HomeMy WebLinkAboutCDC/2001-09
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RESOLUTION NO. CDC/2001-9
A RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO
APPROVING AND AUTHORIZING THE EXECUTIVE
DIRECTOR OF THE REDEVELOPMENT AGENCY TO
EXECUTE SECOND AMENDMENT TO MULTI-PLEX
THEA TER LEASE BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND CINEMASTAR LUXURY THEATERS,
INC.
WHEREAS, the Community Development Commission of the City of San
9 Bernardino (the "Commission") is the governing body of the Redevelopment Agency of the City
10 of San Bernardino (the "Agency"), a public body corporate and politic, organized and existing
11 pursuant to the Community Redevelopment Law (California Health and Safety Code Section 33000,
12 et seq.); and
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WHEREAS, in December, 1996, MDA-San Bernardino Associates, L.L.c., a
15 Delaware limited liability company ("MDA"), as landlord, and Cinemastar Luxury Theaters, Inc.,
16 a Delaware corporation ("Cinemastar"), as tenant, entered into a Multi-Plex Theater Lease (the
17 "Lease") with respect to a Cinemastar San Bernardino Multi-Plex 20 theater (the "Premises") to be
18 constructed on certain real property located in the City of San Bernardino, County of San
19 Bernardino, California (the "Theater Parcel"); and
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WHEREAS, the Cinemastar Lease was subsequently amended by that certain First
22 Amendment to Multi-Plex Theater Lease dated December 10, 1998; and
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WHEREAS, the Commission has, on the date hereof, adopted a resolution approving
25 and accepting the purchase by the Agency from MDA of the Theater Parcel and authorizing the
26 Executive Director of the Agency to execute that certain Purchase and Sale Agreement and Joint
27 Escrow Instructions by and between the Agency and MDA; and
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SB2001 :2392.1
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CDC/2001-9
1 WHEREAS, MDA will, in connection with the purchase of the Theater Parcel by the
2 Agency, assign the Lease to the Agency; and
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4 WHEREAS, Cinemastar has filed a voluntary petition for relief under Chapter 11 of
5 the United States Bankruptcy Code; and
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7 WHEREAS, Cinemastar has requested that certain provisions of the Lease be
8 amended to provide some relief to Cinemastar with respect to rent payment obligations under the
9 Lease; and
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11 WHEREAS, the Agency desires that certain provisions of the Lease, including
12 provisions relating to the obligations ofthe Agency to provide certain parking spaces for the Theater
13 Parcel, be amended; and
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15 WHEREAS, a Second Amendment to Multi-PIex Theater Lease ("Amendment No.
16 2") has been presented to this Commission for approval; and
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18 WHEREAS, in connection with the Cinemastar bankruptcy proceedings, Cinemastar
19 must affirmatively assume the Lease; and
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21 WHEREAS, assumption ofthe Lease by Cinemastar, as amended by Amendment No.
22 2, is a condition precedent to the effectiveness of Amendment No.2.
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24 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION
25 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
26 BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
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28 Section 1. The Commission hereby approves Amendment No.2 attached hereto
SB2001 :2392.1
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CDc/2001-9
1 as Exhibit "A".
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3 Section 2. The Executive Director ofthe Agency is hereby authorized to execute
4 Amendment No.2 on behalf ofthe Agency in substantially the form attached hereto, together with
5 such changes therein as may be approved by the Executive Director and Agency Special Counsel.
6 The Executive Director or such other designated representative of the Agency is further authorized
7 to do any and all things and take any and all actions as may be deemed necessary or advisable to
8 effectuate the purposes of Amendment No.2.
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SB200\:2392.\ 3
CDC/2001-9
1 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY
OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE
2 DIRECTOR OF THE REDEVELOPMENT AGENCY TO EXECUTE SECOND
AMENDMENT TO MULTI-PLEX THEATER LEASE BY AND BETWEEN THE
3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND
CINEMAS TAR LUXURY THEATERS, INC.
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Section 3.
This Resolution shall become effective immediately upon its adoption.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
Development Commission of the City of San Bernardino at a joint regular meeting thereof,
held on the 5 th
day of February
,2001, by the following vote, to wit:
Commission
13 ESTRADA
LIEN
14 MCGINNIS
SCHNETZ
15 SUAREZ
ANDERSON
16 McCAMMACK
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AYES
X
X
X
X
X
X
X
NAYS
ABSTAIN ABSENT
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The foregoing Resolution is hereby approved this ~ day of February ,2001.
