HomeMy WebLinkAboutMendocino Ag, LLC 2019-03-13COU No. 4,Cel G1 - 1Ik=-
300 Plant Road Vineyards
FEE PROPOSAL - Vineyard Lease and Management Agreement
Recitals
1. Landlord, City of Ukiah, is the owner of approximately 35 acres of real property located at
300 Plant Road in the County of Mendocino, California, known as "300 Plant Road Vineyards",
referred to herein as Vineyard.
2. Tenant, Mendocino Ag, LLC, wishes to lease and manage from landlord as approximate
28.25 -acre portion of this real property, specifically the vineyard currently planted to the Pinot
Noir and Chardonnay variety of grapes.
3. Tenant wishes to farm and manage the Vineyard and perform such services, all on the
terms and conditions set forth in this Agreement.
Now therefore, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
Agreement
4. Term and Duration. This lease Agreement shall commence on March 2, 2019 and shall
terminate on December 31, 2019; provided, however, unless written notice of termination shall
have been given by one party to the other by December 31st of each year beginning in 2019, then
this Agreement shall be extended automatically for one additional harvest year. If one of the
parties hereto gives written notice of termination to the other party, then this Agreement shall
terminate on December 31' following the first (1St) harvest following the date of notice.
Effectively this is a two-year initial lease term with annual renewal unless notice of termination is
provided by either party. One year required to terminate Agreement, i.e. 2019 notification for
2020 post-harvest termination.
5. Rent & Operating Expenses. Tenant shall own the crop during the entire Term and
Duration lease term. The Tenant will be responsible for selling the crop and paying for all the
direct farming expenses. The Landlord will be responsible for all the property expenses (such as
property tax expense, insurance, building repairs and maintenance, etc.). The rent paid to
Landlord will be ten percent (10%) of the gross annual winegrape sales during the Term and
Duration of the lease. Tenant shall retain ninety percent (90%) of the gross annual winegrape
sales during the Term and Duration of the lease. Landlord's rent will be paid on March 1St of the
year immediately following harvest of the Vineyard.
6. Use and Occupancy. The Landlord hereby leases to the Tenant, to use for viticulture
purposes.
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7. Utilities. Tenant shall pay all costs in connection with Tenant's operations upon the
Vineyard, including but not limited to costs of preparing the Vineyard for planting of crops,
production costs, costs of tools and labor, electricity and other utilities, and costs of irrigation.
8. Labor, Power, Machinery. Landlord agrees to furnish the Vineyard as described above.
Tenant agrees to furnish all labor, power, machinery and movable equipment and all related
operation and maintenance expenses to operate the Vineyard except Landlord's Equipment. At
this time, the Landlord has no equipment.
9. Repairs of Equipment. Tenant is responsible for maintenance including but not limited to
fuel (gas, propane or diesel).
10. Taxes and Impositions. Landlord covenants and agrees to pay, prior to delinquency, all
real estate taxes, governmental impositions, special assessments and general assessments which
are levied or assessed against the Vineyard and which become payable during the term of this
Lease.
11. Crop Insurance. Crop Insurance in connection with the Premises and Tenant's operations
thereon shall be maintained as follows: Tenant shall pay the crop insurance premium cost.
12. Workers Compensation and Liability Insurance. Tenant shall be responsible for and
provide workers' compensation and public liability insurance insuring Landlord, and its respective
officers, directors, shareholders, employees, agents, and representatives, against any liability for
accidents occurring on the Vineyard or for any injury or damage of any nature claimed to have
resulted from or in any way connected with the activities of the person or entity insured in
connection with the operation of the Vineyard in amounts not less than $1,000,000 for each
occurrence. Tenant shall also direct that its contractors or subcontractors employed in the
operations of the Vineyard carry liability insurance and shall require and maintain in its files
written documentation of such coverage. Tenant shall provide worker's compensation insurance
insuring its employees engaged in the operation of the Vineyard under this Agreement. Tenant
shall also direct that its contractors or subcontractors employed in the operations of the Vineyard
carry worker's compensation insurance for the benefit of their employees, and shall require and
maintain in its files, with copies to Landlord, written documentation of such coverage.
13. Limitation on Landlord Liability. Subject to the provisions of this Lease, Tenant
covenants and agrees that during the term of this lease, Landlord shall not be liable or responsible
for damages for any personal injury or injuries, death, damage or loss to any persons or property
that may be suffered or sustained on or about the Vineyard or any part thereof and which arise from
Tenant's failure to keep the Vineyard in good condition and repair or from the use or occupancy of
the Vineyard by Tenant or its agents, contractors, employees, or invitees.
