18-0821_THE ECOLOGY CENTER_F1a 8/2112018
Fla
l i r,
City of San Juan Capistrano
Agenda Report
TO: Honorable Mayor and Members of the City Council
FROM: j�Vnjamin Siegel, City Manager
SUBMITTED BY- Tom Toman, Assistant Public Works Director��
Charlie View, Project Manager GG
DATE: August 21 , 2018
SUBJECT: License Agreement Between the City and Ecocenter, Inc. (The
Ecology Center) for the Continued Use of Farming Operations at the
City Property Located at 32681 Alipaz Street (Assessor Parcel
Number: 121-190-57) (South Coast Farms); and, Other Agreements
Related to the Continued Use of the Property
RECOMMENDATION:
Approve and authorize the City Manager to execute the following agreements,
substantially in the form attached:
1. License Agreement with Ecocenter, Inc. to conduct farming operations on 27 acres
of land located at 32681 Alipaz Street, commencing on August 21, 2018, for a
three-year term that may be extended for two additional one-year terms upon the
written request of the Licensee; and,
2. Letter Agreement with Ecocenter, Inc. regarding the delinquent water bill for the
property located at 32681 Alipaz Street; and,
3. First Amendment to the Agreement with South Coast Farms Establishing a
Payment Schedule for Outstanding Water Charges; and,
4. Exclusive Negotiation Agreement Extension with Ecocenter, Inc. for a one year
period expiring on August 21, 2019.
EXECUTIVE SUMMARY:
Through an Exclusive Negotiation Agreement (ENA) approved by the City Council on
January 16, 2018, City staff and The Ecology Center have been engaged in discussions
with the goal of producing a mutually acceptable License Agreement that would preserve
City Council Agenda Report
August 21, 2018
Page 2 of 7
the long-term agricultural use of the South Coast Farms site. A location map of the
property is provided as Attachment 1. A copy of the ENA is provided as Attachment 2. As
an initial step to incorporate the City-owned South Coast Farms and the Joel Congdon
House properties into a comprehensive environmental education and agricultural center,
staff is recommending a continued-use License Agreement that transfers farming
operations from the South Coast Farms operator to The Ecology Center. Concurrently,
The Ecology Center is actively coordinating with City staff to begin the environmental
review and entitlement process that is required for the larger development project
envisioned in the ENA and described as a "Transformative Community Farm." Preliminary
renderings of the Transformative Community Farm's design are provided as Attachment
3.
DISCUSSION/ANALYSIS:
Background
The Community Redevelopment Agency(Agency)of San Juan Capistrano purchased the
approximately 56-acre Kinoshita Farm site in 1991 to fulfill an obligation of the Agency to
the Capistrano Unified School District (CUSD) to provide a replacement site for CUSD
facilities displaced by the Agency. Ultimately, the Agency provided CUSD with seven
acres of land for construction of the Kinoshita Elementary School. Subsequently, the City
purchased 45 acres from the Agency using Measure D Open Space Bond funding, and
four acres occupied by the Sports Park/Community Center/Boys and Girls Club were
retained by the Agency until the 2012 statewide dissolution of redevelopment. Ownership
of the four acres was transferred to the City in conjunction with the Long-Range Property
Management Plan that was approved by the State in 2015.
1. South Coast Farms License Agreement
Mr. George Kibby, owner of South Coast Farms, operates an organic farm and retail
produce facility on City-owned land bounded by Alipaz Street, Camino Del Avion and Via
Positiva. Over the term of the various lease and license agreements, in place since 1999,
the cost of water to serve the farm has increased substantially. The current License
Agreement with South Coast Farms is included as Attachment 4. According to Mr. Kibby,
these rate changes have impacted the ability of South Coast Farms to maintain a viable
commercial farm operation and have led to a significant negative balance in South Coast
Farm's water account. On February 7, 2017, the City Council approved an
Agreement/Payment Schedule for South Coast Farms and extended the License
Agreement to August 6, 2018, to accommodate the summer harvest season (Attachment
5).
2. Ecology Center License Agreement
Since October 2010, The Ecology Center has operated the Joel Congdon House and
adjacent grounds as an environmental educational center and museum. The Joel
Congdon House is located adjacent to South Coast Farms at 32701 Alipaz Street. On
City Council Agenda Report
August 21, 2018
Page 3 of 7
May 3, 2016, the City Council approved a 20-year License Agreement with The Ecology
Center (Attachment 6).
3. Exclusive Negotiation Agreement
Over the past year, South Coast Farms and The Ecology Center have been in discussions
about the long-term benefits of preserving the agricultural nature of the City-owned South
Coast Farm's site while also addressing the economic challenges of continued
commercial farming at this location. These discussions led to a new vision that
incorporates crop growing into an expanded operation under the umbrella of a non-profit
organization.
The Ecology Center approached the City with a concept of blending its current
environmental education programming with the farming operations of South Coast Farms
into a cohesive, community-serving facility that is described as a "Transformative
Community Farm." Specifically, the proposed Farm concept could include the following
potential amenities: an agricultural public park with a diversified farming plan; a City trail
through the property; relocation and management of the adjacent Community Gardens;
a culinary and farm institute; special event facility; on-site public parking; and, a cafe. On
January 16, 2018, the City Council approved an ENA as an initial step toward a mutually
acceptable long-term license agreement.
In order to facilitate the proposed land uses associated with a Transformative Community
Farm, an environmental study and Specific Plan Code Amendment are required. Staff is
currently working with The Ecology Center on a comprehensive application for
development review and land use approval. The proposed Specific Plan Amendment and
development plans will likely come before the Council for initiation in Fall 2018. Therefore,
staff recommends a one-year extension to the current ENA with The Ecology Center to
ensure adequate time to process entitlements and conduct the environmental review for
the long-term project.
Next Steps
1. Proposed License Agreement with The Ecology Center
The proposed License Agreement, included as Attachment 7, provides that The Ecology
Center pay the City $25,000 annually for the use of the property in years one, two, and
three of the Agreement. The initial three-year term corresponds with the termination of a
tax-exempt financing obligation associated with the purchase of the property in 1991.
Staff expects that the long-term agreement with The Ecology Center will be presented to
the City Council within the initial three-year term. Should The Ecology Center exercise
the additional one-year extension(s), they would be obligated to pay the City $35,000
annually for the use of the property for each extension year. Additionally, The Ecology
Center has agreed to partially reimburse the City for the existing delinquent water bill from
the current operator(South Coast Farms) through a separate agreement (Attachment 8).
Specifically, The Ecology Center agrees to pay the City $8,000 annually toward the
City Council Agenda Report
August 21, 2018
Page 4 of 7
delinquent water bill for years one, two, and three of the License Agreement. Should The
Ecology Center exercise the additional one-year extension(s), then they would be
obligated to pay the City $10,000 annually for each extension year.
2. Proposed First Amendment to Agreement with South Coast Farms
Establishing a Payment Schedule for Outstanding Water Charges
Although South Coast Farms has paid approximately $68,000 in water-related payments
to the City since the establishment of a payment plan in February 2017, the balance of
unpaid water charges has increased to over $300,000. As discussed in additional detail
below, The Ecology Center has agreed to begin reducing the outstanding balance through
incremental payments over the term of the proposed License Agreement, and has
indicated that they will consider resolving the remaining balance through the anticipated
long-term agreement to establish a Transformative Community Farm.
With that said, it is also recommended that the City retain its ability to pursue South Coast
Farms for the unpaid water charges. Consequently, the City Attorney's Office has
prepared the proposed First Amendment to the Agreement Establishing a Payment
Schedule for Outstanding Water Charges for South Coast Farms (Attachment 9). This
Amendment establishes that the City is willing to hold off on exercising its rights against
South Coast Farms with respect to the outstanding balance, subject to The Ecology
Center's proposed incremental payments to reduce the outstanding balance. The
proposed Amendment also reserves the right for the City to terminate the water
repayment agreement at the City's sole discretion should The Ecology Center fail to make
the outstanding balance payments.
FISCAL IMPACT:
Under the proposed License Agreement with The Ecology Center, the City would receive
$99,000 in revenue during the initial three-year term and an additional $45,000 for each
year The Ecology Center extends the agreement until 2023. The table below shows a
breakdown of the proposed License fee payments.
Years Annual License Annual Water Total
Fee Repayment
1 — FY 2018-2019 $25,000 $8,000 $33,000
2 — FY 2019-2020 $25,000 $8,000 $33,000
3 — FY 2020-2021 $25,000 $8,000 $33,000
4 — FY 2021-2022 $35,000 $10,000 $45,000
5 — FY 2022-2023 $35,0001 $10,0001 $45,000
Subtotals $1459000 1 $44,0001 $189,000
The debt used to acquire the Kinoshita property in 1991 provided tax-exempt interest to
the noteholders (the Kinoshita family). As a result, the City is restricted as to how much
revenue it can receive from use of the property that was acquired with the notes for as
long as tax-exempt debt related to the property remains outstanding. Payments to or on
City Council Agenda Report
August 21, 2018
Page 5 of 7
behalf of the City under the proposed License Agreement and other sources are expected
to reach IRS-imposed maximum limits in 2021, shortly after the due date of the tax-
exempt Kinoshita notes. These IRS revenue limits also serve to effectively prevent The
Ecology Center from making substantial permanent improvements to the property as
contemplated in their Transformative Community Farm concept.
In order to lock in current low interest rates and provide a long-term solution to the
revenue and property improvement restrictions associated with tax-exempt financing, in
June 2018 the Successor Agency approved a taxable refinancing of the Kinoshita notes
to fund an escrow account with enough money to pay the balloon payments due on the
Kinoshita notes and to pay all of the interest due on the Kinoshita notes through March 1,
2021. Under this plan, once the replacement debt was issued, the Successor Agency
would only need to use its tax increment revenue to pay debt service on the replacement
debt. Interest on the Kinoshita notes would have been paid from the escrow account
funded with replacement debt proceeds.
On August 9, 2018, the California Department of Finance (DOF) approved the Successor
Agency's intention to issue replacement debt for the Kinoshita notes, but changed the
financing plan. Under the DOF-approved financing plan, the Successor Agency will
borrow a smaller amount of money, just enough to provide for the balloon payment, the
final interest payment, and costs of issuance. Funds to pay for interest payments on the
Kinoshita notes through maturity would not be borrowed and placed into the escrow
account. Instead, those interest payments would be paid by the Successor Agency using
its annual allocation of tax increment revenue. This means that from the time that the
replacement debt is issued until March 1, 2021, the Successor Agency will need to make
the interest-only payments that are due on the outstanding Kinoshita notes at the same
time that it is paying debt service on the taxable refinancing of the balloon payment. The
DOF requirement to pay debt service on both obligations during this period will increase
the cash flow needs of the Successor Agency and reduce the amount of tax increment
available to be distributed to other taxing entities, including the City. The changes required
by the DOF will reduce total debt service on the replacement debt. This is a result of the
fact that less money will be borrowed, thereby creating significant interest savings, as
indicated in the chart below:
Original D•
Financing Plan Financing Plan
Amount Borrowed $9,180,000 $8,005,000
Average Annual Debt Service on 2018 Bonds $918,000 $802,000
Total Debt Service Paid to Maturity 2018 Bonds $13,047,000 $11,374,000
Additional Amounts to be Paid on Kinoshita Notes
at 6% interest - 1 $1,201,000
Total Debt Service $13,047,000 1 $12,575,000
It is anticipated that much of the financial impact to the General Fund associated with
reduced distributions of residual tax increment to the taxing entities would be
approximately equal to and offset by the natural growth in General Fund residual tax
City Council Agenda Report
August 21 , 2018
Page 6 of 7
increment that has been projected by the City's property tax consultant. This means that
for the current fiscal year and the next two fiscal years, the General Fund would not see
the increase in residual tax increment revenue that would have naturally occurred as a
result of expected increases in assessed valuation. Instead, this revenue source for the
General Fund will be essentially flat for the next three years, at roughly $150,000 per
year.
ENVIRONMENTAL IMPACT:
In accordance with the California Environmental Quality Act (CEQA) the recommended
action is exempt from CEQA per Section 15061(b)(3), the general rule that CEQA applies
only to projects which have the potential for causing a significant effect on the
environment. Where it can be seen with certainty that there is no possibility that the
activity in question would have a significant effect on the environment, the activity is not
subject to CEQA. Should the future development project proposed by The Ecology Center
move forward for discretionary actions, the appropriate environmental documentation will
be prepared consistent with CEQA guidelines.
Additionally, this matter is exempt from CEQA per Section 15301, operation, repair,
maintenance, permitting, leasing, licensing, or minor alteration of existing public or private
structures, facilities, mechanical equipment, or topographical features, involving
negligible or no expansion of use beyond that existing at the time of the lead agency's
determination. Any future improvements to the property associated with this License
Agreement will be evaluated for environmental impact on an individual basis.
CITY COUNCIL REVIEW:
• On, January 16, 2018, the City Council approved and authorized the City Manager to
execute an Exclusive Negotiation Agreement (ENA) with Eco Center, Inc.
• On February 7, 2017, The City Council approved an Agreement Establishing a
Payment Schedule for Outstanding Water Charges with South Coast Farms, Inc.
• On May 4, 2016, the City Council approved a 20-year License Agreement for the use
of the Joel Congdon House and an approximately 0.75 acre area located at
32701 Alipaz Street with The Ecology Center, for a monthly fee of $2,000.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
This item does not require commission, committee, or board review.
City Council Agenda Report
August 21, 2018
Page 7 of 7
NOTIFICATIONS:
George Kibby, Business Owner, South Coast Farms
Evan Marks, Executive Director, The Ecology Center
Bret Babos, Director of Operations, The Ecology Center
Natalie Balthrop, Director of Brand and Communications, The Ecology Center
Joe Baird, Board Member, The Ecology Center
Richard Bolton, Board Member, The Ecology Center
Thomas Whaling, Resident
Shigeru Kinoshita, Resident
Yasuo Kinoshita, Resident
Roger Kinoshita, Resident
ATTACHMENTS:
Attachment 1 — Location Map
Attachment 2 — Ecology Center Exclusive Negotiation Agreement
Attachment 3 —Transformative Community Farm Conceptual Rendering
Attachment 4 — Current License Agreement with South Coast Farms
Attachment 5 — South Coast Farms Agreement/Payment Schedule
Attachment 6 — Ecology Center License Agreement Joel Congdon House
Attachment 7 — Proposed License Agreement with The Ecology Center
Attachment 8 — Proposed Letter Agreement Ecology Center Delinquent Water Bill
Attachment 9 — Proposed First Amendment Agreement Establishing Payment Schedule
LOCATION
KINOSHITA/SOUTH COAST
qr
Lt'ilslist
-it Camino Del Avion
ATTACHMENT 1, PAGE 1
y � l
/icr.�ss l2nee! Km�shda Fame
-,; _ 27 72,ri Acres
�• ���kr 75 Acte
1 �• � (Congdon House)
r
,r
l
�R
OF
THE CITY OF SAN JUAN CAPISTRANO
EXCLUSIVE NEGOTIATION AGREEMENT
(Kinoshita Farm)
THIS EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is dated as of January 16,
2018, for reference purposes only, and is entered into by and between the City of San Juan Capistrano, a
public body corporate and politic ("City") and Ecocenter, Inc., a not-profit public benefit corporation
("Developer"), to provide a specified period of time to attempt to negotiate a license agreement. The City
and the Developer are sometimes referred to in this Agreement individually, as a "Party" and,
collectively, as the "Parties." This Agreement is entered into by the Parties with reference to the
following recited facts (each, a"Recital"):
RECITALS
A. The City is the owner of that certain real property located at 25925 Camino Del Avion,
San Juan Capistrano(APN 121-190-57)and more specifically described in Exhibit A("Property"); and
B. The City has an interest in developing the Property and has been approached by the
current tenant and the nonprofit organization operating on the adjoining parcel regarding the development
and expansion of the community based agricultural uses on the Property. The Developer has proposed the
redevelopment of the Property with a Transformative Community Farm, as generally depicted in the
conceptual site plan attached to this Agreement as Exhibit `B" and incorporated into this Agreement by
this reference("Project"); and
D. The intent of both the City and the Developer in entering into this Agreement is to
establish a specific, limited period of time to negotiate regarding a future agreement between them
governing the potential of licensing the Property and development of the Project on the Property, all
subject to mutually agreeable terms, conditions, covenants, restrictions and agreements to be negotiated
and documented in a license agreement("LA").
NOW, THEREFORE, IN VIEW OF THE GOALS AND OBJECTIVES OF THE CITY
RELATING TO THE LICENSING AND DEVELOPMENT OF THE PROPERTY AND THE
PROMISES OF THE CITY AND THE DEVELOPER SET FORTH IN THIS AGREEMENT, THF.
CITY AND THE DEVELOPER AGREE,AS FOLLOWS:
1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct and
are incorporated into this Agreement, in their entirety, by this reference.
