HomeMy WebLinkAbout04 - Balboa Bay Club Leaseu
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Agenda Item 11 7
CITY OF NEWPORT BEACH NN RGMDDA
CITY ATTORNEYS OFFICE Tl
April 11, 2000
TO: Mayor & Members of the City Council
FROM: Robert H. Burnham, City Attorney
RE: Balboa Bay Club Redevelopment
Addendum to Lease
The Balboa Bay Club (BBC) has asked the California Coastal Commission to
amend Coastal Development Permit 5 -94 -265 to reflect the modifications to the
project approved by the City Council in July, 1999. The Coastal Commission staff
is recommending approval of the amendment to the Coastal Permit subject to
compliance with certain conditions. The conditions include a requirement that the
City and BBC "execute and record an addendum to the lease" that, in essence
commits BBC and the City to preserve the public benefits associated with the
redevelopment of the property. The Coastal Commission staff is also requiring
compliance with a "Water Quality Management Plan" that has certain maintenance
requirements that must be fulfilled by the City if BBC fails to do so. The City will be
entitled to reimbursement from BBC for costs associated with BBC's failure to
comply with the maintenance requirements.
This office has prepared an "Addendum to Lease" (copy attached) that, in our
opinion, complies with the conditions recommended by the Coastal Commission
.staff. We are recommending the Council authorize the Mayor to execute the
Addendum prepared by this office. We are also recommending the Council
authorize the Mayor to execute an Addendum that is modified to address new or
slightly different conditions so long as the changes are not substantive.
RECOMMENDED ACTION
Authorize the Mayor to execute the proposed Addendum to Lease or a modified
Addendum so long as the modifications are not substantive.
Robert Burnham
FIRST ADDENDUM TO GROUND LEASE
THIS FIRST ADDENDUM TO GROUND LEASE (Addendum) is made as of
by and between THE CITY OF NEWPORT BEACH, a
charter city and municipal by ( "Landlord "), and BBC PROPERTY, INC., a
New York Corporation ('Tenant').
RECITALS
A. Landlord is the grantee of that certain parcel of real property located in the City
of Newport Beach, County of Orange, State of California, as more particularly
described on Exhibit A attached hereto (Premises, pursuant to the provisions
of the Beacon Bay Bill (Chapter 74 of the Statutes of 1978).
B. Tenant is currently occupying and in possession of the Premises pursuant to
that certain Lease between Landlord, as lessor, and Tenant, as lessee, dated
May 13, 1986 (Existing Lease. The Premises are operated as a multi -use
hotel and private club facility by International Bay Clubs, Inc., an Affiliate of
Tenant, operating under the name "Balboa Bay Club."
C. Landlord and Tenant have entered into an OPTION AGREEMENT and a
FIRST AMENDMENT TO OPTION AGREEMENT (collectively the Option)
pursuant to which Tenant has the right, subject to compliance with certain
conditions, to enter into a new GROUND LEASE (Lease). Tenant is obligated,
pursuant to the Lease, to redevelop a portion of the Premises with a facilities
open to the general public (Project).
D. Landlord and Tenant intend, through this Addendum, to amend the New Lease
to comply with conditions to approval of the Project that were imposed by the
California Coastal Commission.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
Section 7.4 is added to the New Lease to read as follows:
Section 7.4 Public Use
Landlord and Tenant agree and acknowledge that, during the term of this Lease:
A. Membership in any private club or organization operated on or from the
Premises, and access to any public area, shall not be denied or conditioned on the
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• basis of race, religion, gender, creed, national origin, ethnicity, sexual orientation, or
disability. However, this provision shall not prohibit Tenant from restricting access, on
the basis of gender, to restrooms or portions of any private club specifically designated
for females or males because of the proximity of the area to restrooms, showers, spas
or athletic facilities.
B. All portions of the Premises designated for public use on any plan, exhibit
or drawing submitted to, and approved by, the Landlord or any State Agency (including
the California Coastal Commission) shall remain available for public use during the term
of this Lease .
C. Any development (as that term is defined in Section 30106 of the Public
Resources Code) that is proposed or contemplated by Tenant subsequent to approval
of the Project by the California Coastal Commission shall required Landlord's approval
and an amendment to the approved Coastal Development Permit or a separate Coastal
Development Permit.
D. The public access walkway described on Exhibit 3 of the California
Coastal Commission Staff report prepared for the meeting to approve Coastal Permit 5-
94 -265- Al shall remain free of any development or improvement that would obstruct or
limit public use, including, but not limited to, outdoor dining, furniture of any kind,
. screens or barriers.
