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16- Development Department
D E 4 .. L O P M E N T D E P A R T M h .. T OF THE CITY OF SAN BERN MINO REQUEST FOR COMMISSION/COUNCIL ACTION From: KENNETH J. HENDERSON Subject: POLICE HEADQUARTERS Executive Director ACQUISITION — 466 WEST FOURTH STREET Date: February 24, 1993 ------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On June 22, 1992, the Mayor and Common Council accepted $2.3 million as the appraisal value of the existing Police Department building. On October 22, 1992, the Redevelopment Committee recommended $2,320,000 as the sale price for the acquisition and asked Agency staff to negotiate with City staff regarding lease terms for the lease back of the building. On December 21, 1992, the Community Development Commission continued the matter until January 11, 1993. It was subsequently continued twice more to the first meeting in March 1993. ------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION A: That the Community Development Commission authorize acquisition of the Police Headquarters building at 466 West Fourth Street by the Redevelopment Agency; authorizing the Executive Director and Chairman to execute all pertinent documents therefor. (Motions continued on next page. . .) V� Administ ator KENNETH J. hEOERSON Executive Director ------------------------------------------------------------------------------- Contact Person(s): Kenneth Henderson/John Hoeger Phone: 5081 Project Area(s) : Central City North/Southeast Industrial Park Ward: 1st & 3rd Supporting Data Attached: Staff report, map, resolutions, grant deed, lease FUNDING REQUIREMENTS: Amount: $ 925,000 Source: SEIP Bond Proceeds Budget Authority: Requested ------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------- KJH:JBH:jbh:0448j COMMISSION MEETING AGENDA Meeting Date: 3/22/1993 Agenda Item Number: REQUEST FOR COMMISSION/COUNCIL ACTION Police Headquarters Acquisition February 24, 1993 Page Number -2- ------------------------------------------------------------------------------- Recommended Motion(s): MOTION B: Authorize payment for the acquisition from $925,000 (plus escrow and purchase costs) of bond proceeds from the Southeast Industrial Park project area. MOTION C: Authorize the Executive Director to execute the attached lease agreement between the Redevelopment Agency and the City of San Bernardino, and all documents necessary to administer said agreement. MOTION D: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO MAKING FINDINGS AND DETERMINATIONS AS TO THE BENEFIT OF UNDERTAKING CERTAIN BLIGHT REDUCING ACTIVITIES FOR THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA AND THE CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREAS OF THE AGENCY. (Mayor and Common Council) MOTION E: RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF A GRANT DEED CONVEYING CERTAIN PROPERTY LOCATED ON THE NORTH SIDE OF FOURTH STREET, BETWEEN 'E' STREET AND 'D' STREET, TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO; AUTHORIZING THE EXECUTION OF THE PERTINENT ESCROW INSTRUCTIONS AND AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT WITH SAID REDEVELOPMENT AGENCY AND AUTHORIZING PAYMENT THEREFOR. MOTION F: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO MAKING FINDINGS AND DETERMINATIONS AS TO THE BENEFIT OF UNDERTAKING CERTAIN BLIGHT REDUCING ACTIVITIES FOR THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA AND THE CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA OF THE AGENCY. ------------------------------------------------------------------------------- KJH:JBH:jbh:0448j COMMISSION MEETING AGENDA Meeting Date: 3/22/1993 Agenda Item Number: 161-) DEVELOPMENT DEPARTMENT STAFF REPORT POLICE HEADQUARTERS ACQUISITIOft This item will authorize execution of the necessary documents to consummate the purchase of the existing Police Department headquarters building. On December 21, 1992, the Community Development Commission considered this matter and received information from Agency staff as to the limited amount of tax increment funds remaining available to the Agency. The Commission then continued this matter which has allowed staff to employ a review appraiser who has examined the two existing appraisals for the building. The large difference between the $3.88 million value of the Boznanski appraisal (later reduced to $2.3 million) and the $925,000 value of the Gottfried appraisal prompted a number of questions by Commission members. The review