2. Deposits.
(a) Concurrent with the Developer's execution of this Agreement, the Developer
shall provide to the City a deposit in the amount of Twenty Five Thousand Dollars ($25,000) in
immediately available funds("Initial Deposit")to ensure that the Developer will proceed diligently and in
good faith to fulfill its obligations under this Agreement during the Negotiation Period (as defined in
Section 3(a)), as part of the consideration for the City's agreement not to negotiate with other persons
during the Negotiation Period, and to defray certain costs of the City in pursuing the contemplated
negotiations with the Developer during the Negotiation Period, pursuant to this Agreement. The City
shall charge all costs (including staff time, consultant fees and attorney fees associated with review and
implementation of this Agreement or preparing the LA)against the Initial Deposit(and Extension Deposit
1
ATTACHMENT 2, PAGE 1 OF 13
pursuant to Section 2(b)below, as applicable). At the termination of this Agreement, any remaining funds
shall be applied to any licensing fee negotiated as part of the LA or returned to the Developer. Developer
acknowledges that the Initial Deposit (and any Extension Deposit, pursuant to Section 2(b) below) shall
be in addition to those fees and expenses required by the City for any permit, other required entitlement or
project processing. A portion of the Initial Deposit in an amount equal to One Hundred Dollars ($100)
shall immediately become non-refundable upon Developer's transfer of the Initial Deposit to the City
under this Agreement as consideration for the City's agreement not to negotiate with other persons during
the Negotiation Period.
(b) Upon each extension of the Negotiation Period occurring pursuant to the
provisions of Section 3(b), if any, the Developer shall provide to the City an additional deposit of Ten
Thousand Dollars ($10,000) in immediately available funds on the first day of any extension of the
Negotiation Period occurring pursuant to the provisions of Section 3(b) (each, an "Extension Deposit").
Each Extension Deposit is intended to ensure that the Developer will proceed diligently and in good faith
to fulfill its obligations under this Agreement during any extension of the Negotiation Period, as part of
the consideration for the City's agreement not to negotiate with other persons during any such extension
of the Negotiation Period, and to defray certain costs of the City in pursuing the contemplated
negotiations with the Developer during any such extension of the Negotiation Period, pursuant to this
Agreement. At the termination of this Agreement, any remaining funds from an Extension Deposit shall
be refundable to the Developer as provided in Section 2(a),above.
3. Term of Agreement.
(a) The rights and duties of the City and the Developer established by this
Agreement shall commence on the first date on which all of the following have occurred(the "Effective
Date"): (1)execution of this Agreement by the authorized representative(s)of the Developer and delivery
of such executed Agreement to the City, (2) payment of the Initial Deposit to the City by the Developer,
in accordance with Section 2(a), (3) approval of this Agreement by the City governing body and
execution of this Agreement by the authorized representative(s) of the City and(4)delivery of such fully
executed Agreement to the Developer, the exact date of which shall be mutually agreed to by the Parties
promptly after Developer's receipt of the fully executed Agreement from the City as evidenced in writing
signed by their respective authorized representatives. The City shall deliver a fully executed counterpart
original of this Agreement to the Developer, within ten (10) calendar days following the City governing
body's approval of this Agreement, if approved, and the execution of this Agreement by the authorized
representative(s) of the City. This Agreement shall continue in effect for the period of ninety (90)
consecutive calendar days immediately following the Effective Date ("Negotiation Period"), subject to
the limitations of Sections 3(b).
(b) The Negotiation Period may be extended upon the mutual written agreement of
the City's City Manager and the Developer for no more than two (2) additional consecutive ninety (90)
calendar day periods. Notwithstanding the immediately preceding sentence or any other part of this
Agreement, in no event shall the Negotiation Period exceed two hundred seventy (270) consecutive
calendar days from the Effective Date.
(e) This Agreement shall automatically expire and be of no further force or effect at
the end of the Negotiation Period, unless, prior to that time, both the City and the Developer approve and
execute a LA acceptable to both the City and the Developer, in their respective sole and absolute
discretion, in which case this Agreement will terminate on the effective date of such LA.
2
ATTACHMENT 2, PAGE 2 OF 13
4. Obligations of Developer. During the Negotiation Period, and pursuant to the attached
Milestone Schedule (Exhibit C), Developer shall proceed diligently and in good faith to develop and
present to City staff and, subsequently,to the City governing body, for review, all of the following:
(a) A proposed complete conceptual development plan for the Project on the
Property that describes and depicts: (1) the location and placement of proposed buildings and (2) the
architecture and elevations of the proposed buildings;
(b) Proposed zoning change or changes to the City's General Plan, if any, necessary
to accommodate the Project on the Property;
(c) A list of potential users or tenants and anticipated lease rates for the Property, as
developed with the Project;
(d) A proposed time schedule and cost estimates for the development of the Project
on the Property;
(e) A proposed financing plan identifying financing sources for all private and public
improvements proposed for the Project; and
(f) A preliminary financial analysis demonstrating the costs and benefits to the City
and the City regarding all construction, maintenance and operations of all proposed public improvements,
the costs of additional or increased levels of public services and any new public revenues anticipated to be
generated by the Project.
5. Negotiation of LA.
(a) During the Negotiation Period, the City and the Developer shall proceed
diligently and in good faith to negotiate a LA between them. The City and the Developer shall generally
cooperate with each other and supply such available documents and information as may be reasonably
requested by the other to facilitate the conduct of the negotiations. Both the City and the Developer shall
exercise commercially reasonable efforts to complete discussions relating to the terms and conditions of a
LA and such other matters, as may be mutually acceptable to both the City and the Developer, in their
respective sole discretion. The exact terms and conditions of a LA, if any, shall be determined during the
course of these negotiations. Nothing in this Agreement shall be interpreted or construed to be a
representation or agreement by either the City or the Developer that a mutually acceptable LA will be
produced from negotiations under this Agreement. Nothing in this Agreement shall impose any
obligation on either Party to agree to a definitive LA in the fixture. Nothing in this Agreement shall be
interpreted or construed to be a guaranty, warranty or representation that any proposed LA that may be
negotiated by City staff and the Developer will be approved by the City governing body. The Developer
acknowledges and agrees that the City's consideration of any LA is subject to the sole and absolute
discretion of the City governing body and all legally required public hearings, public meetings, notices,
factual findings and other determinations required by law.
b. Restrictions Against Change in Ownership, Management and Control of Developer
and Assignment of Agreement.
(a) The qualifications and identity of the Developer and its principals are of
particular concern to the City. It is because of these qualifications and identity that the City has entered
into this Agreement with the Developer. During the Negotiation Period, no voluntary or involuntary
3
ATTACHMENT 2, PAGE 3 OF 13
successor-in-interest of the Developer shall acquire any rights or powers under this Agreement, except as
provided in Section 6(c).
(b) The Developer shall promptly notify the City in writing of any and all changes
whatsoever in the identity of the business entities or individuals either comprising or in Control (as
defined in Section 6(d)) of the Developer, as well as any and all changes in the interest or the degree of
Control of the Developer by any such person, of which information the Developer or any of its
shareholders, partners, members, directors, managers or officers are notified or may otherwise have
knowledge or information. Upon the occurrence of any significant or material change, whether voluntary
or involuntary, in ownership, management or Control of the Developer (other than such changes
occasioned by the death or incapacity of any individual) that has not been approved by the City, prior to
the time of such change, the City may terminate this Agreement, without liability to the Developer or any
other person and refund any remaining deposit fiends provided by the Developer to the pursuant to Section
2(a), above, by sending written notice of termination to the Developer,referencing this Section 6(b).
(c) The Developer may assign its rights under this Agreement to an Affiliate (as
defined in Section 6(d)), on the condition that such Affiliate expressly assumes all of the obligations of
the Developer under this Agreement in a writing reasonably satisfactory to the City, and further provided
that Ecocenter, Inc., a not for profit corporation, at all times, Control any such Affiliate and be responsible
and obligated directly to the City for performance of the Developer's obligations under this Agreement.
(d) For the purposes of this Agreement, the term "Affiliate" means any person,
directly or indirectly, controlling or controlled by or under common control with the Developer, whether
by direct or indirect ownership of equity interests, by contract, or otherwise. For the purposes of this
agreement, "Control" means possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of an entity, whether by ownership of equity interests, by
contract, or otherwise.
7. Obligations to Review Draft Agreements and Attend Meetings.
(a) During the Negotiation Period, each Party shall diligently review and comment
on draft versions of a LA provided by the other Party and, if the terms and conditions of such a LA are
agreed upon between City staff and the Developer, the Developer shall submit the LA fully executed by
the authorized representative(s) of the Developer to the City Manager for submission to the City
governing body for review and approval or disapproval. Any future LA shall consist of terms and
conditions acceptable to both the Developer and the City governing body, in their respective sole and
absolute discretion.
(b) During the Negotiation Period, the Developer shall also keep City staff advised
on the progress of the Developer in performing its obligations under this Agreement, on a regular basis or
as requested by City staff, including, without limitation, having one or more of the Developer's
employees or consultants who are knowledgeable regarding this Agreement, the design and planning of
the Project and the progress of negotiation of a LA, such that such person(s) can meaningfully respond to
City and/or City staff questions regarding the progress of the design and planning of the Project or the
negotiation of a LA, attend both: (1) periodic meetings with City staff, as reasonably scheduled and
requested by City staff during the Negotiation Period, and(2)meetings of the City governing body, when
reasonably requested to do so by City staff.
8. Developer to Pay All Costs and Expenses. All fees or expenses of engineers,
architects, financial consultants, legal, planning or other consultants or contractors, retained by the
Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning
4
ATTACHMENT 2, PAGE 4 OF 13
and/or design activities, drawings, specifications or other activity or matter relating to the Property or the
Project or negotiation of a LA that may be undertaken by the Developer during the Negotiation Period,
pursuant to or in reliance upon this Agreement or in the Developer's discretion, regarding any matter
relating to a LA, the Property or the Project, shall be the sole responsibility of and undertaken at the sole
cost and expense of the Developer and no such activity or matter shall be deemed to be undertaken for the
benefit of, at the expense of or in reliance upon the City. The Developer shall also pay all fees, charges
and costs, make all deposits and provide all bonds or other security associated with the submission to and
processing by the City and/or the City of any and all applications and other documents and information to
be submitted to the City and/or the City by the Developer pursuant to this Agreement or otherwise
associated with the Project. The City shall not be obligated to pay or reimburse any expenses, fees,
charges or costs incurred by the Developer in pursuit of any study, analysis, evaluation, report, schedule,
estimate, environmental review, planning and/or design activities, drawings, specifications or other
activity or matter relating to the Property or the Project or negotiation of a LA that may be undertaken by
the Developer during the Negotiation Period, whether or not this Agreement is, eventually, terminated or
extended or a LA is entered into between the City and the Developer, in the future.
9. City Not To Negotiate With Others. During the Negotiation Period, the City and City
staff shall not negotiate with any other person regarding the sale or redevelopment of the Property. The
term "negotiate," as used in this Agreement, means and refers to engaging in any discussions with a
person other than the Developer, regardless of who initiated, with respect to the availability of the
Property or that person's redevelopment of the Property, without the Developer's prior written consent.
Developer acknowledges that City may receive and retain unsolicited offers regarding redevelopment of
the Property, but shall not entertain any offer or negotiate with the proponent of any such offer during the
Negotiation Period; provided, however, that the City may notify such proponent that it is a party to this
Agreement . Developer acknowledges that the City is a public agency and subject to the provisions of the
California Public Records Act, Government Code Section 6254, et. seq. (the "Act"). The City shall use
its best efforts to inform Developer of any request for information received pursuant to the Act. If
Developer believes the information requested is confidential, Developer may pursuant a court order
preventing the release of the requested information.
10. Acknowledgments and Reservations.
(a) The City and the Developer agree that, if this Agreement expires or is terminated
for any reason, or a future LA is not approved and executed by both the City and the Developer, for any
reason, neither the City nor the Developer shall be under any obligation, nor have any liability to each
other or any other person regarding the licensing, sale or other disposition of the Property or the
redevelopment of the Project or the Property; provided, however, that in the event this Agreement
terminates, the City shall return to the Developer within ten (10) business days of such termination any
and all deposits due to be refunded pursuant to Section 2(a)of this Agreement.
(b) The Developer acknowledges and agrees that no provision of this Agreement
shall be deemed to be an offer by the City, nor an acceptance by the City of any offer or proposal from the
Developer for the City to convey any estate or interest in the Property to the Developer or for the City to
provide any financial or other assistance to the Developer for redevelopment of the Project or the
Property.
(c) The Developer acknowledges and agrees that the Developer has not acquired, nor
will acquire, by virtue of the terms of this Agreement, any legal or equitable interest in real or personal
property from the City.
5
ATTACHMENT 2, PAGE 5 OF 13
(d) Certain development standards and design controls for the Project may be
established between the Developer and the City, but it is understood and agreed between the City and the
Developer that the Project and the development of the Property must conform to all City, City and other
applicable governmental development, land use and architectural regulations and standards. Drawings,
plans and specifications for the Project shall be subject to the approval of the City through the standard
development application process for projects of this nature. Nothing in this Agreement shall be
considered approval of any plans or specifications for the Project or of the Project itself by the City.
(e) The City reserves the right to reasonably obtain further available information and
data to ascertain the ability and capacity of the Developer to acquire or lease, develop and operate the
Property and/or the Project. The Developer acknowledges that it may be requested to make certain
financial disclosures to the City, its staff, legal counsel or other consultants, as part of the financial due
diligence investigations of the City relating to the potential licensing of the Property and development of
the .Project on the Property by the Developer and that any such disclosures may become public records.
The City shall maintain the confidentiality of financial information of the Developer to the extent allowed
by law, as determined by the City Attorney.
11. Nondiscrimination. The Developer shall not discriminate against nor segregate any
person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap,
national origin or ancestry in undertaking its obligations under this Agreement.
12. Limitation on Damages and Remedies.
(a) THE DEVELOPER AND TI4E CITY ACKNOWLEDGE THAT IT IS
EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES
THAT WOULD BE SUFFERED BY THE DEVELOPER UPON THE BREACH OF THIS
AGREEMENT BY THE CITY. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS
TO ASCERTAIN THE ACTUAL DAMAGES THE DEVELOPER WOULD SUFFER UPON THE
BREACH OF THIS AGREEMENT BY THE CITY, THE DEVELOPER AND THE CITY AGREE
THAT A REASONABLE ESTIMATE OF THE DEVELOPER'S DAMAGES IN SUCH EVENT IS
FIVE THOUSAND DOLLARS ($5,000.00) (THE "LIQUIDATED DAMAGES AMOUNT").
THEREFORE, UPON THE BREACH OF THIS AGREEMENT BY THE CITY, THE CITY SHALL
PAY THE LIQUIDATED DAMAGES AMOUNT TO THE DEVELOPER AND THIS AGREEMENT
SHALL TERMINATE. RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL BE THE
DEVELOPER'S SOLE AND EXCLUSIVE REMEDY ARISING FROM ANY BREACH OF THIS
AGREEMENT BY THE CITY.
-J5�
` "1
itials of Authorized Initials of Authorized
Representative of City Representative of Developer
(b) THE CITY AND THE DEVELOPER EACH ACKNOWLEDGE AND AGREE
THAT THE CITY WOULD NOT HAVE,ENTERED INTO THIS AGREEMENT, IF IT WERE TO BE
LIABLE TO THE DEVELOPER FOR ANY MONETARY DAMAGES, MONETARY RECOVERY
OR ANY REMEDY OTHER THAN TERMINATION OF THIS AGREEMENT AND PAYMENT OF
THE LIQUIDATED DAMAGES AMOUNT. ACCORDINGLY, THE CITY AND THE DEVELOPER
AGREE THAT THE DEVELOPER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY UPON THE
6
ATTACHMENT 2, PAGE 6 OF 13
BREACH OF THIS AGREEMENT BY THE CITY IS TO TERMINATE THIS AGREEMENT AND
RECEIVE THE LIQUIDATED DAMAGES AMOUNT.
(c) THE DEVELOPER ACKNOWLEDGES THAT IT IS AWARE OF THE
MEANING AND LEGAL EFFECT OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR
HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR.
(d) CALIFORNIA CIVIL CODE SECTION 1542 NOTWITHSTANDING, IT IS
THE INTENTION OF THE DEVELOPER TO BE BOUND BY THE LIMITATION ON DAMAGES,
RECOVERY AND REMEDIES SET FORTH IN THIS SECTION 12, AND THE DEVELOPER
HEREBY RELEASES ANY AND ALL CLAIMS AGAINST THE CITY FOR MONETARY
DAMAGES, MONETARY RECOVERY OR OTHER LEGAL OR EQUITABLE RELIEF RELATED
TO ANY BREACH OF THIS AGREEMENT, EXCEPT RECEIPT OF THE LIQUIDATED DAMAGES
AMOUNT, WHETHER OR NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR
UNKNOWN TO THE DEVELOPER AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE
DEVELOPER SPECIFICALLY WAIVES THE BENEFITS OF CALIFORNIA CIVIL CODE SECTION
1542 AND ALL OTHER STATUTES AND JUDICIAL DECISIONS (WHETHER STATE OR
FEDERAL) OF SIMILAR EFFECT WITH REGARD TO THE LIMITATIONS ON DAMAGES AND
REMEDIES AND WAIVERS OF ANY SUCH DAMAGES AND REMEDIES CONTAINED IN THIS
SECTION 12.
