HomeMy WebLinkAboutItem Di43 $, �qn•.
AGENDA STAFF REPORT
'`OagroflN�P,�'
DATE: March 12, 2018
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Craig A. Steele, City Attorney
SUBJECT: Facility Lease between the City and Bay City, LLC for the
Restaurant Building at 15 First Street
SUMMARY OF REQUEST:
That the City Council adopt a Resolution:
1. Approving the Facility Lease between the City and Bay City, LLC, in the
form attached, for the restaurant building at 15 First Street;
2. Authorizing the City Manager to execute the lease and any other
necessary documents; and,
3. Authorizing the recording of the lease or memorandum of lease with the
County Recorder of Orange County.
BACKGROUND AND ANALYSIS:
The City's First Street Beach Complex (Complex) includes a concession building,
a parking lot, restrooms and other City facilities. For a number of years, the
concession building has been leased to a private operator for use as the "Rivers
End Cafe:' That lease expired in April 2017 and continued on a month-to-month
tenancy. The building is currently vacant. The Complex is on Tidelands land
leased from the State of California. The State Lands Commission recently
approved a new 30 year lease for the Tidelands property, and concurrently gave
its consent for the City to enter into this lease. The City engaged its property
manager and a commercial real estate broker from CB Richard Ellis (CBRE) to
market the building to potential new tenants. After a process through which the
City's broker solicited interest and proposals from interested tenants, the City
proposes to enter into a new lease for a restaurant. Bay City, LLC submitted a
proposal, and has agreed to lease terms that are significantly better than the
prior lease. The proposed lease itself is attached to this report. A summary of
the proposed terms follows:
TERM: The proposed term of the lease is twenty (20) years. The tenant has two
options to extend, one for five (5) additional years, and the second for the
remaining term of the Tidelands lease, minus ninety (90) days.
Agenda Item D
RENT: The proposed monthly rent starts at $6,700 per month, beginning four (4)
months after the lease is executed. As is common with commercial leases, the
proposed tenant will have possession of the building for a period of time, rent
free, while the City and the tenant complete the work necessary to open a quality
restaurant on the site. The rent will be adjusted every 2 Y2 years to reflect CPI
increases. There is no portion of the proposed rent that is based on a
percentage of the tenant's receipts. The prior lease had a much lower base rent
that was only approximately $1,500. The tenant paid an additional percentage of
receipts on a monthly basis. Thus, the rent revenue for the City fluctuated each
month, and seasonally. The Finance Department reports that in the most recent
calendar year, roughly on average the total revenue from the prior tenant was
approximately $5,300 per month. The proposed fixed rent represents a
significant increase over that most recent rough average, a predictable source of
revenue, and a significant increase over the prior annual revenue from the site. In
addition, while the prior arrangement was based on self -reporting from the
tenant, this rent payment is more certain. The City's broker advises that the rent
amount is consistent with a market rent. The tenant will pay for utilities.
CITY OBLIGATIONS: As the owner of the facility, the City is obligated to make
certain improvements to the building, including the roof, HVAC systems, certain
electrical work, relocating a trash enclosure, and waterproofing. This work will be
required whether the City leases the structure now or not, given that it is routine
maintenance on a City facility.
TENANT OBLIGATIONS: The tenant will install the other tenant improvements
necessary for the new restaurant, maintain the work done by the City, be
responsible for ADA access issues, and obtain all necessary permits. The tenant
will pay the City rent monthly, insure the premises, and indemnify the City for
liability arising out of the tenant's use of the building for a restaurant and for
special events.
ENVIRONMENTAL IMPACT:
This matter is categorically exempt from CEQA review under CEQA Guidelines
Section 15301 as the repair, maintenance and leasing of an existing publicly
owned structure with negligible or no expansion of an existing use.
LEGAL ANALYSIS:
The City Attorneys office prepared the new lease and has reviewed and
approved this item as to form.
FINANCIAL IMPACT:
The proposed Facility Lease will result in lease revenue to the City in the amount
of $6,700 per month, adjusted for inflation, for a twenty (20) year term subject to
extensions. The rent revenue will be offset, initially, by the amounts the City will
Page 2
invest in repairs and upgrades to the existing building. The City also will pay its
broker a standard broker's commission.
