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08-0506_SOUTH COAST FARMS_License Agreement0 0 LICENSE AGREEMENT This License Agreement ("Agreement") is made this 0�day of008, 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 552413.1 0 0 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: 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 0 0 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. 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 3 of 9 552413.1 0 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 shall 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 LICENSSEE, which may include well water, recycled water, or domestic water. LICENSEE is required to pay for water at no more then the current agricultural rate, and any costs required in Page 4 of 9 552413.1 0 0 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 Insolvency. 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 thereunder, by ten (10) days' notice in writing to LICENSEE, in which event, on the expiration of the ten (10) days from mailing of the notice, this License shall automatically terminate. Section 10. Notices. Page 5 of 9 552413 1 0 0 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. Attorneys' Fees. 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 insured by endorsement to the policy and shall be in a form satisfactory to LICEN�OR. LICENSEE will furnish LICENSOR with proof of insurance issued by a insurer approved by LICENSOR showing the coverage to be in force. LICEN EE's insurance coverage shall be primary coverage. LICENSOR and LICENSEE eachwaive the rights of subrogation that may arise against the other because of any ct covered by insurance. The policy shall provide that modification or cancellation of,the policy shall Page 6 of 9 552413 1 T not occur without thirty (30) days advance written notice provided by the insurer to LICENSOR. Section 14. Indemnity. LICENSEE shall defend, indemnify, and hold harmless LICENSOR, aind 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 7 of 9 552413.1 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: SO111TH COAST -T By: _ 1'� . �k O'eorge AlAbT APPROVED AS TO FORM: bmalai'vV6 Omar Sandoval, City Attorney LICENSOR: CITY OF SAN JUAN CAPISTRANO, A California municipal corporation 0 [ADDITIONAL SIGNATURE PAGE FOLLOWS] Page 8 of 9 552417.1 SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic Af rrNUWZU H6 i U rUNIVI: Omar S n val, Agency Cc nsel 3y: vc"( 14-,nl Mak Nielsen, Chai man Page 9 of 9 ts,a 0 0 a �w^ KINOSHITA FARM 3008 ,; ,1 CltyGIs 6.0 Copyright 02006 All Rights Reserved. The irRormation contained herein is the proprietary property of the contributor supplied under license and may not be approved except as licensed by Digital Map Products. EXHIBIT A 0 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493.1171 (949) 493-1053 FAx www.sanjuancapistrano.org TRANSMITTAL Q7 George Kibby South Coast Farms 2268 E. Sandalwood Place Anaheim, CA 92806 DATE: May 14, 2008 WIIRRRFRIlR tsluusRFR 1961 1776 FROM: Maria Morris, Deputy City Clerk (949) 443-6309 RE: License Agreement — Kinoshita Farm MEMBERS OF THE CRY COUNCIL SAM ALLEVATO THOMAS W. HRIBAR MARK WELSEN JOE SOTO DR. LONDRES USO Thank you for maintaining documentation confirming compliance with the terms of the agreement related to insurance. Please keep in mind this documentation must remain current with our office during the term of this agreement. If you have questions related to insurance requirements, please contact me at (949) 443-6309. If you have questions concerning the agreement, please contact Michelle Perea, Management Analyst at (949) 487-4313. An original agreement is enclosed for your records. Cc: Michelle Perea, Management Analyst San Juan Capistrano: Preserving the Past to Enhance the Future 40 Prinletl on 100% recyGetl paper • AGENDA REPORT TO: Dave Adams, City Manager FROM: Cindy Russell, Interim Public Works Director • 5/6/2008 D12 SUBJECT: Consideration of a License Agreement for the Kinoshita Farm (South Coast Farms) RECOMMENDATION: 1. By motion, approve the license agreement with South Coast Farms; and, 2. Authorize the Mayor to execute the agreement on behalf of the City. SITUATION: The City and the San Juan Capistrano Community Redevelopment Agency are owners of a 28.225 acre farm on the corner of Alipaz and Del Avion, which was acquired to be maintained as open space within the City (Exhibit A, Attachment 1). South Coast Farms, the current operator of the farm, has renegotiated with the City to continue to farm 27.725 acres, with the remaining acreage set aside for future