In ials of Authorized Initials of Authorized
Representative of City Representative of Developer
13. Default.
(a) Failure or delay by either Party to perform any material term or provision of this
Agreement shall constitute a default under this Agreement. If the Party who is receives notice of a default
from the other Party cures, corrects or remedies the alleged default within fifteen(15)calendar days after
receipt of written notice by the other Party specifying such default, such Party shall not be in default
under this Agreement. The notice and cure period provided in the immediately preceding sentence shall
not, under any circumstances, extend the Negotiation Period. If there are less than fifteen (15) days
remaining in the Negotiation Period, the cure period allowed pursuant to this Section 13(a) shall be
automatically reduced to the number of days remaining in the Negotiation Period.
(b) The Party claiming that a default has occurred shall give written notice of default
to the Party claimed to be in default, specifying the alleged default. Delay in giving such notice shall not
constitute a waiver of any default nor shall it change the time of default. However,the injured Party shall
have no right to exercise any remedy for a default under this Agreement, without first delivering written
notice of the default and allowing the applicable period to cure any such default as set forth in Section
13(a).
7
ATTACHMENT 2, PAGE 7 OF 13
(c) Any failure or delay by a Party in asserting any of its rights or remedies as to any
default shall not operate as a waiver of any default or of any rights or remedies associated with a default.
(d) If a default of either Party remains uncured for more than fifteen (15) calendar
days following receipt of written notice of such default, a "breach" of this Agreement by the defaulting
Party shall be deemed to have occurred. In the event of a breach of this Agreement, the sole and
exclusive remedy of the Party who is not in default shall be to terminate this Agreement by serving
written notice of termination on the Party in breach and, in the case of a breach by the City,the Developer
shall also be entitled to receive the Liquidated Damages Amount.
14. Compliance with Law. The Developer acknowledges that any future LA, if approved
by the governing body of the City, will require the Developer (among other things) to carry out the
development of the Project in conformity with all applicable laws, including all applicable building,
planning and zoning laws,environmental laws, safety laws and federal and state labor and wage laws.
15. Press Releases. The Developer agrees to obtain the approval of the City Manager or his
or her designee or successor in function of any press releases Developer may propose relating to the lease
or development of the Property or negotiation of a LA with the City, prior to publication. The rights and
obligations in this provision shall not apply to leasing and marketing brochures and/or information
distributed by email or placed online on a brokerage website or real estate website such as LoopNet.com.
16. Notice. All notices required under this Agreement shall be presented in person, by
nationally recognized overnight delivery service or by facsimile and confirmed by first class certified or
registered United States Mail, with return receipt requested,to the address and/or fax number for the Party
set forth in this Section 16. Notice shall be deemed confirmed by United States Mail effective the third
(3rd) business day after deposit with the United States Postal Service. Notice by personal service or
nationally recognized overnight delivery service shall be effective upon delivery. Either Party may
change its address for receipt of notices by notifying the other Party in writing. Delivery of notices to
courtesy copy recipients shall not be required for valid notice to a Party
TO DEVELOPER: Evan Marks, Executive Director
Ecology Center
32701 Alipaz Street
San Juan Capistrano,CA 92675
TO CITY: Benjamin Siegel,City Manager
32400 Paseo Adelanto
San Juan Capistrano,CA 92675
Email: Bsiegel@sanjuancapistrano.org
17. Warranty Against Payment of Consideration for Agreement. The Developer
warrants that it has not paid or given, and will not pay or give, any third party any money or other
consideration for obtaining this Agreement. Third parties, for the purposes of this Section 17, shall not
include persons to whom fees are paid for professional services, if rendered by attorneys, financial
consultants, accountants, engineers, architects, brokers and other consultants, when such fees are
considered necessary by the Developer.
8
ATTACHMENT 2, PAGE 8 OF 13
18. Acceptance of Agreement by Developer. The Developer shall acknowledge its
acceptance of this Agreement by delivering to the City three (3) original counterpart executed copies of
this Agreement signed by the authorized representative(s)of the Developer.
19. Counterpart Originals. This Agreement may be executed by the City and the
Developer in multiple counterpart originals,all of which together shall constitute a single agreement.
20. No Third-Party Beneficiaries. Nothing in this Agreement is intended to benefit any
person or entity other than the City or the Developer.
21. Governing Law. The City and the Developer acknowledge and agree that this
Agreement was negotiated, entered into and is to be fully performed in the City of San Juan Capistrano,
California. The City and the Developer agree that this Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the laws of the State of California, without
application of such laws' conflicts of laws principles.
22. Waivers. No waiver of any breach of any term or condition contained in this Agreement
shall be deemed a waiver of any preceding or succeeding breach of such term or condition, or of any other
term or condition contained in this Agreement. No extension of the time for performance of any
obligation or act, no waiver of any term or condition of this Agreement, nor any modification of this
Agreement shall be enforceable against the City or the Developer, unless made in writing and executed by
both the City and the Developer.
23. Construction. Headings at the beginning of each section and sub-section of this
Agreement are solely for the convenience of reference of the City and the Developer and are not a part of
this Agreement, Whenever required by the context of this Agreement,the singular shall include the plural
and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if
it had been prepared by one or the other of the City or the Developer, but rather as if both the City and the
Developer prepared this Agreement. Unless otherwise indicated, all references to sections are to this
Agreement. All exhibits referred to in this Agreement are attached to this Agreement and incorporated
into this Agreement by this reference. if the date on which the City or the Developer is required to take
any action pursuant to the terms of this Agreement is not a business day of the City, the action shall be
taken on the next succeeding business day of the City.
24. Attorneys' Fees. If either Party hereto files any action or brings any action or
proceeding against the other arising out of this Agreement, then the prevailing Party shall be entitled to
recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the
court, in such action or proceeding or in a separate action or proceeding brought to recover such
attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include, in the
case of either Party, salaries and expenses of the lawyers working for or employed by such Party
(allocated on an hourly basis) to the extent they provide legal services to such Party in connection with
the representation of that Party in any such matter.
[Signatures on following pagel
9
ATTACHMENT 2, PAGE 9 OF 13
'I IIE 01'1' OFSAN.1tJAN CAPISTIZANO
EXCLUSIVE NEGOTIATION AGREEMENT
(Kinoshita Farm)
IN WITNESS WHEREOF, the City and the Developer have executed this Negotiation
Agreement on the dates indicated next to each of the signatures of their authorized representatives, as
appear below.
DEVELOPER:
1-112
Dated: By:
Dated: By. _ _-- -
CITY:
THE CITY OF SAN J PISTRANO
Dated; � � `
ATTEST:
Ry:
Ci Cl�k
APPROVED AS TO FORM:
BEST BEST&K It l (i F,R,LLP
I rr r !
BY'�
it A11c1111cyr j•
61147.003 1 OU0414938.2
ATTACHMENT 2, PAGE 10 OF 13
EXHIBIT"A"
TO
NEGOTIATION AGREEMENT
Property-Legal Docription
EXHIBIT A
61147.0031030414938 2
EXHIBIT A, PAGE 1 OF 2
nil
N* + 1 W +-
d }- .
imam
IL
sip
Ab
KINOSHITA PURCHASE
0 200 400
APN 121-190-57 Feet
City of San Juan Capistrano
FcnuiHo nes nv�oa '�' � � ,
T
EXHIBIT"B"
TO
NEGOTIATION AGREEMENT
Pro_jcct_I Description
[To Be Attached Behind This Cover Page]
61147,00310\30414938.2 EXHIBIT B, PAGE 1 OF 2
THE ECOLOGY CENTER r;20I8
ob
Cl
aul
Y e�. Y FARM FIELDS
^� 4� Retooled along biodynamic.
regenerative agriculture principles
ECO LABS
Relocated and expanded to
intersect with farm operations
and provide deeper educational
7 opportunities
] — MAKER VILLAGE
I New structure with dedicated
_ studios for individual makers
EXPANDED
PARKIFARMING&
CULINARY INSTITUTE
New structure with commercial
-
���-� grade kitchen,meeting rooms,and
covered event space
COMMUNITY GRANGE
Public facing general store,cafe,
resource and community center in
an existing farm structure
CONGDON HOUSE
Welcome center and offices
Exhibit B
EXHIBIT B, PAGE 2 OF 2
EXHIBIT C
MILESTONE SCHEDULE
Exclusive Negotiation Agreement Timeline
MILESTONE •
Within 30 Days of Effective Date of ENA
Initial Pro Forma Submit initial pro forma for the proposed development.
Project Development Submit projected construction schedule for the proposed development.
Schedule
Due Diligence Provide written determination of property's physical suitability for development,
taking into account relevant regulatory and environmental conditions.
Full Project Submittal Submit site plans and elevations. Submit all relevant applications and fees.
l Within 45 Days of Effective Date of ENA
Plan Review Staff reviews plans for compliance with applicable codes and regulations; letter
prepared by Project Manager summarizing staff comments is sent to developer
Within 60 Days of Effective Date of ENA
Revised Site Plans and Submit revised site plans and elevations
2nd Plan Review Staff reviews plans for compliance with applicable codes and regulations; letter
prepared by Project Manager summarizing staff comments is sent to developer
Revised Pro Forma and Submit refined pro forma and development schedule based on revised site plans
Development Schedule and elevations.
Market Study Submit a market study containing a forecast of regional and local real estate
market conditions and anticipated performance of proposed product types.
Development Partners Submit letter identifying investment partners.
and Structure
Submit letter identifying lenders and proof of ability to obtain financing
Funding Partners and
Structure
Within 75 Days of Effective Date of ENA
Draft LA Complete negotiations and draft License Agreement.
Final Revisions Finalize revisions to development proposal and all relevant materials
Within 90 Days of Effective Date of ENA
City Council Hearing Present development proposal and LA to City Council for final
review and approval.
61 147.00310\30414938.2 EXHIBIT C, PAGE 1 OF 1
32400 PASEO ADELANTO r MEMBERS OF THE CITY COUNCIL
SAN JUAN CAPISTRANO,CA 92675
(949)4931171 SERGIO FARIAS
(949)4931053 FAx a+n+e•4 1961 KERRY K,FERGUSON
www.suriivancapistrano.org 4776 BRIAN L.MARYOTT
a ` a PAM PATTERSON,ESQ.
DEREK REEVE
April 16, 2018
Evan Marks
Executive Director
Ecology Center
32701 Alipaz Street
San Juan Capistrano, CA 92675
Re: Ecology Center Exclusive Negotiation Agreement (ENA) Period Extension
Dear Mr. Marks:
The Exclusive Negotiation Agieement (ENA) between the City of San Juan Capistrano
and Ecocenter, Inc. dated .January 16, 2018, is set to expire on April 30, 2018, Section
3 (b) of the agreement provides for up to two (2) ninety day extensions.
Pursuant to Section 3 (b) of the agreement, the City wishes to execute the first
extension of the ENA with the new term beginning on May 1, 2018, and expiring on July
30, 2018. All other terms and conditions will remain the same as noted in the original
agreement.
By signing this letter you agree to the extended term of this agreement. Please sign
and return this letter to Tam Toman, Assistant Public Works Director, 32400 Paseo
Adelanto, San Juan Capistrano, CA 92675. We look foi-ward to continuing our positive
working relationship with Ecocenter, Inc.
Sincerely, r
�A - 1k,'�
Bonjamin Piecdel
City Manager
Acknowledgment and Agreement of new terms
�1
1
Evan Mal'ks, Ecocenter, Inc. Dat-
San ,fuan Capistrano; Preserving the Past to Enhance the F'utuw
��
Fqnmor o yr��j a", ATTACHMENT 2, PAGE 11 OF 13
P j I
32400 PASEO ADELANTO MEMBERS OF THE CITY COUNCIL
SAN JI/AN CAPISTRANO,CA 92675
(949)493-1171 SERGIO FARIAS
(949)49.3.1053 FAx ,r„a•,,, I ' 1961 KERRY K.FERGUSON
WWW'Sanjuaneap)sirano.nrg 1716 ` BRIAN L_ MARYOTT
e p:� PAPA PATTERSON,ESQ.
I DEREK REEVE
July 6, 2018
Evan Marks
Executive Director
Ecology Center
32701 Alipaz Street
San Juan Capistrano, CA 92675
RE: Ecology Center Exclusive Negotiation Agreement (ENA) Period Extension
Dear Mr. Marks:
The Exclusive Negotiation Agreement between the City of San Juan Capistrano and
Ecocenter, Inc. dated January 16, 2018, had an original term through April 30, 2018.
Provisions of the agreement (Section 3) provide for up to two (2) ninety day extensions.
On April 16, 2018, the City and Ecocenter, Inc. amended the Agreement to extend the
term from May 1, 2018, to July 30, 2018.
Pursuant to the terms of the agreement, the City wishes to extend the negotiation period
for an additional ninety days, through October 29, 2018. All other terms and conditions
will remain the same as noted in the original agreement.
By signing this letter you agree'to the extended term of this agreement. Please sign and
return this letter to Tom Toman, Assistant Public Works Director, 32400 Paseo
Adelanto, San Juan Capistrano, CA 92675. We look forward to continuing our positive
working relationship with Ecocenter, Inc.
Sincerely, fp°
`f J
"BE:i'fEr14n Sieg.0
City Manaqer
Scan ,Irian Ccaj)istrano.• Preserving the Pose to Enhance the Future
�� pdnleQonioo,t,�Yciwpapo, ATTACHMENT 2, PAGE 12 OF 13
Acknowledgment and Agreement of new terms:
Evan ivarks Ilcocenter, Inc Date
ATTACHMENT 2, PAGE 13 OF 13
Transformative Community Farm
ME ECOLOGY CMUR 7nIA
'FARM FIELDS
Retooled along biodynamic,
regenerative agriculture principles
ECO LABS
Relocated and expanded to
intersect with farm operations
and provide deeper educational
opportunities
MAKER VILLAGE
New structure with dedicated
7
studios for individual makers
EXPANDED
PARKING FARMING&
�e1 CULINARY INSTITUTE
New structure with commerciat
grade kitchen,meeting rooms,and
° covered event space
C COMMUNITY GRANGE
Public facing general store,cafe,
o� resource and community center in
an existing farm structure
CONGDON HOUSE
-� Welcome center and offices
ATTACHMENT 3, PAGE 1 OF 1
LICENSE AGREEMENT
This License Agreement ("Agreement") is made this Oday of 008, by and
between the City of San Juan Capistrano, a municipal corporation, and the n Juan
Capistrano Community Redevelopment Agency, a public body, corporate an politic (known
jointly hereinafter as the "LICENSOR"), and South Coast Farms ("LICENSEE").
RECITALS
WHEREAS, LICENSOR is the owner of the 28.225 acre farm in the City of San Juan
Capistrano, California, generally located at the northwest corner of Alipaz Street and Camino
Del Avion, which property was acquired to be maintained as open-space within the City; and
WHEREAS, LICENSEE desires to conduct farming operations on 27.725 acres of the
property, with 0.50 acres set aside for City use; and
WHEREAS, LICENSEE has farming expertise and experience and desires to manage
the maintenance and operations of all agricultural activities on the property; and
WHEREAS, LICENSEE and LICENSOR had entered into a Lease Agreement dated
June 15, 1999 for a term of 10 years, which was subsequently revised by a Lease Agreement
dated June 6, 2000, which the parties wish to terminate in return for the grant of license and
the terms and conditions herein.
LICENSE
NOW, THEREFORE, LICENSOR and LICENSEE do hereby mutually agree as
follows:
Section 1. Grant of License/Term.
(a) Grant of License. LICENSOR hereby grants to LICENSEE a License to manage,
maintain, and operate a fruit and vegetable farm on the property, as depicted on the
site plan attached hereto as Exhibit "A" and incorporated herein by reference
(hereinafter referred to as the "Premises"), Provided, however, that this License does
not include the Joel Congdon Residence area as depicted in Exhibit "A," which is
subject to a separate.license. LICENSEE shall provide the expertise, supervision and
management over the farm operations, and LICENSEE shall own all crops produced
on the Premises.
(b) Term. The term of this Agreement with regard to the Premises, shall be for a period of
ten (10) years, commencing upon the date first above written unless sooner
terminated by mutual consent of LICENSOR and LICENSEE.
Page 1 of 9
5524 t 3 I
ATTACHMENT 4, PAGE 1 OF 9
• •
Section 2. License Fee.