RECOMMENDATION:
That the City Council adopt a Resolution:
1. Approving the Facility Lease between the City and Bay City, LLC, in the
form attached, for the restaurant building at 15 First Street;
2. Authorizing the City Manager to execute the lease and any other
necessary documents; and,
3. Authorizing the recording of the lease or memorandum of lease with the
County Recorder of Orange County.
SUBMITTED BY:
&'UK Steele
Craig A. Steele, City Attorney
ATTACHMENTS:
A — Resolution
B — Tenant Executed Lease
Page 3
NOTED AND APPROVED:
PR,g
Jill R. Ingram, City Manager
Attachment "A"
RESOLUTION
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
APPROVING AND AUTHORIZING THE CITY MANAGER TO
EXECUTE ON BEHALF OF THE CITY OF SEAL BEACH A
FACILITY LEASE WITH BAY CITY LLC, AUTHORIZING THE
CITY MANAGER TO EXECUTE THE LEASE AND OTHER
NECESSARY DOCUMENTS, AND AUTHORIZING RECORDING
THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:
Section 1. The City Council hereby approves the Facility Lease with Bay City,
LLC in the form attached hereto as Exhibit A, and authorizes the City Manager to
execute on behalf of the City.
Section 2. The City Council hereby authorizes the City Manager to execute other
documents necessary to implement the Lease Agreement on behalf of the City.
Section 3. The City Council hereby authorizes the recording of the Lease
Agreement or a Memorandum of Lease approved by the City Attorney.
Section 4. The approval of the Facility Lease is categorically exempt from CEOA
review under CEQA Guidelines Section 15301 as a lease of an existing City
facility with negligible or no expansion of an existing use.
PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a
regular meeting held on the 121h day of March, 2018 by the following vote:
AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members
Mike Varipapa, Mayor
ATTEST:
Robin L. Roberts, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH l
I, Robin L. Roberts, City Clerk of the City of Seal Beach, do hereby certify that
the foregoing resolution is the original copy of Resolution Number on file
in the office of the City Clerk, passed, approved, and adopted by the City Council
at a regular meeting held on the 12- day of March, 2018.
Robin L. Roberts, City Clerk
Attachment "B"
FACILITY LEASE
This FACILITY LEASE ("Lease") is dated as of February 12, 2018 and is entered into by
and between the CITY OF SEAL BEACH, a California municipal corporation ("City"), and BAY
CITY LLC, a California limited liability company ("Tenant").
RECITALS
A. On or about March 10, 2008, City entered into a Facility Lease dated March 10,
2008 with Michael E. Balchin (the "Prior Lease Agreement") whereby City leased those certain
premises at 15 First Street, Seal Beach, California commonly described as the concession building
located in the City's First Street Beach Complex (the "Premises") for the operation of the River's
End Cafd.
B. The fixed term of the Prior Lease Agreement expired April 30, 2017 and is currently
on a month-to-month tenancy.
C. City and Tenant wish to enter into a new lease agreement with Tenant for the
Premises, which are more particularly described on Exhibit "A".
D. The City had a leasehold interest in the Premises under that certain Tidelands Lease
dated June 22, 1967 which expired on June 22, 2016 and must be extended in order to permit this
Lease to become effective.
E. The City owns a parking lot near the Premises which is described on Exhibit "A"
(the "Parking Lot") and public restrooms described on Exhibit "A" (the "Restrooms") and the City
and Tenant desire to specify herein the rights and obligations of the City with respect to the Parking
Lot and Bathrooms.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants
herein, City and Tenant hereby agree as follows:
Section 1. Possession; Delivery; Term Commencement
1.1 Termination of Existing Tenancy: Extension of Ground Lease. Tenant
acknowledges that Michael Balchin is currently in possession of the Premises and that the
Tidelands Lease needs to be extended for thirty (30) years. City will promptly give the current
tenant a 30 day termination notice. If the current tenant does not timely vacate the Premises, City
shall use reasonable efforts to cause the current tenant to vacate by commencing and diligently
prosecuting an unlawful detainer proceeding. ff City is unable to cause the current tenant to vacate
the Premises by the date that is six (6) calendar months after the date of this Lease, or if City is
unable to so extend the Tidelands Lease (to accommodate the term of this Lease) by the date that
is six (6) calendar months after the date of this Lease, then Tenant may terminate this Lease by
written notice to the other party.
