, conditioned or delayed. Any additional signage or changes to existing signage after the Commencement Date will require the Lessee to pay for and obtain all regulatory approvals (permits) for the Leased Premises. 24. Waiver of Relocation Assistance. In consideration for the execution of this Lease by Lessor, Lessee hereby waives any claim for relocation assistance benefits to which it may otherwise be entitled under federal, state, or local law or regulations, upon vacation of the Leased Premises. 25. Americans with Disabilities Act. Subject to Section 3, upon commencement of Lease with regards to Lessee's Use and Section 12 of this Lease, Lessee shall comply, at its sole cost, with requirements of ADA which provides for the removal of architectural barriers that prevent equal access to disabled persons on the interior of the Leased Premises. Through the duration of the Lease, Lessor shall comply, at its sole cost, with requirements of the ADA which provides for the removal of architectural barriers that prevent equal access to disabled persons on the exterior of the Leased Premises. Lessee was provided a Due Diligence Summary Report by Reyes Architects documenting ADA conditions 26. Compliance with Environmental and Other Laws. Lessee shall not engage in activities upon the Leased Premises, or any portion thereof, for the purpose of or anyway involving the handling, manufacturing, treatment, storage, use, transportation, spillage, leakage, dumping, discharge or disposal (whether legal or illegal, accidental or intentional) or any hazardous or toxic substances, materials or wastes, or any wastes regulated under any local, state or federal law; provided, however, normal quantities and use of those hazardous or toxic substances or materials customarily used in the conduct of general office activities, such as copier fluids and cleaning supplies, may be used and stored by Lessee at the Leased Premises. Lessee shall be, and remain for the term of this Lease, in full compliance with all applicable laws governing the use and occupancy of the Leased Premises including, without limitation, the handling, manufacturing, treatment, storage, disposal, discharge, use, and transportation of hazardous or toxic substances, materials or wastes, and any wastes regulated under any local, state or federal law. Lessee has been advised that no digging or excavation at the site will be authorized without appropriate environmental oversight. In addition, Lessee has been advised that this site may have been constructed with building materials that at this time are considered hazardous substances. Lessee was provided a Due Diligence Summary Report by Reyes Architects documenting hazardous materials conditions, 27. Obstruction. Except as permitted by this Lease, Lessee shall not place, install, maintain, or allow any combustible materials in buildings, structures, or other improvements upon the Leased Premises and shall not cause or allow the surface elevation therein to be changed in any way whatsoever, without Lessor prior written approval. 28. Quiet Possession. Subject to Lessee's full and timely performance of all of Lessee's obligations Page 7 of 9 under this Lease, Lessee shall have the quiet possession of the Leased Premises throughout the Term (as the same may be extended by the Options) as against any persons or entities lawfully claiming by, through or under Lessor. 29. No Encumbrances. Lessor hereby warrants and represents that no part of the Building is subject to any mortgage, deed of trust, ground lease, underlying lease or like encumbrance affecting any part of the Building or any interest of Lessor therein ("Encumbrance") and Lessor covenants that during the Term (as the same may be extended by the Options) no part of the Leased Premises will be subject to any Encumbrance. 30. Entire Agreement. This Lease supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between the parties as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent or representative of any party hereto shall be of any effect unless it is in writing and executed by the party to be bound thereby. 31. Construction. The parties acknowledge and agree that (i) each party is of equal bargaining strength; preparation (iii) (ii) each party has actively participated in the drafting, reoration and negotiation of this Lease; ni each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Lease; (iv) each party and such party's counsel and advisors have reviewed this Lease; (v) each party has agreed to enter into this Lease following such review and the rendering of such advice; and (vi) any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Lease, or any portions hereof, or any amendments hereto. 32. Attornev's Fees. In the event either party places the enforcement of this Lease, or any part thereof, or the collection of any rent due, or to become due hereunder, or recovery of the possession of the Leased Premises in the hands of an attorney, or files suit upon the same, the nonprevailing (or defaulting) party shall pay the other party's reasonable attorney's fees and court costs, in any proceeding, whether at trial, or appeal therefrom, or on any petition for review, or in bankruptcy. 