appraiser has now completed his work and has advised that the Boznanski appraisal should not be used (not even with the lowered amount). The review appraiser also raised questions on some aspects of the Gottfried appraisal which might have resulted in a value even lower than $925,000 however staff has received answers from Gottfried which confirm the $925,000 value as of the appraisal date, March 26, 1992. Based upon the results of the review appraisal work, the staff recommends that the Commission use a value of $925,000 for the sale. BOZNANSKI APPRAISAL The police headquarters building was included in an appraisal done by Mr. Carl Boznanski, CRA. The appraisal was for bonding purposes and it centered on a valuation of City Hall While not the focus of the appraisal, the police building was also included and it was indicated to have a value of $3.88 million as of March 26, 1992. When this value was questioned, Mr. Boznanski subsequently reduced his opinion of value to $2.34 million. The reasons given for the reduction were that it was no longer to be used as a police headquarters and that the original appraisal used an incorrectly larger land area. Although the building is 50 years old, Mr. Boznanski considers it to be the equivalent of a 14 year old building because of remodeling work carried out in 1978. The review appraiser, Warren Neville, MAI, states in the attached letter that the Boznanski appraisal should not be approved by the Commission. This is based primarily upon its violation of standard appraisal practices and numerous other deficiencies such as the lack of any comparison sales or income information that would be necessary and pertinent to the building. ------------------------------------------------------------------------------- KJH:JBH:jbh:0448] COMMISSION MEETING AGENDA Meeting Date: 3/22/1993 Agenda Item Number: _ DEVELOPMENT DEPARTMENT STAFF REPORT Police Headquarters Acquisition February 24, 1993 Page Number -2- GOTTFRIED APPRAISAL The Gottfried appraisal arrived at a value of $925,000 as of March 26, 1992. Neville, the review appraiser, was concerned with some aspects of the Gottfried appraisal and raised the question of whether or not the value should be even lower. The reviewer's principal concerns were whether the values had been downgraded enough to account for the lack of on-site parking, whether enough money had been subtracted for the necessary remodeling, and whether current real estate market data supports a value as high as $925,000. Staff has interviewed Mr. Gottfried and obtained additional information on the specific points broached by the reviewer. Staff has analyzed both the questions and the additional information and concluded that the $925,000 value should not be lowered. Staff approached its analysis from the position that, despite the continued decline in the real estate market, the adopted concept was to use a value that was valid on March 26, 1992 and not a value for today even if it is lower. The reviewer specifically mentions the following: Zoning was not clear to the reviewer and he wondered how the City's parking standards would affect the property's lack of on-site parking. Gottfried dealt with parking issues in his appraisal and staff supplied specific information on the direction of downtown parking for Gottfried which the reviewer did not have. As those more closely involved with downtown San Bernardino are aware, our parking issues relate to nearly the whole of the downtown area and are not peculiar to this particular building. Therefore, downtown parking is already a factor in downtown rental and sales values as is discussed further below. Finally, while not strictly a factor for a market value appraisal, it is worth noting that the Agency's purpose for the acquisition is to demolish the building and create additional interim downtown parking with eventual development that will include parking structures. It is staff's opinion that the recognized lack of parking for this building was adequately accounted for by Gottfried and that no additional reduction is required for this factor. The reviewer questioned whether there was sufficient demand for office space in downtown to support a highest and best use as office. The reviewer suggested that market demand information be obtained to support this use. While the Agency did not commission a market study to support the office use concept staff is not prepared to suggest that a less intensive and lower value use be the basis of the appraisal value. ------------------------------------------------------------------------------- KJH:JBH:jbh:0448j COMMISSION MEETING AGENDA Meeting Date: 3/22/1993 Agenda Item Number: !