2013/04/23 City Council Resolution 2013-070RESOLUTION NO. 2013 -070
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AUTHORIZING AND APPROVING THE MASTER LEASE AGREEMENT BY AND
BETWEEN THE CITY OF ROHNERT PARK AND KIRK VEALE (d.b.a. B.P.O. OF
CALIFORNIA) FOR THE FINANCING, INSTALLATION, OPERATION, AND
MAINTENANCE OF THE CITY OF ROHNERT PARK'S DIGITAL BILLBOARD
WHEREAS, the City of Rohnert Park ( "City ") owns, operates, and maintains a digital
billboard located adjacent to the 101 freeway (the "Premises "); and
WHEREAS, City wishes to replace the existing aging digital billboard and install a new
upgraded digital billboard on the Premises; and
WHEREAS, Kirk Veale, a sole proprietorship, d.b.a. B.P.O. of California ( "B.P.O. "),
has the skills and experience to install, operate, and maintain a digital billboard; and
WHEREAS, the City Council has determined, that entering into a Master Lease
Agreement with B.P.O. (the "Project ") would benefit the City and its citizens by facilitating the
financing, installation, operation, and maintenance of the digital billboard thereby improving
local business marketing opportunities, increasing revenue to the City, and lowering City
operating expenses; and
WHEREAS, an Initial Study and Negative Declaration were prepared in accordance with
the requirements of the California Environmental Quality Act ( "CEQA "), California Public
Resources Code section 21000 et seq., the State CEQA Guidelines, California Code of
Regulations, Title 14, Chapter 3, sections 15000 et seq. (the "Guidelines "), and the local
guidelines of the City of Rohnert Park, in connection with the Planning Commission's
consideration of B.P.O.'s applications for a conditional use permit and site plan and architectural
review (collectively, the "Discretionary Permits ") to permit the demolition of the existing
freeway billboard sign and the installation of a the new digital billboard sign being proposed in
connection with the Project.
WHEREAS, the Initial Study and Negative Declaration assessed the potential
environmental effects associated with both the proposed demolition of the existing digital
billboard and the installation and operation of the new digital billboard in accordance with the
requirements of CEQA and the Guidelines. The Planning Commission found that such
documents indicate that no substantial evidence exists that the demolition and removal of the
existing digital billboard and approval of the proposed digital billboard will have a significant
effect on the environment as such terms are defined under CEQA and adopted the Negative
Declaration at a duly notice public hearing on March 28, 2013; and
WHEREAS, the City Council finds that approval of the Project will not authorize any
activities not already contemplated by and encompassed within the Discretionary Permits and
that the Negative Declaration adopted by the Planning Commission in connection with the
Discretionary Permits thoroughly considers and analyzes the environmental impacts associated
with the Project; and
WHEREAS, the City Council finds that no additional environmental review is required
under CEQA; and
WHEREAS, authorizing and approving the proposed Master Lease Agreement with
B.P.O. does not commit the City in advance to approve the entitlements for the proposed digital
billboard, or otherwise constrain the City's discretion, acting as a governing agency, with respect
to processing the entitlement applications for the digital billboard specifically or to the digital
billboard generally, and the Planning Commission has independently reviewed and approved the
necessary entitlement applications and the Building Official will independently review and issue
building permits for the proposed billboard as appropriate.
NOW, THEREFORE, the City Council of the City of Rohnert Park herby resolves,
determines, finds, and orders as follows:
SECTION 1. Compliance with CEQA. The City Council finds that the Negative
Declaration adopted by the Planning Commission in connection with its approval of the
Discretionary Permits thoroughly and accurately analyzes the potential impacts associated with
the Project. The City Council concurs with the findings and conclusions of the Planning
Commission and finds that no further environmental review is required under CEQA or the
Guidelines.
SECTION 2. Approval of Lease Agreement. The City Council authorizes and approves
that certain Master Lease Agreement between the City of Rohnert Park and Kirk Veale, d.b.a.
B.P.O of California, attached hereto as Exhibit A ( "Lease Agreement "); and
SECTION 3. Execution. The City Manager is hereby authorized and directed to execute
the Lease Agreement in substantially similar form to the attached Exhibit "A" and to take all
actions necessary to effectuate the Lease Agreement, including but not limited to, execution of
documents for and on behalf of the City of Rohnert, subject to approval by the City Attorney.
SECTION 4. Authorized Signature. The Mayor, or presiding officer, is hereby
authorized to affix his or her signature to this Resolution signifying its adoption, and the City
Clerk, or her duly appointed deputy, is directed to attest thereto.
DULY AND REGULARLY ADOPTED this 23rd day of April, 2013.
CITY OF ROHNERT'PARK
Pam Stafford, Mayor
AHANOTU: Aye BELFORTE: Aye MACKENZIE: Aye CALLINAN: Aye STAFFORD: Aye
AYES: ( 5 ) NOES: ( 0 ) ABSENT: ( 0 ) ABSTAIN: ( 0 )
Page 2 of 3 2013 -070
"Exhibit A"
AGREEMENT
Page 3 of 3 2013 -070
DIGITAL BILLBOARD LEASE
by and between
CITY OF ROHNERT PARK,
a California Municipal corporation
("City")
and
KIRK VEALE , a sole proprietorship
dba B.P.O. OF CALIFORNIA
( "Tenant ")
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BASIC INFORMATION
The following Basic Information provides a brief synopsis of the critical terms of this
Lease and a reference for certain specific terms of this Lease. The Basic Information,
the Recitals below, and all exhibits attached hereto are incorporated into and made a
part of the Lease. If there is any conflict between the Basic Information and terms of the
Lease, the terms of the Lease shall control.
Cam: CITY OF ROHNERT PARK, a California Municipal corporation
130 Avram Avenue
Rohnert Park, CA 94928
Notice: City Manager
Email: admin @rpcity.org
Telephone: (707) 588 -2226
Facsimile: (707) 792 -1876
2. Tenant: Kirk Veale, a sole proprietorship
dba B.P.O of California
P. O. Box 1496
Santa Rosa, CA 95402
2800 Cleveland Avenue #A2
Santa Rosa, CA 95402
Notice: Kirk Veale
Email: kirk @vealeinvestmento.com
Telephone: (707) 575 -3752
Facsimile: (707) 575 -4540
3. Effective Date: 2013
4. Premises: That certain real property owned by City legally described in
and depicted on Exhibit A, commonly known and referred to
as the City of Rohnert Park — Highway 101 Digital Sign in the
City of Rohnert Park, County of Sonoma, State of California,
together with the City's improvements serving the digital
billboard located thereon (excluding any pipes, utilities,
structures or other improvements servicing any property
other than the digital billboard).
5. Permitted Use: Operation of one two -sided digital billboard to display
outdoor advertising on the Premises.
6. Term: Twenty (20) years from the Commencement Date of the
Lease and a ten (10) year extension option by Tenant as set
forth in Article 4.
1 -A
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7. Base Rent: As set forth in Article 5, Tenant shall pay City $180,000 per
year payable in monthly installments of $15,000 per month
commencing on the Commencement Date. The Base Rent
will be adjusted as set forth in Article 5. Base Rent will be
adjusted annually after the first five (5) years of the Term
either by the Performance Increase (as defined in Schedule
1) or three and one -half percent (3.5 %), whichever is
greater.
8. Percentage Rent: If the total Base Rent paid by Tenant in any Lease Year is
less than twenty percent (20 %) of the Gross Revenues for
that Lease Year, then in addition to the Base Rent, Tenant
shall pay City the difference as Percentage Rent on an
annual basis, as described in detail in Schedule 1. However,
if the total Base Rent paid by Tenant in any Lease Year
equals or exceeds twenty percent (20 %) of the Gross
Revenues for that Lease Year, City shall have no obligation
to refund any portion of the Base Rent payments or to apply
said payments to any future Lease Year.
LANDLORD'S INITIALS TENANT'S INITIALS
OAK #4849 -6842 -8818 61-B
Lease for Digital Billboard
By and Between
City of Rohnert Park and Veale Investment Properties dba B.P.O of
California
This lease ( "Lease "), dated this 1St day of March, 2013 for identification purposes,
is by and between the City of Rohnert Park ( "City "), a California municipal corporation;
and Kirk Veale, a sole proprietorship, dba B.P.O. of California ( "Tenant "). City and
Tenant may sometimes be referred to hereinafter individually as a "party" and
collectively as the "parties."
RECITALS
A. City owns that certain parcel of land located in the City of Rohnert Park,
County of Sonoma, State of California, consisting of approximately 4,109 square feet
located between Commerce Boulevard and the freeway boundary for U.S. Highway 101
adjacent to State Farm Drive, as more particularly shown on Exhibit A attached hereto
and incorporated herein by reference (the "Premises ").
B. City owns and operates a digital freeway sign located on the Premises
that needs to be retrofitted or replaced . The existing sign was first installed in 2003 and
is rapidly becoming obsolete.
C. Rohnert Park is considered the "Gateway to the Wine Country," and
tourists and visitors drive through the community daily to reach popular wine
destinations in Healdsburg and Sonoma, and along the Russian River.
D. A new digital freeway sign utilizing modern technology will provide a
significant marketing tool for City and Sonoma County. City desires to facilitate the
replacement, operation, and maintenance of the existing digital freeway sign in order to
take advantage of this economic development and marketing tool to increase
awareness about the City of Rohnert Park and to provide promotional and advertising
opportunities for local businesses.
E. On July 9, 2012, City issued a Request for Proposal soliciting proposals
for development of a new digital freeway sign along Highway 101. Three proposals
were received and thoroughly reviewed by City.
F. The Rohnert Park City Council has determined that it is in the best
interests of City, and for the common benefit of the citizens residing in City, to enter into
this Lease with Tenant for the financing, installation, operation and maintenance of a
new digital freeway sign at the Premises.
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G. City desires to lease to Tenant, and Tenant desires to lease from City, the
Premises, all as further set forth herein.
AGREEMENT
ARTICLE 1 — DEFINITIONS.
For purposes of this Lease, unless a different meaning is clearly required, the following
terms shall have the following meanings and be capitalized throughout this Lease:
1.1 "Base Rent" means the guaranteed monthly minimum amount tenant shall
pay to City as consideration for the rights and benefits it enjoys under the
Lease, as more particularly described in Schedule 1.
1.2 "Business Day" means any day City's main offices located at 130 Avram
Avenue, Rohnert Park, California, are open to the public.
1.3 "Caltrans" means the California Department of Transportation.
1.4 "Caltrans Permits" means all permits and approvals, if any, that Tenant
must obtain from Caltrans to install, operate, and maintain the Digital
Billboard in accordance with this Lease.
1.5 "City Permits" means all building permits, conditional use permits, site plan
review, architectural review, and other permits, entitlements, and
agreements that City, acting in its governmental capacity, must issue or
approve for Tenant to install, operate, and maintain the Digital Billboard in
accordance with this Lease.
1.6 "Commencement Date" means the, earlier of the date on which the Digital
Billboard described herein becomes Operational (as described herein) or
120 days after both of the following have occurred: (i) City has finally
approved the Plans (defined in Section 7.2), and (ii) Tenant has received
all necessary governmental permits and approvals for the Digital Billboard,
including the Caltrans Permits and City Permits (as described more fully in
Article 7).
1.7 "Community Center Sign" shall mean the two -sided outdoor - advertising
sign located at 5401 Snyder Lane in the City of Rohnert Park, County of
Sonoma, State of California that Tenant will replace and operate in
accordance with the criteria set forth in Exhibit C to this Lease.
1.8 "Digital Billboard" means the two -sided outdoor - advertising sign that
Tenant will install and operate on the Premises in accordance with the
criteria set forth in Exhibit B to this Lease. The Digital Billboard consists of
a Message Center and a Sign Structure.
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1.9 "Effective Date" means the date as of which both City and Tenant have
signed this Lease, as indicated by the dates in the signature blocks below.
1.10 "Existing Sign" means the digital freeway sign currently located on the
Premises that Tenant will remove in accordance with the criteria set forth
in Subsection 5.1.5 of this Lease.
1.11 "Gross Revenue" means all revenue Tenant derives from the Digital
Billboard, less any commissions paid, at the industry standard commission
rate of sixteen and sixth /tenths percent (16.6 %).
1.12 "Hazardous Materials" means any and all pollutants, wastes, flammables,
explosives, radioactive materials, hazardous or toxic materials, hazardous
or toxic wastes, hazardous or toxic substances, carcinogenic materials or
contaminants and all other materials governed, monitored, or regulated by
any Federal, State or local Law or regulation, including the
Comprehensive Environmental Response, Compensation and Liability
Act, the Hazardous Substances Account Act, and /or the Resources
Conservation and Recovery Act, together with asbestos, asbestos -
containing materials, hydrocarbons, polychlorinated biphenyl ( "PCB ") or
PCB - containing materials, petroleum, gasoline, petroleum products, crude
oil or any fraction, product or by product thereof.
1.13 "Hazardous Materials Laws" means all laws, codes, rules, orders,
ordinances, directives, regulations, permits, or other requirements of
federal, state, county, municipal or governmental authorities having
jurisdiction, now in force or which may hereafter be in force concerning the
management, use, generation, storage, transportation, presence,
discharge or disposal of Hazardous Materials. .
1.14 "Include" and its variants are not restrictive. For example, "includes"
means "includes but not limited to," and "including" means "including but
not limited to."
1.15 "Lease Year" means one of the consecutive 12 -month periods during the
Term. The first Lease Year begins on the Commencement Date, and shall
not include the Pre - Operations Phase of the Initial Term as more
particularly described in Section 4.1.1.
1.16 "Message Center" means the portion of the Digital Billboard that consists
of the two digital (LED) display areas used for general commercial
advertising, with each of the two areas measuring 14 feet high and 48 feet
wide. The Message Center is more particularly described in Exhibit B.
1.17 "Operational" means the Digital Billboard is capable, legally and
functionally, of displaying advertising on the Message Center.
1.18 "Percentage Rent" means the sum representing the difference between
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the total Base Rent paid by Tenant for that Lease Year and a sum which is
twenty percent (20 %) of Gross Revenue for that same Lease Year which
Tenant shall pay to City in addition to the Base Rent where the total Base
Rent paid by Tenant for that Lease Year is less than twenty percent (20 %)
of the Gross Revenues for the same Lease Year, as more particularly
described in Schedule 1.
1.19 "Premises" means City -owned real property described and depicted in
Exhibit A.
1.20 "Rent" means the actual amount Tenant pays to City as consideration for
the rights and benefits it enjoys under the Lease, and includes both "Base
Rent" and "Percentage Rent," as more particularly described in Schedule
1.
1.21 "Sign Structure" means the portion of the Digital Billboard other than the
Message Center, and it includes all ancillary equipment and utilities
installed on the Premises. The Sign Structure is more particularly
described in Exhibit B.
1.22 "Term" means the entire time this Lease is in effect. As specified in Article
4, it consists of the Initial Term, the Extended Term, and any period of
holding over.
