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HomeMy WebLinkAbout1988-395 , 1 2 3 4 5 6 RESOLUTION NO. 88-395 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF A LETTER TO MARUKO, INC. PURSUANT TO CERTAIN PROVISIONS OF THE OWNER PARTICIPATION AND DEVELOPMENT AGREEMENT. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLLOWS: SECTION 1. The Mayor is hereby authorized and directed to 7 execute on behalf of said City a letter to Maruko, Inc. relating 8 to Owner Participation and Development Agreement, which letter is 9 attached hereto as Exhibi t "1", and incorporated herein by 10 11 12 13 reference as fully as though set forth at length. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a regular meeting thereof, held on 14 the day of October 3 rd , 1988, by the following 15 vote, to wit: 16 17 18 19 20 21 22 23 24 25 26 27 28 AYES: Council Members Estrada, Reilly, Pope-Ludlam, Miller NAYS: Council Member Flores ABSENT: Council Members Maudsley, Minor ~~$L~/~~~/ /' City Clerk DAB:cez 9/15/88 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION AUTHORIZING AND DIRECTING THE EXECUTION OF A LETTER TO MARUKO, INC. RE: OWNER PARTICIPATION AND DEVELOPMENT AGREEMENT The foregoing resolution is hereby approved this ~~ day of October , 1988. /' &~1~ j)2~' Evlyn Wilcox, Mayor ,/ City of San Bernardino Approved as to form and legal content: AGENCY COUNSEL DAB:cez 9/22/88 2 BERNARDINO 300 NORTH "0" STREET, SAN BERNARDINO, CALIFORNIA 92418 JAMES F. PENMAN CITY ATTORNEY (714) 384-5355 September 13, 1988 Maruko, Inc. c/o KOAR, Inc. 555 S. Flower Street Los Angeles, CA 90071 Re: Owner Participation and Development Agreement by and among the City of San Bernardino, the Redevelopment Agency of the City of Bernardino, and Maruko, Inc., dated July 20, 1987 (the "Agreement") Gentlemen: This letter shall constitute the approval by the undersigned to the transfer by Maruko, Inc., a Japanese corporation, of undivided interests as tenants in common (the "Interests") in the "Project" (as defined in the Agreement) as hereinafter described. The interests shall be conveyed to purchasers who shall each immediately enter into a lease of each such purchaser's Interest with Maruko, Inc. Pursuant to such Leases, Maruko, Inc. shall agree to assume and perform all the obligations of the "Redeveloper" under the Agreement during the term of such leases, and Maruko, Inc. shall re-acquire such Interests either during the term of such leases under certain conditions or upon the expiration or termination of such leases. This letter shall constitute the approval by the undersigned to the above-described trans fers from Maruko, Inc., to such purchasers and from such purchasers to Maruko, Inc. as required by Section 6.5 of the Agreement, and any and all other documents executed and delivered in connection with the Agreement or with respect to the Project or the "Convention Center" (as defined in the Agreement). The undersigned does hereby approve the form of such leases as shown on Exhibit "A" attached hereto and incorporated herein. Should such leases be changed in form or content, further approval shall be required. Maruko, Inc. September 13, 1988 Page 2 The undersigned hereby waive the provisions of Section 6.5(e) of the Agreement with respect to the foregoing assignments and acknowledge that no transfers of the "Operating Agreement" (as defined in the Agreement) shall be made in conjunction with the foregoing transfers. Very truly yours, THE CITY OF SAN BERNARDINO APPROVED AS TO FORM AND LEGAL CONTENT: THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO / J/ /;~.:~ /' . .../ t 4 BY:Xf?A <,L~~_/ m <<-CA--"-/ Evlyn 1lcox, Cha1rman // /(Y/7// It APPROVED AS TO FORM AND LEGAL CONTENT: v~~ . " LEASE BY AND BETWEEN (Lessor) AND MARUKO INC., a Japan corporation (Lessee) fXHJBlI A ... . . LEASE SUMMARY OF BASIC 'l'BRMS Lessor's Name and Address: Lessee's Name and Address: Maruko Inc., a corporation duly organized and existing under the laws of Japan. MG, I nc . 