(a) LICENSOR shall receive from LICENSEE a license fee of twenty-five thousand dollars
($25,000) annually, to be paid on a quarterly basis, based on calendar year quarters
and prorated accordingly, for the first full five (5) years of the license term.
(b) Ninety days prior to the end of the fifth year of the license term, the license fee shall be
renegotiated between LICENSOR and LICENSEE with the intent being that the agreed
upon license fee for the subsequent five-year term of the license shall match the
market rate for similarly situated properties, provided that in no case shall the license
fee be reduced as a result of the negotiations.
(c) In the event that the parties cannot come to agreement within forty-five (45) days of
commencement of license fee negotiations, either party may call for a binding
arbitration process wherein each side selects an arbitrator and a third arbitration panel
member is then chosen by the two selected arbitrators. The three-person panel shall
then conduct an informal hearing to receive evidence and argument regarding the
appropriate license fee. The panel shall render a final and binding decision within
thirty (30) days of convening the panel. LICENSEE shall continue to pay the license
fee in subsection (a) during the pendency of the proceedings subject to retroactive
adjustment upon the establishment of the new fee pursuant to this subsection.
Section 3. Nature of Uses Permitted Under the license and Maintenance of Premises.
(a) Operation of Farm. LICENSEE shall be responsible for the supervision and
management of every aspect of running a produce farming operation for human
consumption on the Premises in a business like manner.
The existing retail stand may be utilized by LICENSEE for produce retail sales only.
Any expansion, regardless of size or scope, is not permitted under this Agreement
unless LICENSOR's written approval is first obtained.
LICENSEE's supervision and maintenance shall include, but not be limited to:
i. the employment, supervision and direction of all employees engaged in the
farming operation;
ii. providing for the maintenance of all equipment and supervising its use in a
safe and prudent manner;
iii. soil preparation, planting, fertilizing, irrigating, pesticide and herbicide
applications, and the harvesting of all crops;
iv. the marketing and sale of crops;
Page 2 of 9
552413 1
ATTACHMENT 4, PAGE 2 OF 9
v. maintenance of records and accounting for all revenues and expenditures,
including employee payroll and related records;
vi. purchasing of all seeds, plants, fertilizers, herbicides, pesticides, and other
materials and supplies, such as boxes and packaging materials, required for
marketing and sale of the crops;
vii. management and maintenance of all on-site improvements, provided that any
temporary housing is subject to City's approval based on all applicable
provisions of the City's Land Use Code.
LICENSEE shall perform all operations in a competent manner, consistent with the
standards of the industry and in accordance with all applicable Federal, State and local
regulations, including the City's Municipal Code.
(b) Maintenance of Premises. LICENSEE agrees to accept the Premises in its present
condition as of the date of execution of this Agreement. Except for the Congdon
Residence, LICENSEE may use the buildings and existing structures on the Premises
for LICENSEE's use in farming operations. LICENSEE shall maintain, at LICENSEE's
expense, the Premises, including all existing structures and all equipment owned and
furnished by LICENSEE, in a reasonable state of repair and working order.
LICENSEE's maintenance requirements shall include, but shall not be limited to the
following:
i. Fruit Trees. LICENSEE shall plant fruit trees on the Premises and shall be
responsible for properly maintaining them. There is not a restriction regarding
the height of the fruit trees; however, LICENSEE shall be consistent and make
efforts to keep the trees at a height that will not hinder or disrupt views into the
farm or surrounding areas.
ii. Shrubs. The shrubs on the Premises block the wind, limit road dust, and
reduce the amount of debris entering the Premises. LICENSEE is responsible
for sufficiently maintaining the shrubs in,order to keep harmful elements away
from the crops.
(c) Marketing and Sale of Crops. LICENSEE shall be responsible for the marketing and
sale of crops produced on the Premises. Crops will be sold at retail at the retail stand
located on the Premises and to commercial produce wholesalers and distributors.
LICENSEE shall provide a schedule to LICENSOR of proposed days and hours of
operation of the on-site retail location.
i. Importing Items from outside vendors. LICENSEE, in an effort to ensure that
business stays consistent, even in particularly bad years, shall have the
authority to purchase certain produce items from outside vendors to sell at
retail at the Premises.
Page 3of9
552413 1
ATTACHMENT 4, PAGE 3 OF 9
• 0
(d) Condition of Premises. LICENSEE accepts the Premises in its present condition upon
execution of this License. LICENSOR makes no warranty of the suitability of the
Premises for growing crops. LICENSEE agrees, at LICENSEE's expense, to use
reasonable care to control all weeds, noxious or otherwise, growing on the Premises,
including those growing in drainage ditches. LICENSEE small furnish all labor and
materials required to eliminate and otherwise reasonably control all rodents, insects
and other pests on the Premises. LICENSEE agrees to farm the Premises in a
manner reasonably calculated to protect the soil and maintain the fertility through the
use of fertilizers and chemicals in accordance with good farming practices as generally
followed and recognized in Orange County, California. LICENSEE agrees, at
LICENSEE's expense, to keep fences, ditches and borders of the Premises in good
condition and in repair at all times, reasonable wear and tear excepted. The duly
authorized representative of LICENSOR may enter upon the Premises and all
structures and buildings thereon, or any portion thereof, at a reasonable time for the
purposes of inspection.
(e)Access Road. The access road as shown in Exhibit"A," shall be accessible for use by
representatives of the wireless phone company to gain access to the antenna site
located on the Sports Park field adjacent to the Premises. The foundation of the road
shall be comprised of gravel at no cost to LICENSEE. In addition, a gate and
corresponding locks shall be added and maintained at no cost to LICENSEE.
(f) Fourth of July Celebration. LICENSOR shall have use and access to the Premises in
order to host the fireworks celebration for the community from the Premises each July
4th on an annual basis throughout the term of this License. This access shall include,
but not be limited to, all set up, coordination, and take-down activities necessary to fire
the fireworks from the Premises.
Section 4. No Assignments.
LICENSEE shall not assign this License or any interest herein, or sublet the Premises
or any part thereof, or license the use of all or any portion of the Premises or business
conducted therein or thereon, or encumber or hypothecate the Premises or this
License, without first obtaining the written consent of LICENSOR. Any assignment,
subletting, licensing, encumbering, or hypothecating of the Premises or this License
without such prior written consent of LICENSOR, shall be void and shall be cause for
cancellation of this License by LICENSOR at its option.
Section 5. Water.
An existing water well and backbone irrigation system may be available to LICENSEE
for irrigation uses, with LICENSOR being responsible for the maintenance of the well.
The LICENSOR is responsible for providing a source of supply to LICEINSSEE, which
may include well water, recycled water, or domestic water. LICENSED is required to
pay for water at no more then the current agricultural rate, and any cots required in
Page 4 of 9
552413 I
ATTACHMENT 4, PAGE 4 OF 9
keeping the irrigation system operational, regardless of the source of supply.
LICENSEE will not be obligated to pay for differences in water rate costs. LICENSEE
agrees to work cooperatively with LICENSOR to coordinate watering schedules
between the Premises and the City Sports Park. LICENSEE shall not be responsible
for water costs for the City Sports Park.
Section 6. Utilities.
Subject to Section 5 above, LICENSEE is fully and solely responsible for providing any
utility service required for the farm maintenance and operation.
Section 7. Time of the Essence.
Time is of the essence of each and every provision, covenant, and condition herein
contained and on the part of LICENSEE to be done and performed.
Section 8, Default.
(a) If LICENSEE defaults in the payment of the license fee, or any additional
applicable license payments, or defaults in the performance of any of the other
covenants or conditions hereof, LICENSOR may give LICENSEE notice of such
default and if LICENSEE does not cure any such default within three (3) days, or
such other time period as specified in the notice of default, after the giving of such
notice, then LICENSOR may terminate this license on not less than ten (10) days'
notice to LICENSEE. On the date specified in such notice the term of this license
shall terminate, and LICENSEE shall then quit and surrender the Premises to
LICENSOR, but LICENSEE shall remain liable as hereinafter provided. If this
license shall have been so terminated by LICENSOR, LICENSOR may at any time
thereafter resume possession of the Premises by any lawful means and remove
LICENSEE or other occupants and their effects.
(b) If LICENSEE breaches any covenant or condition of this license, LICENSOR may,
on reasonable notice to LICENSEE (except that no notice need be given in case
of emergency), cure such breach at the expense of LICENSEE. The reasonable
amount of all expenses, including attorney's fees, incurred by LICENSOR in so
doing shall be deemed additional fees payable on demand.
Section 9. Termination Due to Bankruptcy or Insolvenc .
In the event proceedings in bankruptcy are commenced by LICENSEE, or LICENSEE
is found to be in a state of insolvency, then in such event, LICENSOR shall have the
right to terminate this Agreement and all further rights and obligations Ihereunder, by
ten (10) days' notice in writing to LICENSEE, in which event, on the airation of the
ten (10) days from mailing of the notice, this License shall automaticall terminate.
Section 10. Notices.
Page 5 of 9
552413 1
ATTACHMENT 4, PAGE 5 OF 9
Any notice required to be given under this Agreement shall be in writing and shall be
deemed to have been duly given and received if and when personally served, or forty-
eight(48) hours after being deposited in the United States mail, first class, postage
prepaid, addressed to the intended party at:
LICENSOR:
City of San Juan Capistrano/Redevelopment Agency
City Manager/Executive Director
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
LICENSEE:
George Kibby
South Coast Farms
2268 E. Sandalwood Place.
Anaheim, CA 92806
Section 11. AttorneysFees.
If either party commences action against the other party arising out of;or in connection
with this License, the prevailing party shall be entitled to have and recover from the
other party reasonable attorney's fees and costs of suit.
Section 12. Surrender of Premises.
LICENSEE shall, at the termination of this License, vacate the Premises in as good
condition as they are in at the time of entry thereon by LICENSEE. Upon vacating,
LICENSEE shall leave Premises free and clear of all rubbish and debris.
Section 13. Insurance.
LICENSEE shall pay for and maintain insurance throughout the life of this License with
general liability coverage of one million Dollars ($1,000,000) minimum coverage per
occurrence, and fire and all risk property damage insurance, insuring all of
LICENSEE's equipment and trade fixtures located on the Premises for full
replacement cost. Said policy shall name LICENSOR as additional inured by
endorsement to the policy and shall be in a form satisfactory to LICENSOR.
LICENSEE will furnish LICENSOR with proof of insurance issued by an insurer
approved by LICENSOR showing the coverage to be in force. LICENSEE's insurance
coverage shall be primary coverage. LICENSOR and LICENSEE eac waive the
rights of subrogation that may arise against the other because of any 4ct covered by
insurance. The policy shall provide that modification or cancellation of,the policy shall
Page 6 of 9
552413 1
ATTACHMENT 4, PAGE 6 OF 9
0 i
not occur without thirty (30) days advance written notice provided by the insurer to
LICENSOR.
Section 14. Indemni .
LICENSEE shall defend, indemnify, and hold harmless LICENSOR, and their
respective elected officials, officers, employees, and agents, from and against any and
all actions, claims, demands, losses, costs, expenses, including legal costs and
attorney's fees, for death or injury to persons or damage to property or the Premises,
or for the pollution thereof and cleanup costs, arising out of or related to LICENSEE's
use of the Premises, except to the extent of such loss as may be caused by
LICENSOR's own negligence, including that of their respective officials, officers,
employees and agents. LICENSOR shall not be held accountable for any preexisting
soil contamination, including those identified in the report dated January 28, 1990,
prepared by Chem Risk, and the report dated December 18, 1990, prepared by South
Coast Geological Services, Inc.
Section 15. Taxes.
Pursuant to Revenue & Taxation Code §107.7, the property interest created herein
may be subject to property taxation and LICENSEE may be subject to property taxes
levied on such interest. In no event shall LICENSOR be liable for any taxes owed as a
result of this License or LICENSEE's use of the Premises.
Section 16. No Relocation Benefits.
This License is not intended to convey a property interest but to permit LICENSEE to
use the Premises as provided for herein. LICENSEE acknowledges the rights granted
by State and/or Federal Relocation Assistance Laws and regulations and,
notwithstanding any other provision of this License, expressly waives all such present
and future rights, if any, to which LICENSEE might otherwise be entitled from
LICENSOR or the City of San Juan Capistrano with regard to this License and the
business operated on the Premises. LICENSEE shall not be entitled to relocation
assistance, relocation benefits, or compensation for loss of goodwill upon the
termination of this License.
Section 17. Entire Agreement.
The terms in this License constitutes the entire understanding and agreement between
the Parties and supersedes all previous negotiations between them pertaining to the
subject matter thereof.
Section 18. Termination of Past Leases Licenses and Agreements. ;
This License and the terms and conditions hereof supersede and shall!terminate the
leases entered into by the parties dated June 15, 1999 and June 6, 2000, and
Page 7of9
552413 1
ATTACHMENT 4, PAGE 7 OF 9
• •
any other leases, licenses, agreements or understandings pertaining to the subject
matter hereof.
IN WITNESS WHEREOF, LICENSOR and LICENSEE have caused this License
to be executed on the date and year first written above.
LICENSEE:
SOUTH COAST FARMS
By:
_ 1'� -4�t
eorge Abbl
LICENSOR
CITY OF SAN JUAN CAPISTRANO,
A California municipal corporation
JBy: •
Joe oto, Mayor
ATT
Mi4rt . Monaha , CitV Cle
APPROVED AS TO FORM:
bwal L'n�v�'-
Omar Sandoval, City Attorney
[ADDITIONAL SIGNATURE PAGE FOLLOWS]
Page 8 of 9
552413 1
ATTACHMENT 4, PAGE 8 OF 9
SAN JUAN CAPISTRANO COMMUNITY
REDEVELOPMENT AGENCY,
a public body corporate and polijic
14
i By
Mak Nielsen, Chai man
A T
Ma Monti
on n, A96ncy cretary
APPROVED AS TO FORM;
Omar 5 n vat, Agency Co nsel
Page 9 of 9
s52ai s i
ATTACHMENT 4, PAGE 9 OF 9
f �
� r
ACCESS RbA❑ n.' .. .�.- ..ti... i •
EC�I]IPMfEfJ7 51'ORAGE
�GbNGODN HE]USti � �
e
• SHITA 11'
KINFARM
6.0
Copyright(D 2006 All Rights Reserved. The informatlon contained herein is the prolyietodY prope9ty of the
contrWt,dor supplied under license and may not be approved except a�;licensed by D.
EXHIBIT A
EXHIBIT A, PAGE 1 OF
AGREEMENT ESTABLISHING A PAYMENT SCHEDULE FOR
OUTSTANDING WATER CHARGES
BY AND BETWEEN
THE CITY OF SAN JUAN CAPISTRANO AND SOUTH COAST FARMS, INC.
This Agreement Establishing a Payment Schedule for Outstanding Water Charges
("Agreement") is made and entered into this 7 day of February, 2017, by and between
the City of San Juan Capistrano, a California municipal corporation ("City") and South
Coast Farms, Inc., a California corporation ("South Coast") with reference to the facts
set forth in the Recitals below:
RECITALS
WHEREAS, City is the owner of the 28.225 acre farm in the City of San Juan
Capistrano, California, generally located at the northwest corner of Alipaz Street and
Camino Del Avion, San Juan Capistrano, California (the"Property").
WHEREAS, On May 6, 2008, the City and South Coast entered into a ten-year
License Agreement ("License Agreement"), granting South Coast a license to conduct
farming operations on 27.725 acres of the Property, with 0.50 acres set aside for City
use.
WHEREAS, Pursuant to Section 5 of the License Agreement, the City is
responsible for providing a source of water supply to South Coast, and South Coast is
required to pay for water at no more than the current agricultural rate and any costs of
keeping the irrigation system operational, regardless of the source of supply.
WHEREAS, South Coast currently owes to the City an outstanding balance of
$246,971 in unpaid water charges for Account No. 90032.
WHEREAS, City and South Coast desire to establish a payment schedule
regarding this outstanding balance.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, and of the mutual
obligations and agreements contained herein, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Payment Schedule.
South Coast shall complete payment of all outstanding charges for Account No.
90032 prior to the expiration of the License Agreement in July 2018.
611.1'W310\29255.538 1
1
ATTACHMENT 5, PAGE 1 OF 4
Specifically, South Coast shall make payments pursuant to the following payment
schedule:
December 31, 2016 $40,000
May 15, 2017 $40,000
August 15, 2017 $40,000
December 1, 2017 $40,000
May 15, 2018 $40,000
July, 2018 $40,000/Remaining Balance
2. Payment in Addition to Regular Monthly Charges.
Payments made by South Coast pursuant to the Payment Schedule set forth in
Section 1 shall be made in addition to the payment by South Coast of regular
monthly charges for current water use.
3. Default.
If South Coast defaults in the payment of any scheduled payment set forth in
Section 1 or defaults in the payment of any regular monthly charges for water
use, such action shall constitute a default as described in Section 8 of the
License Agreement, and shall authorize the City to take action as described
therein_ In addition, if South Coast defaults in the payment of any scheduled
payment set forth in Section 1, the entire outstanding balance for Account No.