E. All Hotel rooms in structures open to the general public shall be available
for use and occupancy by the general public without any restriction or any preference
given to Balboa Bay Club members. However, Balboa Bay Club members may be
given preference in reservations for the Hotel rooms proposed for the „ Club facility” up
to a maximum of twenty -eight (28) rooms per night. Any Hotel room in the "Club facility"
that is reserved by a Balboa Bay Club member shall be made available to the general
public if the member does not confirm the reservation at least forty -eight (48) hours in
advance of occupancy.
F. Notwithstanding any provision of this Lease or any permit, Tenant shall
not install or construct any object or improvement that would obstruct or limit public
views of the bay from within any area designated for public restaurant use on plans
approved by the California Coastal Commission.
G. All view corridors designated on plans approved by the California Coastal
Commission shall remain free of any development that would obstruct or limit public
views to the ocean and bay including, without limitation, landscaping or fencing.
H. All signage required by California Coastal Commission Special Condition
No. 3 shall be displayed at all times during the term of this Lease.
.I. All public amenities, including, without limitation, the bayfront public
walkway shall be available to the general public at all times that any portion of the "Club
facility" is open to any Balboa Bay Club member.
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J. Tenant shall not charge for parking on the premises except to the extent
permitted by California Coastal Commission Special Condition No. 7 pertaining to
special events.
K. Tenant shall fulfill all maintenance and reporting responsibilities relative to
the "Polluted Runoff Control Plan" imposed as a condition to the approval of Coastal
Permit 5 -94 -265 —Al by the California Coastal Commission. In the event that Tenant,
or any successor in interest, fails to comply with any maintenance or reporting
requirement of the Polluted Runoff Control Plan, the Landlord shall notify Tenant of its
failure to do so and that Tenant will be in material default under this Lease if the
maintenance or reporting is not completed within five (5) days after the notice. In the
event Tenant fails to comply with the notice, Landlord shall perform the required
maintenance and/or reporting and Tenant shall reimburse Landlord for all costs and
expenses incurred by Landlord.
The provisions of this Section shall bind Tenant and Landlord and any successor in
interest to either Party for so long as any of the improvements approved by the
California Coastal Commission remain on the Premises. The Parties acknowledge and
agree that the Premises consists entirely of tidelands and the terms and conditions of
this Lease are intended to preserve public benefits on behalf of the people of the State
of California. .
2. Except for the addition of Section 7.4, the terms and conditions of the Lease shall
remain unchanged.
LANDLORD:
CITY OF NEWPORT BEACH,
a municipal corporation
Attest:
City Clerk
Approved as to Form:
Mayor
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City Attorney
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TENANT:
BBC PROPERTY, INC.,
a New York Corporation
m
m
Its:
Its:
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EXHIBIT A
LEGAL DESCRIPTION OF LEASED PREMISES
[TO COME]
A -1
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• EXHIBIT B
MEMORANDUM OF GROUND LEASE
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
International Bay Clubs, Inc.
1221 W. Coast Highway
Newport Beach, California 92663
MEMORANDUM OF GROUND LEASE
This Memorandum of Ground Lease ( "Memorandum ") is entered into effective as of
(the "Commencement Date'), by and between THE
CITY OF NEWPORT BEACH, a municipal corporation ( "Landlord "), and BBC
PROPERTY, INC., a New York Corporation ('Tenant').
RECITALS
A. Landlord and Tenant have entered into that certain Ground Lease (the
"Lease ") dated as of the Commencement Date relating to certain real property
located in the City of Newport Beach, County of Orange, State of California
described more particularly on ExhibitA attached hereto and by this reference
made a part hereof (the "Premises "). Landlord and Tenant each desires to
execute this Memorandum for recordation in the real property records of the
County of Orange in order to memorialize the existence of the Lease.
NOW THEREFORE, with reference to the foregoing recital, the parties hereto agree as
follows:
1. Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby
hires from Landlord, the Premises, on the terms and conditions set forth in the
Lease.
2. Term. The term of the Lease shall be for a period of fifty (50) years
commencing upon the Commencement Date, unless sooner terminated
pursuant to the provisions of the Lease.
3. Incorporation of Lease. This instrument is a memorandum of the Lease and
is subject to all of the terms and conditions of the Lease. The terms of the
Lease shall prevail if there is any inconsistency between the terms of this
instrument and the terms of the Lease.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of
the date first set forth above.
