Agenda Item No. 9A October 11, Honorable Mayor and City Council Attention: Laura C. Kuhn, City Manager

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1 Agenda Item No. 9A October 11, 2011 TO: FROM: SUBJECT: Honorable Mayor and City Council Attention: Laura C. Kuhn, City Manager Mike Palombo, Economic Development Manager RESOLUTION ADOPTING AN OPERATING AGREEMENT BETWEEN THE CITY OF VACAVILLE AND THE BATARSE FAMILY TRUST REGARDING THE OPERATION AND MAINTENANCE OF AN L.E.D. READERBOARD SIGN IN THE VACAVILLE AUTO MALL DISCUSSION: The Batarse Family Trust, owner of the Auto Mall Readerboard Sign (Readerboard) is requesting that the Council authorize the termination of the existing Operating and Maintenance Agreement (O&M) and replace it with a new version. This agreement would expand the scope of advertising allowed to include a limited set of businesses, activities, and products that are available outside the City of Vacaville. Originally, advertising on the Readerboard was limited solely to auto dealers located in the Auto Mall. Subsequently, the Council expanded the allowed advertising to include all businesses located in Vacaville. The applicant has stated that even with the expansions of permitted advertising, the income derived selling time on the Readerboard limited to businesses within the City is insufficient to cover the cost of operating and maintaining the sign. The applicant is seeking to broaden its marketing prospects by being allowed to sell advertising to businesses, activities, and products outside the City that do not compete with those in Vacaville. The new O&M Agreement is primarily focused on what advertising is permitted. It does not alter the design or appearance of the existing Readerboard. The new O&M Agreement does increase the City s share of time on the Readerboard from 10% to 30%. In addition to using the Readerboard for announcements and other messages, a portion of the advertising time allocated to the City could be used to increase revenues by highlighting significant sales and transit occupancy tax producers. This past June, an Operating and Maintenance Agreement for a Readerboard was approved for the Nut Tree. While the proposed and recently enacted O&M Agreements are different in a number of ways, the limitations on the types of advertising allowed are nearly identical. The similarity is intentional and was meant to establish a precedent regarding the limitations on advertising that will be applied to future freeway signs. The proposed Agreement in its entirety is attached for review. The central feature of the new O&M Agreement is found in Sections 3. ADVERTISING PERMITTED/NOT PERMITTED and Section 4. ADVERTISING PROHIBITED. Those sections establish what advertising is permitted and what is not allowed. A key feature of the O&M Agreement is the concept of a restricted zone where advertising would be allowed only on a limited basis. The restricted zone is the area within 20 miles of the City limits. Advertising Permitted: Business located within the City of Vacaville: example: Best Buy. Businesses located both within the city limits and also within a twenty (20) mile restricted zone, measured outward from the Vacaville city limits. Such advertising shall not identify business addresses or location outside of the boundary of the City of Vacaville. example: McDonald s.

2 Businesses located beyond the 20 mile restricted zone, that are not prohibited under Section 4 (alcoholic beverages, tobacco products, adult orientated products and services and gambling) example: Northstar- at-tahoe. Advertising prohibited: Businesses, products, and services not located in Vacaville and within the 20-mile exclusion zone. example: Hopkins Acura of Fairfield Brands, businesses, products and/or services, such as alcoholic beverages; tobacco products; adult orientated products and services and businesses such as casino s and race tracks where gambling is the predominant activity. This prohibition applies within and outside of the city limits. example: River Rock Casino. FISCAL IMPACT: There is no impact to the General Fund as a result of this action. RECOMMENDATION: By simple motion, that the City Council of the City of Vacaville adopt the subject resolution. Attachment: Agreement