13. Improvements. Without the prior written consent of Landlord in its sole discretion,
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Tenant shall not make or erect on the Vineyard or on any portions thereof, any building,
improvement, structure or appurtenances thereto.
14. Compliance with Laws. During the Lease Term, Tenant shall comply with all applicable
laws, ordinances, orders, rules, regulations and requirements of Federal, State, County, City, and
Municipal Governments, departments, bureaus, boards, commissions and officials with respect to
the premises, the improvements thereon or the use or occupancy thereof. Tenant shall have the
right, after prior written notice to Landlord, to contest by appropriate legal proceedings (which
shall be conducted diligently and in good faith in the name of Landlord or Tenant or both), and
without cost or expenses to Landlord, the validity or applicability of any law, ordinance, order,
rule, regulation or requirement referred to in Section 18, and Tenant shall have the right to delay
observance thereof and compliance therewith until such contest is finally determined and is no
longer subject to appeal, provided that observance and compliance therewith pending the
prosecution of such proceeding may be legally delayed without subjecting Landlord to any
criminal liability or fine.
15. Tenant's Obligations. Tenant shall keep the Vineyard in good order, condition and repair
throughout the Lease Term. On the last day of the Lease Term, or on sooner termination of this
Lease, Tenant shall surrender the Vineyard to Landlord in good and sound condition, ordinary
wear and tear excepted, clean and free of debris.
16. Repairs. Repairs to the Vineyard, as may be required to maintain the Vineyard in good
and safe condition, will be the responsibility of Tenant.
17. Farming. In farming and managing the Vineyard, Tenant agrees to perform or cause
to be performed in a timely, efficient and economical manner, all acts and services which
reasonably may be necessary or desirable in order to ensure that the Vineyard is cared for,
maintained and operated as a winegrape vineyard. Tenant hereby represents and warrants that it
has, or will obtain, all necessary licenses and permits to perform all services and tasks envisioned
hereunder.
In performing its duties and obligations hereunder, Tenant shall:
a. Follow the viticultural requirements reasonably requested by Owner to produce
fruit of premium quality and fully developed varietal character;
b. Prune, sucker, thin and leaf pull the Vineyard;
c. Irrigate, fertilize and cultivate the Vineyard;
d. Control weeds, diseases and pests in the Vineyard;
e. Care for and maintain wells, pumps, pipelines, irrigation systems and other
improvements on the Vineyard;
f. Harvest the grapes grown on the Vineyard;
g. Provide labor, machinery, equipment and materials reasonably required or useful to
manage the Vineyard to accomplish the foregoing;
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h. Store and use pesticides, fertilizers, and other chemicals, and dispose of containers
in accordance with state and federal regulations and recommendations. Furnish
the Landlord a written, field by field, record of the amounts, kinds, and dates of
applications of pesticides and fertilizers;
i. Not store motor vehicles, tractors, fuel, and chemicals on the Vineyard in violation
of restrictions in the Landlord's insurance policies.
18. Authority of Tenant. Tenant shall have general power and authority to perform its duties
and obligations hereunder, and to act in all matters relating to or concerning the care,
maintenance and operation of the Vineyard as a winegrape vineyard.
19. Tenant's Employment of Employees. Tenant shall be solely responsible for selecting and
hiring its own employees and for their supervision, direction and control. Moreover,
Tenant shall be solely responsible for setting wages, benefits, hours and working
conditions for such employees; for furnishing, during the entire period of this Agreement,
worker's compensation insurance coverage; for paying wages and social security; for
paying unemployment insurance and disability insurance contributions; and for
withholding taxes with respect to such employees.
20. Sole Agricultural Employer. Tenant acknowledges and agrees that Tenant is the sole
agricultural employer of persons engaged to perform agricultural services pursuant to this
Agreement. In performing its duties and obligations under this agreement, Tenant shall
direct the operation of its labor and equipment in all respects and shall determine the
method, means and manner of its performance.
21. Emergencies. Notwithstanding the fact that Tenant may be required to obtain the consent
of Landlord or Landlord's designated agent under this agreement before taking certain
actions, in the event emergency circumstances arise with respect to the vineyard which
would require prompt action on the part of a reasonably prudent vineyard farmer, and in the
event that time does not reasonably permit the obtaining of any required consent hereunder
or such consents otherwise are not reasonably obtainable, Tenant may take all actions
which under the circumstances would be taken by a reasonably prudent vineyard farmer to
prevent or mitigate damage, and any such actions shall be taken in accordance with the
standards set forth herein.