ARTICLE 2 — REPRESENTATIONS AND WARRANTIES OF TENANT
2.1 Tenant Status
Tenant is a sole proprietorship which has the power to own its properties and to carry
on its business as now owned and operated and as required by this Lease.
2.2 Authority
Tenant has the legal rights, power, and authority to enter into and perform its obligations
under this Lease. The Person signing this Lease on behalf of Tenant has authority to
do so and to bind Tenant to the terms set forth herein.
2.3 Lease Will Not Cause Breach
To the best of Tenant's knowledge, after reasonable investigation, neither the execution
or delivery of this Lease, nor the performance of this Lease by Tenant: (i) conflicts with,
violates, or results in a breach of any applicable law; or (ii) conflicts with, violates or
results in a breach of any term or condition of any judgment, order or decree of any
court, administrative agency or other governmental authority, or any agreement or
instrument to which Tenant is a party or by which Tenant or any of its properties or
assets are bound, or constitutes a default thereunder.
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2.4 No Litigation
To the best of Tenant's knowledge, after reasonable investigation, there is no action,
suit, proceeding or investigation, at law or in equity, before or by any court or
governmental authority, commission, board, agency or instrumentality decided, pending
or threatened against Tenant wherein an unfavorable decision, ruling or finding, in any
single case or in the aggregate, would materially adversely affect the performance by
Tenant of its obligations hereunder or which, in any way, would adversely affect the
validity or enforceability of this Lease or which would have a material adverse effect on
the financial condition of Tenant or any surety guaranteeing Tenant's performance
under this Lease, which has not been waived by City in writing.
2.5 No Adverse Judicial Decisions
To the best of Tenant's knowledge, after reasonable investigation, there is no judicial
decision that affects the validity of this Lease and /or may subject this Lease to legal
challenge.
2.6 Ability to Perform
Tenant possesses the business, professional, and technical expertise to install,
maintain, and operate the Digital Billboard and to remove and dispose of the Existing
Sign on the Premises required to perform this Lease.
2.7 Qualifications and Identity of Tenant Material
Tenant acknowledges and agrees that the qualifications and identity of Tenant, and its
principals, are of particular concern to City and served as a material inducement to City
to enter into this Lease with Tenant and further acknowledges and agrees that a change
in ownership or control of Tenant or of a substantial part thereof, or any other act or
transaction involving or resulting in a significant change in ownership or control of
Tenant or the degree thereof, is for practical purposes a transfer or disposition of the
property then owned by Tenant. Tenant recognizes that it is because of such
qualifications and identity that City is entering into this Agreement with Tenant.
Accordingly, except as expressly authorized and set forth herein, no voluntary or
involuntary successor in interest of Tenant shall acquire any rights or powers under this
Lease.
ARTICLE 3 — LEASE OF PREMISES.
City hereby leases and demises to Tenant, and Tenant hereby leases and hires from
City, the Premises, as of the Effective Date, for the Term and upon the covenants,
terms, and conditions set forth in this Lease.
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ARTICLE 4 — TERM.
4.1 Term
The "Initial Term" of this Lease shall commence on the Effective Date and shall continue
for a period of twenty (20) years from the Commencement Date. The Initial Term shall
consist of two phases:
4.1.1 The "Pre- Operations Phase," which shall begin on the Effective Date and
end on the Commencement Date.
4.1.2 The "Operations Phase," which shall begin when the Pre - Operations
Phase ends and shall expire one (1) day before the twentieth (20th)
anniversary of the Commencement Date.
4.2 Extension of Term
At the end of the Initial Term, City shall extend the Term of this Lease for an additional
period of ten (10) years (the "Extended Term ") in accordance with the provisions of this
Section 4.2. Any reference to Term in this Lease shall include the Extended Term if
Tenant has exercised its right to extend the Term and City has determined there is no
event of default that prohibits the granting of such Extended Term as provided herein.
Any extension of the Term must comply with all of the following:
4.2.1 No Event of Default. To exercise its right to the Extended Term, Tenant
must be in good standing under the Lease. In no event shall City extend
the Term if Tenant is in default under this Lease.
4.2.2 Request for Extension. Tenant shall request the Extended Term by giving
written notice to City not sooner than twelve (12) months nor less than six
(6) months prior to the expiration of the Initial Term.
4.2.3 Conditions for Extended Term. The Extended Term shall be upon all of
the same terms and conditions of this Lease, as the same may be
modified by City and Tenant from time to time, except that Base Rent shall
be set in accordance with Section 2.5 in Schedule 1 to this Lease.
4.3 Expiration of Lease; Holding Over
This Lease shall expire automatically at the end of the Initial Term unless extended in
accordance with Section 4.2. If this Lease is extended, then it shall expire automatically
at the end of the Extended Term. If Tenant shall hold over on the Premises after the
expiration of the Term hereof with the consent of City, such holding over shall be
construed to be only a tenancy from month to month, subject to all the covenants,
conditions and obligations contained in this Lease. Tenant hereby agrees to pay to City
as monthly rental 1/12th of the amount which is one hundred fifty percent (150 %) of the
highest amount of total annual Rent paid by Tenant to City during the last year of the
Term.
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ARTICLE 5 — CONSIDERATION.
As consideration for the rights and benefits it enjoys under this Lease, including the use
and occupancy of the Premises during the Term, Tenant shall do all of the following..
5.1 Rent
Each month during the Operations Phase, Tenant shall pay City the Base Rent set forth
in Schedule 1 in accordance with the terms set forth in this Section 5.1.
5.1.1 Base Rent. Base Rent is due and payable in advance on the first day of
each calendar month without notice, demand, offset or deduction. Tenant
shall remit the Base Rent to City at the address designated in the Basic
Information, or at such other address as City may designate from time to
time in writing to Tenant for the payment of Rent.
a. Late Charge. If Tenant fails to pay any installment of Base Rent
within ten (10) calendar days after the same is due and payable,
such unpaid amount will be subject to a late payment charge equal
to five percent (5 %) of the unpaid amount in each instance. The
late payment charge has been agreed upon by City and Tenant,
after negotiation, as a reasonable estimate of the additional
administrative costs and detriment that City will incur as a result of
any such failure by Tenant, the actual costs thereof being extremely
difficult —if not impossible —to determine. The late payment charge
constitutes liquidated damages to compensate City for its damages
resulting from such failure to pay, and Tenant shall promptly pay
such charge to City together with any unpaid interest
b. Default Interest. If any Base Rent is not paid within fifteen (15)
calendar days following the due date, such unpaid amount shall
bear interest from the due date until paid at the legal interest rate.
However, interest shall not be payable on late charges incurred by
Tenant, nor on any amounts on which late charges are paid by
Tenant to the extent this interest would cause the total interest to
be in excess of that which an individual is lawfully permitted to
charge. Payment of interest shall not excuse or cure any default by
Tenant.
C. Application of Payments. All payments received by City from
Tenant shall be applied to the oldest obligation owed by Tenant to
City. No designation by Tenant, either in a separate writing, on a
check or money order, or otherwise shall modify this Article 3 or
have any force or effect.
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d. Proration for First Base Rental Payment. If the Operations Phase
begins on a day other than the first day of a month, then the first
month's installment of Base Rent will be prorated.
5.1.2 Percentage Rent. In addition to the Base Rent, Tenant shall annually pay
City Percentage Rent as set forth in Schedule 1, in accordance with the
terms of this 5.1.2.
a. Annual Payment. Tenant shall pay to City the Percentage Rent
annually on a date which is no later than forty -five (45) days after
the end of each Lease Year. In the event Tenant fails to pay any
annual installment of Percentage Rent when the same is due, the
late charge and interest provisions of Section 5.1.1, subsections (a)
and (b), above, shall apply to the payment of Percentage Rent.
b. Annual Report. On or before the payment of each installment of
Percentage Rent, Tenant shall furnish to City an annual statement
of Gross Revenue within forty -five (45) days after the end of each
Lease Year. The statement of Gross Revenue shall include a
designation of gross advertising revenue for the Digital Billboard, as
well as a designation for all permissible commissions paid in
accordance with this Lease. Such statement shall be in a form
acceptable to City. Each statement shall be signed and certified to
be correct by a duly authorized officer of Tenant. In addition, each
annual statement shall be reviewed by an independent certified
public accountant reasonably acceptable to City. Tenant shall keep
and make available at its Santa Rosa office complete and accurate
books of account, records, cash receipts and other pertinent data,
in accordance with good accounting practices and in a form
approved by City, showing its Gross Revenue, including without
limitation, accurate records of every sale and other transaction
made for any advertising display on the Digital Billboard and any
commissions paid by Tenant pursuant to this Lease. Such books of
account, records, cash receipts and other pertinent data shall be
kept for a period of ten (10) years after the end of each Lease Year.
The receipt by City of any statement, or any payment of Percentage
Rent (as defined in Schedule 1) for any period, shall not bind City
as to the correctness of the statement or payment.
5.1.3 Adjustment of Rent Schedules. Commencing in Lease Year Six (6) and
annually thereafter, the Base Rent amounts set forth in Section 7 of the
Basic Information shall be adjusted as set forth in Schedule 1.
5.1.4 Inspection and Audit. Tenant shall maintain and make available at its
Santa Rosa office, for City's review and audit, all contracts, leases,
invoices, and other records that are relevant to the accurate determination
of Base Rent in accordance with Schedule 1. After the Base Rent for a
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five -year period has been determined in accordance with Schedule 1,
Tenant shall retain the related records for at least ten (10) years. City, at
its sole option, shall be entitled, at any time and from time to time during
the Term, to inspect, examine, copy and audit Tenant's books, records
and cash receipts as related to Gross Revenue. The purpose of such
examination is to enable City to ascertain, clearly and accurately, Tenant's
Gross Revenue and to verify that the form and method of Tenant's record
keeping provide adequate and proper control and check of all such
revenues. Tenant shall cooperate fully with City and City's agents in
making the examination. City, at its option, shall also be entitled once
during each Lease Year and once after the Expiration Date or other
termination of this Lease, to cause an independent audit of such records
to be performed by a certified public accountant designated by City. The
audit shall be conducted during usual business hours at Tenant's Santa
Rosa office. If the audit shows that there is a deficiency in the payment of
any Percentage Rent, then Tenant shall immediately upon notice pay the
deficiency to City, together with interest thereon at the Default Rate, which
interest shall accrue from the date on which such deficient amount would
have been due until such deficiency is paid. City shall pay the costs of the
audit unless the audit shows that Tenant understated Gross Revenue by
more than two percent (2 %) in which case Tenant shall pay all City's costs
of the audit. Tenant's understatement of Gross Revenue for any Lease
year by more than five percent (5 %) due to Tenant's gross negligence or
willful misconduct shall constitute an event of default as defined in this
Lease.
5.2 Additional Consideration
5.2.1 Signing Bonus. Tenant shall pay City a one -time "Signing Bonus" of
$50,000 within five (5) Business Days after the Effective Date.
5.2.2 Payment for Lost Revenue During Pre - Operation Phase. Commencing on
the date that the Existing Sign on the Premises is removed by Tenant, or
City's ceases to sell advertising on the Existing Sign to accommodate
Tenant's removal of the Existing Sign, and ending on the Commencement
Date, Tenant shall pay to City the sum of five thousand dollars ($5,000)
per month, which sum shall be prorated on a daily basis based on a 30-
day month, for any period in which neither the Existing Sign or the Digital
Billboard are in operation to offset the loss of advertising revenue during
such period.
5.2.3 In Kind Revenue. At no cost to City, and as additional consideration for
use and occupancy of the Premises during the Operations Phase, Tenant
shall provide City the exclusive use of ten percent (10 %) of the total
advertising time for the Digital Billboard ( "City Usage "). City Usage will be
allocated by Tenant, in Tenant's reasonable discretion, on a fair and
consistent basis with other advertisers during the operating hours of the
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Digital Billboard. City may use such advertising time to promote any
purpose that City, in its sole discretion, determines best serve the needs
of the City and its residents. Tenant expressly acknowledges and
understands that its commitment to provide free advertising time to City in
accordance with this Subsection 5.2.3 is a material provision of this Lease.
5.2.4 Removal of Existing Sign. At no cost to City, and as further consideration
for use and occupancy of the Premises during the Operations Phase,
Tenant shall remove the existing digital freeway sign according to the
schedule set forth in Schedule 2, subject to the following:
a. Tenant shall obtain all necessary governmental permits and
environmental clearances prior to starting any demolition of the
Existing Sign.
b. Tenant shall restore the Premises to a condition acceptable to City,
including completing any necessary environmental cleanup
mandated by any governmental agency with jurisdiction over the
Premises.
C. Tenant shall use its best efforts to remove and demolish the
Existing Sign in a manner that permits the existing sign structure
and components to be recycled as fully as possible.
d. Tenant's commitment to remove the Existing Sign according to the
schedule set forth in Schedule 2 and in compliance with the criteria
set forth in this Section 5.2.4 is a material provision of this Lease.
5.2.5 Community Center Sign. At no cost to City, and as further consideration
for use and occupancy of the Premises during the Operations Phase,
Tenant, shall replace the Community Center Sign with a digital billboard
sign in accordance with the criteria set forth in Exhibit C, subject to the
following:
a. No sooner than six (6) months and no later than one (1) year after
the Commencement Date, Tenant shall (i) prepare design plans
and apply for City's review and approval, and (ii) seek all necessary
governmental permits, entitlements, and environmental clearances
to replace the Community Center Sign. No later than one hundred
twenty (120) days after receiving all such approvals, permits,
entitlements, and clearances, Tenant shall replace the Community
Center Sign with a digital billboard sign.
b. Prior to replacing the Community Center Sign, Tenant and City
shall enter into an amendment to this Lease to provide for the lease
of the site and for the installation, operation, and maintenance of
the Community Center Sign in accordance with the terms set forth
in Exhibit C.
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C. Tenant's commitment to replace the Community Center Sign in
accordance with this Section 5.2.5 and the criteria set forth in
Exhibit C is a material provision of this Lease.
ARTICLE 6 — USE OF PREMISES.
6.1 Condition of Premises
City represents and warrants that it has no actual knowledge of any physical condition
of the Premises that would substantially, materially, and adversely impact Tenant's
construction and operation of the Digital Billboard. Other than such warranty, the
Premises and all improvements thereon, including the Existing Sign, are being leased to
Tenant in its current, existing, "AS IS" condition. Except as expressly set forth above,
City makes no representations or warranties of any kind, express or implied, written or
oral, about any of the following: the physical condition of the Premises; the suitability of
the Premises for Tenant's anticipated use; any limitations on Tenant's use of the
Premises, including limitations arising from zoning laws, environmental laws, or other
laws, regulations, or governmental requirements; the costs of conducting Tenant's
business on the Premises; or the condition of the soils or ground waters of the
Premises. By taking possession of the Premises, Tenant accepts the Premises "AS IS"
and acknowledges that the Premises are satisfactory for Tenant's purposes. Tenant has
ascertained the condition of the Premises through its own independent investigation and
has relied solely on that independent investigation when entering into this Lease.
