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Home My WebLink AboutMINUTES - 05061997 - C102 TC,: BOARD OF SUPERVISORS sE. n r;T P s FROM: Barton J. Gilbert, Director of General Services �� Cost_ - . a County DATE: May 6, 1997 SUBJECT: OPTION TO LEASE - 650 PARKWAY DRIVE, MARTINEZ SPECIFIC REQUESTS OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION I. RECOMMENDATION- APPROVE ECOMMENDATIONAPPROVE an Option to Lease, commencing May 1, 1997, with Overaa & Company to develop 650 Parkway Drive, Martinez to County Specifications for occupancy by the Health Services Department, under the terms and conditions more particularly set forth in said Option to Lease, and AUTHORIZE the Director of General Services to EXECUTE said Option on behalf of the County. II. FINANCIAL IMPACT Payments required are to come from the budget of the Health Services Department. The term of the Option is four months with a provision to extend it for two additional months. III. REASONS FOR RECOMMENDATION/BACKGROUND In response to a request for proposals by Contra Costa County, Overaa & Company offered to design and build a building to County specifications at 650 Parkway Drive and lease it to the County with an option to purchase. The Health Services Department has determined that this location is suitable for the Environmental Health and Hazardous Materials Divisions of Health Services, but additional architectural planning is needed to determine the scope of the project. It is necessary to enter into an option to lease the property to cover the carrying costs while plans and specifications are developed. When the Option is exercised, the project will be brought back to the Board for approval. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): q e / ACTION OF BOARD ON MAY 6 1997 APPROVED AS RECOMMENDED %/ OTHER VOTE OF SUPERVISORS UNANIMOUS(ABSENT AYES: NOES: ABSENT: ABSTAIN: I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN MEDIA CONTACT: BARTON J.GILBERT(313-7100) AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVIS J THEMAMMIZOWN. CC: County Administrator(via UM) ATTESTED 19 X b 1997 County Auditor-Controller(via UM) PHIL BATCHELOR,CLERK OF THE BOARD OF Lem Cragholm(via UM) SUPERVISORS AND COUNTY ADMINISTRATOR Health Services Department(via UM) County Counsel(via UM) Risk Management(via UM) Orig:General Services Department-UM BY C DEPUTY Buildings and Grounds(via UM) CGB M382 (10/88) LEASE FOR CONTRA COSTA COUNTY HEALTH SERVICES DEPARTMENT 650 PARKWAY DRIVE MARTINEZ, CALIFORNIA SECTION A: BASIC TERMS AND CONDITIONS A.I. PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A.2. LEASE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A.3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A.4. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A.5. UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A.6. MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A.7. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A.8. EXHIBITS AND ATTACHMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A.9. WRITTEN AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A.10. TIME IS OF THE ESSENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A.11. SIGNATURE BLOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION B: STANDARD PROVISIONS B.1. USE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 B.2. HOLD HARMLESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 B.3. ALTERATIONS, FIXTURES, AND SIGNS . . . . . . . . . . . . . . . . . . . . . . 4 B.4. DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 B.5. OUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 B.6. DEFAULTS . . . . . . . . . . . . . . 5 B.7. SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 B.8. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 B.9. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION C: SPECIAL PROVISIONS C.1. SERVICES BY LESSOR . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . 7 C.2. PROPERTY TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 C.3. INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 CA. LIABILITY INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 C.5. WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 C.6. FIRE INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 C.7. RENTAL INTERRUPTION INSURANCE . . . . . . . . . . . . . . . . . . . . . . . 9 C.8. LENDER PROTECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 C.9. ESTOPPEL CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 C.10 ATTORNEYS' AND EXPERTS' FEES . . . . . . . . . . . . . . . . . . . . . . . . 11 C.11 ACCOMPLISHMENT OF IMPROVEMENTS . . . . . . . . . . . . . . . . . . . 11 C.12. COMPLETION AND OCCUPANCY . . . . . . . . . . . . . . . . . . . . . . . . . . 