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~'7t;. "~
Betty Dean-Anderson, Vice-Chair
commumty Development CommIssIOn
of the City of San Bernardino
23 Approved as to form
and legal content:
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By:
25 Agency Counsel
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SB200 I :2392.1
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1 STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
2 CITY OF SAN BERNARDINO )
3 I, Secretary of the Community Development
Commission ofthe City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached
4 copy of Community Development Commission of the City of San Bernardino Resolution
No. is a full, true and correct copy of that now on file in this office.
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal
6 of the Community Development Commission of the City of San Bernardino this day of
,2001.
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Secretary of the
Community Development Commission
of the City of San Bernardino
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SB200 1 :2392.1
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8B200 1 :2392.1
CDC/2001-9
EXHIBIT "A"
SECOND AMENDMENT TO MULTI-PLEX THEATER LEASE
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CDC/2001-9
filE COpy
SECOND AMENDMENT TO MUL TI-PLEX THEATER LEASE
'r/t-(',~i.'Vf.':'.'!u ('. '." ,,-r.~liCfl'VI.,:,", ('. " u
\ '. ,. .i ! ;.! r
This SECOND AMENDMENT TO MUL TI-PLEX THEATER LEASE ("Amendl%qt No.
2") is made and entered into as of February 26, 200 I by and betweeJJthe ~.tEdBV\tU):~~EN1t1y 15 A11:2-
AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic ("Agency"),
and CINEMASTAR LUXURY THEATERS, INC., a Delaware corporation ("CinemaStar"), with
respect to the facts set forth below.
RECITALS
A. CinemaStar and MDA-San Bernardino Associates, L.L.c., a Delaware limited
liability company ("MDA"), the current owner of that certain real property located in the City of San
Bernardino, County of San Bernardino, California and more particularly described in Exhibit "A"
hereto (the "Property") on which on which the CinemaStar San Bernardino Multi-Plex 20 theater
is situated (the "Premises"), entered into a Multi-Plex Theater Lease dated December 20, 1996,
which was amended by that certain First Amendment to Multi-Plex Theater Lease dated
December 10, 1998 ("Lease"), with respect to the Premises.
B. The Agency has an agreement to purchase the Property from MDA and succeed MDA
as Landlord under the Lease.
C. The Agency and CinemaS tar desire at this time to amend the Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, CinemaStar and the Agency agree as follows:
I. Terms with initial capital letters used in this Amendment No.2, but not otherwise
defined, will have the respective meanings set forth in the Lease.
2. Except as hereby amended, the Lease is in all respects ratified and confirmed and all
the terms, provisions and conditions thereof shall be and remain in full force and effect.
3. Neither the Agency or CinemaStar will have any rights or obligations under this
Amendment No.2, unless:
(a) The Agency acquires fee title to the Property from MDA; and
(b) CinemaStar assumes the Lease, as amended by this Amendment No.2, in
accordance with Section 15, which assumption is approved by the bankruptcy
court.
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4. Section 1.1 (g) of the Lease is hereby amended to read in its entirety, as follows:
"(g) Address for notices:
To Landlord:
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 9240 I
Attention: Executive Director
To Tenant:
CinemaStar Luxury Theaters,
Inc.
7220 A venida Encinas
Suite 203
Carls bad, CA 92009
Attention: Mr. Clay Colbert and Mr. Don Harnois"
5. Section l.3(d) of the Lease is hereby deleted in its entirety.
6. Sections 1.1 (c) and (d) of the Lease are hereby deleted in their entirety. Section 5.1'
of the Lease is hereby amended to read in its entirety, as follows:
"Minimum Annual Rent. Commencing on March I,
200 I, and continuing until the expiration of the Lease
Term, Tenant will annually pay to Landlord
$984,000.00 for occupancy of the Premises
("Minimum Annual Rent"). Minimum Annual Rent
is payable in advance, in 12 equal monthly
installments in the amount of $82,000.00 per month,
on the first day of each calendar month, without
demand, deduction, abatement or offset."
6. Sections 1.1 (e) and 5.2 of the Lease are hereby deleted in their entirety. CinemaStar
shall have no obligation to pay Percentage Rent pursuant to Section 5.2 or any other provision of the
Lease.
