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00-0801_STROSCHER ENTERPRISE_Agenda Report_D9 8/21/2007 AGENDA REPORT D9 TO: Dave Adams, City Manager FROM: Douglas D. Dumhart, Economic Development Manager SUBJECT: Consideration of Revised Second Amendment to License Agreement for Temporary Public Parking on the Former Walnut Grove Restaurant Property- (Stroscher G3, LLC, APN 124-170-12) RECOMMENDATION: By motion, approve the revised Second Amendment to the License Agreement to add temporary public parking on the former Walnut Grove Restaurant property. SUMMARY: The city and property owner of the former Walnut Grove Restaurant site had agreed to use the site for temporary public parking until redevelopment of the property could occur. Costs for the temporary parking lot improvements over the entire site were higher than anticipated. Council elected to redirect the funds to contractual improvements needed at the Capistrano Depot lot. In making their motion to abandon the Second Amendment to use the Walnut Grove site, Council inquired about use of just the improved portion of the Walnut Grove parcel. The property owner is receptive to using only the paved portion of the Walnut Grove property for public parking and a revised Second Amendment is being agendized for City Council consideration. BACKGROUND: On August 1, 2000, the City approved a License Agreement with Stroscher Enterprise, LLC, a family partnership, to place a temporary public parking lot on the northeast corner of EI Camino Real and Ortega Highway, site of the former Arco fueling station. The temporary public parking lot was put in place to accomplish several goals. They were: a. To eliminate a blighted nuisance created in the heart of the Downtown when the gas station was razed in 1999. b. To create additional public parking to meet the increasing demand in the Downtown. Agenda Report August 21, 2007 Page 2 c. To place a desirable temporary use on the property until a future redevelopment project could be fostered with the family partnership and remaining business interest. Immediately adjacent to this temporary parking lot was the former Walnut Grove Restaurant. The Walnut Grove Restaurant was closed in 2004 and its leasehold interest extinguished. The building was razed in September of 2005. The family partnership which owns these properties was reorganized in 2006. The City has been approached by the current licensor, Stroscher G3, LLC, the successor in interest from Stroscher Enterprise, LLC, about adding the former Walnut Grove Restaurant property to the temporary public parking area. On December 5, 2006, City Council approved the Second Amendment to the License Agreement that provided for improvements to the existing parking lot which would have added another 60 spaces to the public parking inventory. The final estimates for completion of the project were higher than anticipated. On June 5, 2007, rather than increase the commitment for temporary improvements, Council terminated the Second Amendment to the License Agreement. Staff is recommending the City Council consider a revised Second Amendment to the License Agreement with Stroscher G3, LLC, to provide for an additional 35 temporary public parking spaces. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: No commission review is required. FINANCIAL CONSIDERATIONS: In exchange for making the Walnut Grove property available to the City at no additional cost, the City would make the necessary temporary improvements such as weed and debris removal, new slurry coating and restriping and assume responsibility and liability of fifty percent of the property. Slurry and restriping of the existing parking lot are anticipated to cost $3,850.00 and monies are available in parking fund account number 31-62419- 4455 to cover these nominal costs. NOTIFICATION: Gretchen Stroscher-Thomson, Stroscher G3, LLC. Agenda Report August 21, 2007 Page 3 RECOMMENDATION: By motion, approve the revised Second Amendment to the License Agreement to add public parking on the former Walnut Grove Restaurant property. Respectfully submitted, Prepared by: Douglas D. umhart Joan A. Ross Economic Development Manager Administrative Coordinator Attachments 1: Revised Second Amendment to License Agreement 2: License Agreement and First Amendment REVISED SECOND AMENDMENT TO THE LICENSE AGREEMENT FOR GENERAL PUBLIC PARKING This revised Second Amendment to the General Public Parking License Agreement is made and entered into this 21 st day of August 2007, by and between the City of San Juan Capistrano (the "City"), and Stroscher G3, LLC, a California limited liability company, and Gretchen Stroscher Thomson, as Trustee of the Thomson Family Trust u/d/t dated October 8, 1990 (collectively, the "Licensor"). RECITALS WHEREAS, on August 1, 2000 the City and Licensor's predecessor-in-interest entered into a License Agreement for temporary public parking on the corner of EI Camino Real and Ortega Highway (APN 124-170-14), hereinafter "Original Agreement," and, WHEREAS, on October 1, 2004 the City and Licensor's predecessor-in-interest executed the First Amendment to the original agreement modifying the monthly consideration in the existing agreement; and, WHEREAS, Licensor controls the adjacent parcel known as APN 124-170-12 the location of the former Walnut Grove