HomeMy WebLinkAboutOrdinance 2728 N.C.S. 08/03/20201
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EFFECTIVE DATE ORDINANCE NO. 2728 N.C.S.
OF ORDINANCE
September 3, 2020
Introduced by Seconded by
Mike Healy Dave King
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING AN
AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY OF PETALUMA AND THE SONOMA
MARIN AREA RAIL TRANSIT DISTRICT FOR THE PETALUMA DEPOT PROPERTY, A.P.N. 007-131-004,
TO PROVIDE FOR SHARED PARKING, INGRESS, SIGNAGE AND PARKING IMPROVEMENTS
13 WHEREAS, Lomas Corona Station LLC, the owner of property at 890 North McDowell Boulevard,
14 APN 137-061-019, in Petaluma ("Corona Property") and Lomas SMART LLC, which is in contract to
15 purchase property owned by SMART located at 315 East D Street, APN 007-131-003, in Petaluma
16 ("Downtown SMART Property") are under the same management and ownership, and are referred to
17 in this ordinance as the "Developer;" and
18 WHEREAS, the Downtown SMART property is adjacent to property owned by SMART located
19 at A.P.N. 007-131-004 ("Depot Property") that contains SMART station and depot and other
20 improvements and that is subject to a lease agreement between SMART and the City ("Depot
21 Lease"), and the City licenses the Depot Property to the Downtown Business Association and the
22 Petaluma Arts Alliance for office space use; and
23 WHEREAS, Developer has submitted applications to the City for approval of development of
24 the Corona Station Residential Project (the "Corona Project") on the Corona Property, including
25 applications for a Zoning Text Amendment ("Corona Zoning Amendment"), a Development
26 Agreement ("Development Agreement"), a Density Bonus and Development Concession/Incentive
27 ("Corona Density Bonus"), a Tentative Subdivision Map ("Corona Tentative Map"), Conditional Use
28 Permit ("Corona Use Permit"), and Site Plan and Architectural Review ("Corona SPAR") for a 1 10 unit
29 residential project within the MU1 B zone with Flood Plain -Combining (FP -C) Overlay, on the Corona
30 Property; and
31 WHEREAS, Developer is in contract with SMART to purchase the Downtown SMART Property
32 which shall in turn be sold to the Hines company ("Hines") for development of a residential project
33 ("Downtown Project") on the Downtown SMART Property; and
34 WHEREAS, Developer has provided the City conceptual plans for the Downtown Project, but
35 no application has been submitted to the City for the Downtown Project, and the conceptual plans
36 for the Downtown Project indicate a project consisting of 402 residential units and ground floor tenant
37 amenity uses; and
Ordinance No. 2728 N.C.S. Page 1
1 WHEREAS, Developer plans to use the proceeds from Developer's sale of the Corona Project
2 to purchase the Downtown SMART Property from SMART, and to sell the Downtown SMART Property to
3 Hines, including City -approved alternative inclusionary housing compliance, but otherwise subject to
4 future City approval of subsequent entitlement applications to be submitted by Hines; and
5 WHEREAS, Developer's fee ownership of the Corona Property entitles Developer to engage in
6 the development of the Corona Property in accordance with Section 23.030 of the City Development
7 Agreement Requirements; and
8 WHEREAS, Developer's contractual obligation to purchase the Downtown SMART Property in
9 accordance with the Developer/SMART Agreement entitles the Developer to engage in
10 Development of the Downtown SMART Property in accordance with Section 23.030 of the City
11 Development Agreement Requirements subject to the terms of the Developer/SMART Agreement
12 dated October 12, 2019 ("Developer/SMART Agreement"); and
13 WHEREAS, the Developer/SMART Agreement is attached to and made a part of the
14 Development Agreement, and in accordance with Section 9(a) of the Developer/SMART Agreement,
15 the close of escrow on the purchase of the Downtown SMART Property is required to occur on May
16 19, 2020; and
17 WHEREAS, Section 2(a) of the Developer/SMART Agreement requires as consideration for
18 purchase of the Downtown SMART Property a payment of $8 million, and in accordance with Section
19 9(c) of the Developer/SMART Agreement, Developer must deposit into escrow the remainder of the
20 $8 million purchase amount, less a non-refundable $500,000 deposit already given by Developer and
21 closing costs allocable to Developer by May 15, 2020; and
22 WHEREAS, Section 9(e), the Developer/SMART Agreement also requires Developer to dedicate
23 to SMART 1.27 acres of land at the corner of McDowell Boulevard and Corona Road in Petaluma for
24 the Corona SMART Station improvements, and the Corona Tentative Map includes such 1.27 acres of
25 land as a remainder parcel; and
26 WHEREAS, SMART intends to use the proceeds from sale of the Downtown SMART Property for
27 the cost of design and construction of the Corona SMART Station on land at McDowell Boulevard and
28 Corona Road in Petaluma, with terms regarding the design and construction of the Corona SMART
29 Station being the subject of the proposed agreement to be executed between SMART and the City;
30 and
31 WHEREAS, in 2016, the City contracted with Willdan Financial Services ("Willdan") to perform a
32 nexus analysis to determine the City's ability to fund the cost of parking improvements for the Corona
33 Station project from the City's traffic development impact fees; and
34 WHEREAS, Willdan determined that a nexus exists for including parking structure improvements
35 for the Corona Station project in the City's traffic impact fee program, that similar to other transit
36 improvements included in the fee program, 22.43% of the cost of the Corona Station parking
37 improvements could be attributed to future development, and that based on an estimated parking
38 structure improvement cost of $10,500,000, $2,355,134 of the parking structure improvement costs