City use. Please note that the City entered into a separate license agreement on August 8, 2006, with the San Juan Family Farm Museum (an affiliate of South Coast Farms), for the maintenance and use of the Joel Congdon House also at this location. As part of the proposed license agreement (Attachment 1) for farm operations, South Coast Farms shall continue to maintain a fully functioning farm, as well as a fruit and vegetable stand over the 10 -year term of the license agreement. At the end of the fifth year, the annual license rate of $25,000 may be renegotiated. In addition to the annual license fee, the agreement provides for South Coast Farms to pay the current agricultural rate for water. South Coast Farms shall own all crops produced at the property, and shall continue to provide the supervision and management over the farm operations. Changes to the agreement include the following items. 1) The farm will be responsible for paying the current agricultural rate for water. 2) The license agreement specifies that South Coast Farms will allow for use of the access road, with the City maintaining the road and gate. 2) Language was added to allow the City to continue to access the property to host the annual Fourth of July Celebration throughout the term of the agreement. 3) The previous agreement called for an annual payment of $50,000, but it was re -negotiated in 2002 to $25,000 after further analysis of costs associated with being 100% certified organic and increased water costs, as well as evaluating comparison rents. AGENDA REPORT • • May 6, 2008 Pace 2 Since beginning operations on this property in 1999, South Coast Farms has proven to be a successful farm operator with 100% of its operations being organic. This type of organic farm means that the residents of San Juan Capistrano are not exposed to any of the herbicides and pesticides that normal farm operations utilize, while being offered healthier foods to enjoy. South Coast Farms is well-known for such produce as strawberries, tomatoes, leafy greens, pumpkins, etc. Additionally, South Coast Farms has become a part of the community providing educational opportunities for our schools and residents as well. Staff recommends that the City Council approve the proposed license agreement with South Coast Farms for continued operation of the farm property. NOTIFICATION: George Kibby, South Coast Farms. COMMISSION/BOARD REVIEW, RECOMMENDATIONS: Not Applicable. FINANCIAL CONSIDERATIONS: The proposed license agreement with South Coast Farm provides for a $25,000 per annum payment. The proposed license agreement requires South Coast Farms to pay the current agricultural rate for water. The previous agreement called for an annual payment of $50,000, and it was later re -negotiated to $25,000. RECOMMENDATION: 1. By motion, approve the license agreement with South Coast Farms; and, 2. Authorize the Mayor to execute the agreement on behalf of the City. Respectfully submitted, Vt fllt Ru Cdy Rel"l Cti— in Interim Public Works Director Attachments: 1. License Agreement Prepared by, Michele Management Analyst LICENSE AGREEMENT This License Agreement ("Agreement') is made this _ day of _, 2008, by and between the City of San Juan Capistrano, a municipal corporation, and the San Juan Capistrano Community Redevelopment Agency, a public body, corporate and 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 ATTACHMENT 1 552413.1 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 calk 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: 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 5524 BA 0 0 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 3 of 9 552413.1 (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 shall 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 4'h 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 is available to LICENSEE for irrigation uses. LICENSEE is required to pay for water at the current agricultural rate for water and any costs required in keeping the irrigation system operational. LICENSOR is responsible for the maintenance of the well. In the Page 4 of 9 552413,1 0 0 event LICENSOR closes the well, LICENSOR will be required to provide another source of water. In this event, LICENSOR 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 Insolvency. 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 thereunder, by ten (10) days' notice in writing to LICENSEE, in which event, on the expiration of the ten (10) days from mailing of the notice, this License shall automatically terminate. Page 5 of 9 552413 1 • Section 10. Notices. C� 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 parry 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. Attorneys' Fees. 