1.2 Permits and Approvals. Tenant shall use diligent efforts to submit applications and
other items and fees quired for a liquor license, City approvals and pets for Tenant's
improvements to the Premises and signs, any Coastal Commission approvals and permits required
!172% 10 1913215.d.
for Tenant's improvements and signs (collectively, the "Permits'). City shall cooperate in good
faith as the owner of the Premises in connection with all applications for liquor license and Coastal
Commission approvals and permits.
1.3 Base Building Work. Upon the existing tenant's vacating the Premises and the
extension of the Ground Lease, City shall diligently publicly bid and then diligently perform the
work described on Exhibit "B" ("Base Building Work"). City shall obtain reasonable warranties
for the Base Building Work (including a warranty for the roof, and a warranty for the HVAC) and
shall assign them in writing to Tenant whereupon Tenant shall maintain the Base Building Work,
including the new roof and new HVAC, in good condition and repair.
1.4 Delivery of Possession: Term Commencement Date. City shall deliver possession
of the Premises to Tenant promptly after completion of the City Work, whereupon the term of this
Lease shall commence (and City and Tenant shall comply with Section 10.8 below). The date of
such delivery is hereinafter referred to as the "Commencement Date".
1.5 Condition of Premises. Tenant acknowledges that Tenant has had the opportunity
to inspect the Premises and, subject to City's obligation to complete the City Work, Tenant accepts
the Premises in their current "AS 1S" condition, without representation or warranty, express or
implied.
1.6 Certified Access Snacialist. The following disclosure is required by law:
"The Premises have not been inspected by a Certified Access Specialist (CASp). A
Certified Access Specialist (CASp) can inspect the Premises and determine whether the Premises
comply with all of the applicable construction -related accessibility standards under state low.
Although state law does not require a CASp inspection of the Premises, the commercial property
owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the
Premises for the occupancy or potential occupancy; of the lessee or tenant, if requested by the
lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of
the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any
repairs necessary to correct violations of construction -related accessibility standards within the
Premises."
However, in that regard, the parties hereby agree that Tenant shall pay any such inspection fees
and the cost of making any such repairs.
Section 2. Rent, Utilities and Security Deposit
2.1 Rent. All sums payable by Tenant to City pursuant to this Lease shall be deemed
rent.
2.2 BucRcnt. Commencing on the dale ("Rent Commencement Date") that is four (4)
calendar months after the date on which the City delivers the Premises to Tenant with the Base
Building Work completed, Tenant shall commence paying to City monthly base rent, in the amount
of Six Thousand Sqven Hundred and No/100 Dollars ($6,700.00), which shall be increased every
two and one half yours i.e., every 30 months) (each, an "Adjustment Datf) by the lesser of (i)
five percent (5%); or (it) the percentage increase in the CPI over such period, determined by
_2-
S71%,[ W IL 1191)215A.
comparing the latest CPI published at least one (1) month prior to the applicable Adjustment Date
to the latest CPI published at least one (1) month prior to the previous Adjustment Date (or in the
case of the first adjustment, published at least one (t) month prior to the Rent Commencement
Date) ("Base Rent"). Base Rent shall be prorated for any partial month after [be Rent
Commencement Date and for any partial month at the end of the term.
"CPT' shall mean the United States Department of Labor, Bureau of Labor Statistics'
Consumer Price Index for All Urban Consumers for the Los Angeles -Anaheim -Riverside
statistical area (CPI -U) (1982-84=100) the ("CPT'). Should the Bureau of Labor Statistics
discontinue the publication of the CPI , or publish the same less frequently or alter the same in
some other manner, then the most nearly comparable index or procedure as reasonably determined
by Landlord, or substituted by the United States Department of Labor, Bureau of Labor Statistics,
shall be substituted therefore.
2.3 Payments. All rent shall be paid in advance on or before the first day of each
calendar month, without prior demand and without offset or deduction, to the City at 211 Eighth
Street, Seal Beach, CA 90740 or to such other address as; may be designated in writing by the City,
except that the fret partial month of Base Rent shall be paid promptly after the Rent
Commencement Date.
2.4 Utilities. Tenant shall contract and pay for all utilities.
2.5 Security Deposit. Concurrently with Tenant's execution of this Lease, Tenant shall
deposit with City the sum of $6,700.00, which shall be held by City as security for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the tens hereof. If Tenant defaults with respect to any provision of
this Lease, City may (but shall not be required to) use, apply or retain all or any pan of this Security
Deposit for the payment of any amount which City may spend or become obligated to spend by
reason of Tenant's default, or to compensate City for any other loss or damage which City may
suffer by reason of Tenant's default. City shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on the Security Deposit.