7. Article 6 of the Lease is amended in its entirety to read as follows:
"PARKING FOR THEATER PARCEL
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At least 1,100 parking spaces within a 1600' radius of
the Theater Parcel shall be made available by
Landlord and/or Agency for the non-exclusive use by
"Permittees" (as defined in Section 4.4) of the
Premises."
8. The text of Section 18.2 of the Lease is hereby deleted in its entirety, and Section 18.2
shall be re-captioned "[RESERVED]".
9. The parties hereto acknowledge and 'agree that that certain Parking Agreement
attached to the Lease as Exhibit "I" shall be of no further force and effect upon the rights and
obligations between the Agency and CinemaStar under the Lease, as amended, upon the assignment
by MDA of the Parking Agreement to the Agency in connection with the purchase of the Property
by the Agency from MDA.
10. Section 18.3(a) of the Lease is hereby amended to read in its entirety, as follows:
(a) Tenant's Pro Rata Share. The expenses incurred by
Landlord in connection with the operation, maintenance,
insurance, repair and replacement and/or usage of the
Common Areas (collectively, the "Common Area Expenses")
shall be apportioned among the various tenants of the
Development. Tenant hereby agrees to pay to Landlord, as
Additional Rent, its Proportionate Share (as defined herein)
of such Common Area Expenses. For the purposes of this
Section 18.3, Tenant's "Proportionate Share" shall mean 80%
of the aggregate Common Area Expenses.
11. As of February 1, 2001, notwithstanding anything to the contrary contained in the
Lease or this Amendment No.2, CinemaStar shall have no obligation to pay the Parking Cost (as
defined in Section 18.4 of the Lease).
12. CinemaS tar agrees that the Agency may notify the California Department of
Transportation, pursuant to that certain Public Parking Structure Use Agreement dated November
9, 1998, by and between the Agency and the California Department of Transportation ("CaITrans"),
that CalTrans does not need to make its parking structure available for public parking. Further,
CinemaStar agrees that the Agency, in its sole and absolute discretion ,may modify or terminate the
Public Parking Structure Use Agreement, after 30-days written notice to CinemaStar of the Agency's
intent to take such action.
13. CinemaS tar will pay to the Agency or its successors or assigns, as Additional Rent,
any cost incurred by the Agency under the Public Parking Structure Use Agreement, if CinemaStar
notifies the Agency or its successors or assigns that CinemaStar desires the Agency to exercise its
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rights under the Public Parking Structure Use Agreement to make parking spaces in the CalTrans
parking structure available for public parking. Further, if the CinemaStar San Bernardino Multi-Plex
20 theater issues 1,000,000 or more admissions, whether by sale, promotion, discount, give-away
or otherwise and whether transacted in person, telephonically, electronically, by computer or
otherwise, during any calendar year, CinemaStar will pay to the Agency or its successors or assigns,
as Additional Rent, any cost incurred by the Agency under the Public Parking Structure Use
Agreement for the entire succeeding calendar year, regardless of the number of admissions issued
in such succeeding calendar year. All Additional Rent due under the provisions of this Section is
payable in advance, in 12 equal monthly installments, on the first day of each calendar month,
without demand, deduction, abatement or offset, commencing on January 1 of the calendar year for
which such Additional Rent is payable.
14. In consideration of the reduction of rent granted to CinemaStar hereby (the
"Reduction"), CinemaStar hereby agrees to an allowed, general, unsecured claim in favor of the
Agency and against CinemaS tar, as debtor-in-possession of the bankruptcy estate, in the total
principal amount of the Reduction ("Allowed Claim"). In consideration for CinemaStar's prompt
compliance with its obligations under the Lease, as hereby amended, Agency agrees to forbear from
collection of the Allowed Claim for the remaining Lease Term; and provided that there are no
defaults hereunder, at the conclusion of the remaining Lease Term, Agency shall waive any right to
enforcement of the Allowed Claim.
15. CinemaStar filed a bankruptcy petition in U.S.B.C., S.D. Cal., Case No. 01-00110-
JMIl. CinemaStar must assume the Lease, as amended by this Amendment No.2, pursuant to
Section 365 of the United States Bankruptcy code, in U.S. B.C., S.D. Cal., Case No. OI-OOIIO-JMll,
subject to court approval and notwithstanding confirmation of a plan of reorganization. Agency
shall permit assumption of the Lease, as amended, by the Debtor-in-possession in such case.