90032 becomes due and owing as a separate obligation under this Agreement.
4. Additional Fees.
Provided that South Coast makes payments in accordance with the Payment
Schedule set forth in Section 1, the City shall not assess any of the following
charges against South Coast regarding Account No. 90032: late fees, courtesy
tag fees for nonpayment, disconnection of service fees.
5. Termination.
This agreement shall remain in effect until South Coast has completed payment
of the outstanding balance for Account No. 90032, unless earlier terminated by
mutual agreement of the parties.
6. Notices.
Any notice required to be given under this Agreement shall be in writing and shall
be deemed to have been duly given and received if and when personally served,
or forty-eight (48) hours after being deposited in the United States mail, first
class, postage prepaid, addressed to the intended party at:
61147.00310\29255538.1
2
ATTACHMENT 5, PAGE 2 OF 4
CITY:
City of San Juan Capistrano
City Manager
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
SOUTH COAST:
George Kibby
South Coast Farms r,
7. Attorney's Fees.
If either party commences action against the other party arising out of or in
connection with this Agreement, the prevailing party shall be entitled to have and
recover from the other party reasonable attorney's fees and costs of suit.
8. Indemnity_
South Coast shall defend, indemnify, and hold harmless the City, and its elected
officials, officers, employees, and agents, from and against any and all actions,
claims, demands, losses, costs, expenses, including legal costs and attorney's
fees, for death or injury to persons or damage to property, arising out of or
related to South Coast's performance under this Agreement, except to the extent
of such loss as may be caused by the City's own negligence, including that of the
City's officials, officers, employees and agents.
9. Entire Acireement.
The terms of this Agreement constitute the entire understanding and agreement
between the Parties and supersedes all previous negotiations between them
pertaining to the subject matter thereof.
IN WITNESS WHEREOF, City and South Coast have caused this Agreement to
be executed on the date and year first written above.
611-17(X)3[M-1925553S.1
3
ATTACHMENT 5, PAGE 3 OF 4
SOUTH COAST FARMS:` CITY OF SAN JUAN CAPISTRANO
Ge� a�Kil� a S' ei n r
� Y 1 Ma age
ATTEST:
Maria Morris, CMC, City Clerk
APPROVED AS TO FORM:
Jeff Ballinger, Clty Attomey
61147.003 1012925553 B.1
4
ATTACHMENT 5, PAGE 4 OF 4
LICENSE AGREEMENT
This License Agreement ("Agreement") is made this 4t" day of May, 2016, by and
between the City of San Juan Capistrano and Ecocenter, Inc., dba The Ecology Center,
a California nonprofit public benefit corporation ("Licensee").
RECITALS:
WHEREAS, Licensor is the owner of a 28.225 acre farm in the City of San Juan
Capistrano, California, located at 32701 Alipaz Street, which property was acquired to
be maintained as open space within the City and for the preservation of the historic Joel
Congdon House; and
WHEREAS, Licensee desires to continue conducting environmental education
uses in and around the Congdon House (House) on an approximately 0.75 acre area at
32701 Alipaz Street (hereinafter referred to as the "Property") and has the requisite
expertise and experience to conduct such uses.
NOW, THEREFORE, City and Licensee do hereby mutually agree as follows:
Section 1. Grant of License.
Licensor hereby grants a license to Licensee for the purpose of managing and
maintaining The Ecology Center within the Property.
The portion of the site which is the subject of this License is specifically
described in the Site Plan attached as Exhibit A, and incorporated herein by reference.
Section 2. Term of License.
The term of this License Agreement shall be for a period of twenty (20) years
following the date that this Agreement is fully executed ("Effective Date").
Section 3. License Fee.
In consideration of the terms of this Agreement, the Licensee agrees to pay
Licensor the fee amount of two thousand ($2,000) dollars per month for the use of the
Property. The monthly fee shall be due on the first day of each month after the Effective
Date of this Agreement and the monthly fee amount shall automatically increase
annually thereafter on the anniversary date of this Agreement based on the current Los
Angeles/Orange County/Riverside Consumer Price Index for the preceding year,
rounded up to the nearest five (5) dollar increment. In no event shall the amount of the
License Fee go down.
1
ATTACHMENT 6, PAGE 1 OF 7
Section 4. Allowable Uses.
Licensee may not utilize the Property in violation of laws, regulations or
conditions of approval or for any other uses than those specifically set forth in this
Agreement and Conditional Use Permit (CUP) 15-006 for The Ecology Center,
approved by Planning Commission Resolution No. 16-02-23-1, as amended from time
to time, and incorporated herein by reference (Exhibit B).
Section 5. Reservations to Licensor.
Licensor reserves the right to enter the Property at any reasonable time for
the purpose of inspection. Any rights herein reserved shall, moreover, not be exercised
in any manner which will unreasonably interfere with Licensee's use and occupancy of
the Property for the purposes stated in this Agreement.
Licensor also reserves the right to enter the Property for purposes of
maintenance, which may include the need for Licensee to vacate Property for a
reasonable temporary period to be specified at that time, with provision of (ninety) 90
days' notice, except for repairs deemed to be for emergency/public safety reasons.
Section 6. Condition, Maintenance and Improvements.
(a) Condition: Licensee agrees to accept the Property in present condition on
the date of execution of this Agreement. Licensee agrees to maintain at the Licensee's
expense the Property in good order and safe and sanitary condition.
(b) Maintenance, Repair, and Custodial Responsibilities: Licensee shall be
responsible for, but not limited to the following items:
1. Interior maintenance and janitorial functions including solid waste and
recycling disposal.
2. Appliance repair and replacement.
3. Maintenance of the heating/cooling system, smoke detectors and
interior plumbing, including repair or replacement of deteriorated
equipment/fixtures due to aging.
4. Care and maintenance of interior flooring, walls, ceilings, including
painting/wallpaper, and built-ins. Repair or like-for-like replacement of
materials shall be in compliance with the Secretary of the Interior's
Standards for Treatment of Historic Properties due to ordinary wear
and tear/aging.
5. Repair and maintenance of interior furnishings.
6. Repair and maintenance of interior and exterior light fixtures, including
replacement of bulbs and like-for-like replacement of fixtures due to
aging or malfunction.
2
ATTACHMENT 6, PAGE 2 OF 7
7. Exterior grounds maintenance and repair, including ensuring adequate
drainage to prevent deterioration of historic building foundations;
irrigation; utility laterals; landscape (except historic tree trimming),
parking and drive aisles; and hardscape in compliance with the
Secretary of the Interior's Standards for Treatment of Historic
Properties.
8. Pest control (not including termites).
9. Exterior building(s) upkeep and minor repair, including minor wall,
window and door repair; exterior painting of the House, outbuilding,
and water tower per Secretary of the Interior's Standards.
10.House, outbuilding, water tower roof shingle repair/replacement and
exterior character-defining feature replacement, repair, maintenance
as determined by the City Manager or designee.
11.No alterations to the House or any other facility located on the Property
shall occur without prior written approval by the Licensor.
12.Repair or replacement of House electrical system due to aging of
structure.
13.Periodic trimming and maintenance as determined necessary by the
Licensor for the three pre-existing historic trees (palm and citrus
southeast of, and palm in front of the House).
14.Interior repair and maintenance of water tower and it's componentsif
proposed to be used for program, office or any related uses by
Licensee with prior Licensor approval.
15.Maintenance (sanitation pipe cleaning and clog removal, minor leaks)
of water/sewer mains and storm drains external to the site that serves
the Property.
(c) Tenant Improvements: Licensee must receive written approval from
Licensor prior to making any improvements to the Property and/or facilities. If a permit is
required the Licensee shall submit to the Development Services Department, in writing,
any desired changes/improvements to the Property and/or facilities. It is is the
responsibility of Licensee to determine if a permit(s) is required. All required permits
must be obtained prior to commencing any work on said improvements.
All improvements undertaken by Licensee and their maintenance shall be the
financial responsibility of Licensee unless a cost sharing agreement with the City is
approved by the Licensor.
Section 7. Domestic and Irrigation Water, Electrical, Gas, Telephone
Television/Cable/Wireless Services.
Expenses related to any and all of these utilities and services for the Property are
the sole responsibility of Licensee. Licensee shall be responsible for opening/closing
facility for installation, repairs, and/or removal of these utilities and services. Licensor
staff will not meet vendor for delivery, installation, repair, or removal appointments.
3
ATTACHMENT 6, PAGE 3 OF 7
Section 8. Conditions of Operation.
The Property shall be used for environmental education and museum functions in
accordance with the provisions of this Agreement and CUP 15-006 including the
specific conditions therein, as amended from time to time and incorporated herein by
reference.
(a) Any holes or other defacement of the walls, roof or ceiling of the House
shall be repaired and restored back to original condition by Licensee. No
structural or other changes of any kind shall be made to the House or any
other improvement on the Property unless prior written approval is
obtained from the Licensor. The House floor shall be maintained in its
original condition, with no permanent alterations; only temporary coverings
(e.g., rugs) that do not need to be affixed to the floor are allowed.
(b) Licensee shall obtain approval from Licensor for distribution of keys, and
shall provide Licensor a list of key-holders. No unauthorized distribution of
keys shall occur.
(c) Licensee shall, at all times, keep the Licensor's designated liaison, the
Assistant City Manager (or his/her designee), advised of the Licensee's
current address and telephone number.
(d) Licensee shall, at all times, ensure that the operation and use of the
Property does not adversely affect the public health, safety and welfare.
(e) Licensee shall submit a performance report annually on or before March
31St to the City Manager per City Council Policy 014 including the
following:
1. Number of visitors receiving benefits from activities including tours,
meetings, and classes.
2. The city of residence of citizens receiving benefits.
3. Proof of the organization's continued nonprofit status.
4. Disclosure of all activities being conducted on the Property, including
tours, meetings, and classes.
5. Description of maintenance of Property.
6. Information on the total revenue received by the Licensee in
conjunction with the operation of the Property under this Agreement
during the reporting period and disclosure of the sources of that
revenue.
4
ATTACHMENT 6, PAGE 4 OF 7
Section 9. Future Capital Improvement Projects.
The Licensee shall conduct capital donation fundraising campaigns for future
Capital Improvement Projects (CIP) including, but not limited to the following:
■ Reconstruction of the Barn Facility and Public Meeting Room Space
■ An additional Restroom Facility
• Supporting Sanitation and Water Structure Improvements
• Concession Snack Bar
■ Parking Lot Improvements
• Additional Exterior Low-level Energy Efficient Lighting
Additional House Improvements Including New Flooring
The initial fundraising campaign for the Barn Restoration shall be initiated no
later than July 1, 2016. Fundraising campaign efforts for Property related CIPs
shall not be initiated without prior Licensor written approval.
In partnership with improving and constructing these projects as listed in this
section, the City will waive permit fees associated with these projects.
Section 10. Compliance with Law.
Licensee shall comply with all applicable laws, ordinances, codes and regulations
of federal, state and local government.
Section 11. Event Parking.
Off-site vehicle parking shall be provided to participants during any event held at
the Property exceeding one hundred (100) participants.
Section 12. Insurance/Indemnity.
On or before beginning any of the services or work called for by any term of this
Agreement, Licensee, at its own cost and expense, shall carry, maintain for the duration
of the Agreement, and provide proof thereof that is acceptable to the Licensor, the
insurance specified below with insurers and under forms of insurance satisfactory in all
respects to the Licensor. Insurance required herein shall be provided by Admitted
Insurers in good standing with the State of California and having a minimum Best's
Guide Rating of A-Class VII or better.
(a) Comprehensive General Liability: Throughout the term of this Agreement,
Licensee shall maintain in full force and effect Comprehensive General Liability
coverage in an amount not less than two and a half million dollars ($2,500,000),
per occurrence combined single limit coverage.
(b) Proof of Insurance Requirements/Endorsement: Licensee shall submit the
5
ATTACHMENT 6, PAGE 5 OF 7
insurance certificates, including the deductible or self-retention amount, and an
additional insured endorsement naming Licensor, its officers, employees, agents,
and volunteers as additional insured as respects each of the following: liability
arising out of activities performed by or on behalf of Licensee, including the
insured's general supervision of Licensee; products and completed operations of
Licensee; or premises owned, occupied or used by Licensee. The coverage shall
contain no special limitations on the scope of protection afforded the Licensor, its
officers, employees, agents, or volunteers.
(c) Notice of Cancellation/Termination of Insurance: The above policy/policies
shall not terminate, nor shall they be canceled, nor the coverages reduced, until
after thirty (30) days' written notice is given to Licensor, except that ten (10) days'
notice shall be given if there is a cancellation due to failure to pay a premium.
Section 13. No Assignments.
Licensee shall not assign this Agreement or any interest herein, or sublet the
Property or any part thereof, or license the use of all or any portion of the Property or
business conducted therein or thereon, or encumber or hypothecate this Agreement,
without first obtaining the written consent of Licensor. Any assignment, subletting,
licensing, encumbering, or hypothecating of this Agreement without such prior written
consent shall, at the option of the Licensor, be subject to automatic termination of the
Agreement by Licensor.
Section 14. Termination.
This Agreement may be terminated upon the default of one of the parties if such
default is not cured within ninety (90) days following written notice of such default from
non-defaulting party. In the event of a dispute between the parties, Licensor and
Licensee shall meet and confer regarding the matter. If the dispute cannot be resolved
through a meet and confer session, then the Agreement may be terminated by the non-
defaulting party.
Section 15. Notices.
All notices, demands, consents, or other communications required to be given
under this agreement shall be accomplished by first class mail, postage prepaid, and
deposited in the U.S. mail, or personally served upon the other party.
To Licensor:
City of San Juan Capistrano
City Manager
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
6
ATTACHMENT 6, PAGE 6 OF 7
To Licensee:
Evan Marks, Executive Director
The Ecology Center
32701 Alipaz Street
San Juan Capistrano, CA 92675
Section 16. Attorneys' Fees.
If either party commences action against the other party arising out of or in
connection with this Agreement, the prevailing party shall be entitled to have and
recover from the other party reasonable attorney's fees and costs of suit.
Section 17. Entire Agreement.
This Agreement constitutes the entire understanding and agreement between the
Parties regarding the Property and supersedes all previous negotiations and
agreements between them pertaining to the subject matter thereof.
IN WITNESS WHEREOF, the Licensor and Licensee have caused this
Agreement to be executed on the date and year first written above.
CITY OF SAN JUAN CAPISTRANO BY:
Benj i ie I, City Manager
ECOCENTER, INC.
B &,—� -y:
Evan Marks, Executive Director
A T:
- n-P 0.,
ria Morris, Ci i
APPROVED AS TO FORM:
n o ,/7
Jeff gallAg6r, City ttorney
7
ATTACHMENT 6, PAGE 7 OF 7
EXHIBIT A
t�, •,3. I r
r
'' ,t fir• � ' .: ����� r
RON
,N
50
.. l+l��Y'+! .`yira 'i c.1{ res f:• � s 1
7 J11r ;1 5 f ,1l1 i
Ir��'�-���, ,,.� �.�,�.df.1�r/1• �re• ���.� f�:' � .�y�;ii•�,i' .
The Ecology Center License Agreement Site Plan
BITE AREA: APPROXIMATELY . 75 ACRE
PENNDriveways/farm access under joint use of The Ecology Center and South Coast Farms,
NAP 1 "Not A Part" designating existing weather station,
EXHIBIT A, PAGE 1 OF 1
PC RESOLUTION NO. 16-02-23-1
CONDITIONAL USE PERMIT CLIP 15-00
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SAN JUAN
CAPISTRANO,CALIFORNIA APPROVING OF CONDITIONAL USE PERMIT(CUP)15-
006 FOR THE ECOLOGY CENTER PROJECT LOCATED AT 32701 ALIPAZ STREET
(ASSESSOR PARCEL NUMBER 121-190-57)(EVAN MARKS)
Whereas, Even Marks,The Ecology Center, 32701 Alipaz Street, San Juan
Capistrano,CA 92675(the"Applicant"), has requested approval of Conditional Use Permit
(CUP) 15-006 for The Ecology Center which would modify Conditional Use Permit 08-003,
specifically permitted uses,hours of operation,frequency of events, parking requirements
and alcohol services located at the Congdon House at 32701 Alipaz Street which is
General Plan-designated Agri-Business, classified as Agri-Business, and regulated by
Specific Plan (SP) 85-01, Kinoshita Farm on the Official Zoning Map (the"Project"); and,
Whereas, the-City of San Juan Capistrano is the owner of real property
located at 32400 Paseo Adelanto; and,
Whereas, the proposed project has been processed pursuant to Section 9-
2.301, Development Review of the Land Use Code; and,
Whereas,the Environmental Administrator has reviewed the project pursuant
to the California Environmental Quality Act(CEQA)and has determined that the project is
Categorically Exempt(State CEQA Guidelines Section 15301; Class 1 "Existing Facilities")
from further environmental review; and,
Whereas,the Planning Commission conducted a duly-noticed public hearing
on January 12, 2016, February 9, 2016, and February 23, 2016, pursuant to Title 9, Land
Use Code, Section 9-2.302 and City Council Policy 5 to consider public testimony on the
proposed project and has considered all relevant public comments.