�/ DEVELOPMENT DEPARTMENT STAFF REPORT Police Headquarters Acquisition February 24, 1993 Page Number -3- The reviewer was concerned that the rehabilitation cost would be more than Gottfried had provided for in the appraisal. This seems to stem from the reviewer's lack of personal knowledge about the structure and from his not having the information obtained by Gottfried from firms that have been involved in projects involving conversion of government buildings into multi-tenant office buildings. Staff was impressed at the thorough nature of Gottfried's inspection of the building and is satisfied that an adequate effort was made to arrive at a valid estimate of the conversion costs. The reviewer contacted a broker with Grubb & Ellis to determine current lease rates in downtown. Based upon his information (mostly concerning the Andreson building) the reviewer felt that the actual market value may be significantly less than Gottfried stated. Staff understands that, in this case, it is the intention of the Commission to use the value of the building as it was on March 26, 1992 and not to use today's value. The values used fairly reflect the 1992 value although today's value would be lower. As the reviewer concludes, Gottfried used correct methodology in his appraisal and while the reviewer wanted additional information to have been presented in the report itself, that information does exist within Gottfried's files. Moreover, we are in a current market situation where there is less than an ideal amount of market data available because there simply are few sales other than auctions of property in foreclosure. Values have continued downward from those of March 26, 1992 which was the original appraisal date but that does not invalidate the March 26, 1992 value as the appropriate value at that time. For all of the above reasons, it is the recommendation of staff that the Gottfried appraisal value of $925,000 not be lowered and that it be adopted as the correct appraisal value for the sale between the City and Agency. Alternatives would be to hire a fourth appraiser to do another appraisal of the building's value, accept the Boznanski values, or select some compromise number. The staff's recommended value is lower than that recommended by the Redevelopment Committee which met on October 22, 1992 without the benefit of the above review information. This value is also lower than the $2.3 million used in the City's current budget. ------------------------------------------------------------------------------- KJH:JBH:jbh:0448j COMMISSION MEETING AGENDA Meeting Date: 3/22/19(93 Agenda Item Number: f DEVELOPMENT DEPARTMENT STAFF REPORT Police Headquarters Acquisition February 24, 1993 Page Number -4- LEASEBACK TERMS At the same October 22, 1992 meeting, the Committee discussed the need for a lease from the Agency to the City to cover continued occupancy by the Police Department while its new facility is being prepared. The Committee recommended that staff meet with the City Administrator or representative to negotiate lease terms for the building. Agency staff subsequently met with City staff from the Administrator's office to discuss lease terms. The lease is written for a term ending with the current fiscal year plus two one-year options to extend. It can be canceled, however, by a 30 day notice from either party. The lease is a triple net lease which continues the City's existing responsibilities for maintenance and related matters. The lease rate will be $1 per month until the end of the 1992-1993 fiscal year. For the 93/94 fiscal year, an appropriate lease rate will be determined during budget deliberations and submitted to the Mayor and Common Council for approval. SOURCE OF ACQUISITION FUNDS The Agency is experiencing significant restrictions in its ability to fund major transactions. Due to the private use of the office tower and restaurants planned for the site, the source of funds for this acquisition has been designated to be tax increment money. However, the Department's Administrative Services Division advises that Central City North, the project area in which the building is located, has no tax increment or other funds available for the purchase and no likely means of repayment of any loan. Therefore, for some time, the Agency's cash