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HomeMy WebLinkAbout2018 CON San Diego Electric Railway - National City Depot - Maintenance and Operating Agreement0- CALIFORNIA NikwooNAL orry INCORPORATED MAINTENANCE AND OPERATING AGREEMENT by and between CITY OF NATIONAL CITY and SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, INC. Dated as of September 12, 2018 SECTION HEADING Recitals ARTICLE 1 ARTICLE 2 ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 ARTICLE 9 ARTICLE 10 ARTICLE 11 ARTICLE 12 ARTICLE 13 ARTICLE 14 ARTICLE 15 ARTICLE 16 ARTICLE 17 ARTICLE 18 ARTICLE 19 ARTICLE 20 ARTICLE 21 ARTICLE 22 TABLE OF CONTENTS PAGE Terms of Agreement The Property Permitted Uses Utilities Repairs and Maintenance Improvements; Alterations Mechanics' Liens; Stop Notices Taxes Indemnifications and Insurance Termination Hazardous Materials Assignment Defaults by SDERA or by City; Remedies Abandonment Damage or Destruction Eminent Domain Sale or Mortgage by City City's Right of Access Notices Non -Discrimination Records, Accounts, and Audits Administrative Provisions MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND SAN DIEGO ELECTRIC RAILWAY ASSOCIATION This Maintenance and Operating Agreement (the "Agreement") is entered into as of September 12, 2018, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, a California non-profit corporation ("SDERA"). RECITALS A. WHEREAS, the CITY owns the improved real property commonly known as the National City Depot, located at 922 West 23rd Street, National City, California (the "Property"). The improvements on the Property are sometimes referred to as the "Railroad Depot" building. A legal description of the Property is attached hereto as Exhibit "A" and incorporated herein by reference. B. WHEREAS Article 11, Section 7 of the California Constitution empowers the CITY to provide for the health and welfare of its residents. C. WHEREAS, the CITY desires to enter into a Maintenance & Operating Agreement due to the special services to be performed under this Agreement for the City and to facilitate a more collaborative relationship between the CITY and the operator of the Premises. D. WHEREAS, one of the goals of the CITY's General Plan is to develop educational experiences capable of promoting the cultural heritage of the city and lifting the spirits of residents and visitors to National City. E. WHEREAS, the CITY desires the services of an organization to maintain and operate the Property in a manner beneficial to the public. F. WHEREAS, the CITY has further determined that SDERA is skilled in providing educational experiences capable of lifting the spirits of residents and visitors to National City. G. WHEREAS, the CITY wishes to have SDERA maintain and operate the Property, for the community's benefit, as an educational rail museum that highlights the historic role railroad activities played in the development of the CITY and region.. SDERA is willing to operate and maintain the Property for such a purpose. NOW, THEREFORE, in consideration of the foregoing facts, and in consideration of the promises and covenants hereinafter set forth, the parties agree as follows: Maintenance & Operating Agreement Page 3 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) ARTICLE 1 TERM OF AGREEMENT 1.1 Term. The term of this Agreement shall be five (5) years, commencing Novemberl, 2018 (the "Commencement Date") and expiring on October 31, 2023. 1.2 Option to Extend Term. If SDERA is not in default of any provision of this Agreement upon the expiration of the term described in Article 1.1, the City Manager or designee may extend the term for up to three (3) five-year periods. The five year term, and any extension pursuant to this Article 1.2, shall collectively be referred to hereafter as the "Term." ARTICLE 2 THE PROPERTY 2.1 License for Use of Property. The CITY grants SDERA a revocable license to enter and operate the Property for the purpose of operating a public educational rail museum that benefits the residents and visitors of National City. SDERA's revocable license is subject to the covenants and requirements of this Agreement as of the Commencement Date. 2.2 Ownership of Personal Property and Improvements. The rights and obligations of the parties regarding the ownership of personal property and improvements on the Property shall be as follows: 2.2.1 Ownership of Personal Property. All improvements existing on the Property (Improvements), together with all fixtures permanently attached to the Property (Fixtures), as of the Commencement Date shall remain the property of the CITY during the Term. SDERA shall not remove any Improvements or Fixtures from the Property and shall also not waste, destroy, or modify any Improvements or Fixtures on the Property, except as permitted by this Agreement. 2.2.2 Ownership of Improvements. All improvements made to the property by SDERA shall become the property of the CITY. ARTICLE 3 PERMITTED USE 3.1 Purpose. The parties intend that the operation of the Premises by SDERA will provide (a) an opportunity for the community to learn about the historic role railroad activities played in the development of the city and region, and (2) educational experiences for the children of National City. Maintenance & Operating Agreement Page 4 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 3.2 Operations Plan. SDERA must submit a written operations plan to the CITY that addresses all aspects of maintaining and operating the Property. This written operations plan must include, but will not be limited to, descriptions of the following: 1) Hours of operation; 2) Proposed activities or facilities available to the public; 3) The number of employees, volunteers or long term caretakers on staff; 4) Visitor safety and property security; 5) Capital improvements; 6) Property, building, equipment, and preservation of grounds; 7) Sources of funding, fundraising plan; 8) Expected expenses; 9) Community outreach; 10) Parking; 11) Lighting; 12) Handicap accommodations; 13) Facility rentals to third parties; 14) Goals for the next year and next three years thereafter. 3.3 Hours of Operation. SDERA shall open the Property to the general public Saturday and Sunday except holidays from 10 a.m. to 4 p.m. and also for public special events scheduled in advance of the event. SDERA shall post, in a location visible from West 23rd Street, the Property's hours of operation. 3.4 Service Fees. SDERA shall not provide any programs and services for profit. However, SDERA may charge user fees for classes and programs offered to school groups and the community to offset costs incurred by SDERA in its maintenance and operation of the Property. Any fees charged under this Article 3.4 must be approved by the City Manager or designee. The public shall pay no fee to gain access to the Property during those hours of operation listed in this Article 3. 3.5 Reporting by SDERA. SDERA shall provide annual reports to the CITY that provide Statistical Information (defined below) for the immediately preceding year. Each annual report shall contain, at a minimum, the total number of: (a) National City residents who participated in SDERA's Projects; (b) participants and volunteers who participated in SDERA's Projects; (c) events and programs coordinated; (d) and capital projects completed. The annual reports shall also include reports on SDERA's operating and maintenance plans, long-term and short-term goals, and any other pertinent statistics. The information required to appear in the annual reports by this Article 3.5 will be referred to as "Statistical Information." Each annual report will include the previous years' worth of Statistical Information, if any. SDERA will deliver the annual report to the CITY at a mutually agreeable date and time. 3.6 Annual Budget. SDERA shall provide the CITY with a proposed budget for SDERA's estimated maintenance and operating expenses for the Property by July 1st of each year during the Term. SDERA shall provide to the CITY an audited financial report and tax return, forty-five (45) days following June 30th of each year during the Term. Maintenance & Operating Agreement Page 5 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 3.7 Volunteer Management. SDERA may utilize volunteers to operate the Property, and in providing the Projects required by this Agreement. SDERA is responsible for recruiting, training, and managing all volunteers on the Property. Volunteers are considered the responsibility of SDERA for the purpose of workers compensation or general liability. 3.8 Alcohol Use. SDERA, or third parties with permission from SDERA, may, hold events on the Property where alcoholic beverages are served. Alcoholic beverages shall be served subject to the following requirements: • Alcohol will not be served during youth programming under any circumstances. • Alcohol may be served in designated areas of the Property, designated by SDERA in advance, and approved by the City Manager or designee. • Alcoholic beverages must be served by a licensed bartender, with a copy of the bartender's license on the Property. • The event host must obtain approval from the state Department of Alcoholic Beverage Control to serve alcohol. • The event host is responsible for all guest behavior during and following the service of alcohol. • "Last call" for service of alcohol shall be at least thirty (30) minutes prior to the scheduled end of the event. When third parties (with permission from SDERA) serve alcoholic beverages, the following additional requirements shall apply: • The third party shall provide the CITY proof of liability insurance acceptable to the City's Risk Manager. • The third party shall provide two licensed security guard for every 100 guests registered to attend the event. • SDERA shall reserve the authority to immediately terminate an event if SDERA determines, in its sole discretion, the third party has not complied with any requirement of this Article 3.8. • SDERA shall provide the CITY a copy of their third party rental agreement template for approval. 3.9 Consideration. SDERA's payment of $1.00 to the City, in addition to its' performance under the remainder of this Agreement, shall serve as the sole consideration due the CITY for SDERA's license to use and operate the Premises. 3.10 Compliance with Laws. SDERA, at its sole expense, shall procure, maintain, and hold available for the CITY's inspection any governmental license or permit required for the proper and lawful conduct of SDERA's operation of the Property. SDERA shall not use the Property for any use or purpose in violation of the laws of the United States of America, or the laws, ordinances, regulations, orders, or requirements of the State of Maintenance & Operating Agreement Page 6 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) California, the County of San Diego, the CITY, or of other lawful authorities. SDERA shall, at its sole expense, comply with all applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the Term (Laws or Orders), regulating the use by SDERA of the Property. 3.10.1 TUP Requirements. Any programs, activities, or events that are not provided for in this Agreement may, in the CITY's sole discretion, require a Temporary Use Permit (TUP) or other permit as required by the CITY. 3.10.2 Cannabis Cultivation Prohibited. Notwithstanding any other provision in this Agreement, or in this Article 3.10, SDERA shall neither: (a) cultivate; (b) allow the cultivation of; (3) sell; nor (4) allow the sale of cannabis at the Property. ARTICLE 4 UTILITIES 4.1 Utility Services. The CITY shall be responsible for maintaining reasonable utility services to the Property. SDERA shall provide and pay for all utilities or services necessary for its use and operation of the Property during the Term, including water, electricity, trash, and sewer charges. SDERA shall pay directly to the applicable utility company such charges, and the City shall have no obligation to pay for such utility services. ARTICLE 5 REPAIRS; MAINTENANCE 5.1 SDERA's Repair and Maintenance Obligations. SDERA acknowledges that it has made a thorough visible inspection of the Property and that it accepts the Property "as -is" as of the Commencement Date. At SDERA's own cost and expense, SDERA shall repair, replace, and maintain the Property in good, tenable condition as necessary. SDERA shall not be obligated to repair or replace damage to the Property caused by ordinary wear and tear. SDERA shall maintain the Property in an accessible manner for use by individuals with disabilities and comply with federal and state law regarding accessibility, including but not limited to the Americans with Disabilities Act and California's Disabled Persons Act. Other than repair work in emergency situations not exceeding Three Thousand and no/100 Dollars ($3,000), SDERA shall not perform any repair work without the CITY's prior written consent. As used in this Article 5.1, "emergency" means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. All emergency repairs performed by the City on the Property are governed by Public Contract Code Section 22050. SDERA's obligations under this Article shall apply regardless of whether the repairs, restorations, and replacements are ordinary or extraordinary, foreseeable or unforeseeable, capital or noncapital, the fault or not the fault of SDERA, its agents, employees, volunteers, invitees, visitors, or Maintenance & Operating Agreement Page 7 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) contractors. All replacements made by the SDERA shall be of like size, kind, and quality to the items replaced. 