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HomeMy WebLinkAbout43-SBETA ORIGINAL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Ernest B. Dowdy, Executive Director Subject: Resolution authorizing the San Bernardino Employment and Training Agency ("SBET A") to enter into a Lease with the Arrowhead Professional Center, L.P., for the premises located at 600 N. Arrowhead Avenue, Suite 300, San Bernardino, California, and approval of Subordination Agreement of Excel National Bank Dept: San Bernardino Employment and Training Agency Date August 31, 2005 MICC Meeting Date: September 6, 2005 Synopsis of Previous Council Action: Continued from August 15, 2005 Recommended Motion: Adopt Resolution E; ~-0 Signature ~ Contact person: Ernest B. Dowdv Phone: 888-7881 Supporting data attached: Yes Ward: 1 FUNDING REQUIREMENTS: Amount:---.J2.195.472.00 Source: (Acct. No.) 123-949-5171 & 123-950-5171 (Acct. Description) WIA Admin Cost Pool WIA Program Cost Pool Finance: Council Notes: ~. ~ 005" - 3 13 qJIP/Ot:) I Agenda Item No. 43 CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the San Bernardino Employment and Training Agency ("SBETA") to enter into a Lease Agreement with Arrowhead Professional Center, L.P., for the lease of premises at 600 No. Arrowhead Avenue, Suite 300, San Bernardino, California, and approval of Subordination Agreement of Excel National Bank. Backl?:round: Presently, the San Bernardino Employment and Training Agency (SBET A) is located at 599 North Arrowhead. The office is crowded and does not provide sufficient space to meet the requirements of a fully operational One-Stop Career Center, as defined in the Workforce Investment Act (WIA). In addition, the office does not provide adequate space to accommodate customer flow/processing and business service activities, nor is it suitable to support the program growth anticipated in the immediate future. Additionally, there are a number of major building deficiencies in SBET A's current location, none of which can be easily corrected. In response to these issues, SBET A staff has surveyed a number of buildings in the immediate area to determine appropriateness for our needs. The building that is being recommended for lease is located at 600 North Arrowhead Avenue and is owned by Arrowhead Professional Center, L.P. The building is approximately 18,654 square feet, at a negotiated lease price of $1.28 per square foot. The lease agreement is for a seven-year period. The cost per square foot price increases $.04 per year. The building should be available for occupancy within 45-60 days following execution of the lease agreement. The owners have expressed agreement with a seven-year lease term, with a provision for termination in the event that program funding is curtailed/eliminated. Subsequent to the preparation ofthis item for the Agenda of August 15,2005, the owner of the property has requested a loan from its bank, secured by a lien of a deed of trust on the property in which SBET A will have its offices. The owner's bank, Excel National Bank of Encino, the lender for the loan, has requested that the City enter into a subordination agreement. A sub- ordination agreement, which also typically contains other related clauses, provides that a lease is subordinate to a lien placed on the property to secure a loan. Generally, agreeing to a fair and legally sufficient subordination agreement is fairly common in the business world, and does not result in any prejudice to the tenant. The Subordination, Nondisturbance and Attornment Agreement submitted with this item has been reviewed by the City Attorney's Office and is not prejudicial to the City. Therefore, it is requested that the Mayor and City Council authorize SBET A to enter into a lease agreement and authorize the Subordination, Nondisturbance and Attornment Agreement for the following reasons: 1. A larger facility is essential to meet the requirements of the Workforce Investment Act, and to effectively cope with ever expanding program needs and partnership collaboration. 2. Additional space will permit expansion of the One-Stop Career Center to include adequate areas for orientations, classroom instruction, record storage, and business service. 3. The Subordination, Nondisturbance and Attornment Agreement is satisfactory in form and will not be prejudicial to the City in the lease of the property for SBET A. Financial Impact: It is anticipated that the present and future SBET A administration budgets provide sufficient funding to meet our financial obligation as it pertains to the current cost of the lease at $23,877.00 per month, through the seventh year of the agreement at which time the monthly cost will be $28,510.00. There will be no impact to the City's General Fund. This building will be used to administer the Workforce Investment Act (WlA) programs and the funding that is made available through the Department of Labor is adequate to support the rent and incremental increases to the base rent. Recommendation: Adopt Resolution. .. CITY OF SAN BERNARDINO CITY ADMINISTRATOR'S OFFICE INTEROFFICE MEMORANDUM SUBJECT: Mayor and c;:;rrn Council Fred Wilso~dministrator Proposed office space lease for SBET A TO: FROM: DATE: August 29, 2005 COPIES: At the August 15 Council meeting, the Council continued a proposed resolution that would have authorized SBET A to enter into a lease with the Arrowhead Professional Center for the offices located at 600 N. Arrowhead, Suite 300. Subsequent to the Council meeting, I met with Mr. Ernest Dowdy to discuss the issue, and also conferred with Gary Van Osdel to see if the EDA may have any appropriate office space. Based