The Security Deposit or any balance thereof shall be returned to Tenant (or, to the last assignee of
Tenant's interest hereunder) upon completion of the Base Building Work, Tenant's other
improvement work, and the opening of the restaurant in the Leased Premises for business. If City
transfers its interest in the Premises, City shall transfer the cash Security Deposit to City's
successor in interest. TENANT HEREBY WANES THE PROVISIONS OF SECTION 1950.7
OF THE CALIFORNIA CIVIL CODE AND AGREES THAT THE FOREGOING PROVISIONS
OF THIS SECTION SHALL GOVERN CITY'S USE AND RETURN OF THE SECURITY
DEPOSIT.
Section 3. Term
3.1 Initial Term. The term of this Lease shall continue from the Commencement Date
until the date that is twenty (20) years thereafter, subject to Section 4 below.
-3-
57396-0 011I1913M.d.
Section 4. Tenant's Options to Extend
4.1 Options to Extend. Tenant shall have two (2) options to extend the term of this
Lease each by giving City prior written notice of each extension at least six (6) months prior to the
expiration of the then -current term. The first extension shall be for five (5) years, and the second
shall extend this Lease to the date which is ninety (90) days prior to the expiration of the Ground
Lease (as extended by 30 years under Section 1. t above)
4.2 Extension Term Base Rent. The Base Rent for the first extension term shall be the
then -Fair Market Rent, and such Base Rent shall thereafter be adjusted as set forth in Section 2.2
for the remainder of the first extension term and, if applicable, during the second extension term.
As used herein, the term "Fair Market Rent" shall mean the fair market rent for the
use of the Premises as a good quality beach restaurant m of the commencement of the applicable
extension (i.e., the first extension and third extension), determined as follows. City shall notify
Tenant in writing of City's determination of Fair Market Rent after Tenant exercises its extension
option. If Tenant objects to City's determination, Tenant shall, within fifteen (15) days after
delivery of City's notice to Tenant, notify City in writing of the specific reasons for Tenant's
disagreement, whereupon City and Tenant shall meet and attempt to resolve such disagreement.
If City and Tenant are unable to agree on the Fair Market Rent within twenty (20) days following
Tenant's notice to City, then the Fair Market Rent shall be determined by an independent realtor
in the manner provided below, and until the Fair Market Rent determination is completed, Tenant
shall continue to pay to City the Base Rent in effect immediately prior to the extension. After such
fair market determination is completed, Tenant shall promptly make payment to City for any
underpayments owing for prior months.
The process for determining the Fair Market Rent in the event of an aforesaid
unresolved disagreement shall be as follows. An independent realtor with no less than seven (7)
years of experience representing Citys and tenants in retail and restaurant leasing transactions in
Los Angeles County, California chosen by City shall, in good faith, determine the Fair Markel
Rent for the Premises based on similar beach premises in the cities of Seal Beach, Long Beach and
Huntington Beach leased for restaurant use ("First FMV Determination"), and City shall forward
the resulting fair market determination to Tenant.
If the First FMV Determination is unacceptable to Tenant, then Tenant shall so
advise City in writing within ten (10) business days after the First FMV Determination is delivered
to Tenant, and Tenant shall then have the right to engage an independent reaper with no less than
ten (10) years of experience representing Citys and tenants in retail and restaurant leasing
transactions in Los Angeles County to similarly determine, in good faith, the Fair Market Rent for
the Premises, and the resulting fair market determination shall be delivered to City.
If the Second FMV Determination is unacceptable to City, then City shall so advise
Tenant within ten (10) business days after receipt of the Second FMV Determination, and the first
independent realtor and second independent realtor shall then together choose a third independent
realtor with no less than seven (7) years of significant experience representing Citys and tenants
in retail ant restaurant leasing transactions in Los Angeles County who shall similarly determine
3/296-0 lL11913M.d
the Fair Market Rent for the Premises ("Third Appraisal") and shall send the resulting fair market
determination to both City and Tenant.
If the Third FMV Determination is greater than the highest fair market
determination or lower than the lowest determination given by the first realtor and second realtor,
then the Fair Market Rent shall be the average of the First FMV Determination and the Second
FMV Determination. If the Third FMV Determination is not greater than the highest fair market
determination nor lower than the lowest fair market determination by the first realtor and second
realtor, then the Fair Market Value shall be the average of all three determinations.