5.2 CITY Repair and Maintenance Obligations. For any repair and maintenance work exceeding Three Thousand and no/100 Dollars ($3,000), the CITY will consider the nature and priority of the work and available funding to determine if and when such repairs will be completed. 5.3 CITY Right to Inspect; CITY Not Obligated to Repair or Maintain. SDERA shall permit the CITY to enter the Property at all times during usual hours of operation to inspect the Property. Any entry pursuant to this Article 5.3 shall not unreasonably interfere with SDERA's operation of the Property. However, nothing contained in this Article 5 shall create any duty on the part of the CITY to do any work which, under any provision of this Agreement, SDERA may be required to do. ARTICLE 6 IMPROVEMENTS; ALTERATIONS 6.1 Alterations. SDERA may alter, replace, add to, change, or construct additional improvements to the Property (collectively, "Alterations") as SDERA may find necessary or convenient for its operation of the Property. Any Alterations performed by SDERA under this Article 6.1 shall be performed: (a) at SDERA's sole cost and expense; (b) with the CITY's prior written consent; and (c) in accordance with construction plans submitted to and approved by the CITY. 6.2 Construction Permits and Licenses. At all times during the Term, SDERA shall procure, at its sole cost and expense, all permits and licenses that are necessary or required from any local governmental agency for the proposed construction of any Alterations. The CITY may, in its sole discretion, waive CITY permitting fees where applicable. 6.3 Proposed Plans. In its sole discretion, the CITY may require SDERA to do any of the following: • Submit a complete set of proposed plans of any Alterations to the CITY; • Apply for and receive a permit from the Building Department to complete any Alterations; • Within sixty (60) days of a written request, furnish the CITY with a complete set of "as -built" plans for any CITY -approved Alterations. 6.4 Prevailing Wages. SDERA shall comply with prevailing wage statutes for any work not performed by volunteers. ARTICLE 7 MECHANICS' LIENS; STOP NOTICES Maintenance & Operating Agreement Page 8 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 7.1 Mechanics' Liens; Stop Notices. SDERA shall pay, or cause to be paid, the total cost and expense of all works of improvement, as that phrase is defined in the Mechanics Lien Law in effect at time and place of construction, done by it, or caused to be done by it, on the Property, and for all materials furnished for or in connection with any such work. If any lien or stop notice is filed against the Property, SDERA shall cause the lien or stop notice to be discharged of record within one hundred eighty (180) days after it is filed. SDERA shall indemnify, defend, and hold the CITY harmless from any and all liability, loss, damage, costs, attorneys' fees, and all other expenses on account of claims of lien of laborers, materialmen, or others for work performed, or materials or supplies furnished for SDERA or persons claiming under SDERA. 7.2 Notice of Lien or Stop Notice. Should any claim of lien or stop notice related to SDERA's work of improvement of the Property be filed against the Property, or any action be filed against the Property, or any action affecting the title to the Property be commenced, the party receiving notice of such lien or stop notice or action shall immediately give the other party written notice thereof. 7.3 Notice of Non -Responsibility. The CITY or its representatives shall have the right to post and keep posted on the Property notices of non -responsibility or such other notices which the CITY may deem to be proper for the protection of the CITY's interest in the Property. SDERA shall, before the commencement of any work which might result in any such lien or stop notice, give to the CITY written notice of its intention to do so with sufficient time to enable posting of such notices. ARTICLE 8 TAXES 8.1 Definition. "Taxes" shall mean all taxes, governmental bonds, special assessments, charges, or transfer taxes, license and transaction fees, including, but not limited to, (a) any state, local, federal income tax, or any real or personal property tax, (b) increases in taxes attributable to SDERA's operation of the Property, or (c) any taxes which are essentially payments to a governmental agency, other than the CITY, for the right to make improvements to the Property. 8.2 Possessory Interest. Notwithstanding Article 2.1, SDERA acknowledges that this Agreement may create a possessory interest subject to property taxation and that SDERA may be subject to the payment of taxes levied on such interest. SDERA shall pay, before delinquency, all taxes, assessments, and fees assessed or levied upon the Property. 8.3 Responsibility for Payment of Taxes. The CITY shall not be obligated to pay any Taxes accruing against any interest in SDERA's use of the Property at any time before or during the Term. SDERA shall pay any Taxes that accrue against any interest in SDERA's use of the Property. Additionally, SDERA shall pay any Taxes levied upon any Improvements, Fixtures, or Personal Property located on the Property to the extent such Maintenance & Operating Agreement Page 9 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Taxes result from SDERA's operations or other activities held upon, or in connection with, the Property. ARTICLE 9 INDEMNIFICATION AND INSURANCE 9.1 SDERA Indemnity. The CITY shall not be liable for, and SDERA shall defend, indemnify, and hold harmless the CITY, its officers, officials, agents, employees, and volunteers from any and all claims, costs, liability, loss, damages to property, injuries to, or death of any person or persons, and all claims, demands, suits, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature, including workers' compensation claims resulting from, related to, or arising out of SDERA's improvement, operation or use of the Property, or arising either directly or indirectly from any act, error, omission, or negligence of SDERA or its contractors, licensees, invitees, members, agents, servants or employees; provided, however, that this indemnification and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers, officials, employees, or volunteers. CITY will cooperate reasonably in the defense of any action, and SDERA shall employ competent counsel, reasonably acceptable to the CITY'S City Attorney. The indemnity, defense, and hold harmless obligations contained herein shall survive the termination of this Agreement for any alleged or actual omission, act, or negligence under this Agreement that occurred during the term of this Agreement. 9.1.1 Third Party Indemnity. SDERA shall not invite third party organizations onto the Property until said third party organization furnishes CITY a written agreement in which it indemnifies and holds CITY harmless, upon terms satisfactory to CITY. 9.1.2 Waivers from Third Party Entities. SDERA agrees to obtain from all third party organizations whose participants operate on the Property, a waiver of liability and hold harmless agreement upon terms satisfactory to the CITY. 9.2 Insurance. SDERA, at its sole cost and expense, shall purchase and maintain, and shall require its subcontractors, and third party organizations SDERA invites onto the Property, to purchase and maintain throughout the term of this Agreement, the following insurance policies: 9.2.1 Commercial General Liability Insurance (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with minimum limits of $2,000,000 per occurrence and $4,000,000 aggregate, covering all bodily injury and property damage arising out of its operations under this Agreement. The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location." The Commercial General Maintenance & Operating Agreement Page 10 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Liability required by this Article must include Sexual Misconduct Liability coverage. 9.2.2 Automobile Insurance SDERA does not own any vehicles. Any individual members of SDERA who drive their personal vehicles in connection with SDERA events or activities will maintain valid automobile insurance coverage that satisfies minimum insurance requirements under California law 9.2.3 Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of SDERA's employees, and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the CITY. Said endorsement shall be provided prior to commencement of work under this Agreement. 9.2.4 Property Insurance against all risks of loss to any improvements or betterments made by SDERA, or any third party with permission from SDERA, at full replacement cost with no coinsurance penalty provision. 9.2.5 The aforesaid policies shall constitute primary insurance, at least as broad as ISO CG 20 01 04 13, as to the CITY, its officers, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY's Risk Manager, at the address listed in Article 9.2.7 below, of cancellation or material change. 9.2.6 If required insurance coverage is provided on a "claims made" rather than "occurrence" form, SDERA shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. 9.2.7 The Certificate Holder for all policies of insurance required by this Article 9.2 shall be: City of National City do Risk Manager 1243 National City Boulevard National City, CA 91950-4397 9.2.8 Insurance shall be written with only insurers authorized to conduct business in California that hold a current policy holder's alphabetic and financial size category rating of not less than A VIII according to the current Best's Key Rating Guide, or a company of equal financial stability that is approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. Maintenance & Operating Agreement Page 11 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 9.2.9 This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, are filed with and approved by the CITY' S Risk Manager. If SDERA does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. 9.2.10 All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by the CITY. CITY reserves the right to modify the insurance requirements of this Article 9.2, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 9.2.11 If SDERA maintains broader coverage or higher limits (or both) than the minimum limits shown above, the CITY requires and shall be entitled to the broader coverage or higher limits (or both) maintained by SDERA. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. ARTICLE 10 TERMINATION 10.1 This Agreement may be terminated with or without cause by the CITY. Termination without cause shall be effective only upon 60-day's written notice to SDERA. During said 60-day period, SDERA shall perform all services in accordance with this Agreement. This Agreement may also be terminated immediately by the CITY for cause in the event of a material breach of this Agreement, misrepresentation by SDERA in connection with the formation of this Agreement or the performance of services, or the failure to perform services as directed by the CITY. Termination with or without cause shall be effected by delivery of written Notice of Termination to SDERA as provided for herein. The CITY further reserves the right to immediately terminate this Agreement upon: (a) the filing of a petition in bankruptcy affecting SDERA; (b) a reorganization of SDERA for the benefit of creditors; or (c) a business reorganization, change in business name or change in business status of SDERA. ARTICLE 11 HAZARDOUS MATERIALS 11.1 Hazardous Materials Laws -Definition. As used in this Article, the term "Hazardous Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees, orders, regulations or court decisions (including the so-called "common law") relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under, or about the Property, soil and ground water conditions, or other similar substances or conditions. The following legal Maintenance & Operating Agreement Page 12 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) authority is a non -exhaustive list of the legal authority that applies to the definition of the term "Hazardous Materials Laws": • the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C., Section 9601 et seq.) • the Hazardous Materials Transportation Act, as amended (49 U.S.C., Section 1801 et seq.), and • the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C., Section 6901 et seq.) 11.2 Hazardous Materials - Definition. As used in this Article the term "Hazardous Materials" means any chemical, compound, material, substance or other matter that: 11.2.1 is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine, bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material, whether injurious