6.2 Permitted Uses
Except as otherwise provided in Section 7.12, Tenant has the exclusive right to display
outdoor advertising on the Premises. City shall not authorize any other off -site outdoor
advertising on the Premises. In addition, City shall not authorize any off -site outdoor
advertising on any other City -owned or City - controlled property. Tenant's exclusive
right to conduct outdoor advertising on the Premises includes the following:
a. Installing, operating, maintaining, repairing, improving, repositioning
(with City's consent), and removing the Digital Billboard on or from
the Premises when this Lease terminates.
b. All rights of ingress and egress over the Premises that Tenant
needs to access the Digital Billboard.
C. Subject to the criteria set forth in Exhibit B to this Lease, licensing
the use of the Digital Billboard, or any portion it, for any lawful
purpose related to outdoor advertising, except that Tenant may not
install non - digital signs on the Digital Billboard without City's prior
consent, which City may withhold or condition in its sole discretion.
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6.3 Prohibited Uses
6.3.1 Hazardous Substances. Neither Tenant nor any of Tenant's
representatives or agents shall use, handle, store, transport, treat,
generate, release or dispose of any Hazardous Materials anywhere in, on,
under or about the Personal Property, the Premises, the Digital Billboard,
any portion thereof, or any improvements thereon. Notwithstanding the
foregoing, Tenant may use, handle, store, transport, treat, generate,
release or dispose of any Hazardous Materials in such limited amounts as
are customarily used to install, operate, maintain, repair, improve,
reposition, or remove the Digital Billboard in accordance with this Lease,
provide City has consented in writing before the Hazardous Materials are
brought on the Premises, and so long as Tenant is at all times in full
compliance with all applicable environmental laws. Tenant shall cause any
and all Hazardous Materials brought onto, used, generated, handled,
treated, stored, released or discharged on or under the Digital Billboard,
the Premises, any portion thereof, or any improvements thereon to be
removed therefrom and transported for disposal in accordance with
applicable Laws, including Hazardous Materials Laws. City shall have the
right to enter the Premises, any portion thereof, or any improvements
thereon from time to time to conduct tests, inspections and surveys
concerning Hazardous Materials and to monitor Tenant's compliance with
its obligations concerning Hazardous Materials and Hazard Materials
Laws. Tenant shall immediately notify City in writing of: (a) any release or
discharge of any Hazardous Material; (b) any voluntary clean -up or
removal action instituted or proposed by Tenant, (c) any enforcement,
clean -up, removal or other governmental or regulatory action instituted or
threatened, or (d) any claim made or threatened by any person against
City, Tenant, the Digital Billboard, the Premises, any portion thereof, or
any improvements thereon relating to Hazardous Materials or Hazardous
Materials Laws. Tenant shall also supply to City as promptly as possible,
and in any event within five (5) business days after Tenant receives or
sends same, copies of all claims, reports, complaints, notices, warnings or
asserted violations relating in any way to the Digital Billboard, the
Premises, any portion thereof, or any improvements thereon or Tenant's
use thereof and concerning Hazardous Materials or Hazardous Materials
Laws. In the event Tenant institutes a cleanup or removal action, Tenant
shall provide copies of all work plans and subsequent reports submitted to
the governmental agency with jurisdiction to City in a timely manner.
Tenant shall indemnify and defend City any claims, causes of action,
liabilities, losses, damages, injunctions, suits, fines, penalties, costs or
expenses (including attorneys' fees and expenses and consultant fees
and expenses) caused or alleged to have been caused by the presence of
Hazardous Materials in, on, under, about, or emanating from the Personal
Property, the Digital Billboard, the Premises, any portion thereof, or any
improvements thereon, in accordance with the provisions of Section 11.3
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6.3.2 Unlawful Activities. Tenant shall not use or permit the Premises to be used
in any way that violates this Lease or any valid and applicable statute,
ordinance, regulation, rule, or order of any federal, state, or local
governmental entity (including City). Tenant shall not maintain or commit,
or permit the maintenance or commission of, any public or private
nuisance as defined by any law applicable to the Premises on or after the
Effective Date. Tenant hereby waives any rights to compensation it may
have if a court finds that the Digital Billboard constitutes a public or private
nuisance under any valid and applicable federal, state, or local law and for
that reason orders Tenant to remove or modify the Digital Billboard or to
limit the operation of the Message Center.
6.3.3 Encumbrances. Tenant shall not encumber the Premises or any part of
the Premises, for any purpose, without City's prior written consent, which
City may withhold for any reason. Tenant shall keep the Premises free of
all liens and other encumbrances other than those, if any, to which City
consents. Notwithstanding the foregoing, Tenant may, without the
consent of City, encumber the Digital Billboard or any part of the Digital
Billboard in Tenant's sole discretion, including leasing of such Digital
Billboard through a financing lease with a nationally recognized financing
company. In the event of such encumbrance or financing lease, all rights
under such encumbrance or financing lease shall be subordinate and
subject to the rights and obligations of the parties under this Lease.
6.4 Unobstructed Use
6.4.1 City shall not allow either of the following (each, an "Obstruction "):
a. On the Premises - any structure, tree, or vegetation that obstructs
the view of the Message Center from U.S. Highway 101.
b. On any City -owned or City - controlled real property in the immediate
vicinity of the Premises - any structure, tree, or vegetation that is
within 1,000 feet of the Digital Billboard and obstructs the view of
the Message Center from U.S. Highway 101.
6.4.2 If Tenant notifies City in writing that an Obstruction exists, and if City
authorized or actively caused the Obstruction, then City shall remove or
remedy the Obstruction at its own cost within fifteen (15) days after
receiving the notice.
6.4.3 If Tenant notifies City in writing that an Obstruction exists, and if City did
not authorize or actively cause the Obstruction, then City may remove or
remedy the Obstruction at its own cost within fifteen (15) days after
receiving the notice. If City does not remove or remedy the Obstruction
within the fifteen (15) days, then, at no cost to City, and after coordinating
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with the appropriate department of City, Tenant may remove the
Obstruction described in the notice.
6.4.4 Tenant's exercise of its rights under this Section 6.4 are in addition to any
other remedies it may have under this Lease.
ARTICLE 7 — INSTALLATION AND OPERATION OF DIGITAL BILLBOARD
Tenant shall install and operate the Digital Billboard on the Premises in accordance with
this Article 7 and consistent with Article 6, all at no cost to City.
7.1 Deposit of Costs
Tenant shall bear all costs associated with permitting and entitling the Digital Billboard.
Concurrently with the execution of this Lease, Tenant shall submit to City a cash deposit
in the full amount of the estimated cost of the fees for processing the entitlement
applications for the Digital Billboard, completing the required environmental review, and
issuing the permits to construct the Digital Billboard (the "Deposit "). City shall deposit
said funds in an interest - bearing account and such interest, when received by City, shall
become part of the Deposit. City is authorized to use the Deposit to pay the following
actual and reasonable out -of- pocket costs and expenses incurred in carrying out its
obligations under this Agreement: all costs or fees paid incurred, either by City or third
parties retained by City, for the purposes of (i) preparing, submitting and processing
entitlements for the proposed Digital Billboard, including preparing a conditional use
permit application , (ii) preparing and submitting environmental studies and any other
necessary CEQA documentation and reports, and (iii) reviewing and approving the
plans and specifications described in Section 7.2 and issuing building permits to
authorize construction of the Digital Billboard (collectively, "City Expenses "). In the
event that City determines that, in order to carry out its obligations under this Lease, the
anticipated City Expenses will exceed the remaining balance of the Deposit by more
than ten percent (10 %), City may by ten (10) days written notice to Tenant require
Tenant to replenish the Deposit to cover such anticipated additional City Expenses.
Upon the completion of the entitlement process, City shall return the unexpended
portion of the Deposit, if any, to Tenant.
7.2 Plans and Specifications
At no cost to City, Tenant shall prepare complete plans and specifications for the Digital
Billboard, working closely with City to develop plans and specifications that are mutually
acceptable (the "Plans "). Tenant shall submit the Plans to City for final approval, which
City shall not withhold unreasonably. The Digital Billboard shall be designed to comply
with all applicable state, county, and City codes and regulations. At a minimum, the
Plans shall comply with the criteria set forth in Exhibit B to this Lease.
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7.3 Caltrans Permits
Tenant shall be responsible for insuring that the Digital Billboard complies with all
requirements of California's Outdoor Advertising Act and Regulations if Caltrans
determines that the Premises fall within the scope of the Act. In addition, Tenant shall
be responsible for obtaining any and all permits required from Caltrans to install the
Digital Billboard on the Premises. As soon as practicable after the Effective Date,
Tenant shall apply to Caltrans for all necessary Caltrans Permits, if any, and City shall
cooperate with Tenant in that effort, all at no cost to City. At its discretion, Tenant may
designate City as the permittee under the Caltrans Permits, but that designation will
confer no legal rights on City to use, encumber, or transfer the Caltrans Permits except
as may be necessary for the parties to benefit from the Digital Billboard during the
Term. Upon termination of this Lease, if title to the Digital Billboard transfers to the City
as provided in Section 7.6, Tenant shall relinquish any interest it may have in the
Caltrans Permits and execute any documents needed to confirm that City is the sole
owner of the Caltrans Permits. Alternatively, if City elects to have Tenant remove the
Digital Billboard as provided in Section 7.13, then City shall relinquish any interest it
may have in the Caltrans Permits and execute any documents needed to confirm that
Tenant is the sole owner of the Caltrans Permits. During the Term, Tenant shall perform
all obligations under the Caltrans Permits at no cost to City whether Tenant or City is
designated as the permittee. Prior to the issuance of City Building Permits, Tenant shall
submit evidence reasonably satisfactory to City that it has obtained all necessary
permits from Caltrans.
7.4 City Permits
Prior to starting construction, Tenant shall apply for a conditional use permit in
accordance with Section 17.27.080 of the Rohnert Park Municipal Code ( "RPMC "), site
plan and architectural review in accordance with RPMC Section 17.25.030, and all
necessary building and electrical permits for the Digital Billboard. City shall diligently
process Tenant's applications for all City Permits. This Lease does not commit City in
advance to approve City Permits; and this Lease does not constrain City's discretion,
acting as a government, with respect to City Permits specifically or to the Digital
Billboard generally, and nothing contained herein shall be construed to mean that City is
agreeing or has agreed to exercise its discretionary authority in support of any
approvals or entitlements that may be required to construct the Digital Billboard.
7.5 Installation
Tenant shall install the Digital Billboard in accordance with the proposed schedule set
forth in Schedule 2 to this Lease. Tenant shall begin installing the Digital Billboard as
soon as practicable after all permits and governmental approvals have been obtained
and shall diligently pursue installation to completion without unnecessary interruption so
that the Digital Billboard is Operational by the 120th day after such permits and
governmental approvals have been obtained. Tenant will be excused, however, for any
delays in beginning or completing installation that are caused by a Force Majeure
OAK 44849- 6842 -8818 v615
Event, as defined in Section 13.5. Tenant shall use reasonable diligence to avoid such
delays and to resume work as promptly as possible after such a delay.
7.6 Ownership
Tenant intends to lease the Digital Billboard under a financing lease from a nationally
recognized financing company and thereafter acquire title pursuant to the terms of such
financing lease. Upon the expiration or other termination of this Lease for any reason, if
the Digital Billboard is then owned outright by Tenant, the Digital Billboard, and all other
improvements on the Premises, shall, without compensation to Tenant, become City's
property free and clear of all claims to or against them by Tenant or any third person. If,
upon such expiration or other termination of this Lease, Tenant has not yet acquired title
to the Digital Billboard, and title to or a security interest in such Digital Billboard is still
held by such financing company, City's rights to the Digital Billboard shall be
subordinate and subject to the rights of such financing company. In either event, if City,
at its sole option, elects to have Tenant remove the Digital Billboard, Tenant shall
remove the Digital Billboard upon the expiration or termination of the Term in
accordance with Section 7.13.
7.7 Security Fencing /Bollards
Before beginning installation of the Digital Billboard, Tenant shall enclose with a
temporary security fence the portion of the Premises Tenant needs to install, operate,
maintain, and repair the Digital Billboard. Tenant shall maintain the temporary security
fence until Tenant replaces it with permanent bollards around the base of the Sign
Structure to protect the Digital Billboard from damage. Tenant shall install and maintain
the temporary fence and the permanent bollards at no cost to City and shall consult with
City on the location and design of each. Tenant shall install the permanent bollards at
the beginning of the Operations Phase and maintain those bollards until the end of the
Term.
7.8 Maintenance
At no cost to City, Tenant shall maintain the Premises and shall maintain, repair, and
improve the Digital Billboard in accordance with the highest standards of the outdoor -
advertising industry. Tenant's maintenance obligation under this Section 7.8 includes
the obligation to remove promptly any graffiti from the Premises and the Digital
Billboard. Tenant's obligation to improve the Digital Billboard under this Section 7.8
includes the obligation to replace the entire Message Center every ten (10) years. City
is not obligated to maintain the Premises or to maintain or repair the Digital Billboard. If,
however, Tenant does not maintain the Premises or the Digital Billboard in accordance
with this Lease, then City may notify Tenant in accordance with Section 13.1 that City
will perform the maintenance described in the notice if Tenant does not do so within ten
(10) Business Days. If Tenant does not perform the needed maintenance within the ten
(10) Business Days after the notice is given, then City may perform the maintenance
described in the notice, and Tenant shall reimburse City's costs.
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7.9 Insured Damage or Destruction
7.9.1 Restoration. This Lease will continue in full effect if the Digital Billboard is
damaged or destroyed in whole or part by any cause covered by the fire -
and- casualty insurance Tenant is required to maintain under Section
12.1(c). No loss or damage by fire or any other cause resulting in either
partial or `total destruction of the Digital Billboard, or any portion thereof,
shall (except as otherwise provided in Section 7.10, below) operate to
terminate this Lease or to relieve or discharge Tenant from the payment of
any Rent, or other amounts payable hereunder, as and when they become
due and payable, or from the performance and observance of any of the
agreements, covenants and conditions herein contained to be performed
and observed by Tenant. Tenant covenants to repair, reconstruct, and /or
replace or cause to be repaired, reconstructed and /or replaced the Digital
Billboard, or any portion thereof, including any Personal Property owned
by Tenant and used or intended to be used in connection with the
Premises, so damaged or destroyed. Tenant also covenants that all
insurance proceeds will be applied to the repair, reconstruction and /or
replacement described herein, subject to the following:
a. Tenant shall repair or replace the Digital Billboard at no cost to City
using the insurance proceeds Tenant receives or is entitled to
receive under the fire - and - casualty policy. Tenant shall promptly
apply for, and diligently pursue the issuance of, any permits or
approvals it needs to repair or replace the Digital Billboard. Within
thirty (30) days after obtaining the necessary permits and
approvals, Tenant shall begin work to repair or replace the Digital
Billboard. Tenant shall complete the work within 180 days after the
work begins and shall pay any costs that exceed the available
insurance proceeds.
b. Tenant may elect not to repair or replace the Digital Billboard if:
the cost to repair or replace it exceeds fifty percent (50 %) of
its fair - market value immediately before it is damaged or
destroyed; and
the damage or destruction occurs:
1) during the last two years of the Initial Term (if Tenant
opts not to extend this Lease under Section 4.2); or
2) during the last two years of the Extended Term (if
Tenant opts to extend this Lease under Section 4.2).