NOW,THEREFORE, BE IT RESOLVED, that the Planning Commission of
the City of San Juan Capistrano does hereby find that the project is Categorically Exempt
(Section 15301; Class 1 "Existing Facilities") from further environmental review under
CEQA, The project is consistent with Section 15301 because the proposed modifications
to the CUP result in uses identical or substantial similar to those already permitted and
taking place at the Ecology center and within theAgri-Business designation. Therefore,the
proposed modifications to the CUP do not result in an expansion of the existing use. In
addition, the CUP modifications will also not result in any physical alteration of the Joel
Congdon House or any other structures at the Ecology Center site, thus there will be no
expansion of capacity. Further, none of the exceptions to the exemptions, found in State
CEQA Guidelines Section 15300.2, apply.
NOW, THEREFORE, BE IT FURTHER RESOLVED, that the Planning
Commission of the City of San Juan Capistrano does hereby make the following findings
EXHIBIT B, PAGE 1 OF 3
EXHIBIT B
PC Rosolulbn 10-02-23-1 �.� ___ FebruaN 23,2016
as established by Section 9-2.317,Conditional Use Permit of Title 9,Land Use Code of the
City of San Juan Capistrano,
1. The proposed use and design are consistent with the maps and policies of the
General Plan because the modifications will not have an adverse impact on the
primary agricultural use of the site. Physical changes and enhancements to the
surroundings of the Congdon House comply with the Cultural Resources Element of
the General Plan. The modification is consistent with the Secretary of the Interior's
Standards primarily because it will have minimal impact on historic materials, is
compatible with the site's historic character,and will appropriately address potential
archaeological resources.
2, The proposed use and design are consistent with the purpose, intent, and
standards of the Land Use Code and any applicable specific plan or comprehensive
development plan, except as otherwise approved, because the site is zoned Agri-
Business and regulated under the provisions of Specific Plan (SP)85-01, Kinoshita
Farm, which allows for accessory compatible uses to the primary agricultural
production use at the site. The proposed events are related to the agricultural use of
the site and are considered accessory and compatible to the primary agricultural
production use.
3. The site for the proposed use is adequate in size and shape to accommodate all
yards,open spaces, setbacks,walls and fences, parking and loading areas,fire and
building code considerations, trash and recycling enclosures, and other features
pertaining to the applidation because the modification will occur at an existing
historic developed site. There are no project components that affect or involve yard,
open space or setback standards. The site has existing parking and access in
accordance with Land Use Code, fire and building code requirements. Adequate
trash and recycling receptacles exist on the site at the rear of the structure and
coordinated with the farm's existing trash service,
4. The proposed use and the ongoing operation of the use are compatible with
abutting properties and the permitted uses thereof, and will not generate excessive
light, noise, vibration, odors, visual blight, traffic, or other disturbances, nuisances,
or hazards because the modification.; and on-going operation is compatibie with the
abutting farm on three sides and the existing residential uses on the east side of
Alipaz Street, The proposed use will continue to operate as an enhancement of the
existing farm use and will not create any additlonal impacts related to light, noise,
vibration, odors, visual blight or other disturbances, nuisances, or hazards etc,
5. The site for the proposed use has adequate access and parking to support the use
because modifications are not proposed to impact access and parking and the
project will utilize an existing vehicular entry to the site and adequate access and
parking exists on the site; and the use will not generate significant or excessive
traffic.
EXHIBIT B, PAGE 2 OF 3
r't: I�tsot«lic7n 16.02.2:1-1 - FgDruarY 23.24�G
NOW, THEREFORE, BE IT FURTHER RESOLVED, that the Planning
Commission of the City of San Juan Capistrano hereby approves (CUP) 15-006, subject to
those conditions of approval established by Exhibit A, attached hereto and incorporated
herein.
NOTICE OF DETERMINATION: The Planning Commission hereby directs
staff to prepare and file a Notice of Exemption with the County Clerk within five days of the
adoption of this resolution.
CUSTODIAN OF RECORDS: The documents and materials associated with
this Resolution that constitute the record of proceedings on which these findings are based
are located at San Juan Capistrano City Hall, 32400 Paseo Adelanto, San Juan
Capistrano, California 92675. The Development Services Director is the custodian of the
record of proceedings,
EFFECTIVE DATE & FINAL APPROVAL: This project approval shall
become effective following expiration of the fifteen (15) day appeal period, subject to an
appeal application. The appeal period shall expire at 5;00 p.m., Wednesday, March 9,
2016. This project approval is a modification to an already existing use and is in effect as
of the date of this approval.
PROTEST OF FEES, DEDICATIONS, RESERVATIONS OR OTHER
EXACTIONS: Pursuant to Government Code Section 66020, the applicant may protest the
imposition of fees, dedications, reservations or other exactions imposed on this
development project by taking the necessary steps and following the procedures
established by Sections 66020 through 66022 of the California Government Code.
PASSED, APPROVED AND ADOPTED this-2-3 Id day of February, 2016
R Wlllian $; ie Chairman
-�,ISergi Klotz, A I5, Assistant Development
Servic s Director
Secretary
EXHIBIT B, PAGE 3 OF 3
EXH
PC RESOLUTION NO.16-02-23-1
CONDITIONS OF APPROVAL
PROJECT LOG 01: Conditional Use Permit(CUP) IMOO
PROJECT NAME: The Ecology Center
PC APPROVAL DATE: February 23,2016
These conditions of approval apply to the above-referenced project application described In
more detail below. For the purpose of these conditions,the term'applicenr shall also mean the
developer, the owner or any successor(s)In interest to the terms of this approval.
GENERAL CONDITIONS:
A. P(olect_i ons Th a subject project consists of Conditional Use Permit (CUP) 15-
000 to modify CUP 08-003 located at 32701 Affpaz Street (Asaass❑r Parcel
Number 121-11-0-$7), which Is General Plan-designated Agri-Business and
classified as Agri-Business and regulated under the provisions of SpecMc Plan
(SP)8"1, Kinoshita Farm,This project approval Is based on and subject to the
application materials prepared by The Ecology Center - site photos, sketches
and Including site plan(s), and any other plans. These plans and the proposed
use of the prosect site are hereby Incorporated by reference Into this approval as
submitted and conditioned herein, and shall not be further altered unless
reviewed and approved pursuant to Article 9.2.301, Development Review
Procedures of Title 9, Land Use Code.
B. g!g yllAnce Mh Otdalclio R-e-aul manta, Approval of this application does not
relieve the applicant from complying with other applicable Federal, State, County
or City regulations or requirements. The applicant shall compty with all
requirements of the City of Sen Juan Capistrano Municipal Cade, all
requirements of City ordinances, resoluilons, and all applicable standards and
policies that are In effect at the lime that building permits are Issued for the
development.
C. Slon%J Pigripi All pians, specificatlons, studies, reports, calculatfans, maps,
notes, legal documents, and designs shall be prepared, stamped and signed,
when required, only by those Individuals legally authorized to do so.
D. tYantr! D-olmm, The applicant, its agents, representatives, suconssore, and
assignees shall defend, Indemnify and hold harmless the City of San Juan
Capistrano, Its elected and appointed offlolala and employees, and its contract
consultants, from any claim, action or proceeding to attack, set aside, vold, or
annul any(and use approval associated with this project, Including but not limited
to environmental approvals under CEQA, architectural control approvals, use
permit approval's, or other applicable City Municipal Code Title S land use
approvals. Upon notice provided by Chy to the applicant, its agents,
representatives, successors, or assignees, of service of process of such claims
or actions, the project proponent, Its agents, representatives, successors, and
EXHIBIT C, PAGE 1 OF 3
PC Resolution 16-02-23-1 CondNlons of Approval
CUP 15-006, The Ecology Center Date of Approval:February 23, 2016
Page 2 of 6 pages
assIgnees, shall Immediately ad to provide an appropriate defense to such
claims or actions. The applicant shall consult with the City Attomey regarding
appropriate defense counsel In the event of the filing of such claims or actions.
(DSD)
.�, E. In the event that exhibits and written conditions are
Inoonslatent, the written conditions shall prevail. If there are any disparities
between these condltions and the plans or final revised plans that are approved
for any subsequent phase, the conditions and/or plans as stipulated In the later
approval shall prevell.
F. Ems.The applicant shall pay all fees at the time fees are determined payable
and comply with all requirements of the City of San Juan Capistrano Munlclpai
Code Section 9.5.101 and applicable federal, state, and focal agencies,The duty
of Inquiry as to such requirements shall be upon the applicant.
1z THE FOLLOWING CONDITIONS SHALL BE SATISFIED PRIOR TO ISSUANCE OF
ANY BUILDING PERMIT(S):
1.1P Prior hie c{c r� Prior to Issuance of building permits, plans for this purled
shall be submitted to the Building and Safely Division for review and approval,
and shall comply with the latest City-adopted odition of the applicable building
codes. (B&S)
1.2 Canroaslon jGnsck_Sar). Prior to Issuance of building permits, plans for this
project shall be submitted to the Planning Division for review and entitlement
processing. (13813)
THE FOLLOWING CONDITIONS SHALL BE SATISFIED AT ALL TIMES:
2.1 Hourp of 4nor^ratlon. The use may be oparaled daily, between the hours of 8:00
a.m. and 7:00 p.m. The use hours may extend to 10:0D p.m. up to three
evenings per month,for a total of up to 36 times per year.(DSD)
2.2A111pgz and Gsmjn( rir�l Avi S rout AkML Prtorwritten approval by the City
E nglnuor Is required on a case by case bauia for tho six (8) annual community
events for paAing on the west aide of AtiW Street(from Via Positiva to Camino
- del Avion)and Camino del Avlon(west of Allpaz Sbreet). (PW&UD)
2.3 Alrah I ftr0gq, The onslte sale of alcohol shall not be permitted. The service
of alcohol may be served In conjundlon with. the six (0) annual community
events, carporato oducatlonaI events and cullnory educational classes; subject to
approval from the Deipartmeril of Alcoholic Beverage Control (ABC) for a 1-day
(daily)seller license for each event.(DSD)'
2.4 gqauaI`- ClrA q E n The applicant shall, submit to the
P%nning Dlvlalon a calendar of all activit{oe for each calendar year. SIX (6)
annual community events shall be included as part of this CUP.(DSD)
2.5 Nan-91jumalton Activities Including wedding ceremonlesl
receptions and concerts are not permitted on the property.(DSD)
EXHIBIT C, PAGE 2 OF 3
PC Resolution 16-02-23-1 Condttbns of Approval
CUP I&M, The Ecology Center Date of Approval:February 23, 2010
Page 3 of 0 pages
2.6 PmpjRqci 5ou[1 , The use of amplified sound for Ove entertainment shall be
limited to the six(6)annual community events.(DSD)
2.7 sltc+ MgInteneno, The applicant shall maintain all portions of the site, Including
undeveloped areas, pursuant to Munlclpal Code requirements for property
maintenance. (DSD)
2.8 Conelatenr,_y will) AcgrgtQq F 1Ang The project shall be conatructed In
accordance with all the approved plans and conditions of approval, Including but
not tlm ted to site plan,'Roor plan and landscapellrrigatlon plana. (PLN)
2.9 OCFA. Coordinate all events with the Orange County Fire Authority (OCFA) -
contact Lynne Pivoroff at(714)573.6133.
Responsible Departments/Agencies: DSD: Development Services Department
DSD-B&S: DSD Building&Safety Division
MUD: PubOc Works and Utilities Department
OCFA: Orange County Fire Authority
Applicant Acceptance of Condkions of Approval:
Signature of(name&title) Date
EXHIBIT C, PAGE 3 OF 3
LICENSE AGREEMENT
BY AND BETWEEN THE CITY OF SAN JUAN CAPISTRANO
AND ECOCENTER, INC., DBA THE ECOLOGY CENTER FOR THE PROPERTY
LOCATED AT 32681 ALIPAZ STREET, SAN JUAN CAPISTRANO
PARTIES AND DATE
This License Agreement ("Agreement") is entered into as of this day of August,
2018 ("Effective Date") by and between the City of San Juan Capistrano, a California
municipal corporation (the "City") and Ecocenter, Inc., dba The Ecology Center, a
California nonprofit public benefit corporation (the "Licensee"). City and Licensee are
sometimes hereinafter individually referred to as "Party" and hereinafter collectively
referred to as the "Parties."
RECITALS
A. Licensee is a nonprofit organization whose mission is to provide creative
solutions for thriving on planet earth. Licensee believes everyone should have
access to the tools, knowledge, and skills that promote healthy communities and
an abundant future for all.
B. City is the owner of a 28.225 acre farm located at 32681 Alipaz Street, San Juan
Capistrano, California, which was acquired by the City to be maintained as open
space.
C. Licensee desires to conduct farming operations on approximately 27.475 acres
of the property, with 0.50 acres set aside for City use.
D. Licensee has farming expertise and experience and desires to manage the
maintenance and operations of the agricultural activities on the property.
TERMS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Grant of License.
1.1. Scope. The City grants to Licensee a license to manage, maintain and
operate a fruit and vegetable farm on 27.475 acres of the property located
at 32681 Alipaz Street, San Juan Capistrano (herein after "Property") as
described below:
1.1.1. The Property subject to this Agreement is specifically depicted in
the Site Plan attached hereto as Exhibit "A" and is incorporated
hereby this reference.
1.1.2. The Joel Congdon House is not subject to this Agreement, but is
subject to a separate license agreement between City and
Licensee dated May 4, 2016.
1 ATTACHMENT 7, PAGE 1 OF 12
1.1.3. All crops harvested on the Property during the term of this
Agreement shall be the sole property of Licensee.
1.1.4. City makes no warranty of the suitability of the Property for the
growing of crops.
2. Term. This Agreement shall commence on , 2018 ("Commencement
Date") and shall be effective for three (3) years ("Initial Term"), except as
otherwise provided in this Agreement. This Agreement may be extended for two
(2) additional one (1) year terms, upon the written request of the Licensee. Such
notice of the extension shall be submitted to the City in writing no less than thirty
(30) days before the expiration of the Term.
3. License Fees.
3.1. License Fees. In consideration of Licensee's nonprofit status and mission
as well as the terms of this Agreement, the Licensee agrees to annually
pay the license fees to City as follows:
3.1.1. Twenty-five thousand ($25,000) dollars annually for the use of the
Property for the Initial Term.
3.1.2. Should Licensee exercise the additional one (1) year extension(s)
pursuant to Section 2 of the Agreement, then the Licensee agrees
to pay City the fee amount of thirty-five thousand ($35,000) dollars
annually for the use of the Property for each extension year.
3.2. The initial payment of the annual License fee shall be due within five (5)
working days of the Commencement Date. Each subsequent payment of
the License fee shall be due annually on each anniversary of the
Commencement Date.
4. Licensee obligations.
4.1. Licensee shall comply with all applicable laws, ordinances, codes and
regulations of federal, state and local government.
4.2. Operation of Farm_. Licensee shall be responsible for the supervision and
management of every aspect of running a farming operation of produce for
human consumption on the Property in a business-like manner.
Supervision and maintenance obligations, shall be performed at no cost to
the City, and include but are not limited to:
4.2.1. The employment, supervision and direction of all employees
engaged in the farming operation.
4.2.2. Providing for the maintenance of all equipment and supervising its
use in a safe and prudent manner.
2 ATTACHMENT 7, PAGE 2 OF 12
4.2.3. Soil preparation, planting, fertilizing, irrigating, pesticide and
herbicide applications, and the harvesting of all crops.
4.2.4. The marketing and sale of crops.
4.2.5. Maintenance of records and accounting for all revenues and
expenditures, including employee payroll and related records.
4.2.6. Purchasing of all seeds, plants, fertilizers, herbicides, pesticides,
and other materials and supplies, such as boxes and packaging
materials, required for marketing and sale of the crops.
4.2.7. All operations shall be performed in a competent manner,
consistent with the standards of the industry and in accordance with
all applicable Federal, State and local regulations, including the
City's Municipal Code.
4.2.8. Licensee shall farm the Property in a manner that protects the soil
in accordance with sound agricultural practices commensurate with
the custom and practice within Orange County, California. Should
Licensee desire to implement any unique agricultural practices, the
Licensee shall seek written approval from the City in advance of
implementing the unique agricultural practices.
4.2.9. Licensee shall not plant or grow Cannabis otherwise known as
Marijuana ("Marijuana").
4.3. Maintenance of Property. Licensee shall be responsible for the
management and maintenance of all on-site improvements, at no cost to
the City.
4.3.1. Temporary housing is subject to City's approval based on all
applicable provisions of the City's Land Use Code.