or potentially injurious by itself or in combination with other materials; 11.2.2 is controlled, referred to, designated in or governed by any Hazardous Materials Laws; 11.2.3 gives rise to any reporting, notice or publication requirements under any Hazardous Materials Laws, or; 11.2.4 is any other material or substance giving rise to any liability, responsibility or duty upon the CITY or the SDERA with respect to any third person under any Hazardous Materials Law. 11.3 SDERA Representations and Warranties. Consistent with the visible inspection referenced in Article 5 above, SDERA shall not be liable for any improvements or modifications to the Property that occurred before SDERA took possession of the Property. A search of building permits and hazardous control maps does not indicate that SDERA imported any Hazardous Materials to the Property. SDERA represents and warrants that, during the Term or any extension thereof, SDERA shall comply with the following provisions of this Article unless otherwise specifically approved in writing by the CITY, subject to the terms and conditions of the SDERA's maintenance obligations provided elsewhere in this Agreement: 11.3.1 SDERA shall not cause or permit any Hazardous Materials to be brought, kept or used in or about the Property by SDERA, its agents, employees, assigns, contractors or invitees, except as required by SDERA's permitted use of the Property in the normal course of operations; Maintenance & Operating Agreement Page 13 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 11.3.2 Any handling, transportation, storage, treatment, or usage by SDERA of Hazardous Materials that is to occur on the Property following the Commencement Date shall be in compliance with all applicable Hazardous Materials Laws; 11.3.3 Any leaks, spills, release, discharge, emission or disposal of Hazardous Materials which may occur on the Property following the Commencement Date shall be promptly and thoroughly cleaned and removed from the Property by SDERA at its sole expense, and any such discharge shall be promptly reported in writing to the CITY, and to any other appropriate governmental regulatory authorities; 11.3.4 No friable asbestos shall be constructed, placed on, deposited, stored, disposed of, or located by SDERA on the Property; 11.3.5 No underground improvements, including but not limited to treatment or storage tanks, or water, gas or oil wells shall be located by SDERA on the Property without the CITY's prior written consent; 11.3.6 SDERA shall promptly supply the CITY with copies of all notices, reports, correspondence, and submissions made by SDERA to the United States Environmental Protection Agency, the United Occupational Safety and Health Administration, and any other local, state or federal authority which requires submission of any information concerning environmental matters or hazardous wastes or substances pursuant to applicable Hazardous Materials' Laws; and 11.3.7 SDERA shall promptly notify the CITY of any liens threatened or attached against the Property pursuant to any Hazardous Materials' Law. If such a lien is filed against the Property, then, within the earlier of (i) twenty (20) days following such filing, or (ii) before any governmental authority commences proceedings to sell the Property pursuant to the lien, SDERA shall either: (a) pay the claim and remove the lien from the Property, or (b) furnish either: (1) a bond or cash deposit reasonably satisfactory to the CITY in an amount not less than the claim from which the lien arises, or; (2) other security satisfactory to the CITY in an amount not less than that which is sufficient to discharge the claim from which the lien arises. 11.3.8 At the end of this Agreement, SDERA shall surrender the Property to the CITY free of any and all Hazardous Materials, that were imported to the Property after Maintenance & Operating Agreement Page 14 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) SDERA took possession of the Property, and in compliance with all Hazardous Materials' Laws affecting the Property. ARTICLE 12 ASSIGNMENT; THIRD PARTY USE OF PROPERTY 12.1 Assignment; CITY's Consent Required. SDERA shall not voluntarily or involuntarily assign or otherwise transfer all or any portion of its rights and duties under this Agreement without the CITY's prior written consent. Any attempted assignment or transfer without the CITY's prior written consent shall be void. 12.2 Third Party Use of the Property. SDERA may engage third party organizations to provide special services or programming at the Property if: 12.2.1 The City Manager consents, in writing, to the third party organizations' proposed use of the Property; 12.2.2 The third party organization obtains policies of insurance acceptable to the City's Risk Manager and Article 9.2 of this Agreement; and 12.2.3 SDERA shall forward to the City Manager, or designee, any proposed agreements between SDERA and other third party organizations that wish to operate or conduct business on the Property ("Third Party Agreement"). No third party may operate or conduct business on the property until the City Manager, or designee, approves the Third Party Agreement. The City Manager, or designee, will determine whether the Third Party Agreement is compatible with the overall nature of the Property and the educational rail museum. ARTICLE 13 DEFAULTS BY SDERA OR BY CITY; REMEDIES 13.1 Events of Default; Remedies. The following sub -articles shall apply if either SDERA or the CITY neglects, fails to perform, or fails to observe any of their respective obligations under the terms, covenants, or conditions contained in this Agreement ("Default"): 13.1.1 Thirty -Day Correction of Default. If either SDERA or the CITY determines that the other party is in Default, then the non -defaulting party must provide the defaulting party written notice of the Default and thirty (30) days to correct the Default. 13.1.2 Extended Correction of Default. If the defaulting party determines that more than thirty (30) days is required to correct the Default, the defaulting party must provide the other party written notice of the reasons why additional time is required to correct such Default. The defaulting party must use diligent efforts to correct a Default under this Article 13.1.2 and, in any case, must correct such Default within ninety (90) days from the date of the written notice of default. Maintenance & Operating Agreement Page 15 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 13.1.3 Remedies for Failure to Correct Default. If the defaulting party fails to comply with Article 13.1.1. or 13.1.2, then the non -defaulting party may immediately terminate this Agreement. The defaulting party shall be liable to the non -defaulting party for any and all damages sustained by the non -defaulting party as a result of the defaulting parties' breach. ARTICLE 14 ABANDONMENT 14.1 Abandonment. SDERA shall not vacate or abandon the Property at any time during the Term nor permit the Property to remain unoccupied for a period of longer than five (5) consecutive days during the term of this Agreement. These provisions shall not apply if the Property is closed and operation is temporarily discontinued therein on account of strikes, lockouts, acts of nature, or similar causes beyond the reasonable control of SDERA. Any exceptions must be submitted in writing to the City Manager or designee for approval. ARTICLE 15 DAMAGE OR DESTRUCTION 15.1 SDERA's Duty to Repair Casualty. SDERA shall, as expeditiously as reasonably possible, repair any damages to the Property caused by fire, earthquake, or any other identifiable event of a sudden, unexpected, or unusual nature ("Casualty"), and repair, restore, and replace any such damaged or destroyed Fixtures, Improvements or Personal Property ("Casualty Repairs"). Any Casualty Repairs made under this Article 15 are: (a) To be performed at SDERA's sole cost and expense; (b) To be performed except as otherwise provided in this Article 15; and are (c) Subject to all other terms and conditions of this Agreement. 15.2 Construction Provisions. In the event of any reconstruction of the Property, Fixtures or Improvements required of SDERA pursuant to this Article, SDERA shall repair the Property, and repair or rebuild such Fixtures and Improvements, to substantially the same condition they were in immediately preceding such Casualty. 15.3 No Abatement. In the event of reconstruction, replacement, or repair by SDERA pursuant to this Article, SDERA shall continue its operations on the Property during any such period to the extent reasonably practicable from the standpoint of prudent business management, and in continuing compliance with applicable laws and regulations. SDERA shall not be entitled to any compensation or damages from CITY for: (a) loss of use of the whole or any part of the Property; (b) SDERA's Personal Property; or (c) any inconvenience or annoyance occasioned by such damage, reconstruction, or replacement. 15.4 Major Destruction. Notwithstanding any of the foregoing provisions of this Article to the contrary, if, at any time after the Commencement Date, (a) the Improvements are Maintenance & Operating Agreement Page 16 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) damaged or destroyed to the extent of more than twenty-five percent (25%) of their replacement cost, or (b) the damage is such that the Improvements cannot be repaired and restored within one hundred and eighty (180) days after the Casualty, then SDERA shall have the right to terminate this Agreement upon thirty (30) days' prior written notice to the CITY. ARTICLE 16 EMINENT DOMAIN 16.1 Condemnation. SDERA may terminate this Agreement within twenty (20) days after the date that a condemning authority (by a party other than the CITY) takes possession of the Property by delivery of written notice of such condemnation if: (a) If all of the Property is taken under eminent domain proceedings; or (b) less than all of the Property is taken under such eminent domain proceeding and the part taken substantially impairs the ability of SDERA to use the remainder of the Property for the purposes permitted by this Agreement. In the absence of such written notice from a condemning authority, SDERA may terminate this Agreement within twenty (20) days after the condemning authority shall have taken possession. 16.2 Continuation of Operating Agreement after Condemnation. If this Agreement is not terminated by SDERA, it shall remain in full force and effect as to any portion of the Property remaining, and this Agreement will end as of the date possession of the part taken by the public entity as to the part of the Property that is taken. 16.3 Award. All monies awarded in any condemnation shall belong to the CITY. The CITY shall have no liability to SDERA for any award not provided by the condemning authority. ARTICLE 17 SALE OR MORTGAGE BY CITY 17.1 Sale or Mortgage. The CITY may, pursuant to existing and subsequently enacted CITY ordinances and State laws, at any time, and without the consent of SDERA, vacate, sell, purchase, exchange, transfer, assign, lease, encumber or convey the CITY's interest in whole or in part, in the Property (collectively referred to in this Article as a "Sale"). The CITY shall provide to SDERA written notice of the CITY's intent to a Sale or discontinuance pursuant to this Article at least ninety (90) days prior to said proposed transfer. 