HomeMy WebLinkAbout03/27/1989 Item #F-2ar
i,Y TV' -41Y OUNCIL
CITY )I '.; V:MORT 3EAG
MAR 27 1889 MEMORANDUM F -2(a)
OFFICE OF THE CITY ATTORNEY
March 27, 1989
TO: Mayor and Members of the City Council
FROM: Robert H. Burnham, City Attorney
RE: Request for City Council Approval of Assignment of Bay
Club Lease
Introduction:
Balboa Bay Club has asked the City Council to consent to an
assignment of their leasehold interest as security for a loan.
(Copy of proposed Assignment is attached). The Consent to
Assignment includes certain City commitments as to the status of
the existing Lease and the effect of previous transactions. In
the past, the City Council has granted similar requests, the most
recent being a 1982 approval of an assignment to secure a loan
or loans totally approximately $14.5 million dollars.
Discussion:
The proposed Lease Assignment is a part of a relatively complex
transaction through which International Bay Clubs, Inc., a holding
company, will refinance existing loans secured by the Bay Club
Lease and obtain additional capital to finance Bay Club
improvements or other business ventures. The current Lease
authorizes the City Manager to execute consents to assignment
providing the City's fee interest is not compromised and the
proposed encumbrance is subject to all of the terms and conditions
in the Lease. However, the Lessee has reserved the right to
request City Council approval of any proposed use of the Lease for
financing purposes and the Bay Club has chosen to exercise that
right.
The proposed transaction is similar to a homeowner signing a
note and trust deed to secure a new low interest loan to pay off
existing high interest debt and make improvements to the property.
Since the Lease is the Lender's security, the proposed Assignment
gives the Lender the right to cure any default and, if lease
termination cannot be avoided, the right to a "new" lease on the
same terms and conditions as the existing Agreement. The Lender
also reserves the right to assign the Lease to certain
"transferees" who, because of their financial status and/or
business experience, can be expected to properly operate and
manage the Bay Club.
( )YA
0 0
Mayor and Members of the City Council
Page -2-
March 27, 1989
This office believes certain minor changes should
the proposed documents to ensure that the City's fee
the property is not subordinated and our interest in
are otherwise fully protected.
Recommendation:
be made to
interest in
the property
It is recommended that the City Council authorize the Mayor and
City Clerk to execute the proposed assignment of the BBC Lease
subject to City Attorney approval of the document.
obert H. Burnham
ity Attorney
RHB/mll
FLb 28 '89 11:14
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RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:
ROGERS i WELLS
200 park Avenue
Now York, New York 10166
Attn: Frederick. R. Utley III, Esq.
LESSOR'S ESTOPPEL CERTIFICATE, A('KN0WLEf-VMFNT AND
c N_ g_SENT_T9_�3ifH2SE2! i_Qr.. JL"5riiQLR_ E$W. t. B.Y_.QF.ED _Q: TRM
KNOW ALL MEN BY THESE PRESENTS:
THAT the CITY OF NEii'PORT BEACH, a municipal
corporation having an address at 3300 Newport Boulevard, Newport
Beach, California ("Lessor"), in consideration of Ten Dollars
(510.00) to it in hand paid, the receipt o: which is hereby
acknowledged, hereby certifies to PISS." A.ME,RICA`! TRUST COMPANY,
not personally but solely as truatee +:ndtr Land Holding 'frust
PLH-1167 ("Lessee"), INTERNATIONAI, BAY CTk..�1,3', INC. ("XBC"), IBC
CO)N&RCIAL CREDIT CO"ORATION ("Lender"), F..NANCT.A: SECURITY
ASSURANCE INC. ("Financial security") (Lender and Financial
Security are hereinafter collectively referred to as the
"Interested Parties") as follows:
1. Lessor is the landlord under that certain lease
With Iwssea more fully described in Fxhibit "A" eittached hereto
(the "Lasa") , desising thee premimea tor" tull.;r deacribad in
Exhibit "B" attached hereto (the "rreaisos"). The Iaase (1) is
in full force and effect and has not been modified, amended or
supplemented in any respect, except as e4;.ti fort* in FYhibit. "A"
and (ii) constitutes the entire agreement .•etween Lessor. and
Lessee with respect to the Promises.