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 insured 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. LICE~NSEE's insurance coverage shall be primary coverage. LICENSOR and LICENSEE each waive the rights of subrogation that may arise against the other because of any act covered by insurance. The policy shall provide that modification or'tancellation of Page 6 of 9 552413.1 0 0 the policy shall not occur without thirty (30) days advance written notice provided by the insurer to LICENSOR. Section 14. Indemnity. 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 7 of 9 552413 1 0 0 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 91 LICENSOR: CITY OF SAN JUAN CAPISTRANO, A California municipal corporation M ATTEST: Margaret R. Monahan, City Clerk APPROVED AS TO FORM: CGti1� Omar Sandoval, City Attorne Joe Soto, Mayor [ADDITIONAL SIGNATURE PAGE FOLLOWS] Page 8 of 9 552413.1 0 0 SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic By: Mark Nielsen, Chairman ATTEST: Margaret R. Monahan, Agency Secretary APPROVED AS TO FORM: " 0 " j&IAAv Omar San o al, Agency Coun el Page 9 of 9 55^_413 1 r l i r-e u �t'�J24'4'.[Yh '9 ri�^is'eZ`:@'ti'iT.'t t{} $=. � �✓�� �V �{�I ACCESS ROAD X123 � x i �. law EQUIPVNT STORAGE �CONGDON HOUSE _11 FARMERS MARKET -� UCF;STAND' .. kj&l.. r cis bG fY+:'e;: S4Y .w- iia �.. ._�.. '� '� i7M. �...i.. �.n:. ...• .4Y �. .f .....� -1 .zy n 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 F" www. s ai�luancapistra no. org Jwa, ✓(��✓��yjy IAfAAAAAAl1A • (SIR IUAAIA 1961 1776 MEMBERS OF THE CITY COUNCIL NOTIFICATION OF MEETING OF POTENTIAL INTEREST OF THE SAN JUAN CAPISTRANO CITY COUNCIL SAM ALLEVATO THOMAS W. HRIBAR MARK NIELSEN JOE SOTO DR. LONDRES USO The City Council of San Juan Capistrano will meet at 6:30 p.m. on Tuesday, May 6, 2008 in the City Council Chamber in City Hall, to consider: "Consideration of a License Agreement for the Kinoshita Farm (South Coast Farms)" — Item No. D12. If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the City Council through correspondence addressed to the Council and/or by attending the meeting and speaking to the Council during the public meeting. Correspondence related to this item must be received at the City Clerk's office by 5:00 p.m. on Monday, May 5, 2008 to allow time for the Council to consider its content. If you would like to speak at the meeting, please complete a yellow "Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Mayor when the item is considered. You have received this notice at the request of the City staff member Michelle Perea, Management Analyst. You may contact that staff member at (949) 487-4315 with any questions. The agenda, including agenda reports, is available to you on our web site: www.sanivancaoistrano.or-g. If you would like to subscribe to receive a notice when agendas are posted to the web site, please make that request by sending an e-mail to: cityclerk(a) san iva ncaoistra no.oro. Meg Monahan, MMC City Clerk cc: George Kibby, South Coast Farms; Michelle Perea, Management Analyst * Received staff report San Juan Capistrano: Preserving the Past to Enhance the Future 0 Pdntetl on 100% recycled pa0er LJ SUPPLEMENTARY AGENDA REPORT • 4/1/2008 TO: Dave Adams, City Manager i h FROM: Cindy Russell, Interim Public works Director SUBJECT: Consideration of a License Agreement for the Kinoshita Farm (South Coast Farms) SITUATION: This Item has been withdrawn by staff from the Agenda. It will be placed on the April 15, 2008, City Council Meeting. Respectfully submitted, Cindy Russell Interim Public Works Director Prepared by, Michelle Perea Management Analyst 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAx www. san/uancapis trano. org April 2, 2008 0 �,,"mo�'ii" IA[AAIOAAIIA IsrAlusem I 1961 1776 NOTIFICATION OF ACTION BY THE CITY COUNCIL OF SAN JUAN CAPISTRANO MEMBERS OF THE CRY COUNCIL SAM ALLEVATO THOMAS W. HRIBAR MARK NIELSEN JOE SOTO DR. LONDRES USO On April 1, 2008, the City Council of San Juan Capistrano met regarding: "Consideration of a License Agreement for the Kinoshita Farm (South Coast Farms)" Item No. D6. The following action was taken at the meeting: Item withdrawn from the agenda by staff. If you have any questions regarding this action, please contact Michelle Perea, Management Analyst at (949) 487-4315 for more detailed information. Thank you, ,MMC Clerk Cc: Georg Kibby, South Coast Farms; Cindy Russell, Interim Public Works Director; Michelle Perea, Management