12 C.13. OPTION TO PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 C.14. RECORDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 LEASE DRAFT LEASE FOR CONTRA COSTA COUNTY HEALTH SERVICES DEPARTMENT 650 PARKWAY DRIVE MARTINEZ, CALIFORNIA SECTION A: BASIC TERMS AND CONDITIONS A.I. PARTIES: Effective on , C. OVERAA AND COMPANY, hereinafter called "LESSOR", and the COUNTY OF CONTRA COSTA, a political subdi- vision of the State of California, hereinafter called "COUNTY", mutually agree and promise as follows: A.2. LEASE OF PREMISES: LESSOR, for and in consideration of the rents, hereby leases to COUNTY, and COUNTY leases from LESSOR those certain premises described as follows: A two-story office building containing approximately square feet, commonly known as 650 Parkway Drive, Martinez, more particularly described on Exhibits A and B which are attached hereto and made a part hereof. A.3. TERM: The term of the Lease shall be twenty(20)years, commencing and ending A.4. RENT: COUNTY shall pay to LESSOR as base rent for the use of the premises a monthly rental as follows: Period Monthly Rent Rental shall be payable in advance on the tenth day of each month during the term of this Lease. Payments shall be mailed to LESSOR at 200 Parr Boulevard, Richmond, CA 94801. A.5. UTILITIES: COUNTY shall pay for all gas, electric, water, sewer, and refuse collection services provided to the demised premises. Draft: May 5,1997 1 — A.6. MAINTENANCE AND REPAIRS: a. COUNTY shall maintain the structural integrity of the building, shall keep the exterior of the building in good order, condition, and repair and shall maintain the roof, the exterior doors and their fixtures, closers and hinges, glass and glazing, and all locks and key systems used in the demised premises. b. COUNTY shall keep and maintain the interior of the premises in good order, condition, and repair. c. COUNTY shall repair and maintain the electrical, lighting, water, and plumbing systems in good order, condition, and repair. d. COUNTY shall maintain and repair the heating, ventilating, and air-conditioning systems. e. COUNTY shall maintain the parking lot, landscaping, sprinkler system, and exterior lighting system in good order, condition, and repair. f. COUNTY shall provide, install, maintain, repair, and replace, at the direction of the Fire Marshal, the necessary number of A-B-C fire extinguishers for the premises at no cost to LESSOR. g. COUNTY shall not suffer any waste on or to the demised premises. A.7. NOTICES: All notices given hereunder shall be in writing and shall be deemed to have been given if personally delivered or deposited in the United States mail postage prepaid, certified or registered, return receipt requested, and addressed to the other parry as follows or as otherwise designated by written notice hereunder from time to time: To LESSOR: C. Overaa and Company 200 Parr Boulevard Richmond, CA 94801 To COUNTY: Contra Costa County General Services Department Lease Management Division 1220 Morello Avenue, Suite 100 Martinez, CA 94553-4711 A.8. EXHIBITS AND ATTACHMENTS: Section B, Standard Provisions, Section C, Special Provisions, and Exhibit A - Premises and Exhibit B - Preliminary Site Plan are Draft: May 5,1997 — 2 — attached to this Lease and are made a part hereof. A.9. WRITTEN AGREEMENT: Neither party has relied on any promise or representation not contained in this Lease. All previous conversations, negotiations, and understandings are of no further force or effect. This Lease may be modified only by a writing signed by both parties. The headings of the paragraphs are for convenience only and shall not be considered in construing the intent of this Lease. A.10. TIME IS OF THE ESSENCE of each and all of the terms and provisions of this Lease. A.11. SIGNATURE BLOCK COUNTY LESSOR COUNTY OF CONTRA COSTA, a C. OVERAA AND COMPANY political subdivision of the State of California By By Director of General Services Jerry Overaa, President By RECOMMENDED FOR APPROVAL: By Deputy County Administrator By Deputy General Services Director By Lease Manager APPROVED AS TO FORM: VICTOR J. WESTMAN, County Counsel By Deputy Draft: May 5,1997 — 3 — CGB/650Pkway.Lse LEASE FOR CONTRA COSTA COUNTY HEALTH SERVICES DEPARTMENT 650 PARKWAY DRIVE MARTINEZ, CALIFORNIA SECTION B: STANDARD PROVISIONS B.1. USE OF PREMISES: The premises shall be used during the term for purposes of conducting various functions of COUNTY. B.2. HOLD HARMLESS: COUNTY agrees to indemnify and hold harmless the LESSOR from any and all claims, costs and liability, including attorney's fees, for any damage, injury or death of or to any person or the property of any person, arising out of willful misconduct or negligent acts by the COUNTY, its officers, employees or invitees. COUNTY agrees to hold harmless the LESSOR from any and all claims, costs and liability, including attorneys fees, for damage, injury or