Assumption ofthe Lease, as amended by this Amendment No.2, by CinemaStar is a condition
to this Amendment No.2.
16. CinemaS tar defaulted in certain payments due under the Lease during the period prior
to February 1,2001 ("Defaulted Payments"). CinemaStar will pay the Agency a portion of the
Defaulted Payments in the amount of$150,000, in 12 equal monthly installments in the amount of
$12,500 per month, beginning on March 10,2001, and continuing until February 10,2002. The
remaining amount ofthe Defaulted Payments is added to the Allowed Claim and treated in the same
manner as provided in Section 14 above.
17. As long as the Agency is the owner of the fee title to the Property, in lieu of any other
property tax amounts required to be paid by CinemaS tar under the Lease, CinemaS tar will pay when
due and prior to delinquency all taxes, assessments, and other charges including possessory interest
taxes levied or imposed by any governmental entity on the possessory interest of CinemaStar in the
Premises, including personal property, trade fixtures, appliances, and equipment placed by
CinemaStar in, on, or about the Premises during the Term of the Lease. CinemaStar recognizes that,
as long as the Agency owns fee title to the Property, CinemaS tar's interests in the Lease, as amended
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CDC/2001-9
by this Amendment No.2. will be subject to the assessment and imposition of a possessory interest
tax (as defined in Revenue and Taxation Code Section 107) by the San Bernardino County Assessor
and Tax Collector, and CinemaS tar agrees to pay such tax amount as may be so levied with respect
to the possessory interest of CinemaS tar in the Premises.
In the event that the possessory interest of Cinem as tar in the Premises, or the personal
property, trade fixtures, appliances and equipment of CinemaStar on the Premises or the real
property taxes and assessments on the Premises is not separately assessed under one or more county
tax assessor tax parcel designations for any period oftime during the Term of the Lease, as amended
by this Amendment No.2, (e.g.: a "joint assessment") the tax liability of CinemaStar for any
amounts due will be an equitable allocation of the total tax liability assessed to the Premises under
such a joint assessment. Such an allocation of the tax liability of CinemaS tar under a joint
assessment will be determined by the Agency based upon its review of the tax valuations assigned
to the Premises (and the interests of CinemaS tar therein) in the work sheets and assessment records
of the San Bernardino County Assessor relating to any property or possessory interest tax assessment
(or supplemental assessment) during the Term of the Lease, as amended by this Amendment No.2.
Following receipt of the Agency's determination and not later than twenty (20) days prior to the
applicable delinquency date, CinemaS tar will pay to the Agency the amount of such equitable
allocation of the tax owed by CinemaS tar. Upon its receipt from CinemaStar of such amount, the
Agency will promptly remit the funds to the San Bernardino County Tax Collector for the account
of CinemaS tar.
Upon the request of the Agency, CinemaStar will execute an appropriate form of a
notice of responsibility of CinemaS tar for the payment of the taxes due for filing by the Agency with
the Office of the San Bernardino County Assessor and the San Bernardino County Tax Collector.
18. If the Agency receives a legitimate third-party offer to purchase the Premises during
the Term of the Lease, as amended by this Amendment No.2, the Agency will submit the offer to
CinemaStar. CinemaS tar will have 7 calendar days to match the purchase offer in writing, signed
by its corporate President and Secretary. If the Agency does not receive a matching written offer
from CinemaS tar within 7 calendar days of sending the third-party offer to CinemaS tar, the Agency
may accept the third-party offer to purchase the Premises and assign all of the rights of the Agency
under the Lease, as amended by this Amendment No.2, to the third-party purchaser.
19. CinemaStar hereby covenants to use its commercially reasonable efforts to promote
attendance at its San Bernardino Multi-Plex Theater through media advertisement, joint promotions
with other manufacturers or distributors of products or providers of services and other means of
promoting attendance at the theater, all of which must be consistent with the normal operation of
similar theaters and the covenants and provisions of the Lease. CinemaStar hereby covenants and
agrees that it shall provide to Agency quarterly reports on its marketing efforts and their results.
20. Sections 1.1 (a)(ii) and 3.7 of the Lease are hereby deleted. Any remaining references
to Extended Term appearing in the Lease are without any force or effect.
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21. In the event of any inconsistency between this Amendment No.2 and the Lease, the
terms of this Amendment No.2 will govern and control. This Amendment No.2 may be executed
in counterparts, each of which, taken together, will constitute one fully executed original. Facsimile
signatures will be binding and effective for all purposes.
