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HomeMy WebLinkAboutS34 - Amendment to Lease Option with Bahia Corinthian Yacht ClubCouncil Meeting: 4 J L 7' `/ Agenda Item No: S` -- -34-- CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY April 23,1998 TO: Mayor and Members of the City Council FROM: Robin L. Clauson, Assistant City Attorney RE: AMENDMENT TO LEASE OPTION WITH BAHIA CORINTHIAN YACHT CLUB BACKGROUND: by IHE. CFFY CC UNC:tI_ CITY OF NEWPORT BEACH, APR 2 7199,' APPROVED On October 4, 1995, the City Council approved an Option to Lease between the City and the Bahia Corinthian Yacht Club (BCYC). The option grants the BCYC an exclusive option to lease City tidelands where the BCYC's marina is located. The three (3) year option terminates at 5:00 p.m., on October 4, 1998. The BCYC plans to exercise the option before it expires. The approved lease did not contain provisions relating to BCYC's ability to mortgage the leasehold interest. The City Attorney's Office and the BCYC has negotiated the attached First Amendment to Lease which allows for the BCYC to mortgage the leasehold once the option is exercised and the lease is signed. RECOMMENDATION: Approve First Amendment to Lease in substantially the form attached. Robin4L. Clauson RC:da FAcat\ccmemo\13ahia1ease.doc FIRST AMENDMENT TO LEASE THIS FIRST AMENDMENT TO LEASE (this "Amendment"), made this day of, 1998, by and between the City of Newport Beach, a municipal corporation and Charter City ("Lessor"), and Bahia Corinthian Yacht Club, a California non- profit corporation ("Lessee"), is made with reference to the following recitals: RECITALS A. Lessor and Lessee have entered into, or concurrently herewith are entering into, that certain Lease dated , 1998 (the "Lease"). B. Lessor and Lessee desire to supplement and amend the Lease as hereinafter set forth. NOW, THEREFOR, Lessor and Lessee agree that the Lease is supplemented and amended as follows; 1. Add the word "Beach" to the name of the Lessor in the preamble to the Lease. 2. Add the phrase "Except as contemplated by Section 22 of this Lease," to the beginning of Section 18 of the Lease. 3. Add a new Section 22 to the Lease as follows: 22. PROVISIONS RELATING TO LEASEHOLD MORTGAGES A. Rights of Leasehold Mortgacrees. (1) Definitions. (a) The term "Leasehold Mortgage" as used herein shall include a mortgage, a deed of trust, a deed to secure debt, or other security instrument by which Lessee's interest under this Lease and the leasehold estate created thereby is mortgaged, encumbered, conveyed, assigned, or otherwise transferred, to secure a debt or other obligation, and any and all amendments, modifications, supplements, extensions and renewals thereof. (b) The term "Leasehold Mortgagee" as used therein shall refer to a holder of a Leasehold Mortgage in respect to which the notice provided for by Section 22A(3) has been given. (2) Leasehold Mort a e Authorized. On one or more occasions, without Lessors prior consent, Lessee may mortgage or otherwise encumber Lessee's Leasehold Estate, MUHL 3Un 389696 2 under one or more Leasehold Mortgages and assign this Lease as security for such Leasehold Mortgage or Mortgages. (3) Notice to Lessor. (a) If the holder of a Leasehold Mortgage shall provide Lessor with notice of such Leasehold Mortgage together with a true copy of such Leasehold Mortgage and the name and address of the Leasehold Mortgagee, Lessor and Lessee agree that, following receipt of such notice by Lessor, the provisions of this Section 22 shall apply in respect to such Leasehold Mortgage and Leasehold Mortgagee. In the event of any assignment of a Leasehold Mortgage or in the event of a change of address of a Leasehold Mortgagee or of an assignee of such Leasehold Mortgagee, notice of the new name and address shall be provided to Lessor. (4) Notices to Leasehold Mortgagees. Lessor, upon providing Lessee with any notice of: (i) default under this Lease, or (ii) a termination of this Lease, or (iii) a matter on which Lessor may predicate or claim such a default or termination, shall at the same time provide a copy of such notice to any Leasehold Mortgagee. No such notice by Lessor to Lessee shall be deemed to have been duly given unless and until a copy thereof has been so provided to any Leasehold Mortgagee. From and after the date such notice has been given to Lessee and any Leasehold Mortgagee, any Leasehold Mortgagee shall have the right to remedy, commence remedying or cause to be remedied any default or acts or omissions which are the subject matter of such notice, within the same cure period as is given Lessee, plus in each instance, the additional periods of time specified in this Section 22. Lessee authorizes each Leasehold Mortgagee to take any such action at such Leasehold Mortgagee's option and does hereby authorize entry upon the