3 RESOLUTION NO. RESOLUTION ADOPTING AN OPERATING AGREEMENT BETWEEN THE CITY OF VACAVILLE AND THE BATARSE FAMILY TRUST REGARDING THE OPERATION AND MAINTENANCE OF A L.E.D. READERBOARD SIGN IN THE VACAVILLE AUTO MALL WHEREAS, the Batarse Family Trust (Applicant) is the owner of property located at 661 Orange Drive, which is within the Vacaville Auto Mall; and WHEREAS, in September of 2001, the City of Vacaville (City) approved the installation of a readerboard sign on the aforementioned property, and WHEREAS, the applicant constructed the readerboard in compliance with the requirements of the City; and WHEREAS, in October of 2002 the applicant requested that the City Council (Council) allow for offsite advertising for businesses located in Vacaville and the Council approved that request with a condition that a operating agreement be approved by the Council; and WHEREAS, on October 25, 2002, the Council approved an operating agreement, and WHEREAS, the Applicant is requesting that the existing Operating and Maintenance Agreement be terminated and replaced by a new Operating and Maintenance Agreement, that would among other things allow limited additional advertising for businesses, activities, events that operate outside the City of Vacaville; and WHEREAS, the Applicant has negotiated with City staff a proposed new Operation and Maintenance Agreement that includes additional benefits to the City and the applicant. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Vacaville that the Operating Agreement approved by the Council on October 25, 2002 is terminated and hereby adopts the subject Operating and Maintenance Agreement and directs the City Manager or her designee to execute this Agreement on its behalf. I HEREBY CERTIFY that the foregoing resolution was introduced and passed at a regular meeting of the City Council of the City of Vacaville, held on the 11 th day of October, 2011, by the following vote: AYES: NOES: ABSENT: ATTEST: Michelle A. Thornburgh, City Clerk

4 AGREEMENT BETWEEN CITY OF VACAVILLE AND THE BATARSE FAMILY TRUST REGARDING THE OPERATION AND MAINTENANCE OF A READERBOARD LED SIGN IN THE VACAVILLE AUTO MALL AT VACAVILLE, CALIFORNIA THIS AGREEMENT is made as of this day of, 2011, by and between the CITY OF VACAVILLE, a municipal corporation organized under the laws of the State of California (hereinafter "CITY") and THE BATARSE FAMILY TRUST (hereinafter APPLICANT ). R E C I T A L S A. APPLICANT is the owner of property located at 661 Orange Drive, within the City of Vacaville, California (hereinafter Property ). B. On or about September 18, 2001, CITY approved APPLICANT S application for a policy plan amendment and design review modification to allow for the installation of a Readerboard sign (hereinafter LED Sign ) on the Property, subject to certain conditions of approval as more fully set forth in CITY S Design Review File No (hereinafter Design Review ). C. Condition of approval number 6.e. of the Design Review (hereinafter Condition 6.e. ) provides that advertising shall be on-premise only for the services rendered or the goods produced or sold within the Vacaville Auto Center, which may include automobile dealers in adjacent business parks, consistent with the California Business and Professions Code. D. Subsequent to the approval of the Design Review, APPLICANT requested that Condition 6.e. be modified to allow for advertising on the LED Sign by businesses located within the Vacaville city limits. 10/04/2011 1

5 E. On October 8, 2002, the City Council of the City of Vacaville approved the requested modification to Condition 6.e. to allow for off-site advertising on the LED Sign when authorized through an operating agreement approved by the City Council. F. On October 25, 2002, APPLICANT and CITY entered into the operating agreement, entitled Agreement Between the City of Vacaville and Anthony A. Batarse Jr. Regarding the Operation and Maintenance of a Readerboard Sign at 661 Orange Drive, Vacaville, California (hereinafter Operating and Maintenance Agreement ). G. APPLICANT and CITY now wish to modify the Operating and Maintenance Agreement by terminating that Agreement and replacing it with this AGREEMENT. NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: SECTION 1. OPERATING AND MAINTENANCE AGREEMENT TERMINATED. The Operating and Maintenance Agreement between BATARSE and CITY dated the 25 th day of October, 2002 is terminated SECTION 2. LED SIGN ADVERTISING STANDARDS AND CONDITIONS. The LED Sign shall be a High Definition, minimum 33 millimeter LED screen quality ( LED Sign ). As required by State law, illumination of the LED Sign shall not impair the vision of any driver, or interfere with any driver s operation of a motor vehicle. No moving, flashing or animated display shall be permitted but tickertape type messages will be allowed. Messages and displays on the LED Sign shall meet all of the requirements of the California Business and Professions Code including, but not limited to, display and illumination. The LED Sign shall be for advertising purposes, subject to the standards and conditions set forth in Sections 3 and 4, below. The LED Sign shall conform to the dimensions shown in Exhibit A, attached hereto and made part of this AGREEMENT, with the exception that the box sign as depicted in Exhibit A between the structural legs of the LED Sign shall not be required. SECTION 3. ADVERTISING PERMITTED/NOT PERMITTED. 10/04/2011 2