C. If Tenant elects, under this Section 7.9, not to repair or replace the
Digital Billboard, then Tenant shall:
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notify City in writing of its election;
use the insurance proceeds Tenant receives for the damage
or destruction to remove the Digital Billboard and restore the
Premises in accordance with Section 7.13; and
iii. pay to City half of the insurance proceeds that remain after
Tenant has performed under the preceding subsection, and
this Lease will terminate when those proceeds are so paid.
Except as otherwise permitted by this Section 7.9.1, Tenant's failure to
make such full repair, restoration and replacement under any conditions in
which it was elected or required so to do shall constitute a default by
Tenant under this Lease.
7.9.2 Procedures for Repair and Restoration. In the event of any damage or
destruction, Tenant shall promptly give City written notice of such damage
or destruction and the date on which such damage or destruction
occurred. Tenant shall promptly make proof of loss and shall proceed
promptly to collect, or cause to be collected, all valid claims which Tenant
may have against insurers or others based upon any such damage or
destruction. Except as otherwise provided above, amounts received on
account of any losses pursuant to insurance policies shall be used and
expended for the purpose of fully repairing or reconstructing the portions
of the Digital Billboard which has been destroyed or damaged.
7.10 Uninsured Damage or Destruction
Notwithstanding the provisions of Section 7.9, if, during the Term, (i) the Digital Billboard
is totally destroyed or rendered unusable from a risk not covered ninety percent (90 %)
by the insurance required to be carried by Tenant under this Lease, and (ii) the cost of
restoration exceeds fifty percent (50 %) of the replacement cost of the Digital Billboard
immediately before the damage or destruction or twelve times the Base Rent in effect
when the damage occurs, whichever is greater, then either City or Tenant may elect to
terminate this Lease by giving notice to the other party within thirty (30) days after City's
determination of the restoration cost and replacement value.
7.11 Utilities
At no cost to City, Tenant shall provide and pay for all utility connections, utility
equipment, and utility service required to install, operate, maintain, repair, improve, or
reposition the Digital Billboard throughout the Term. Tenant shall coordinate with City
and the applicable utility companies for utility tie -ins and electrical power sources that
Tenant may need to operate the Digital Billboard. When purchasing electricity needed to
operate the Digital Billboard, Tenant shall participate in the "Green Option" program
offered by Pacific Gas & Electric ( "PG &E "), so that 100% of the Digital Billboard's
electrical needs come from renewable resources. If PG &E discontinues the Green
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Option program, then Tenant shall participate in any comparable program that PG &E
then offers.
7.12 Advertising Rights
During the Term, Tenant will have the exclusive right to enter into agreements for
advertising on the Digital Billboard, subject to the following:
7.12.1 Operation of the Message Center. In operating the Message Center,
Tenant shall conform to all valid and applicable laws and regulations,
including laws and regulations pertaining to outdoor advertising, including
the criteria and limitations set forth in Exhibit B. Unless otherwise legally
obligated to do so, Tenant shall not display any message that in the
judgment of the Rohnert Park City Manager or his or her designee:
is false, misleading, or deceptive;
ii. promotes the sale or use of tobacco products, or medical
marijuana, whether directly or indirectly, provided that advertising
for hydroponics shall not be deemed indirect promotion of
marijuana;
iii. promotes the sale of alcoholic beverages in a manner that violates
the best standards of the outdoor advertising industry for the
promotion of wineries or alcoholic beverages;
iv. depicts violence or anti - social behavior or relates to illegal activity;
V. contains "obscene matter," as that term is defined in California
Penal Code section 311 on the Effective Date, or promotes adult
entertainment;
vi. promotes or opposes a candidate for public office or promotes or
opposes a ballot measure;
vii. holds a person or group of persons up to public ridicule, derision, or
embarrassment, or defames a person or group of persons; or
viii. contains language that is obscene, vulgar, profane, or scatological,
or that presents a clear- and - present danger of causing riot,
disorder, or other imminent threat to public safety, peace, or order.
As used in this Section 7.12.1, "legally obligated" shall mean under a court
order from a court with competent jurisdiction.
7.12.2 Amber Alerts and Public- Service Messages. Tenant shall make the
Message Center available to Caltrans for the purpose of displaying
"Amber Alert" messages in accordance with the Amber Alert Guidelines
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established by Caltrans and the United States Department of Justice. In
addition, Tenant shall make the Message Center available to Caltrans, to
City, and to other government agencies, on a space - available basis and
without cost, for the purpose of displaying public - service messages (e.g.,
reports of commute times, drunk - driving- awareness messages, reports of
serious accidents, emergency- disaster communications). As used in this
7.12.2, "space- available basis" means any time when Tenant has not sold
out the display time on the Message Board. Such use for public - service
messages shall not count against the ten percent (10 %) of the advertising
time allocated to City pursuant to Section 5.2.3 and the criteria set forth in
Exhibit B without the prior written consent of City. Alternatively, Tenant
may include such public - service messages in the body of commercial
advertising.
7.12.3 City Messages. During the Term, City shall have the exclusive right to ten
percent (10 %) of the total advertising time on the Digital Billboard, as
provided in Section 5.2.3 and Exhibit B.
7.13 Removal of Digital Billboard
If City, at its sole option, elects to have Tenant remove the Digital Billboard rather than
transfer title pursuant to Section 7.6, within 120 days after the Term ends, whether the
Term expires as scheduled or is terminated early for any reason, Tenant shall remove
the Digital Billboard from the Premises and shall restore the Premises to their pre -lease
condition, all at no cost to City.
7.14 Compliance with Law; Waiver of Compensation
During the Term and while removing the Digital Billboard after the Term in accordance
with Section 7.13, Tenant, at no cost to City, shall comply with all valid and applicable
statutes, ordinances, regulations, rules, and orders that concern the Premises or the
Digital Billboard and are enacted or issued by any federal, state, or local governmental
entity with jurisdiction over the Premises or the Digital Billboard (including City) whether
enacted or issued before, on, or after the Effective Date.
ARTICLE 8 — EVENT OF DEFAULT; EARLY TERMINATION.
8.1 Defaults by Tenant
Tenant shall be in default under this Lease upon occurrence of any of the following:
8.1.1 Tenant shall at any time be in default in the payment of Rent or any other
monetary sum called for by this Lease for more than ten (10) days
following written notice from City to Tenant; or
8.1.2 Tenant shall at any time be in default in the keeping and performing of any
of its other covenants or agreements herein contained, or any other
provisions of this Lease, and such other default continues for thirty (30)
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days after written notice thereof from City to Tenant specifying the
particulars of such default, or if such default is of a nature that curing such
default will take more than thirty (30) days Tenant has failed to commence
such cure within such thirty (30) day period and to thereafter diligently
pursue completion of such cure; or
8.1.3 Except as otherwise authorized by this Lease, Tenant assigns, sells,
transfers, conveys, encumbers, hypothecates or leases the whole or any
part of the Digital Billboard, the Premises, any portion thereof, or any
improvements thereon in violation of this Lease; or
8.1.4 Except as otherwise expressly permitted in this Lease, there is any
change in control of Tenant, or any other act or transaction involving or
resulting in a change in the identity of the parties in control of Tenant or
the degree of such control.
8.2 City's Remedies For Default By Tenant
Upon the occurrence of any such default, in addition to any and all other rights or
remedies of City hereunder, or by Law or in equity provided, City shall have the sole
option to exercise the following rights and remedies:
8.2.1 Without prejudice to its other remedies at law or in equity, City may
terminate this Lease, at any time and in its sole discretion, effective 30
days after City gives Tenant written notice of termination.
8.2.2 City shall have the remedy described in California Civil Code section
1951.4 (lessor may continue lease in effect after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has right to
sublet or assign, subject only to reasonable limitations), as amended from
time to time, and successor statutes thereto.
8.3 Damages
Should City elect to terminate this Lease, City shall be entitled to recover from Tenant,
as damages:
8.3.1 The worth at the time of the award of the unpaid Rent that had been
earned at the time of termination of this Lease;
8.3.2 The worth at the time of the award of the amount by which the unpaid
Rent that would have been earned after the date of termination of this
Lease until the time of award exceeds the amount of the loss of Rent that
Tenant proves could have been reasonably avoided;
8.3.3 The worth at the time of the award of the amount by which the unpaid
Rent for the balance of the Term of this Lease after the time of award
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exceeds the amount of the loss of Rent that Tenant proves could have
been reasonably avoided; and
8.3.4 Any other amount (and court costs) necessary to compensate City for all
detriment proximately caused by Tenant's default, including costs of
alterations and improvements in connection with reletting.
8.4 Cumulative
Each right and remedy of City provided for herein or now or hereafter existing at Law or
in equity, by statute or otherwise shall be cumulative and shall not preclude City from
exercising any other rights or remedies provided for in this Lease or now or hereafter
existing at Law or in equity, by statute or otherwise. No payment by Tenant of a lesser
amount than the Rent nor any endorsement on any check or letter accompanying any
check or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent; and City may accept such payment without prejudice to City's right to recover the
balance of such Rent or to pursue other remedies.
ARTICLE 9 — TAXES
Tenant is responsible for and shall pay or otherwise discharge, without abatement or
deduction, all taxes levied on, or related to, Tenant's outdoor - advertising activities on
the Premises. Tenant's obligation to pay taxes includes payment of the following:
9.1 Possessory Interest Taxes
This Lease creates a possessory property interest in Tenant. Tenant acknowledges
and agrees that Tenant's leasehold and /or other property interests may be subject to
property taxation, and Tenant to the payment of property taxes levied on such interest.
Such taxes are referred to herein as "Possessory Interest Taxes," and shall be paid by
Tenant during the term of this Lease.
9.2 Sales Taxes
The sale of advertising space on the Digital Billboard may be subject to sales or similar
tax. Tenant acknowledges and agrees that such activities may subject Tenant to the
payment of sales taxes levied on such interest, and Tenant agrees that all such sales
taxes shall be paid by Tenant (or Tenant's customers) during the term of this Lease.
9.3 Personal Property Taxes
Tenant shall pay before delinquency all taxes, assessments, license fees and other
charges levied and assessed against Tenant or City with respect to any real - property
tax allocated to the Digital Billboard and /or personal - property tax levied on Tenant's
personal property on the Premises ( "Personal Property Taxes ") which may become
payable during the Term or are attributable to Tenant's use or occupancy of the
Premises. On demand by City, Tenant shall furnish City with satisfactory evidence of
these payments. Notwithstanding the foregoing, Tenant shall have the right to contest
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the imposition or collection of any such Personal Property Taxes, which Tenant
reasonably believes, was improperly assessed or calculated.
9.4 Other Taxes
Excepting any Possessory Interest Taxes as set forth in section 9.1, Tenant shall pay
before delinquency all taxes, impositions, general or special assessment, surcharge,
fee, levy, penalty, bond, or similar charge is levied on any business conducted on the
Premises or any portion thereof) general and special taxes including gross receipts tax,
excise tax levied by any Taxing Authority (defined below) including with respect to City's
receipt of Rent or ownership, management or operation of the Premises, or any
improvements, any portion thereof, or any improvements thereon by any authority
having the power to tax, including any federal, state or county government or any
political subdivision thereof ( "Taxing Authority "). In the event any Personal Property
Taxes, and other Taxes, as described in this Article 9 or any other costs to be borne by
or due from Tenant are not assessed or charged against the Premises separately from
other City -owned property, City shall reasonably allocate such on a pro -rata basis.
9.5 Tenant's Tax Liability Prorated
Tenant's liability to pay any Taxes and new assessments shall be prorated on the basis
of a 365 -day year to account for any fractional portion of a fiscal tax year included in the
Term at its inception and expiration or other termination in accordance with this Lease.
ARTICLE 10 — EMINENT DOMAIN
10.1 Definitions
For the purposes of this Article 10, the following definitions shall apply:
a. "Condemning Entity" means any entity that by law may exercise the
power of eminent domain to acquire possession of, and title to, any
of the following: the Digital Billboard, the entire Premises, or an
Essential Part of the Premises.
b. "Essential Part of the Premises" means any portion of the Premises
that is reasonably necessary for installing, operating, maintaining,
repairing, or improving the Digital Billboard in accordance with this
Lease.
10.2 Termination Events
This Lease will terminate if a Condemning Entity acquires the Digital Billboard, the
entire Premises, or an Essential Part of the Premises:
a. by using the power of eminent domain; or
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b. through negotiations under the threat of using the power of eminent
domain.
10.3 Termination Date; Rent Refund; Caltrans Permits
Termination under this Article 10 will occur on the date the Condemning Entity obtains
possession of, or title to, the Digital Billboard, the entire Premises, or the Essential Part
of the Premises, whichever occurs first. Within 15 Business Days after the termination
date, City shall:
a. refund to Tenant any pre -paid Base Rent for the unexpired portion
of the Term; and
b. relinquish any interest it may have in the Caltrans Permits and
execute any documents needed to confirm that Tenant is the sole
owner of the Caltrans Permits.
10.4 Compensation
If termination occurs under this Article 10, then Tenant and City may each
independently seek to recover from the Condemning Entity all compensation and other
remedies provided by law for the interests taken from them. But City may not seek or
recover compensation for Tenant's lost interests, and Tenant may not seek or recover
compensation for City's lost interests. Without limiting the preceding, Tenant may seek
to recover some or all of the following from the Condemning Entity:
a. compensation for its lost advertising income, for the value of the
Digital Billboard, for lost goodwill, and for its interest in this Lease;
and
b. financial assistance for relocating the Digital Billboard.
ARTICLE 11 — INDEMNIFICATION
11.1 Definitions
For the purposes of this Article 11, the following definitions shall apply:
11.1.1 "Person" is to be interpreted broadly and includes Tenant and Tenant's
directors, officers, employees, contractors, and agents; and City and City's
elected officials, officers, employees, contractors, and agents.
11.1.2 "Liabilities" means all liabilities, claims, demands, damages, and costs
(including reasonable attorneys' fees and litigation costs through final
resolution on appeal) that arise directly or indirectly from Tenant's
possession or use of the Premises.
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11.1.3 "Occurrence" means (A) the death of, or injury to, any Person; and (B)
damage to, or destruction of, any real property, personal property
(including intellectual property), or the environment (broadly interpreted to
include the air, soil, soil vapor, surface water, groundwater, flora, and
fauna on or about the Premises).
11.1.4 "Secured Area" means the portion of the Premises enclosed by the
permanent security fence that Tenant erects around the Digital Billboard in
accordance with Section 6(f).