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2. Lessor acknowledges and consents to the transfer of
the lessees interest in the LeaaO from IBC to Lessee pursuant to
First Amended :.and Holding Trurt dated november ). :962 �;hict,
created Trust PLA-1187 (the "Trust";. Lessor acknowledges tnnt the
lease between Lessor, as lessor, And Balboa Bay Club, Inc., as
lessee dated May 13, 1986 (the 111986 Lease") was an extension of
the prior lease agreer,ents affecting the Premises and that the
lessee's interest in such lease vested in Lessee, and not Balboa
Bay Club, Inc. Simultaneously herewith, IHc's beneficial interest
in the Trust has been assigned, transferred and conveyed to a
wholly-owned Subsidiary of IBC ("IBC Subsidiary') and Lessor
consents to such assigrueent, transfer and conveyance and to the
extension of the Trust Co -terminus with the terms of the Lease.
3. The commencement data of the terse of the most recent
extension of
the
Lease
was
May 13,
1966,
and the
term
of the
Lease
will expire
on
May
12,
2011.
All
Minimum
Rent
due
as of
, 1989, has been paid. Percentage Rent has been paid
through the period ending , 19_ __ Lessee has paid
in full all other sums presently due and payable under the Lease.
<. To the best of Leascr's knowledge, neither Lessor
nor Lessee is in default under any of the provisions of the Lease,
and Lessor knows of no event which would, with the passage of t sze
and/or the giving of notice, constitute a default under the Lease.
There are no actions, voluntary or
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FEB 29 'og 11:17 . • r. -
otherwise, pending against Lessor, under any bankruptcy,
reorganization, insolvency or similar federal or state law.
5. Lessor consents to the making by Lender to
Losses and IBC subsidiary of a loan in the amount of
$30,000,000.00 (the "Loan") (and to the refinancing of the Loan)
and the granting by Lessee to First American Title Insurance
Company for the benefit of under of a leasehold deed of traet
and security agreement (the "Deed of Trust") the granting by
Lessee to Lander of an assignment of leases and rents (the
"Assignment of Leases and Rents"), and the granting by IBC
Subsidiary to Lender of and acceptance of assignment of
beneficial interest in the Trust (the "Collateral Aesignment")
(the Dead of Trust, the Assignment of Leasee and Renta, the
Collateral Assignment and any other documents executed in
connection therewith are collectively, the "security Documents")
encumbering all of Lossae's interest in the Premises and IDU s
Bubsidiary's beneficial interest in the Trust, including,
without limitation, Lessee's leasehold estate, all personal
Property at the Premises owned by Lessee and/or IBC Subsidiary
and Lessee's and/or IBC's subsidiary's interest in all
subleasea, rents, profits and other income or the Premises
arising under the Lon e. Lessor understands that the Security
Docunants will be assigned by Lender to Financial Security.
Lessor acknowledge• that all references to "authorized
encumbrancer" &hall be deemed to apply to L«der and Financial
Security.
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�. , UWUL). 111 HENJES�- �3-16-$? 96Pm _
FE8 26 '99 11:19
6. In the event that Financia? Security (a) cures
any defaults of Lessee under the :.ease, (b) performs Lessee's
covenants and obligations under the Lease, or (r..) exercises any
election, option or privileges of Lessee under the Leese, Lessor
shall accept Financial Security's parformanee of the same as if
it had been mads by Losses.
7. Lessor shall not modify or amend any term or
provision of the Lease without the prior written approval of
Financial Security. In the event of a default by Lessee under
the Lease, Lessor shall not voluntarily agree to or accept any
surrender, cancellation or modification of t.ta Lease without
Financial security's consent.
