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BEACON BAY LEASE <br />THIS BEACON BAY LEASE ("Lease") is entered into as of the &day of June, <br />2014 ("Effective Date"), by and between the City of Newport Beach, a California <br />municipal corporation, tideland's trustee, and charter city ("Lessor" or "City") and 18 <br />Beacon Bay, LLC, a California limited liability company ("Lessee"). Lessor and Lessee <br />are sometimes individually referred to herein as "Party" and collectively as the "Parties." <br />RECITALS <br />A. Lessor by virtue of a 1978 legislative grant found in Chapter 74 of the <br />Statutes of 1978, as amended ("Beacon Bay Bill"), holds the right, title, and interest to <br />certain tidelands and uplands commonly known as Beacon Bay and generally depicted <br />in Exhibit "A" attached hereto and incorporated by reference. <br />B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands <br />from the public trust and specifically authorizes the lease of the property for residential <br />purposes subject to certain express statutory conditions. <br />C. As required by the Beacon Bay Bill, the consideration to be received by <br />the City for the residential leases is the fair market rental value of such lots as finished <br />subdivided lots with streets constructed and all utilities installed. <br />D. On November 3, 1987, a majority of the electors in the City approved a <br />measure authorizing the City Council to enter into residential leases in Beacon Bay for a <br />period not to exceed fifty (50) years. <br />E. On November 3, 1992, a majority of the electors in the City approved <br />Measure M authorizing the City Council to lease tidelands and waterfront property <br />consistent with the provisions of state law. <br />F. The City Council, pursuant to the authority conferred by the electors and <br />the Beacon Bay Bill, leased out the residential lots within Beacon Bay for fifty (50) year <br />terms. <br />G. The current residential leases are set to expire on July 1, 2044, which is <br />preventing certain persons with existing leases within Beacon Bay from obtaining a <br />traditional thirty (30) year mortgage. <br />H. Lessor and Lessee desire a new residential lease for Beacon Bay with a <br />new fifty (50) year term and new provisions that are reflective of current conditions. <br />I. City has determined this Lease is consistent with the Beacon Bay Bill, the <br />City's Charter, General Plan, Zoning Ordinances, and all other applicable state and <br />local laws. <br />18 Beacon Bay, LLC Lease 1 <br />