08-0205_26755 VERDUGO LLC_D6_Agenda Report2/5/2008
AGENDA REPORT D6
TO: Dave Adams, City Manager
FROM: Douglas Dumhart, Economic Development Manager
SUBJECT: Consideration of Agreement for Shared Use of Electrical Panel Located in
the Multi -Modal Terminal Area between the City and 26755 Verdugo, LLC
(Lot 4 of Tract 50)
RECOMMENDATION:
By motion, approve -the Agreement for shared use of Electrical Panel Located in the
Multi -Modal Terminal Area between the City and 26755 Verdugo, LLC.
SUMMARY:
The City leases a portion of lot 4 of tract 50 for the purpose of maintaining and operating
the Multi -modal parking lot pursuant to the terms set forth in a ground lease dated July
15, 1982 and a related Settlement Agreement dated May 28, 2003. As part of the
improvements to the Multi -modal area the City installed and maintains an electrical
panel (meter number 68987654) on lot 4 for the purpose of energizing irrigation timers
and parking lot lights.
The City has received a request by the owner of the Vaquero West building to share this
electrical panel located near the rear of his building to provide additional power needed
for his tenant Blendz. Blendz can be described as a fruit smoothie type of business
which requires good air conditioning, refrigerator units and power for multiple
commercial grade blenders. The current level of power serving this building is
insufficient to meet the load demands for the Blendz operation and the other suites.
The owner has desires to redevelop his property in the near future and neither he nor
his tenant desire to incur the additional expense to upgrade the electrical service to the
building pending the redevelopment efforts. Utilizing the City's electrical panel which
has additional capacity to service Blendz demand is an inexpensive alternative to
completely upgrading the building's electrical service.
City staff has reviewed the request to share the electrical panel located on the owner's
property and find the request reasonable. An Agreement for the shared use of this
electrical panel has been prepared for the City Council's consideration and is provided
as Attachment 1 to this report.
Agenda Report February 5, 2008
Page 2
COMMISSION/BOARD REVIEW AND RECOMMENDATIONS:
Not Applicable.
FINANCIAL CONSIDERATIONS:
The Agreement for shared use requires 26755 Verdugo, LLC to assume responsibility
for the electrical panel. The meter account will be changed from the City to 26755
Verdugo, LLC. As the party responsible for the oversight of the administration, operation
and maintenance of the electrical panel, Verdugo will indemnify the City for any claims
and/or liability arising from its performance obligations of the shared agreement.
Staff has reviewed the last three years of billings for meter number 68987654. The
annual average monthly billing rate for this period has been $170.00. In its assumption
of the meter account, 26755 Verdugo, LLC has agreed to invoice the city a flat monthly
fee of $170.00 for the life of the shared use agreement. The term of the agreement shall
last until terminated by mutual consent of the parties or with six months notice by either
party.
NOTIFICA"TION:
Eric Altman, 26755 Verdugo, LLC*
* Received copy of Agenda Report.
RECOMMENDATION:
By motion, approve the Agreement for shared use of Electrical Panel Located in the
Multi -Modal Terminal Area between the City and 26755 Verdugo, LLC.
Res ctfully submitted,
aLf AO Z
Douglas D. Dumhart
Economic Development Manager
Attachment 1: Agreement
AGREEMENT FOR SHARED USE OF ELECTRICAL PANEL
LOCATED IN THE MUTLI-MODAL TERMINAL AREA
BETWEEN THE CITY OF SAN JUAN CAPISTRANO AND 26755 VERDUGO, LLC
This AGREEMENT ("Agreement") is entered into this 5 1 day of February, 2008 by and
between THE CITY OF SAN JUAN CAPISTRANO, a California municipal corporation
("SJC) and 26755 VERDUGO LLC, a California Limited Liability Company
("VERDUGO"). SJC and VERDUGO are hereafter together referred to as the "Parties"
and each individually as a "Party".