flow forecasts have assumed that the Southeast Industrial Park project area will have to buy the building. Southeast currently has sufficient tax increment funds for the transaction provided the Council and the Commission determine that it would be beneficial to the Southeast project area to buy the building, demolish it, and then contribute the site to the development of downtown. To proceed with this source of funds, Agency Counsel has prepared the attached benefit resolutions for consideration by the Council and the Commission. ------------------------------------------------------------------------------- KJH:JBH:jbh:0448j COMMISSION MEETING AGENDA Meeting Date: 3/22/J1993 Agenda Item Number: 1 ��, DEVELOPMENT DEPARTMENT STAFF REPORT Police Headquarters Acquisition February 24, 1993 Page Number –5– RECOMMENDATION In anticipation of this transaction, the City's Real Property Section has prepared the necessary deeds and selling resolutions. An escrow has been opened and matters of record have been researched. Based upon the foregoing considerations, staff recommends a sale price of $925,000 together with the attached lease. The building will be purchased by the Southeast Industrial Park project area which will eventually donate the property to the development of the downtown area after demolishing the existing building. Staff recommends adoption of the form motions and attached resolutions. — �Jjtt"I"I - KENNE J. HEND RSON, Executive Director Development De rtment ------------------------------------------------------------------------------- KJH:JBH:jbh:0448j COMMISSION MEETING AGENDA Meeting Date: 3/22/1993 Agenda Item Number: ��G' 8�pCK 'Z9 jVAfp1A112 pF 50 ,;,ee• C11y M, 9, �•ss' 4L?5 t � I I � I I I . I s I 4' t Atf • * I I � I 2 9 s. s.•—• I .I I •� I M I t L --F-- i T i Wmi • 4 I 'S I 2 / I I I � ' I sS' '.L' sT• ' — � N - • ` - 41h - • - ST. - M •„ f M f �QoAE,Qry TO 9E SctD >1v0W,�v WARREN H. NEVILLE, MAI 5015 CANYON CREST DRIVE APPRAISAL CONSULTANT SUITE 202 RIVERSIDE, CALIFORNIA 92507 MEMBER APPRAISAL INSTITUTE TELEPHONE 17141 784-7340 FAX 17141 784-5702 February 9, 1993 VIA FACSIMILE & US MAIL David J. Norman Development Specialist San Bernardino Economic Development Agency Development Department 201 North E Street,Third Floor San Bernardino, CA 92401-1507 Re: Appraisal Review Boznanski & Company, Inc. Letter Appraisal Report San Bernardino Police Headquarters Building Dear Mr.Norman: At your request, I have completed a review of the May 22, 1992 letter appraisal report prepared for the above-referenced real property by Carl W. Boznanski, CRA of Boznanski& Company, Inc. This review is consultative in nature and does not in itself constitute an appraisal. The scope of this review included a desk-top examination and brief telephone conversation with Carl W. Boznanski, CRA on February 5, 1993. The purpose of this review is to analyze the content and conclusions of the letter appraisal report; to document the reviewer's conclusions with respect to the relevancy, adequacy and analysis of the data used; and to form an opinion as to appropriateness of the appraisal methods and techniques used, and to develop the reasons for any disagreement. This review document contained on the pages immediately following consists of a Certification of the Reviewer, Review Summary and Qualifications of Appraiser. This review has been prepared in conformity with the current requirements of the Appraisal Foundation as set forth in the Uniform Standards of Professional Practice �C� David J. Norman February 9, 1993 Page 2 (USPAP). The function of this review is solely for internal use by the City of San Bernardino Economic Development Agency. It is my opinion the captioned letter appraisal report does not adequately support the stated value of the subject property. I found the report to be deficient in many areas and in violation of Standard Rule 1-1 (a &b) of USPAP. It is my recommendation that you NOT APPROVE this report for use by the San Bernardino Economic Development Agency. Respectfully submitted, udc-'-�� q- K,0� Warren H. Neville, MAI /WHN:ddn WARREN H. NEVILLE, MAI I RESOLUTION NO. 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO MAKING FINDINGS AND DETERMINATIONS AS TO 3 THE BENEFIT OF UNDERTAKING CERTAIN BLIGHT REDUCING ACTIVITIES FOR THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA AND THE 4 CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA OF THE AGENCY. 