39 could be recovered through an increase in the City's traffic impact fees; and
40 WHEREAS, on May 16, 2016, the City Council approved Resolution No. 2016-076 N.C.S.
41 repealing and replacing Resolution No. 2015-191 N.C.S and modifying the City's traffic impact fee
42 program based on the Willdan analysis to add up to $2,355,134 in funding for parking improvements
43 for the Corona Station; and
Ordinance No. 2728 N.C.S. Page 2
1 WHEREAS, the City has anticipated since updating City traffic impact fees on May 16, 2016
2 that City funding for the Corona Station would come entirely from traffic impact fee proceeds, and
3 that City funding for the Corona SMART station would be allocated entirely to parking improvement
4 costs; and
5 WHEREAS, as a result of changing cost estimates for the Corona Station project, the City
6 financial contribution must be designated more generally for Corona Station improvements, which
7 may include station design, construction, parking improvements and other costs, pursuant to SMART's
8 design/build contract; and
9 WHEREAS, Willdan, the consultants that prepared the 2016 update to the City's Traffic Impact
10 fees have confirmed that using City traffic fee proceeds for Corona Station costs is permitted under
11 the City's existing Traffic Impact Fee legislation because the nexus - traffic relief due to Corona Station
12 SMART ridership - is unchanged, and the costs are also comparable, and, as a result, the City may rely
13 entirely on Traffic Impact Fee proceeds to provide $2 million toward the Corona Station project costs;
14 and
15 WHEREAS, the proposed City/SMART Agreement provides for allocation of $2 million in City
16 funds for the Corona SMART Station improvements, which will provide traffic relief in Petaluma via
17 commuter use of the Corona SMART Station consistent with the purposes of the use of Traffic Impact
18 Fee proceeds for the Corona Station project; and
19 WHEREAS, Developer's payment for purchase of the Downtown SMART Property in
20 accordance with the Developer/SMART Agreement, the proceeds of which are to be used to fund
21 construction of the Corona SMART Station, and Developer's dedication of 1.27 acres of land at
22 McDowell Boulevard and Corona Road for the Corona SMART Station are critical elements of
23 achieving the Corona Station and essential consideration regarding the City's review of the Corona
24 Project, the Downtown Project, and the Development Agreement; and
25 WHEREAS, the City's payment of $2 million in City Traffic Impact Fee proceeds allocated to the
26 Corona Station project improvements is also a critical element of achieving the Corona Station and
27 essential consideration for purchase of the Downtown SMART Property and the Development
28 Agreement; and
29 WHEREAS, SMART indicates that construction work for the Corona Station must coincide with
30 the construction work on the planned Windsor SMART station originally scheduled for March 2020,
31 such that Developer's payment for the Downtown SMART Property and dedication of 1.27 acres at
32 Corona Road and Mc Dowell Boulevard must occur before the scheduled closing on the Downtown
33 SMART Property purchase on May 19, 2020 for the Corona Station construction to proceed in
34 conjunction with the Windsor station; and
35 WHEREAS, the justification for entering into the Development Agreement with the Developer
36 regarding the Corona Station Residential Project and the Downtown Project and the special long -
37 term project considerations that make preservation of existing zoning requirements desirable
38 throughout the life of the Corona Project, or so long as otherwise provided in the Development
39 Agreement, consist of dedication of land for, and funding of, construction of the Corona Station on
40 land at McDowell Boulevard and Corona Road in Petaluma, as well as considerations regarding
41 inclusionary housing compliance of the Corona and Downtown projects; and
42 WHEREAS, the City Council has recently approved most of the entitlements needed for the
43 Corona Project proposed by Developer; and
Ordinance No. 2728 N.C.S. Page 3
1 WHEREAS, except for the ordinance approving a Development Agreement between the
2 Developer and the City, and the Development Agreement itself, all of the entitlements for the Corona
3 Project include as a condition precedent that must be satisfied before the entitlements take effect
4 that the City must have entered an agreement with SMART for construction of the Corona Station;
5 and
6 WHEREAS, a provision in the Development Agreement with Developer allows the City to
7 terminate the Development Agreement without liability if the City does not reach an agreement with
8 SMART on the Corona Station; and
9 WHEREAS, the conditions in the Corona Project approvals conditioning their effectiveness (or
10 giving the City a right of termination) based on the City reaching an agreement with SMART on the
11 Corona Station all reflect the emphasis the City Council has placed on achieving the Corona Station;
12 and