Premises by the Leasehold Mortgagee for such purpose. (5) Leasehold Mortgagee's Election to Cure. Anything contained in this Lease to the contrary notwithstanding, if any breach or default shall occur and remain uncured, Lessor shall have no right to terminate this Lease or exercise any other remedy unless, following the expiration of the period of time given Lessee to cure such breach or default, or the act or omission which gave rise to such breach or default, Lessor shall first notify any Leasehold Mortgagee of Lessor's intent to so exercise such remedy, such notice to be given at least thirty (30) days in advance of the proposed effective date of such exercise if such default is capable of being cured by the payment of money, and at least sixty (60) days in advance of the proposed effective date of such exercise if such default is not capable of being cured by the payment of money. The provisions of Section 22A(6) shall apply if, during such thirty (3o) or sixty (60) day period, any Leasehold 7HKUHL 30277 399696 2 -2 _ A Mortgagee shall notify Lessor of such Leasehold Mortgagee's desire to exercise its rights to perform under Section 22A(6) and shall: (a) pay or cause to be paid all rent, and other payments then due and in arrears as specified in such notice and which may become due during such thirty (30) or sixty (60) day period; and (b) comply or in good faith, with reasonable diligence and continuity, commence to comply with all non -monetary requirements of this Lease then in default and reasonably susceptible of being complied with by such Leasehold Mortgagee. (6) Procedure on Default. (a) If any Leasehold Mortgagee shall have proceeded in the manner provided Section 22A(5), the period specified in Section 22A(5) during which Lessor may not terminate this Lease or exercise any other remedy shall be extended for a period of six (6) additional months, provided that such Leasehold Mortgagee shall, during such additional six (6) month period: (i) pay or cause to be paid all rent, and other monetary obligations of Lessee under this Lease as the same become due, and continue its good faith efforts to perform all of Lessee's other obligations under this Lease, excepting non -monetary obligations not reasonably susceptible of being cured or performed by such Leasehold Mortgagee; and (ii) if not enjoined or stayed, take steps to acquire or sell Lessee's interest in this Lease by foreclosure of the Leasehold Mortgage or other appropriate means and prosecute the same to completion with reasonable diligence. (b) If at the end of such additional six (6) month period such Leasehold Mortgagee is complying with Section 22A(6)(a), this Lease shall not then terminate, and the time for completion by such Leasehold Mortgagee of its proceedings shall continue so long as such Leasehold Mortgagee is enjoined or stayed and thereafter for so long as such Leasehold Mortgagee proceeds to complete steps to acquire or sell Lessee's interest in this Lease by foreclosure of the Leasehold Mortgage or by other appropriate means with reasonable diligence and continuity. Nothing in this Section 22A(6)(b), however, shall be construed to extend this Lease beyond the original term hereof as extended by any exercised options; nor to require a Leasehold Mortgagee to continue such foreclosure proceedings after a breach or default has been cured. If YBKUHL 30277 39%96 2 -3 the Lessee's breach or default is cured and the Leasehold Mortgagee discontinues such foreclosure proceedings, this Lease shall continue in full force and effect as if no breach or default under this Lease has occurred. (c) The making of a Leasehold Mortgage shall not impose personal liability or any Leasehold Mortgagee for the performance of any of the terms, covenants or conditions on the part of the Lessee to be performed hereunder. Nothing contained herein shall require a Leasehold Mortgagee to commence any cure or performance on behalf of Lessee or, once having commenced such a cure or performance, to continue or complete such cure or performance or require a Leasehold Mortgagee to commence any remedy or exercise any right under its Leasehold Mortgage or once having commenced such remedy or exercise to continue or complete such remedy or exercise. (d) The purchaser at any sale of this Lease and of the leasehold estate hereby created in any proceedings for the foreclosure of or trustee's sale under any Leasehold Mortgage, or pursuant to any deed in lieu of foreclosure, shall be deemed to be an assignee or transferee of this Lease, and shall be deemed to have agreed to perform all of the terms, covenants and conditions on the part of the Lessee to be performed hereunder, but only from and after the date of such purchase and assignment, and only for so long as such purchaser or assignee is the owner of the leasehold estate created