Restaurant; and, WHEREAS, Licensor has approached the City about including this parcel to the License Agreement for expanded public parking until such time as licensor is ready to redevelop its property; and, WHEREAS, the City desires to use the property at the recently demolished Walnut Grove Restaurant site to provide additional parking alternatives for the residents and the patrons of the City's downtown businesses; and, WHEREAS, the City supports the purpose of providing safe, convenient and adequate parking facilities for its residents and businesses. NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and the terms, covenants, and conditions set forth in this revised Second Amendment, the Parties hereby agree as follows: SECTION 1. Section 1, of the Original Agreement entitled "Grant of License" and its First Amendment shall be amended to include the former Walnut Grove parking lot area on the top portion of the L-shaped lot at the former Walnut Grove Restaurant site commonly known as APN 124-170-12 shown on Exhibit A attached to and incorporated herein for all Page 1 of 2 ATTACHMENT 1 purposes of said agreement. SECTION 2. In exchange for use of the property, the Licensee shall remove weeds and debris and reslurry and restripe the lot on this site and pay the pro-rata share of (50%) fifty percent of the property taxes assessed upon APN 124-170-12 for the term of the Agreement. It shall be the responsibility of the Licensee to maintain the property in a useable, safe condition, in good repair and free of garbage, litter, debris or weeds. SECTION 3. During the term of the license, the city shall maintain commercial liability insurance for APN 124-170-12 and APN 124-170-14 in amounts reasonably acceptable to licensor, which insurance policy shall name licensor as an additional insured. SECTION 4. All other terms and conditions of the said Original Agreement and its First Amendment shall remain in full force and effect. IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first written above. City of San Juan Capistrano Stroscher G3, LLC Sam Allevato, Mayor Gretchen Stroscher Thomson, as Trustee of the Thomson Family Trust u/d/t dated October 8, 1990 ATTEST: Margaret R. Monahan, City Clerk Approved as to Form: John Shaw, City Attorney Page 2 of 2 Pagel of 2 .n �+r rs Area Under License r. 6 Not a Part as ,r 75ft N cityGis 6.0 EXHIBIT A http://maps.digitalmapcentral.com/production/CityGIS/vO7_O l_034/indexA.html 7/30/2007 LICENSE AGREEMENT FOR GENERAL PUBLIC PARKING This License Agreement, hereinafter("License") is made on the 1 st day of August, 2000, by and between Stroscher Enterprise, a California General Partnership, hereinafter referred to as Licensor,and the City of San Juan Capistrano,a municipal corporation, duly organized and existing under and by virtue of the laws of the State of California,hereinafter referred to as Licensee. Whereas, the Licensor is the owner of a vacant parcel of land located on the corner of EI Camino Real and Ortega Highway in Downtown San Juan Capistrano, formally known as the ARCO fueling station site; and, Whereas, it is in both parties' interest to ensure the economic vitality of the Downtown establishments by ensuing adequate parking inventory and traffic circulation for their patronage; and, Whereas, the Licensee desires to utilize Licensor's real property, for the creation of temporary general public parking and Licensor is agreeable to said use. Now, therefore, be it mutually resolved, between the Licensor and Licensee as follows: Covenants Section 1. Grant of License: Licensor hereby grants to licensee a license entitling Licensee to utilize Licensor's real property located on the northeast corner of Ortega Highway and EI Camino Real and more particularly described as Assessor's Parcel No. 124-170-14 and graphically depicted on Exhibit 1, attached to, and incorporated by reference to this license agreement, for public parking purposes. Section 2. Use of Property: Licensee shall be entitled to use the property 24 hours a day, seven days a week, and to make it available to the general public for parking purposes, and for no other purpose. Licensee shall be responsible for enforcement of vehicle parking at all times during this license. It is anticipated that Licensee will make improvements to the subject real property to facilitate the use of the real property as a parking lot. The cost of improvements, up to a maximum of$45,000, will be depreciated on a straight-line method over the first thirty-six months, for the purposes set forth in Section 3. Page 1 of 4 ATTACHMENT 2 SD Section 3. Term: The term of this license shall be for three (3) years commencing August 1, 2000. The license shall continue thereafter on a month to month basis unless terminated by either party by giving the other party thirty (30) days written notice of termination. In the event Licensor terminates the License prior to the expiration of the original term of 36 months, Licensor shall be obligated to pay Licensee the remaining prorated cost of improvements. For example, if the cost of improvements are $45,000 and the License is terminated effective month 24,then the Licensor shall be obligated to pay the Licensee the unused portion or $15,000 (12 months times $1250.) Licensor may elect to offset this amount against any unpaid sums owed