22. CinemaStar represents and warrants to the Agency that the persons executing this
Amendment No.2 on CinemaS tar's behalfhave all the power and authority required under California
law and the law of the state of domicile of CinemaS tar to execute this Amendment No.2 and,
thereby, make this Amendment No.2 a legally binding obligation of CinemaStar. In this regard,
CinemaS tar has provided the Agency with a copy of an Action by Unanimous Written Consent in
Lieu of a Special Meeting of the Board of Directors of CinemaStar Luxury Theaters, Inc., as
evidence of the corporate authority of the persons executing this Amendment No.2, as attached
hereto as Exhibit "B" and incorporated herein by this reference.
23. If the bankruptcy case described in Section 15 is dismissed, this Amendment No.2
will be of no further force or effect.
IN WITNESS WHEREOF, the parties have caused this Amendment No.2 to be executed
as of the date first above-written.
AGENCY:
CINEMAST AR:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO, a public
body corp e and 9 itic
CINEMAST AR LUXUR Y THEATERS,
INC., a /7r.:;orporation
BY~
Name: ~ . 'tJl:S;J). .
Tille, C/IIcFP/t'iWt/\
By: tV", l.- <
Name: c..~ c" (,..(3...(1.....-
Title: ?r......:. tl. ...-~
By: /
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
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EXHIBIT A
LEGAL DESCRIPTION OF THEATER PROPERTY
PARCEL 1 OF PARCEL tvfAP NO. 15038, IN THE CITY OF SAN BERNARDINO, COUNTY
OF SAN BERNARDINO. STATEOFCALIFORNlA, AS PER PLAT RECORDED IN BOOK 186
OF PARCEL tvfAPS, PAGE(S) 14 AND IS, RECORDS OF SAID COUNTY.
5684300012-1022905.3
CDC/2001-9
EXHIBIT "B"
ACTION BY UNANIMOUS WRITTEN CONSENT IN LIEU OF A SPECIAL MEETING
OF THE BOARD OF DIRECTORS OF CINEMASTAR LUXURY THEATERS, INC.
112.\
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ACTION BY UNANIMOUS WRITTEN CONSENT
IN LIEU OF A SPECIAL MEETING
OF THE BOARD OF DIRECTORS
OF
CINEMAST AR LUXURY THEATERS, INC.
The undersigned, being all of the directors (the "Board of Directors") of CinemaStar
Luxury Theaters, Inc., a Delaware corporation (the "Company"), acting by unanimous
written consent without a meeting pursuant to Section 141 (f) of the General Corporation
Law of the State of Delaware, and pursuant to Section 3.11 of the By-Laws of the
Company, hereby consent to the adoption of the following resolution and agree that such
resolution shall have the same force and effect as if it was approved and adopted at a duly
constituted meeting of the Board of Directors of the Company.
AUTHORIZA nON TO EXECUTE LEASE AMENDMENT
BE IT RESOLVED, that Donald H. Harnois, Jr. as Chief Financial Officer, and Clay
Colbert as President (the "Contracting Officers"), whose signatures appear below, acting
together, are authorized, instructed and empowered to execute and deliver, in the name
and on behalf of the Company, the Second Amendment to the Multi-Plex Theater Lease
with the Redevelopment Agency of the City of San Bernardino related to the CinemaStar
San Bernardino Multi-Plex 20 theater located at 450 North E Street in San Bernardino,
California, subject to the limitations of the United States Bankruptcy code, and in such
form and with such terms and provisions as such Contracting Officers shall approve, such
approval to be conclusively evidenced by their execution thereof.
/ \1/ _ \
( Y~-7L-~\
Clay Colbert
President
_V' V~ ~,.~v ~
't,JVU.' vu..;
CDC/2001-9
IN WITNESS WHEREOF, the undersigned Board of Directors of CinemaStar Luxury
Theaters, Inc., have executed this consent as of this lSd. day of February 2001.
~aL 0 {'----- 1/
1 ck R Crosby
Wayne B. Weisman
Being all the Directors of the Company
CDC/2001-9
IN WITNESS WHEREOF, the undersigned Board of Directors or CinemuStar Luxury
Theaters, Inc., have cxeeuleu this consent as of this 15t~1 day of Febmury 2001.
Jack R. Crosby
Jack S. Gray, Jr.
Being a\lthc Directors of the Company