on my review of the issue, I would offer the following observations: SBET A currently has 30-35 employees located in approximately 10,500 square feet of space. An average of75-100 people visit the center daily. According to Mr. Dowdy, the current space is inadequate to meet the office needs, and also cannot accommodate conference rooms and classrooms needed to meet the agency's mission. The new 18,000+ square foot space will meet current needs and also allow for some growth in the future. The Workforce Investment Board, which oversees SBETA operations and includes Mr. Van Osdel, voted to approve the recommended lease for the new space. The Economic Development Agency has no office space available of this size, nor any available land in thl: downtown area that has not been designated for other uses. Mr. Van Osdel also indicates that the proposed lease rate is reasonable for the downtown area. Mr. Dowdy provided the attached list of downtown area locations that were also considered, but were rejected for various reasons. I hope this information is helpful to you. Wo. '/3 q /~/OS City of San Bernardino EMPLOYMENT & TRAINING AGENCY (SBETA) ONE STOP CAREER CENTER ERNEST B. DOWDY - EXECUTIVE DIRECTOR 599 North Arrowhead Ave. . San Bernardino. CA 92401-1201 909.888-7881 . email: sbeta@sbeta.com. www.sbeta.com TO: Fred Wilson FROM: ~i~~~ Ernest Dowdy 9 Executive Director, SBETA DATE: August 25, 2005 .-J SUBJECT: SBET A Building Search Mr. Wilson, the following references a list of buildings observed during our initial search for adequate space to house our agency: 505 N. Arrowhead 14,000 sqf Size and present configuration will not meet our specific needs. Office Building 696 N. D Street 15, 000 sqf Size and present configuration is not sufficient for our needs. Office Building 599 N. Arrowhead (present location) and adjacent building 595 N. Arrowhead Total duplex 15,000 sqf Size and present configuration not sufficient for our needs. 699 N. Arrowhead 39,445 sqf Office Building Former Federal Bankruptcy Court. Parking and present configuration is not sufficient. 909 N. D Street 9,000 sqf Size not sufficient for our needs. Office Building 599 N. D Street Southwest Bank Formerly First Federal Savings. Size and parking not sufficient for our needs. 708 N. Mt. Vernon 7,500 sqf Formerly a theater. Size and present configuration is not sufficient for our needs. In addition, we considered several buildings in the Hospitality Lane area. However, cost ranged from $1.65 - $2.00 sqf. Fred, this is not an exhaustive list of buildings that were included in our search. Other buildings were simply not considered due to a number of other factors. 1 RESOLUTION NO. (C ~ lP Y 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND 3 TRAINING AGENCY ("SBETA") TO ENTER INTO A LEASE WITH ARROWHEAD PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD 4 AVENUE, SUITE 300, SAN BERNARDINO. 5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 6 7 8 9 10 11 SECTION 1. The Mayor and Common Council of the City of San Bernardino do hereby authorize the San Bernardino Employment and Training Agency ("SBET A") to enter into a lease with Arrowhead Professional Center, L.P. with an initial rent of$23,877 per month, to be adjusted annually as provided in Exhibit B of said lease, for a term of seven years and any extensions thereof, for premises located at 600 N. Arrowhead Avenue, Suite 300, San Bernardino, California and approval of Subordination Agreement of Excel National Ban1e 12 /// 13 /// 14 /// 15 /// 16 /// 17 /// 18 /// 19 /// 20 /// 21 /// 22 /// 23 /// 24 /11 25 /// 26 /// 27 /// 28 DHC/js [Resolutions\SBETA.Res] 1 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 2 SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND TRAINING AGENCY ("SBETA") TO ENTER INTO A LEASE WITH ARROWHEAD 3 PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD AVENUE, SUITE 300, SAN BERNARDINO. 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and meeting thereof, held on the day of 7 COUNCIL MEMBERS: AYES 8 ESTRADA 9 LONGVILLE 10 MCGINNIS 11 DERRY 12 KELLEY 13 JOHNSON 14 MCCAMMACK 15 16 17 18 ,2005, by the following vote, to wit: NAYS ABSTAIN ABSENT CITY CLERK The foregoing Resolution is hereby approved this _ day of ,2005. 19 20 21 JUDITH V ALLES, Mayor City of San Bernardino 22 Approved as to form and legal content: 23 JAMES F. PENMAN, ~: ::YAtI{JM~/~ 27 28 DHC/js [Resolutions\SBETA.Res] 2 SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT AGREEMENT This Subordination, Nondisturbance, and Attornment Agreement ("Agreement") is entered into as of , by Excel National Bank ("Lender"), Arrowhead Professional Center, LP ("Landlord") and City of San Bernardino ("Tenant"). RECITALS A. Landlord and Tenant have entered into an office lease dated as of September 6, 2005] ("Lease"), covering certain premises ("Demised Premises"), located 600 N.Arrowhead Avenue Suite 300, San Bernardino, California, being part of a business office complex, commonly known as Arrowhead Professional Center. ("Property"). B. Lender is the beneficiary of a deed of trust ("Deed of Trust") dated as of , and recorded on , in the official records of County of San Bernardino as [describe recording information] encumbering the Property, which secures a note payable to Lender in the original principal amount of$I,191,000.00. C. On the terms and conditions in this Agreement, the parties desire to subordinate Tenant's leasehold interest in the Demised Premises to the lien of the Deed of Trust and to assure Tenant possession of the Demised Premises for the entire term ofthe Lease, even though Lender may foreclose the lien of the Deed of Trust before