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HomeMy WebLinkAboutReso 39-1998 RESOLUTION NO. 39-98 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING A JOINDER AND SECOND AMENDMENT TO THE GROUND LEASE BETWEEN THE CITY, THE SAN MATEO COUNTY HARBOR DISTRICT, AND RAISER RESOURCES LLC, RELATED TO PROPERTY AT THE OYSTER POINT MARINA WHEREAS, the City and San Mateo County Harbor District have entered into a joint powers agreement to manage the property at the Oyster Point Marina; and WHEREAS, the City desires to approve a Joinder and Second Amendment to the Ground Lease between the San Mateo County Harbor District and Raiser Resources; . NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco as follows: 1. The City Council approves the Second Amendment to the Ground Lease and the Joinder, both of which are attached hereto as Exhibit "A" related to the Raiser Resources development at the Oyster Point Marina. the City. The City Council further authorizes the City Manager to execute the Joinder on behalf of I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a r e gu ] a r meeting held on the 22nd day of_ AprJ ] , 1998 by the following vote: AYES: Councilmembers James L. Datzman, Joseph A. Fernekes, Karyl Matsumoto, John R. Penna and Ma~vor Eugene R. Mullin NOES: None ABSTAIN: None ABSENT: None C:kMODEM~RAISER.CC ATTEST: City Clerk EXHIBIT A RESOLUTION NO. 39-98 SECOND AMENDMENT TO GROUND LEASE THIS SECOND AMENDMENT TO GROUND LEASE made and entered in to this I ~r'day of April, 1998, by and between SAN MATEO COUNTY HARBOR DISTRICT ("Landlord") and RAISER RESOURCES, LLC, a California limited liability company ("Tenant"), bears the following recitals: A. On or about January 30, 1997, the parties entered into a Ground Lease covering premises in the City of South San Francisco for the purposes of constructing a hotel as described therein. The Ground Lease was amended by First Amendment to Ground Lease dated November 18, 1997. The Ground Lease, as amended, is referenced to herein as the "Lease." B. The parties now desire to amend the Lease further as hereinafter provided. NOW, THEREFORE, the parties hereto hereby agree as follows: 1. The second Recital is hereby amended in its entirety to read as follows: "Tenant desires to lease from Landlord a portion of the aforedescribed land consisting of that certain parcel of real property outlined on the map attached here to as Exhibit A and identified as Parcel __ on that certain Parcel Map dated March , 1998, filed on , 1998, in Book ~ of Parcel Maps, at Pages m and , San Mateo County Official Records, or to be filed, plus a nonexclusive easement for ingress and egress for vehicular and pedestrian traffic on, over and across thos~e certain streets kno;vn as "Marina Blvd." and "Gull Drive" to and from the Premises and to and fi.om Oyster Point 'Blvd. (the "Premises"), for the purpose of constructing a hotel containing a minimum of 250 guest rooms and ballroom in addition to a conference center with a minimum of 2,000 sq. ft. and a maximum of 10,000 sq. ft. (which may either be in the hotel itself or be housed in a building adjoining the hotel) and operating a hotel pursuant to the Provisions coq) 2ts3/31/95 1 stated in this Lease, and Landlord is ~villing to lease same to Tenant. Facility, including hotel logo sign, not to exceed a total of 126 feet in height." 2. The follo~ving definition is added to Section 1: "Landlord: San Mateo County Harbor District pursuant to the Joint Powers Agreement, effective November 11, 1977, recorded on October 15, 1984, as Recorder's Serial No. 84111706, San Mateo County Official Records, as amended from time to time. "Landlord" shall also mean the successor to the interest of San Mateo County Harbor District or the owner of the property upor~ .the expiration of said Joint Powers Agreement." ~ 3. The second sentence in Section 2.1 is herel~y amended in its entirety to read as follows: ~ follows: "However, this Lease confers no rights with regard to the subsurface of the Premises more than fifteen (15) feet below ground level, except to the extent necessary to install pilings or other support for the Improvements, nor does it confer rio~hts to air space above the roof of the Facility other than air space rights for a hotel logo sign which may be placed upon the roof of the Facility, provided that the total height of the Facility, including the sign, shall not exceed 126 feet." Section 2.2 of the Lease is hereby amended in its entirety to read as Lease Tenn. The term of the Lease ("Lease Term") shall commence on the earlier