4.3.2. Licensee agrees to accept the Property in its present condition as
of the date of execution of this Agreement. Licensee may use the
buildings and existing structures on the Property for Licensee's use
in farming operations.
4.3.3. Licensee shall use reasonable care to control all weeds, noxious or
otherwise, growing on the Property, including those growing in
drainage ditches.
4.3.4. Licensee shall reasonably control all rodents, insects, and other
pests on the Property.
4.3.5. Licensee shall keep fences, ditches and borders of the Property in
good condition and repair.
3 ATTACHMENT 7, PAGE 3 OF 12
4.3.6. Licensee shall maintain, at Licensee's expense, the Property,
including all existing structures and all equipment owned and
furnished by Licensee, in a reasonable state of repair and working
order.
4.3.6.1. Licensee may plant fruit trees on the Property and
shall be responsible for properly maintaining all trees
including removal of all tree debris.
4.3.6.2. Licensee understands that the shrubs on the
Premises block the wind, limit road dust, and reduce the
amount of debris entering the Property. Licensee shall
sufficiently maintain the shrubs in order to keep harmful
elements away from the crops.
4.3.7. Licensee agrees that "The Letter Agreement Regarding Delinquent
Water Bill for the Property located at 32681 Alipaz Street, San Juan
Capistrano" ("Letter Agreement") dated between City and
Licensee was a material inducement for City entering into this
Agreement with Licensee and, as such, any breach of the Letter
Agreement shall be considered a breach of this Agreement.
4.4. Retail Stand.
4.4.1. The existing retail stand may be utilized by Licensee solely for retail
sales of agricultural products. Related merchandise may be
allowed however, sales shall be primarily agricultural products and
City reserves the right to prohibit certain merchandise.
4.4.2. Licensee shall not sell Marijuana, Marijuana products or Marijuana
accessories as those terms are defined in the San Juan Capistrano
Municipal Code that may be amended from time to time.
4.4.3. Licensee is also permitted to allow members of the public to pick
their own produce. Sufficient parking on site shall be provided for
the retail stand.
4.4.4. Any expansion, regardless of size or scope, is prohibited under this
Agreement unless Licensee obtains written approval of the City.
4.5. Improvements: Licensee shall receive written approval from City prior to
making any improvements or alterations to the Property and/or facilities. If
a permit is required the Licensee shall submit to the Development
Services Department, in writing, any desired changes/improvements to the
Property and/or facilities. It is the responsibility of Licensee to determine if
a permit(s) is required. All required permits must be obtained prior to
commencing any improvement work.
4 ATTACHMENT 7, PAGE 4 OF 12
4.5.1. All improvements undertaken by Licensee shall be the sole
financial responsibility of Licensee unless Licensee and City enter
into a cost sharing agreement.
4.5.2. The total cost of all improvements shall not exceed ninety thousand
dollars ($90,000) during the Initial Term of this License Agreement.
4.6. Domestic and Irrigation Water. Electrical. Gas, Telephone,
Television/Cable/ Wireless Services. Licensee shall be solely responsible
for any and all expenses related to any and all utilities, including but not
limited to domestic and irrigation water, electrical, gas, telephone,
television/cable/wireless services, for the Property. Property shall be
repaired by Licensee if any damage is done to the Property due to the
installation or removal of the utilities and services.
4.7. Access Road. The access road as shown in Exhibit "A" attached hereto
and incorporated here shall be accessible for use by the representatives
of the wireless phone company to gain access to the antenna site located
on the sports park field adjacent to the Property. In addition, a gate and
corresponding locks shall be added and maintained at no cost to City.
4.8. Licensee shall, at all times, keep City advised of the name, address, and
telephone number of the person(s) responsible for the operation of the
Property.
4.9. On or before the termination or expiration of this Agreement, the Licensee
at their sole expense shall remove all of Licensee's personal property from
the Property and shall surrender possession of the Property to the City in
good order and repair, in substantially the same condition at the time of
entry into this Agreement, to the satisfaction of the City. Licensee shall
leave Property free and clear of all rubbish and debris. Licensee shall not
remove any fruit trees or approved improvements at the termination of the
Agreement.
5. Multi-Use Trail Project. Licensee shall cooperate with the City, and City shall
involve Licensee, during the design, environmental review, and construction of a
multi-use trail project (hereinafter "Trail") through the Kinoshita Farms site
connecting the adjacent Vermeulen property, located north of Via Positiva, to the
Joel Congdon House located in the southeast quadrant of the Kinoshita Farm
property. Licensee shall not be liable for any costs associated with the Trail.
Licensee hereby agrees that the City and the contractors of the Trail shall have
access to the Property as necessary for the construction of the Trail. Upon
completion of the Trail, Licensee hereby agrees that City and members of the
public shall have access to the Trail.
6. Event Parking. Licensee shall provide, on-site vehicle parking for any event held
at the Property that exceeds one hundred (100) participants.
5 ATTACHMENT 7, PAGE 5 OF 12
7. Reservations to City
7.1. City reserves the right to enter the Property at any reasonable time for the
purpose of inspection. Any rights herein reserved shall, moreover, not be
exercised in any manner which will unreasonably interfere with Licensee's
use and occupancy of the Property for the purposes stated in this
Agreement.
7.2. City also reserves the right to enter the Property for purposes of
maintenance, which may include the need for Licensee to vacate Property
for a reasonable temporary period to be specified at that time, with
provision of ninety (90) days' notice, except for repairs deemed to be for
emergency/public safety reasons no notice shall be required.
7.3. Fourth of July Celebration. City shall have use and access to the Property
at no cost to the City in order to host the fireworks celebration for the
Community from the Property each July 4th on an annual basis throughout
the term of this Agreement. This access shall include, but is not limited to,
all set up, coordination, and take-down activities necessary for the annual
fireworks display. City shall clean up and return the Property to its
ordinary state at the conclusion of such event.
8. Indemnification.
8.1. Indemnification of City by Licensee. The Licensee shall defend (with
counsel approved by City), indemnify and hold the City, its officials,
officers, employees, and agents (the "City Indemnified Parties") free and
harmless from any and all liability from loss, damage, or injury to property
or persons, including wrongful death, in any manner arising out of or
incident to acts, omissions, and/or operations by the Licensee, its officials,
officers, personnel, employees, contractors, and/or subcontractors as well
as its contractors' and/or subcontractors' officials, officers, employees, and
agents.
8.2. Indemnification of Licensee by City. The City shall defend (with counsel
approved by Licensee), indemnify and hold the Licensee, its officials,
officers, employees, and agents (the "Licensee Indemnified Parties") free
and harmless from any and all liability from loss, damage, or injury to
property or persons, including wrongful death, in any manner arising out of
or incident to (i) the construction, operation, use, or maintenance of the
Trail on the Property, (ii) any other acts, omissions, and/or operations on
the Property by the City (including, but not limited to, any activities
conducted pursuant to Section 7) by City's officials, officers, personnel,
employees, contractors, and/or subcontractors as well as its contractors'
and/or subcontractors' officials, officers, employees, and agents.
8.3. The Parties' obligations under this Section 8 (Indemnification) shall apply
to all damages and claims for damages of every kind suffered, or alleged
to have been suffered, regardless of whether or not the City has prepared,
6 ATTACHMENT 7, PAGE 6 OF 12
supplied, or approved any plans or for the uses allowed by this
Agreement, and regardless of whether or not such insurance policies shall
have been determined to be applicable to any of such damages or claims
for damages.
8.4. The City's Bights. The City does not and shall not waive any rights against
the Licensee that the City may have under the indemnification provision in
this Section 8 (Indemnification) because of the City's acceptance of any
security deposits or insurance policies.
8.5. Survival. The indemnification provision in this Section 8 (Indemnification)
shall survive the termination or expiration of this Agreement.
9. Insurance
9.1. On or before beginning any of the services or work called for by any term
of this Agreement, Licensee, at its own cost and expense, shall carry,
maintain for the duration of the Agreement, and provide proof thereof that
is acceptable to City, the insurance specified below with insurers and
under forms of insurance satisfactory in all respects to the City. Insurance
required herein shall be provided by Admitted Insurers in good standing
with the State of California and having a minimum Best's Guide Rating of
A-Class VII or better.
9.1.1. Throughout the term of this Agreement, Licensee at Licensee's sole
cost and expense, shall maintain in full force and effect the
following insurance against liabilities arising out of Licensee's
activities on the Property:
9.1.1.1. Comprehensive General Liability coverage in an
amount not less than two million dollars ($2,000,000), per
occurrence combined single limit coverage, and three million
dollars ($3,000,000) aggregate;
9.1.1.2. Worker's Compensation in an amount not less than
one million ($1,000,000) per accident and to include a
Waiver of Subrogation;
9.1.1.3. Automobile Insurance covering all owned, non-owned
and hired vehicles with a limit of one million dollars
($1,000,000) each accident for bodily injury and property
damage; and,
9.1.1.4. The insurance coverage required herein shall be
primary insurance as respects the City, its officials,
employees, and volunteers. Any insurance or self-insurance
maintained by the City, its officials, employees, or volunteers
shall be in excess of the insurance required herein and shall
not contribute with it; and
7 ATTACHMENT 7, PAGE 7 OF 12
9.1.1.5. The City, its officials, employees, and volunteers are
to be covered as additional insureds, and the coverage shall
contain no special limitations on the scope of the protection
afforded to the City, its officials, employees, or volunteers.
9.1.2. Proof of Insurance Requirements/Endorsement: Licensee shall
submit the insurance certificates, including the deductible or self-
retention amount, and an additional insured endorsement naming
City, its officers, employees, agents, and volunteers as additional
insured as respects each of the following: liability arising out of
activities performed by or on behalf of Licensee, including the
insured's general supervision of Licensee; products and completed
operations of Licensee; or premises owned, occupied or used by
Licensee. The coverage shall contain no special limitations on the
scope of protection afforded City, its officers, employees, agents, or
volunteers.
9.1.3. Notice of Cancellation/Termination of Insurance: The above
policy/policies shall not terminate, nor shall they be canceled, nor
the coverages reduced, until after thirty (30) days' written notice is
given to City, except that ten (10) days' notice shall be given if there
is a cancellation due to failure to pay a premium.
9.2. Copy of Policy and Endorsements. The Licensee shall provide the City
with a copy of the policy, including an endorsement that states that the
policy will not be cancelled except after ten (10) days' notice in writing to
the City.
10. Termination. This Agreement may be terminated upon the default of one of the
Parties if such default is not cured within ninety (90) days following written notice
of such default from non-defaulting Party. In the event of a dispute between the
Parties, City and Licensee shall meet and confer regarding the matter. If the
dispute cannot be resolved through a meet and confer session, then the
Agreement may be terminated by the non-defaulting Party
10.1. In the event Licensee files for bankruptcy or is found to be in a state of
insolvency, then City shall have the right to terminate this Agreement and
all further rights and obligations thereunder by ten (10) days' written notice
to Licensee. Upon the expiration of the ten (10) days' notice this
Agreement shall automatically terminate.
11. Possessory Interest Tax Notice. Licensee hereby recognizes and understands
that this Agreement may create a possessory interest subject to property
taxation, and that Licensee may be subject to the payment of property taxes
levied on such interest. Any such imposition of a possessory interest tax shall be
a tax liability of Licensee solely, notwithstanding any provision of this Agreement
to the contrary. Licensee shall promptly notify City of any possessory interest tax
imposed against Licensee's interest in the License Area, and shall provide City
with a copy of any bill or assessment imposing the possessory interest tax.
8 ATTACHMENT 7, PAGE 8 OF 12
Licensee shall remit to the taxing agency the amount of the possessory interest
tax imposed against Licensee, and shall notify City in writing of the payment.
Licensee acknowledges that City, in accordance with California Revenue and
Taxation Code Section 107.6, has given notice to Licensee that Licensee may be
subject to property taxation, and that Licensee may be subject to the payment of
property taxes levied on the possessory interest created by this Agreement and
license. Licensee shall be fully responsible for the payment of all possessory
interest taxes levied and/or assessed during the term of this Agreement
regarding the license.
12. Attorneys' Fees. If any legal action or proceeding arising out of or relating to this
Agreement is brought by either Party to this Agreement, the prevailing Party shall
be entitled to receive from the other Party, in addition to any other relief that may
be granted, the reasonable attorneys' fees, costs, and expenses incurred in the
action or proceeding by the prevailing Party.
13. Governinq Law and Venue. This Agreement shall be governed by the laws of the
State of California. Venue shall be in Orange County.
14, Waiver. The City's failure to insist upon strict compliance with any provision of
this Agreement or to exercise any right or privilege provided herein, or the City's
waiver of any breach hereunder, shall not relieve the Licensee of any of its
obligations hereunder, whether of the same or similar type. The foregoing shall
be true whether the City's actions are intentional or unintentional. Further, the
Licensee agrees to waive as a defense, counterclaim, or setoff any and all
defects, irregularities, or deficiencies in the authorization, execution, or
performance of this Agreement as well as any laws, rules, regulations,
ordinances, or resolutions of the City with regard to this Agreement.
15. Supplement, Modification and Amendment. No supplement, modification, and/or
amendment of this Agreement shall be binding unless executed in writing and
signed by both Parties.
16. Assignment or Transfer.
16.1. No Assignment without the City's Consent. The Licensee shall not assign,
hypothecate, or transfer, either directly or by operation of law, this
Agreement or any interest herein without prior written consent of the City.
Any attempt to do so shall be null and void, and any assignee,
hypothecatee, or transferee shall acquire no right or interest by reason of
such attempted assignment, hypothecation, or transfer. Unless
specifically stated to the contrary in the City's written consent, any
assignment, hypothecation, or transfer shall not release or discharge the
Licensee from any duty or responsibility under this Agreement.
16.2. Merer. The transfer of a majority of the ownership interests in the
Licensee, however accomplished, and whether in a single transaction or in
a series of related or unrelated transactions, or the merger of the Licensee
into any other entity in which the Licensee is not the surviving entity, or the
9 ATTACHMENT 7, PAGE 9 OF 12
sale of all or substantially all of the Licensee's assets, shall be deemed an
assignment of the Licensee's rights hereunder subject to the requirements
of Section 16.1 (No Assignment without the City's Consent).
17. No Relocation Benefits. This Agreement is not intended to convey a property
interest but to permit the Licensee to use the property as provided for herein. The
Licensee acknowledges the rights granted by State and/or Federal Relocation
Assistance Laws and regulations and, notwithstanding any other provision of this
Agreement, expressly waives all such present and future rights, if any, to which
the Licensee might otherwise be entitled from the City with regard to this
Agreement and the business operated on the property. The Licensee shall not be
entitled to relocation assistance, relocation benefits, or compensation for loss of
goodwill upon the termination of this Agreement.
18. Construction References and Captions.
18.1. Simple Construction. It being agreed the Parties or their agents have
participated in the preparation of this Agreement, the language of this
Agreement shall be construed simply, according to its fair meaning, and
not strictly for or against any Party.
18.2. Section Headings. Section headings contained in this Agreement are for
convenience only and shall not have an effect in the construction or
interpretation of any provision.
18.3. Calendar Days. Any term referencing time, days, or period for
performance shall be deemed calendar days and not work days.
18.4. References to the City. All references to the City shall include, but shall
not be limited to, City Council, City Manager, City Attorney, City Engineer,
or any of their authorized representatives. The City shall have the sole and
absolute discretion to determine which public body, public official or public
employee may act on behalf of the City for any particular purpose.
18.5. References to the Licensee. All references to the Licensee shall include all
officials, officers, personnel, employees, agents, contractors, and
subcontractors of Licensee, except as otherwise specified in this
Agreement
19. Relationship Between the Parties. The Parties hereby mutually agree that neither
this Agreement, nor any other related entitlement, permit, or approval issued by
the City for the Property shall operate to create the relationship of partnership,
joint venture, or agency between the City and the Licensee. The Licensees'
contractors and subcontractors are exclusively and solely under the control and
dominion of the Licensee. Nothing herein shall be deemed to make the Licensee
or its contractors or subcontractors an agent or contractor of the City.
20, Notices. All notices to be given hereunder shall be in writing and may be made
either by personal delivery or by registered or certified mail, postage prepaid,
return receipt requested. Mailed notices shall be addressed to the parties at the
10 ATTACHMENT 7, PAGE 10 OF 12
addresses listed below, but each Party may change the address by written notice
in accordance with this Section 20 (Notices). Notices delivered personally will be
deemed communicated as of actual receipt; mailed notices will be deemed
communicated as of two (2) days after mailing.
To City: To Licensee:
City of San Juan Capistrano Evan Marks, Executive Director
32400 Paseo Adelanto The Ecology Center
San Juan Capistrano, CA 92675 32701 Alipaz Street
Attn: City Manager San Juan Capistrano, CA 92675
21. Entire Agreement and Severability.
21.1. Entire Agreement. This Agreement contains the entire Agreement of the
Parties with respect to the subject matter hereof, and supersedes all prior
negotiations, understandings or agreements, either written or oral, express
or implied.