expiration of the Lease. Therefore, in consideration of the mutual covenants and agreements contained in this Agreement, the parties agree as follows: Section 1. Subordination The Lease shall be subject and subordinate to the lien of the Deed of Trust and to any renewals, modifications, consolidations, replacements and extensions of the Deed of Trust to the full extent of the principal sum secured by the Deed of Trust including any interest. Section 2. Nondisturbance So long as Tenant is not in default, beyond any period given to Tenant to cure a default, in the payment ofrent or in the performance of any ofthe terms, covenants, or conditions ofthe Lease, Tenant's possession of the Demised Premises and Tenant's rights and privileges under the Lease, including any extensions or renewals, shall not be diminished or interfered with by Lender during the term ofthe Lease or any extensions or renewals. So long as Tenant is not in default, beyond any period given Tenant to cure such default, in the payment of rent or in the performance of any of the terms, covenants, or conditions of the Lease, Lender will not join Tenant as a party for the purpose F :ICalkinslAgreemen tslSubordination .Agreement] 1 of terminating or otherwise affecting Tenant's interest under the Lease, in any action offoreclosure or other proceeding brought by Lender to enforce any rights arising because of any default under the Deed of Trust. Lender may, however, join Tenant as a party if joinder is necessary under any statute or law to secure the remedies available to Lender under the Deed of Trust, but joinder shall be for that purpose only and not for the purpose of terminating the Lease or affecting Tenant's right to possession of the Demised Premises. Section 3. Attornment. If the Landlord's interest is transferred to and owned by Lender or any successor of Lender ("Acquiring Party") because of foreclosure, sale under a private power from a deed of trust, other proceedings brought by Lender, or by any other manner and Lender succeeds to Landlord's interest under the Lease, Tenant shall be bound to the Acquiring Party, and Acquiring Party shall be bound to Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the remaining term, including any extensions or renewals, with the same effect as if Acquiring Party were Landlord under the Lease. Tenant agrees to attorn to Acquiring Party as the Landlord, with the attornment being effective and self-operable immediately upon Acquiring Party succeeding to the interest of Landlord under the Lease, all without the execution by the parties of any further instruments. However, Tenant shall not be obligated to pay rent to the Acquiring Party until Tenant receives written notice from Acquiring Party, together with evidence satisfactory to Tenant, demonstrating that Acquiring Party has succeeded to Landlord's interest under the Lease and directing where rent should be mailed. The respective rights and obligations of Tenant and Acquiring Party upon attornment, to the extent of the then remaining balance of the term of the Lease, shall be the same as in the Lease, which is incorporated by reference in this Agreement. If Acquiring Party succeeds to Landlord's interest in the Lease, Acquiring Party shall be bound to Tenant under all the terms, covenants, and conditions ofthe Lease, and Tenant shall, after Acquiring Party's succession to Landlord's interest, have the same remedies against Acquiring Party for the breach of any agreement in the Lease that Tenant might have had against Landlord. Section 4. New Lease and Further Instruments. Immediately upon request by the Acquiring Party, Tenant and Acquiring Party shaH enter into a new written lease for the remainder of the original term of the Lease on the same terms and conditions as the Lease, except for any changes made necessary because of the substitution of the Acquiring Party in place of Landlord. Section 5. Definitions. The term "Lender" or any similar term shall include Lender, the trustee under any deed of trust affecting the Demised Premises, and any agents, heirs, successors, or assigns, including any party that succeeds to Landlord's interest by foreclosure of the Deed of Trust, of the deed in lieu of foreclosure, or of a sale under a private power contained in the Deed of Trust or by any other proceeding. The term "Deed of Trust" or any similar term shall include the Deed of Trust and any F :\CalkinslAgreements\Subordination .Agreement] 2 amendments or addenda. The term "Landlord" shall include Landlord and the successors, assigns, and sub lessees of Landlord. The term "Tenant" shall include Tenant and the successors, assigns, and sublessess of Tenant. This Agreement shall inure to the benefit of and be binding upon all successors, assigns, and sublessees. The term "Lease" shall include the Lease and all amendments, addenda, extensions, and renewals. Section 6. No Change in Lease. Landlord and Tenant agree not to change, alter, amend, or otherwise modify the Lease without the prior written consent of Lender. Any change, alteration, amendment, or other modification to the Lease without the prior written consent of Lender shall be void as to Lender. Section 7. Modification. This Agreement may not be modified other than by an agreement in writing signed by the parties or by their respective successors in interest. Section 8. Attorney Fees. If any party commences any action against any other party based on this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees, expenses, and costs of suit. Section 9. Notices. In this Agreement, wherever it is required or permitted that notice and demand be given by any party to