13-8, Chuo l-chome Nakano-ku, Tokyo Japan Commencement Date: Term: Six (6) years, with two 6-year options to extend Rent: u.S. $ U.S. $ U.S. $ , Years 1-6 , Years 7-12 , Years 13-18 Operation Deposit: Yen Initial Maintenance Fee: $ Remittance Agent in Japan: MG, Inc. 13-8, Chuo I-chome Nakano-ku, Tokyo Japan fXHIBlI A LEASE This Lease ("Lease") is entered into as of -' 1988, by and between (the "Les- sor") and Maruko, Inc., a corporation duly organized and existing under the laws of Japan (the "Lessee"). RECITALS A. Lessor has purchased from Lessee a / th undivided tenant-in-common interest (defined for the purposes of this Lease as a "Leased Unit") in that certain real property in San Bernardino, California (the "Property"), which has been improved with a hotel and related facilities (the "Hotel") com- monly known as the Maruko Hotel and Convention Center. The Prop- erty and the Hotel (collectively, the "Project") are subject to (i) that certain Cotenancy Agreement dated as of , 1988 (the "Agreement") and (ii) that certain Owner Participation and Development Agreement (the "Development Agreement") by and among Lessee, the City of San Bernardino, a municipal corporation (the "City"), and the Redevelopment Agency of the City of San Bernar9ino, a public body corporate and politic (the "Agency"). Except as otherwise defined herein or where the con- text requires otherwise, all capitalized terms in this Lease shall have the meaning assigned to them in the Agreement. B. The Lessor desires to lease the Leased Unit to the Les- see, and the Lessee desires to lease the Leased Unit from the Lessor, for the use of the Leased Unit in connection with the operation of the Project as a hotel with related commercial facilities, on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the covenants and agree- ments contained herein, Lessor hereby leases the Leased Unit to Lessee, and Lessee hereby leases the Leased Unit from Lessor, upon the following terms and conditions: ARTICLE 1 TERM Section 1.1. Term. The initial term of this Lease shall be for a period of six (6) years, subject to extension in accordance with Section 1.2 below, commencing on the date Lessor pays to -1-(RE:763080l8LR.Ol) EXhldH I Lessee the final installment of the purchase price for the Leased Unit and Lessee has transferred title to the Leased Unit to Les- sor. Section 1.2. Extensions of Term. The term of this Lease shall be automatically extended for two (2) additional six (6) year periods upon the same terms and conditions and at the same rent as set forth herein unless Lessee delivers written notice to the Lessor prior to the commencement of either extension period stating that the term of the Lease shall not be so extended. ARTICLE 2 RENT Section 2.1. Rent. During the term of this Lease, Lessee shall pay to Lessor a monthly rental (the -Rent") equal to the following, subject to the offsets in Section 2.3, and prorated for any partial month: (a) U.S. $ per month during the first six years of the term of this Lease: .(b) U.S. $ per month during the second six years of the term of this Lease: and (c) U.S. $ during the third six years of the term of this Lease. Section 2.2. Payment of Rent. Lessee shall pay the Rent in equal monthly installments, prorated for any partial month, pay- able commencing on the date hereof and on the fifth day of each calendar month thereafter (provided that if the fifth day of a month falls on a Sunday or holiday, payment shall be made on the next day). As the monthly Rent actually received may fluctuate in terms of yen according to the prevailing exchange rate, the conversion from U.s. dollars to yen shall be based on the TTB exchange rate as of the twenty-fifth day of the previous month. All remittance charges shall be for the account of Lessor. Nei- ther party hereto shall have any right to claim an increase in or reduction of the monthly Rent while this Lease remains in effect: however, in the event of material changes in the economic envi- ronment or other similar conditions after the execution of this Lease, the Rent may be adjusted at the sole discretion of Lessee. Section 2.3. Fees. MG, Inc., with offices at 13-8, Chuo l-chome, Nakana-ku, Tokyo, Japan, shall assist Lessee in domestic remittance and Maruko USA, Inc., with offices at 9 East 45th -2-(RE:76308018LR.Ol) f.Ahu311 A Street, New York, New York, 10017, U.S.A., shall assist Lessee in the operation of the Leased Unit: in connection with such ser- vices, Lessor shall pay to Lessee an agency fee in the amount of ten percent (10%) of the monthly Rent, which shall be deducted by Lessee from the monthly Rent at the time of remittance at the