17.2 Release on Sale. From and after a Sale or discontinuance of the CITY's entire interest in the Property, the CITY shall be released from all liability to SDERA and SDERA Maintenance & Operating Agreement Page 17 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) successors and assigns arising from this Agreement because of any act, occurrence, or omission of the CITY occurring after such Sale. ARTICLE 18 CITY'S RIGHT OF ACCESS 18.1 Right of Entry. CITY, its agents, employees, and contractors may enter the Property at any time with or without notice to SDERA to: (a) respond to health and safety concerns; (b) inspect the Property and Improvements; (c) determine whether SDERA is complying with its obligations in this Agreement (including its obligations with respect to compliance with Hazardous Materials Laws) (d) post notices of non -responsibility or similar notices (e) inspect the progress of construction of any improvement; or (f) make repairs that this Agreement requires or allows CITY to make, or make repairs to any adjoining space or utility services, or make repairs, alterations, or improvements to any other portion of the Property All work enumerated in this Article 18.1 must be done as promptly as reasonably possible and so as to cause as little interference to SDERA as reasonably possible. ARTICLE 19 NOTICES 19.1 Notices. Whenever in this Agreement it shall be required or permitted that notice or demand be given or served by either party to this Agreement to or on the other, such notice or demand shall be in writing, mailed or personally delivered to the other party at the addresses specified below. Mailed notices shall be sent by United States Postal Service, postage prepaid and shall be deemed to have been given, delivered, and received three (3) business days after the date such notice or other communication is posted by the United States Postal Service. All other such notices or other communications shall be deemed given, delivered, and received upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at any time designate a different address to which notices shall be sent. CITY: CITY OF NATIONAL CITY City Manager City of National City 1243 National City Boulevard National City, CA 91950-4397 With a copy to: Housing and Economic Development Manager City of National City Maintenance & Operating Agreement Page 18 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) SDERA: 140 East 12th Street, Suite B National City, CA 91950 San Diego Electric Railway Association, Inc. Executive Director 922 West 23rd Street National City, CA 91950 ARTICLE 20 NON-DISCRIMINATION 20.1 Non -Discrimination. SDERA hereby covenants by and for itself, its successors, assigns and all persons claiming under or through it, that this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against, or segregation of, any person or group of persons on account of race, age, color, creed, religion, sex, sexual orientation, marital status, national origin, physical handicap, medical condition or ancestry in the use, operation, or enjoyment of the Property. ARTICLE 21 RECORDS, ACCOUNTS, AND AUDITS 21.1 SDERA's Duty to Keep Records. SDERA shall, at all times during the Term, and for a period of five (5) years following expiration or earlier termination of this Agreement, keep or cause to be kept, true and complete books, records and accounts of all (a) construction undertaken pursuant to the rights conferred on SDERA under this Agreement, and (b) financial transactions in the operation of all business activities, of whatever nature, conducted pursuant to the rights granted by this Agreement. Such records shall also include the source and disposition of all trash and other waste collected and disposed of by SDERA in the operation of its business. Said records must be supported by source documents such as receipts, invoices, sales slips, cash register tapes, purchase invoices or other pertinent documents. 21.2 CITY's Right to Audit. All SDERA books, accounts, and records shall be kept and made available at one location within the limits of the County of San Diego. The CITY shall have the right at any reasonable time to examine and perform audits of SDERA's records pertaining to (a) construction undertaken pursuant to the rights conferred on SDERA under this Agreement, and (b) its operations on the Property, including, without limitation, any records pertaining to SDERA's use of utilities on the Property. The cost of said audits shall be borne by the CITY, except that SDERA shall provide to the CITY, at SDERA's expense, necessary data to enable the CITY to fully comply with each and every requirement of the State of California or by the United States of America for information or reports relating to this Agreement and to SDERA's use of the Property. ARTICLE 22 ADMINISTRATIVE PROVISIONS Maintenance & Operating Agreement Page 19 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 22.1 Authority. SDERA represents and warrants that it has full power and authority to execute and fully perform its obligations under this Agreement pursuant to its governing instruments, without the need for any further action, and that the person executing this Agreement on behalf of SDERA is the duly designated agent of SDERA and is authorized to do so. 22.2 Captions. The captions and headings appearing in this Operating Agreement are inserted for convenience only and in no way define, limit, construe, or describe the scope or intent of the provisions of this Agreement. 22.3 CITY Approval. Except where stated in this Agreement to the contrary, the phrases "CITY approval," and "CITY's written approval" or such similar phrases shall mean approval of the City Manager or designee, which approval shall not be unreasonably withheld. 22.4 Cumulative Remedies. In the event of a default under this Agreement, each party's remedies shall be limited to those remedies set forth in this Agreement. Any such remedies are cumulative and not exclusive of any other remedies under this Agreement to which the non -defaulting party may be entitled. 22.5 Entire Agreement. This Agreement, together with all addenda and exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all prior or contemporaneous agreements, understandings and representations, oral or written, are superseded. 22.6 Exhibits. All exhibits referred to herein are attached hereto and incorporated by reference: Exhibit "A": Legal description of the Property 22.7 Force Majeure. If either party is prevented or delayed from performing any act or discharging any obligation hereunder, because of any and all causes beyond either party's reasonable control, including unusual delays in deliveries, abnormally adverse weather conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or equipment, acts of God, governmental restrictions, regulations or controls, any hostile government actions, acts of terrorism, civil commotion and fire or other casualty, legal actions attacking the validity of this Agreement or the CITY or SDERA's operations of the Property, or any other casualties beyond the reasonable control of either party ("Force Majeure"), performance of such act shall be excused for the period of such delay, and the period for performance of such act shall be extended for a period equivalent to the period of such delay. Force Majeure shall not include any bankruptcy, insolvency, or other financial inability on the part of either party hereto. 22.8 Governing Law. This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of California. Maintenance & Operating Agreement Page 20 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) 22.9 Independent Contractor. SDERA acknowledges that it is an independent contractor; that it alone retains control of the manner of conducting its activities in furtherance of this Agreement; and that it, as well as any persons, contractors or agents it may employ, are not employees of CITY for any purpose. 22.10 Interpretation. The provisions of this Agreement shall be liberally construed to effectuate its purpose. The language of all parts of this Agreement shall be construed simply according to its plain meaning and shall not be construed for or against either party. 22.11 SDERA's Agreement Administration. SDERA confirms that SDERA's Agreement Administrator has been given full operational responsibility for compliance with the terms of this Agreement. SDERA shall provide the CITY with a written schedule of its normal hours of business operation on the Property, and SDERA's Agreement Administrator, or a representative designated thereby, shall be available to the CITY during SDERA's normal business hours, to resolve problems or answer question pertaining to this Agreement and SDERA's operations on the Property. 22.12 Modification. The provisions of this Agreement may not be modified, except by a written amendment signed by both parties. 22.13 Partial Invalidity. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law. 22.14 Successors & Assigns. This Agreement shall be binding on and inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided herein. SDERA shall not assign this agreement to any other party unless approved in writing by the CITY. 22.15 Time of Essence. Time is of the essence of each and every provision of this Agreement. 22.16 Waiver. No provision of this Operating Agreement or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed. Maintenance & Operating Agreement Page 21 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) IN WITNESS WHEREOF, the CITY and SDERA have duly executed this Agreement as of the day and year first above written. CITY OF NATIONAL CITY (CITY) By: SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, a California non-profit corporation (SDERA) Ron Morrison, Mayor By:ame) 1/ APPROVED AS TO FORM: Angil P. Morris -Jones By: Roberto M. Contreras Deputy City Attorney Maintenance & Operating Agreement %1„z-G,t,/,o.SLfa7 6 (Print) Az.,g,S="--AJ/ (Title) By: VOP' (Name) v Arles (Pri t kC-2C6`) (Title) Page 22 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) RESOLUTION NO. 2018 — 174 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND THE SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, INC. (SDERA), WITH A TERM OF 5 YEARS AND AN OPTION TO EXTEND THE TERM FOR UP TO THREE ADDITIONAL 5-YEAR PERIODS FOR THE CITY -OWNED LAND AND BUILDING LOCATED AT 922 WEST 23RD STREET IN NATIONAL CITY (NATIONAL CITY DEPOT) WHEREAS, one of the goals of the City's General Plan is to develop educational experiences capable of promoting the cultural heritage of the city for residents and visitors to National City; and WHEREAS, the City of National City ("City") owns the improved real property commonly known as the National City Depot (the "Depot") located at 922 West 23rd Street, National City; and WHEREAS, the City desires the services of an organization to maintain and operate the Depot in a manner beneficial to the public; and WHEREAS, the City has further determined that the San Diego Electric Railway Association, Inc., ("SDERA") is qualified by experience and ability to maintain and operate the Depot for the community's benefit, as an educational rail museum that highlights the historic role railroad activities played in the development of National City and the region, and SDERA is willing to operate and maintain the Depot for such services; and WHEREAS, SDERA and the City desire to enter into a Maintenance and Operating Agreement (the "Agreement") for the property with a term of five (5) years with an option to extend the term for up to two (2) additional five (5) year periods; and WHEREAS, SDERA will pay one dollar ($1) in consideration of the Agreement. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of National City hereby approves and authorizes the Mayor to execute the Maintenance and Operating Agreement by and between the City of National City and the San Diego Electric Railway Association, for a term of 5 years with the option to extend the term for up to three additional 5 year periods for the City -owned land and building located at 922 West 23rd Street in National City. Said Maintenance and Operating Agreement is on file in the office of the City Clerk. [Signature Page to Follow] Resolution No. 2018 — 174 Page Two PASSED and ADOPTED this 2nd day of Octobe " 18. ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: An . Morris -Jones 9 Attorney c.� n Morrison, Mayor Passed and adopted by the Council of the City of National City, California, on October 2, 2018 by the following vote, to -wit: Ayes: Councilmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California MICHAEL R. DALLA City Clerk of the City of National City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2018-174 of the City of National City, California, passed and adopted by the Council of said City on October 2, 2018. City Clerk of the Cit of National City, California By: Deputy CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT MEETING DATE: October 2, 2018 AGENDA ITEM NO. 8 OEM TITLE: Resolution of the City Council of the City of National City authorizing the Mayor to execute a Maintenance & Operating Agreement by and between the City of National City and San Diego Electric Railway Association, Inc. (SDERA), consisting of a term of 5 years with an option to extend the term for up to three additional 5 year periods for the city -owned land and building located at 922 West 23rd Street in National City. PREPARED BY: Gregory Rose Property Agent PHONE: 619 336-4266 EXPLANATION: (Please see attached background report). DEPARTMENT: Housing & Economic APPROVE FINANCIAL STATEMENT: APPROVED: ACCOUNT NO. Finance APPROVED: MIS The Maintenance and Operating Agreement will not have a financial impact to the City of National City at this time. The City may need to provide for major maintenance in the future, but no major maintenance has been identified or requested by SDERA at this time. ENVIRONMENTAL REVIEW: The Maintenance & Operating Agreement is not considered a project as defined by the California Environmental Quality Act (CEQA), and is therefore not subject to CEQA. ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Approve the resolution. BOARD / COMMISSION RECOMMENDATION: N/A ATTACHMENTS: 1. Background Report 2. Maintenance & Operating Agreement g4O/k,1701, ho. ?DIS'-/} l Attachment No. 1 Background Report As a result of legislation (ABX1 26) signed by Governor Brown in June 2011, all redevelopment agencies throughout California were dissolved as of February 1, 2012 and successor agencies were established to wind down the affairs of the former redevelopment agencies. City of National City accepted the transfer of certain Real Property from the Successor Agency to the Community Development Commission ("CDC") as the National City Redevelopment Agency on May 17, 2016. These properties are to be retained by the City of National City for governmental use and future development. Three historically significant properties were transferred to the City and were retained for government use as historical sites and museums available to the public. They are the National City Railroad Depot ("Railroad), the Frank Kimball House and the Stein Family Farm. The existing leases and agreements were negotiated with the former Community Development Commission. In an attempt to update agreements with all the City -owned historic site operators ("Site Operators") in National City to include adequate insurance provisions and consistent operating standards, new Maintenance and Operating Agreements ("M&O Agreements") for the Site Operators were offered by the City. The Depot is the oldest railroad -related structure in San Diego County and is a nationally registered historic site. The Depot was built in 1882 and was the first rail station in the San Diego region to be integrated into the transcontinental rail system. The depot was designed with an Italianate style of architecture and lies within its original location. In 1995 the CDC acquired the Depot so it could remain a historic site under public ownership. The CDC made numerous improvements to restore the Depot to the original design. The Depot is currently being maintained and operated by the San Diego Electric Railway Association, Inc. (SDERA), which is a non-profit corporation dedicated to preserving the historic streetcar systems in the County. The Depot acts as both a museum, highlighting the historic role of the railroad system in developing San Diego, as well as a community gathering center. The current lease with the San Diego Electric Railway Association expires in 2023. This new M&O Agreement will: • Renegotiate terms to a 5 year lease with three additional 5 year options. • Require a detailed accounting of activities. • Allow the Depot to serve alcohol at their onsite fundraisers. • Allow the Depot to rent to third parties to use the Depot for events as a way to raise funds and continue to rent part of the facility to offset operating expenses. • Further define repair and maintenance obligations. Staff recommends entering into the M&O Agreement with the Depot. Attachment No. 2 CALIFORNIA. • N TW�NA�jL;1 RNI 'NooR,POtATED MAINTENANCE AND OPERATING AGREEMENT by and between CITY OF NATIONAL CITY and SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, INC. Dated as of September 12, 2018 Attachment No. 2 SECTION HEADING Recitals ARTICLE 1 ARTICLE 2 ARTICLE 3 ARTICLE 4 ARTICLE 5 ARTICLE 6 ARTICLE 7 ARTICLE 8 ARTICLE 9 ARTICLE 10 ARTICLE 11 ARTICLE 12 ARTICLE 13 ARTICLE 14 ARTICLE 15 ARTICLE 16 ARTICLE 17 ARTICLE 18 ARTICLE 19 ARTICLE 20 ARTICLE 21 ARTICLE 22 TABLE OF CONTENTS PAGE Terms of Agreement The Property Permitted Uses Utilities Repairs and Maintenance Improvements; Alterations Mechanics' Liens; Stop Notices Taxes Indemnifications and Insurance Termination Hazardous Materials Assignment Defaults by SDERA or by City; Remedies Abandonment Damage or Destruction Eminent Domain Sale or Mortgage by City City's Right of Access Notices Non -Discrimination Records, Accounts, and Audits Administrative Provisions Attachment No. 2 MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND SAN DIEGO ELECTRIC RAILWAY ASSOCIATION This Maintenance and Operating Agreement (the "Agreement") is entered into as of September 12, 2018, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, a California non-profit corporation ("SDERA"). RECITALS A. WHEREAS, the CITY owns the improved real property commonly known as the National City Depot, located at 922 West 23rd Street, National City, California (the "Property"). The improvements on the Property are sometimes referred to as the "Railroad Depot" building. A legal description of the Property is attached hereto as Exhibit "A" and incorporated herein by reference. B. WHEREAS Article 11, Section 7 of the California Constitution empowers the CITY to provide for the health and welfare of its residents. C. WHEREAS, the CITY desires to enter into a Maintenance & Operating Agreement due to the special services to be performed under this Agreement for the City and to facilitate a more collaborative relationship between the CITY and the operator of the Premises. D. WHEREAS, one of the goals of the CITY's General Plan is to develop educational experiences capable of promoting the cultural heritage of the city and lifting the spirits of residents and visitors to National City. E. WHEREAS, the CITY desires the services of an organization to maintain and operate the Property in a manner beneficial to the public. F. WHEREAS, the CITY has further determined that SDERA is skilled in providing educational experiences capable of lifting the spirits of residents and visitors to National City. G. WHEREAS, the CITY wishes to have SDERA maintain and operate the Property, for the community's benefit, as an educational rail museum that highlights the historic role railroad activities played in the development of the CITY and region.. SDERA is willing to operate and maintain the Property for such a purpose. NOW, THEREFORE, in consideration of the foregoing facts, and in consideration of the promises and covenants hereinafter set forth, the parties agree as follows: Maintenance & Operating Agreement Page 3 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 ARTICLE 1 TERM OF AGREEMENT 1.1 Term. The term of this Agreement shall be five (5) years, commencing November!, 2018 (the "Commencement Date") and expiring on October 31, 2023. 1.2 Option to Extend Term. If SDERA is not in default of any provision of this Agreement upon the expiration of the term described in Article 1.1, the City Manager or designee may extend the term for up to three (3) five-year periods. The five year term, and any extension pursuant to this Article 1.2, shall collectively be referred to hereafter as the "Term." ARTICLE 2 THE PROPERTY 2.1 License for Use of Property. The CITY grants SDERA a revocable license to enter and operate the Property for the purpose of operating a public educational rail museum that benefits the residents and visitors of National City. SDERA's revocable license is subject to the covenants and requirements of this Agreement as of the Commencement Date. 2.2 Ownership of Personal Property and Improvements. The rights and obligations of the parties regarding the ownership of personal property and improvements on the Property shall be as follows: 2.2.1 Ownership of Personal Property. All improvements existing on the Property (Improvements), together with all fixtures permanently attached to the Property (Fixtures), as of the Commencement Date shall remain the property of the CITY during the Term. SDERA shall not remove any Improvements or Fixtures from the Property and shall also not waste, destroy, or modify any Improvements or Fixtures on the Property, except as permitted by this Agreement. 2.2.2 Ownership of Improvements. All improvements made to the property by SDERA shall become the property of the CITY. ARTICLE 3 PERMITTED USE 3.1 Purpose. The parties intend that the operation of the Premises by SDERA will provide (a) an opportunity for the community to learn about the historic role railroad activities played in the development of the city and region, and (2) educational experiences for the children of National City. Maintenance & Operating Agreement Page 4 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 3.2 Operations Plan. SDERA must submit a written operations plan to the CITY that addresses all aspects of maintaining and operating the Property. This written operations plan must include, but will not be limited to, descriptions of the following: 1) Hours of operation; 2) Proposed activities or facilities available to the public; 3) The number of employees, volunteers or long term caretakers on staff; 4) Visitor safety and property security; 5) Capital improvements; 6) Property, building, equipment, and preservation of grounds; 7) Sources of funding, fundraising plan; 8) Expected expenses; 9) Community outreach; 10) Parking; 11) Lighting; 12) Handicap accommodations; 13) Facility rentals to third parties; 14) Goals for the next year and next three years thereafter. 3.3 Hours of Operation. SDERA shall open the Property to the general public Saturday and Sunday except holidays from 10 a.m. to 4 p.m. and also for public special events scheduled in advance of the event. SDERA shall post, in a location visible from West 23rd Street, the Property's hours of operation. 3.4 Service Fees. SDERA shall not provide any programs and services for profit. However, SDERA may charge user fees for classes and programs offered to school groups and the community to offset costs incurred by SDERA in its maintenance and operation of the Property. Any fees charged under this Article 3.4 must be approved by the City Manager or designee. The public shall pay no fee to gain access to the Property during those hours of operation listed in this Article 3. 3.5 Reporting by SDERA. SDERA shall provide annual reports to the CITY that provide Statistical Information (defined below) for the immediately preceding year. Each annual report shall contain, at a minimum, the total number of: (a) National City residents who participated in SDERA's Projects; (b) participants and volunteers who participated in SDERA's Projects; (c) events and programs coordinated; (d) and capital projects completed. The annual reports shall also include reports on SDERA's operating and maintenance plans, long-term and short-term goals, and any other pertinent statistics. The information required to appear in the annual reports by this Article 3.5 will be referred to as "Statistical Information." Each annual report will include the previous years' worth of Statistical Information, if any. SDERA will deliver the annual report to the CITY at a mutually agreeable date and time. 3.6 Annual Budget. SDERA shall provide the CITY with a proposed budget for SDERA's estimated maintenance and operating expenses for the Property by July 1st of each year during the Term. SDERA shall provide to the CITY an audited financial report and tax return, forty-five (45) days following June 30th of each year during the Term. Maintenance & Operating Agreement Page 5 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 3.7 Volunteer Management. SDERA may utilize volunteers to operate the Property, and in providing the Projects required by this Agreement. SDERA is responsible for recruiting, training, and managing all volunteers on the Property. Volunteers are considered the responsibility of SDERA for the purpose of workers compensation or general liability. 3.8 Alcohol Use. SDERA, or third parties with permission from SDERA, may, hold events on the Property where alcoholic beverages are served. Alcoholic beverages shall be served subject to the following requirements: • Alcohol will not be served during youth programming under any circumstances. • Alcohol may be served in designated areas of the Property, designated by SDERA in advance, and approved by the City Manager or designee. • Alcoholic beverages must be served by a licensed bartender, with a copy of the bartender's license on the Property. • The event host must obtain approval from the state Department of Alcoholic Beverage Control to serve alcohol. • The event host is responsible for all guest behavior during and following the service of alcohol. • "Last call" for service of alcohol shall be at least thirty (30) minutes prior to the scheduled end of the event. When third parties (with permission from SDERA) serve alcoholic beverages, the following additional requirements shall apply: • The third party shall provide the CITY proof of liability insurance acceptable to the City's Risk Manager. • The third party shall provide two licensed security guard for every 100 guests registered to attend the event. • SDERA shall reserve the authority to immediately terminate an event if SDERA determines, in its sole discretion, the third party has not complied with any requirement of this Article 3.8. • SDERA shall provide the CITY a copy of their third party rental agreement template for approval. 3.9 Consideration. SDERA's payment of $1.00 to the City, in addition to its' performance under the remainder of this Agreement, shall serve as the sole consideration due the CITY for SDERA's license to use and operate the Premises. 3.10 Compliance with Laws. SDERA, at its sole expense, shall procure, maintain, and hold available for the CITY's inspection any governmental license or permit required for the proper and lawful conduct of SDERA's operation of the Property. SDERA shall not use the Property for any use or purpose in violation of the laws of the United States of America, or the laws, ordinances, regulations, orders, or requirements of the State of Maintenance & Operating Agreement Page 6 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 California, the County of San Diego, the CITY, or of other lawful authorities. SDERA shall, at its sole expense, comply with all applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the Term (Laws or Orders), regulating the use by SDERA of the Property. 