13 WHEREAS, Staff have been working for some time to finalize a Corona Station Agreement with
14 SMART for presentation to the City Council, and most recently met online with SMART staff on April 23
15 to finalize an agreement, with the resulting agreement being presented to the City Council for
16 approval as Item 4C on the May 4, 2020 City Council agenda; and
17 WHEREAS, the proposed Corona Station Agreement being presented to the City Council
18 includes language requiring cooperation regarding an amendment to the lease agreement between
19 SMART and the City for the Depot property, APN 007-131-004; and
20
21 WHEREAS, the Depot property subject to lease consists of about 71,874 square feet of land,
22 and three buildings, the Petaluma Passenger Depot, a 2,450 square foot building, the Baggage Shed,
23 a 520 square foot building, and the Freight Shed, a 4,760 square foot building; and
24
25 WHEREAS, the proposed Corona Station Agreement includes a provision requiring the City
26 Council to introduce an ordinance approving an amendment to the lease for the Depot property by
27 May 4, 2020, and for the amendment to be effective by June 1, 2020, and the proposed Corona
28 Station Agreement provides for the City and SMART amending the Depot Lease agreement to provide
29 for the City's and SMART's shared use of parking spaces on the Downtown Depot Property, and design
30 and construction by SMART of new access, striping and related improvements on the Depot Property;
31 and
32
33 WHEREAS, the contemplated changes to the Depot property lease are required as a result of
34 sale and development of the Downtown SMART Property, the loss of SMART parking on the Downtown
35 SMART Property, and the related need to reconfigure the vehicular access into the Depot property
36 from East Washington Boulevard, because part of the current access to the Depot property from East
37 Washington Boulevard is located on the Downtown SMART Property and will be lost and reconfigured
38 when that property is sold and developed; and
39
40 WHEREAS, Section 4 of the Depot property lease anticipates that all or a portion of the leased
41 property may be needed for transportation related purposes, including development, construction,
42 maintenance, and operation of transportation systems or transit related projects, including passenger
43 loading areas and parking; Section 4 requires SMART to provide the City 365 days prior notice that
44 SMART needs to obtain possession of all or a portion of the leased Premises; and Section 4 also
45 provides that if SMART only requires a portion of the Premises, the lease shall continue in effect except
46 the rent shall be reduced in proportion to the area of the part of the Premises rendered unusable for
47 conduct of the City's business compared to the total area of the Premises; and
48
Ordinance No. 2728 N.C.S. Page 4
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WHEREAS, Section 8(a) of the Depot property lease specifies that the rent due totals $12,000
per year, to be paid monthly in advance on the first day of each month, and Section 8(b) of the
Depot property lease provides that to the extent the City's receipt of rents from sublessees in any
calendar year exceeds the sum of 1) 1 /25th of the amount necessary to amortize the City's actual
out of pocket costs for the improvements to the buildings on the Depot property over a 25 year period,
and 2) the City's cost of operating and maintaining the leased property for that year, and 3) the rents
paid to the City during that year, the City must pay SMART 50% of the amount by which the sum of 1),
2) and 3) exceeds the City's receipt of rents; and
WHEREAS, the Depot property lease is in effect until August 1, 2023, and the City may renew
the lease by giving SMART notice sometime between February 1 and April 1, 2023, and if the City does
so and unless the City and SMART agree to a further extension of the Depot property lease, the lease
will expire August 2, 2028; and
WHEREAS, under the provisions of Section 5 of the proposed Corona Station Agreement with
SMART, which is also before the City Council for approval at the May 4, 2020 City Council meeting, as
a result of the loss of the SMART parking on the Downtown SMART Property being sold to Developer,
the City and SMART intend to provide for the City's and SMART's shared use of the parking currently
located on the Depot property and leased to the City such that: SMART patrons may use parking
spaces at the Depot during SMART's operational hours and the patrons of City's sublessees and
licensees (the Petaluma Downtown Association and the Petaluma Arts Alliance) may us parking
spaces at the Depot during the sublessees' and licensees' operational hours on a first come, first
served basis; no other parking will be allowed, including no overnight parking or parking for any
residential, retail or commercial use, and SMART will be responsible for enforcing parking restrictions
as for other SMART parking facilities; and