Analyst San Juan Capistrano: Preserving the Past to Enhance the Future 0 printed on 100% recycled paper 11 AGENDA REPORT TO: Dave Adams, City Manager 49''' FROM: Cindy Russell, Interim Public Works Director • 41112008 SUBJECT: Consideration of a License Agreement for the Kinoshita Farm (South Coast Farms) RECOMMENDATION: 1. By motion, approve the license agreement with South Coast Farms for $25,000 annually; and, 2. Authorize the Mayor to execute the agreement on behalf of the City. SITUATION: The City and the San Juan Capistrano Community Redevelopment Agency are owners of a 28.225 acre farm on the corner of Alipaz and Del Avion, which was acquired to be maintained as open space within the City (Exhibit A, Attachment 1). South Coast Farms, the current operator of the farm, has renegotiated with the City to continue to farm 27.725 acres, with the remaining acreage set aside for future City use. Please note that the City entered into a separate license agreement on August 8, 2006, with the San Juan Family Farm Museum (an affiliate of South Coast Farms), for the maintenance and use of the Joel Congdon House also at this location. As part of the proposed license agreement (Attachment 1) for farm operations, South Coast Farms shall continue to maintain a fully functioning farm, as well as a fruit and vegetable stand over the 10 -year term of the license agreement. At the end of the fifth year, the annual license rate of $25,000 may be renegotiated. In addition to the annual license fee, the agreement provides for South Coast Farms to pay the current agricultural rate for water. South Coast Farms shall own all crops produced at the property, and shall continue to provide the supervision and management over the farm operations. There is an antenna site located at the Sports Park field, which is adjacent to the farm. The license agreement specifies that South Coast Farms will allow for use of the access road (Exhibit A, Attachment 1), with the City maintaining the road and gate. In addition, the City will continue to access the property to host the annual Fourth of July Celebration throughout the term of the agreement. Since beginning operations on this property in 1999, South Coast Farms has proven to be a successful farm operator with 100% of its operations being organic. This type of AGENDA REPORT • • April 1, 2008 organic farm means that the residents of San Juan Capistrano are not exposed to any of the herbicides and pesticides that normal farm operations utilize, while being offered healthier foods to enjoy. South Coast Farms is well-known for such produce as strawberries, tomatoes, leafy greens, pumpkins, etc. Additionally, South Coast Farms has become a part of the community providing educational opportunities for our schools and residents as well. Staff recommends that the City Council approve the proposed license agreement with South Coast Farms for continued operation of the farm property. NOTIFICATION: George Kibby, South Coast Farms COMMISSION/BOARD REVIEW, RECOMMENDATIONS: Not Applicable. FINANCIAL CONSIDERATIONS: The proposed license agreement with South Coast Farm provides for a $25,000 per annum payment. The proposed license agreement requires South Coast Farms to pay the current agricultural rate for water. RECOMMENDATION: By motion, approve the license agreement with South Coast Farms for $25,000 annually; and, 2. Authorize the Mayor to execute the agreement on behalf of the City. Respectfully submitted, Pte/ Y "tX Cindy Russ Interim Public Works Director Attachments: 1. License Agreement Prepared by, 1v 4 _ Michelle Perea Management Analyst 0 0 LICENSE AGREEMENT This License Agreement ("Agreement') is made this _ day of _, 2008, by and between the City of San Juan Capistrano, a municipal corporation, and the San Juan Capistrano Community Redevelopment Agency, a public body, corporate and 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 Licensefferm. (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. 552413.1 Page 1 of 9 ATTACHMENT 1 0 Section 2. License Fee. 0 (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: 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 0 0 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. 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 3 of 9 552413.1 (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 shall 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 4t" 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 LICENSSEE, which may include well water, recycled water, or domestic water. LICENSEE is required to pay for water at no more then the current agricultural rate, and any costs required in Page 4 of 9 552413.1 0 0 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 Insolvency. 