11.2 General Indemnity
Except to the extent claims are caused by City's sole negligence or willful misconduct,
Tenant shall indemnify, protect, defend, and hold harmless City and its elected officials,
officers, employees, volunteers, lenders, agents, representatives, tenants and each of
their successors and assigns from and against any and all claims, judgments, causes of
action, damages, penalties, costs, liabilities, and expenses, including all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any
action or proceeding brought thereon, arising at any time during or after the Term as a
result (directly or indirectly) of or in connection with (a) any Tenant default under this
Lease (including in the performance or non - performance of any obligation on Tenant's
part to be performed under the terms of this Lease); (b) Tenant's performance of the
installation of the Digital Billboard (including design, development, and construction); (c)
Tenant's or Tenant's representatives or agents use of the Premises, the Digital
Billboard, any portion thereof, or any improvements thereon, the conduct of Tenant's
business or any activity, work or thing done, permitted or suffered by Tenant or its
representatives or agents in or about the Premises or any portion thereof, or any
improvements thereon, except that with regard to the presence of Hazardous Materials,
the Premises or any improvements thereon, Tenant shall not be responsible for
conditions that may have existed prior to the Effective Date; (d) any act, error or
omission of Tenant or its representatives or agents in or about the Premises, any
portion thereof, or any improvements thereon; (e) loss of, injury or damage to, or
description of property (including merchandise or inventory), including loss of use
resulting from such loss, injury, damage, or destruction; or (f) any resulting economic
loss, consequential damages, or exemplary damages (collectively, "Indemnification ").
Tenant shall provide such Indemnification by and through counsel selected by City.
Without limiting the foregoing, Tenant's obligation under this Section 11.2 includes
Liabilities arising from any of the following:
a. Any Occurrence on the Premises and outside the Secured Area,
but only to the extent caused by Tenant's acts or omissions.
b. Any Occurrence inside the Secured Area.
C. Any Occurrence that is in any way connected with any of Tenant's
personal property on the Premises.
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d. Any Occurrence caused or allegedly caused by (A) any condition of
the Premises created by Tenant or by any Person on the Premises
with Tenant's permission; or (B) some act or omission on the
Premises by Tenant or by any Person on the Premises with
Tenant's permission.
e. Any Occurrence caused by, or related in any way to, work or
activities performed on the Premises or materials furnished to the
Premises at the request of Tenant or any person or entity acting for
Tenant or with Tenant's permission.
Any Occurrence that is caused by, or related in any way to, a verbal
or nonverbal display on the Message Center.
g. Tenant's failure to perform any provision of this Lease, to comply
with any requirement of law applicable to Tenant, or to fulfill any
requirement imposed by any governmental entity (including City
when acting as a government) on Tenant or on Tenant's use of the
Premises.
h. Any claim that Tenant's policies with respect to the allocation of
advertising time violate any person's or persons' First Amendment
rights.
11.3 Hazardous Materials
Except to the extent caused by City's sole negligence or willful misconduct or except
with regard to the presence of Hazardous Materials on the Premises prior to the
Effective Date, Tenant shall indemnify, defend and hold City harmless from any claims,
causes of action, liabilities, losses, damages, injunctions, suits, fines, penalties, costs or
expenses (including attorneys' fees and expenses and consultant fees and expenses)
caused or alleged to have been caused by the presence of Hazardous Materials in, on,
under, about, or emanating from the Digital Billboard, the Premises, any portion thereof,
or any improvements thereon, including any bodily injury, death, property damage,
natural resource damage, decrease in value of the Premises, any portion thereof, or any
improvements thereon, caused or alleged to have been caused by Tenant's use,
storage, handling, treatment, generation, presence, discharge or release of Hazardous
Materials in violation of Tenant's obligations under this Lease, whether such claims,
causes of action or liabilities are first asserted during the Term or thereafter, and
including claims made against City with respect to bodily injury, death or property
damage sustained by third parties caused or alleged to have been caused by Tenant or
Tenant's Parties' use, storage, handling, treatment, generation, presence, discharge or
release of Hazardous Materials.
11.4 Legal Challenges
Tenant shall indemnify, defend (with attorneys selected by City), protect, and hold
harmless City and City's elected officials, officers, and employees in any litigation
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brought to challenge the award or validity of this Lease, the validity of City Permits or
the Caltrans Permits, or the validity of City ordinances that authorize the installation and
operation of the Digital Billboard on the Premises. Tenant's obligation to indemnify
under this Section 11.4 includes liability for attorneys' fees awarded to a party who
successfully challenges the validity of this Lease, of City Permits or the Caltrans
Permits, or of any authorizing ordinance.
11.5 Not a Construction Contract
This Lease is not intended nor shall it be construed to be a construction contract. To
the extent this Lease is construed by a court of law to be a construction contract, all
indemnity obligations construed to be related to construction contracts shall be read as
if including the carve out "except to the extent claims are caused by the sole or active
negligence or willful misconduct of the indemnified party."
11.6 Exemption of City from Liability
Tenant, as a material part of the consideration to City, hereby assumes all risk of
damage to property (including the Personal Property, the Digital Billboard, the
Premises, any portion thereof and any improvements thereon), and injury to or death of
persons in, upon or about Personal Property, the Digital Billboard, the Premises, any
portion thereof, or any improvements thereon, arising from any cause, and Tenant
hereby waives all claims in respect thereof against City, except to the extent such
claims are caused by City's sole negligence or willful misconduct. Tenant hereby
agrees that City shall not be liable for injury to Tenant's business or any loss of income
therefrom or for damage to the Personal Property, or injury to or death of Tenant, its
representatives, or agents, or any other person in or about the Premises, any portion
thereof, or any improvements thereon, whether such damage or injury is caused by fire,
steam, electricity, gas, water or rain, or from the breakage, leakage or other defects of
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether said damage or injury results from conditions arising within or
about the Personal Property, the Digital Billboard, the Premises, any portion thereof, or
any improvements thereon or from other sources or places, and regardless of whether
the cause of such damage or injury or the means of repairing the same is inaccessible
to Tenant, except damage or injury caused solely by City's sole negligence or willful
misconduct. City shall not be liable for any damages arising from any act or neglect of
any other tenant or occupant, if any, of the Personal Property, the Digital Billboard, the
Premises, any portion thereof, or any improvements thereon, or Landlord's failure to
enforce the terms of any agreements with parties other than Tenant.
11.7 Survival
Tenant's obligations under this Article 11 shall survive expiration or termination of this
Lease.
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ARTICLE 12 — INSURANCE
12.1 Types of Policies
During the Term and during Tenant's removal of the Digital Billboard in accordance with
7.13, at no cost to City, Tenant shall procure and maintain the following forms and
amounts of insurance covering Tenant's possession and use of the Premises. Such
insurance shall be primary to and not contributing with any other insurance, self -
insurance or joint self- insurance maintained by City, and shall name the City as an
additional insured.
a. Commercial General Liability Insurance. A policy of commercial
general liability insurance (occurrence form) having a combined
single limit of not less than Five Million Dollars ($5,000,000) per
occurrence and Five Million Dollars ($5,000,000) annual aggregate,
providing coverage for, among other things, blanket contractual
liability (including Tenant's indemnification obligations under this
Lease), premises liability, products and completed operations
liability, owner's protective coverage, broad form property damage,
and bodily injury (including wrongful death) and advertising injury
coverage. If necessary, Tenant shall provide for restoration of the
aggregate limit.
b. Workers' Compensation and Employer's Liability Insurance.
Workers' compensation insurance, if required by Law, which
complies with all applicable state statutes and regulatory
requirements, and employer's liability insurance coverage in
statutory amounts.
C. Premises Insurance. "All risk" property insurance including fire and
extended coverage, sprinkler leakage, vandalism and malicious
mischief coverage, insures the Digital Billboard for its full
replacement value against damage or destruction by fire or by any
of the perils commonly covered under the standard extended -
coverage endorsement to fire - insurance policies issued on real
property in Rohnert Park. In addition, during installation of the
Digital Billboard, the policy must include coverage for course of
construction, vandalism, and malicious mischief and must insure
the Digital Billboard and all materials delivered to the Premises for
their full insurable value. All insurance proceeds that become
payable under this policy while this Lease is in effect will be paid to
Tenant in trust and applied by Tenant to the cost of repairing and
restoring the Digital Billboard as required by, and except as
otherwise provided in, Section 7.9.
d. Other Insurance. Any other form or forms of insurance as City may
reasonably require from time to time, in form, amounts and for
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insurance risks against which a prudent tenant would protect itself,
but only to the extent such risks and amounts are available in the
insurance market at commercially reasonable costs.
12.2 Insurer Qualifications
Tenant's Insurance shall be written by companies licensed to do business in California
and having a "General Policyholders Rating" of at least A VII (or such higher rating as
may be required by a lender having a lien on the Leasehold Interest) as set forth in the
most current issue of "Best's Insurance Guide."
12.3 Certificates of Insurance
Tenant shall deliver to City certificates of insurance for Tenant's Insurance, in the form
of the ACORD standard certificate of insurance, prior to the Commencement Date.
Tenant shall, at least thirty (30) days prior to expiration of the policy, furnish City with
certificates of renewal or "binders" thereof. Each certificate shall expressly provide that
such policies shall not be cancelable or otherwise subject to modification except after
thirty (30) days' prior written notice to the parties named as additional insureds as
required in this Lease. If Tenant fails to maintain any insurance required in this Lease,
Tenant shall be liable for all losses and costs resulting from said failure.
12.4 Notice
Each of the policies must obligate the insurer to give City at least 30 days' advance
written notice before the policy is cancelled or materially changed.
12.5 Other Requirements
The general - liability and automobile - liability policies must each:
a. name City and City's elected officials, officers, employees, and
agents as additional insureds;
b. provide that Tenant's insurance coverage is primary insurance with
respect to City and City's elected officials, officers, employees, and
agents to the extent they are additional insureds;
C. any umbrella liability policy or excess liability policy shall provide
that if the underlying aggregate is exhausted, the excess coverage
will drop down as primary insurance. The limits of Tenant's
Insurance shall not limit Tenant's liability under this Lease;
d. provide that Tenant's insurance applies separately to each insured
against whom a claim is made or a suit brought, except with
respect to the applicable policy limits;
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e. provide that City's insurance and self- insurance are in excess of
Tenant's insurance and will not contribute with it;
waive any right to recover against City for claims for damages to
Tenant's Personal Property to the extent covered (or required by
this Lease to be covered) by Tenant's Insurance. This provision is
intended to waive fully, and for the benefit of City, any rights and /or
claims which might give rise to a right of subrogation in favor of any
insurance carrier. The coverage obtained by Tenant pursuant to
this Lease shall include a waiver of subrogation endorsement
attached to the certificate of insurance.
12.6 Notification of Incidents
Tenant shall notify City within twenty -four (24) hours after the occurrence of any
accident or incident on or about the Digital Billboard, the Premises, any portion thereof,
or any improvements thereon which could give rise to a claim against City, City's
Insurance, Tenant, or Tenant's Insurance, except that Tenant shall not be obligated to
give City notice of any accident or incident which could give rise to a claim under
Tenant's workers' compensation insurance. Tenant's notice shall be accompanied by a
copy of any report(s) relating to the accident or incident.
12.7 No Limit on Indemnification
Nothing in this Article 12 limits Tenant's obligations under Article 11.
ARTICLE 13 — MISCELLANEOUS
13.1 Notices
Any notice or other communication to be given under this Lease shall be in writing and
shall be considered properly given and effective only when addressed to the persons
identified below and (i) mailed postage prepaid by certified or registered mail, return
receipt requested, or (ii) delivered by personal or courier delivery, or (iii) sent by
facsimile (immediately followed by one of the preceding methods). Notices or
communications shall be deemed served upon the earlier of receipt or three (3) days
after the date of mailing. A party may change its address for these purposes by giving
written notice of the change to the other party in the manner provided in this Section
13.1.
If to City:
City Manager
City of Rohnert Park
130 Avram Avenue
Rohnert Park, California 94928
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If to Tenant:
Kirk Veale, dba B.P.O. of California
2800 Cleveland Avenue #A2
P.O. Box 1496
Santa Rosa, California 95402
Facsimile: (707) 792 -1876 Attention: Kirk Veale
Facsimile: (707) 575 -4540
13.2 Assignments and Subleases
Except as set forth herein, neither party may sublet, assign or otherwise transfer this
Lease or any interest herein, either voluntarily or by operation of law, without the other
party's prior written consent, which the other party shall not unreasonably withhold,
condition, or delay. Notwithstanding the above, the consent of City shall not be required
(a) for Tenant to assign his rights and duties under this Lease to any type of legal entity,
including but not limited to a limited liability company, corporation, or limited partnership,
in which Tenant has a controlling ownership interest; or (b) in the event any such entity
to which this Lease has been so assigned thereafter merges with another company,
reorganizes its stock, or undergoes a similar corporate restructuring, changes
ownership or sells any of its assets or stock. In addition, the consent of City shall not be
required if Tenant's interest in this Lease is distributed on Tenant's death to an heir,
successor or assign via a trust distribution, will, order of the court or other transfer.
Notwithstanding the foregoing, if Tenant assigns his rights and duties under this lease to
any immediate family member or to any intervivos trust of which Tenant is either a
trustee or beneficiary, Tenant shall first obtain City's consent to the transfer, which
consent shall not be unreasonably withheld. An assignment, transfer, or sublease
made contrary to this Section 13.2 shall be null and void and of no effect whatsoever.
13.3 Successors and Assigns
Subject to the restrictions set forth herein, each of the terms, covenants and conditions
of this Lease shall extend to and be binding on and shall inure to the benefit of not only
City and Tenant, but to each of their respective heirs, administrators, executors,
successors and assigns. Whenever in this Lease reference is made to either City or
Tenant, the reference shall be deemed to include, wherever applicable, the heirs,
administrators, executors, successors and assigns of such parties, the same as if in
every case expressed.
13.4 City's Right to Enter and Inspect the Premises
City and its authorized representatives shall have the right to enter upon and inspect the
Premises at any time to determine Tenant's compliance with this Lease.
13.5 Force Majeure
13.5.1 "Force Majeure Event" means a cause of delay that is not the fault of the
party who is required to perform under this Lease and is beyond that
party's reasonable control, including the elements (including floods,
earthquakes, windstorms, and unusually severe weather), fire, energy
shortages or rationing, riots, acts of terrorism, war or war - defense
conditions, acts of any public enemy, epidemics, the actions or inactions
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of any governmental entity (excluding City) or that entity's agents,
litigation, labor shortages (including shortages caused by strikes or
walkouts), and materials shortages.
13.5.2 Except as otherwise expressly provided in this Lease, if the performance
of any act required by this Lease to be performed by either City or Tenant
is prevented or delayed because of a Force Majeure Event, then the time
for performance will be extended for a period equivalent to the period of
delay, and performance of the act during the period of delay will be
excused. An extension of time for any such Force Majeure Event shall be
for the period of the enforced delay and shall commence to run from the
time of the commencement of the cause, if notice by the party claiming
such extension is sent to the other party within thirty (30) days of the
commencement of the cause. Times of performance under this Lease
may also be extended in writing by the mutual agreement of City and
Tenant.
