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HomeMy WebLinkAboutReso 13-1999 RESOLUTION NO. 13-99 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING A GROUND LEASE BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND THE SOUTH SAN FRANCISCO CONFERENCE CENTER AUTHORITY January that the WHEREAS, the Ground Lease, which was approved by the Conference Center Authority on 28, 1999, establishes an annual rent payable in installments on October 1 and April 1 of each year Ground Lease is in force; and WHEREAS, the Ground Lease contains a clause that reopens negotiations on the rental amount in the year 2009 and 2019; and WHEREAS, approval of the Ground Lease is one of the final actions required from Council before the bonds may be issued to pay for the acquisition of the Conference Center property. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby authorizes a Ground Lease between the City of South San Francisco and the South San Francisco Conference Center Authority. 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 Regul ar meeting held on the 10th day of February __., 1999 by the following vote: AYES: Councilmembers Joseph A. Fernekes, Karyl Matsumoto, Eugene R. Mullin, and Mayor James L. Datzman NOES: None. ABSTAIN: None ABSENT: Councilmember John R. Penna ATTEST: C:\My Documents\RESO\grou ndlease.res.doc City Clerk THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. GROUND LEASE Dated as of January 1, 1999 by and between CITY OF SOUTH SAN FRANCISCO, as sublessor and SOUTH SAN FRANCISCO CONFERENCE CENTER AUTHORITY, as sublessee Relating to SOUTH SAN FRANCISCO CONFERENCE CENTER GROUND LEASE THIS GROUND LEASE (this "Ground Lease"), dated for convenience as of February 1, 1999, is by and between the CITY OF SOUTH SAN FRANCISCO, a municipal corporation, duly organized and existing under the laws of the State of California, as sublessor (the "City"), and the SOUTH SAN FRANCISCO CONFERENCE CENTER AUTHORITY, an authority organized and existing under the laws of the State of California, as sublessee (the "Conference Center Authority"); WITNESSETH: WHEREAS, the Conference Center Authority has been formed for purposes that include operating a conference center; and WHEREAS, the City will acquire, by an eminent domain action that is expected to conclude by February 28, 1999, fee title to certain land and improvements used and operated as a conference center, more particularly described in Exhibit A hereto (the "Property"); and WHEREAS, in order to provide funds to enable the City to finance the acquisition of the Property, the following agreements dated January 1, 1999 have been entered into by the City, the City of South San Francisco Capital Improvements Financing Authority ("Financing Authority"), and U.S. Bank or such other person as may be designated trustee under the agreements referenced herein ("Trustee"): Site Lease between the City and the Financing Authority; Trust Agreement among the City, Trustee, and Financing Authority; Lease Agreement between the City and the Financing Authority; Assignment Agreement between the Financing Authority and Trustee; and such other documents as are referenced and incorporated in said agreements (collectively, "Financing Agreements"), which Financing Agreements are incorporated by reference into this Ground Lease; and WHEREAS, in order to perform its obligations under the Financing Agreements, the City has agreed to sublease to the Conference Center Authority, and the Conference Center Authority has agreed to sublease from the City, the land and improvements constituting the Property as more fully described on Exhibit A, attached hereto, and incorporated herein by reference; and WHEREAS, the City and the Conference Center Authority are authorized to enter into this Ground Lease; and WHEREAS, the Conference Center Authority and the City wish to enter into this Ground Lease to provide the terms and conditions relating to the sublease of the Property by the Conference Center Authority from the City; NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows: SECTION 1. Ground Lease. The City hereby subleases the Property to the Conference Center Authority and the Conference Center Authority hereby subleases the Property from the City, on the terms and conditions hereinafter set forth. SECTION 2. Term. The term of this Ground Lease shall commence on January 1, 1999 and shall end on the date on which the Trust Agreement shall be discharged pursuant to and in accordance with Section 13.01 thereof (30 years from February 1, 1999 to January 31, 2029); provided that in no case shall this Ground Lease terminate later than the maximum term contained in California Government Code Section 37380, as amended. The City and the Conference Center Authority expect the Trust Agreement to be so discharged, and this Ground Lease to terminate, on January 31, 2029 Iexpected date]. SECTION 3. "Rent"- No Setoff. Conference Center Authority shall pay rent equal to Four Hundred Twenty Thousand U.S. Dollars ($420,000.00) annually with said amount paid in the following manner. Commencing not later than October 1, 1999 and every October 1 thereafter an amount equal to One Hundred Fifty Thousand U.S. Dollars ($150,000.00) and commencing on April 1, 2000 and every April 1 thereafter an amount equal to Two Hundred Seventy Thousand U.S. Dollars ($270,000.00). In addition Conference Center Authority shall make an initial rent payment of Fifty Thousand Three Hundred Dollars and Eighty Three Cents ($50,300.83) not later than April 1, 1999. Payment, without any setoff or deduction, shall be made at the Finance Department for the City of South San Francisco or at any other place that City may from time to time designate