by the Licensee, subject to the terms and conditions set forth in Sections 4 and 5. Licensee agrees that if the costs of improvements exceed $45,000, then the Licensee shall be solely responsible for that amount and shall not be included in determining the amount owed by Licensor. Section 4. Consideration: As consideration forsaid License,Licensee shall pay licensor$4,500.00 in advance, on or before the first day of each month for the first six months commencing August 1, 2000, and $3,000.00 per month in advance, on or before the first day of each month for each month thereafter during the term of the license. So long as the Licensor owns and operates the Mission Inn Motel located at 26891 Ortega Highway, monthly consideration shall be credited first against any and all outstanding Transient Occupancy Tax owed by the Licensor to the Licensee under Section 3, Article 6 of the Municipal Code. In addition to the foregoing rent, Licensee shall pay the pro-rata share of the property taxes assessed upon the premises for the term of the License Agreement. Licensee shall pay its pro-rata share to the County Assessor/Tax Collector within thirty(30) days of receipt of Licensor's request for payment accompanied with the Assessor/Tax Collector's statement thereof. Section 5. Additional Consideration, Maintenance and Operation: Licensee shall make minor paving improvements to facilitate the use of the property for public parking. It shall be the responsibility of the Licensee to maintain property in useable safe condition, in good repair and free of garbage, litter, debris or weeds which may accumulate upon the premises. In the event of destruction or damage to the licensors' premises by an insured casualty or event, so that premises becomes wholly or partially unusable this license Agreement shall terminate, and Licensor's duties to reimburse Licensee under Section 3 herein shall not apply. Page 2 of 4 Section 6. Assignments: Licensee shall notassign,sell,transferor hypothecate its interest under this License Agreement. Section 7. Attorneys Fees: In the event that Licensor or Licensee is required to file legal action to enforce the terms of this agreement, the prevailing party shall be entitled to all costs incurred in connection with such action, including reasonable attorney's fees. Section 8. Notices: Any notice required to be served pursuant to this License Agreement shall be effective upon posting in the United States mail, first class, with postage prepaid, addressed as follows: Ted Stroscher City Manager Stroscher Enterprise Partnership City of San Juan Capistrano 31882 Del Obispo, Suite 200 32400 Paseo Adelanto San Juan Capistrano CA 92675 San Juan Capistrano CA 92675 Section 9. Indemnification: Licensee shall hold harmless, indemnify and defend Licensor,its Partners,officers, employees agents, and successors from all liabilities, penalties, losses damages, costs, expense,causes of action,claims and/or judgements arising out of the negligence or willful misconduct of Licensee, its agents, employees contractors and invitees, or activities pursuant to this License Agreement. Section 10. Entire Agreement: This License Agreement contains the entire agreement of the parties and any agreement or representations affecting the premises,the duties of Licensor and Licensee not expressly set forth herein, is null and void. Amendments can only be made by writing and executed by both parties. Page 3 of 4 In Witness Whereof,the parties have read and understood the above License Agreement. City of San Juan Ca istrano (Licensee): -ze- -o' C ene C4woell, "yor Stroscher Enterprise Partnership {Licensorl: Theodore H. Strosc er, artner Approved as to Form: John ShaW, City Attorney Attest_ Cheryl Jo ns i Jerk Page 4 of 4 �.N FIRST AMENDMENT TO LICENSE AGREEMENT FOR GENERAL PUBLIC PARKING This First Amendment to the License Agreement, hereinafter("Amendment"} is made on the V*day of October 2004, by and between Stroscher Enterprise, a California General Partnership, hereinafter referred to as Licensor, and the City of San Juan Capistrano, a municipal corporation, duly organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as Licensee. Whereas, on or about August 1, 2000, Licensor and Licensee entered into that certain License Agreement(°License') covering that certain parcel of land located at the comer of El Camino Real and Ortega Highway in San Juan Capistrano, described as Assessor's Parcel Number 124-170-14; and Whereas, Licensor and Licensee desire to hereby amend certain provisions of the License. Now, therefore, be it mutually resolved, between the Licensor and Licensee as follows: Covenants Section 4. Consideration: Commencing October 1, 2004, the monthly consideration shall increase to $6,000.00 per month in advance, and shall continue for 36 months. Commencing October 'l, 2007 the monthly consideration shall decrease to$3,000.00 per month in advance. All other terms and provisions of Section 4., and the other Sections of the License, shall remain unchanged and in full force and effect. SD In Witness Whereof, the parties have read and understood the above Amendment. City of San Juan Capistmno_( icensee)• Joe Soto, ayor Stroscher Enterprise Partnershif) (Licensor): The dors H. oscher, Partner Approved as to Form John S , City Attorney Asst: el eg onahan, City Clerk