RECITALS:
Whereas SJC leases a portion of Lot 4 of Tract 50 for the purpose of maintaining
and operating the Multi -Modal Terminal Area (MMTA); and,
Whereas SJC has installed and maintains a certain electrical panel (meter
number 68987654) hereinafter "Electrical Panel" for the purposes of energizing
irrigation timers and parking lot lighting within the NIMTA; and,
Whereas, VERDUGO is the fee owner of Lot 4 and desires to redevelop its
property in the near future but needs additional power for its current tenant operations,
and has approached SJC regarding the use of SJC's Electrical Panel to meet
VERDUGO's power demands until such time as redevelopment on VERDUGO's
property can occur; and,
Whereas, SJC desires to assist VERDUGO to minimize the costs of providing
additional power to 26755 Verdugo Street, by sharing its Electrical Panel located on Lot
4 as depicted on the plot plan provided as Exhibit "A" attached to and incorporated
herein; and,
Whereas, this agreement is only for the purpose of sharing the Electrical Panel,
mutually exclusive of any and all existing Agreements between VERDUGO and SJC.
AGREEMENT:
NOW THEREFORE, in consideration of the mutual covenants and obligations of
the parties herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.OMAINTENCE AND OPERATION OF THE ELECTRICAL PANEL
1.1 Recitals
The recitals set forth above are incorporated herein by this reference.
Page 1 of 5
ATTACHMENT 1
1.2 Shared Cost for Maintenance and Operation
VERDUGO and SJC agree to mutually share the cost of maintenance and
operation of the Electrical Panel. Costs may include, but are not limited to
electricity, routine maintenance, repair, and all other miscellaneous costs
associated with the Electrical Panel and its operation. The Parties have
calculated and agree that SJC's monthly power consumption costs are
$170.00 per month, and agree that SJC shall be liable for only a flat costs of
$170.00 per month or $680.00 per quarter for its electrical usage during the
term of this Agreement. VERDUGO shall be responsible for all electrical
consumption costs in excess of $170.00 per month.
VERDUGO shall be solely responsible for any costs to bring both power and
the capacity to use the power from the Electrical Panel to VERDUGO's
property.
1.3 Meter and Contract Administration
The Meter shall be changed from .SJC to VERDUGO and VERDUGO shall be
responsible for the meter, power charges, and contract administration, to
include preparation of a quarterly billing to SJC for the maintenance and SJC
share of electrical usage of the panel as provided for in Section 1.2 herein.
VERDUGO shall send the billing for the electrical usage to SJC at the
address listed in the notice section below. VERDUGO agrees to provide all
information requested by SJC in order for SJC to determine whether the bills
are accurate and reasonable. SJC shall remit payment within thirty (30) days
of receipt of the bill unless it contests the charges (which charges shall then
become due until the parties mutually settle the same to their mutual
satisfaction).
1.4 Indemnification
As the party responsible for the actual operation and maintenance of the
Electrical Panel, VERDUGO shall be solely responsible for costs of any
claims, liability or related defense costs, including attorney's fees arising out
of its operation and maintenance of the Electrical Panel, and performance of
the Agreement. VERDUGO shall indemnify, hold harmless and defend SJC
and its officers, employees and agents from any claim or liability arising out of
VERDUGO's operation of Electrical Panel or VERDUGO's performance of its
obligations under this agreement. SJC shall only be responsible for any
injuries or damages resulting from its own fault or negligence, and shall not
be held liable for any fault or negligence of VERDUGO in the operation and
maintenance of the Electrical Panel. After consultation with VERDUGO, SJC
shall employ any legal counsel deemed necessary to defend an action arising
out of this agreement.
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This hold harmless agreement shall apply to all liability regardless of whether
any insurance policies are applicable. The policy limits do not act as a
limitation upon the amount of indemnification to be provided by VERDUGO.
1.5 Mutual Cooperation regarding_ Operation of Electrical Panel
In the event that the Electrical Panel malfunctions, VERDUGO shall be
responsible for all repairs to the Electrical Panel that are the result of
VERDUGO's use. Any and. all costs that are related to VERDUGO's use shall
be the sole responsibility of VERDGUO. Any and all costs that are related to
SJC's use shall be the sole responsibility of SJC. Any costs for normal wear
and tear to the Panel shall be split equal between the parties. Furthermore,
VERDUGO agrees that SJC shall have reasonable access to the Electrical
Panel upon reasonable notice to VERDUGO.
1.6Term
This Agreement shall remain in effect until amended or terminated by mutual
consent of the Parties hereto. This agreement may also be terminated by
either party upon one hundred eighty (180) days notice to the other party.
Upon termination, VERDUGO shall be required to place the Electrical Panel
in substantially the same condition as it was prior to VERDUGO's use thereof,
all at VERDUGO's sole cost.
1.7Amendment
This Agreement may be amended by a written instrument executed and
acknowledged by both parties.