hereby. Any such purchaser or assignee shall not have any personal liability for any obligations of the Lessee accruing either before or after such purchaser's period of ownership. (e) Notwithstanding any other provision of this Lease, any sale of this Lease and of the leasehold estate hereby created in any proceedings for the foreclosure of or Trustee's sale under any Leasehold Mortgage, or the assignment or transfer of this Lease and of the leasehold estate hereby created in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to be a permitted sale, transfer or assignment of this Lease and of the leasehold estate hereby created, not requiring any consent or approval of Lessor. B. Termination and New Lease. (1) New Lease. In the event this Lease is terminated by reason of the happening of any breach or default under this Lease which is not cured by Lessee or a Leasehold Mortgagee under the provisions and within the time limits set forth above, or in the event of rejection or disaffirmance of this Lease pursuant to bankruptcy or insolvency law or other law affecting creditors rights, Lessor shall give prompt notice thereof to any Leasehold 7HKUHL 30277 339686 2 _4 Mortgagee. Lessor shall, on written request of any Leasehold Mortgagee, made at any time within sixty (60) days after the giving of such notice by Lessor, enter into a new lease of the Premises with such Leasehold Mortgagee within thirty (30) days after receipt of such request, which new lease shall be effective as of the date of such termination of this Lease for the remainder of the term of this Lease, at the rent provided for herein, and upon the same terms, covenants, conditions and agreements as are herein contained; provided that such Leasehold Mortgagee shall: (a) pay to Lessor at the time of the execu- tion and delivery of said new lease any and all unpaid sums for rent and other charges payable by Lessee hereunder to and including the date thereof, less the net amount of all sums received by Lessor from any subtenants in occupancy of any part or parts of the Premises or improvements thereon up to the date of commencement of such new lease; and (b) on or prior to the execution and delivery of said new lease, agree in writing that promptly following the delivery of such new lease, such Leasehold Mortgagee will perform or cause to be performed all of the other covenants and agreements herein contained on Lessee's part to be performed to the extent that Lessee shall have failed to perform the same to the date of delivery of such new lease except such covenants and agreements which are not reasonably susceptible of performance by such Leasehold Mortgagee. (2) New Lease Priority. Any new lease made pursuant to Section 22B(1) and any renewal Lease entered into with a Leasehold Mortgagee pursuant to this Lease shall be prior to any mortgage or other lien, charge or encumbrance on the fee interest in the Premises and the tenant under such new lease shall have the same right, title and interest in and to the Premises and the improvements located thereon as Lessee had under this Lease. (3) Liability -of N w Lessee. The tenant under any such new lease shall be liable to perform the obli- gations imposed on the tenant by such new lease only during the period such person has ownership of the leasehold estate created thereby, subject to the possibility of exculpation noted in Section 22B(1). (4) Subleases and Rents. After the termination of this Lease and during the period thereafter during which any Leasehold Mortgagee shall be entitled to enter into a new lease of the Premises, Lessor shall not terminate any sublease or the rights of the subtenant thereunder unless such subtenant shall be in default under such sublease. During such period Lessor shall receive all rent and other payments due from subtenants, including subtenants whose JHKUNL 30277 399686 2 -5- attornment Lessor shall have agreed to accept, as agent of such Leasehold Mortgagee and shall deposit such rents and payments in a separate and segregated account in trust for the Premises, but may withdraw such sums, from time to time, to pay necessary operating expenses and carrying charges of the Premises; and, upon the execution and delivery of such new lease, shall account to the tenant under the said new lease for the balance, if any, (after application as aforesaid) of the basic rent, additional rents and other payments made under said subleases, and said tenant shall thereupon assign the basic rent, additional rents and other payments due under said subleases to any Leasehold Mortgagees of the new lease in the same manner as such rentals and other payments had been assigned to the. Leasehold Mortgagees under this Lease. The collection of rent by the Lessor acting as an agent pursuant to this subparagraph shall not be deemed an acceptance by Lessor for its own