The cost of the First FMV Determination shall be borne by City. The cost of the
Second FMV Determination shall be borne by Tenant. The cost of the Third FMV Determination
shall be shared equally between City and Tenant.
Section 5. Relationship of the Parties
The only relationship created by this Lease is of that of lessor and lessee. Neither
City nor any of its officers, employees, or agents shall have control over the means of service or
means of production of Tenant or any of its officers, agents, or employees. Tenant is solely
responsible for all aspects of its operations, including, without limitation, its use of the Premises.
Tenant shall not, at any time or in any manner, represent that it or any of its officers, agents, or
employees are in any manner agents or employees of City.
Section 6. Use/Maintenance of Premises; Parking Lot; Signs.
6.1 se. Tenant shall use the Premises primarily for a restaurant, but may also conduct
ancillary uses permitted by applicable law, including the uses described in Section 6.2 below.
6.2 Music and Television. Tenant may install television monitors and play non -
amplified music on the Premises after having obtained all necessary City permits or approvals as
required by the City's ordinances and policies as they currently exist or may hereafter be amended.
6.3 Maintenance. Tenant shall keep the interior of the Premises (including the
Restrooms) and all fixtures therein in good condition and repair. City shall clean and maintain and
repair the Parking Lot and the structural portions of the Premises (except for damage caused by
Tenant). Maintenance of the roof and HVAC and other Base Building Work shall be governed by
Section 1.3 above.
6.4 Compliance With Law. Tenant shall comply with all applicable laws and
regulations, including the Americans with Disabilities Act and any improvements required thereby
as a result of Tenant's improvements or use of the Premises as a business open to the public.
6.5 Preservation of Insurance. Tenant shall not commit any acts on the Premises, nor
use the Premises in any manner that will cause the cancellation of any fire, liability, or other
insurance policy maintained by City insuring the Premises or the improvements on the Premises.
�-6 No Waste or Nuisance. Tenant shall not commitlany waste or any public or private
nuisance upon the Premises.
-5-
Sr295-09an2r 19132v5 d.
6.7 Leval Compliance. Tenant shall not violate any law, rule, or order of any federal,
state, or municipal government or agency that may be applicable to use of the Premises.
6.8 Vacating Premises. On orbefore the expiration orearlier termination of this Lease,
Tenant shall vacate the Premises, remove all of Tenant's personal property from the Premises, and
leave the Premises in good order and repair.
6.9 Parkin . Tenant acknowledges that the Parking Lot is open to the public and
governed by a pay -to -park system.
6.10 Parking Lot Events. City shall cooperate in good faith with Tenant to: (i) coordinate
City events in the parking Lot that City desires (including any events described in the following
clause), (ii) schedule events in the Parking Lot for local organizations as proposed by Tenant in
writing (including such organizations as the Lions Club, Women of the Night, LAEF, Navy
Weapons Station, and Surfrider Foundation) on terms reasonably acceptable to City; and (iii)
schedule funerals, weddings and other similar events that relate to such events at the Premises
upon written request by Tenant but on terms reasonably acceptable to City. City shall use good
faith attempts to waive or minimize parking costs for such special events.
6.11 Delivery Area in Parking Lot. Tenant acknowledges that a delivery area exists in
the Parking Lot and is marked. City shall maintain said markings and not reduce or eliminate
them. Tenant may use such area for deliveries.
6.12 Tenant Signs. Subject to applicable laws and permits, and City's approval thereof
(not be unreasonably withheld) in its proprietary capacity as the landlord under this Lease, Tenant
may, at its cost, install a sign for the restaurant on the roof of the Premises and signs for the
restaurant on City property, replacing the previous tenant's signs, at the locations described on
Exhibit "C".
Section 7. Indemnity
Tenant shall indemnify, defend and hold harmless the City, its governing board and
commissions and the individuals thereof, and all its officers, agents, employees and representatives
(collectively hereinafter referred to as the "City" in this Section 7) from and against any and all
claims, demands, debts, liens, claims, losses, damages, liability, costs, expenses (including, but
not by way of limitation, fees and costs actually incurred, whether or not litigation has
commenced), judgments or obligations, action, or causes of actions whatsoever, for or in
connection to any injury, damage or loss (including, but not limited to bodily injury, death,
personal injury, property damage, violation of any applicable Municipal, County, State, and
Federal laws and regulations, Court Rules or ordinances, or any other type of loss) sustained or
claimed to have been sustained by any person or persons, or corporation, or public or private entity
arising out of the performance or nonperformance of services, operations, duties, and other
obligations of the Tenant, its pacers, agents, employees, representatives, and subcontractors under
this Lease. The provisions of this indemnification clause shall not be limited to the availability or
ability to collect insurance coverage, and shall survive the termination of this agreement.