33. Punitive and Consequential Damages. Notwithstanding anything herein to the contrary, in no event shall Lessor be liable to Lessee for any punitive or consequential damages or damages for loss of business by Lessee nor shall Lessee be liable to Lessor for any punitive or consequential damages or damages for loss of business by Lessor. Signature Page to Follow Page 8 of 9 IN WITNESS WHEREOF, this Lease is executed by the City of National City, pursuant to resolution authorizing the City Manager to execute the same for and on behalf of said City, and by San Diego Joint Port Labor Relations Committee. LESSOR: LESSEE City of National City San Diego Joint Port Labor Relations Committee By: Nick Inzunza, Mayor By: International Longshore & Warehouse Union Local No. 29 APPROVED AS TO FORM: By: By: George Eiser,111, City Attorney Page 9 of 9 By: Pacific Maritime Association • Exhibit A (Site Plan) 7/25/2006 SITE PLAN TOTAL AREA 4.247 SC. FEET 7 OFFICE SPACES 0 0] O 0 Lsz 14 GENERAL MEMEBERSHIP SPACES MARTIN LUTHER KING CENTER rWCRTUTM1Ei. marchese + partners International ;rE>Maw* rh PI PUMP., mLnWmortrnro, ..«P.uto .wow woo, ror awrPP ME WS RRE". wrxwn: RES 'Am s..P..... whohlnlethAshostpaPrencon OEUT CONSTELLATION PROPERTY MANAGEMENT INC. PNMF PRELIMINARY TENDER ?MA ILWU PROPOSED SPACE PLAN NATIONAL CITY. CALIFORNIA THE IrE P S SITE PLAN A 0 1N.AT 06005 EXHIBIT B WORK LETTER — LESSEE IMPROVEMENTS This Work Letter is made part of that certain Lease dated as of , 2006 ("Lease") by and between City of National City ("Lessor,") and San Diego Joint Port Labor Relations Committee (comprised of the International Longshore & Warehouse Union — Local No. 29 and the Pacific Maritime Association) ("Lessee."). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Lease. 1. General Contractor. Lessor and Lessee acknowledge that the Lessee Improvements will be considered a "public project" under Section 20161 of the California Public Contract Code, and shall be contracted for/by Lessor and let to the lowest responsible bidder after notice. The lowest responsible bidder shall be the agreed general contractor (the "Contractor") for the construction of the Lessee Improvements (as defined below). Lessor shall cause Contractor to complete construction of the initial improvements to the Leased Premises in accordance with the following terms and provisions of this Exhibit B (the "Work Letter"), promptly, in a good and workmanlike manner and in compliance with all applicable laws. It is understood that the intention of both parties is that Lessor and Lessor's Contractor is to construct the Leased Premises and all of the Lessee Improvements on behalf of Lessee at no cost to Lessee. 2. Plans. (a) Conceptual Space Plans. Lessee's architect shall provide input in a timely manner to the draft space plans with the goal of completing an agreed conceptual space plan (the "Conceptual Space Plan") by no later than July 15, 2006 (the "Conceptual Space Plan Deadline"). The Conceptual Space Plans shall show the proposed improvements to be constructed in the Leased Premises. Lessee and Lessor shall respond promptly to any reasonable objections by either party to the draft space plan. (b) Final Space Plans. Lessee's architect shall provide input in a timely manner to the Conceptual Space Plan with the goal of completing an agreed final space plan (the "Final Space Plan") by no later than July 30, 2006 (the "Final Space Plan Deadline") substantially all of the improvements which Lessee desires to be constructed in the Leased Premises. Lessee and Lessor shall respond promptly to any reasonable objections by either party to the draft space plan. The Space Plans, as finally approved in writing by Lessor and Lessee, shall be referred to herein as the "Final Space Plans." (c) Permit Set / Working Drawings. On or before September 28„ 2006 (the "Final Drawing Deadline"), Lessor shall furnish to Lessee for Lessee's written approval (which shall not be unreasonably withheld, delayed or conditioned) working plans and specifications (the "Working Drawings") prepared by Lessor's Architect for substantially all of the improvements, including any proposed structural work, mechanical, electrical, plumbing or HVAC requirements, and shall contain such detail and specifications as would permit the Contractor to obtain all necessary governmental permits for construction of the improvements and to secure multiple bids from qualified contractors to perform the work and shall show improvements which substantially conform to applicable building codes and legal requirements. Lessee shall respond to the Working Drawings within five (5) working days of its receipt thereof. Lessee shall not unreasonably withhold its approval to the Working Drawings and the improvements set forth thereon. Lessor shall respond promptly to any reasonable objections of Lessee to the Working Drawings and shall resubmit appropriately revised Working Drawings prepared by Lessor's Architect within ten (10) working days of Lessor's receipt of Lessee's objections. Such resubmitted Working Drawings 8545653.4 shall clearly indicate which portions of the plans remain unchanged from the previously submitted