death of or to any person or the property of any person, arising out of the use of the premises by the COUNTY, its officers, employees or invitees. LESSOR agrees that all contractors retained by LESSOR to perform any work of maintenance and repair required of LESSOR pursuant to the terms hereof shall maintain adequate public liability insurance. COUNTY shall be named as additional insured on said policies. The obligations under this paragraph arising by reason of any occurrence taking place during the Lease term shall survive any termination of this Lease. B.3. ALTERATIONS, FIXTURES, AND SIGNS: COUNTY may make any lawful and proper minor alterations, attach fixtures and signs in or upon the premises, which shall remain COUNTY property and may be removed therefrom by COUNTY prior to the termination of this Lease. Any such alterations, signs or fixtures shall be at COUNTY's sole Draft: May 5,1997 — 4 — cost and expense. BA DESTRUCTION: a. In the event of damage causing a partial or total destruction of the premises during the term of this Lease from any cause which is covered by insurance and repairs can be made under the applicable laws and regulations of governmental authorities, LESSOR shall repair the damage promptly and within a reasonable time, but such destruction shall not void this Lease, except that COUNTY shall be entitled to a proportionate reduction of rent while such repairs are being made, such proportionate reduction to be based upon the extent to which the portion of the premises unusable by COUNTY bears to the total area of the premises. b. If such repairs are not covered by insurance but can be made under the applicable laws and regulations of governmental authorities, LESSOR shall, at COUNTY's option, make the same within a reasonable time, the rent to be proportionately reduced as provided in the previous subparagraph, all such repairs to be at COUNTY's sole cost and expense. In the event COUNTY does not so elect to have LESSOR make such repairs (which are not covered by insurance), or such repairs cannot be made under the applicable laws and regulations of governmental authorities, this Lease shall continue in effect with no rent change. B.5. QUIET ENJOYMENT: LESSOR covenants that COUNTY shall at all times during the term peaceably and quietly have, hold, and enjoy the demised premises without suit, trouble or hindrance from or on account of LESSOR as long as COUNTY fully performs hereunder. BA DEFAULTS: In the event of COUNTY's material breach of any of the covenants or conditions herein, LESSOR may re-enter and repossess the premises and remove all persons and property therefrom after giving COUNTY written notice of such default and in accordance with due process of law. In the event of such a breach by LESSOR, COUNTY Draft: May 5,1997 — 5 — may terminate the Lease and quit the premises without further cost or obligation or may proceed to repair the building or correct the problem resulting from the breach and deduct the cost thereof from rental payments due to LESSOR, provided that COUNTY has given LESSOR written notice of the breach and provided that LESSOR has not made a substantial effort to correct the breach. B.7. SURRENDER OF PREMISES: On the last day of the term, or sooner termination of this Lease, COUNTY will peaceably and quietly leave and surrender to LESSOR these premises with their appurtenances and fixtures (except signs and fixtures referred to hereinabove) in good order, condition, and repair, reasonable use and wear thereof and damage by earthquake, fire, public calamity, by the elements, by Act of God, or by circumstances over which COUNTY has no control excepted. COUNTY shall not be liable for painting the interior of the demised premises upon termination of this Lease. B.8. SUCCESSORS AND ASSIGNS: The terms and provisions of this Lease shall extend to and be binding upon and inure to the benefit of the heirs, successors, and assigns of the respective parties hereto. B.9. SEVERABILITY: In the event that any provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of any such provision does not materially prejudice either the COUNTY or LESSOR in its respective rights and obligations contained in the valid provisions of this Lease. Draft: May 5,1997 — 6 — LEASE FOR CONTRA COSTA COUNTY HEALTH SERVICES DEPARTMENT 650 PARKWAY DRIVE MARTINEZ, CALIFORNIA SECTION C: SPECIAL PROVISIONS C.1. SERVICES BY LESSOR: It is understood and agreed LESSOR shall provide certain janitorial, maintenance, construction, remodeling or like services as requested by COUNTY from time to time during the term of this Lease. COUNTY shall pay to LESSOR as additional rental one hundred percent (100%) of the costs of the service. LESSOR shall consult with COUNTY and select either licensed, insured contractors or employees of LESSOR to provide