_6-
a7296d0a112r 1913243
Section 8. Risk Management/Insurance
Tenant shall follow the principles of a sound risk management program. Whenever
possible, risk shall be avoided. Tenant, at its own expense, shall obtain and maintain in effect at
all times during the tem3 of this Lease, all insurance coverage related to every aspect of its use of
the Premises. Tenant is responsible for securing and maintaining all insurance coverage to operate
the restaurant pursuant to requirements of City, State, or Federal statutes. Tenant shall provide
proof of general liability, workers compensation, vehicle, and other insurance to City before the
commencement of the term and again prior to each anniversary of the commencement of the
operating term. Tenant shall obtain and maintain general liability insurance of $2,000,000. City
shall be named as additional insured.
Section 9. Notices
All notices and demands that may be required or permitted by this Lease must be
made in writing. All notices and demands must be sent by national overnight delivery service
(e.g., Federal Express) or certified U.S. mail, return receipt requested, to the addresses specified
below, or to any other place that the respective party may from time to time designate in a notice
to the other.
Com: City of Seal Beach
211 8th Street
Seal Beach, CA 90740
Attn: City Manager
Tenant: Bay City LLC
134'h Main Street
Seal Beach, CA 90740
Attn: Brian Kyle
Section 10. Miscellaneous
10.1 Assignment. Tenant shall not assign this Lease or sublet the Premises without the
City's prior consent, which shall be granted or withheld in the City's sole and absolute discretion.
10.2 Entire Aereement. This Lease contains the entire agreement between the parties
hereto with respect to the subject matter hereof, and any other prior agreement or purported
agreement made shall be ineffective to change, modify, discharge or effect an abandonment of this
Lease in whole or in part unless such purported agreement is in writing and signed by the party
against whom enforcement is sought.
10.3 Applicable Law. This Lease shall be governed and interpreted in accordance with
the laws of the State of California.
10.4 Brokers. City's broker is CBRE (James Lehigh) and Tenant's broker is Davco
Realty Advisors. City will pay a leasing commission tosty's broker pursuant to a separate written
agreement between City and the City's broker. Tenants broker will need to make arrangements
with City's broker to share in such commission. Each party represents to the other that it has not
-7-
S7296 MIL I 191320.d.
engaged or used the services of any other broker, finder, or salesperson in connection with this
Lease.
10.5 Counterparts. This Lease may be executed in multiple counterparts each of which
shall be deemed an original for all purposes.
10.6 Time of Essence. Time is of the essence of every provision hereof in which time
is a factor.
10.7 Possessory Interest Taxes. Tenant acknowledges that although City is exempt from
property taxes, Tenant's leasehold interest under this Lease is subject to possessory interest taxes
(a type of property tax assessed and billed directly to and payable by tenants who lease property
from tax-exempt government entities) and that City is legally obligated to report possessory
interest such as this Lease to facilitate the assessment of such taxes payable by the holders of the
possessory interests. Tenant shall pay all such possessory interest taxes billed to Tenant by the
County.
10.8 Memorandum of Lease. Promptly after the Commencement Date, City and Tenant
shall execute, acknowledge and record a Memorandum of Lease in the form of Exhibit "D" (as
required by law).
10.9 Defaults. Neither party shall be in "Default" under this Lease unless such party
shall have failed to cure the default within (i) five (5) business days after written notice of the
default from the non -defaulting party in the case of monetary defaults; or (ii) thirty (30) days after
written notice from the non -defaulting party in the case of non -monetary defaults; provided, that
if the non -monetary default reasonably requires more than 30 days to cure, the defaulting party
shall not be in Default if it commences the cure within the 30 day period and thereafter diligently
prosecutes the cure to completion. However, the foregoing shall not affect the right of either party
to obtain injunctive relief for any default. Upon a Default by Tenant, City may terminate this Lease.
Upon a Default by either party, the non -defaulting party shall have any of its rights and remedies
under applicable law. City's default notices may be in the form required by the unlawful detainer
statutes.