plans. Lessee shall respond to revised Working Drawings within three (3) working days of receipt thereof, unless such revised Working Drawings include material revisions to structural, mechanical, electrical, or life safety components, in which event Lessee shall respond within five (5) working days of receipt thereof. Lessee and Lessor shall reasonably collaborate and agree on commercial quality grade lighting, carpet, paint and other design and finish related details. Where there is conflict between Lessee and Lessor as to the quality of finishes to be used in constructing the Lessee Improvements the Lessee's current leased premises shall serve as a benchmark. The Working Drawings, as approved in writing by Lessee, as revised by Lessor from time to time with Lessee's written approval in accordance with the following provisions of this Work Letter, are hereinafter called the "Final Plans", and the improvements to be performed in accordance with the Final Plans are hereinafter called the "Lessee Improvements". Notwithstanding anything to the contrary contained herein, Lessor and Lessee agree that the Lessee Improvements shall include and incorporate, without limitation, each of the items specified in Schedule 1 attached hereto and incorporated herein by reference. (d) Approval. Lessee's approval of any item reviewed by Lessee under this Work Letter shall merely indicate Lessee's consent to the proposed work shown thereon, and in no event shall such consent by Lessee be deemed to constitute a representation by Lessee that the work called for therein complies with applicable building codes or other legal requirements, nor shall such consent release Lessor from Lessor's obligation to supply Working Drawings that do so substantially conform to applicable building codes and legal requirements. (e) Construction Documents. Lessor shall provide copies to Lessee of Construction Documents prepared by Lessor's Architect prior to commencing any of the works or making changes to any of the works. 3. Lessee's Representative. For the purposes of this Work Letter, Lessee's representative shall be Brian McPherson of Cole Project Management and Bryce Mason of ICBM Partners or such other representative(s) designated by Lessee from time to time ("Lessee's Representatives"). 4. Cooperation. Lessor and Lessee and their respective contractors, consultants and representatives, shall communicate and cooperate with each other to the end that the Lessee Improvements are constructed in an expeditious manner, having due regard for minimizing disturbance of other Lessees and park visitors in the area. Lessor and Lessee shall cooperate with each other to resolve any space planning or other issues that are raised by applicable local, state or federal building codes during the planning, permit or construction process. Lessor shall keep Lessee informed regarding the progress of the work, and Lessor and Lessee's Representative shall hold construction meetings with frequency reasonably satisfactory to Lessee. 5. Lessor's Work. In addition to Lessor's sole responsibility for payment of all expenses related to the construction of the Final Space Plan incorporating the Demolition Work and Lessee Improvements, Lessor shall, at Lessor's sole cost and expense, perform all work necessary to cause the restroom facilities in the Leased Premises to comply with applicable laws and codes regarding handicap access and use (using Building standard plans and finishes) to the extent such work is required in connection with the Lessee Improvements (collectively, "Lessor's Work). 2 6. Construction. (a) Construction Operations Fee. Lessor acknowledges and agrees that no construction management or administration fee shall be charged by Lessor to Lessee in connection with the demolition or construction of the Lessee Improvements. (b) Preconstruction Services. Lessor shall cause Lessor's Contractor to perform the following preconstruction services: Participate in a reasonable number of construction meetings and provide to Lessee an estimated schedule for the construction of the Lessee Improvements including providing Lessee weekly updates to any schedule changes or complications related to the construction of the Lessee Improvements. Lessor shall cause Lessor's Contractor to use reasonable care in preparing these schedules and weekly updates. (c) Schedule of Values. Upon approval of the Final Plans and selection of a Contractor and approval of the schedule, and after securing all necessary permits, Lessor shall cause Contractor to provide a detailed line item schedule of values for the Lessee Improvements ("Schedule of Values"). The Schedule of Values shall include all items included in Schedule 1 attached hereto. (d) Commencement of Construction; On -going Obligations. Upon approval of the Final Plans and selection of a contractor and approval of the schedule, and after securing all necessary permits, Lessor shall cause Contractor to promptly commence and diligently pursue to completion construction of the Lessee Improvements. Lessor's Contractor shall update the project schedule weekly, and Lessee shall be provided on a weekly basis a reasonably thorough report on its