6 A. BUSINESSES LOCATED WITHIN THE CITY. Advertising is permitted for businesses that are located and actively doing business within the Vacaville city limits, as may be amended from time to time ( City Limits ). B. BUSINESSES WITH LOCATIONS WITHIN THE CITY AND WITHIN TWENTY MILES OF THE CITY. Advertising is permitted for businesses that are located and actively doing business within both the City Limits and within twenty-miles of the City Limits, provided the addresses or locations of the latter are not specified or identified on the LED Sign. For the purpose of this AGREEMENT, the area within twenty miles of the City Limits shall be referred to as the Restricted Zone. C. BUSINESSES WITH LOCATIONS WITHIN THE RESTRICTED ZONE. Advertising is not permitted for businesses located within the Restricted Zone that do not also have a location within the City Limits. D. BUSINESSES WITH LOCATIONS NOT WITHIN THE CITY AND THE RESTRICTED ZONE. Advertising is permitted for businesses not located within the City Limits or the Restricted Zone, e.g. Northstar at Tahoe ski resort. The addresses and locations of such businesses may be specified or identified on the LED Sign. E. BRAND NAMES. Advertising of brand names is permitted on the LED Sign, provided such advertisements do not specify or identify the address or location where such brand products or services are available. The address or location, however, may be specified or identified if the brand name is sold by a business located and actively doing business within the City Limits. F. SPORTING AND ENTERTAINMENT EVENTS AND VENUES. Advertising is permitted for regional, sporting and entertainment events and venues, provided such events or venues are not associated with or sponsored by businesses or entities engaged in any of the prohibited activities specified in Section 4. of this AGREEMENT. By way of example, permitted events and venues would include professional sporting events, such as San Francisco Giants and Sacramento River Cats 10/04/2011 3

7 baseball games; regional sporting events, such as Infineon Raceways NASCAR automobile races; concerts, art exhibitions, theatrical productions, and fairs; and venues such as AT&T Park, the Oakland Coliseum, Arco Arena, the Vacaville Performing Art Center, Cal Expo, and the Solano County Fairgrounds. Examples of prohibited events and venues would include concerts, boxing matches, and other events sponsored by or held at casinos, wineries, or breweries, SECTION 4. ADVERTISING PROHIBITED. Advertisements for the following businesses, products, services and brand names, at all times are prohibited on the LED Sign. A. Alcoholic beverages, such as beer, wine, liquor, and other intoxicating beverages. B. Tobacco products, such as cigarettes, cigars, chewing tobacco, and pipe tobacco. C. Adult-oriented products and services, such as adult books, magazines, videos, entertainment, and services. D. Gambling activities and establishments, such as casinos, card rooms, and horseracing tracks where gambling is the predominant activity, not including bingo games held within the City Limits pursuant to Section of the California Penal Code. SECTION 5. CITY-CONTROLLED ADVERTISING. Thirty percent (30%) of the LED Sign s total available display time (on each side of the LED Sign) shall be made available to CITY for its sole use. CITY, at its sole discretion, shall determine the types of advertisements, announcements, public service messages, and displays to be placed at such time period. CITY shall provide the necessary media to the APPLICANT for placement on the LED Sign. APPLICANT shall place on the LED Sign in a timely manner such announcements, messages and displays as CITY may provide to APPLICANT. APPLICANT shall display such advertisements, announcements, public 10/04/2011 4