another party, that notice or demand shall be given in writing and forwarded by certified mail, addressed as follows: For Landlord: Arrowhead Professional Center, L.P., 600 N. Arrowhead Avenue San Bernardino, CA 92402 For Tenant: City of San Bernardino c/o San Bernardino Employment and Training Agency (SBET A) 600 N. Arrowhead Avenue, Suite 300 San Bernardino, CA 92402 F :Ieal kinslAgreemen tslS ubordination.Agreement] 3 For Lender: Excel National Bank 16255 Ventura Boulevard, Suite 300 Encino, CA 91436 Any party may change an address given for notice by giving written notice of that change by certified mail to all other parties. Section 10 Successors. This Agreement shall be binding on and inure to the benefit of the parties and their respective heirs, successors, and assigns. Section 11. Authority. If any party is a corporation or a partnership, all individuals executing this Agreement on behalf of a corporation or partnership represent and warrant that they are authorized to execute and deliver this Agreement on behalf ofthe corporation or partnership and that this Agreement is binding upon the corporation or partnership. Section 12. Headings. The headings this Agreement are for reference only and shall not limit or define any meaning of this Agreement. Section 13. Counterparts. This Agreement may be executed in one or more counterparts, each of which is an original, but all of which shall constitute one and the same instrument. III III III III III III III III III I I I I I I III F: \CalkinslAgreements\Subordination,Agreement ] 4 Section 14. Governing Law. This Agreement shall be construed in accordance with and governed by California law. The parties have duly executed this Agreement as of the date first above written. City of San Bernardino, Tenant Excel National Bank, Lender By By Sarah Warner Judith Valles, Mayor City of San Bernardino Arrowhead Professional Center, L.P., Landlord APPROVED AS TO FORM AND LEGAL CONTENT: By Steve Moffatt, President of its General Partner, Sierra West Properties, Inc., a California Corporation James F. Penman, City Attorney By . . Q , "."."" i'/~ .F". ., / ...__\ / ) /L /{~{{ LJ4:jJ{j ~{ILJu\J.) ,j F: ICalkinslAgreementslSubordination.Agreement ] 5 CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Dept: San Bernardino Employment and Training Agency Subject: Resolution authorizing the San Bernardino Employment and Training Agency ("SBETA") to enter into a Lease with the Arrowhead Professional Center, L.P., for the premises located at 600 N. Arrowhead Avenue, Suite 300, San Bernardino From: Ernest B. Dowdy, Executive Director Date: August 8, 2005 MICC Meeting Date: August 15, 2005 Synopsis of Previous Council Action: None Recommended Motion: Adopt Resolution r -~ ge;:; ~_I Signature "t Contact person: Ernest B. Dowdy Phone: 888-7881 Supporting data attached: Yes Ward: NIA FUNDING REQUIREMENTS: Amount: $2,195.472.00 Source: (Acct. No.) 123-949-5171 & 123-950-5171 (Acct. Description) WIA Admin Cost Pool WIA Program Cost Pool Finance: Council Notes: Agenda Item No. J. S" 8'/I~/O~ CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: Resolution authorizing the San Bernardino Employment and Training Agency ("SBET A") to enter into a Lease with Arrowhead Professional Center, L.P., for the premises located at 600 No. Arrowhead Avenue, Suite 300, San Bernardino. Backl.!:round: Presently, the San Bernardino Employment and Training Agency (SBETA) is located at 599 North Arrowhead. The office is crowded and does not provide sufficient space to meet the requirements of a fully operational One-Stop Career Center, as defined in the Workforce Investment Act (WIA). In addition, the office does not provide adequate space to accommodate customer flow/processing and business service activities, nor is it suitable to support the program growth anticipated in the immediate future. Additionally, there are a number of major building deficiencies in SBETA's current location, none of which can be easily corrected. In response to these issues, SBETA staff has surveyed a number of buildings in the immediate area to determine appropriateness for our needs. The building that is being recommended for lease is located at 600 North Arrowhead Avenue and is owned by Arrowhead Professional Center, L.P. The building is approximately 18,654 square feet, at a negotiated lease price of $1.28 per square foot. The lease agreement is for a seven-year period. The cost per square foot price increases $.04 per year. The building should be available for occupancy within 45-60 days following execution of the lease agreement. The owners have expressed agreement with a seven-year lease term, with a provision for termination in the event that program funding is curtailed/e liminated. Therefore, it is requested that the Mayor and City Council authorize SBET A to enter into a lease agreement for the following reasons: 1. A larger facility is essential to meet the requirements of the Workforce Investment Act, and to effectively cope with ever expanding program needs and partnership collaboration. 2. Additional space will permit expansion of the One-Stop Career Center to include adequate areas for orientations, classroom instruction, record storage, and business service. Financial Impact: It is anticipated that the present and future SBET A administration budgets provide sufficient funding to meet our financial obligation as it pertains to the current cost of the lease at $23,877.00 per month, through the seventh year of the agreement at which time the monthly cost will be $28,510.00. There will be no impact to the City's General Fund. This building will be used to administer the Workforce Investment Act (WIA) programs and the funding that is made available through the Department of Labor is adequate to support the rent and incremental increases to the base rent. Recommendation: Adopt Resolution. 