THE CITY OF NEWPORT BEACH,
a municipal corporation
in
BBC PROPERTY, INC.,
a New York Corporation
By: _
Its:
By: _
Its:
ME
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STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On before me personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be
the person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature on the
instrument the person, or entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
(SEAL)
Notary Public
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On before me personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be
the person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature on the
instrument the person, or entity upon behalf of which the person acted, executed the
instrument.
(SEAL)
WITNESS my hand and official seal.
Notary Public
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On before me personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be
the person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature on the
instrument the person, or entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
(SEAL)
Notary Public
NB1:215136.23
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EXHIBIT C
SIGNAGE REGULATIONS
[TO COME]
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C -1
GROUND LEASE
by and between
CITY OF NEWPORT BEACH,
a municipal corporation
"Landlord"
BBC PROPERTY, INC.,
a New York Corporation
'Tenant'
Dated as of
N61:215136.23
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TABLE OF CONTENTS
Page
ARTICLE
DEFINITIONS, GRANT AND TERM
1.1 Definitions .............................................................................. ..............................2
ARTICLE
GRANT OF LEASE AND TERM
2.1
Lease .....................................................................................
..............................8
2.2
Term ......................................................................................
..............................9
2.3
Quiet Possession ...................................................................
..............................9
2.4
Ownership of Improvements .................................................
.............................10
ARTICLE
III
CONSTRUCTION AND IMPROVEMENT OF PREMISES
3.1
Improvements to be Erected by Tenant ................................
.............................10
3.2
Coastal Approval and Entitlements .......................................
.............................11
3.3
Compliance With Laws .........................................................
.............................11
3.4
Lien Free Completion ............................................................
.............................11
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3.5
3.6
As -Built Drawings ..................................................................
Tenant's Architects and Contractors .....................................
.............................12
.............................12
3.7
Costs of Construction ............................................................
.............................12
3.8
Renovation and Maintenance of Hotel ..................................
.............................12
3.9
Renovation and Maintenance of Apartments ........................
.............................13
3.10
Maintenance of Marina Operations .......................................
.............................13
3.11
Landlord's Cooperation .........................................................
.............................13
ARTICLE
IV
REPRESENTATIONS AND WARRANTIES
4.1
Landlord's Representations and Warranties .........................
.............................14
4.2
Tenant's Representations and Warranties ............................
.............................15
ARTICLE
V
RENT
5.1
Rent ......................................................................................
.............................15
5.2
Percentage Rent ...................................................................
.............................15
5.3
Base Rent During Construction ............................................
.............................16
5.4
Periodic Adjustments of Base Rent .......................................
.............................16
5.5
Fair Market Adjustment of Base Rent ...................................
.............................16
5.6
Payment of Rent ...................................................................
.............................17
5.7
Charges for Goods and Services ..........................................
.............................17
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5.8
Reconciliation of Annual Rent ...............................................
.............................17
5.9
Place for Payment of Rentals ...............................................
.............................18
TABLE OF CONTENTS
(continued)
Page
5.10 Records and Reports of Sales .............................................. .............................18
5.11 Additional Rent ..................................................................... .............................19
5.12 No Abatement or Reduction in Rent ..................................... .............................19
5.13 No Partnership Created ........................................................ .............................19
5.14 Net Lease ............................................................................. .............................19
ARTICLE VI
TENANT'S OBLIGATION WITH RESPECT TO MAINTAINING PREMISES
6.1 Repairs and Maintenance ..................................................... .............................19
6.2 Taxes and Assessments ....................................................... .............................20
6.3 Capital Repairs and Replacements ....................................... .............................21
ARTICLE
USE OF PREMISES
VII
7.1 Use of Premises ................................................................... .............................21
7.2 Pump -Out Station ................................................................. .............................22
7.3 Environmental Requirements ................................................ .............................22
ARTICLE
CONDUCT OF BUSINESS BY TENANT
VIII .
8.1
Standards of Operation .........................................................
.............................23
8.2
Management .........................................................................
.............................23
8.3
Competition by Tenant ..........................................................
.............................23
8.4
Use of Name .........................................................................