WHEREAS, the current parking area at the Depot property consists of approximately 50 parking
spaces totaling approximately 25,960 square feet of the 71,874 square foot Depot parcel, and, based
on the formula in Section 4 of the Depot property lease for reduction of rent upon SMART obtaining
part of the leased property for transportation related purposes, to reflect the shared use of the parking
on the Depot property pursuant to the amended Depot property lease, the City's annual rent of
$12,000 would be reduced by 18% ($2,157) to $9,833, which corresponds with the reduction in leased
space from 71,874 square feet to 45,914 square feet, with the reduction divided by two, because
SMART and City will share the parking spaces, with each receiving approximately 1/2 of the benefit of
the parking spaces; and
WHEREAS, the 365 day notice requirement in Section 4 of the Depot property lease regarding
SMART obtaining part of the leased property for transportation related purposes is impractical under
the circumstances and the lease amendment attached to this ordinance as Exhibit 1 has been
drafted to wave that notice requirement; and
WHEREAS, although the rent the City pays for the Depot property lease reflects the use of
redevelopment funds to restore the improvements on the Depot property; nonetheless, the rent has
not been adjusted since the lease commenced on August 1, 2003, and accordingly, City staff have
recommended that the City waive the rent reduction that otherwise would apply under Section 4 of
the Depot property lease, and as result, the lease amendment included as Exhibit 1 provides for
waiver of the lease reduction that otherwise would apply, and, similarly, for waiver of the City's
obligation to share subtenant rent with SMART that otherwise could apply under Section 8(b) of the
lease; and
WHEREAS, Section 46 of the Petaluma Charter requires that the City Council take certain
actions by ordinance, including actions involving sale, acquisition or lease of real property when the
amount in question exceeds $3,000; and
Ordinance No. 2728 N.C.S.
Page 5
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WHEREAS, approval of the amendment to the Depot property lease agreement is exempt
under the "common sense" exception in CEQA Guidelines Section 15061(b) (3) which establishes the
general rule for projects concerning which it can be seen with certainty that there is no possibility that
the activity in question may have a significant effect on the environment, because the lease
amendment relates to the use of existing parking on the Depot property and to ingress, parking and
signage improvements on the Depot property that will be required as a result of the sale of the
Downtown SMART Property to the Developer, and the need to reconfigure vehicle access to and
parking on the Depot property; and
WHEREAS, the amendment to the Depot property lease is also exempt from CEQA pursuant to
Section 15301 of the CEQA Guidelines as involving the operation, repair, maintenance, permitting,
leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical
equipment, or topographical features, involving negligible or no expansion of existing or former use,
including, in accordance with Section 15301, subdivision (c), regarding existing highways and streets,
sidewalks, gutters, bicycle and pedestrian trails, and similar facilities, transit improvements, such as bus
lanes, pedestrian crossings, and other similar alterations;
NOW, THEREFORE, be it ordained by the Council of the City of Petaluma as follows:
Section 1. Recitals Made Findings. The above recitals are hereby declared to be true and
correct and are incorporated into this ordinance as findings of the City Council.
Section 2. Amendment Exempt from CEQA. Approval of the amendment to the Depot
property lease agreement pursuant to this ordinance exempt from CEQA under the "common
sense" exception in CEQA Guidelines Section 15061(b) (3) which establishes the general rule for
projects concerning which it can be seen with certainty that there is no possibility that the activity in
question may have a significant effect on the environment, because the lease amendment relates
to the use of existing parking on the Depot property and to ingress, parking and signage
improvements on the Depot property that will be required as a result of the sale of the Downtown
SMART Property to the Developer, and the need to reconfigure vehicle access to and parking on
the property. The amendment to the Depot property lease is also exempt from CEQA pursuant to
Section 15301 of the CEQA Guidelines as involving the operation, repair, maintenance, permitting,
leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical
equipment, or topographical features, involving negligible or no expansion of existing or former use,
including, in accordance with Section 15301, subdivision (c), regarding existing highways and
streets, sidewalks, gutters, bicycle and pedestrian trails, and similar facilities, transit improvements,
such as bus lanes, pedestrian crossings, and other similar alterations.