8. Lessor shall give Financia'. Security (or any
other substitute party designated in writinq by Financial
Security) notice of any default by Lasses under the Lease
simultaneously with the giving of such notice to Lessee. Upon
the giving of such default notice to Financial Security for such
substitute party), Financial Security shall have the right, but
not the obligation, to cure (i) aay monetary default within a
period of fifteen (15) days attar the expiration of the
applicable grace and/or notice period set forth in the Leads and
(ii) any non -monetary default within a period of thirty (30)
days after the expiration of the applicable grace and/or notice
period set forth in the Lease, or in the case of any
non -monetary default which cannot with dne diligence be cured
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FEB 29 '09 11:20
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within much 30 -day period, by commencing to cure ouch default
within the aforesaid 30 -day period and thereafter prosecuting
the curing of such default with due diligence. With respect to
any non -monetary default not susceptible of cure by Financial
Security, Lessor shall not exercise any of its rights or
remedies under the Lease if Financial Security, after receipt of
notice from Lessor, shall (i) commence and prosecute a
foreclosure of the Deed of Trust or (ii) diligently atteapt to
acquire the Premises encumbered by the Deed of Trust through a
deed in lieu of foreclosure or otherwise, and upon completion of
such foreclosure or acquisition the then owner of the Premises
shall commeneo to cure such defaults as have been specified in
any notice given to Financial Security ac are than susceptible
of cure by such owner. Any exercise by Financial Security of
its remedies under the security Documents shall not constitute a
default under the Lease.
9. If Financial Security is not able to avoid a
termination of the lease, Financial Security may, within thirty
(30) days after such tersination, require that Lessor grant to
it a new lease on the same terms and conditions as the
terminated Lease, provided Financial Security pays all
arrearages and diligently cures all defaults susceptible of cure
by Financial Security under the terminated Lease within thirty
(30) days after Financial security requires much new Lease, or
in the case of any default which cannot be cured within such
FEE 29 1e9 11122 1
I
'7146426947:
r.,
thirty (90) day period, commences to cure such default within
such period and thereafter prosecuted the curing of such
defaults) with due diligence.
10. In the event of Leasee's default under the
Lease or any exercise by Financial Security of its remedies
under the Security Documents, Lessor shall not disturb the
estate of any subtanants of the Premises whose sublease has been
I
approved by Lessor pursuant to Article 17 of the 1996 Lease, or
for which no consent shall be required thereunder. Lessor
agrees not to cancel any license or rental agreements concerning
I
any apartments or boat slips located within the Premises in the
event of Leasee's'default under the Lease or the exercise by
I
Financial Saouritj of its rights under the Security Documents.
11. If Lessee defaults under the Dead of Trust,
Financial Security may foreclose the Dead of Trust through
private power of 'sale or otherwise, effect the appointment of a
receiver and take possession of the Premises. In the event of a
sale pursuant to such foreclosure or upon Financial Security
becoming the holder of Lessee's leasehold estate, Lessee's
I
leasehold estate �a the Premises may, subject to provisions of
paragraph 11 below, be assigned, and upon such assignment and
the assumption pf Lessee's obligations by the assignee,
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Financial security * shall be released from all the Lease
obligations arising after the effective date of the assignment.
Financial security shall not be personally liable under the
i
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EIIT E -
FEB 2e 'a9 W Z4
r.o
Lease either before such foreclosure or after Financial Security
further assign& or transfers the interest foreclosed.
12. Upon Financial Security toreclosing the Deed of
Trust, or accepting a deed or au --render in lieu of foreclosure,
(which transfer may be made) the Lease may be (i) freely
assigned to any Class k Tranrferee (as hereinafter defined)
without obtaining Lessor's prior consent thereto, (ii) assigned
to any Class 8 Transferee (as hereinafter defined) after
obtaining Lessor's consent thereto, which consent shall not be
unreasonably withhold or delayed, or (iii) assigned to any Class
C Transfers& (es hereinafter defined) after obtaining Lessor's
consent thereto, which consent shall be granted or denied at
Lessor's sole discretion.