the service. LESSOR shall obtain COUNTY's prior approval on the scope, term, and cost of the contracts. COUNTY shall have the right to change the level of service from time to time by giving LESSOR thirty (30) days' prior written notice, including the right to terminate any or all service, or to require different contractors to provide the service. C.2. PROPERTY TAXES: COUNTY shall pay to LESSOR within thirty (30) days after being requested to do so by LESSOR, as additional rental, a sum equal to 100 percent (100%) of the increase, if any, in the City and/or County taxes levied against Assessor's Parcel , in any year during the term of this Lease, except COUNTY shall not pay a prorata share of any increase resulting from a change in ownership of the property. These taxes shall be prorated for the first and last years of the term hereof. C.3. INSPECTION: The LESSOR reserves the right to enter the premises by prior appointment only between-the hours of 9:00 a.m. and 4:30 p.m., Monday through Friday, holidays excepted, and to employ the proper representative or contractor in order to see that the property is being reasonably cared for, that no waste is being made, and that all things are done in the manner best calculated for the preservation of the property, and in full Draft: May 5,1997 — 7 — compliance with the terms and conditions of this Lease. CA. LIABILITY INSURANCE: 1. Self-insurance: It is understood and agreed that the COUNTY is self-insured, and the coverages described below shall be maintained under its own program and evidence of self-insurance shall be provided to LESSOR. 2. Policies: If COUNTY ceases to be self insured, COUNTY shall purchase at its sole expense and keep in force during the term of this Lease, a policy or policies of comprehensive liability insurance, including public liability and property damage occurring in, on, or about the Premises with limits of liability of not less than THREE MILLION DOLLARS ($3,000,000.00) single limit. Certificates evidencing the insurance described in this paragraph CA. shall be delivered to LESSOR by COUNTY upon termination of its self insurance program or upon commencement of the term of any sublease and upon each renewal of the insurance. LESSOR reserves the right to increase the minimum limits of coverage at intervals of no shorter than one (1)year if, in the opinion of LESSOR, said coverage is inadequate or commercially unreasonable. The policy or policies shall: A. Be issued as primary insurance and non-contributory with any insurance that may be carried by LESSOR; B. Name LESSOR as an additional insured; C. Be issued by an insurance company with a numerical rating of at least XIV and letter rating of at lease A+in the most recent edition of Best's Guide Insurance Reports; D. Provide that the insurance shall not be substantially modified or canceled unless thirty (30) days' prior written notice shall have been given to LESSOR; E. Contain deductibles in an amount no more than TWO THOUSAND DOLLARS ($2,000.00); and Draft: May 5,1997 — 8 — F. Cover the indemnity provisions of this Lease. C.5. WAIVER OF SUBROGATION: LESSOR and COUNTY shall each obtain from their respective insurers under all policies of fire, theft, public liability, worker's compensation, and other insurance maintained by either of them at any time during the term hereof insuring the building or any portion thereof, a waiver of all rights of subrogation which the insurers of one party might have against the other party, and LESSOR and COUNTY shall each indemnify the other against any loss or expense, including reasonable attorney's fees, resulting from the failure to obtain such a waiver. CA FIRE INSURANCE: COUNTY shall, at its sole cost and expense during the term of this Lease, maintain all risk insurance in the amount of$ and earthquake insurance naming LESSOR as additional insured. However, COUNTY may, at its option, have a self- insured retention at its own determination of amount. Said property insurance shall be factored annually by COUNTY's broker to maintain adequate coverage in accordance with the insurable value of the premises. In the event of any damage to or destruction of any part of the demised premises covered by said insurance, the proceeds shall be utilized for the repair, reconstruction or replacement of the damaged or destroyed portion of the demised premises to the same good order, repair and condition as it was prior to the damage or destruction. Should COUNTY become entirely self-insured, said coverages shall be maintained under its own program and evidence of self insurance shall be provided to LESSOR. C.7. RENTAL INTERRUPTION INSURANCE: COUNTY, at its sole expense, shall procure and maintain, throughout the term of this Lease, rental interruption or use and occupancy insurance to cover loss, total