Section 3. Amendment to Depot Property Lease Approved. The amendment to the Depot
Property lease between the City of Petaluma and the Sonoma Marin Are Rail Transit District
("SMART") which is attached to and made a part of this ordinance as Exhibit 1 is hereby approved.
Section 4. City Manager Authorized to Execute Amendment. Upon this ordinance taking
effect, the City Manager or her designee are hereby authorized to execute on behalf of the City an
amendment to the Depot Property Lease between SMART and the City substantially in accordance
with that attached as Exhibit 1, subject to such changes to the amendment deemed necessary or
appropriate by the City Manager and approved by the City Attorney to affect the intended
purposes of this ordinance.
Section S. Severability. The City Council hereby declares that every section, paragraph,
sentence, clause, and phrase of this ordinance is severable. If any section, paragraph, sentence,
clause or phrase of this ordinance is for any reason found to be invalid or unconstitutional, such
invalidity, or unconstitutionality shall not affect the validity or constitutionality of the remaining
sections, paragraphs, sentences, clauses, or phrases.
Ordinance No. 2728 N.C.S.
Page 6
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Section b. Effective Date. This ordinance shall be in full force and effective 30 days after its
adoption and shall be published and/or posted in the manner required by the City's charter.
INTRODUCED and ordered posted this 4th day of May 2020.
ADOPTED this 31d day of August 2020 by the following vote:
Ayes:
Healy, Kearney, King, McDonnell, Miller
Noes:
Mayor Barrett, Vice Mayor Fischer
Abstain:
None
Absent:
None
�1)1
Teresa Barrett, Mayor
ATTEST: APPROVED AS TO FORM:
Claire Cooper, CMC, City Clerk
0
Eric Danly, City Attorney
Ordinance No. 2728 N.C.S.
Page 7
I EXHIBIT 1
2
3 AMENDMENT 1 TO COMMERCIAL LEASE
4 BETWEEN
5 THE SONOMA MARIN AREA RAIL TRANSIT DISTRICT,
6 SUCCESSOR TO THE NORTHWESTERN PACIFIC RAILROAD AUTHORITY
7 AND
8 THE CITY OF PETALUMA, SUCCESSOR TO THE PETALUMA COMMUNITY
9 DEVELOPMENT SUCCESSOR AGENCY
10
11 WHEREAS, City staff have been working for some time to finalize a Corona Station
12 Agreement with SMART for presentation to the City Council, and most recently met online with
13 SMART staff on April 23, 2020 to finalize an agreement, with the resulting agreement being presented
14 to the City Council for approval as Item 4C on the May 4, 2020 City Council agenda; and
15 WHEREAS, the proposed Corona Station Agreement being presented to the City Council
16 includes language requiring cooperation regarding an amendment to the City's lease
17 agreement with SMART for the Depot property, APN 007-131-004; and
18
19 WHEREAS, the lease agreement between the City and SMART for the Depot property
20 was originally entered by the Petaluma Community Development Commission (the City's
21 former redevelopment agency) and the Northwestern Pacific Railroad Authority on August
22 1, 2003, and SMART succeeded the Northwestern Pacific Railroad Authority as owner and
23 lessor of the Depot property, the Petaluma Community Development Successor Agency
24 succeeded the Petaluma Community Development Commission by operation of law when
25 California redevelopment agencies were dissolved by state statute, and on August 22, 2013,
26 the Petaluma Community Development Successor Agency assigned its lease interest in the
27 Depot property to the City; and
28
29 WHEREAS, the Depot property subject to lease consists of about 71,874 square feet of
30 land, and three buildings, the Petaluma Passenger Depot, a 2,450 square foot building, the
31 Baggage Shed, a 520 square foot building, and the Freight Shed, a 4,760 square foot building;
32 and
33
34 WHEREAS, the proposed Corona Station Agreement includes a provision requiring
35 the City Council to introduce an ordinance approving an amendment to the lease for the
36 Depot property by May 4, 2020, and for the amendment to be effective by June 18, 2020, and
37 the proposed Corona Station Agreement provides for the City and SMART amending the
38 Depot Lease agreement to provide for the City's and SMART's shared use of parking spaces
39 on the Depot property, and design and construction by SMART of new access, striping and
40 related improvements on the Depot property; and
41
Ordinance No. 2728 N.C.S. Page 8
1 WHEREAS, the contemplated changes to the Depot property lease are required as a
2 result of sale and development of the Downtown SMART Property and loss of SMART
3 parking on the Downtown SMART Property, and the related need to reconfigure the
4 vehicular access into the Depot property from East Washington Boulevard, because part of
5 the current access to the Depot property from East Washington Boulevard is located on the
6 Downtown SMART Property and will be lost and reconfigured when that property is sold
7 and developed; and
8
9 WHEREAS, Section 4 of the Depot property lease anticipates that all or a portion of
10 the leased Premises may be needed for transportation related purposes, including
11 development, construction, maintenance, and operation of transportation systems or transit
12 related projects, including passenger loading areas and parking; Section 4 requires SMART
13 to provide the City 365 days prior notice that SMART needs to obtain possession of all or a
14 portion of the Premises; and Section 4 also provides that if SMART only requires a portion