8 service messages, and displays at no charge to CITY or its designee. APPLICANT shall display such advertisements, announcements, messages and displays evenly during the time the LED Sign is operating and shall not group together or limit such displays to a specific time of day. SECTION 6. NO OTHER ADVERTISING PERMITTED. Except as expressly provided hereunder, no other advertising, announcements, messages or displays shall be permitted or displayed on the LED Sign. SECTION 7. INTERPRETATION AND MODIFICATION OF RESTRICTIONS. CITY s City Manager or his/her designee shall be solely responsible for interpreting Sections 3 and 4 of this AGREEMENT and is empowered to modify the terms of said Sections when requested by the APPLICANT. The City Manager may grant such requests at his/her sole discretion but shall not grant such modifications unless he/she finds that such modifications are in the best interests of CITY. SECTION 8. OTHER RESPONSIBILITIES. At all times hereunder, APPLICANT shall: A. SIGN MAINTENANCE. Maintain the LED Sign in good working order, condition, and appearance. B. TAXES, INSURANCE, UTILITIES AND OTHER CHARGES. Pay all taxes, insurance, utilities, and other charges associated with the operation and maintenance of the LED Sign. SECTION 9. MODIFICATION OF SIGNS. APPLICANT shall make no modification to the LED Sign without CITY s prior written consent by its City Manager or his/her authorized designee. Modifications shall include, but not be limited to, modifying the illumination system currently existing on the LED Sign as approved by CITY in the Design Review. SECTION 10. RECORD OF ADVERTISEMENTS. APPLICANT shall maintain a written record of all advertisements, announcements, messages and displays and the times they appeared on the LED Sign. In order to verify compliance with the 10/04/2011 5

9 requirements of this AGREEMENT, APPLICANT shall provide to CITY, upon CITY S written request, a report listing the advertisements, announcements, messages and displays and the times they appeared on the LED Sign. SECTION 11. COMPLIANCE WITH OTHER LAWS, RULES, AND REGULATIONS. At all times hereunder, APPLICANT shall operate and maintain the LED Sign in compliance with all applicable laws, regulations, permits, and approvals including, without limitation: (i) all CITY ordinances and regulations, (ii) Caltrans regulations (iii) all relevant provisions of the California Business and Professions Code and California Vehicle Code including, but not limited to, those relating to sign displays and illumination, and (iv) all land use permits and approvals issued for the LED Sign, including but not limited to, the conditions of approval set forth in the Design Review.. SECTION 12. TERMINATION FOR CAUSE. APPLICANT acknowledges and agrees that CITY may monitor the LED Sign to determine APPLICANT s compliance with the provisions of this AGREEMENT. In the event APPLICANT fails to comply with any provision of this AGREEMENT, CITY may provide written notice to APPLICANT of such non-compliance. If APPLICANT does not correct the failure within thirty (30) business days from the issuance of such notice by CITY, CITY s City Council shall have the right to terminate this AGREEMENT at a duly-noticed meeting of the City Council at which time APPLICANT shall have the right to provide testimony and evidence on its behalf relating to its compliance or non-compliance with the provisions of this AGREEMENT.. SECTION 13. TERMINATION BY MUTUAL CONSENT. This AGREEMENT may be terminated upon the mutual written consent of the parties. SECTION 14. TERM OF AGREEMENT. This AGREEMENT shall terminate on the 10 th anniversary of its execution, unless extended by the mutual consent of the parties. SECTION 15. EFFECT OF TERMINATION. In the event that this AGREEMENT is terminated pursuant to Sections 11, 12, or 13 above, such termination shall apply only to this AGREEMENT only and not to the policy plan amendment or the Design Review 10/04/2011 6