prevailing TTB rate. In addition, Lessor shall pay to Lessee a maintenance fee of u.s. S per month (the "Maintenance Fee") which shall be deducted from the monthly remittance of Rent by Lessee, who shall submit a statement of account to Lessor annually. The Maintenance Fee may be increased or decreased as a result of changes in the Consumer Price Index, all items 1967=100, Los Angeles-Anaheim-Riverside, California, Metropolitan Area, for all Urban Consumers published by the United States Department of Labor, Bureau of Labor Statistics, or changes in the economic environment or for other such similar reason. ARTICLE 3 OPERATION DEPOSIT Immediately upon the execution of this Lease, Lessor shall deliver to Lessee, as a non-refundable deposit, Yen in immediately available funds (the "Operation Deposit"). The Operation Deposit shall be applied by Lessee from time to time and as Lessee deems necessary in its sole discretion toward the repair and replacement of the structural components of the Proj- ect including, but not limited to, wall coverings and carpets. Lessee may commingle the Operation Deposit with Lessee's other funds. Lessee shall not be required to pay Lessor interest on the Operation Deposit. ARTICLE 4 USE Section 4.1. Use of Premises. Lessee may use the Leased Unit for any of the purposes set forth in the Agreement with respect thereto. Lessee shall have the right to enter into a contract with a professional management or operating company ,(the "Operator") with respect to the Leased Unit and all or a portion of the Project for the operation of a hotel and related facili- ties thereon, and Lessee shall be entitled to delegate any of its duties or assign any of its rights hereunder to such Operator. Lessee shall use its best efforts to maintain and enhance the utilization of the Premises. -3-(RE:763080l8LR.Ol) EXH,BIT It Section 4.2. Name. Lessee may operate the Project under any name as determined by Lessee in its sole discretion. ARTICLE 5 MAINTENANCE Lessee shall maintain and repair the Leased Unit in good condition and repair during the term of this Lease. In the event of any damage or destruction to the Project which the Association is not required to repair under the Agreement, Lessee may termi- nate this Lease. ARTICLE 6 COMPLIANCE WITH AND ASSIGNMENT OF GOVERNING DOCUMENTS Section 6.1. Lessor's Compliance With Governinq Documents. Lessor shall at all times comply with all the terms and provi- sions of the Agreement and the other Governing Documents applica- . ble to Lessor, including, without limitation, (a) the payment of any and all assessments that may be payable with respect to the Leased Unit which assessments shall include charges for fire, casualty and liability insurance, and (b) delivery of notice to the Association of the execution of this Lease and of Lessee's name and address in accordance of Section 7.2 of the Agreement. Section 6.2. Assiqnment of Governinq Documents. Lessor acknowledges and agrees that Lessee, in accordance with the terms of the Agreement shall upon the effective date of this Lease become a Member of the Association in lieu of Lessor and that Lessee shall have all rights appurtenant to such membership including, without limitation, all voting rights in the Associa- tion. Without limiting the foregoing, Lessor hereby assigns to Lessee for the term of this Lease all rights and benefits of Les- sor under the Agreement and the other Governing Documents. ARTICLE 7 COMPLIANCE WITH DEVELOPMENT AGREEMENT For so long as this Lease remains in effect, Lessee agrees to assume and to comply with all the terms and obligations of the Development Agreement applicable to an owner of an interest in -4-(RE:76308018LR.Ol) t.Atllvd " . . the Project; provided, however, that Lessor shall not perform any act in violation of the Development Agreement, and specifically, without limiting the generality of the foregoing, Lessor shall not transfer any interest in the Leased Unit without obtaining the consent of the Agency and the City in accordance with the Development Agreement. Lessor hereby assigns all its right, title and interest in the Development Agreement to Lessee and appoints Lessee as its lawful attorney-in-fact for so long as this Lease remains in effect to enforce the terms and provisions of the Development Agreement, which power shall