account of the attornment of any subtenant unless Lessor shall have agreed in writing with such subtenant that its tenancy shall be continued following the expiration of any period during which a Leasehold Mortgagee may be granted a new lease in which case such attornment shall take place upon such expiration but not before. C. Miscellaneous Provi.s.ions for -Leasehold Mortcla ees. (1) Leasehold Mortgagee Need Not cure Sbecified efau s. Nothing herein contained shall require any Leasehold Mortgagee, as a condition to the exercise of any Of its rights hereunder, to cure any breach or default of Lessee not reasonably susceptible of being cured by such Leasehold Mortgagee, including without limitation any breach or default under Sections 19(a)(iii), (iv) and (v). (2) Consent of Leasehold Mortgagee Recruired. No cancellation, termination, surrender or modification of this Lease shall be effective as to any Leasehold Mortgagee unless either consented to in writing by such Leasehold Mortgagee or made pursuant to and in compliance with this Section 22. (3) Eminent Domain. So long as any Leasehold Mortgagee shall exist, the proceeds arising from a condemnation shall be disposed of as provided for in such Leasehold Mortgage. (4) Casualty oss. A standard Lender's Loss Payable endorsement naming each Leasehold Mortgagee may be added to any and all insurance policies required to be carried by Lessee hereunder. Nevertheless, the provisions in any Leasehold Mortgage for the application of insurance Proceeds shall be subject to the provisions of this Lease with respect thereto and, in the event of any conflict between the provisions of this Lease and the provisions of JIUCUHI. 30M 389686 2 T any Leasehold Mortgage with respect thereto, the provisions of this Lease shall control. (5) Arbitration and Legal Proceedings. Lessor shall give any Leasehold Mortgagee prompt notice of any arbitration or legal proceedings between Lessor and Lessee involving obligations under this Lease. Any Leasehold Mortgagee shall have the right to intervene in any such proceedings and be made a party to such proceedings, and the parties hereto do hereby consent to such intervention. Lessor shall also give any Leasehold Mortgagee notice of, and a copy of, any award or decision made in any such proceedings. Anything contained in this Lease to the contrary notwithstanding, in the event Lessee shall fail to appoint an arbitrator under circumstances where Tenant is required or authorized to do so, a Leasehold Mortgagee shall have an additional period of thirty (30) days, after notice by Lessor that Lessee has failed to appoint such arbitrator, to make such appointment, and the arbitrator so appointed shall thereupon be recognized in all respects as if he had been appointed by Lessee. (6) Notices. No notice to be given by Lessor to any Leasehold Mortgagee or by any Leasehold Mortgagee to Lessor shall be effective unless in writing and, if to any Leasehold Mortgagee, sent by registered mail to the most recent address furnished Lessor pursuant to Section 22A(2), and if to Lessor, sent by registered mail to the address set forth in Section 21(c). (7) Erroneous Payments. A Leasehold Mortgagee making any payment to Lessor in error or pursuant to Lessor's wrongful, improper or mistaken notice or demand shall be entitled to the return of any such payment or portion thereof. If, after any such payment by a Leasehold Mortgagee, the Lessee pays the same or any part thereof to Lessor, Lessor shall promptly refund said payment or portion thereof to such Leasehold Mortgagee. (S) Li itat'on o Lessor's Right to Encumber Fee. Any mortgage now or hereafter placed on Lessor's fee interest in the Premises shall be subject to this Lease, to any new lease created pursuant to Section 22B, to any mortgage now in existence on the leasehold estate as permitted by this Lease or such new lease, and to Lessee's right, as permitted by this Lease or such new lease, subsequently to encumber the leasehold estate created hereby or thereby. (9) No Rights to Encumber Fee of Lessor. The Provisions of this Section do not give to any person whatsoever the right to mortgage, hypothecate or otherwise to encumber or to cause any liens to be placed against the freehold estate of Lessor, nor shall said provisions be JHKUHL 302n 399696 2 construed as resulting in a subordination in whole or in part of the freehold estate of Lessor to any indebtedness of Lessee. (10) Per orma ce hu Le sehold MQrtqagee. Any Leasehold Mortgagee shall have the right, but not the obligation, to make any payment, perform or cause to be performed any act, or otherwise comply or cause compliance with any and all terms, covenants and provisions of this Lease to be complied with by Lessee, and Lessor shall accept any such payment, performance or compliance by any Leasehold Mortgagee as