13.5.3 This Section 13.5 does not excuse (A) Tenant's obligation to pay Rent
when due and payable; or (B) either party's obligation to perform an act
when performance is rendered difficult or impossible solely because of
that party's financial condition. Tenant expressly agrees that adverse
changes in economic conditions, either of Tenant specifically or the
economy generally, changes in market conditions or demand, and /or
Tenant's inability to sell advertising time on the Digital Billboard or other
lack of funding, or to complete the installation of the Digital Billboard shall
not constitute grounds of enforced delay pursuant to this Section 13.5.
Tenant expressly assumes the risk of such adverse economic or market
changes and /or financial inability, whether or not foreseeable as of the
Commencement Date
13.6 Waiver of Breach
A party's failure to insist on strict performance of this Lease or to exercise any right or
remedy upon the other party's breach of this Lease will not constitute a waiver of the
performance, right, or remedy. A party's waiver of the other party's breach of any
provision in this Lease will not constitute a continuing waiver or a waiver of any
subsequent breach of the same or any other provision. A waiver is binding only if set
forth in writing and signed by the waiving party.
13.7 Relationship of the Parties
This Lease does not create any relationship or association between City and Tenant
other than that of landlord and tenant, and it is expressly understood and agreed that
City does not in any way nor for any purpose become a partner of Tenant or a joint
venturer with Tenant in the conduct of Tenant's business or otherwise; nor does this
Lease create between City and Tenant the relationship of principal and agent.
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13.8 Attorney's Fees
In the event that any action is brought by either party hereto as against the other party
hereto for the enforcement or declaration of any right or remedy in or under this Lease
or for the breach of any covenant or condition of this Lease, the prevailing party shall be
entitled to recover, and the other party agrees to pay, all fees and costs to be fixed by
the court therein including, but not limited to, attorneys' fees.
13.9 Severability
If any term, provision, condition or covenant of this Lease or its application to any party
or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of
this Lease, or the application of the term, provision, condition or covenant to persons or
circumstances other than those as to whom or which it is held invalid or unenforceable,
shall not be affected, and shall be valid and enforceable to the fullest extent permitted
by Law.
13.10 Memorandum of Lease
Either City or Tenant may record with the Sonoma County Recorder's Office, using a
form reasonably satisfactory to City, a memorandum summarizing this Lease.
13.11 Further Assurances
Each party shall execute all additional documents or instruments and take all necessary
action that either party reasonably considers necessary to carry out the proper purposes
of this Lease.
13.12 Estoppel Certificates
Either Party hereto shall, from time to time during the Term upon not less than twenty
(20) days' prior written notice from the other Party, execute, acknowledge and deliver to
the other Party, or such persons or entities designated by such other Party, a statement
in writing certifying: (a) the Commencement Date and Expiration Date of this Lease, (b)
that this Lease is unmodified and in full force and effect (or, if there have been
modifications, that the Lease is in full force and effect as modified and stating the
modifications), (c) that there are no defaults under this Lease (or if so, specifying the
same), (d) the dates, if any, to which the Base Rent has been paid, and (e) any other
information that may be reasonably required by any such persons or entities. Any such
certificate delivered pursuant to the provisions hereof may be relied upon by the other
Party or any prospective purchaser or Encumbrancer of its estate. The City Manager
shall be authorized to execute, acknowledge and deliver any such certificate on behalf
of City.
13.13 Time of Essence
Time is expressly made of the essence with respect to the performance by the parties of
each and every obligation and condition of this Lease.
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13.14 Interpretation
This Lease is to be interpreted and applied in accordance with California law without
regard to conflict -of -laws principles, except that the rule of interpretation in California
Civil Code section 1654 will not apply. Schedules 1 and 2 and Exhibits A, B, and C are
expressly incorporated into and form a part of this Lease. The titles to the articles and
sections of this Lease are for convenience only; they do not form a part of this Lease
and shall have no effect upon the construction or interpretation of any part of this Lease.
As used in this Lease, masculine, feminine or neuter gender and the singular or plural
number shall each be deemed to include the others where and when the context so
dictates. The word "including" shall be construed as if followed by the words "without
limitation." This Lease shall be interpreted as though prepared jointly by both parties
13.15 Integration and Modification
This Lease, including all recitals of exhibits and attachments to each of the foregoing,
constitute the entire agreement between the parties and there are no conditions,
representations or agreements regarding the matters covered by this Lease which are
not expressed herein. It supersedes all prior or contemporaneous agreements,
representations, and negotiations (written, oral, express, or implied) and may be
modified only by another written agreement signed by both parties. City and Tenant
agree to mutually consider reasonable requests for amendments to this Lease that may
be made by either of them, provided such requests are consistent with this Lease and
would not materially alter the basic business terms included herein. No amendment
hereto shall be effective unless in writing and signed by both parties hereto.
13.16 Quiet Possession
So long as Tenant is not in default under this Lease and is paying the Rent and
performing all of the covenants and conditions of this Lease, Tenant shall quietly have,
hold and enjoy the Premises during the Term without interruption or disturbance from
City or any other persons claiming by, through or under City.
13.17 Surrender
Upon the expiration or other termination of the Term of this Lease, and notwithstanding
anything herein contained to the contrary, Tenant shall surrender to Premises, all
portions thereof, and all improvements thereon, in good condition and repair,
reasonable wear and tear excepted, and free from the Digital Billboard in accordance
with the provisions of Section 7.13.
13.18 Legal Advice
Each party represents and warrants to the other the following: they have carefully read
this Lease, and in signing this Lease, they do so with full knowledge of any right which
they may have; they have received independent legal advice from their respective legal
counsel as to the matters set forth in this Lease, or have knowingly chosen not to
consult legal counsel as to the matters set forth in this Lease; and, they have freely
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signed this Lease without any reliance upon any agreement, promise, statement or
representation by or on behalf of the other party, or their respective agents, employees,
or attorneys, except as specifically set forth in this Lease, and without duress or
coercion, whether economic or otherwise.
13.19 Nonliability
No member, official or employee of City shall be personally liable to Tenant, or any
successor in interest, in the event of any default or breach by City or for any amount
which may become due to Tenant or its successors, or on any obligations under the
terms of this Lease. Tenant hereby waives and releases any claim it may have against
the members, officials or employees of City with respect to any default or breach by City
or for any amount which may become due to Tenant or its successors, or on any
obligations under the terms of this Lease.
13.20 Applicable Law; Venue
The laws of the State of California, without regard to conflict of Laws principles, shall
govern the interpretation and enforcement of this Lease. Any action to enforce or
interpret this Lease shall be filed in the Superior Court for Sonoma County, California.
13.21 Covenants and Conditions
Each obligation of the parties hereunder, including, without limitation, Tenant's
obligations for the payment of Rent and the replacement of the Community Center Sign,
shall be construed to be both a covenant and a condition of this Lease.
13.22 Commission
Each party represents to the other that it has not been represented by any broker in
connection with this Lease, and that no real estate broker's commission, finder's fee or
other compensation (individually and collectively, "Commission ") is due or payable.
Each party agrees to indemnify and hold the other harmless from any claims or liability,
including reasonable attorneys' fees, in connection with a claim by any person for a
Commission based upon any statement, representation or agreement of the other party.
13.23 Counterparts
The parties hereto agree that this Lease may be executed in counterparts, each of
which shall be deemed an original, and said counterparts shall together constitute one
and the same agreement, binding all of the parties hereto, notwithstanding all of the
parties are not signatory to the original or the same counterparts. For all purposes,
including, without limitation, recordation, filing and delivery of this Lease, duplicate
unexecuted and unacknowledged pages of the counterparts may be discarded and the
remaining pages assembled as one document.
OAK #4849 - 6842 -8818 v635
IN WITNESS WHEREOF, the parties have executed this Lease as of the Effective Date.
LANDLORD:
CITY OF ROHNERT PARK, a California
Municipal corporation
By :_
Name
Its:
ATTEST:
JoAnne Buergler, City Clerk
APPROVED AS TO FORM:
Michelle Marchetta Kenyon, City Attorney
Gabriel A. Gonzalez
City Manager
—AND—
TENANT:
KIRK VEALE, a sole proprietorship, dba
B.P.O. of CALIFORNIA
By:_
Name:
Its:
APPROVED AS TO FORM:
By:
Name:
Its:
OAK #4849- 6842 -8818 v636
EXHIBIT A
PREMISES
Legal Description and Map
[Legal Description to be inserted here]
EXHIBIT A
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co
(1)
m
EXHIBIT B
CRITERIA FOR DESIGN, INSTALLATION, AND OPERATION
OF DIGITAL BILLBOARD
The design, installation, operation, and maintenance of the Digital Billboard shall comply
with all applicable state, county, and City codes and regulations and, at a minimum,
shall conform to the criteria, terms, conditions, and restrictions set forth in the Lease
and this Exhibit B.
1. Definitions
Unless otherwise indicated, all capitalized terms set forth in this Exhibit B shall
have the meanings ascribed thereto in the Lease to which this Exhibit B is
attached and forms a material part.
2. Location
The Digital Billboard shall be located on the City -owned Premises, as described
more particularly in the Lease. The Premises are generally located on the
eastside of U.S. Highway 101 between Rohnert Park Expressway and the
Wilfred Overpass /Golf Course Drive Interchange. The Premises contain
approximately 4,109 square feet of land situated between Commerce Boulevard
and the freeway boundary adjacent to State Farm Drive, as shown on site map
included in Exhibit A to the Lease.
3. Entitlement Process /Environmental Review Standards
3.1 Tenant's Responsibilities
At no cost to City, Tenant shall:
(i) prepare complete plans and specifications for the Digital Billboard
in accordance with Section 7.2 of the Lease and the criteria set
forth in Paragraph 3.2 of this Exhibit B for review and approval by
City; and
(ii) obtain all entitlements, environmental clearances, and permits
necessary to remove the Existing Sign and install the Digital
Billboard, including the City Permits described in Paragraph 3.2
below and any Caltrans Permits; and
(iii) remove and dispose of the Existing Sign as provided in Section
5.2.4 of the Lease; and
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10:I:11 312 1
(iv) install the Digital Billboard in accordance with the plans and
specifications approved by City and entitled through the process
described in Paragraph 3.2, below.
3.2 Zoning and Permit Requirements
3.2.1 City Permits Required. Prior to constructing the Digital Billboard,
Tenant shall apply for and obtain the following approvals from City
acting in its regulatory capacity:
(i) a conditional use permit in accordance with Section
17.27.080 of the Rohnert Park Municipal Code ( "RPMC ");
(ii) site plan and architectural review in accordance with Section
17.25.030 of the RPMC; and
(iii) all necessary building and electrical permits.
3.2.2 Governmental Discretion Retained. City shall diligently process
Tenant's applications for all City Permits. Notwithstanding this
requirement, the Lease does not commit City in advance to
approve City Permits; and the Lease does not constrain City's
discretion, acting as a government, with respect to City Permits
specifically or to the Digital Billboard generally. Nothing contained
in the Lease or this Exhibit B shall be construed to mean that City is
agreeing or has agreed to exercise its discretionary authority in
support of any approvals or entitlements that may be required to
construct the Digital Billboard. In the event that City fails to
approve City Permits, this Lease shall be of no further force and
effect.
3.2.3 Environmental Review. Both the removal of the Existing Sign and
the installation and operation of the Digital Billboard pursuant to the
Lease constitute a project under the California Environmental
Quality Act (CEQA) and compliance with CEQA will be required.
City staff shall prepare an Initial Study and shall determine the level
of environmental review required.
3.2.4 Costs; Deposit. Tenant shall be responsible for all costs associated
with the review and compliance described in this Section 3,
including noticing costs, filing fees, staff costs and consultant fees
(collectively, the "City Permitting Costs "). City staff shall provide
Tenant with an estimate of the projected City Permitting Costs.
Concurrently with the execution of the Lease, Tenant shall submit
to City a cash deposit in the full amount of the estimated City
Permitting Costs as provided in Section 7.1 of the Lease.
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3.3 Compliance with Other Regulatory Requirements.
In accordance with Section 7.3 of the Lease, Tenant shall be responsible
for insuring that the Digital Billboard complies with all requirements of
California's Outdoor Advertising Act and Regulations if Caltrans
determines that the Premises fall within the scope of the Act. In addition,
Tenant shall be responsible for obtaining any and all permits required from
Caltrans to install the Digital Billboard on the Premises. Prior to the City's
issuance of building permits for the Digital Billboard, Tenant shall submit
evidence reasonably satisfactory to City that it has obtained all necessary
approvals and permits from Caltrans. In the event that Caltrans fails to
grant the necessary permits for the Digital Billboard, this Lease shall be of
no further force and effect.
4. Minimum Specifications for Proposed Digital Billboard
City shall select the ultimate sign design from the plans and specifications
prepared by Tenant as part of the entitlement and permitting process described
in Paragraph 3.2 above. Subject to City's approval as provided in the Lease and
this Exhibit B, the Digital Billboard shall conform to the following criteria:
4.1 Size. The Message Center portion of the Digital Billboard shall have a
maximum width of fourteen feet (14) and a maximum height of forty -eight
feet (48').
4.2 Height. The Digital Billboard shall have a maximum height of fifty feet
(50') to the top of the Sign Structure.
4.3 Technology. The Digital Billboard shall employ the then current best
available digital - billboard technologies to the extent known to Tenant at
the time of installation or upgrade as required by the Lease, including:
a. UL and IEC approved
b. Remote diagnostic and maintenance capability;
C. Amber Alert capability;
d. State -of- the -art sensors for automatic brightness adjustment to
ambient lighting conditions;
e. Color calibration to ensure consistent image quality;
f. Remote shutdown capability.
4.4 Compliance with Laws. The Digital Billboard shall be designed to comply
with all applicable federal, state, county, and City statutes, ordinances,
regulations, rules, and orders as provided in Section 7.14 of the Lease.
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EXHIBIT B
4.5 Energy. The Digital Billboard shall employ the latest technology to ensure
it achieves the greatest energy efficiency possible. In addition, Tenant
shall purchase power through PG &E's "Green Option" program —as
provided in Section 7.11 of the Lease and described more fully in
Paragraph 6.8 (Sustainability Plan) of this Exhibit B.
4.6 Service Access. The Digital Billboard shall be designed with internal
service access for safety and improved appearances. There shall be no
visible catwalks on the exterior of the Digital Billboard.
5. Construction Requirements
5.1 Removal of Existing Sign. Prior to the installation of the Digital Billboard,
Tenant, at no cost to City, shall remove the Existing Sign according to the
schedule set forth in Schedule 2, to the Lease subject to the following:
a. Tenant shall obtain all necessary governmental approvals, permits
and environmental clearances prior to starting any demolition of the
Existing Sign.
b. Tenant shall restore the Premises to a condition acceptable to City,
including completing any necessary environmental cleanup
mandated by any governmental agency with jurisdiction over the
Premises.
C. Tenant shall use its best efforts to remove and demolish the
Existing Sign in a manner that permits the existing sign structure
and components to be recycled as fully as possible.
5.2 Compliance with Law. Tenant shall comply with all applicable state,
county, and City codes and permitting requirements governing the
demolition of the Existing Sign and the construction of the Digital Billboard.