22. Events of Tenant Default. The following shall constitute events of default ("Events of
Default") under this Lease:
a. Tenant shall fail to make payment of Rent payable by Tenant under the terms of this
Lease by March 1St of the year immediately following harvest of the Vineyard;
b. Tenant shall fail to perform any other agreement or covenant of Tenant under this
Lease and Tenant shall fail to cure such default within thirty (30)
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days after written notice thereof from Landlord; provided, however, if such default
may not be reasonably cured by Tenant within such thirty (30) day period, then no
Event of Default shall occur hereunder provided Tenant commences cure within
such thirty (30) day period and thereafter diligently pursues cure to completion;
c. Tenant shall make any general arrangement or assignment for the benefit of
creditors, any petition shall be filed by or against Tenant under any chapter of the
Federal Bankruptcy Code, or any successor statute thereto, or Tenant shall be
adjudicated as a bankrupt or insolvent, or a receiver or trustee shall be appointed to
take possession of all or substantially all of the assets of Tenant, or any other action
shall be taken or suffered by Tenant under any State or Federal insolvency or
bankruptcy law.
24. Landlord's Remedies. Upon the occurrence of any Event of Default, Landlord, with
notice or demand, may at its option terminate Tenant's right to possession of the Premises
on account of such breach.
25. Assignment. Tenant may not assign its interest in this Lease unless it obtains Landlord's
prior written consent, which consent shall not be unreasonably withheld; provided,
however, no such assignment shall release Tenant from liability hereunder.
26. Transfer of Ownership. Landlord's transfer of ownership of the real property located at
300 Plant Road, including the Vineyard, shall not terminate the lease. The Lease runs
with the land. In the event Landlord transfers ownership of the property during the lease
term, voluntarily or not, Tenant shall be entitled to finish the lease term.
27. Severability. If any term, covenant, condition or provision of this Lease or the application
thereof to any person or circumstances shall, at any time or to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which such term or provision is held invalid
or unenforceable, shall not be affected thereby, and shall continue to be valid and to be
enforced to the fullest extent permitted by law.
28. Successors and Assigns. Except as otherwise provided in this Lease, all covenants,
agreements, provisions, and conditions of this Lease shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
29. Subordination. This Lease and all of Tenant's right, title and interest in the Vineyard are
demised hereunder and shall be subject and subordinate to any mortgages or deeds of trust
that now exist or that may subsequently be placed upon the Vineyard, to all advances made
under them, and to all amendments, modifications, extensions or replacements of them.
30. No Waiver. No waiver by either party of any covenant or condition contained in this
Lease or of any breach of any such covenant or condition shall constitute a waiver by such
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party of any subsequent breach of such covenant or condition, or justify or authorize the
nonobservance by the other party on any other occasion of the same or any other covenant
or condition hereof.
31. Interpretation. This Lease shall be construed in accordance with the internal laws of the
State of California without application of the conflicts of laws, provisions thereof.
Whenever the contents of any provision shall require, the singular number shall be deemed
to include the plural number, and vice versa, and the reference to any gender shall be
deemed to include reference to all other genders. This Lease has been drafted by both
parties and shall not be construed either for or against Landlord or Tenant. The captions
and headings of the Sections of this Lease are solely for convenience and shall not be
deemed to be a part of this Lease for the purpose of construing the meaning hereof or for
any other purpose.
32. Entire Agreement. This Lease contains the entire agreement of the parties hereto with
respect to the letting, managing and hiring of the Vineyard described above and this Lease
may not be amended, modified, released or discharged, in whole or in part, except by an
instrument in writing signed by the parties hereto or their respective successors or assigns.
33. Attorneys' Fees. If either party brings an action to enforce the terms hereof or to declare
rights hereunder, the prevailing party in any such action shall be entitled to recover from
the other party its reasonable attorneys' fees and costs as determined by the court, in
addition to any other relief to which it may be entitled.
34. Access to Vineyard by Landlord. Landlord shall at all times have the right to access the
Vineyard.
IN WITNESS WHEREOF, the parties hereto have executed this Lease on this /P) 711
day of /1///t7L , 20 /7
Cityf Ukiah docino Ag, L
Sage Sangiacomo 'yler Rodrigue
City Manager, Manager Mem
300 Seminary Ave. PO Box 1030
Ukiah, CA 95482 Ukiah, CA 95482
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Vineyard Map
300 Plant Road, Ukiah, CA 95482
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