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND 3 TRAINING AGENCY (lfSBETAIf) TO ENTER INTO A LEASE WITH ARROWHEAD PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD 4 A VENUE, SUITE 300, SAN BERNARDINO. 5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 6 7 8 9 10 SECTION 1. The Mayor and Common Council of the City of San Bernardino do hereby authorize the San Bernardino Employment and Training Agency ("SBETA") to enter into a lease with Arrowhead Professional Center, L.P. with an initial rent of $23,877 per month, to be adjusted annually as provided in Exhibit B of said lease, for a term of seven years and any extensions thereof, for premises located at 600 N. Arrowhead Avenue, Suite 300, San Bernardino. 11 1/1 12 /II 13 /II 14 /II 15 /II 16 /II 17 /II 18 /II 19 1/1 20 /II 21 /II 22 /II 23 /II 24 /II 25 /II 26 /II 27 /II 28 DHC/js [Resolutions\SBETA.Res] 1 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 2 SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND TRAINING AGENCY ("SBETA") TO ENTER INTO A LEASE WITH ARROWHEAD 3 PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD A VENUE, SUITE 300, SAN BERNARDINO. 4 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a meeting thereof, held on the day of 7 COUNCIL MEMBERS: AYES 8 ESTRADA 9 LONGVILLE 10 MCGINNIS 11 DERRY 12 KELLEY 13 JOHNSON 14 MCCAMMACK 15 16 17 18 , 2005, by the following vote, to wit: NAYS ABSTAIN ABSENT CITY CLERK 19 20 21 22 Approved as to form and legal content: 23 JAMES F. PENMAN, 24 City Attorney 25 26 27 28 DHC/js [Resolutions\SBETA.Res] 2 The foregoing Resolution is hereby approved this _ day of ,2005. JUDITH V ALLES, Mayor City of San Bernardino SUBORDINA nON, NONDISTURBANCE, AND ATTORNMENT AGREEMENT This Subordination, Nondisturbance, and Attornment Agreement ("Agreement") is entered into as of , by Excel National Bank ("Lender"), Arrowhead Professional Center, LP ("Landlord") and City of San Bernardino ("Tenant"). RECITALS A. Landlord and Tenant have entered into an office lease dated as of September 6, 2005] ("Lease"), covering certain premises ("Demised Premises"), located 600 N.Arrowhead Avenue Suite 300, San Bernardino, California, being part of a business office complex, commonly known as Arrowhead Professional Center. ("Property"). B. Lender is the beneficiary of a deed of trust ("Deed of Trust") dated as of , and recorded on , in the official records of County of San Bernardino as [describe recording information] encumbering the Property, which secures a note payable to Lender in the original principal amount of $1,191,000.00. C. On the terms and conditions in this Agreement, the parties desire to subordinate Tenant's leasehold interest in the Demised Premises to the lien of the Deed of Trust and to assure Tenant possession ofthe Demised Premises for the entire term ofthe Lease, even though Lender may foreclose the lien of the Deed of Trust before expiration of the Lease. Therefore, in consideration of the mutual covenants and agreements contained in this Agreement, the parties agree as follows: Section 1. Subordination The Lease shall be subject and subordinate to the lien of the Deed of Trust and to any renewals, modifications, consolidations, replacements and extensions ofthe Deed of Trust to the full extent of the principal sum secured by the Deed of Trust including any interest. Section 2. Nondisturbance So long as Tenant is not in default, beyond any period given to Tenant to cure a default, in the payment of rent or in the performance of any of the terms, covenants, or conditions ofthe Lease, Tenant's possession of the Demised Premises and Tenant's rights and privileges under the Lease, including any extensions or renewals, shall not be diminished or interfered with by Lender during the term of the Lease or any extensions or renewals. So long as Tenant is not in default, beyond any period given Tenant to cure such default, in the payment of rent or in the performance of any of the terms, covenants, or conditions of the Lease, Lender will not join Tenant as a party for the purpose F :ICalkinslAgrecmentslSubordination .Agreemen t] 1 of terminating or otherwise affecting Tenant's interest under the Lease, in any action offoreclosure or other proceeding brought by Lender to enforce any rights arising because of any default under the Deed of Trust. Lender may, however, join Tenant as a party if joinder is necessary under any statute or law to secure the remedies available to Lender under the Deed of Trust, but joinder shall be for that purpose only and not for the purpose of terminating the Lease or affecting Tenant's right to possession of the Demised Premises. Section 3. Attornment. If the Landlord's interest is transferred to and owned by Lender or any successor of Lender ("Acquiring Party") because of foreclosure, sale under a private power from a deed of trust, other proceedings brought by Lender, or by any other manner and Lender succeeds to Landlord's interest under the Lease, Tenant shall be bound to the Acquiring Party, and Acquiring Party shall be bound to Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the remaining term, including any extensions or renewals, with the same effect as if Acquiring Party were Landlord under the Lease. Tenant agrees to attorn to Acquiring Party as the Landlord, with the attornment being effective and self-operable immediately upon Acquiring Party succeeding to the interest of Landlord under the Lease, all