or partial, of the rental income from the use of the premises as the result of any of the hazards covered by the insurance required by this Lease in an amount sufficient to pay the part of the total rent hereunder attributable to the portion of the premises rendered unusable for a period of at lease one (1) year, except that such insurance may be subject to a deductible clause of not to exceed$ Any proceeds Draft: May 5,1997 — 9 — of such insurance shall be applied to abated rental and to the prepayment of rental payments as provided in this Lease. CA LENDER PROTECTIONS: LESSOR shall have the right at any time and without notice to or consent of COUNTY, to obtain a deed or deeds of trust, mortgage or mortgages or other lien or encumbrance of any nature securing payment of any amount or amounts secured in whole or in party by LESSOR's interest in the Building or this Lease or any part thereof("LESSOR'S Mortgages"). This Lease shall be subordinate to LESSOR's Mortgages, including without limitation, any and all additional mandatory or discretionary future advances thereon and any and all renewals, modifications, and consolidations, replacements and extensions thereof, whenever made or recorded; provided, however, COUNTY's right to quiet possession of the demised premises and option to purchase the demised premises during the term shall not be disturbed so long as COUNTY pays all rent and performs all of COUNTY's obligations under this Lease and is not otherwise in default. If the holder of any LESSOR's Mortgage elects to have this Lease prior to the LESSOR'S Mortgage and gives COUNTY prior written notice thereof, this Lease shall be deemed prior to the LESSOR's Mortgage without further documentation. If LESSOR's interest in the building is acquired by the holder of any LESSOR's Mortgage under a deed of trust or mortgage, or by any other purchaser at a judicial or non- judicial foreclosure sale, COUNTY shall attorn to the transferee of or successor to LESSOR's interest in the building and recognize such transferee or successor as LESSOR under this Lease. COUNTY waives the protection of any statute or rule of law which gives or purports to give COUNTY any right to terminate this Lease or surrender possession of the building upon the transfer of LESSOR's interest. C.9. ESTOPPEL CERTIFICATES: Upon LESSOR's written request, and at any time or times during the term hereof, COUNTY shall execute, acknowledge, and deliver to LESSOR or to the holder of any LESSOR Mortgage a written statement certifying:(I) that none of the terms or provisions of this Lease have been changed (or if they have been changed, stating how they have been changed); (ii) that this Lease has not been canceled or Draft: May 5,1997 — 10 — terminated; (iii) the last date of payment of rent and all other changes and the time period covered by such payments; (iv) that LESSOR is not in default under this Lease (or, if LESSOR is claimed to be in default, stating why); and (v) such other matters as may be reasonably required by LESSOR or the holder of a LESSOR Fee Mortgage to which the building is or becomes subject. COUNTY shall deliver such statement to LESSOR within ten(10) days after LESSOR's request. Any such statement by COUNTY may be given by LESSOR to any prospective purchaser or encumbrancer of the building or to any title insurer. Such purchaser, encumbrancer or title insurer may rely conclusively upon such statement as true and correct. C.10. ATTORNEYS' AND EXPERTS' FEES: If LESSOR or COUNTY brings any action or arbitration to interpret or enforce this Lease, or for damages for any alleged breach hereof, the prevailing party in any such action or arbitration shall be entitled to reasonable atttorneys' and experts' fees as awarded by the court or arbitrator, in addition to all other recoverable damages and costs. C.11. ACCOMPLISHMENT OF IMPROVEMENTS: a. LESSOR shall construct improvements per plans and specifications labeled Exhibits " " and " ," which are attached and made a part hereof. Final plans and two (2) copies of specifications of materials and equipment to be installed will be submitted to COUNTY and shall be approved by COUNTY before any construction work is commenced. COUNTY will reimburse LESSOR for the cost of the final plans and specifications, not to exceed $ , within thirty (30) days of being requested to do so. After approval by COUNTY, LESSOR shall not make or cause to be made any changes in the plans or specifications without the prior written consent of COUNTY. LESSOR shall make changes, additions or deletions upon written Change Order from COUNTY and such items shall be charged at a rate not to exceed direct cost, plus percent (_%). COUNTY hereby reserves the right to inspect during construction of improvements as Draft: May 5,1997 specified herein, but will not