For purposes hereof:
"Class A Transferee* shall mean:
(i) any bank, trust company, savings bank,
savings and loan association or insurance
company regulated by the United States or
any stater a pension, retirement or
profit sharing plan regulated under the
Federal Employees Retirement Income
Security Act, a corporation, partnership
or trust who3o securities 'or beneficial
interests are listed on the New York or
American Stock Exchange, or
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• -rV .
I
any person
or entity actively engaged in
the operation
cr management of hotel,
resort oL
vacation properties whose net
worth, in
its most recent audited
i
financial
statement prepared in
accordance
with generally accepted
accounting
principles, is not less than
i
$50,000,000,
provided that the proposed
transferee,
and if the proposed
transferee
is an entity, its chief
executive
officer, chai.rnan of the board,
i
president,
chief operating officer, chief
financial
officer, any director or
general partner and any person, firm or
i
corporation
having a beneficial interest
in twenty
(20%) or more of the moneys
I
invested
in the proposed transfers,
whether by
loan, stock ownership or other
form of
financial interest, has not,
1/
within the
past five years bean convicted
or is not
under current indictment for a
i
�r
crime involving
corruption or bribery of
I
a public
official or body or misuse of
i
public funds.
i
I
I
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FEB 28 189 11:26 • • - 10.1e
"Class B Transferee" eha12 mean any parson or entity
actively engaged in the operation or nantgament. of hotel, resort
or vacation properties whose net worth on its most recent
audited financial statement, prepared in accordance with
generally accepted accounting principles is less than
3501000,000 but greater than $20,000,000, provided that the
proposed transferee, and if the proposed transferee is an
entity, its chief executive officer, chairman of the board,
president, chief operating officer, chief financial officer, any
director or general partner and any person, firm or corporation
having a beneficial interest in twenty percent (20%) or more of
the moneys invested in the proposed transferee, wbather by loan,
stock ownership or other form of financial interest, has, as of
the date of the transfer, a good reputation for integrity.
"Class C Transferee" shall sawn any individual or
entity which is not a Class A Transferee or Class B Transferee.
Any parent, subsidiary, sister corporation or other
affiliate of the entities described in the definition of Class
A, Class B or Class C Transferee shall also respectively be
deemed Class A, Class B or Class C Transferees.
17. Notvithatanding any provision in the Tease to
the contrary, and as long as Financial Security retains a
security interest in Losses's interest in the Ieaee,' upon any
damage to or destruction of the improvements located on the
Premises where the insurance proceeds payable from such damage
9
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ALO n 189 11128
E
• P.11
or destruction exceed $2,000,o0C, Financial Security shall
receive all insurance proceeds frog such destruction and shall
deposit same in an interest-bearing escrow account to protect
Financial Security's security and to assure completion of the
restoration of the improvements. Financial security shall
deliver the proceeds to Lessee no later than thirty (30) days
following (i) completion of the restoration of the improvements
or any portion thereof that has been damaged or destroyed, to
the same condition, character and value as nearly as possible to
that existing prior to such damage or destruction, and (ii) the
issuance of all applicable governmental approvals in connection
with the performance of such work. In the event that, in
Financial Security's sole judgment, the insurance proceeds held
by Financial security are not sufficient to fully accomplish
such restoration, Lessee shall promptly, on demand, deposit with
Financial Security the additional amounts necessary to complete
such restoration. In lieu of holding such proceeds until after
completion of restoration of the improvements, Financial
security shall be obligated to release such insurance proceeds
as the restoration of the improvements progresses upon receipt
of an unconditional, irrevocable standby letter of credit,
issued• by an entity satisfactory to Financial Security in its
sole discretion, in an amount equal to the proceeds released for
restoration, and otherwise upon such terms and conditions as may
be set forth in the Security !xocuments. Anything to the
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`F9 29 '09 11.29
contrary notwithstanding, insurance proceeds may, at Financial
Security's option, be applied towtrds the obligations of Lessee
under the Security Documents in the event of a default under the
Security Documents. Lessor hereby consents to any subordinate
financinq encumbering Lessee's leasehold estate or such
insurance proceeds solely in connection with financing the
restoration of the improveaents. It the amount of insurance
proceeds exoead the then principal and interest due on the loan
which is secured by the Dead of Trust, any excess proceeds shall
be distributed as otherwise in accordance with the Lease.