10.10 Proprietary Caoacity. The City is executing this Lease in its proprietary capacity.
Nothing in the Lease shall waive or alter the City's rights or powers in its governmental capacity.
10.11 City Manager Authority. The City Manager of the City shall have the authority to
issue consents, approvals and notices and make elections for City under this Lease provided they
are in writing.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date first written
above.
CITY: TENANT:
CITY OF SEAL BEACH BAS Y CITY LLC
-8-
571% W01L119g20 d«
By: By: K
Jill R. Ingram, City Manager Brian r�
Mana0and Me
Attest:
By:
Robin Roberts, City Clerk
Approved as to Form:
an
Craig Steele, City Attorney
-9-
S]±9G-09aIL1191320 d.
EXHIBIT"A"
DESCRIPTION OF PREMISES, PARKING LOT AND RESTROOMS
(Attached.)
S7- &-MON 119U?0 ,b
EXHIBIT "B"
DESCRIPTION OF BASE BUILDING WORK
I. Replace existing roof, including roof supports.
2. If necessary, install/repair electrical panels and breakers.
3. Replace existing HVAC and related vents.
4. Relocate trash area to neighboring City Beach Maintenance Yard.
57±96 p 1@1191320 d
EXHIBIT "C"
SIGN LOCATIONS
Subject to applicable laws, Tenant shall replace the former Tenant's signs at:
First & Ocean.
Beach side of Premises on leased building.
At bike entry.
OM -"M I 19132v5.o
EXHEBIT "D"
FORM OF MEMORANDUM OF LEASE
(Attached.)
S7M-00011' 1191JNS.d.
RECORDING REQUESTED BY,
AND WHEN RECORDED MAI, TO:
City of Seal Beach
211 Eighth Street
Seal Beach, CA 90740
Attn: City Clerk
The undersigned Landlord declares that this Memorandum of lease is exempt from Recording Fees
pursuant to California Government Code Section 27383, and is exempt from Documentary
Transfer Tax under Reserve and Taxation Code Section 11922.
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (this "Memorandum") is dated as of _
_, 2018 and is entered into by and between the CITY OF SEAL BEACH, a municipal
corporation ("Landlord') and BAY CITY LLC, a California limited liability company ("Tenant").
RECITALS
A. Landlord and Tenant executed that certain Facility Lease dated February 12, 2018
(the "Lease") affecting the property in the City of Seal Beach, California (the "Property") located
at 15 First Street.
B. Landlord and Tenant now desire to record this Memorandum in order to, among
other things, comply with law requiring that municipal leases be recorded, giving constructive
notice of the existence of the Lease, and permitting the Tenant to obtain title insurance for its
leasehold interest (if desired).
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and the covenants and
conditions contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
4. Ground Lease. landlord has leased the Property to Tenant, and Tenant has leased
the Property from Landlord, upon and subject to the terms and conditions set forth in the lease,
which are hereby incorporated herein by this reference.
5. Term. The term of the Lease commenced on , 2018 and expires
twenty (20) years thereafter, provided, however, that the Tenant has two (2) options to extend the
term, as more particularly dgscribed in the Lease.
57'_96-"M 1191120.)
IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of
the date and year first above written.
LANDLORD: CITY OF SEAL BEACH,
a municipal corporation
By:
Print Name:
Title:
TENANT: BAY CITY LLC
M
Brian Kyle,
Manager and Member
[ALL SIGNATURES MUST BE DULY ACKNOWLEDGED]
S72%- IU 1913M, c
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
A notary public or other officer cornpleting this certificate verifies only the identity of the individual who signed the
document to which this radificate is attached, and not the tmthfulness, accuracy, or validity of cwt document.
State of California )
County of Orange )
On , before me, ,
line wne wW bilk of the omctt)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the persons) whose anal is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/herhheir authorized capacity(ies), and that by his/her/their signatures) on the instrument
the person(s), or the entity upon behalf of which the persons) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
A rotary public or other officer complatirg this certificate vie fees only the identify of the InclMdual who signed the
document to which this cedlacate Is stached, and not the truthfulness, accuracy, or validty of that document.
State of California
County of Orange
On , before me, ,
limen nae w,l lite of tn+oRett)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the persons) whose names) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in histher/their authorized capacily(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the persons) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the Slate of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature I (Seal)
S729&0013IL 119133v3 t