if such payment, performance or compliance had been made by Lessee. (11) Rights of Leasehold Mortctagees. The exercise by any Leasehold Mortgagee of its rights to obtain possession of the Premises, including without limitation the right to commence an action against the Lessee for the appointment of a receiver, shall not constitute a breach or default under this Lease. (12) Non -Merger. So long as any Leasehold Mortgage is in existence, unless the Leasehold Mortgagee thereof shall otherwise expressly consent in writing, the fee title to the Premises and the leasehold estate therein created by this Lease shall not merge but shall remain separate and distinct, notwithstanding the acquisition of both said fee title and said leasehold estate by Lessor, Lessee or by a third party, by purchase or otherwise. (13) Estonnel Certificate. Lessor shall, without charge, at any time and from time to time within ten (lo) days after written request of Lessee or any Leasehold Mortgagee to do so, certify by written instrument duly executed and acknowledged to any Leasehold Mortgagee or purchaser, or proposed Leasehold Mortgagee or purchaser, or any other person, firm or corporation specified in such request: (a) as to whether this Lease has been modified, supplemented, amended, extended or renewed and if so, the substance and manner of such modification, supplement, amendment, extension or renewal; (b) as to the validity and force and effect of this Lease in accordance with its provisions; (c) as to the existence of any breach or default hereunder or any circumstance which, with the giving of notice or the passage of time, or both, would constitute a breach or default hereunder; (d) as to the existence of any offsets, counterclaims or defenses to the enforcement of this Lease on the part of either Lessor or Lessee; (e) as to the commencement and expiration dates of the term of this Lease; and (f) as to any other matters as may be reasonably so requested. Any such certificate may be relied upon by Lessee and any other person, firm or corporation to whom the same may be exhibited or delivered, and the contents of such certificate shall be binding upon Lessor. IHKUHL 30277 389696 2 -8- (14) survival. The provisions.of this Section 22 shall survive the termination, rejection or disaffirmance of this Lease and shall continue in full force and effect thereafter to the same extent as if this Section 22 was a separate and independent contract made by Lessor and any Leasehold Mortgagee and, from the effective date of such termination, rejection or disaffirmance of this Lease to the date of execution and delivery of any new lease pursuant to Section 22B, such Leasehold Mortgagee may use and enjoy the Premises without hindrance by Lessor or any person claiming by, through or under Lessor so long as such Leasehold Mortgagee or any person claiming by, through or under such Leasehold Mortgagee complies with the terms of this Lease except as otherwise provided in Section 22C(1). 4. Except as expressly set forth herein, the Lease remains unmodified and in full force and effect. IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date first written above. LESSOR City of Newport Beach Mayor Attest: City Clerk Approved as to form: Asst. City Attorney YUKUHL 30277 389686 2 Q� LESSEE Bahia Corinthian Yacht Club By: Its: By: Its: 10 Authorized to Publish Advertisements of all kinds including public notices by Decree of the Superior Court of Orange County, California. Number A-6214, September 29, 1961, and A-24831 June 11, 1963. PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss. County of Orange ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. am a principal clerk of the NEWPORT BEACH -COSTA MESA DAILY PILOT, a newspaper of general circulation, printed and published in the City, of Costa Mesa, County of- Orange, State of California, and that attached Notice is a true and complete copy as was printed and published on the following dates: April 27, 1998 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on April 27 1998 at Costa Mesa, California. Signature "D '98 MAY -1 A10 :30 OOF THE CITY CLERK FFICE OF ioEW PORT BEACH PUBLIC NQTICE NEWPORT BEACH CITY COUNCIL ,AGENDA SUMMARY Special Study Session • 5:00 p.m. April 27, 11998 CONSENT CALENDAR S34. FIRST AMENDMENT TO LEASE AGREEMENT BETWEEN, THE CITY OF NEWPORT BEACH AND BAHIA CORINTHIAN YACHT CLUB. S35. COMMERCIAL IN - LIEU PARKING FEE PRO- GRAM - Aubergine Restau- rant. ORDINANCES FOR ADOPTION ORDINANCE NO. 98.6 AMENDING SECTIONS 5.96.020, 5.96.025, AND 5.96.040 OF NBMO RELAT- ING TO ADULT ORIENTED USINESS APPLICATIONS AND THE OFF-SITE PRE- SENTATION OF .LIVE, ADULT ORIENTED ENTER- TAINMENT. Adopt: Ordi. nance. MISCELLANEOUS ACTIONS UPDATE ON EASTBLUFF TRAFFIC, Receive and file. Published Newport Beach -Costa Mesa ,Dally Pilot April 27, 1998. - m154