of (a) the first day of the month following the month in which the City of South San Francisco has issued the last of any necessary discretionary land use approvals permitting construction of all Improvements to be consn-ucted by Tenant on the Premises or (b) October 1, 1998, and expire at midn/~t on the same day fifty-five (55) years subsequent, subject to any options to extend. Promptly following commencement of the Lease Term, Landlord, Tenant and the City shall execute an amendment confilTning the commencement and expiration dates of the Lease Term which amendment shall be recorded." corp21s3/3 1/98 2 o A new Section 2.2.1 is added to the Lease reading as follows: "2.2.1 Option to Extend Lease Term. Provided Tenant is not then in default under any of the terms and conditions of this Lease, to the extent permitted by law, Tenant shall have the option to extend the Lease Term for two (2) additional consecutive periods of ten (10) years each upon all of the terms and provisions contained in the Lease, as amended to date, including the rent. Said options shall be exercised by Tenant by written notice to Landlord, given at least one hundred eighty (180) days prior to expiration of the original or previously extended Lease Te~xn, but not before the twentieth (20th) anniversary of the commencement of the Lease Term." A new Section 2.3.1 is added to the Lease r. eading as follows: "2.3.1 Tenant's Ri.oht of First Refusal. In addition to Tenant's other rights as set forth elsewhere in this Lease, during the term of this Lease and for a period of six (6) months following its expiration, in any instance in which Landlord makes an offer to a third party to lease the Premises, receives an offer from a third party to lease the Premises or negotiates a written lease with a third party to lease the Premises (subject and subordinate to Tenant's prior rights under this Lease so long as this Lease is in effect), Landlord shall, before accepting any such offer or entering into any written lease with a third party for the Premises, give Tenant written notice of all of the terms and conditions of said offer or written lease and Tenant shall have sixty (60) days fi:om the date of Landlord's notice to give Landlord written notice that Tenant elects to enter into a written lease of the Premises upon the terms and conditions set forth in Landlord's notice. If Tenant does not elect to accept the terms and conditions of the xvritten lease set forth in Landlord's notice, Landlord shall have a period of six (6) months in which to enter into a written lease xvith said third party on said terms and conditions; provided, however, that in the event of any change in the terms and conditions from those set forth in Landlord's notice, Landlord shall be required to give Tenant a new v~xitten notice of the new terms and conditions and Tenant shall have another sixty (60)-day period in which to notify Landlord that Tenant accepts the new terms and conditions." corp21s3/31/98 3 follows: Section 3.1 of the Lease is hereby amended in its entirety to read as Minimum Rent. Commencing January 1, 1998, Tenant shall pay Landlord Minimum Rent of one thousand dollars ($1,000.00) per month for every month. Commencing upon the expiration of one year from commencement of the Lease Terrn, Tenant shall pay Landlord a monthly rental equal to three thousand three hundred thirty-four dollars ($3,334.00) per month. Commencing on the earlier of (a) the first day of the month following the issuance of a Certificate of Occupancy for the Facility or (b) February 1, 2000, which date shall be. extended if Tenant experiences Unavoidable Delays ("Full trent Commencement Date"), Tenant shall pay Landlord Minimum Rent of six thousand six hundred sixty-six and sixty-seven dollars ($6,667.00) per month. Tenant shall apply for the Cerfificat~ of Occupancy for the Facility as soon as it is practicable to do so. Minimum Rent shall be paid in advance on or before the first day of each calender month." 8. The first para~'aph, third line, of Section 3.2 of the Lease is hereby amended to change "five percent (5%)" to "three percent (3%)." 9. Subparagraph k. of Section 3.2.1 of the Lease is hereby amended in its entirety to read as follows: Franchise fees or similar charges paid to a franchisor or hotel management company for the use of its name, reservation system and other services not to exceed the usual and customary charges to other hotel franchisees for comparable services and facilities of this size and type in the Bay Area." 10. New subparagraphs 1. through p., inclusive; are hereby added to Section 3.2.1 of the Lease reading as follows: "l. Service charges, finance charges, handling fees and other credit card charges charged, borne and paid by Tenant and not reimbursed by guests and customers for credit card services by banks, credit companies and credit card service companies. corp.ls.