in writing. Payment must be in United States dollars, either in the form of a check (drawn on a bank located in the State of California) or via electronically transmitted funds. The rent amount set forth herein shall be subject to renegotiation, at the option of either party, between January 1 and February 28, 2009 and 2019. Any adjustment in rent pursuant to the renegotiation identified herein shall take effect on March 1, 2009 or March 1, 2019 respectively. SECTION 4. Utilities. The Conference Center Authority shall pay all costs associated with utility service at the Conference Center including, but not limited to, telephone, gas, water, sewer, electric and garbage. City shall not be responsible for any costs associated with utility services. SECTION 5. Repair and Maintenance Obligations. Conference Center Authority shall, at Conference Center Authority's sole expense and in accordance with the terms of this lease keep the premises (including all improvements, alterations, fixtures and furnishings) in good order, repair and condition at all times during the lease term. Conference Authority shall at Conference Center's sole expense and in accordance with the terms of this lease promptly and adequately repair all damage to the Property and replace or repair all damaged or broken fixtures or other leasehold improvements. At City's option, or if Conference Center Authority fails to make such repairs, City may, but need not, make the repairs and replacements. On receipt of an invoice from City, Conference Center Authority shall pay City's out-of-pocket costs incurred in connection with such repairs and replacements. Conference Center Authority waives and releases its rights, including the right to make repairs at landlord's expense, under California Civil Code Section 1941-1942 or any similar law, statute, or ordinance now hereinafter affect. SECTION 6. Assignments and Subleases. The Conference Center Authority may not assign its rights under this Ground Lease or sublet all or any portion of the Property without the prior written consent of the South San Francisco City Council. SECTION 7. Possession. The Conference Center Authority already occupies the Property and shall be entitled to continue occupying the Property under the terms and conditions set forth in this Ground Lease. The Conference Center Authority's right hereunder to occupy the Property shall cease on the termination date of this Ground Lease as provided in Section 2 above or upon material default as set forth in Section 8 herein, including but not limited to failure to pay Sublease Payments when due. SECTION 8. Right of Entry. The City reserves the right for any of its duly authorized representatives to enter the Property, or any portion thereof, at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. SECTION 9. Termination. The Conference Center Authority agrees, upon the termination of this Ground Lease, to quit and surrender the Property in the same good order and condition as the Property was in at the time of commencement of the term hereof, reasonable wear and tear excepted, and agrees that all buildings, improvements and structures then existing upon the Property, shall remain thereon and title thereto shall vest thereupon in the City for no additional consideration. SECTION 10. Default. In the event the Conference Center Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this Ground Lease, which default continues for thirty (30) days following notice and demand for correction thereof to the Conference Center Authority, the City may exercise any and all remedies provided by law. SECTION 11. ©uiet Enjoyment. From and after the effective date of this Ground Lease, and continuing throughout the Term of this Ground Lease, the City shall provide the Conference Center Authority with quiet use and enjoyment of the Property and the Conference Center Authority shall peaceably and quietly have and hold and enjoy the Property, without suit, trouble or hindrance from the City, except as expressly set forth in this Ground Lease. Notwithstanding the foregoing, the City shall have the right to inspect the Property as provided in Section 8 above. SECTION 12. Hazardous Materials. The Conference Center Authority hereby covenants and agrees that it will not bring onto the Property, or cause or permit to be brought onto the Property, any materials that may cause or contribute to mortality or serious illness or pose a substantial hazard to human health ("Hazardous Materials"), including but not limited to materials defined as hazardous waste under state law (22 California Code of Regulations Sections 66261.1 eL seq.) or federal law (40 Code of Federal Regulations Sections 261.1 et sect.). The Conference Center Authority assumes all responsibility and legal liability relating to any Hazardous Materials brought onto the Property during the term of this Ground Lease. SECTION 13. Waiver of Personal Liability. All liabilities under this Ground Lease on the part of the Conference Center Authority are solely corporate liabilities of the Conference Center Authority, and the City hereby releases each and every member and officer of the Conference Center Authority of and from any personal or individual liability under this Ground Lease. No member or officer of the Conference Center Authority or its governing board shall at any time or under any circumstances be individually or personally liable under this Ground Lease for anything done or omitted to be done by the Conference Center Authority hereunder. SECTION 14. Taxes and Assessments. The Conference Center Authority covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Property and any improvements thereon. SECTION 15. Insurance. The Conference Center Authority covenants and agrees to maintain or cause to be maintained throughout the Term of this Lease, the following insurance: A. Public Liability and Property Damage Insurance. The Conference Center Authority shall maintain or cause to be maintained throughout the Term of this Ground Lease a standard comprehensive general insurance policy or policies in protection of the Financing Authority, the Trustee, the City, the Conference Center Authority, and their respective members, officers, agents, employees and assigns. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Property. Such policy or policies shall provide coverage in the minimum liability limits of $5,000,000 for personal injury or death of each person and $5,000,000 for personal injury or deaths of two or more persons in each accident or event (subject to a deductible of not to exceed $100,000), and in a minimum amount of $5,000,000 (subject to a deductible of not to exceed $100,000) for damage to property resulting from each accident or event. Such insurance may, however, be in the form of a single limit policy in the amount of $5,000,000 covering all such risks, subject to a deductible of not to exceed $100,000. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the Conference Center Authority, and may be maintained in whole or in part in the form of participation by the Conference Center Authority in a joint powers agency or other program providing pooled insurance. The Net Proceeds of such liability insurance shall be applied by the Conference Center Authority toward extinguishment or satisfaction of the liability with respect to which paid. Bo Fire and Extended Coverage Insurance. The Conference Center Authority shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease, insurance against loss or damage to any improvements constituting part of the Property by fire and lightning, with extended coverage and vandalism and malicious mischief insurance. Said extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance. Such insurance shall be in an aggregate amount at least equal to the replacement cost of the improvements insured thereunder. All policies of such insurance may be subject to deductible clauses of not to exceed ten percent (10%) of the value of the insured improvements for any one loss. The Net Proceeds of such insurance shall be paid to the Trustee as provided in Section 6.1 of the Lease Agreement and shall be deposited by the Trustee in the Insurance and Condemnation Fund as set forth in Section 6.01 of the Trust Agreement. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the Conference Center Authority, and may be maintained in whole or in part in the form of the participation by the Conference Center Authority in a joint powers agency or other program providing pooled insurance. Co Insurance Net Proceeds; Form of Policies. Each policy of insurance required by Subparagraphs A, B, and C above shall name the Trustee as loss payee so as to provide that all proceeds thereunder shall be payable to the Trustee. The Conference Center Authority shall pay or cause to be paid when due the premiums for all insurance policies required by this Ground Lease. All such policies shall provide that the Trustee shall be given thirty (30) days' notice of each expiration, any intended cancellation thereof or reduction of the coverage provided thereby. SECTION 16. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Ground Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Ground Lease shall be affected thereby, and each provision of this Ground Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 17. Notices. Any notice, request, complaint, demand or other communication under this Ground Lease shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by facsimile, telex or other form of telecommunication, at its number set forth below. Notice shall be effective either (a) upon transmission by facsimile, telex or other form of telecommunication, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The City and the Conference Center Authority may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder. If to the City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: Finance Director Facsimile: (650) 829-6614 If to the Conference Center Authority: South San Francisco Conference Center 255 S. Airport Boulevard South San Francisco, CA 94080-6703 Attention: Executive Director Facsimile: (650) 877-5356 If to the Trustee: U. S. Bank One California Street, Suite 400 San Francisco, CA 94111 Attention: Corporate Trust Department Facsimile: (415) 273-4592 SECTION 18. Governing Law. This Ground Lease shall be construed in accordance with and governed by the laws of the State of California. SECTION 19. Binding Effect. This Ground Lease shall inure to the benefit of and shall be binding upon the Conference Center Authority, the City and their respective successors and assigns, subject, however, to the limitations contained herein. SECTION 20. Severability of Invalid Provisions. If any one or more of the provisions contained in this Ground Lease shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Ground Lease and such invalidity, illegality or unenforceability shall not affect any other provision of this Ground Lease, and this Ground Lease shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Conference Center Authority and the City each hereby declares that it would have entered into this Ground Lease and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Ground Lease may be held illegal, invalid or unenforceable. SECTION 21. Exculpation and Indemnification. To the fullest extent permitted by law, Conference Center Authority, on its behalf and on behalf of all of