5 WHEREAS, the City of San Bernardino, (the "City" ), is a 6 municipal corporation and a charter city duly created and existing 7 pursuant to the Constitution of the laws of the State of 8 California; and 9 , WHEREAS, the Community Development Commission of the City of 10 San Bernardino (the "Commission" ) on behalf of the Redevelopment 11 Agency of the City of San Bernardino (the "Agency" ), is a 12 redevelopment agency, a public body, corporate and politic of the 13 State of California, organized and existing pursuant to the 14 Community Redevelopment Law (Part 1 of Division 24) commencing 15 with Section 33000 of the Health and Safety Code of the State of 16 California (the "Act" ); and 17 WHEREAS, the Agency may, in furtherance of its redevelopment 18 purposes, undertake redevelopment projects either within or 19 without redevelopment project areas of the Agency to the extent 20 that it determines that such projects are of benefit to the 21 project areas of the Agency; and 22 WHEREAS, the Agency may undertake various blight reducing 23 redevelopment activities (the "Blight Reducing Activities" ) 24 including but not limited to the acquisition of the old police 25 facility for land assembly which is located within the Central 26 City North Redevelopment Project Area but will benefit the 27 Southeast Industrial Park Redevelopment Project Area if the Agency 28 determines: (1) that such Blight Reducing Activities are of MS:kla[BL31GRr3.WM] ne 17. 1992 I benefit to the redevelopment project areas of the Agency or the 2 immediate neighborhoods in which the projects are and (2) that no 3 other reasonable means of financing such Blight Reducing 4 Activities is available to the community; and 5 WHEREAS, it is in the interests of the City and the Agency 6 that the Agency causes the undertaking of the Blight Reducing 7 Activities in order to reduce blighting conditions from the 8 downtown area of the City which area has a direct effect on the 9 viability, growth and development of the Southeast Industrial Park 10 Redevelopment Project Area of the Agency; and 11 WHEREAS, the undertaking of the Blight Reducing Activities 12 will promote the development of redevelopment project areas within 13 the City which project areas include: the Central City North 14 Project Area and the Southeast Industrial Park Redevelopment 15 Project Area to the extent that it will make such project areas 16 more desirable for industrial, commercial or residential 17 development which in turn will assist in the elimination of blight 18 within such areas; and 19 WHEREAS, in order to promote the City's health, safety and 20 welfare and ensure the orderly development of the Agency's various 21 project areas, it is important that the Blight Reducing Activities 22 be financed by the Agency; and t 23 WHEREAS, it is appropriate at this time for the Mayor and 24 Common Council of the City (the "Council" ) to make certain 25 findings and determinations and take certain action with respect 26 to the financing of the Blight Reducing Activities. 27 NOW, THEREFORE, BE IT RESOLVED BY THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 28 DM:m.[BL1G rs.n3J 2 nar 17. 1992 I SECTION 1. The Recitals hereinabove are true and correct 2 and are incorporated herein by this reference. 3 SECTION 2. The Commission consents to the payment by the 4 Agency of the costs of the Blight Reducing Activities in order to 5 implement the redevelopment plans of the Agency for the reasons 6 set forth in the Recitals hereinabove. The Commission further 7 finds and determines that no other reasonable means of financing 8 the Blight Reducing Activities is presently available to the City 9 or the Agency and that the City and the Agency require the use of 10 revenues generated from the various project areas of the Agency in 11 order to fund the Blight Reducing Activities. 12 SECTION 3. The undertaking of the Blight Reducing 13 Activities will allow the Agency to promote redevelopment within 14 the project areas of the Agency by eliminating blighting 15 conditions in the downtown area which in turn will help stimulate 16 development of such project areas and their immediate 17 neighborhoods. 18 SECTION 4. The Secretary is hereby authorized and directed 19 to cause this Resolution to be transmitted to the Mayor and Common 20 Council for appropriate action by that body. 21 SECTION 5. This Resolution shall take :effect upon the date 22 of its adoption. ' 23 24 25 26. 27 28 DM:kro[BLI MM] 3 ID 17. 