without the execution by the parties of any further instruments. However, Tenant shall not be obligated to pay rent to the Acquiring Party until Tenant receives written notice from Acquiring Party, together with evidence satisfactory to Tenant, demonstrating that Acquiring Party has succeeded to Landlord's interest under the Lease and directing where rent should be mailed. The respective rights and obligations of Tenant and Acquiring Party upon attornment, to the extent of the then remaining balance of the term of the Lease, shall be the same as in the Lease, which is incorporated by reference in this Agreement. If Acquiring Party succeeds to Landlord's interest in the Lease, Acquiring Party shall be bound to Tenant under all the terms, covenants, and conditions of the Lease, and Tenant shall, after Acquiring Party's succession to Landlord's interest, have the same remedies against Acquiring Party for the breach of any agreement in the Lease that Tenant might have had against Landlord. Section 4. New Lease and Further Instruments. Immediately upon request by the Acquiring Party, Tenant and Acquiring Party shall enter into a new written lease for the remainder of the original term of the Lease on the same terms and conditions as the Lease, except for any changes made necessary because of the substitution ofthe Acquiring Party in place of Landlord. Section 5. Definitions. The term "Lender" or any similar term shall include Lender, the trustee under any deed of trust affecting the Demised Premises, and any agents, heirs, successors, or assigns, including any party that succeeds to Landlord's interest by foreclosure of the Deed of Trust, ofthe deed in lieu of foreclosure, or of a sale under a private power contained in the Deed of Trust or by any other proceeding. The term "Deed of Trust" or any similar term shall include the Deed of Trust and any F: ICalkinslAgreemen ts\Subordination.Agreement] 2 amendments or addenda. The term "Landlord" shall include Landlord and the successors, assigns, and sub lessees of Landlord. The term "Tenant" shall include Tenant and the successors, assigns, and sublessess of Tenant. This Agreement shall inure to the benefit of and be binding upon all successors, assigns, and sublessees. The term "Lease" shall include the Lease and all amendments, addenda, extensions, and renewals. Section 6. No Change in Lease. Landlord and Tenant agree not to change, alter, amend, or otherwise modify the Lease without the prior written consent of Lender. Any change, alteration, amendment, or other modification to the Lease without the prior written consent of Lender shall be void as to Lender. Section 7. Modification. This Agreement may not be modified other than by an agreement in writing signed by the parties or by their respective successors in interest. Section 8. Attorney Fees. If any party commences any action against any other party based on this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees, expenses, and costs of suit. Section 9. Notices. In this Agreement, wherever it is required or permitted that notice and demand be given by any party to another party, that notice or demand shall be given in writing and forwarded by certified mail, addressed as follows: For Landlord: Arrowhead Professional Center, L.P., 600 N. Arrowhead Avenue San Bernardino, CA 92402 For Tenant: City of San Bernardino c/o San Bernardino Employment and Training Agency (SBET A) 600 N. Arrowhead Avenue, Suite 300 San Bernardino, CA 92402 F :ICalkinslAgreementsISubordination.Agreement] 3 For Lender: Excel National Bank 16255 Ventura Boulevard, Suite 300 Encino, CA 91436 Any party may change an address given for notice by giving written notice of that change by certified mail to all other parties. Section 10 Successors. This Agreement shall be binding on and inure to the benefit ofthe parties and their respective heirs, successors, and assigns. Section 11. Authority. If any party is a corporation or a partnership, all individuals executing this Agreement on behalf of a corporation or partnership represent and warrant that they are authorized to execute and deliver this Agreement on behalf ofthe corporation or partnership and that this Agreement is binding upon the corporation or partnership. Section 12. Headings. The headings this Agreement are for reference only and shall not limit or define any meaning of this Agreement. Section 13. Counterparts. This Agreement may be executed in one or more counterparts, each of which is an original, but all of which shall constitute one and the same instrument. III III III I I I III I II I I I III III III III I II F :\CalkinslAgreementslSubordination .Agreement] 4 Section 14. Governing Law. This Agreement shall be construed in accordance with and governed by California law. The parties have duly executed this Agreement as of the date first above written. City of San Bernardino, Tenant Excel National Bank, Lender By J (lith Valles, Mayor ity of San Bernardino By Sarah Warner Arrowhead Professional Center, L.P., Landlord APPROVED AS TO FORM AND LEGAL CONTENT: By James F. Penman, City Attorney Steve Moffatt, President of its General Partner, Sierra West Properties, Inc., a California Corporation By .,i'~i({{ u~j)(jaLiCJu'dJ (j F :\Calkins\Agreements\Subordination.Agreemen t] 5 SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT AGREEMENT This Subordination, Nondisturbance, and Attornment Agreement ("Agreement") is entered into as of , by Excel National Bank ("Lender"), Arrowhead Professional Center, LP ("Landlord") and City of San Bernardino ("Tenant"). RECITALS A. Landlord and Tenant have entered into an office lease dated as of September 6, 2005] ("Lease"), covering certain premises ("Demised Premises"), located 600 N. 