HomeMy WebLinkAboutC-5567(N) - Newport Boulevard, 3300 - Ground Lease Estoppel Certificate 2025 Lido House HotelGROUND LEASE ESTOPPEL
CERTIFICATE AND AGREEMENT
To: LIDO HOUSE, LLC, a California limited liability company ("Tenant")
and PNC BANK, National Association, a national banking association,
together with its successors and assigns ("Lender")
Date: ji a.� 7t; , 2025
Reference is made to that certain Ground Lease dated as of September 9, 2014
("Original Lease") between the CITY OF NEWPORT BEACH, a California municipal
corporation and charter city ("Landlord"), and OLSON REAL ESTATE GROUP, INC.,
a California corporation ("Original Tenant") (as predecessor in interest to Tenant), as
modified by that certain First Amendment to Ground Lease dated as of May 3, 2016
between Landlord and Original Tenant, as iodified by that certain Assignment
Agreement dated May 3, 2016 between Original Tenant, Landlord and Tenant
("Assignment Agreement"), whereby Original Tenant assigned to Tenant all of Original
Tenant's rights under the Original Lease, as modified by that certain Second Amendment
to Ground Lease dated as of November 13, 2024, and as further modified by that certain
Third Amendment to Ground Lease dated as of �7v, c , 20:Zb("Third
Amendment") (collectively, "Lease"). The Lease covers cert n real property described
therein ("Leased Premises"). Capitalized terms used herein and not otherwise defined
shall have the meanings given such terms in the Lease.
Tenant has informed Landlord that Lender has committed to make a loan in the
maximum aggregate principal amount of $78,600,000.00 ("Loan") to Tenant, which
will be secured by, among other things, a Deed of Trust (defined below). Landlord
hereby certifies the following to Lender as follows in connection with the contemplated
encumbrance of the Lease by Lender pursuant to the Deed of Trust:
1. Landlord currently holds all of the right, title and interest of the "Lessor"
under the Lease. Tenant currently holds the right, title and interest of the "Lessee" under
the Lease.
2. A true, complete and correct copy of the Lease and all amendments
thereto are attached as Exhibit A to this Ground Lease Estoppel Certificate and
Agreement ("Estoppel Certificate"). There are no other agreements, whether oral or
written, between Tenant and Landlord with respect to the Lease or concerning the Leased
Premises.
3. The Lease is in full force and effect and, except as described above in the
definition of "Lease," has not been amended, modified or assigned by Landlord.
4. The Commencement Date of the Lease was May 3, 2016, and the term
of the Lease expires on May 3, 2071. Tenant has one option to extend the term by a
period of thirty (30) years, as described in Section 4.5 of the Lease.
5. The Base Rent under the Lease is $345,000.00 per annum, payable in
monthly installments, and has been paid in full through February 28, 2025. There is no
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security deposit held by Landlord under the Lease. All other sums payable as of the date
hereof by Tenant under the Lease have been paid.
6. To Landlord's knowledge, there exist no Defaults by Landlord under the
Lease. To Landlord's knowledge, there are no uncured Defaults or breaches on the part
of Tenant under the Lease, nor has any fact, act or omission occurred that, with notice or
the passage of time, or both, would constitute a Default by Tenant under the Lease.
7. The requirements under Section 12.1.1 of the Lease have been satisfied
and Landlord consents to the execution and delivery by Tenant to Lender of the Deed of
Trust encumbering Tenant's leasehold interest in the Leased Premises, which Deed of
Trust does not in any way encumber the Landlord's fee interest in the Leased Premises or
the Landlord's rights set forth in the Lease. Landlord is providing this Ground Lease
Estoppel Certificate and Agreement based on its understanding that the proposed Loan,
evidenced by the Deed of Trust, shall be fully subordinate to Landlord's fee title in and
to the Leased Premises and all of Landlord's rights set forth in the Lease.
8. Tenant's use and operation of the Leased Premises complies with any use
covenants or operating requirements contained in the Lease.
9. Landlord has received, and/or by virtue of this Estoppel Certificate,
acknowledges Lender has registered its name and address with Landlord in accordance
with Section 12.2.i of the Lease.
10. Landlord has not conveyed, assigned or encumbered its interest in the
Lease.