progress on the Lessee Improvements showing impact to schedule and estimated impact to the anticipated completion date. 7. Changes. If Lessee shall desire any change in or to the Final Plans (a "Change"), Lessee shall submit to Lessor for Lessor's review and written request including illustrations prepared by Lessee's Architect incorporating the requested Change. Lessor shall not unreasonably withhold or delay its approval of the revised Working Drawings, provided, however, that Lessor shall have at least three (3) business days after receipt of the revised Working Drawings to review any proposed Change. If Lessor fails to approve or disapprove a requested Change which is not a Material Change within the three (3) business day period specified above, Lessor shall be deemed to have approved such proposed Change. If Lessor approves any proposed Change, then together with such approval, if practicable, and if not practicable as soon thereafter as is practicable, Lessor' Contractor shall give Lessee Lessor's estimated delay (if any) which would result from incorporating such Change. If, following Lessee's review of the estimated delays, Lessee desires Lessor to incorporate the Change into the Lessee Improvements, then Lessor and Lessee shall execute a change order for such Change on Lessor's Contractor's standard form therefore, and the term "Final Plans" shall thereafter be deemed to refer to the Working Drawings as so revised and approved. If a Change will increase the cost of an item (an "Item Change") in the Budget by more than 10%, the cost over that percentage, plus the Contractor mark-up (not to exceed 4%) shall be borne by Lessee (the "Lessee Overcharge"). If the accumulation of Item Changes increases the total Cost of the Lessee Improvements by more that 5%, Lessee shall pay the total Lessee Overcharge. The Lessee shall pay to Lessor within fourteen (14) days of payment by Lessor to Contractor for the Lessee Overcharge. 8. Substantial Completion. "Substantial Completion" of the Lessee Improvements shall be deemed to have occurred when (i) the Lessee Improvements have been completed pursuant to the Final Plans, subject only to the completion or correction of Punch List Items, and (ii) Lessor has obtained all approvals and permits from the appropriate governmental authorities required for the legal occupancy of the Leased Premises for Lessee's intended use. Punch List Items shall mean 3 incomplete or defective work or materials in the improvements, of a nonmaterial nature, called for in the Final Plans which do not materially impair Lessee's use of the Leased Premises for the conduct of Lessee's business therein. Upon notice from Lessor that the Lessee Improvements have been Substantially Completed, Lessor and Lessee shall tour the Leased Premises and prepare a joint list of Punch List items. Lessor shall cause Lessor's Contractor to diligently pursue the Punch List Items to completion to Lessee's reasonable satisfaction, and Lessee shall reasonably cooperate with and accommodate Lessor's Contractor in connection therewith. Within one month after upon Substantial Completion of the project, Lessor shall cause Lessor's Architect to deliver to Lessee a set of "as -built" drawings for the Lessee Improvements. 9. Cost of Improvements. The cost of the construction and installation of the Lessee Improvements shall be borne entirely by Lessor, except for any Lessee Overcharge, including but no limited to; (a) Lessor shall pay the entire cost of Lessor's Work. (b) Lessor shall pay for all of the construction and installation of the Lessee Improvements. 10. Vendor Entry During Construction Period. Notwithstanding anything to the contrary in the Lease or this Work Letter, Lessee may, prior to the Substantial Completion of the Lessee Improvements, and during and in conjunction with the construction of the Lessee Improvements, permit Lessee's vendors to enter the Leased Premises for the purpose of installing telephones, electronic communication or related equipment, security or audio/visual equipment, and furniture systems and equipment. Such early access to the Leased Premises and such installation shall be permitted only to the extent that Lessor determines that such early access and installation activities will not delay Lessor's Contractor's completion of the construction of the Lessee Improvements, provided that Lessor's Contractor shall use reasonable good faith efforts to reasonably integrate the work to be completed by Lessee's Vendors into Lessor's Contractor's scheduling and planning such that the Lessee Improvements and the work to be completed by Lessee's Vendors will be completed in an efficient manner. Lessee's Vendor will be responsible for any damage Vendor during Lessee's installation activities. 