~/~ 1/98 4 "n. 11. follows: 12. sentence: 13. Any funds derived from a state-supported lottery system. Fees received by Tenant for allowing installation and operation of automatic teller machines. Telephone conunissions. Sales of public transportation or off-site entertainment and sporting event admission tickets." Section 6.1 of the Lease is hereby amended in its entirety to read as Use. Tenant shall use the Premises for,., the construction and operation of a hotel containing a minimurq, of two hundred fifty (250) guest rooms and ballroom in addition to. a conference center which shall be a minimum of two thousand-(2,000) sq. ft., not to exceed a maximum often thousand (10,000) sq. ft." Section 6.2.6 of the Lease is hereby amended to add the following "Without limiting the generality of the foregoing, in the event of a foreclosure against the leasehold by a leasehold mortgagee referred to in Section 19.1, the leasehold mortgagee shall be entitled to cease operating the Facility for a period of up to one hundred eighty (180) days; provided, however, that payment of the Minimum Rent shall continue," Section 8.5 of the Lease is hereby amended to add the following: "Without limiting the generality of the foregoing;-, Landlord or the City, as owner of the property, as the case may be, agrees to indemnify, hold harmless and defend Tenant' from any and all claims, losses, liabilities, demands, costs and fees (including attorneys' fees) which may relate to or arise out of said Hazardous Material or Contamination which is not a result of any act, omission or negligence of Tenant or caused by Tenant, or any agent, employee, contractor, subtenant, licensee or contractor of Tenant, and shall include the duty to remediate and mitigate (including, but not limited to, satisfying any other governmental corp21s3/31/98 5 14~ follows: 15. sentences: agencies or administrative proceedings) and any hazardous material or contamination problem concerning the Leachate system or the production of methane which may result from Tenant's construction of the Improvements using normal construction methods (e.g., excavation, pile driving) so long as Tenant is not negligent and does not introduce any hazardous materials or contamination to the Premises." Section 9.1.1 of the Lease is hereby amended in its entirety to read as "9.1.1 Tenant shall file a complete application for a building permit within two hundred seventy (270) d.ays of the approval of schematic drawings." Section 9.2 of the Lease is hereby ame~nded to add the following 16. sentence: "Notwithstanding anything contained in this Lease to the contrary, and in addition thereto, Tenant shall not be responsible for the costs, if any, which may be required in order to construct Marina Blvd. to City standards. "In addition, the District agrees to use its best efforts to cause the City to undertake and complete the widening of Oyster Point Boulevard to a four (4)-lane road, with a center median and landscaping, as described in the "East of 101 Plan," at no cost to Tenant, on or before the issuance of a Certificate of Occupancy for the Facility." Section 9.9 of the Lease is hereby amended to add the following "Landlord agrees to consider waiving the, Bond based upon a revie~v of Tenant's financial condition and structure of the financing and construction of the Facility prior to Tenant beginning construction." corp21s3/31/98 6 17. follows: Section 12.2.1 of the Lease is hereby added, reading in its entirety as "12.2.1 Indemnification of Tenant. Landlord a~ees to indemnify Tenant against and save harmless from and defend Tenant against, all demands, claims, attorneys' fees, causes of action or judgrnents for injury to person, loss of life, or damage to property occurring on said Premises arising fi'om Landlord's negligence or willful or intentional misconduct." 