1.8VERDUGO's Non -responsibility for SJC Leased Property
Except for the specific rights conferred to, or liabilities imposed upon,
VERDUGO under this Agreement, nothing herein shall be interpreted to
confer upon VERDUGO any property right upon, or liability for, SJC's
leasehold interest identified above.
1.9 Insurance
On or before beginning the operation of the Electrical Panel by VERDUGO
pursuant to this Agreement, VERDUGO, at its own cost and expense, shall
carry, maintain for the duration of the agreement, and provide proof thereof
that is acceptable to SJC, the insurance specified below with insurers and
under forms of insurance satisfactory in all respects to SJC. VERDUGO shall
not allow any contractor to perform any work or maintenance until all
insurance required of VERDUGO has also been obtained for the contractor.
Insurance required herein shall be provided by insurers in good standing with
Page 3 of 5
the State of California having a minimum Best's Guide Rating of A- Class VII
or better.
Comprehensive General Liability. Throughout the term of this Agreement,
VERDUGO shall maintain in full force and effect Comprehensive General
Liability coverage in an amount not less than one million dollars per
occurrence ($1,000,000.00), combined single limit coverage for risks
associated with the operations contemplated by this agreement. If a
Commercial General Liability Insurance form or other form with a general
aggregate limit is used, either the general aggregate limit shall apply
separately to the work to be performed under this agreement or the general
aggregate limit shall be at least twice the required occurrence limit.
Worker's Compensation. If VERDUGO intends to employ employees to
perform operations under this Agreement, VERDUGO shall obtain and
maintain, during the term of this Agreement, Worker's Compensation
Employer's Liability Insurance in the statutory amount as required by state
law.
Proof of Insurance Requirements/Endorsement. Prior to beginning any
operations under this Agreement, VERDUGO shall submit the insurance
certificates, including the deductible or self -retention amount, and an
additional insured endorsement naming SJC, its officers, employees, agents,
and volunteers as additional insureds as respects to liability arising out of
operations or activities performed by or on behalf of VERDUGO, including the
insured's general supervision of VERDUGO. The coverage shall contain no
special limitations on the scope of protection afforded SJC, its officers,
employees, agents, or volunteers.
Notice of Cancel Iation/Termination of Insurance. The above policy shall not
terminate, nor shall they be cancelled, nor the coverages reduced, until after
thirty (30) days' written notice is given to SJC, except that ten (10) days'
notice shall be given if there is a cancellation due to failure to pay a premium.
2.OGENERAL PROVISIONS
2.1 Notice
All notices, requests, demands, claims, and other communications hereunder
will be in writing and duly addressed to the parties as follows:
To SJC: City of San Juan Capistrano
Attn: Economic Develop ment/Redevelopment Manager
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Page 4 of 5
To VERDUGO: 26755 Verdugo, LLC
Attn: Eric Altman
26755 Verdugo Street, Suite 200
San Juan Capistrano, CA 92675
2.2 Attorney's Fee
In the event a dispute (with or without litigation) arises under this Agreement, or
either Party is required to bring an action against the other Party for enforcement of
its terms, the prevailing party in such action shall be entitled to recover its
reasonable attorney's fees and costs from the other party.
2.3 No Partnership or Joint Venture
Nothing in this agreement shall be construed to create a partnership or joint venture
between the Parties with respect to the subject matter of this Agreement.
2.4 Severability
In the event that any provision or provisions of this Agreement are held
unenforceable, all provisions not so held shall remain in full force and effect.
2.5 Authoritv of Sianatories
The persons executing this Agreement on behalf of the Parties hereto warrant that
they are duly authorized to execute this Agreement on behalf of said Parties and
that by so executing this Agreement the Parties are formally bound to the provisions
of this Agreement.
ATTEST:
Margaret R. Monahan, City Clerk
APPROVED AS TO FORM:
Omar Sandoval, City Attor ey
CITY OF SAN JUAN CAPISTRANO
Joe Soto, Mayor
26755 VERDUGO LLC
Z
Eric Altman, Managing Member
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Lot 4 Property Lines Location of Electrical Panel
Location Description— The electrical panel is located 13.12 feet North; thence South
83°26'00" and 24.29 feet West of the Northeast corner of the Mexican Lindo Building.
On Lot 4, Tract 134 commonly referenced as 26775 Verdugo Street, San Juan Capis-
trano, CA 92675.
Exhibit A
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