3.10.1 TUP Requirements. Any programs, activities, or events that are not provided for in this Agreement may, in the CITY's sole discretion, require a Temporary Use Permit (TUP) or other permit as required by the CITY. 3.10.2 Cannabis Cultivation Prohibited. Notwithstanding any other provision in this Agreement, or in this Article 3.10, SDERA shall neither: (a) cultivate; (b) allow the cultivation of; (3) sell; nor (4) allow the sale of cannabis at the Property. ARTICLE 4 UTILITIES 4.1 Utility Services. The CITY shall be responsible for maintaining reasonable utility services to the Property. SDERA shall provide and pay for all utilities or services necessary for its use and operation of the Property during the Term, including water, electricity, trash, and sewer charges. SDERA shall pay directly to the applicable utility company such charges, and the City shall have no obligation to pay for such utility services. ARTICLE 5 REPAIRS; MAIN"PENANCE 5.1 SDERA's Repair and Maintenance Obligations. SDERA acknowledges that it has made a thorough visible inspection of the Property and that it accepts the Property "as -is" as of the Commencement Date. At SDERA's own cost and expense, SDERA shall repair, replace, and maintain the Property in good, tenable condition as necessary. SDERA shall not be obligated to repair or replace damage to the Property caused by ordinary wear and tear. SDERA shall maintain the Property in an accessible manner for use by individuals with disabilities and comply with federal and state law regarding accessibility, including but not limited to the Americans with Disabilities Act and California's Disabled Persons Act. Other than repair work in emergency situations not exceeding Three Thousand and no/100 Dollars ($3,000), SDERA shall not perform any repair work without the CITY's prior written consent. As used in this Article 5.1, "emergency" means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. All emergency repairs performed by the City on the Property are governed by Public Contract Code Section 22050. SDERA's obligations under this Article shall apply regardless of whether the repairs, restorations, and replacements are ordinary or extraordinary, foreseeable or unforeseeable, capital or noncapital, the fault or not the fault of SDERA, its agents, employees, volunteers, invitees, visitors, or Maintenance & Operating Agreement Page 7 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 contractors. All replacements made by the SDERA shall be of like size, kind, and quality to the items replaced. 5.2 CITY Repair and Maintenance Obligations. For any repair and maintenance work exceeding Three Thousand and no/100 Dollars ($3,000), the CITY will consider the nature and priority of the work and available funding to determine if and when such repairs will be completed. 5.3 CITY Right to Inspect; CITY Not Obligated to Repair or Maintain. SDERA shall permit the CITY to enter the Property at all times during usual hours of operation to inspect the Property. Any entry pursuant to this Article 5.3 shall not unreasonably interfere with SDERA's operation of the Property. However, nothing contained in this Article 5 shall create any duty on the part of the CITY to do any work which, under any provision of this Agreement, SDERA may be required to do. ARTICLE 6 IMPROVEMENTS; ALTERATIONS 6.1 Alterations. SDERA may alter, replace, add to, change, or construct additional improvements to the Property (collectively, "Alterations") as SDERA may find necessary or convenient for its operation of the Property. Any Alterations performed by SDERA under this Article 6.1 shall be performed: (a) at SDERA's sole cost and expense; (b) with the CITY's prior written consent; and (c) in accordance with construction plans submitted to and approved by the CITY. 6.2 Construction Permits and Licenses. At all times during the Term, SDERA shall procure, at its sole cost and expense, all permits and licenses that are necessary or required from any local governmental agency for the proposed construction of any Alterations. The CITY may, in its sole discretion, waive CITY permitting fees where applicable. 6.3 Proposed Plans. In its sole discretion, the CITY may require SDERA to do any of the following: • Submit a complete set of proposed plans of any Alterations to the CITY; • Apply for and receive a permit from the Building Department to complete any Alterations; • Within sixty (60) days of a written request, furnish the CITY with a complete set of "as -built" plans for any CITY -approved Alterations. 6.4 Prevailing Wages. SDERA shall comply with prevailing wage statutes for any work not performed by volunteers. ARTICLE 7 MECHANICS' LIENS; STOP NOTICES Maintenance & Operating Agreement Page 8 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 7.1 Mechanics' Liens; Stop Notices. SDERA shall pay, or cause to be paid, the total cost and expense of all works of improvement, as that phrase is defined in the Mechanics Lien Law in effect at time and place of construction, done by it, or caused to be done by it, on the Property, and for all materials furnished for or in connection with any such work. If any lien or stop notice is filed against the Property, SDERA shall cause the lien or stop notice to be discharged of record within one hundred eighty (180) days after it is filed. SDERA shall indemnify, defend, and hold the CITY harmless from any and all liability, loss, damage, costs, attorneys' fees, and all other expenses on account of claims of lien of laborers, materialmen, or others for work performed, or materials or supplies furnished for SDERA or persons claiming under SDERA. 7.2 Notice of Lien or Stop Notice. Should any claim of lien or stop notice related to SDERA's work of improvement of the Property be filed against the Property, or any action be filed against the Property, or any action affecting the title to the Property be commenced, the party receiving notice of such lien or stop notice or action shall immediately give the other party written notice thereof. 7.3 Notice of Non -Responsibility. The CITY or its representatives shall have the right to post and keep posted on the Property notices of non -responsibility or such other notices which the CITY may deem to be proper for the protection of the CITY's interest in the Property. SDERA shall, before the commencement of any work which might result in any such lien or stop notice, give to the CITY written notice of its intention to do so with sufficient time to enable posting of such notices. ARTICLE 8 TAXES 8.1 Definition. "Taxes" shall mean all taxes, governmental bonds, special assessments, charges, or transfer taxes, license and transaction fees, including, but not limited to, (a) any state, local, federal income tax, or any real or personal property tax, (b) increases in taxes attributable to SDERA's operation of the Property, or (c) any taxes which are essentially payments to a governmental agency, other than the CITY, for the right to make improvements to the Property. 8.2 Possessory Interest. Notwithstanding Article 2.1, SDERA acknowledges that this Agreement may create a possessory interest subject to property taxation and that SDERA may be subject to the payment of taxes levied on such interest. SDERA shall pay, before delinquency, all taxes, assessments, and fees assessed or levied upon the Property. 8.3 Responsibility for Payment of Taxes. The CITY shall not be obligated to pay any Taxes accruing against any interest in SDERA's use of the Property at any time before or during the Term. SDERA shall pay any Taxes that accrue against any interest in SDERA's use of the Property. Additionally, SDERA shall pay any Taxes levied upon any Improvements, Fixtures, or Personal Property located on the Property to the extent such Maintenance & Operating Agreement Page 9 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 Taxes result from SDERA' s operations or other activities held upon, or in connection with, the Property. ARTICLE 9 INDEMNIFICATION AND INSURANCE 9.1 SDERA Indemnity. The CITY shall not be liable for, and SDERA shall defend, indemnify, and hold harmless the CITY, its officers, officials, agents, employees, and volunteers from any and all claims, costs, liability, loss, damages to property, injuries to, or death of any person or persons, and all claims, demands, suits, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature, including workers' compensation claims resulting from, related to, or arising out of SDERA's improvement, operation or use of the Property, or arising either directly or indirectly from any act, error, omission, or negligence of SDERA or its contractors, licensees, invitees, members, agents, servants or employees; provided, however, that this indemnification and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers, officials, employees, or volunteers. CITY will cooperate reasonably in the defense of any action, and SDERA shall employ competent counsel, reasonably acceptable to the CITY'S City Attorney. The indemnity, defense, and hold harmless obligations contained herein shall survive the termination of this Agreement for any alleged or actual omission, act, or negligence under this Agreement that occurred during the term of this Agreement. 9.1.1 Third Party Indemnity. SDERA shall not invite third party organizations onto the Property until said third party organization furnishes CITY a written agreement in which it indemnifies and holds CITY harmless, upon terms satisfactory to CITY. 9.1.2 Waivers from Third Party Entities. SDERA agrees to obtain from all third party organizations whose participants operate on the Property, a waiver of liability and hold harmless agreement upon terms satisfactory to the CITY. 9.2 Insurance. SDERA, at its sole cost and expense, shall purchase and maintain, and shall require its subcontractors, and third party organizations SDERA invites onto the Property, to purchase and maintain throughout the term of this Agreement, the following insurance policies: 9.2.1 Commercial General Liability Insurance (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with minimum limits of $2,000,000 per occurrence and $4,000,000 aggregate, covering all bodily injury and property damage arising out of its operations under this Agreement. The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location." The Commercial General Maintenance & Operating Agreement Page 10 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 Liability required by this Article must include Sexual Misconduct Liability coverage. 9.2.2 Automobile Insurance SDERA does not own any vehicles. Any individual members of SDERA who drive their personal vehicles in connection with SDERA events or activities will maintain valid automobile insurance coverage that satisfies minimum insurance requirements under California law 9.2.3 Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of SDERA's employees, and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the CITY. Said endorsement shall be provided prior to commencement of work under this Agreement. 9.2,4 Property Insurance against all risks of loss to any improvements or betterments made by SDERA, or any third party with permission from SDERA, at full replacement cost with no coinsurance penalty provision. 9.2.5 The aforesaid policies shall constitute primary insurance, at least as broad as ISO CG 20 01 04 13, as to the CITY, its officers, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY's Risk Manager, at the address listed in Article 9.2.7 below, of cancellation or material change. 9.2.6 If required insurance coverage is provided on a "claims made" rather than "occurrence" form, SDERA shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. 9.2.7 The Certificate Holder for all policies of insurance required by this Article 9.2 shall be: City of National City do Risk Manager 1243 National City Boulevard National City, CA 91950-4397 9.2.8 Insurance shall be written with only insurers authorized to conduct business in California that hold a current policy holder's alphabetic and financial size category rating of not less than A VIII according to the current Best's Key Rating Guide, or a company of equal financial stability that is approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. Maintenance & Operating Agreement Page 11 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 9.2.9 This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, are filed with and approved by the CITY'S Risk Manager. If SDERA does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. 9.2.10 All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by the CITY. CITY reserves the right to modify the insurance requirements of this Article 9.2, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 9.2.11 If SDERA maintains broader coverage or higher limits (or both) than the minimum limits shown above, the CITY requires and shall be entitled to the broader coverage or higher limits (or both) maintained by SDERA. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. ARTICLE 10 TERMINATION 10.1 This Agreement may be terminated with or without cause by the CITY. Termination without cause shall be effective only upon 60-day's written notice to SDERA. During said 60-day period, SDERA shall perform all services in accordance with this Agreement. This Agreement may also be terminated immediately by the CITY for cause in the event of a material breach of this Agreement, misrepresentation by SDERA in connection with the formation of this Agreement or the performance of services, or the failure to perform services as directed by the CITY. Termination with or without cause shall be effected by delivery of written Notice of Termination to SDERA as provided for herein. The CITY further reserves the right to immediately terminate this Agreement upon: (a) the filing of a petition in bankruptcy affecting SDERA; (b) a reorganization of SDERA for the benefit of creditors; or (c) a business reorganization, change in business name or change in business status of SDERA. ARTICLE 11 HAZARDOUS MATERIALS 11.1 Hazardous Materials Laws -Definition. As used in this Article, the term "Hazardous Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees, orders, regulations or court decisions (including the so-called "common law") relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under, or about the Property, soil and ground water conditions, or other similar substances or conditions. The following legal Maintenance & Operating Agreement Page 12 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 authority is a non -exhaustive list of the legal authority that applies to the definition of the term "Hazardous Materials Laws": • the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C., Section 9601 et seq.) • the Hazardous Materials Transportation Act, as amended (49 U.S.C., Section 1801 et seq.), and • the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C., Section 6901 et seq.) 11.2 Hazardous Materials - Definition. As used in this Article the term "Hazardous Materials" means any chemical, compound, material, substance or other matter that: 11.2.1 is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine, bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material, whether injurious or potentially injurious by itself or in combination with other materials; 11.2.2 is controlled, referred to, designated in or governed by any Hazardous Materials Laws; 11.2.3 gives rise to any reporting, notice or publication requirements under any Hazardous Materials Laws, or; 11.2.4 is any other material or substance giving rise to any liability, responsibility or duty upon the CITY or the SDERA with respect to any third person under any Hazardous Materials Law. 11.3 SDERA Representations and Warranties. Consistent with the visible inspection referenced in Article 5 above, SDERA shall not be liable for any improvements or modifications to the Property that occurred before SDERA took possession of the Property. A search of building permits and hazardous control maps does not indicate that SDERA imported any Hazardous Materials to the Property. SDERA represents and warrants that, during the Term or any extension thereof, SDERA shall comply with the following provisions of this Article unless otherwise specifically approved in writing by the CITY, subject to the terms and conditions of the SDERA's maintenance obligations provided elsewhere in this Agreement: 11.3.1 SDERA shall not cause or permit any Hazardous Materials to be brought, kept or used in or about the Property by SDERA, its agents, employees, assigns, contractors or invitees, except as required by SDERA's permitted use of the Property in the normal course of operations; Maintenance & Operating Agreement Page 13 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 11.3.2 Any handling, transportation, storage, treatment, or usage by SDERA of Hazardous Materials that is to occur on the Property following the Commencement Date shall be in compliance with all applicable Hazardous Materials Laws; 11.3.3 Any leaks, spills, release, discharge, emission or disposal of Hazardous Materials which may occur on the Property following the Commencement Date shall be promptly and thoroughly cleaned and removed from the Property by SDERA at its sole expense, and any such discharge shall be promptly reported in writing to the CITY, and to any other appropriate governmental regulatory authorities; 11.3.4 No friable asbestos shall be constructed, placed on, deposited, stored, disposed of, or located by SDERA on the Property; 11.3.5 No underground improvements, including but not limited to treatment or storage tanks, or water, gas or oil wells shall be located by SDERA on the Property without the CITY's prior written consent; 11.3.6 SDERA shall promptly supply the CITY with copies of all notices, reports, correspondence, and submissions made by SDERA to the United States Environmental Protection Agency, the United Occupational Safety and Health Administration, and any other local, state or federal authority which requires submission of any information concerning environmental matters or hazardous wastes or substances pursuant to applicable Hazardous Materials' Laws; and 11.3.7 SDERA shall promptly notify the CITY of any liens threatened or attached against the Property pursuant to any Hazardous Materials' Law. If such a lien is filed against the Property, then, within the earlier of (i) twenty (20) days following such filing, or (ii) before any governmental authority commences proceedings to sell the Property pursuant to the lien, SDERA shall either: (a) pay the claim and remove the lien from the Property, or (b) furnish either: (1) a bond or cash deposit reasonably satisfactory to the CITY in an amount not less than the claim from which the lien arises, or; (2) other security satisfactory to the CITY in an amount not less than that which is sufficient to discharge the claim from which the lien arises. 11.3.8 At the end of this Agreement, SDERA shall surrender the Property to the CITY free of any and all Hazardous Materials, that were imported to the Property after Maintenance & Operating Agreement Page 14 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 SDERA took possession of the Property, and in compliance with all Hazardous Materials' Laws affecting the Property. ARTICLE 12 ASSIGNMENT; THIRD PARTY USE OF PROPERTY 12.1 Assignment; CITY's Consent Required. SDERA shall not voluntarily or involuntarily assign or otherwise transfer all or any portion of its rights and duties under this Agreement without the CITY's prior written consent. Any attempted assignment or transfer without the CITY's prior written consent shall be void. 12.2 Third Party Use of the Property. SDERA may engage third party organizations to provide special services or programming at the Property if: 12.2.1 The City Manager consents, in writing, to the third party organizations' proposed use of the Property; 12.2.2 The third party organization obtains policies of insurance acceptable to the City's Risk Manager and Article 9.2 of this Agreement; and 12.2.3 SDERA shall forward to the City Manager, or designee, any proposed agreements between SDERA and other third party organizations that wish to operate or conduct business on the Property ("Third Party Agreement"). No third party may operate or conduct business on the property until the City Manager, or designee, approves the Third Party Agreement. The City Manager, or designee, will determine whether the Third Party Agreement is compatible with the overall nature of the Property and the educational rail museum. ARTICLE 13 DEFAULTS BY SDERA OR BY CITY; REMEDIES 13.1 Events of Default; Remedies. The following sub -articles shall apply if either SDERA or the CITY neglects, fails to perform, or fails to observe any of their respective obligations under the terms, covenants, or conditions contained in this Agreement ("Default"): 13.1.1 Thirty -Day Correction of Default. If either SDERA or the CITY determines that the other party is in Default, then the non -defaulting party must provide the defaulting party written notice of the Default and thirty (30) days to correct the Default. 13.1.2 Extended Correction of Default. If the defaulting party determines that more than thirty (30) days is required to correct the Default, the defaulting party must provide the other party written notice of the reasons why additional time is required to correct such Default. The defaulting party must use diligent efforts to correct a Default under this Article 13.1.2 and, in any case, must correct such Default within ninety (90) days from the date of the written notice of default. Maintenance & Operating Agreement Page 15 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 13.1.3 Remedies for Failure to Correct Default. If the defaulting party fails to comply with Article 13.1.1. or 13.1.2, then the non -defaulting party may immediately terminate this Agreement. The defaulting party shall be liable to the non -defaulting party for any and all damages sustained by the non -defaulting party as a result of the defaulting parties' breach. ARTICLE 14 ABANDONMENT 14.1 Abandonment. SDERA shall not vacate or abandon the Property at any time during the Term nor permit the Property to remain unoccupied for a period of longer than five (5) consecutive days during the term of this Agreement. These provisions shall not apply if the Property is closed and operation is temporarily discontinued therein on account of strikes, lockouts, acts of nature, or similar causes beyond the reasonable control of SDERA. Any exceptions must be submitted in writing to the City Manager or designee for approval. ARTICLE 15 DAMAGE OR DESTRUCTION 15.1 SDERA's Duty to Repair Casualty. SDERA shall, as expeditiously as reasonably possible, repair any damages to the Property caused by fire, earthquake, or any other identifiable event of a sudden, unexpected, or unusual nature ("Casualty"), and repair, restore, and replace any such damaged or destroyed Fixtures, Improvements or Personal Property ("Casualty Repairs"). Any Casualty Repairs made under this Article 15 are: (a) To be performed at SDERA's sole cost and expense; (b) To be performed except as otherwise provided in this Article 15; and are (c) Subject to all other terms and conditions of this Agreement. 15.2 Construction Provisions. In the event of any reconstruction of the Property, Fixtures or Improvements required of SDERA pursuant to this Article, SDERA shall repair the Property, and repair or rebuild such Fixtures and Improvements, to substantially the same condition they were in immediately preceding such Casualty. 15.3 No Abatement. In the event of reconstruction, replacement, or repair by SDERA pursuant to this Article, SDERA shall continue its operations on the Property during any such period to the extent reasonably practicable from the standpoint of prudent business management, and in continuing compliance with applicable laws and regulations. SDERA shall not be entitled to any compensation or damages from CITY for: (a) loss of use of the whole or any part of the Property; (b) SDERA's Personal Property; or (c) any inconvenience or annoyance occasioned by such damage, reconstruction, or replacement. 15.4 Major Destruction. Notwithstanding any of the foregoing provisions of this Article to the contrary, if, at any time after the Commencement Date, (a) the Improvements are Maintenance & Operating Agreement Page 16 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 damaged or destroyed to the extent of more than twenty-five percent (25%) of their replacement cost, or (b) the damage is such that the Improvements cannot be repaired and restored within one hundred and eighty (180) days after the Casualty, then SDERA shall have the right to terminate this Agreement upon thirty (30) days' prior written notice to the CITY. ARTICLE 16 EMINENT DOMAIN 16.1 Condemnation. SDERA may terminate this Agreement within twenty (20) days after the date that a condemning authority (by a party other than the CITY) takes possession of the Property by delivery of written notice of such condemnation if: (a) If all of the Property is taken under eminent domain proceedings; or (b) less than all of the Property is taken under such eminent domain proceeding and the part taken substantially impairs the ability of SDERA to use the remainder of the Property for the purposes permitted by this Agreement. In the absence of such written notice from a condemning authority, SDERA may terminate this Agreement within twenty (20) days after the condemning authority shall have taken possession. 16.2 Continuation of Operating Agreement after Condemnation. If this Agreement is not terminated by SDERA, it shall remain in full force and effect as to any portion of the Property remaining, and this Agreement will end as of the date possession of the part taken by the public entity as to the part of the Property that is taken. 16.3 Award. All monies awarded in any condemnation shall belong to the CITY. The CITY shall have no liability to SDERA for any award not provided by the condemning authority. ARTICLE 17 SALE OR MORTGAGE BY CITY 17.1 Sale or Mortgage. The CITY may, pursuant to existing and subsequently enacted CITY ordinances and State laws, at any time, and without the consent of SDERA, vacate, sell, purchase, exchange, transfer, assign, lease, encumber or convey the CITY's interest in whole or in part, in the Property (collectively referred to in this Article as a "Sale"). The CITY shall provide to SDERA written notice of the CITY's intent to a Sale or discontinuance pursuant to this Article at least ninety (90) days prior to said proposed transfer. 