.............................24
ARTICLE
ALTERATIONS, FIXTURES AND SIGNS
IX
9.1 Tenant's Right to Make Alterations .......................................
.............................24
9.2 Prohibition Against Liens ......................................................
.............................24
9.3 Signs .....................................................................................
.............................24
ARTICLE
X
INSURANCE, INDEMNITY AND CASUALTY
10.1 Insurance ..............................................................................
.............................24
10.2 Indemnification ......................................................................
.............................27
10.3 Settlement of Insurance Claims ............................................
.............................28
10.4 Casualty ................................................................................
.............................29
10.5 Casualty Late in Term ...........................................................
.............................29
10.6 No Abatement of Rent ..........................................................
.............................29
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TABLE OF CONTENTS
. (continued)
Page
ARTICLE
UTILITIES
XI
11.1 Utilities .................................................................................. .............................30
ARTICLE
ESTOPPEL CERTIFICATES
M
12.1 Estoppel Certificates ............................................................. .............................30
ARTICLE XIII
ASSIGNMENT AND SUBLEASING
13.1 Limitation on Right to Assign ................................................ .............................31
13.2 Grant or Denial of Consent ................................................... .............................31
13.3 Non - Application to Guest Rooms and Facilities .................... .............................32
13.4 Assignment to Affiliate .......................................................... .............................32
13.5 Limitation on Transfer of Interest in Tenant .......................... .............................32
13.6 Participation in Sale Proceeds .............................................. .............................33
ARTICLE
HYPOTHECATION
XIV
14.1 Tenant's Right to Hypothecate .............................................. .............................34
14.2 Notice to and Rights of Mortgagees ...................................... .............................36
14.3 NonsubordInation of Fee ....................................................... .............................38
14.4 Equipment Financing ............................................................ .............................38
14.5 Cross Collate ralization of Premises ...................................... .............................39
ARTICLE
WASTE AND GOVERNMENTAL REGULATIONS
XV
15.1 Waste or Nuisance ................................................................ .............................39
15.2 Governmental Regulations ................................................... .............................39
15.3 Tenant's Right to Contest Governmental Regulations .......... .............................39
ARTICLE
EMINENT DOMAIN
XVI
16.1 Lease Governs ..................................................................... .............................40
16.2
Termination of Lease ............................................................ .............................40
16.3
Partial Taking; Rental Abatement .........................................
.............................40
16.4
Partial Taking; Restoration ....................................................
.............................40
16.5
Distribution of Award .............................................................
.............................40
16.6
Allocation of Award; Partial Taking .......................................
.............................41
16.7
Allocation of Award; Temporary Taking ................................
.............................41
16.8
Allocation of Award; Total Taking ..........................................
.............................41
TABLE OF CONTENTS
(continued) .
Page
16.9 Conduct of Proceedings ........................................................ .............................42
16.10 Notices .................................................................................. .............................42
ARTICLE
DEFAULT PROVISIONS
17.1 Events of Default .................................................................. .............................42
17.2 Remedies Upon Default ........................................................ .............................43
17.3 Landlord Acting for Tenant's Account ................................... .............................44
17.4 Limited Liability; Non- Recourse Ground Lease ..................... .............................44
ARTICLE
XVIII
LANDLORD'S ACCESS
18.1 Landlord's Right of Access ................................................... .............................45
ARTICLE
XIX
MISCELLANEOUS
19.1
Waiver ...................................................................................
.............................45
19.2
Accord and Satisfaction ........................................................
.............................45
19.3
Entire Lease ..........................................................................
.............................46
19.4
Termination of Existing Lease ...............................................
.............................46
19.5
Force Majeure .......................................................................
.............................46
19.6
Notices ..................................................................................
.............................46
19.7
Captions and Section Numbers ............................................
.............................47
19.8
Construction of Language .....................................................
.............................47
19.9
Broker's Commission ............................................................
.............................47
19.10
Limitation of Landlord's Obligations ......................................
.............................48
19.11
Landlord's or Tenant's Discretion .........................................
.............................48
19.12
Interest ..................................................................................
.............................48
19.13
Successors ...........................................................................
.............................48
19.14
Applicable Law ......................................................................
.............................48
19.15
Landlord's and Tenant's Rights are Cumulative ...................
.............................48
19.16
Saving Clause .......................................................................
.............................48
19.17
Attorneys' Fees and Expenses .............................................
.............................48
19.18
Injunctive Relief ....................................................................
.............................49
19.19
Appraisal ...............................................................................
.............................49
19.20
Recording .............................................................................
.............................49
19.21
Incorporation of Preamble, Recitals and Exhibits
................. .............................49
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April 11, 2000
AGENDA ITEM NO. 7
Supplemental
CITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
April 11, 2000
TO: Mayor and Members of the City Council
FROM: Robert H. Burnham, City Attorney
RE: Balboa Bay Club Redevelopment
Addendum to Lease
Please disregard the attached Exhibits A, B and C and Table of Contents included
in your pjackets on Wednesday.
• FY6 ert H. Burnham
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