'Arrowhead Avenue Suite 300, San Bernardino, California, being part of a business office complex, commonly known as Arrowhead Professional Center. ("Property"). B. Lender is the beneficiary of a deed of trust ("Deed of Trust") dated as of , and recorded on , in the official records of County of San Bernardino as [describe recording information] encumbering the Property, which secures a note payable to Lender in the original principal amount of$1,19l,000.00. C. On the terms and conditions in this Agreement, the parties desire to subordinate Tenant's leasehold interest in the Demised Premises to the lien of the Deed of Trust and to assure Tenant possession ofthe Demised Premises for the entire term of the Lease, even though Lender may foreclose the lien of the Deed of Trust before expiration of the Lease. Therefore, in consideration of the mutual covenants and agreements contained in this Agreement, the parties agree as follows: Section 1. Subordination The Lease shall be subject and subordinate to the lien of the Deed of Trust and to any renewals, modifications, consolidations, replacements and extensions ofthe Deed of Trust to the full extent of the principal sum secured by the Deed of Trust including any interest. Section 2. Nondisturbance So long as Tenant is not in default, beyond any period given to Tenant to cure a default, in the payment of rent or in the performance of any ofthe terms, covenants, or conditions of the Lease, Tenant's possession of the Demised Premises and Tenant's rights and privileges under the Lease, including any extensions or renewals, shall not be diminished or interfered with by Lender during the term of the Lease or any extensions or renewals. So long as Tenant is not in default, beyond any period given Tenant to cure such default, in the payment of rent or in the performance of any of the terms, covenants, or conditions of the Lease, Lender will not join Tenant as a party for the purpose F :\Calkins\Agreements\Subordination,Agreement ] of terminating or otherwise affecting Tenant's interest under the Lease, in any action of foreclosure or other proceeding brought by Lender to enforce any rights arising because of any default under the Deed of Trust. Lender may, however, join Tenant as a party if joinder is necessary under any statute or law to secure the remedies available to Lender under the Deed of Trust, but joinder shall be for that purpose only and not for the purpose of terminating the Lease or affecting Tenant's right to possession of the Demised Premises. Section 3. Attornment. If the Landlord's interest is transferred to and owned by Lender or any successor of Lender ("Acquiring Party") because of foreclosure, sale under a private power from a deed of trust, other proceedings brought by Lender, or by any other manner and Lender succeeds to Landlord's interest under the Lease, Tenant shall be bound to the Acquiring Party, and Acquiring Party shall be bound to Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the remaining term, including any extensions or renewals, with the same effect as if Acquiring Party were Landlord under the Lease. Tenant agrees to attorn to Acquiring Party as the Landlord, with the attornment being effective and self-operable immediately upon Acquiring Party succeeding to the interest of Landlord under the Lease, all without the execution by the parties of any further instruments. However, Tenant shall not be obligated to pay rent to the Acquiring Party until Tenant receives written notice from Acquiring Party, together with evidence satisfactory to Tenant, demonstrating that Acquiring Party has succeeded to Landlord's interest under the Lease and directing where rent should be mailed. The respective rights and obligations of Tenant and Acquiring Party upon attornment, to the extent of the then remaining balance of the term of the Lease, shall be the same as in the Lease, which is incorporated by reference in this Agreement. If Acquiring Party succeeds to Landlord's interest in the Lease, Acquiring Party shall be bound to Tenant under all the terms, covenants, and conditions ofthe Lease, and Tenant shall, after Acquiring Party's succession to Landlord's interest, have the same remedies against Acquiring Party for the breach of any agreement in the Lease that Tenant might have had against Landlord. Section 4. New Lease and Further Instruments. Immediately upon request by the Acquiring Party, Tenant and Acquiring Party shall enter into a new written lease for the remainder of the original term of the Lease on the same terms and conditions as the Lease, except for any changes made necessary because of the substitution of the Acquiring Party in place of Landlord. Section 5. Definitions. The term "Lender" or any similar term shall include Lender, the trustee under any deed of trust affecting the Demised Premises, and any agents, heirs, successors, or assigns, including any party that succeeds to Landlord's interest by foreclosure ofthe Deed of Trust, of the deed in lieu of foreclosure, or of a sale under a private power contained in the Deed of Trust or by any other proceeding. The term "Deed of Trust" or any similar term shall include the Deed of Trust and any F:\Calki nslAgreementslSubordination,Agreement] 2 amendments or addenda. The term "Landlord" shall include Landlord and the successors, assigns, and sub lessees of Landlord. The term "Tenant" shall include Tenant and the successors, assigns, and sublessess of Tenant. This Agreement shall inure to the benefit of and be binding upon all successors, assigns, and sublessees. The