17.2 Release on Sale. From and after a Sale or discontinuance of the CITY's entire interest in the Property, the CITY shall be released from all liability to SDERA and SDERA Maintenance & Operating Agreement Page 17 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 successors and assigns arising from this Agreement because of any act, occurrence, or omission of the CITY occurring after such Sale. ARTICLE 18 CITY'S RIGHT OF ACCESS 18.1 Right of Entry. CITY, its agents, employees, and contractors may enter the Property at any time with or without notice to SDERA to: (a) respond to health and safety concerns; (b) inspect the Property and Improvements; (c) determine whether SDERA is complying with its obligations in this Agreement (including its obligations with respect to compliance with Hazardous Materials Laws) (d) post notices of non -responsibility or similar notices (el inspect the progress of construction of any improvement; or (f) make repairs that this Agreement requires or allows CITY to make, or make repairs to any adjoining space or utility services, or make repairs, alterations, or improvements to any other portion of the Property All work enumerated in this Article 18.1 must be done as promptly as reasonably possible and so as to cause as little interference to SDERA as reasonably possible. ARTICLE 19 NOTICES 19.1 Notices. Whenever in this Agreement it shall be required or permitted that notice or demand be given or served by either party to this Agreement to or on the other, such notice or demand shall be in writing, mailed or personally delivered to the other party at the addresses specified below. Mailed notices shall be sent by United States Postal Service, postage prepaid and shall be deemed to have been given, delivered, and received three (3) business days after the date such notice or other communication is posted by the United States Postal Service. All other such notices or other communications shall be deemed given, delivered, and received upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at any time designate a different address to which notices shall be sent. CITY: CITY OF NATIONAL CITY City Manager City of National City 1243 National City Boulevard National City, CA 91950-4397 With a copy to: Housing and Economic Development Manager City of National City Maintenance & Operating Agreement Page 18 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 SDERA: 140 East 12th Street, Suite B National City, CA 91950 San Diego Electric Railway Association, Inc. Executive Director 922 West 23rd Street National City, CA 91950 ARTICLE 20 NON-DISCRIMINATION 20.1 Non -Discrimination. SDERA hereby covenants by and for itself, its successors, assigns and all persons claiming under or through it, that this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against, or segregation of, any person or group of persons on account of race, age, color, creed, religion, sex, sexual orientation, marital status, national origin, physical handicap, medical condition or ancestry in the use, operation, or enjoyment of the Property. ARTICLE 21 RECORDS, ACCOUNTS, AND AUDITS 21.1 SDERA's Duty to Keep Records. SDERA shall, at all times during the Term, and for a period of five (5) years following expiration or earlier termination of this Agreement, keep or cause to be kept, true and complete books, records and accounts of all (a) construction undertaken pursuant to the rights conferred on SDERA under this Agreement, and (b) financial transactions in the operation of all business activities, of whatever nature, conducted pursuant to the rights granted by this Agreement. Such records shall also include the source and disposition of all trash and other waste collected and disposed of by SDERA in the operation of its business. Said records must be supported by source documents such as receipts, invoices, sales slips, cash register tapes, purchase invoices or other pertinent documents. 21.2 CITY's Right to Audit. All SDERA books, accounts, and records shall be kept and made available at one location within the limits of the County of San Diego. The CITY shall have the right at any reasonable time to examine and perform audits of SDERA's records pertaining to (a) construction undertaken pursuant to the rights conferred on SDERA under this Agreement, and (b) its operations on the Property, including, without limitation, any records pertaining to SDERA's use of utilities on the Property. The cost of said audits shall be borne by the CITY, except that SDERA shall provide to the CITY, at SDERA's expense, necessary data to enable the CITY to fully comply with each and every requirement of the State of California or by the United States of America for information or reports relating to this Agreement and to SDERA's use of the Property. ARTICLE 22 ADMINISTRATIVE PROVISIONS Maintenance & Operating Agreement Page 19 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 22.1 Authority. SDERA represents and warrants that it has full power and authority to execute and fully perform its obligations under this Agreement pursuant to its governing instruments, without the need for any further action, and that the person executing this Agreement on behalf of SDERA is the duly designated agent of SDERA and is authorized to do so. 22.2 Captions. The captions and headings appearing in this Operating Agreement are inserted for convenience only and in no way define, limit, construe, or describe the scope or intent of the provisions of this Agreement. 22.3 CITY Approval. Except where stated in this Agreement to the contrary, the phrases "CITY approval," and "CITY's written approval" or such similar phrases shall mean approval of the City Manager or designee, which approval shall not be unreasonably withheld. 22.4 Cumulative Remedies. In the event of a default under this Agreement, each party's remedies shall be limited to those remedies set forth in this Agreement. Any such remedies are cumulative and not exclusive of any other remedies under this Agreement to which the non -defaulting party may be entitled. 22.5 Entire Agreement. This Agreement, together with all addenda and exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all prior or contemporaneous agreements, understandings and representations, oral or written, are superseded. 22.6 Exhibits. All exhibits referred to herein are attached hereto and incorporated by reference: Exhibit "A": Legal description of the Property 22.7 Force Majeure. If either party is prevented or delayed from performing any act or discharging any obligation hereunder, because of any and all causes beyond either party's reasonable control, including unusual delays in deliveries, abnormally adverse weather conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or equipment, acts of God, governmental restrictions, regulations or controls, any hostile government actions, acts of terrorism, civil commotion and fire or other casualty, legal actions attacking the validity of this Agreement or the CITY or SDERA's operations of the Property, or any other casualties beyond the reasonable control of either party ("Force Majeure"), performance of such act shall be excused for the period of such delay, and the period for performance of such act shall be extended for a period equivalent to the period of such delay. Force Majeure shall not include any bankruptcy, insolvency, or other financial inability on the part of either party hereto. 22.8 Governing Law. This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of California. Maintenance & Operating Agreement Page 20 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 22.9 Independent Contractor. SDERA acknowledges that it is an independent contractor; that it alone retains control of the manner of conducting its activities in furtherance of this Agreement; and that it, as well as any persons, contractors or agents it may employ, are not employees of CITY for any purpose. 22.10 Interpretation. The provisions of this Agreement shall be liberally construed to effectuate its purpose. The language of all parts of this Agreement shall be construed simply according to its plain meaning and shall not be construed for or against either party. 22.11 SDERA's Agreement Administration. SDERA confirms that SDERA's Agreement Administrator has been given full operational responsibility for compliance with the terms of this Agreement. SDERA shall provide the CITY with a written schedule of its normal hours of business operation on the Property, and SDERA's Agreement Administrator, or a representative designated thereby, shall be available to the CITY during SDERA's normal business hours, to resolve problems or answer question pertaining to this Agreement and SDERA's operations on the Property. 22.12 Modification. The provisions of this Agreement may not be modified, except by a written amendment signed by both parties. 22.13 Partial Invalidity. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law. 22.14 Successors & Assigns. This Agreement shall be binding on and inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided herein. SDERA shall not assign this agreement to any other party unless approved in writing by the CITY. 22.15 Time of Essence. Time is of the essence of each and every provision of this. Agreement. 22.16 Waiver. No provision of this Operating Agreement or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed. Maintenance & Operating Agreement Page 21 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) Attachment No. 2 IN WITNESS WHEREOF, the CITY and SDERA have duly executed this Agreement as of the day and year first above written. CITY OF NATIONAL CITY (CITY) By: Ron Morrison, Mayor APPROVED AS TO FORM: Angil P. Morris -Jones By: Roberto M. Contreras Deputy City Attorney SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, a California non-profit corporation (SDERA) By: (Name) (Print) (Title) By: ` `\VN e-"-, VI (Name) (-0‘ 6;9 (Print) _( (&124— 61-12j (Title) Maintenance & Operating Agreement Page 22 of 22 City of National City and September, 12, 2018 San Diego Electric Railway Association (SDERA) RESOLUTION NO. 2018 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A MAINTENANCE AND OPERATING AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND THE SAN DIEGO ELECTRIC RAILWAY ASSOCIATION, INC. (SDERA), WITH A TERM OF 5 YEARS AND AN OPTION TO EXTEND THE TERM FOR UP TO THREE ADDITIONAL 5-YEAR PERIODS FOR THE CITY -OWNED LAND AND BUILDING LOCATED AT 922 WEST 23RD STREET IN NATIONAL CITY (NATIONAL CITY DEPOT) WHEREAS, one of the goals of the City's General Plan is to develop educational experiences capable of promoting the cultural heritage of the city for residents and visitors to National City; and WHEREAS, the City of National City ("City") owns the improved real property commonly known as the National City Depot (the "Depot") located at 922 West 23rd Street, National City; and WHEREAS, the City desires the services of an organization to maintain and operate the Depot in a manner beneficial to the public; and WHEREAS, the City has further determined that the San Diego Electric Railway Association, Inc., ("SDERA") is qualified by experience and ability to maintain and operate the Depot for the community's benefit, as an educational rail museum that highlights the historic role railroad activities played in the development of National City and the region, and SDERA is willing to operate and maintain the Depot for such services; and WHEREAS, SDERA and the City desire to enter into a Maintenance and Operating Agreement (the "Agreement") for the property with a term of five (5) years with an option to extend the term for up to two (2) additional five (5) year periods; and WHEREAS, SDERA will pay one dollar ($1) in consideration of the Agreement. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of National City hereby approves and authorizes the Mayor to execute the Maintenance and Operating Agreement by and between the City of National City and the San Diego Electric Railway Association, for a term of 5 years with the option to extend the term for up to three additional 5 year periods for the City -owned land and building located at 922 West 23rd Street in National City. Said Maintenance and Operating Agreement is on file in the office of the City Clerk. [Signature Page to Follow] Resolution No. 2018 — Page Two PASSED and ADOPTED this 2nd day of October, 2018. Ron Morrison, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: Angil P. Morris -Jones City Attorney 9� r.�t. .` q.41 NATEU A, 0 ,. unnnxn qN\,�� CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950-4397 619-336-4228 Michael R. Dalla, CMC - City Clerk SAN DIEGO ELECTRIC RAILWAY NATIONAL CITY DEPOT Maintenance and Operating Agreement Gregory Rose (Housing & Economic Development) forwarded a duplicate original Agreement to San Diego Electric Railway.