5.3 Prevailing Wage. Tenant acknowledges and agrees that any construction
or alterations made by or on behalf of Tenant to the Premises, including
demolition of the Existing Sign, installation of the Digital Billboard, repair or
upgrades to the Digital Billboard, or any improvements thereon
( "Improvement Work "), whether paid for in whole or part by City or which
are considered under law to have been paid for in whole or part by City
(e.g. any improvement which become City's property upon the expiration
or other termination of the Lease), will constitute "construction, alteration,
demolition, installation, or repair work done under contract and paid for in
whole or in part out of public funds...." California Labor Code Section
1720. Accordingly, except as to Tenant's employees, Tenant shall comply
with applicable prevailing wage policies as set forth in the Rohnert Park
Municipal Code, applicable California Labor Code requirements pertaining
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EXHIBIT B
to "public works" (California Labor Code Section 1720 et seq., as
amended from time to time and implementing regulations), the Davis -
Bacon Act (sec. 1 -7, 46 Stat. 1949, as amended; Pub. L. 74 -403, 40
U.S.C. 276a- 276a -7, as amended from time to time and implementing
regulations), and other applicable laws addressing the payment of
prevailing wages in connection with any Improvement Work (collectively,
"Prevailing Wage Laws "). Tenant shall require the general contractor for
any Improvement Work to submit, upon request by City, certified copies of
payroll records to City and to maintain and make records available to City
and its designees for inspection and copying to ensure compliance with
Prevailing Wage Laws. Tenant shall defend, indemnify and hold harmless
City and its officers, officials, employees, volunteers, agents and
representatives (collectively, "Indemnitees ") from and against any and all
Claims arising out of or in any way connected with Tenant's obligation to
comply with all Laws with respect to any Improvement Work and /or
Prevailing Wage Laws, including all Claims that may be made by Tenants,
subtenants or other third party claimants pursuant to Labor Code Section
1726. Tenant hereby waives, releases and discharges forever the
Indemnitees from any and all present and future Claims arising out of or in
any way connected with Tenant's obligation to comply with all Laws with
respect to the Improvement Work and Prevailing Wage Laws
5.4 Security Fencing. Prior to commencing demolition of the Existing Sign,
Tenant shall enclose with a temporary security fence the portion of the
Premises Tenant needs to remove the Existing Sign and install, operate,
maintain, and repair the Digital Billboard. Tenant shall maintain the
temporary security fence until Tenant replaces it with the permanent
bollards described in Paragraph 6.3 of this Exhibit B. Tenant shall install
and maintain the temporary fence at no cost to City and shall consult with
City on the location and design of the temporary security fence.
5.5 Performance Bond. Within five (5) days of the execution of the Lease,
Tenant shall provide City a faithful performance bond securing Tenant's
faithful performance of its obligations under the Lease. The principal sum
of the faithful performance bond shall be equal to the full amount of the
Base Rent for Lease Years 1 and 2, inclusive.
6. Operational Requirements
6.1 Hours of Operation. Tenant shall operate the Digital Billboard from 5:00
a.m. until 3:00 a.m. daily. Tenant reserves the right, with the consent of
City, which shall not be unreasonably withheld, to shorten or extend such
hours of operation if economic conditions warrant such change.
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EXHIBIT B
6.2 Maintenance; Upgrades.
6.2.1 Premises. As provided in Section 7.8 of the Lease, Tenant shall, at
Tenant's sole cost and expense, maintain the Premises, in good,
clean and first -class condition and repair at all times during the
Term, reasonable wear and tear excepted. Without limiting the
generality of the foregoing, Tenant shall be solely responsible for
keeping the Premises free from weeds and debris. To ensure
compliance with these requirements, Tenant shall implement a
regular weed removal program and shall remove weeds from the
Premises not less than weekly. In addition, Tenant shall promptly
remove and dispose of any debris from the Premises.
6.2.2 Digital Billboard. As provided in Section 7.8 of the Lease, Tenant,
at no cost to City, shall maintain, repair, and improve the Digital
Billboard in accordance with the highest standards of the outdoor -
advertising industry. Tenant's maintenance obligation includes the
obligation to promptly remove any graffiti from the Premises and
the Digital Billboard, as provided in Paragraph 6.4, below. Tenant's
obligation to improve the Digital Billboard includes the obligation to
replace the entire Message Center every ten (10) years.
6.2.3 City's Responsibility. City shall not be obligated to maintain the
Premises or to maintain or repair the Digital Billboard. If, however,
Tenant does not maintain the Premises, then City may notify
Tenant in accordance with Section 13.1 of the Lease that City will
perform the maintenance described in the notice if Tenant does not
do so within ten (10) Business Days. If Tenant does not perform the
needed maintenance within ten (10) Business Days after the notice
is given, then City may perform the maintenance described in the
notice, and Tenant shall reimburse City's costs.
6.3 Security Bollards. Upon completion of the installation of the Digital
Billboard, Tenant shall replace the temporary security fence described in
Paragraph 5.4, above, with permanent bollards around the base of the
Sign Structure to protect the Digital Billboard from damage. Tenant shall
install and maintain the permanent bollards at no cost to City and shall
consult with City on the location and design of the bollards. Tenant shall
install the permanent bollards at the beginning of the Operations Phase
and maintain those bollards until the end of the Term.
6.4 Graffiti Removal. At no cost to City,
graffiti on the Digital Billboard or on
same to a condition acceptable to City.
Tenant shall promptly remove any
the Premises and shall restore the
EXHIBIT B
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6.5 Advertising rights
During the Term, Tenant will have the exclusive right to enter into
agreements for advertising on the Digital Billboard, subject to the following
6.5.1 General Provisions
a. Tenant shall, at all times, operate the Message Center in a
manner that fully complies with all valid and applicable laws
and regulations, including laws and regulations pertaining to
outdoor advertising, and shall adhere to the criteria and
limitations set forth in the Lease and this Exhibit B.
b. Unless otherwise legally obligated to do so, Tenant shall not
display any message that in the judgment of the Rohnert
Park City Manager, or his or her designee, violates any of
the provisions of Section 7.12.1 of the Lease. As used in
this subparagraph (b), "legally obligated" shall mean under a
court order from a court with competent jurisdiction.
C. When requested, Tenant shall make the Message Center
available to Caltrans for the purpose of displaying "Amber
Alert" messages in accordance with the Amber Alert
Guidelines established by Caltrans and the United States
Department of Justice, as set forth in Section 7.12.2 of the
Lease.
d. Tenant shall give City the exclusive right to ten percent
(10 %) of the total advertising time on the Digital Billboard, as
more fully described in Paragraph 6.5.2, below.
6.5.2 Allocation of Advertisinq Time.
The advertising time on the Digital Billboard shall be allocated in
accordance with the provisions of this Paragraph 6.5.2.
a. City Exclusive Use. Ten percent (10 %) of the total
advertising time on the Digital Billboard shall be allocated to
the exclusive use of City. City shall be solely responsible for
the message content for this advertising time.
b. Local Business Use.
the total advertising
allocated for first
accordance with the
below. Subject to
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An additional twenty percent (20 %) of
time on the Digital Billboard shall be
right of use by local businesses in
provisions set forth in Paragraph 6.5.3,
the limitations and criteria set forth in
EXHIBIT B
Paragraph 6.5.3, Tenant will have the exclusive right to enter
into agreements to fill the local business advertising time on
the Digital Billboard. In the event that, after reasonable effort
by Tenant, local businesses do not purchase advertising for
the full twenty percent (20 %) allocated to local businesses,
any portion of such advertising time not purchased by local
business may be added to the unrestricted time as set forth
in Paragraph 6.5.2 (c) below. Tenant shall submit a written
report to the City Manager every six (6) months summarizing
the usage of the Digital Billboard by local business and
documenting the reallocation of any time reserved for first
right of use by local businesses to unrestricted time pursuant
to the provisions of this Paragraph 6.5.2(b)
C. Unrestricted. The remaining seventy percent (70 %) of the
total advertising time on the Digital Billboard shall be
unrestricted, subject only to requests for use by Caltrans for
Amber Alerts in accordance with Section 7.12.2 of the
Lease. Tenant will have the exclusive right to enter into
agreements to fill the unrestricted advertising time on the
Digital Billboard.
(i) Amber Alerts — Any request by Caltrans to use the
Digital Billboard to display Amber Alerts pursuant to
Section 7.12.2 of the Lease shall be allocated time
from the unrestricted advertising time on a space
available basis. Alternatively, Tenant may include
such public - service messages in the body of
commercial advertising.
d. Limitation on Advertisement. To avoid a single business or
group of related businesses from monopolizing the
advertising time on the Digital Billboard, no single business
or group of related businesses may utilize more than thirty
percent (30 %) of the advertising time available on the Digital
Billboard in any given month. This limitation shall apply
separately to each class of advertising time (e.g. Local
Business or Unrestricted) with the exception of the
advertising time allocated to City pursuant to subparagraph
(a), above, or provided to Caltrans for Amber Alerts pursuant
to Section 7.12.2 of the Lease. For the purposes of
enforcing this limitation, a "group of related businesses" shall
include parent corporations, subsidiaries, sister corporations,
and other off - shoots of a particular business, as well as any
tenants or licensees of that business.
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EXHIBIT B
6.5.3 Local Economic Development and Marketing Partnership. The
advertising time allocated to local businesses pursuant to
subparagraph 6.5.2(b), above, shall be administered in accordance
with this Paragraph 6.5.3.
a. Definition of Local Business. For the purposes of this
program, "local business" means a business located within
the corporate limits of the City of Rohnert Park that is
independently owned or a locally -owned franchise.
b. Local Marketing Program. Subject to City's approval, Tenant
shall develop a comprehensive, locally -based marketing and
economic development plan for the Digital Billboard.
Through the proposed public /private partnership, Tenant will
work with City to promote city events, civic communications,
promotions, and programs. Tenant will use its best efforts to
reach out to local businesses through the Rohnert Park
Chamber of Commerce, Sonoma State University School of
Business, and the Sonoma Mountain Business Cluster.
These efforts may initially include: (i) placing advertisements
in Rohnert Park Chamber of Commerce Community Guide;
(ii) holding at least two (2) informational meetings /seminars
for local businesses; (iii) sending direct mailers to local
business to make them aware of the advertising
opportunities on the Digital Billboard and the resources
Tenant is making available to locally -based businesses; (iv)
employing website marketing on Tenant's website; (v)
making direct contact with Tenant's existing client base in
the City; (vi) making direct contact with marketing agencies
in Sonoma County and Bay Area to make them aware of the
advertising opportunities for local businesses on the Digital
Billboard; (vii) advertising in the chamber newsletter; and
(viii) making direct contact with potential advertisers. No
restrictions will be placed on the number of local businesses
that can advertise on the Digital Billboard. Tenant will use its
best efforts to leverage its local knowledge and experience
to provide advertising opportunities to many local small
businesses that could not previously afford outdoor
advertising.
C. Discounted Time for Local Businesses. In an effort to
maximize opportunities to advertise for local businesses, the
advertising time allocated to local businesses pursuant to
subparagraph 6.5.2(b), above, shall be offered to local
businesses at the following discounted rates:
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EXHIBIT B
• twenty -five percent (25 %) off a full 28 -day showing
• twenty percent (20 %) off a one -half (1/2) 28 -day
showing
• fifteen percent (15) off a one - quarter (1/4) 28 -day
showing
d. Additional Incentives for Local Business. In addition to the
foregoing, Tenant will execute the following plan:
Within 45 -days of the Effective Date, Tenant shall
host a series of advertising and marketing training
sessions for local businesses. These sessions will be
held in partnership with the Rohnert Park Chamber of
Commerce, will be open to all Rohnert Park -based
businesses, and will take place at various times to
maximize the opportunity for local businesses to
participate.
Tenant shall present the Digital Billboard to the local
business community and will discuss the various
ways local businesses can utilize the new sign to
advertise their products and services, brand their
businesses, and increase sales.
iii. Tenant will have its graphic design team at all
seminars /meetings to give a presentation on
designing attractive, creative, and successful ads for
the Digital Billboard.
iv. Tenant shall work with Sonoma State University
School of Business (the "Business School ") in a good
faith effort to create (and participate in) a program
which would give students the opportunity to gain
real world experience in assisting and working with
local businesses in creating advertising campaigns.
The goal of this program will be to allow students to
gain real world experience in sales and marketing,
while simultaneously giving local businesses access
to the talent that exists at the university. Tenant shall
work with the Business School to create the program
as soon as reasonably possible. If Tenant's efforts to
create the program are successful, the program shall
continue throughout the Term of the Lease for as long
as the Business School supports it.
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EXHIBIT B
6.6 Utilities. At no cost to City, Tenant shall provide and pay for all utility
connections, utility equipment, and utility service required to install,
operate, maintain, repair, improve, or reposition the Digital Billboard
throughout the Term, as provided in Section 7.11 of the Lease. When
purchasing the electricity needed to operate the Digital Billboard, Tenant
shall participate in the "Green Option" program offered by PG &E, as more
fully discussed in Section 7.11 of the Lease and Paragraph 6.8, below.
6.7 Hazardous Materials. Neither Tenant nor any of Tenant's representatives
or agents shall use, handle, store, transport, treat, generate, release or
dispose of any Hazardous Materials anywhere in, on, under or about the
Personal Property, the Premises, the Digital Billboard, any portion thereof,
or any improvements thereon, except as permitted by Section 6.3.1 of the
Lease. In the event there is a release or suspected release of Hazardous
Materials anywhere in, on, under or about the Personal Property, the
Premises, the Digital Billboard, any portion thereof, or any improvements
thereon, Tenant shall promptly take all action necessary to investigate and
remedy the release of any Hazardous Materials in accordance with the
provisions set forth in Section 6.3.1 of the Lease, and Tenant shall
indemnify City from any from any claims, causes of action, liabilities,
losses, damages, injunctions, suits, fines, penalties, costs or expenses
(including attorneys' fees and expenses and consultant fees and
expenses) caused or alleged to have been caused by the presence and
release of such Hazardous Materials in accordance with the provisions of
Section 11.3 of the Lease.
6.8 Sustainability Plan. Tenant shall implement the following sustainability
plan in connection with the Digital Billboard:
a. The Digital Billboard design shall employ the latest technology to
ensure that it achieves the greatest energy efficiency possible, as
provided in Paragraph 4.5 of this Exhibit B.
b. Tenant shall purchase power through PG &E;s "Green Option"
program to ensure the Digital Billboard is powered using only
renewable energy resources, in accordance with the provisions set
forth in Section 7.11 of the Lease.
C. Tenant shall operate the Digital Billboard from 5:00 a.m. until 3:00
a.m. daily, subject to possible revision as provided in Paragraph
6.1, above. This represents a slight reduction from the hours of
operation for the Existing Sign and will reduce the energy
consumption and prolong the life expectancy of the Digital Billboard
without compromising the promotional and advertising opportunities
for the City and local businesses.