18. follows: Section 19.1 of the Lease is hereby amended in its entirety to read as "19.1 Subordination. This Lease shall, vJi'thout further act of Tenant, at the option of the Landlord, be st~bject and subordinate to the lien of any mortgage or deed of trust 9r other encumbrance which may affect the Premises as of JanualT 30, 1997. This Lease shall not be subject and subordinate to any other lien or encumbrance placed on the Premises by Landlord after January 30, 1997, without the prior written consent of Tenant, which consent may be conditioned upon the lien holder agreeing that, in the event of default of Landlord and enforcement of the lien, Tenant's possession of the Premises and this Lease, including any options to extend the term, shall not be disturbed so long as Tenant is not in default and continues to perform all of the terms and conditions of the Lease to be performed by Tenant and attorns to any new record owner of the Premises (i.e. a "non- disturbance and attomment agreement")." 19. Section 19.3 of the Lease is amended in its entirety to read as follows: "19.3 Financing Contingency. Tenant's obligation under this Lease is subject to its obtaining satisfactory construction and permanent financing for the construction of the Improvements. This Lease shall ternfinate if this contingency is not satisfied or waived by Tenant on or before the date six (6) months folloxving the date of the City's issuance of the last of any necessary discretionary land use approvals pernfitting consn-uction of all Improvements to be constructed by Tenant on the Premises." corp21s3/31/98 7 20. follows: Section 35 of the Lease is hereby amended in its entirety to read as "35. TENANT'S RIGHT OF FIRST REFUSAL "In addition to Tenant's other rights as set forth elsewhere in this Lease, dining the term of this Lease and for a period of six (6) months following its expiration, in any instance in which Landlord makes an offer to a third party to sell or otherwise transfer the Premises, receives an offer from a third party to purchase or otherwise acquire the Premises or negotiates a written contract with a third party to sell or otherwise transfer the Premises, Landlord shall, before accepting any such offer or entering into any written contract with a third p..amj for the Premises, give Tenant mitten notice of all of the terms and conditions of said offer or written contract and Tenant shall have sixty (~.0) days from the date of Landlord's notice to give Landlord written notice that Tenant elects to purchase or otherwise acquire the Premises upbn the terms and conditions set forth in Landlord's notice. If Tenant does not elect to accept the terms and conditions of purchase set forth in Landlord's notice, Landlord shall have a period of six (6) months in which to sell or otherwise transfer the Premises to said third party on said terms and conditions; provided, however, that in the event of any change in the terms and conditions from those set forth in Landlord's notice, Landlord shall be required to give Tenant a new wxitten notice of the new terms and conditions and Tenant shall have another sixty (60)-day period in which to notify Landlord that Tenant accepts the new terms and conditions." 21. A new Section 39 is hereby added to the Lease reading as follows: "39. MEMORANDUM OF LEASE "Concurrently with execution of this Second Amendment, the parties shall execute and acknowledge a Memorandum of Lease identifying the Lease, First Amendment and Second Amendment to be recorded in San Mateo County. Upon the request of either party, the parties shall execute and acknowledge further lVlemoranda of any furore amendments of this Lease." corp21s3/3 1/98 8 22. The parties hereto hereby ratify, confmn and readopt all of the terms and conditions of the Lease, as amended by the First Amendment and the Second Amendment. IN WITNESS WHEREOF, the parties have executed this Second Amendment effective on the day and year first above written. DATED: April /J , 1998. DATED: April , 1998. "LANDLORD" SAN MATEO COUNTY DISTRICT HARBOR LedPadreddii, ~ President ./ ,,/'?" Peter Greneli', General Manager "TENANT" RAISER RESOURCES, LLC co~1021s3/31/98 9 JOINDER The undersigned hereby join in executing the foregoing Second Amendment to Ground Lease for the following limited purposes: · 1. To confirm that they have approved the terms and conditions and execution of the Lease, First Amendment to Lease and Second Amendment to Lease by Landlord therein named. 2. To confirm that, upon the expiration or sooner termination of that certain Joint Powers Agreement between the City and Landlord, effective November 11, 1997, as amended, the City shall succeed to the interest of Landlord under the Lease and shall become the Landlord thereunder, subject to all of the terms and conditions thereof. ~" "CITY" ~ CITY OF SOUTH SAN FRANCISCO DATED: , 1998. By SOUTH SAN FRANCISCO RECREATION AND PARKS DISTRICT DATED: , 1998. By corp21s3/31/98 lO