15 of the Premises, the lease shall continue in effect except the rent shall be reduced in
16 proportion to the area of the part of the Premises rendered unusable for conduct of City
17 business compared to the total area of the Premises; and
18
19 WHEREAS, Section 8(a) of the Depot property lease specifies that the rent due totals
20 $12,000 per year, to be paid monthly in advance on the first day of each month, and Section
21 8(b) of the Depot property lease provides that to the extent the City's receipt of rents from
22 sublessees in any calendar year exceeds the sum of 1) 1/25th of the amount necessary to
23 amortize the City's actual out of pocket costs for the improvements to the buildings on the
24 Depot property over a 25 year period, and 2) the City's cost of operating and maintaining the
25 leased property for that year, and 3) the rents paid to the City during that year, the City must
26 pay SMART 50% of the amount by which the sum of 1), 2), and 3) exceeds the City's receipt
27 of rents; and
28
29 WHEREAS, the Depot property lease is in effect until August 1, 2023, and the City
30 may renew the lease by giving SMART notice sometime between February 1 and April 1,
31 2023, and if the City does so and unless the City and SMART agree to a further extension of
32 the Depot property lease, it will expire August 2, 2028; and
33
34 WHEREAS, under the provisions of Section 5 of the proposed Corona Station
35 Agreement with SMART, which is also before the City Council for approval at the May 4,
36 2020 City Council meeting, as a result of the loss of the SMART parking on the Downtown
37 SMART Property being sold to Developer, the City and SMART intend to provide for the
38 City's and SMART's shared use of the parking currently located on the Depot property and
39 leased to the City such that: SMART patrons may use parking spaces at the Depot during
40 SMART's operational hours and patrons of the City's sublessees and licensees may us
41 parking spaces at the Depot during the sublessees' and licensees' operational hours on a first
42 come, first served basis; no other parking will be allowed, including no overnight parking or
43 parking for any residential, retail or commercial use, and SMART will be responsible for
44 enforcing parking restrictions as for other SMART parking facilities; and
Ordinance No. 2728 N.C.S. Page 9
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WHEREAS, the current parking area at the Depot property consists of approximately
50 parking spaces totaling approximately 25,960 square feet of the 71,874 square foot Depot
parcel, and, based on the formula in Section 4 of the Depot property lease for reduction of
rent upon SMART obtaining part of the Premises for transportation related purposes, to
reflect the shared use of the parking on the Depot property pursuant to the amended Depot
property lease, the City's annual rent of $12,000 would be reduced by 18 % ($2,167) to $9,833,
which corresponds with the reduction in leased space from 71,874 square feet to 45,914
square feet, with the reduction divided by two, because SMART and City will share the
parking spaces, with each receiving approximately 1/2 of the benefit of the parking spaces;
and
WHEREAS, the 365 day notice requirement in Section 4 of the Depot property lease
regarding SMART obtaining part of the leased property for transportation related purposes
is impractical under the circumstances and this lease amendment has been drafted to wave
that notice requirement; and
WHEREAS, although the rent the City pays for the Depot property lease reflects the
use of redevelopment funds to restore the improvements on the Depot property, nonetheless
the rent has not been adjusted since the lease commenced on August 1, 2003, and
accordingly, City staff have recommended that the City waive the rent reduction that
otherwise apply under Section 4 of the Depot property lease, and as result, this lease
amendment provides for waiver of the lease reduction that otherwise would apply, and,
similarly, for waiver of the City's obligation to share subtenant rent with SMART that
otherwise could apply under Section 8(b) of the lease; and
WHEREAS, Section 46 of the Petaluma Charter requires that the City Council take
certain actions by ordinance, including actions involving sale, acquisition or lease of real
property when the amount in question exceeds $3,000; and
WHEREAS, approval of the amendment to the Depot property lease agreement is
exempt under the "common sense" exception in CEQA Guidelines Section 15061(b)(3) which
establishes the general rule for projects concerning which it can be seen with certainty that
there is no possibility that the activity in question may have a significant effect on the
environment, because the lease amendment relates to the use of existing parking on the
Depot property and to ingress, parking and signage improvements on the Depot property
that will be required as a result of the sale of the Downtown SMART Property to the
Developer, and the need to reconfigure vehicle access to and parking on the Depot property;
and
WHEREAS, the amendment to the Depot property lease is also exempt from CEQA
pursuant to Section 15301 of the CEQA Guidelines as involving the operation, repair,
maintenance, permitting, leasing, licensing, or minor alteration of existing public or private
structures, facilities, mechanical equipment, or topographical features, involving negligible
Ordinance No. 2728 N.C.S.