Financial Security shall be entitled to participate in any
settlement or adjustment of fire or other casualty losses.
Nothing contained in this paragraph 13 shall be deemed to alter
Lessee's obligation to restore the Promises pursuant to
Article 2S(b) of the 1986 Lease.
14. Prior to any distribution of the proceeds of
any award for any condemation or public or quasi-publia taking,
Financial Security shall be entitled to the amount of such award
up to the than full obligation for principal, interest and other
charges of Lessee under the Security Doaumente but in no avant
in exoaas of the value of Lessee's interest in the portion of
the Presises subject to such "taking" on the day Immediately
preceding to such taking. Nothing contained herein shall effect
Lessor's right to a condemnation award equal to Lessor's
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.c.a co o� 1151 •
reversionary interest in the Pramisos on the data immediately
preoeding such taking.
15. 7,*ssor covenants that the Lease and all
amendments, revisions, or other modifications thereto, now or
hereafter mad*, whether recorded or unrecorded, shall be
superior to any and all financing encumbering Lessor's interest
in the Premises, The foregoing covenant shall run with the land
and shall be self -operative without the requirement of the
exeoution of any further instrument.
16. Lessor agrees to provide Financial security
with a copy of each notice given to Leasee at the same time and
In the same manner as such notice is provided Lessee and
addressed as follows:
Financial Security Assurance Inc.
350 Park Avenue - 13th Ploor
Now York, New York 10022
Attention: Surveillance Department
with a copy tot
Rogers i Walls
200 Park Avenue
New York, Now York 10166
Attention: Frederick S. Utley III, Esq.
or to such other addresses as Financial Eacurity may hereafter
designate to Lessor in writing from time to time. No such
notice from Lessor to Lsesse shall be effective until a copy of
the same is so provided to Financial Security.
17. Lessor acknowledges that Lender and Financial
security are relying upon this certificate and the
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rLnl G•Jr�yraJl�N ..r�J �..... _
FEB 28 '89 11132 •
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N.14
representations Contained herein in providing financing to
Lessee, and Lessor makes the above representations for the
benefit and protection of Lessee, SBC, IBC subsidiary,
Interested Parties, and their respective successors and
assigns. Any rights granted to Financial security shall apply
to Financial Security or its designee under the Security
IN WITNESS WHEREOF, the undersigned have executed and
acknovledgsd this certificate as of the ! day of ,
1989.
Approved as to fore
and due authorization
City Attorney
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14,
CITY OF NEWPORT BEACH
By:
mayor
ATTEST:
BY: --___—
City Clerk
ra 29 199 11'39 •
The i4ndersignea hereby
ratifies " confirms
the provisions of
peragraph 2 herein
SAY CLUB) INC.
L
By:
14
FIRST AMERICAN TRUST CO"ANY,
not personally but solely as
trustee under Land Holding
Trust PLH-1187
INTERNATIONAL SAY CLaBS, INC.