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 thereunder, by ten (10) days' notice in writing to LICENSEE, in which event, on the expiration of the ten (10) days from mailing of the notice, this License shall automatically terminate. Section 10. Notices. Page 5 of 9 552417.1 9 0 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. Attorneys' Fees. 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 insured 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 each waive the rights of subrogation that may arise against the other because of any act covered by insurance. The policy shall provide that modification or cancellation of the policy shall Page 6 of 9 552413.1 not occur without thirty (30) days advance written notice provided by the insurer to LICENSOR. Section 14. Indemnity. 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 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'� 'a� eorge I ibb LICENSOR: CITY OF SAN JUAN CAPISTRANO, A California municipal corporation By: Joe Soto, Mayor ATTEST: Margaret R. Monahan, City Clerk APPROVED AS TO FORM: Omar Sandoval, City Attorney [ADDITIONAL SIGNATURE PAGE FOLLOWS] Page 8 of 9 552413 1 0 0 SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic 0 ATTEST: Margaret R. Monahan, Agency Secretary APPROVED AS TO FORM: A4,111 � J.6. 0 Omar SAn-loval, Agency Co nsel ark Nielsen, Chairman Page 9 of 9 0 0 a KINOSHITA FARM 30OR }a CityG1S6.0 Copyright O 2006 All Rights Reserved. The information contained herein Is the proprietary property of the contributor suppled under license and may not be approved except as licensed by Digtal Map Products. EXHIBIT A 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493.1171 (949) 493-1053 FAx www san)uancapestrano. org m[onvoenm ' 6Tnl 1961 1776 MEMBERS OF THE CRY COUNCIL NOTIFICATION OF MEETING OF POTENTIAL INTEREST OF THE SAN JUAN CAPISTRANO CITY COUNCIL SAM ALLEVATO THOMAS W. HRIBAR MARK NIELSEN JOE SOTO DR. LONDRES USO The City Council of San Juan Capistrano will meet at 6:30 p.m. on Tuesday, April 1, 2008 in the City Council Chamber in City Hall, to consider: "Consideration of a License Agreement for the Kinoshita Farm (South Coast Farms)" — Item No. D6. If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the City Council through correspondence addressed to the Council and/or by attending the meeting and speaking to the Council during the public meeting. Correspondence related to this item must be received at the City Clerk's office by 5:00 p.m. on Monday, March 31, 2008 to allow time for the Council to consider its content. If you would like to speak at the meeting, please complete a yellow 'Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Mayor when the item is considered. You have received this notice at the request of the City staff member Michelle Perea, Management Analyst. You may contact that staff member at (949) 487-4315 with any questions. The agenda, including agenda reports, is available to you on our web site: www.san'uancapistrano.org. If you would like to subscribe to receive a notice when agendas are posted to the web site, please make that request by sending an e-mail to: cityclerk(cDsanivancapistrano.org. Meg Monahan, MMC City Clerk cc: Georg Kibby, South Coast Farms; Cindy Russell, Interim Public Works Director; Michelle Perea, Management Analyst Received staff report San Juan Capistrano: Preserving the Past to Enhance the Future 0 Pnnled on 100% recycled paper 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAX WWW san juancaptstrano. org May 12, 2008 0 NOTIFICATION OF ACTION BY THE CITY COUNCIL OF SAN JUAN CAPISTRANO MEMBERS OF THE CITY COUNCIL SAM ALLEVATO THOMAS W. HRIBAR MARK NIELSEN JOE SOTO DR. LONDRES USO On May 6, 2008, the City Council of San Juan Capistrano met regarding: "Consideration of a License Agreement for the Kinoshita Farm (South Coast Farms)" Item No. D12. The following action was taken at the meeting: License agreement with South Coast Farms for farm operations at the Kinoshita Farm, in the amount of $25,000 annually and a term of 10 years, approved; and the Mayor authorized to execute the agreement. If you have any questions regarding this action, please contact Michelle Perea, Management Analyst at (949) 487-4315 for more detailed information. Thank you, 1 pan, MMC Clerk Cc: George Kibby, South Coast Farms; Michelle Perea, Management Analyst San Juan Capistrano: Preserving the Past to Enhance the Future Printetl on 100°6 recycled paper