Conference Center Authority's parties, waives all claims (in law, equity, or otherwise) against City arising out of, knowingly and voluntarily assumes the risk of, and agrees that City shall not be liable to Conference Center for any of the following: a. The injury or death of any person; or bo The loss of, injury or damage to, or destruction of any tangible or intangible property, including the resulting loss of use, economic losses, and consequential or resulting damage of any kind from any cause. This exculpation clause shall not apply to claims against the City to the extent that a final judgment of a court of competent jurisdiction establishes that the injury, loss, damage, or destruction was proximately caused the City's negligence, fraud, willful injury to person or property, or violation of law. Conference Center Authority, shall at Conference Center Authority's sole expense and with counsel reasonably acceptable to City, indemnify, defend, and hold harmless City from and against all claims from any cause, arising out of, or relating to this lease, the tenancy created under this lease, or the property, including: a. The use or occupancy, or manner of use or occupancy of the property by Conference Center Authority, its officials, agents, contractors, and employees; Any act, error, omission, or negligence of Conference Center Authority or of any invitee, guests or licensee of Conference Center Authority in, on, or about the property; Co Conference Center Authority's conducting of its businesses; do Any alterations, activities, work, or things done, omitted, permitted, allowed, or suffered by Conference Center Authority in, at, or about the premises or building, including the violation of or failure to comply with any applicable laws, statutes, ordinances, standards, rules, regulations, orders, decrees, or judgments in existence at the commencement of the lease, or enacted, promulgated, or issued after the date of this lease; and, eo Any breach or default in performance of any obligation on Conference Center Authority's part to be performed under this lease, whether before or during the lease term or after its expiration or earlier termination. For purposes of this Section, Conference Center Authority refers singularly and collectively to Conference Center Authority and Conference Center Authority's officers, members, agents, employees, and independent contractors as well as to all persons and entities claiming through any of these persons or entities. The term City refers singularly and collectively to the City and its elected officials, officers, employees and agents. SECTION 22. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Ground Lease. SECTION 23. Execution in Counterparts. This Ground Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same lease. It is also agreed that separate counterparts of this Ground Lease may be separately executed by the Conference Center Authority and the City, and with the same force and effect as though the same counterpart had been executed by both the Conference Center Authority and the City. IN WITNESS WHEREOF, the City and the Conference Center Authority have caused this Ground Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF SOUTH SAN FRANCISCO, as sublessor By: City Manager CITY OF SOUTH SAN FRANCISCO CONFERENCE CENTER AUTHORITY, as sublessee By: Executive Director Attest: City Clerk EXHIBIT "A" All that certain real property situated in the City of South San Francisco, County of San Mateo, State of California, described as follows: Lot 1 and Portion of Lot 2, all in Block 1, as designated on the map entitled "SOUTH SAN FRANCISCO INDUSTRIAL PARK UNIT NO. 1, SOUTH SAN FRANCISCO, SAN MATEO COUNTY, CALIFORNIA", which map was filed in the office of the Recorder of the County of San Mateo, State of California on September 14, 1956 in Book 46 of Maps at pages 5, 6 and 7, said Portion of Lot 2 being more particularly described as follows: BEGINNING at the Northwesterly corner of said Lot 2, as shown on the map above mentioned; thence along the Northerly and Easterly lines of said Lot, North 89° 58' 58" East 300.00 feet and South 0° 01' 02" East 75 feet; thence South 89° 58' 58" West 300.00 feet to the Westerly line of said Lot 2; thence along the last mentioned line North 0° 01' 02" West 75 feet to the point of beginning. TOGETHER WITH a non-exclusive easement for ingress, egress and public utilities over a portion of said Lot 2, described as follows: BEGINNING at a point on the Westerly line of said Lot 2, which point is South 0° 01' 02" East, a distance of 75 feet from the Northwesterly corner of said Lot: thence from said point of beginning, along said Westerly lot line, South 0° 01' 02" East 25 feet; thence leaving said Westerly lot line, North 89° 58' 58" East 50 feet; thence North 0° 01' 02" West 25 feet; thence South 89° 58' 58" West 50 feet to the point of beginning. A-1 Also, TOGETHER WITH a non-exclusive easement for ingress and egress over a portion of Lot 2, described as follows: BEGINNING at a point on the Westerly line of Lot 2, Block 1, as shown on that certain map above mentioned, said point of beginning being located along said Westerly line of Lot 2, South 0° 01' 02" East 75.00 feet from the Northwesterly corner thereof; thence from said point of beginning North 89° 58' 58" East 300.00 feet to a point in the Easterly line of said Lot 2; thence along said Easterly line South 0° 01' 02" East 13.00 feet; thence leaving said Easterly line south 89° 58' 58" West 290.00 feet; thence South 65° 02' 39" West 11.03 feet to a point on the Westerly line of said Lot 2; thence Northerly along said Westerly line ! 7.65 feet to the point of beginning. J:\WPD\MNRSW\482 \MISC\LEASE 1.WPD