By:
FU 29 199 1113/ • • t. LO
(AcknovledgementAl
Ull
rtz .117 'f" aA-.24 r••'
i
lxhibit A
1. Indenture of lease dated March 24, 1948 by and between City
of Newport Beach, as landlord, and The Newport Bay company,
as tenant, recorded in the Official Records of the County
Recorder's office of orange County, California in Book
96510 Page 116
1. Amendment to Lease dated April 10, 1950 by and between City
Of Newport Beach, as landlord, and The Newport Bay Company,
as tenant,' recorded in the official Records of the county
Recorder's Office of orange County, California in Book
26510 Page 146
3. Amendment to lease dated September
City of Newport Beach, as landlord,
Company, as tenant, recorded in the
County Recorder's Office of Orange
Book 2651, page 152
29, 1952 by and between
and The Newport Bay
official Records of the
County, California in
Amendment to Lease dated March 28, 1960 by and among City
of Newport Beach, as landlord, and The Newport Bay Company,
as tenant,, and Wrather Investment, Inc.; as assignee of
tenant's interest, recorded in the Official Records of the
County Recorder's office of Orange County, California in
Book 3179, page 430
5. Lease dated May 13, 1986 by and between city of Newport
Beach, as 'lessor, and Balboa Say Club, Inc., as leasee, a
memorandum of which is intended to be recorded in the
Official Recorda of the County Recorder's Office of orange
County, California simultaneously herewith
11
61 14 .. b -'.1d
Exhibit 8
(legal description]
• RECEIVED AFTER AGENDA DONALD W. HARVEY
PRINTEV .�� C42 2099 PORT WH URIOQC PLACE a
(41 N[ RT BCACN. C t .FIRMA 0266044
EIYEO
Liz` ,� eXly,.�.� 'y"•7 n��
Atj
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•
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
March 13, 1989
TO: MAYOR AND CITY COUNCIL
•TY COUNCIL
Agenda Item No. J3
v,...<A
CITY 11 .i,_ROR1 2ERCI
MAR 13 1989
FROM: City Manager
SUBJECT: N8K0VJU99W, #SRSTANDING/BA&&&h!AKRY' JMB'
The original Balboa Bay Club lease was signed on
March 24, 1948 and was to have expired on August 31, 1998.
On June 10, 1985 the City entered into a Memorandum of Under-
standing with the BBC outlining procedures for the considera-
tion of a new twenty-five year lease. On May 12, 1986 the
City Council approved of the new lease adding twelve years to
the original lease and increasing the rental payments to the
City. Both the 1985 MOU and the 1986 agreement required the
BBC to prepare a new redevelopment plan for the BBC consistent
with the newly adopted City General Plan and Land Use Element.
On February 13, 1989 representatives of the Balboa
Bay Club appeared before the City Council at the Study Session
and presented the conceptual redevelopment plan to the City.
This conceptual plan is consistent with the newly adopted City
General Plan. During the presentation of February 13th it was
stated to the City Council that a new MOU would be presented
on March 13th for the Council's consideration. Attached you
will find the proposed MOU which provides basically for the
following:
1. The Balboa Bay Club will retain, at their expense,
professional consultants to prepare all of the
studies, reports, and plans necessary to implement
the plan, and will reimburse City for costs
incurred in the preparation of the EIR.
2. The Balboa Bay Club will review the proposed
redevelopment or master plan with the California
Coastal Commission staff and obtain conceptual
approval, and will participate in any appropriate
public hearings and meetings to develop a consensus
approval by the Newport Beach communities.
3. The Balboa Bay Club will submit the redevelopment
plan or master plan to the City for public hearings
by the Planning Commission and the City Council.
Osv
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4. Upon City approval of the
a further lease extension
mutual agreement on terms,
rates.
0
plan, the City agrees to
of fifty years subject to
conditions, and rental
The reason for the Memorandum of Understanding is that
the Balboa Bay Club will spend in excess of $1 Mil to prepare
all plans, specifications, environmental impact reports, and agreements
with the Coastal Commission. This MOU will give some assurance to
them that for this expenditure of funds the City will, in good faith,
consider a fifty year term lease, provided the City Council agrees
with the rental terms and conditions. Finally, it is the BBC
contention that the large sums of money needed to implement the
redevelopment plan will require more than twenty-five years to
amortize.
Attached you will find a copy of the Memorandum of
Understanding.
RLW:kf
Attachment
ROBERT L. WYNN
0 0
• MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is entered into on
, 1989, by and between the CITY OF NEWPORT
BEACH (City) and INTERNATIONAL BAYS CLUB, INCORPORATED and BALBOA
BAY CLUB, INC. (Club) with reference to the following:
R E C I T A L S
A. On March 24, 1948, prior to the
effective date of the City Charter, City
and Club entered into a fifty (50) year
lease of certain City -owned harbor
frontage lands terminated on August 31,
1998.
C. On May 12, 1986, the City Council of
City approved a new lease between City
and Club having an additional term of
twelve (12) years for a total of twenty-
five (25) years terminating in the year
2011, (New Lease).