be coupled with an interest and irrevocable. In the event of any termination of the Development Agreement, Lessee may terminate this Lease. ARTICLE 8 TAXES Section B.l. Payment of Taxes on Leased Unit. Lessor shall pay all real property taxes assessed against the Leased Unit or any portion thereof; provided, however, that Lessee shall pay all taxes, assessments or impositions which may be levied on Lessee's possessory interest in the Leased Unit. Sectipn B.2. Other Taxes. Lessee shall be responsible for all sales taxes, excise taxes, inventory taxes and occupancy taxes and any other taxes and impositions with respect to the Lessee's operations of the Project as a hotel. In addition, Les- see shall be responsible for any business license tax with respect to the business conducted by Lessee at the Leased Unit. Section B.3. Riqht to Contest. Either party, at such party's sole expense, may contest the amount or legality of any taxes payable by such party in accordance herewith if the con- testing party determines in good faith and with reasonable belief that such taxes or assessments are improper or excessive, and the non-contesting party shall reasonably cooperate with the con- testing party in connection therewith. ARTICLE 9 RIGHT OF FIRST REFUSAL Should Lessor, during the term of this Lease or any exten- sion thereof, elect to sell all or a portion of the Leased Unit, Lessee shall have the right of first refusal to meet any bona fide purchase offer on the same terms and conditions of such -S-(RE:763080IBLR.Ol) tAi ll~d A I . offer: provided, however, that if the proposed purchase or trans- fer is to occur during the first three (3) years of the term of this Lease to a resident, citizen or domiciliary of the United States, then the provisions of Section 10.1 below shall apply to such proposed sale or transfer in lieu of this Article 9. Should Lessor receive such an offer, Lessor shall send to Lessee a copy of such offer, and, if during the first three (3) years of the term hereof, a certification to Lessee that such offeror is not a resident, citizen or domiciliary of the United States (the "Offer Notice"), at least three (3) months prior to the intended time of transfer. Lessee shall have fourteen (14) days from the date Lessee receives the Offer Notice from Lessor to elect to either exercise such right of first refusal or to permit Lessor to transfer the Leased Unit to such purchaser in accordance with such purchase offer. The terms of this Lease, including, without limitation, the Lessee's right of first refusal, shall be appli- cable to Lessor and all subsequent owners of the Leased Unit and to each and every sale of the Leased Unit. Lessor shall cause the party to whom ownership of the Leased Unit is being trans- ferred to expressly assume all of Lessor's obligations under this Lease and all other rules and regulations relative to this Lease and all other rules and regulations relative to this Lease drawn up or instituted by Lessor and Lessee ana to abide by all the terms of this Lease including, without limitation, Lessee's right. of first refusal. In the event that Lessee does not exercise its right of f.irst refusal with respect to any purchaser offer and if the Lessor fails to transfer the Leased Unit in accordance with such purchase offer, the Lessee's right of first refusal shall be applicable to all subsequent purchase offers. In the event Les- sor fails to comply with each and every term of this Article 9 in connection with its proposed sale of the Leased Unit, any such sale shall be void and have no force or effect. ARTICLE 10 -- LESSEE'S REPURCHASE OF PREMISES Section 10.1. Repurchase Durinq First Three Years. In the event that Lessor desires to sell or transfer all or a portion of the Leased Unit during the first three (3) years of the term of this Lease to any resident, citizen or domiciliary of the United States, Lessor shall send to Lessee a notice (the "Repurchase" Notice") at least three (3) months prior to the intended time of transfer, setting forth the terms of such proposed sale or trans- fer, and certifying to Lessee that such purchaser or transferee is a resident, citizen or domiciliary of the United States. Pro- vided that Lessee determines that the proposed purchaser or transferee is a resident, citizen or domiciliary of the United -6-(RE:76308018LR.Ol) EAI ilL>t f A States, and provided that Lessee determines that the proposed purchase or transfer is pursuant to a bona fide purchase offer from an unrelated party negotiated at arms length, then Lessee agrees to purchase the Leased Unit from Lessor, and Lessor agrees to sell the Leased Unit to Lessee, on the same terms and condi- tions set forth in the Repurchase Notice. In the event Lessor fails to comply with each and every term of this Section 10.1 in connection with its proposed sale of the Leased Unit, any such sale shall be void and have no force or effect. Section 10.2. Repurchase Upon Termination of Lease. As of the expiration (if this Lease is not renewed within fifteen (15) days of such expiration) or earlier termination of this Lease, Lessor agrees to sell, and Lessee agrees to buy, the Leased Unit at a purchase price equal to an amount to be agreed upon by Les- sor and Lessee or, in the event Lessor and Lessee cannot agree to a purchase price within thirty (30) days after written notice by Lessor to Lessee of Lessor's intention to repurchase the Leased Unit, Lessor shall purchase the Leased Unit at a purchase price equal to its then "Fair Market Value." For the purposes of this Lease, "Fair Market Value" shall be calculated as follows: In the event that an appraisal of the Fair Market Value of the Leased Unit is required pursuant to this Section 10.2, the Lessor shall, by notice to the Lessee, appoint an appraiser. Within twenty (20) days thereafter the Lessee may, by written notice to the Lessor, appoint another appraiser as a second appraiser. The appraisers thus appointed shall appoint a third appraiser and such three appraisers shall as promptly as possible determine the Fair Market Value of the Leased Unit; provided, however, that: (A) If the second appraiser shall not have been appointed within the twenty (20) day period set forth above, the first appraiser shall proceed to determine such value: and -- (B) If, within fifteen (15) days after the appointment of the second appraiser, the two appraisers appointed by the par- ties shall be unable to agree upon the appointment of a third appraiser, they shall give written notice of such failure to agree to the Lessor and Lessee, and, if the Lessor and Lessee fail to agree upon the selection of such third appraiser within fifteen (15) days after the appraisers appointed by the Lessor. and Lessee give notice as aforesaid, then within fifteen (15) days thereafter either of the parties upon written notice to the other party hereto may apply for such appointment to the Superior Court for the county where the Leased Unit is located or to any other court having jurisdiction and exercising functions similar to those now exercised by the Superior Court for the county where the Leased Unit is located. -7-(RE:76308018LR.OI) EXHIBIT A As used in this Section 10.2, the term "Fair Market Value" of the Leased Unit shall mean the cash price which a sophisti- cated purchaser would pay for the Leased Unit subject to existing encumbrances affecting all interests in the Property (as opposed to encumbrances affecting only the interests of Lessee individu- ally). The determination of the majority of the appraisers or of the sole appraiser, as the case may be, shall be conclusive upon the parties and judgment upon the same may be entered in any court having jurisdiction thereof.. The appraisers shall give written notice to the parties stating their determination, and shall furnish to each party a copy of such determination signed by them. Each party shall pay the fees and expenses of the appraiser selected by such party, and the fees and expenses of the third appraiser shall be shared equally by both parties. In the event of the failure, refusal or inability of any appraiser to act, a new appraiser shall be appointed in his stead, which appointment shall be made in the same manner as hereinbefore pro- vided for the appointment of the appraiser so failing, refusing or unable to act. Each appraiser shall be a member of the Ameri- can Institute of Real Estate Appraisers and shall have not less than ten (10) years experience in the appraisal of commercial property in the county where the Leased Unit is located. The closing (the "Close of Escrow") of any purchase and sale pur- . suant to this Section 10.2 