interfere with LESSOR's work and will notify LESSOR of any requests, recommendations or discrepancies. b. LESSOR shall commence construction within thirty (30) days of the effective date of this Lease and the improvements shall be complete, including final inspections and issuance of a Certificate of Occupancy, by If actual construction has not commenced within sixty (60) days of the effective date of this Lease, COUNTY may, upon written notice to LESSOR, cancel this Lease without cost or obligation to COUNTY. In the event LESSOR cannot deliver the premises on or before as provided hereinabove, rent shall be prorated as of the first workday after the improvements are completed and accepted by the COUNTY. However, if the improvements are not completed by , COUNTY may, at its sole discretion, terminate the Lease by giving LESSOR written notice, with no cost or obligation on the part of COUNTY. c. Upon LESSOR's written request, the dates in this paragraph shall be extended by the time lost as a result of work stoppages, strikes, shortages of material or Act of God; provided such time lost is entirely beyond LESSOR's control. C.12. COMPLETION AND OCCUPANCY: The following procedure shall apply for completion and acceptance of the remodeling of the existing building, hereinafter called im- provements. a. Upon LESSOR's completion of improvements and written notice thereof to the County Lease Manager, COUNTY shall inspect within three (3) workdays after receiving the notice and shall accept or reject the improvements within six (6) workdays of receipt of such written notice. b. The sole basis for rejection of the improvements shall be nonconformity with plans and specifications or applicable laws or ordinances. In the event COUNTY rejects the improvements, COUNTY shall provide LESSOR with Draft: May 5,1997 — 12 — a reasonably detailed list of the deficient portions or details of the improvements. C. LESSOR shall immediately commence to complete or correct the rejected portion. e. Acceptance of said improvements shall not constitute a waiver of any warranty of any defect in regard to workmanship or material of the improvements on said premises. C.13. OPTION TO PURCHASE: a. As part of the consideration for this Lease, LESSOR hereby grants to COUNTY or its assignee the exclusive right and privilege to purchase the real property of which the premises form a part described as follows: Purchase may be made at any time during the term of this Lease for an amount which is the capitalized value of the triple net monthly rent which is in effect during the month escrow closes, using a capitalization rate of %. For example, if escrow closes on , and the triple net monthly rent for of 1997 is $____, then the purchase price would be $ times 12 = $ X—%= $ b. To exercise the purchase option, COUNTY shall give NINETY(90) days prior written notice to LESSOR. C. LESSOR shall deliver to COUNTY an executed grant deed in recordable form conveying the premises. Title to the premises shall be conveyed by LESSOR to COUNTY free and clear of all liens, encumbrances, covenants, conditions, restrictions, easements, and rights of way of record, and other matters of record, except current taxes, a lien not yet delinquent, and those portions of current assessments not yet due and payable. d. The sale shall be consummated through an escrow to be opened after the option notice has been given to LESSOR. Escrow shall be deemed to be Draft: May 5,1997 — 13 — opened under this paragraph on the date the escrow instructions are drawn. The parties shall execute all documents required by escrow holder as long as they are consistent with the provisions of this paragraph. Escrow shall close approximately sixty (60) days after the option notice has been given to LESSOR. Escrow shall be deemed to be closed pursuant to this paragraph on the date the grant deed is recorded. e. At the close of escrow, escrow holder must be prepared to issue a CLTA Standard Coverage Policy of Title Insurance in the amount of the purchase price insuring title to the premises vested in COUNTY, subject only to the matters set forth in subparagraph above. f. Rent and taxes shall be prorated as of close of escrow. g. Transfer taxes and recording fees on the deed, the cost of the title policy referred to in paragraph , charges of escrow, and all other closing costs shall be paid by COUNTY. h. If the premises are partially destroyed between the date COUNTY exercises the option to purchase and the date set for the close of escrow, LESSOR shall restore the premises. The partial destruction shall not affect this option, the date set for the close of escrow or the purchase price of the premises. If the lease terminates, this option shall also terminate unless COUNTY otherwise agrees in writing to complete the purchase. I. On close