D. The 1985 MOU and the New Lease required
Club to prepare a new Master Plan for
the Club property consistent with the
City General Plan and Land Use Element.
The New Lease further provided for the
City to consider an additional lease
term extension of the financing and
implementation of the new Master Plan.
• E. The Club has completed preparation of
the Plan and filed with the City a
vesting tentative map incorporating said
Plan. The application for the vesting
tentative map has been deemed complete
by the City.
F. In order to complete details of the
Master Plan, the Club will be required
7
B. On June 10, 1985, the City and the Club
entered into a Memorandum of
Understanding (1985 MOU) providing for,
among other things, the extension of the
existing Club Lease for a period of up
•
to twenty-five (25) years upon
satisfaction of certain conditions
relating to establishing current fair
market rent for the leased premises.
C. On May 12, 1986, the City Council of
City approved a new lease between City
and Club having an additional term of
twelve (12) years for a total of twenty-
five (25) years terminating in the year
2011, (New Lease).
D. The 1985 MOU and the New Lease required
Club to prepare a new Master Plan for
the Club property consistent with the
City General Plan and Land Use Element.
The New Lease further provided for the
City to consider an additional lease
term extension of the financing and
implementation of the new Master Plan.
• E. The Club has completed preparation of
the Plan and filed with the City a
vesting tentative map incorporating said
Plan. The application for the vesting
tentative map has been deemed complete
by the City.
F. In order to complete details of the
Master Plan, the Club will be required
7
to make a major financial commitment in
retaining the necessary consultants for
the preparation of the architectural and
• engineering plans and traffic studies,
as well as paying the cost of the
consultant retained by the City to
prepare the environmental impact report
(EIR).
G. Before the Club makes substantial
additional financial commitments to the
Master Plan, the City and Club desire to
reach an understanding regarding the
terms and conditions under which the
City would consider a further extension
of the Club Lease for a period of up to
fifty (50) years consistent with the
provisions of the 1985 MOU and the New
Lease. Implementation of the Master
Plan will require further major
financial commitments for the new
improvements and necessitate a longer
lease term to finance and amortize these
new improvements.
• Now, therefore, the parties have mutually reached the
following understandings:
Club will retain professional
consultants to prepare all of the
studies, reports, and plans necessary to
implement the plan, and will reimburse
City for costs incurred in the
preparation of the EIR by City's
environmental consultant.
2. Club will review the Master Plan with
the California Coastal Commission staff
and obtain conceptual approval from said
Commission staff. Club will also
participate in any appropriate public
hearings and meetings for the purpose of
obtaining community input and consensus
on the Master Plan. Finally, Club will
submit the Master Plan and applications
• for all necessary permits to City for
its consideration. The Master Plan and
the EIR prepared by the City will then
be reviewed to determine compliance with
the City's General Plan, Local Coastal
Plan, Zoning and Subdivision Ordinances,
and the provisions of the California
Environmental Quality Act (CEQA) and the
CEQA Guidelines.
•
•
S
3. Upon City approval of the plan, the plan
EIR and associated entitlements and
permits, City agrees to a further lease
extension having a maximum total term of
fifty (50) years subject to mutual
agreement on terms, conditions, and
rental rates.
4. The future lease terms will incorporate
the provisions of the original Lease and
the New Lease providing that the City
shall become the owner of all structures
on the leased premises at the end of the
future lease from the election
provisions of Section 420 of the City
Charter.
IN WITNESS WHEREOF, the undersigned have executed this
Memorandum of Understanding as of the day and year first above
written.
APPROVED AS TO FORM:
Robert H. Burnham
City Attorney
ATTESTED TO:
Wanda Ragg
City Clerk
CITY OF NEWPORT BEACH
By:
Donald A. Strauss
Mayor
INTERNATIONAL BAY CLUBS, INC.
BALBOA BAY CLUB, INC.,
a California corporation
By:
W. D. Ray
Chairman of the Board
By:
Thomas G. Deemer
President