11. Addresses for Notices and Deliveries. For the purposes of this Work Letter (i) notices, submittals and deliveries to Lessor shall be made to. Lessor's Representative at the addresses set forth below, (ii) notices, submittals and deliveries to Lessee shall be made to Lessee's Representative at the address set forth below, and (iii) notices, submittals and deliveries to either pay may be made via facsimile transmissions with answerback confirmation at the respective facsimile numbers set forth below. Facsimile transmissions received after 6:00 P.M. shall be deemed to have been given the following business day. (a) Lessee's Representative: Cole Project Management Brian McPherson 153 Kearny Street San Francisco, CA 94108 Fax: (415) 393-8008 (b) Lessor's Representative: City of National City David Parsons 1243 National City Boulevard National City, CA 91950 Fax: (619) 336-4286 4 SCHEDULE 1 (LESSEE IMPROVEMENTS DETAIL) The following are a list of items Lessee shall receive as part of the Lessee Improvements: • AB "New Construction" materials to be new and of commercial grade. • New Commercial Grade floor finishes to be installed throughout space (Carpet, VCT ETC.) All sub -flooring to be prepared to meet code and industry standards prior to the installation of any new finishes. PMA to have input on selection of all colors. • All walls to be new construction or repaired to like new condition with smooth surface to receive new paint. • All walls to receive at least one (1) coat of primer and two (2) coats of commercial grade paint. PMA to have input on all paint colors. • Exterior lighting shall be sufficient to appropriately illuminate all parking areas and walkways. Lights to be operated on timers for illumination during all evening and early morning hours. • Ceiling at Great Hall to be maintained at the existing elevation at minimum (except where necessary to facilitate lighting fixtures), including the vaulted area at the front/center of the space. ■ All ceiling tile to be replaced with new White acoustic tile. • All existing Gypsum Board ceilings to be replaced or repaired to like new condition with smooth surface to receive paint. • All Gypsum Board ceilings to receive at lease one (1) coat of primer and two (2) coats of commercial grade ceiling paint • All exterior doors to be replaced or repaired to like new condition with operable and appropriate Code compliant locking hardware. All exterior doors should be metal and installed in hollow metal frames. • All exterior doors to be finished with Exterior Grade finish on all exterior exposures. All interior exposures should be finished to compliment the surrounding interior space. • All interior doors and frames to be new or in like new condition with appropriate code compliant locking hardware. • All interior doors to have locking hardware and be keyed to the same master pin configuration. LL to distribute 2 keys for each door and 2 master keys upon move in. • All interior doors and frames to be finished with appropriate commercial grade finish complimenting the surrounding areas. • All toilet room partitions, fixtures, and accessories to be new commercial grade. • Interior lighting to provide adequate distribution of light for standard office environment. • All interior light fixtures and lamps to be new or in like new and code compliant condition. • Power distribution —120 v AC power to be distributed throughout the space to meet code and provide no less than 6 Watts per Rentable Square Foot power to operate standard office equipment PMA to have input on placement of all outlets. ■ Telephone / Data cabling distribution — Category 5e cable to be distributed throughout the space to standard complement of four (4) drops per location to provide adequate access for installation of business computers and phones. All cable to be landed in existing Communications Room on appropriate Punch Down blocks. PMA to have input on location of all jacks. • Landlord to provide live telephone circuit at Communications room. • All interior and exterior windows shall be in operable condition and replaced where broken. 1 ■ Security: o The building and windows shall be secured in an appropriate manner to resist access by vandals as reasonably agreed by PMA. o "Teller window" at Dispatch Counter to be constructed of tamper proof materials and be designed in such a way as to prevent access from the Great Hall. • HVAC- Landlord to provide adequate Heating Ventilation and Air Conditioning to reasonably support Tenants Use during the Term per the Lease. ■ All work to be done in a professional and workman like manner by qualified contractors. 2 City of National City Office of the City Clerk 1243 National City Boulevard, National City, CA 91950-4397 Michael R. Della, CMC - City Clerk (619) 336-4228 Fax: (619) 336-4229 October '9.2t30 Mr. Mario Espinoza, President International Longshore & Warehouse Union - Local No. 29 200 East 12th Street National City CA, 91950 Project: City of National City — Lease Agreement for Western Portion of Library at 200 East 12th Street. Resolution No. 2006-213 Dear Mr. Espinoza: On October 3 2006 the City Council of the City of National City passed and adopted Resolution No. 2006-213, executing lease agreement between the San Diego Joint Port Labor Relations Committee and the City of National City. We are pleased to enclose a fully executed original agreement and a certified copy of the Resolution for your files. Should you have any questions, please contact The City Manager's Office at (619) 336-4240. Sincerely Michael R. Da la City Clerk MRD Enclosure cc: City Manager CDC Flie C2006-49