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MINIMUM]
d. Tenant shall use its best efforts to remove and demolish the
Existing Sign in a manner that permits the existing sign structure
and components to be recycled as fully as possible, as provided in
Paragraph 5.1, above.
e. Tenant will continue to demonstrate its commitment to sustainable
business practices by continuing its ongoing discussions with
PG &E to create a solar farm on Tenant -owned property, as more
fully described in Tenant's August 2, 2012 response to the City's
July 9, 2012 Request for Proposals for the Digital Billboard. If this
solar farm is approved, it would create sufficient energy to
completely power all of Tenant's digital and static billboards,
including the Digital Billboard. Tenant shall keep City informed of
the progress of its efforts to create the solar farm and shall provide
annual reports to the City Council documenting these efforts.
6.9 Insurance. At no cost to the City, Tenant shall maintain both public liability
insurance and fire and casualty insurance covering improvements placed
onsite in accordance with the provisions set forth in Article 12 of the
Lease.
6.10 Indemnification. At no cost to City, Tenant shall indemnify City as
provided in Article 11 of the Lease.
6.11 Performance Bond. Within five (5) days of the execution of the Lease,
Tenant shall provide City either (i) a set -aside irrevocable letter of credit in
a form acceptable to City, payable to City, or (ii) a faithful performance
bond securing Tenant's faithful performance of its obligations under the
Lease, as provided in Paragraph 5.5, above.
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EXHIBIT B
EXHIBIT C
CRITERIA FOR REPLACEMENT OF
COMMUNITY CENTER SIGN
Definitions.
Unless otherwise indicated, all capitalized terms set forth in this Exhibit C shall
have the meanings ascribed thereto in the Lease to which this Exhibit C is
attached and forms a material part.
2. Replacement of Community Center Sign. As a material inducement to get City to
enter into the Lease, Tenant has agreed to replace the existing non - digital sign
located at the Rohnert Park Community Center at 5401 Snyder Lane in the City
of Rohnert Park, County of Sonoma (the "Community Center Sign ") in
accordance with the following terms and conditions:
2.1 Tenant shall bear all costs associated with (i) preparing complete plans
and specifications for the Community Center Sign, (ii) obtaining all
entitlements, environmental clearances, and permits necessary to install
the Community Center Sign, (iii) removing and disposing of the existing
sign at the Community Center, and (iv) constructing the Community
Center Sign. Notwithstanding the foregoing, City staff will trench the
utilities to the Community Center Sign location, if necessary.
2.2 City shall diligently process Tenant's applications for all City Permits
necessary for the Community Center Sign. These terms do not commit
City in advance to approve City Permits; and this Exhibit C does not
constrain City's discretion, acting as a government, with respect to City
Permits specifically or to the Community Center Sign generally, and
nothing contained herein shall be construed to mean that City is agreeing
or has agreed to exercise its discretionary authority in support of any
approvals or entitlements that may be required to construct the
Community Center Sign.
2.3 The Digital Billboard shall be constructed first.
2.4 Tenant shall be obligated to construct the Community Center Sign within
the time frame provided for in Section 5.2.5 of the Lease.
2.5 Both the Digital Billboard and the Community Center Sign shall be
covered by a single agreement. Prior to starting construction of the
Community Center Sign, Tenant and City shall enter into an amendment
to the Lease to set forth the terms and conditions for installation,
operation, and maintenance of the Community Center Sign.
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EXHIBIT C
2.6 Subject to City's approval, the Community Center Sign shall be similar in
design and technology to the Digital Billboard.
2.7 City and Tenant shall share the utility costs for the Community Center
Sign equally.
2.8 Tenant shall pay City a percentage of the Gross Revenue from advertising
on the Community Center Sign as rent for the lease of the Community
Center Sign site. No fixed rent shall be required for the Community
Center Sign site. The rent to be paid by Tenant shall initially be structured
with Tenant receiving seventy -five percent (75 %) of the Gross Revenue
and City receiving twenty -five percent (25 %) of the Gross Revenue until
such time as Tenant has been reimbursed from the extra twenty -five
percent (25 %) for Tenant's actual cost to design, permit, and construct the
Community Center Sign. Tenant shall provide evidence reasonably
satisfactory to City to document the actual costs to design, permit, and
construct the Community Center Sign. Upon the earlier of (i) Tenant
recovering the actual cost for construction of the Community Center Sign
or (ii) the beginning of the fourth year of operation of the Community
Center Sign, Tenant shall pay City fifty percent (50 %) of the Gross
Revenue from the Community Center Sign as rent for remainder of the
Term and any extension thereof.
2.9 As additional consideration, the City shall receive the exclusive use of
thirty -five percent (35 %) of all advertising time on the Community Center
Sign at no cost to City. City may use such advertising time to promote any
purpose that City, in its sole discretion, determines best serve the needs
of the City and its residents. The allocation of advertising time to the City
shall be on a fair and consistent basis with other advertisers during the
operating hours of the Community Center Sign.
2.10 Subject to the criteria and limitations set forth in the Lease, Tenant shall
have the exclusive right to manage all advertising content on the
Community Center Sign for the portion of advertising time not allocated to
the City. The City shall have sole authority to manage its own sign
content.
2.11 Tenant shall operate the Community Center Sign in a manner similar to
the Digital Billboard —no less than six (6) seconds nor more than eight (8)
seconds per ad.
2.12 Tenant and City shall mutually agree upon the hours of operation for the
Community Center Sign, but in no event less than 6:00 a.m. to 10:00 p.m.
daily, except on nights when evening events that let out at or after 10:00
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p.m. are held at the Green Music Center, in which event the sign may
operate no later than one (1) hour after the end of said event.
2.13 Subject to City approval, Tenant may explore the option to build the
Community Center Sign with a rotating face. This feature will allow the
sign to be repositioned at various times of the day to optimize visibility of
the Community Center Sign to prevailing traffic patterns. Nothing in this
Paragraph 2.13 shall be construed to require Tenant to construct the
Community Center Sign with a rotating face, and if the cost to include a
rotating face is determined to be too expensive, Tenant may elect to
eliminate this option.
2.14 Tenant shall own the Community Center Sign during the term of the lease.
2.15 Either party may elect to terminate the agreement for the Community
Center Sign upon an agreed upon time based on performance, community
sentiment, and other factors that may limit the viability of the Community
Center Sign. Except where City exercises its right to terminate this Lease
for cause, City may not terminate the Lease pursuant to this provision
prior to Tenant recouping its investment to design, permit and construct
the Community Center Sign. Upon the expiration or other termination of
the agreement for the Community Center Sign, City shall not be financially
liable to Tenant for the cost to construct the sign and ownership of the
Community Center Sign shall, without compensation to Tenant, become
City's property, free and clear of all claims to or against it by Tenant or any
third person.
2.16 Subject to City's approval, which approval shall not be unreasonably
withheld, Tenant may hire a California licensed arborist to trim, shape and
prune the trees in the median on Rohnert Park Expressway to maximize
the visibility of the Community Center Sign.
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EXHIBIT C
SCHEDULE 1
RENT
Definitions
For purposes of this Schedule 1, the following definitions shall apply:
1.1 "Base Rent" means the guaranteed minimum monthly amount Tenant
shall pay to City as consideration for the rights and benefits it enjoys under
the Lease, including the use and occupancy of the Premises during the
Term. The Base Rent shall be $15,000 per month during Lease Years 1
through 5.
1.2 "Gross Revenue" means all revenue Tenant derives from the Digital
Billboard, less any commissions paid at the industry standard commission
rate of sixteen and sixth /tenths percent (16.6 %).
1.3 "Percentage Rent" means the sum representing the difference between
the total Base Rent paid by Tenant for that Lease Year and a sum which is
twenty percent (20 %) of Gross Revenue for that same Lease Year which
Tenant shall pay to City in addition to the Base Rent where the total Base
Rent paid by Tenant for that Lease Year is less than twenty percent (20 %)
of the Gross Revenues for the same Lease Year.
1.4 "Rent" means the actual amount Tenant shall pay City as consideration for
the rights and benefits it enjoys under the Lease, including the use and
occupancy of the Premises during the Term. Total Rent shall include
Base Rent and any Percentage Rent due under the terms of the Lease
and this Schedule 1
Unless otherwise indicated, all other capitalized terms set forth in this Schedule 1
shall have the meanings ascribed thereto in the Lease to which this Schedule 1
is attached and forms a material part.
2. Rent
Each month during the Operations Phase, Tenant shall pay City Base Rent
calculated as provided in this Schedule 1. The Base Rent shall be calculated as
follows:
2.1 Lease Years 1 -5
During Lease Years 1 through 5, inclusive, Tenant shall pay City the Base
Rent of $15,000 per month. In addition, if the total Base Rent paid by
SCHEDULE 1
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Tenant in any Lease Year is less than twenty percent (20 %) of the Gross
Revenues for that Lease Year, then in addition to the Base Rent, Tenant
shall pay City the difference as Percentage Rent on an annual basis.
However, if the total Base Rent paid by Tenant in any Lease Year equals
or exceeds twenty percent (20 %) of the Gross Revenues for that Lease
Year, City shall have no obligation to refund any portion of the Base Rent
payments or to apply said payments to any future Lease Year.
2.2 Lease Years 6 -10
Commencing in Lease Year 6, and annually thereafter, the Base Rent
shall be adjusted at the conclusion of each Lease Year to be the greater of
(a) one hundred three and one -half percent (103.5°/x) of the Base Rent in
effect as of the end of preceding Lease Year, or (b) an amount equal to
the actual rent (Base Rent plus Percentage Rent) paid during Lease Years
3, 4 and 5, divided into monthly installments. The calculation of Base
Rent based on the actual Rent paid in such prior years shall be referred to
as the Performance Increase. If the Base Rent is determined based on
the Performance Increase, it shall thereafter be adjusted up annually by
three and one -half percent (3.5 %) at the conclusion of each Lease Year.
In addition, if the total Base Rent paid by Tenant in any Lease Year during
Lease Years 6 -10, inclusive, is less than twenty percent (20 %) of the
Gross Revenues for that Lease Year, then in addition to the Base Rent,
Tenant shall pay City the difference as Percentage Rent on an annual
basis. However, if the total Base Rent paid by Tenant in any Lease Year
equals or exceeds twenty percent (20°/x) of the Gross Revenues for that
Lease Year, City shall have no obligation to refund any portion of the Base
Rent payments or to apply said payments to any future Lease Year.
2.3 Lease Years 11 -15
Commencing in Lease Year 11, and annually thereafter, the Base Rent
shall be adjusted at the conclusion of each Lease Year to be the greater of
(a) one hundred three and one -half percent (103.5 %) of the Base Rent in
effect as of the end of preceding Lease Year, or (b) the Performance
Increase based on the average Rent paid in Lease Years 6 through 10. If
the Base Rent is determined based on the Performance Increase, it shall
thereafter be adjusted up annually by three and one -half percent (3.5 %) at
the conclusion of each Lease Year.
In addition, if the total Base Rent paid by Tenant in any Lease Year during
Lease Years 11 -15, inclusive, is less than twenty percent (20 %) of the
Gross Revenues for that Lease Year, then in addition to the Base Rent,
Tenant shall pay City the difference as Percentage Rent on an annual
basis. However, if the total Base Rent paid by Tenant in any Lease Year
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SCHEDULE 1
equals or exceeds twenty percent (20 %) of the Gross Revenues for that
Lease Year, City shall have no obligation to refund any portion of the Base
Rent payments or to apply said payments to any future Lease Year.
2.4 Lease Years 16 -20
Commencing in Lease Year 16, and annually thereafter, the Base Rent
shall be adjusted at the conclusion of each Lease Year to be the greater of
(a) one hundred three and one -half percent (103.5 %) of the Base Rent in
effect as of the end of preceding Lease Year, or (b) the Performance
Increase based on the average Rent paid in Lease Years 11 through 15.
If the Base Rent is determined based on the Performance Increase, it
shall thereafter be adjusted up annually by three and one -half percent
(3.5 %) at the conclusion of each Lease Year.
In addition, if the total Base Rent paid by Tenant in any Lease Year during
Lease Years 16 -20, inclusive, is less than twenty percent (20 %) of the
Gross Revenues for that Lease Year, then in addition to the Base Rent,
Tenant shall pay City the difference as Percentage Rent on an annual
basis. However, if the total Base Rent paid by Tenant in any Lease Year
equals or exceeds twenty percent (20 %) of the Gross Revenues for that
Lease Year, City shall have no obligation to refund any portion of the Base
Rent payments or to apply said payments to any future Lease Year.
2.5 Extended Term
Commencing in the first Lease Year of the Extended Term, and annually
thereafter, the Base Rent shall be adjusted at the conclusion of each
Lease Year to be the greater of (a) one hundred three and one -half
percent (103.5 %) of the Base Rent in effect as of the end of preceding
Lease Year, or (b) the Performance Increase based on the average Rent
paid in Lease Years 16 through 20. If the Base Rent is determined based
on the Performance Increase, it shall thereafter be adjusted up annually
by three and one -half percent (3.5 %) at the conclusion of each Lease
Year.
In addition, if the total Base Rent paid by Tenant in any Lease Year during
the Extended Term is less than twenty percent (20 %) of the Gross
Revenues for that Lease Year, then in addition to the Base Rent, Tenant
shall pay City the difference as Percentage Rent on an annual basis.
However, if the total Base Rent paid by Tenant in any Lease Year equals
or exceeds twenty percent (20 %) of the Gross Revenues for that Lease
Year, City shall have no obligation to refund any portion of the Base Rent
payments or to apply said payments to any future Lease Year.
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SCHEDULE 1
SCHEDULE 2
DEVELOPMENT SCHEDULE
Council Awards Lease
Submit Certificate of Insurance
and begin plan preparation
Planning Department Meeting
Submit Plans to Planning Dept. /Caltrans
City Approval of Insurance Certificates
Begin Seminars
Planning Commission Hearing
City Council Hearing
Issue Notice to Proceed to YESCO
Seminars and Commence Sales
Removal of Existing Sign
Begin Construction of Digital Billboard
Complete Construction of Digital Billboard
Commence Operation of Digital Billboard
March 12 2013
March19, 2013
SCHEDULE2
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OAK 44842 - 5749 -9923 v6
l4f0lI In aBll
DEVELOPMENT SCHEDULE
Council Awards Lease
April 23, 2013
Submit Certificate of Insurance
and begin plan preparation
April 30, 2013
Planning Department Meeting
April 29, 2013
Submit Plans to Planning Dept. /CALTRANS
See note below
Submit Plans to Building Department
April 24, 2013
City Approval of Insurance Certificates
May 7, 2013
Begin Seminars
May 29, 2013
Planning Commission Hearing
CUP approved
City Council Hearing
April 23, 2013
Issue Notice to Proceed to YESCO
April 24, 2013
Commence Sales
May 1, 2013
Remove Existing Sign
July 24, 2013
Begin Construction of Digital Billboard
August 1, 2013
Complete Construction of Digital Billboard
August 15, 2013
Commence Operation of Digital Billboard
September 1, 2013