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or no expansion of existing or former use, including, in accordance with Section 15301,
subdivision (c), regarding existing highways and streets, sidewalks, gutters, bicycle and
pedestrian trails, and similar facilities, transit improvements such as bus lanes, pedestrian
crossings, and other similar alterations;
NOW, THEREFORE, for good and valuable consideration, the sufficiency of which
is hereby acknowledged, the City of Petaluma, a California municipal corporation and
charter city (City), and the Sonoma Marin Area Rail Transit District, a regional transportation
district (SMART), hereby agree to amend the Commercial Lease (Lease) first entered August
1, 2003 by the Northwestern Pacific Railroad Authority, as predecessor in interest to SMART,
and the Petaluma Community Development Commission, as predecessor in interest to the
City, concerning Assessor's Parcel No. 007-131-004.
Amendments Concerning Leased Premises and Use of the Leased Premises
In accordance with Section 31, paragraph (c) of the Lease concerning amendments, and with
reference to Section 1, Premises, Section 4, Use/Termination for Transit Activities, Section 5,
Use, Section 6, Restrictions on Use, Section 12, Tenant Improvements and Other Alterations,
Section 17, Indemnification, and Section 19, Insurance, the City and SMART hereby modify
the Lease in accordance with this amendment (Amendment) as follows, notwithstanding
anything to the contrary in the Lease:
The above recitals are hereby declared to be true and correct and made a part of this
Amendment.
Section 1, Premises of the Lease is hereby modified in accordance with the following:
a. Reconfiguration of ingress, parking, and related improvements.
The area and boundaries of the Premises, as defined and described in the Lease, are not
modified by this Amendment. However, as a result of the sale of the Downtown SMART
property to the Developer, and loss of the SMART parking and also ingress improvements
onto the Premises currently on the Downtown SMART property, the ingress from East
Washington Boulevard, the configuration of the parking stalls currently on the Premises, and
related improvements such as curb, gutter, sidewalk, bus access and drainage improvements
(SMART Improvements), will have to be redesigned and reconfigured in accordance with
the terms of this Amendment.
b. Shared parking
The reconfigured parking stalls on the Premises will be shared by City, City's sublessees and
licensees, and SMART, and the patrons of City's sublessees and licensees and of SMART,
such that SMART patrons may use the parking stalls during SMART's operational hours,
and City, City's sublessees and licensees and their invitees may use the parking stalls during
Ordinance No. 2728 N.C.S.
Page 11
1 the City's, City's sublessees' and licensees' operational hours, on a first come, first served
2 basis. No other parking will be permitted on the Premises, including no overnight parking
3 or parking for any residential, retail or commercial use. SMART will be responsible for
4 enforcing these parking restrictions as for other SMART parking facilities.
5
6 Section 4, Use/Termination for Transit Activities of the Lease is hereby modified in
7 accordance with the following:
8
9 a. Need to use a portion of the Premises for transportation related purposes.
10
11 In accordance with Section 4 of the Lease, and due to the sale of the Downtown SMART
12 Property and loss of the SMART parking and also ingress improvements onto the Premises
13 currently on the Downtown SMART property, SMART has a need for a portion of the
14 Premises for transportation related purposes, and more particularly, for reconfiguration of
15 the ingress from East Washington Boulevard to the Premises, the parking stalls currently on
16 the Premises, and related improvements on the Premises such as curb, gutter, sidewalk, bus
17 access and drainage improvements. SMART also has a need to permit SMART patrons to
18 use the reconfigured parking stalls on the Premises in accordance with the terms of this
19 Amendment. Solely for the purposes SMART's need to reconfigure Premises improvements
20 and to use the reconfigured improvements for transportation related purposes pursuant to
21 this Amendment, the City and SMART hereby agree that the 365 day notice requirement in
22 Section 4 of the Lease is waived and shall not apply.
23
24 b. No reduction of rent.