term "Lease" shall include the Lease and all amendments, addenda, extensions, and renewals. Section 6. No Change in Lease. Landlord and Tenant agree not to change, alter, amend, or otherwise modify the Lease without the prior written consent of Lender. Any change, alteration, amendment, or other modification to the Lease without the prior written consent of Lender shall be void as to Lender. Section 7. Modification. This Agreement may not be modified other than by an agreement in writing signed by the parties or by their respective successors in interest. Section 8. Attorney Fees. If any party commences any action against any other party based on this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees, expenses, and costs of suit. Section 9. Notices. In this Agreement, wherever it is required or permitted that notice and demand be given by any party to another party, that notice or demand shall be given in writing and forwarded by certified mail, addressed as follows: For Landlord: Arrowhead Professional Center, L.P., 600 N. Arrowhead Avenue San Bernardino, CA 92402 For Tenant: City of San Bernardino c/o San Bernardino Employment and Training Agency (SBET A) 600 N. Arrowhead Avenue, Suite 300 San Bernardino, CA 92402 F :\CalkinslAgreementslSubordination.Agreement] 3 F or Lender: Excel National Bank 16255 Ventura Boulevard, Suite 300 Encino, CA 91436 Any party may change an address given for notice by giving written notice ofthat change by certified mail to all other parties. Section 10 Successors. This Agreement shall be binding on and inure to the benefit ofthe parties and their respective heirs, successors, and assigns. Section 11. Authority. If any party is a corporation or a partnership, all individuals executing this Agreement on behalf of a corporation or partnership represent and warrant that they are authorized to execute and deliver this Agreement on behalf ofthe corporation or partnership and that this Agreement is binding upon the corporation or partnership. Section 12. Headings. The headings this Agreement are for reference only and shall not limit or define any meaning of this Agreement. Section 13. Counterparts. This Agreement may be executed in one or more counterparts, each of which is an original, but all of which shall constitute one and the same instrument. III III III III III III III III III III III III F :ICalkinslAgreementslS ubordination .Agreement] 4 Section 14. Governing Law. This Agreement shall be construed in accordance with and governed by California law. The parties have duly executed this Agreement as of the date first above written. City of San Bernardino, Tenant Excel National Bank, Lender By J ith Valles, Mayor ity of San Bernardino By Sarah Warner Arrowhead Professional Center, L.P., Landlord APPROVED AS TO FORM AND LEGAL CONTENT: By James F. Penman, City Attorney Steve Moffatt, President of its General Partner, Sierra West Properties, Inc., a California Corporation By -. /{/(~{{ U~JJfJa{{Z lU'dJ :j F :ICalkinslAgreementsISubordination.Agreement ] 5 CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: September 14,2005 TO: Josie Soria, Legal Secretary FROM: Eileen Gomez, Senior Secretary RE: Transmitting Documents for Signature ~ Resolution Nos. 2005-313 At the Mayor and Common Council meeting of September 16,2005, the City of San Bernardino adopted Resolution No. 2005-313 - Resolution authorizing the San Bernardino Employment and Training Agency ("SBET A '') to enter into a lease with Arrowhead Professional Center, L.P., for premises located at 600 N. Arrowhead Avenue, Suite 300, San Bernardino. Attached are one (1) original Subordination, Nondisturbance, and Attornment Agreement and two (2) duplicate agreements to be executed by Excel National Bank and Arrowhead Professional Center, L.P. Please obtain signatures in the appropriate locations and return the ORIGINAL agreement to the City Clerk's Office as soon as possible, to my attention. Please keep the other two (2) fully executed copies for your records and for the other party. If you have any questions, please do not hesitate to contact me at ext. 3206. Thank you. Eileen Gomez Senior Secretary I hereby acknowledge receipt of the above mentioned documents. Signed~h166'U?l Date: ~ o-S- Please sign and return . **' FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT ** \ RESOLUTION AGENDA ITEM TRACKING FORM Meeting Date (Date Adopted): ~ I b t OS Item # ~ ?J Vote: Ayes -1 Nays Change to motion to amend original documents D NulINoid After: days / Resolution # On Attachments: D PUBLISH D POST D Date Sent to Mayor: Date of Mayor's Signature: Date of Clerk/CDC Signature: Abstain Resolution # ~roO)' 3/3 Absent Companion Resolutions RECORD W/COUNTY D Note on Resolution of attachment stored separately: D By: Date Memo/Letter Sent for Signature: I st Reminder Letter Sent: Date Returned: 2nd Reminder Letter Sent: Not Returned: D Request for Council Action & Staff Report Attached: Updated Prior Resolutions (Other Than Below): Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634): Updated CDC Personnel Folders (5557): Updated Traffic Folders (3985, 8234, 655, 92-389): Copies Distributed to: Animal Control City Administrator City Attorney Code Compliance D Uv) D Development Services D Others: <)Dt:{A(J) EDA D ~ D D Reso. Log Updated: Seal Impressed: Reso. # on Staff Report D D D Yes No By_ Yes No By_ Yes No By_ Yes No By Yes No By_ Information Services Parks & Recreation Police Department Public Services Water Department D D D D D Notes: \/~ -. / It' ,,~ / /I, #'\. ,'1.-1 o~~6" ~ ~ ~ l~ ~~ . Facilities Finance Fire Department Human Resources Ready to File: _ Date: Revised 12/18/03