11. Landlord has not commenced any action or given or received any notice
for the purpose of terminating the Lease, nor has Tenant commenced any action or given
or received any notice for the purpose of terminating the Lease.
12. As more particularly described in Section 12.4 of the Lease, for so long as
the obligations secured by the Deed of Trust remain outstanding and unperformed,
without the prior written notice to Lender, Landlord will not execute any amendment or
modification to the Lease without the prior written consent of Mortgagee.
13. Landlord acknowledges and agrees that a copy of any notices sent to
Tenant pursuant to the Lease shall also be sent to Lender at the following address:
PNC Bank, National Association
PNC Real Estate
2020 Main Street, Suite 900
Irvine, CA 92614
Attn: Damon Smith
E-Mail: damon.smith@pnc.com
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With a copy to:
Riemer & Braunstein LLP
660 Newport Center Dr., Suite 1400
Newport Beach, CA 92660
Attention: Mark Appelbaum
E-Mail: mappelbaum@riemerlaw.com
Further, Landlord requests that a copy of any notices of default sent by Lender
to Tenant pursuant to the Deed of Trust shall also be sent to the Landlord at the following
address:
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attention: City Manager
14. Tenant has agreed to execute, for the benefit of Lender, an amended and
restated deed of trust, encumbering Tenant's leasehold interest in the Lease ("Deed of
Trust"). Landlord hereby agrees that neither Tenant's execution of the Deed of Trust nor
Lender's foreclosure or exercise of any or all rights and remedies afforded to Lender
thereunder shall constitute a Default under the Lease, nor will it constitute an event
permitting Landlord to terminate the Lease. Lender shall be entitled to all the benefits
and rights of a "Mortgagee" (as defined in the Lease) set forth in the Lease, including,
without limitation, the provisions in Article 12 of the Lease.
15. Landlord acknowledges and agrees that (i) items 1-19 included in the
Schedule of Performance for the Third Amendment ("Schedule of Performance")
attached as Exhibit B to that certain Option Agreement to Ground Lease with Related
Third Amendment to Ground Lease dated as of November 13, 2024 between Tenant and
Landlord ("Option Agreement"), have been fully performed and completed to the
satisfaction of Landlord, and (ii) the Commencement Date of the Third Amendment
described in item 20 on the Schedule of Performance has occurred.
16. If Lender or Lender's designee or nominee or any third party (a
"Successor Owner") succeeds to the interest of "Tenant" under the Lease, whether by
foreclosure, acceptance of a deed in lieu thereof or execution of a new lease in accordance
with the terms of the Lease, then Landlord agrees that the dates identified in the Schedule
of Performance for items which have not been completed by Tenant or accepted by
Landlord on the date on which such Successor Owner succeeds to the interest of "Tenant"
under the Lease, shall be extended by the timeframes to cure a default set forth in Sections
12.4(iii) and 15.1 of the Lease.
17. As of the date hereof, the Capital Replacement Reserve Fund (as defined
in Section 8.5 of the Lease) has not been established by Tenant.
18. Lender is relying on this Estoppel Certificate in agreeing to accept the
Deed of Trust from Tenant. Landlord represents and warrants to Lender that this Estoppel
Certificate is a valid and authorized certificate of Landlord and the person(s) executing
this Estoppel Certificate on behalf of Landlord have the authority to do so. This Estoppel
Certificate shall inure to the benefit of Lender and its successors and assigns. This
Estoppel Certificate shall not be relied upon and is not intended for the benefit of any
person or entity other than Lender and its successors and assigns.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, Landlord has executed this Ground Lease Estoppel Certificate and
Agreement as of the date set forth above.
LANDLORD:
CITY OF NEWPORT BEACH,
a municipal corporation and charter city
By:
Grace K. eung
City M nager
Approve
s to form:
Aaron C.
arp
City Att
ey
Attest:
0
Brown I V X
City Cler ofP
CgCIFORL
[Signature Page to Ground Lease Estoppel Certificate and Agreement]
EXHIBIT A
ORIGINAL LEASE, FIRST AMENDMENT TO ORIGINAL LEASE, ASSIGNMENT
AGREEMENT, SECOND AMENDMENT TO ORIGINAL LEASE, OPTION
AGREEMENT, AND THIRD AMENDMENT TO ORIGINAL LEASE
[See Attached]
Exhibit A