shall occur, pursuant to an escrow opened by ~he parties, on the thirtieth day following the later to occur of (i) the expiration or prior termination of this Lease or (ii) the determination by the appraisers of the Fair Market Value of the Leased Unit, provided that if such thirtieth day is not a business day, the Close of Escrow shall occur on the first business day occurring thereafter. The Repurchase Price shall be payable at the Close of Escrow upon such terms and conditions as the parties may agree, and Lessor shall deliver title to the Leased Unit to Lessee at Close of Escrow subject only to matters of record as of the commencement of the term hereof, and any mat- ters created by Lessee. This Section 10.2 shall survive the expiration or termination of this Lease. ARTICLE 11 WAIVER OF PARTITION During the term of this Lease, Lessor, for itself" and its heirs, successors and assigns, hereby expressly waives and relin- quishes any right to partition the Project whether in kind or by sale, at law or in equity, including, without limitation, pursu- ant to Sections 872.010 to 874.240 of the Code of Civil Procedure of the State of California as well as any other statutes or common law principles of similar effect. -8-(RE:76308018LR.Ol) EXhlC)11 A . . .. ARTICLE 12 RIGHT TO CURE Neither party shall be deemed to be in default hereunder unless such party fails to perform any of the terms, conditions and covenants of this Lease to be observed or performed by such party, and such failure has not been cured within a period of thirty (30) days after the defaulting party receives written notice from the other party of such default (unless the cure of such default reasonably requires more than thirty (30) days to cure, in which event the defaulting party shall have such addi- tional time as is reasonably necessary to effect such cure so long as the defaulting party commences the cure of such default within the 30-day period and thereafter diligently pursues such cure to completion). Neither of the parties hereto may terminate this Lease while this Lease remains in effect, except as permit- ted hereunder or under applicable law. If any discrepancy and/or obscurity arises in relation to the interpretation or imple- mentation of this Lease, all relevant laws, regulations and cus- toms shall be observed and the parties hereto shall endeavor to resolve the matter amicably. ARTICLE 13 GENERAL PROVISIONS Section 13.1. Governinq Law. This Lease and the perfor- mance thereof shall be governed, interpreted, construed and regu- lated by the laws of California. Section 13.2. Notices. Any notice required to be given by either party to the other party under this Lease shall be in writing and personally delivered or given by certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below, subject to the right of either party to designate a different address for itself by notice similarly given: (a) Lessor: (b) Lessee: Maruko Inc. 13-8, Chuo l-chorne Nakano-ku, Tokyo Japan -9-(RE:76308018LR.Ol) E.XrJlDl f ~ \ ., .. ,. . . . Any notice so given shall be deemed given on the date of actual delivery which may be evidenced by a signed receipt if by profes- sional delivery service or by addressee's registry or certifica- tion receipt if by registered or certified mail. Section 13.3. Entire Aqreement: Modification in Writinq. This Lease contains the entire agreement of the parties hereto with respect to the matters covered hereby, and no other agree- ment, statement or promise made by any party hereto, or by any employee, officer or agent of any party hereto which is not contained herein shall be binding or valid. This Lease shall not be modified or cancelled except by writing subscribed by both parties. Section 13.4. Successors and Assiqns. This Lease shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto. Section 13.5. Memorandum. Upon Lessee's request, Lessor shall execute a memorandum of this Lease, Lessee's right of first refusal in Article 9 and/or Lessee's repurchase obligation in Article 10, in a form acceptable to Lessee, which Lessee may record in the office of the County Recorder of San Bernardino County, California. IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as o~ the date first above written. "LESSOR" "LESSEE" -- MARUKO INC. By: Its: -lO-(RE:763080l8LR.Ol) EXrUBiT A L