10 described in Recital B, above (i.e. termination shall apply only to APPLICANT S right to use the LED Sign for off-site advertising as provided herein). SECTION 16. NON-OPERATION. Should the LED Sign cease operation for a period of thirty (30) or more continuous days, APPLICANT agrees, upon receiving written notice from CITY, to either restore the LED Sign to operation or remove it within one hundred and twenty (120) days of such notice, in which case APPLICANT shall obtain all necessary permits and approvals that may be required for such removal. SECTION 17. OTHER TERMS AND CONDITIONS. All other terms and conditions of the Design Review not expressly modified by this AGREEMENT shall remain in full force and effect. SECTION 18. NOTICES. All notices and other communications required or permitted to be given under this AGREEMENT shall be in writing and shall be personally served or mailed, certified mail postage prepaid and addressed to the respective parties as follows: TO CITY: City Manager City of Vacaville 650 Merchant Street Vacaville, CA TO APPLICANT Batarse Family Trust International Blvd. Oakland, CA Notice shall be deemed effective on the date personally delivered or, if mailed, three (3) days after deposit in the mail. SECTION 19. SUCCESSORS AND ASSIGNS. The covenants, conditions, terms, and provisions of this AGREEMENT shall inure to the benefit of and apply to and bind the heirs, successors, executors, administrators, and assigns of the parties. SECTION 20. GOVERNING LAW. The law governing this AGREEMENT shall be that of the State of California. 10/04/2011 7

11 SECTION 21. WAIVER. APPLICANT agrees that waiver by CITY of any breach or violation of any term or condition of this AGREEMENT shall not be deemed to be a waiver of any other term or condition contained herein or a waiver of any subsequent breach or violation of the same or any other term or condition. SECTION 22. VENUE; ATTORNEY FEES. In the event that suit shall be brought by either party to this AGREEMENT, the parties agree that venue shall be exclusively vested in the state courts of the County of Solano and that the prevailing party shall be entitled to recover from the other party the prevailing party s reasonable costs of litigation including, without limitation, attorney fees, expert fees, and other related costs and expenses reasonably incurred. SECTION 23. INTERPRETATION. Each party has reviewed this AGREEMENT and any question of doubtful interpretation shall not be resolved by any rule or interpretation providing for interpretation against the drafting party. This AGREEMENT shall be construed as if both parties drafted it. The captions and headings contained herein are for convenience only and shall not affect the meaning or interpretation of this AGREEMENT. SECTION 24. MEMORANDUM OF AGREEMENT. Either party shall have the right to record a memorandum of this AGREEMENT with the Solano County Recorder s Office, in substantially the form set forth in Exhibit B of this AGREEMENT. SECTION 25. SIGNATOR S WARRANTY. Each party warrants to each other party that he or she is fully authorized and competent to enter into this AGREEMENT in the capacity indicated by his or her signature and agrees to be bound by this AGREEMENT. SECTION 26. PRIOR AGREEMENTS AND AMENDMENTS. This AGREEMENT represents the entire understanding of the parties as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to 10/04/2011 8

12 those matters covered hereunder. This AGREEMENT may only be modified by a written amendment duly executed by the parties to this AGREEMENT. WITNESS THE EXECUTION HEREOF on the day and year first hereinabove written. "CITY" APPROVED AS TO FORM: CITY OF VACAVILLE, a municipal corporation GERALD L. HOBRECHT City Attorney By: LAURA C. KUHN City Manager APPLICANT THE BATARSE FAMILY TRUST By: ANTHONY A. BATARSE JR. Trustee 10/04/2011 9

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14 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Vacaville 650 Merchant Street Vacaville, CA Attn: City Clerk A.P.N EXHIBIT B MEMORANDUM OF AGREEMENT MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is made as of this day of, 2011, by and between the CITY OF VACAVILLE, a municipal corporation organized under the laws of the State of California (hereinafter "CITY") and THE BATARSE FAMILY TRUST (hereinafter APPLICANT ). 1. On 2011, CITY and APPLICANT entered into an agreement entitled Agreement Between the City of Vacaville and the Batarse Family Trust Regarding the Operation and Maintenance of a Readerboard LED Sign in the Vacaville Auto Mall at Vacaville, California ( Agreement ). 2. The Agreement pertains to the terms and conditions for the operation and maintenance of a Readerboard LED sign on such property. IN WITNESS WHEREOF, the parties have executed this Memorandum of Agreement as of the day and year first above written. APPROVED AS TO FORM: CITY" CITY OF VACAVILLE, a municipal corporation By: By: GERALD L. HOBRECHT LAURA C. KUHN City Attorney City Manager APPLICANT BATARSE FAMI LY TRUST By: ANTHONY A. BATARSE JR. Trustee 10/04/