of escrow,this Lease shall terminate and the parties shall be released from all liabilities and obligations under this Lease. C.14. RECORDING: A Memorandum of Lease shall be executed and recorded by the parties hereto. This will be in lieu of recording the entire instrument. Draft: May 5,1997 — 14 — OPTION TO LEASE TABLE OF CONTENTS 650 Parkway Drive Martinez, California Health Services Department 1. PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. PURPOSE: PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4. FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5. EXTENSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6. OBLIGATIONS OF OPTIONOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 8. EXHIBITS AND ATTACHMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 9. EXERCISE OF OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 10. WRITTEN AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 11. TIME IS OF THE ESSENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 12. SIGNATURE BLOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 EXHIBITS EXHIBIT A: PREMISES EXHIBIT B: PRELIMINARY SITE PLAN EXHIBIT C: DRAFT LEASE OPTION TO LEASE FOR CONTRA COSTA COUNTY HEALTH SERVICES DEPARTMENT 650 PARKWAY DRIVE MARTINEZ, CALIFORNIA 1. PARTIES: Effective on , OVERAA AND COMPANY, hereinafter called "OPTIONOR", and the COUNTY OF CONTRA COSTA, a political subdivision of the State of California, hereinafter called "COUNTY', mutually agree and promise as follows: 2. PURPOSE: PREMISES: OPTIONOR has proposed to design and build an office building on a site commonly known and designated as 650 Parkway Drive, as further described on Exhibits A and B which are attached hereto and made a part hereof, and to lease said site with improvements to COUNTY for use and occupancy by the Health Services Department, in accordance with the Lease labeled Exhibit C which is attached hereto and made a part hereof. Additional architectural planning is necessary to determine the scope of the project. The purpose of this Option is to secure the property and cover the carrying costs of OPTIONOR for the property while plans and specifications are developed. 3. TERM: The term of this Option to Lease shall be four (4) months, commencing on May 1, 1997 and ending on August 31, 1997. 4. FEE: COUNTY shall pay to OPTIONOR as a fee for the Option the monthly amount of FOUR THOUSAND ONE HUNDRED TWENTY FIVE AND N0/100 DOLLARS ($4,125.00), payable in advance on the tenth day of each month during the term of this Option. Payments shall be mailed to: 200 Parr Boulevard, Richmond, CA 94801. 5. EXTENSION: This Option to Lease may, at the option of the COUNTY, be extended for two (2)months upon the same terms and conditions, by providing written notice to OPTIONOR. - 1 - 6. OBLIGATION OF OPTIONOR: During the term of this Option, OPTIONOR agrees to secure and maintain an Option to Purchase the premises at 650 Parkway Drive, Martinez from Sierra West Properties, for an amount not to exceed of FIVE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($550,000.00). 7. NOTICES: All notices given hereunder shall be in writing and shall be deemed to have been given if personally delivered or deposited in the United States mail postage prepaid, certified or registered, return receipt requested, and addressed to the other party as follows or as otherwise designated by written notice hereunder from time to time: To OPTIONOR: Jerry Overaa 200 Parr Boulevard Richmond, CA 94801 To COUNTY: Contra Costa County General Services Department Lease Management Division 1220 Morello Avenue, Suite 100 Martinez, CA 94553-4711 8. EXHIBITS AND ATTACHMENTS: Exhibit A, a written description of the premises, and Exhibit B, a preliminary site plan, and Exhibit C, Draft Lease, are attached to this Option and are made a part hereof. 9. EXERCISE OF OPTION: To exercise the Option to Lease, COUNTY shall give ten (10) written notice to OPTIONOR. - 2 - 10. WRITTEN AGREEMENT: Neither party has relied on any promise or representation not contained in this Lease. All previous conversations, negotiations, and understandings are of no further force or effect. This Lease may be modified only by a writing signed by both parties. The headings of the paragraphs are for convenience only and shall not be considered in construing the intent of this Option to Lease. 11. TIME IS OF THE ESSENCE of each and all of the terms and provisions of this Option to Lease. 12. SIGNATURE BLOCK COUNTY OPTIONOR COUNTY OF CONTRA COSTA, a Overaa and Company political subdivision of the State of California By By Director of General Services By RECOMMENDED FOR APPROVAL: By Deputy County Administrator By Deputy General Services Director By Lease Manager APPROVED AS TO FORM: VICTOR J. WESTMAN, County Counsel By Deputy CGB 650Pkway.Opt - 3 -