21.2. Severability. The invalidity in whole or in part of any provision of this
Agreement shall not void or affect the validity of any other provision of this
Agreement.
22. Binding Effect.
22.1. The Parties. Each and all of the terms and conditions of this Agreement
shall be binding on and shall inure to the benefit of the Parties, and their
successors, heirs, personal representatives, or assigns.
22.2. Successors and Assigns. This Agreement shall be binding on the
successors and assigns of the Parties.
22.3. Not Authorization to Assign. This Section 22 (Binding Effect) shall not be
construed as an authorization for any Party to assign any right or
obligation under this agreement other than as provided in Section 16
(Assignment or Transfer).
Signatures on next page.
11 ATTACHMENT 7, PAGE 11 OF 12
SIGNATURE PAGE TO LICENSE AGREEMENT
LICENSE AGREEMENT
BY AND BETWEEN THE CITY OF SAN JUAN CAPISTRANO
AND ECOCENTER, INC., DBA THE ECOLOGY CENTER FOR THE
PROPERTY LOCATED AT 32681 ALIPAZ STREET, SAN JUAN CAPISTRANO
In witness thereof, the Parties here to have executed this Agreement:
City of San Juan Capistrano Ecocenter, Inc.
A California municipal corporation
By: By:
BENJAMIN SIEGEL, EVAN MARKS,
City Manager Executive Director
ATTEST:
By:
MARIA MORRIS,
City Clerk
APPROVED AS TO FORM:
By:
JEFF BALLINGER,
City Attorney
12 ATTACHMENT 7, PAGE 12 OF 12
SEx�rts Park r
e
5 1 '
Access Road Kir1g5hita�arn�
2T 47'5 Acrss
EXHIBIT "A"
SITE PLAN
Ecology Center
75 Acre
{Congdarti House}
i
• r
Dal Avion
EXHIBIT ` "PAGE 1 OF
August 21, 2018
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attention: City Manager
Re: Letter Agreement Regarding Delinquent Water Bill for the Property Located
at 32681 Alipaz Street, San Juan Capistrano
Dear City Manager:
Reference is made to that certain License Agreement (the "SCF License Agreement'),
dated as of May 16, 2008, by and between City of San Juan Capistrano, a California
municipal corporation, and the San Juan Capistrano Community Redevelopment
Agency, a public body, corporate and politic (collectively, the "City') and South Coast
Farms ("SCP').
WHEREAS, SCF is liable to the City for certain delinquent water utility bills in
connection with the Property under the SCF License Agreement in excess of
$306,591.29 (the "Legacy Water Debt');
WHEREAS, the City and Ecocenter, Inc., dba The Ecology Center, a California
nonprofit public benefit corporation ("TEC') have entered into that certain License
Agreement (the "TEC License Agreement'), dated as of August 21, 2018;
WHEREAS, in connection with the TEC License Agreement, TEC is interested in
entering into a services agreement with SCF (the "Services Agreement');
WHEREAS, contingent on the execution of the Services Agreement and on the
terms contained in this Letter Agreement (the "Agreement'), TEC is interested in
making certain payments toward the principal of the Legacy Water Debt during the term
of the TEC License Agreement in the manner set forth in this letter; and
NOW, THEREFORE, in consideration of the foregoing recitals, TEC and the City
hereby agree to do the following in order to reduce the Legacy Water Debt:
1. Schedule of TEC Payments on Legacy Water Debt. Subject to the terms of this
Agreement, TEC hereby agrees to make the following payments to the City ("Water
Debt Payments") in respect of the Legacy Water Debt:
(a) On or before September 1, 2018, TEC will make a payment to the City in the
amount of eight thousand dollars ($8,000);
(b) On or before September 1, 2019, TEC will make a payment to the City in the
amount of eight thousand dollars ($8,000);
ATTACHMENT 8, PAGE 1 OF 5
(c) On or before September 1, 2020, TEC will make a payment to the City in the
amount of eight thousand dollars ($8,000);
(d) If TEC exercises its right to a first Extension Term under Section 2 of the TEC
License Agreement, then, on or before September 2, 2021, TEC will make a payment to
the City in the amount of ten thousand dollars ($10,000); and
(e) If TEC exercises its right to a second Extension Term under Section 2 of the
TEC License Agreement, then, on or before September 2, 2022, TEC will make a
payment to the City in the amount of ten thousand dollars ($10,000).
2. Application of Water Debt Payments to Principal. The City agrees that each Water
Debt Payment shall reduce the outstanding principal amount of the Legacy Water
Debt.
3. Payoff of the Legacy Water Debt. If the Legacy Water Debt is paid in full by SCF or
any other third party in its entirety before the final Water Debt Payment is due under
this Agreement, no further payments shall be due under this Agreement.
4. No Assumption of Legacy Water Debt. TEC and the City agree that TEC shall not
be deemed to assume the Legacy Water Debt (or any portion thereof) as a result of
this Letter Agreement. TEC and the City acknowledge that the Legacy Water Debt
exceeds the total of the Water Debt Payments set forth above, and that TEC shall
not be liable to the City for any other payments or obligations with respect to the
Legacy Water Debt except as specifically set forth in Section 1 of this Letter
Agreement.
5. Forbearance. Subject to compliance by TEC with the terms and conditions of this
Agreement, the City hereby agrees to forbear from exercising their rights and
remedies against SCF with respect to the Legacy Water Debt during the period
commencing on the Effective Date (as defined in the TEC License Agreement) and
ending on the termination of this Agreement. The City's forbearance, as provided
herein, shall immediately and automatically cease without notice or further action on
the termination of this Agreement or upon TEC's failure to comply with the terms and
conditions of this Agreement. On and from the date of the termination of this
Agreement, the City may, in its sole discretion, exercise any and all remedies
available to it with respect to the Legacy Water Debt.
6. Taxes. TEC and the City acknowledge that payment of the Water Debt Payments
may have tax consequences for the City, SCF, or other third parties, and the City
agrees that TEC shall have no liability under this Letter Agreement for any present
or future taxes, levies, imposts, duties, deductions, withholdings (including backup
withholding), assessments, fees or other charges imposed by any governmental
authority (including any interest, additions to tax or penalties applicable thereto)
incurred by the City, SCF, or any other third party as a result of TEC's Water Debt
Payments under this Agreement, except as required by applicable law.
2
1027334393
ATTACHMENT 8, PAGE 2 OF 5
7. Contingent on Services Agreement. The City and TEC acknowledge and agree that
the effectiveness of this Agreement shall be contingent on the execution of that
certain Services Agreement, dated [•], 2018, by and between TEC and SCF, in a
form reasonably acceptable to TEC.
8. Termination. Notwithstanding anything to the contrary in this Agreement, the rights
and obligations (including any obligation to make a payment) set forth in this Letter
Agreement shall automatically terminate upon termination or expiration of the TEC
License Agreement.
[Signature Pages Follow]
3
1027334393
ATTACHMENT 8, PAGE 3 OF 5
Sincerely yours,
ECOCEN ER, INC.
By:
Name: Evan Marks
Title: Executive Director
[Signature Page to Letter Agreement]
1027334393 ATTACHMENT 8, PAGE 4 OF 5
Accepted and Agreed:
City of San Juan Capistrano,
a California municipal corporation
By:
BENJAMIN SIEGEL,
City Manager
ATTEST:
By:
MARIA MORRIS,
City Clerk
APPROVED AS TO FORM:
By:
JEFF BALLINGER,
City Attorney
[Signature Page to Letter Agreement]
102733439.3
ATTACHMENT 8, PAGE 5 OF 5
FIRST AMENDMENT TO
AGREEMENT ESTABLISHING A PAYMENT SCHEDULE FOR
OUTSTANDING WATER CHARGES
BY AND BETWEEN
THE CITY OF SAN JUAN CAPISTRANO AND SOUTH COAST FARMS, INC.
This First Amendment to the Agreement Establishing a Payment Schedule for
Outstanding Water Charges dated February 7, 2017 ("First Amendment'), is made and
entered into this 21st day of August, 2018, by and between the City of San Juan
Capistrano, a California municipal corporation ("City") and South Coast Farms, Inc., a
California corporation ("South Coast') with reference to the facts set forth in the Recitals
below:
RECITALS
WHEREAS, City is the owner of the 28.225 acre farm in the City of San Juan
Capistrano, California, generally located at the northwest corner of Alipaz Street and
Camino Del Avion, San Juan Capistrano, California ("Property").
WHEREAS, on May 6, 2008, the City and South Coast entered into a ten-year
License Agreement ("License Agreement'), granting South Coast a license to conduct
farming operations on 27.725 acres of the Property, with 0.50 acres set aside for City
use.
WHEREAS, Pursuant to Section 5 of the License Agreement, the City is
responsible for providing a source of water supply to South Coast, and South Coast is
required to pay for water at no more than the current agricultural rate and any costs of
keeping the irrigation system operational, regardless of the source of supply.
WHEREAS, on February 7, 2017, the City and South Coast entered into an
Agreement Establishing a Payment Schedule for Outstanding Water Charges ("Payment
Schedule Agreement'), which established a payment schedule for the outstanding
balance of$246,971 in unpaid water charges for Account No. 90032, and required South
Coast to pay all regular monthly charges for water use (which included Account No. 90032
and Account No. 24091).
WHEREAS, following the execution of the Payment Schedule Agreement, South
Coast made the following payments on Account No. 90032 and Account No. 24091:
61147.00310\31359958.1
ATTACHMENT 9, PAGE 1 OF 6
Account No. 90032 Account No. 24091
$314.05 on February 15, 2017 $153.47 on February 15, 2017
$1,658.81 on March 23, 2017 $161.01 on March 13, 2017
$3,911.18 on April 24, 2017 $132.51 on April 24, 2017
$6,484.02 on June 5, 2017 $269.20 on June 5, 2017
$4,796.74 on July 5, 2017 $242.55 on July 5, 2017
$20,000 on July 10, 2017 $641.65 on August 30, 2017
$20,000 on July 17, 2017 $823.18 on November 2, 2017
$10,217.20 on November 1, 2017
Total: $67,382.00 Total: $2,423.57
WHEREAS, on March 13, 2017, the City and South Coast extended the term of
the License Agreement to August 6, 2018.
WHEREAS, due to the challenges of operating a successful organic farm in light
of continued dry weather conditions and the ongoing cost of water, there remains an
outstanding balance of$304,323.62 in unpaid water charges for Account No. 90032, and
an outstanding balance of $2,267.67 for Account No. 24091, for a total outstanding
balance of$306,591.29 (the "Legacy Water Debt").
WHEREAS, the City and Ecocenter, Inc., dba The Ecology Center, a California
nonprofit public benefit corporation ("TEC") have entered into a License Agreement for
the Property ("TEC License Agreement"), dated August 21, 2018.
WHEREAS, on August 21, 2018, the City and TEC entered into a Letter
Agreement Regarding Delinquent Water Bill for the Property Located at 32681 Alipaz
Street, San Juan Capistrano ("TEC Letter Agreement"), dated August 21, 2018 which is
attached to this First Amendment as Exhibit "A" and incorporated herein by reference.
TEC has agreed to make minimal payments toward the principal of the Legacy Water
Debt during the term of the TEC Letter Agreement in the manner set forth in the TEC
Letter Agreement.
WHEREAS, subject to TEC's compliance with the TEC Letter Agreement, the City
is willing to forbear from exercising its rights against South Coast with respect to the
Legacy Water Debt during the term of the Payment Schedule Agreement, and the parties
now desire to amend the Payment Schedule Agreement to incorporate the City's
forbearance.
NOW THEREFORE, in consideration of the foregoing, and of the mutual
obligations and agreements contained herein, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
61147 00310\31359958 1
ATTACHMENT 9, PAGE 2 OF 6
SECTION 1. AMENDMENT OF SECTION 1, "PAYMENT SCHEDULE." Section
1 of the Payment Schedule Agreement is hereby amended to read in its entirety as
follows:
1. Payment Schedule and Tolling Period.
a. Payment. The License Agreement terminated August 6, 2018. South
Coast currently has outstanding water charges for Accounts No.
90032 and No. 24091, as listed below.
South Coast shall immediately pay the outstanding balances listed
below, plus any and all additional charges for those accounts which
accrue after the execution of this Agreement and the termination of
the License Agreement (collectively, the "Legacy Water Debt"). City
shall provide an updated accounting of accrued charges in excess of
the amounts listed below due on Accounts No. 90032 and No. 24091
within ten (10) days of termination of the License Agreement
("Accrued Charges"). Parties agree that said notice of Accrued
Charges shall be incorporated into this Agreement, as though fully
set forth herein. Payment of the Accrued Charges shall be due within
thirty (30) days of the notice.
Current outstanding balance:
Account No. 90032 $304,323.62
Account No. 24091 2,267.67
Total: $306,591.29
b. Forbearance. The City and Ecocenter, Inc., dba The Ecology
Center, a California nonprofit public benefit corporation ("TEC") have
entered into a Letter Agreement Regarding Delinquent Water Bill for
the Property Located at 32681 Alipaz Street, San Juan Capistrano
("TEC Letter Agreement"), dated August 21, 2018, in which TEC has
agreed to make minimal payments to the City in respect to the
Legacy Water Debt. Subject to TEC's compliance with the terms and
conditions of the TEC Letter Agreement, specifically including, but
not limited to, TEC's timely completion of payments on the Legacy
Water Debt, the City hereby agrees to forbear from exercising its
rights and remedies against South Coast with respect to the Legacy
Water Debt during the period commencing on February 7, 2017 (the
Effective Date of this Agreement) and ending upon the termination
of this Agreement.
i. The City's forbearance, as provided herein, shall immediately
and automatically cease without notice or further action upon
the termination of this Agreement as set forth in Section 5 of
61147 00310\31359958 1
ATTACHMENT 9, PAGE 3 OF 6
this Agreement. On and from the date of the termination of
this Agreement, the City may, in its sole discretion, exercise
any and all remedies available to it with respect to the Legacy
Water Debt.
C. Tolling of Statutes of Limitations.
i. The statutes of limitations, statutes of repose, and any other
defenses based upon passage of time, including any claim of
laches, applicable to the collection of the Legacy Water Debt
arising under federal, state or local laws, including the
California Code of Civil Procedure and the California
Government Code, are hereby tolled for the time period
between February 7, 2017 (the Effective Date of this
Agreement) and the termination of this Agreement, inclusive
(the "Tolling Period"). The City agrees to forebear from filing
any lawsuit related to the collection of the Legacy Water Debt
during the Tolling Period.
ii. Each Party further agrees that if the City commences any
litigation or any other judicial proceeding of any kind, nature
or description against South Coast with respect to any of the
collection of the Legacy Water Debt, the Tolling Period shall
not be asserted or relied upon in any way by South Coast to
compute the running of time under any statute of limitations or
other time-related defense to such action or proceeding and
with respect to any claim for which the applicable statute of
limitations has commenced to run prior to the expiration of
the Tolling Period, such statute of limitations shall be deemed
suspended for the entire duration of the Tolling Period.
iii. Justifiable Reliance. South Coast agrees that City is justifiably
and reasonably relying upon the terms and conditions set
forth in this Agreement, that the statutes of limitation at issue
here are subject to being tolled, and that this Agreement is
enforceable in accordance with its terms.
iv. Restart of Statute of Limitations and End of Stay. Upon
termination of this Agreement all applicable statutes of
limitations will restart.
SECTION 2. AMENDMENT OF SECTION 5, "TERMINATION." Section 5 of the
Payment Schedule Agreement is hereby amended to read in its entirety as follows:
5. Termination.
61147-003 1 M31359958-1
ATTACHMENT 9, PAGE 4 OF 6
This Agreement shall remain in effect until September 22, 2022, unless
earlier terminated by the City. The City, in its sole discretion, may terminate
this Agreement upon (i) termination of the TEC Letter Agreement, or (ii)
upon failure by TEC to make a scheduled payment on the Legacy Water
Debt within thirty (30) days of the payment deadline established in the TEC
Letter Agreement.
SECTION 3. CONTINUING EFFECT OF PAYMENT SCHEDULE AGREEMENT.
Except for the changes specifically set forth herein, all other terms and conditions of the
Payment Schedule Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, City and South Coast have caused this First
Amendment to be executed on the date and year first written above.
CITY OF SAN JUAN CAPISTRANO SOUTH COAST FARMS
By: _ By:
Benjamin Siegel George Kibby
City Manager Owner
APPROVED AS TO FORM:
By
Jeffrey S. Ballinger
City Attorney
61 147.003 10\31359958.1
ATTACHMENT 9, PAGE 5 OF 6
EXHIBIT "A"
Letter Agreement Regarding Delinquent Water Bill for the Property Located
at 32681 Alipaz Street, San Juan Capistrano
[Attached behind this cover page]
61147 00310\31359958.1
ATTACHMENT 9, PAGE 6 OF 6