25
26 Under Section 4 of the Lease, as a result of SMART's need to obtain part of the Premises for
27 transportation related purposes, the City's obligation to pay Rent under the Lease would be
28 reduced in proportion to the area of the Premises rendered unusable for the conduct of the
29 City's business compared to the total area of the Premises. Under Section 4, the City's annual
30 Rent obligation of $12,000 would be reduced by 18% ($2,157) to $9,833, which corresponds
31 with the reduction in leased Premises area from 71,874 square feet to 45,914 square feet,
32 divided by two, because SMART and City will share the reconfigured Premises parking
33 spaces, with each receiving approximately'/2 of the benefit of the parking spaces. Although
34 the rent the City pays for the Depot property lease reflects the use of redevelopment funds
35 to restore the improvements on the Depot property, nonetheless the rent has not been
36 adjusted since the lease commenced on August 1, 2003, and accordingly the City waives the
37 rent reduction that otherwise apply under Section 4 of the Depot property lease, solely for
38 purposes of this Amendment. Similarly, the City's obligation to share subtenant rent with
39 SMART that would apply under Section 8(b) of the Lease is waived for purposes of this
40 Amendment.
41
42 Section 5, Use, of the Lease, is hereby modified in accordance with the following:
43
Ordinance No. 2728 N.C.S. Page 12
1 The use of the Premises pursuant to the Lease shall include the shared use of the parking on
2 the Premises as described in this Amendment. Notwithstanding anything to the contrary in
3 Section 5 of the Lease, the City and SMART shall each be liable for their respective use of the
4 Premises in accordance with this Amendment, and for their related operations and
5 maintenance on the Premises, and City and SMART agree to cooperate in good faith
6 concerning their respective operations and maintenance on the Premises.
7
8 Section 6, Restrictions on Use, of the Lease, is hereby modified in accordance with the
9 following:
10
11 SMART also agrees to comply with all provisions of Section 6 of the Lease that are applicable
12 to SMART's operations, maintenance, and improvement activities on the Premises pursuant
13 to this Amendment. In particular, SMART agrees, at SMART's sole expense, to comply with
14 all applicable laws, regulations, rule and orders with respect to SMART's use and/or
15 improvement of the Premises in accordance with Section 6 of the Lease.
16
17 Section 12, Tenant Improvements and Other Alterations, of the Lease is hereby modified to
18 add a new paragraph c. in accordance with the following:
19
20 e. Reconfiguration of ingress from East Washington Boulevard, the Premises parking, and
21 related improvements.
22
23 SMART shall design and construct the SMART Improvements at SMART's sole expense.
24 SMART will submit for City review and approval, which approval will not be unreasonably
25 withheld, improvement plans for reconfiguration of' ingress from East Washington
26 Boulevard to the Premises, the Premises parking, and related improvements. Improvement
27 work encroaching into City right of way will be subject to issuance of a City encroachment
28 permit. City agrees to cooperate with SMART and not unreasonably withhold City
29 encroachment permits. Once SMART has satisfied the requirements for issuance of an
30 encroachment permit or permits for work encroaching into City right of way, such permit or
31 permits will be issued at no cost to SMART._ SMART will be solely liable for the SMART
32 Improvements work and agrees to indemnify and hold the City and the City's sublessees
33 and licensees harmless concerning the SMART Improvements work in accordance with
34 Section 17 of the Lease, as amended. SMART agrees to cooperate and coordinate with the
35 City concerning the SMART Improvements and the SMART Improvements work to the
36 extent reasonably possible to minimize impacts on the operations of the City and City's
37 sublessees and licensees.
38
39 Section 17, Indemnification, of the Lease, is hereby modified in accordance with the
40 following:
41
42 Section 17 of the Lease is hereby amended such that SMART agrees to indemnify, defend
43 and hold harmless the City and the City's sublessees and licensees concerning the use,
44 maintenance, occupation, alteration or improvement of the Premises by SMART, any act,
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omission or neglect of SMART, SMART's officers, employees, agents, servants, sublessees,
concessionaires, contractors or visitors, and/or any breach or default by SMART of any of
the terms, covenants or conditions of the Lease, to the same extent and subject to the same
limitations as the City's obligation to indemnify, defend and hold harmless SMART pursuant
to that section.
Section 19, Insurance, of the Lease, is hereby modified in accordance with the following:
SMART agrees to maintain during the term of the Lease and any extension of the Lease the
insurance specified in Section 19 of the Lease, and to provide evidence of insurance as
specified in that section.
Except as modified by this Amendment, the Lease shall remain unchanged and in full force
and effect.
IN WITNESS WHEREOF, a representative authorized to bind the City and a
representative authorized to bind SMART have each executed this Amendment on the date
indicated.
City of Petaluma SMART
PeggyFlynn, City Manager
Date
Approved as to form:
Eric W. Danly, City Attorney
Farhad Mansourian, General Manager
Date
Approved as to form:
Thomas F. Lyons, District Counsel
Ordinance No. 2728 N.C.S.
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