1992 1 RESOLUTION UNDERTAKING CERTAIN BLIGHT REDUCING ACTIVITIES FOR THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA AND 2 THE CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA OF THE AGENCY. 3 4 I HEREBY CERTIFY that the foregoing resolution was duly 5 adopted by the Community Development Commission of the City of San 6 Bernardino at a meeting thereof, held on the 7 day of 1992, by the following vote, to wit: 8 Comission Members: AYES NAYS ABSTAIN ESTRADA 9 REILLY 10 HERNANDEZ 11 MAUDSLEY 12 MINOR 13 POPE-LUDLAM 14 MILLER 15 16 17 Secretary 18 The foregoing resolution is hereby approved this day of 1992. 19 20 W. R. Holcomb, Chairman of the Community Development Commission 21 of the City of San Bernardino 22 Approved as to 23 form and legal content: 24 By: AA"A 25 Agency Cou 1 26 27 28 DM:m.[BrscW3.WMI 4 n� ex 17. 1"2 I RESOLUTION NO. 2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF A GRANT DEED CONVEYING CERTAIN PROPERTY LOCATED ON THE NORTH SIDE OF FOURTH STREET, 3 BETWEEN 'E' STREET AND 'D' STREET, TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO; AUTHORIZING THE EXECUTION OF THE PERTINENT ESCROW 4 INSTRUCTIONS AND AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT WITH SAID 5 REDEVELOPMENT AGENCY AND AUTHORIZING PAYMENT THEREFOR. 6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 7 8 SECTION 1. The Mayor and City Clerk of the City of San Bernardino are 9 authorized and directed to execute on behalf of the City, a Grant Deed 10 conveying certain property located on the North side of Fourth Street between 11 "E" Street and "D" Street, commonly known as the Police Station, to the 12 Redevelopment Agency of the City of San Bernardino, a public body, corporate 13 and politic, a copy of which is attached hereto, marked Exhibit "A" and 14 incorporated herein by reference as fully as though set forth at length 15 herein. 16 17 SECTION 2. The Director of Public Works is authorized and directed to 18 execute all escrow instructions pertinent to this transaction. 19 SECTION 3. The Mayor of the City of San Bernardino is authorized and 20 directed to execute on behalf of the City, that certain Lease Agreement 21 relative to the above described property, between the City and the 22 Redevelopment Agency, a copy of which is attached hereto, marked Exhibit "B" 23 and incorporated herein by reference as fully as though set forth at length 24 herein. 25 SECTION 4. That the Mayor and Common Council of the City of San 26 Bernardino hereby authorize payment of rents as set out in said Lease 27 Agreement. 28 11-30-92 RESOLUTION AUTHOR"TNG EXECUTION OF GRANT DEED, ET' 1 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the 2 Mayor and Common Council of the City of San Bernardino at a 3 meeting thereof, held on the day of 1992, by the 4 following vote, to wit: 5 Council Members: AYES NAYS ABSTAIN ABSENT 6 ESTRADA 7 REILLY 8 HERNANDEZ 9 MAUDSLEY 10 MINOR 11 POPE-LUDLAM 12 MILLER 13 14 City Clerk 15 The foregoing resolution is hereby approved this day of 16 1992. 17 18 W.R. Holcomb, Mayor Approved as to City of San Bernardino 19 form and legal content: 20 JAMES F. PENMAN, 21 City Attorney 22 By: 23 24 25 26 27 28 11-30-92 2 r, WOOROM REOUEBTEO BY C. rAGO TITLB COKPANY AND WHEN RECORDED MALL TH M DEED ANO,UNLESS OTHER WISE SHOWN BELOW,MALL TAX BTATEMENT8 TO: NAME AtXIREff 201 N. •E• STREET BAN BERNARDINO, CALIFORNIA 92418 AoN is�1'ISi•!9 Tick Order No. 9204508 -11 Escrow No.13216 -35 13216-35 •"a" ^��"O1"�'�*s� GRANT DEED The undersigned declares that the documentary transfer tax is NONE ands O computed an the hill value Of the interest or Property conveyed,or is t] computed ou the hill value less the value of liens or encumbrances remaining thereon at the time of sale. The undersigned declares that the City/county transfer tax is 5 The lead,tenements or realty is located in ❑ unincorporated area © City of SAN BERNARDINO FOR A VALUABLE CONSIDERATION,receipt of which is hereby ackwwledged, CITY OF SAN BERNARDINO, A MUNICIPAL CORPORATION hereby cRANT"S�to THE REDEVELOP AGENCY OF THE CITY OF SAN BERNARDINO, A PUBLIC BODY, CORPORATE AND POLITIC the following deaailMd real property in the CITY OF SAN BERNARDINO County of SAN BERNARDINO ,State of California: THE SOUTHERLY 190 FEET OF LOTS 2 AND 3, BLOCK 29, CITY OF SAN BERNARDINO, AS PER PLAT T RECORDED IN BOOK 7 OF MAPS, PAGE 1, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PORTIONSr SEE ATTACHED DESCRIPTION f Dated__July 24. 1902 CITY OF SAN BERNARDINO, A MUNICIPAL CORPORATION HY:� W.R. HOLCIMB, Mayor RACHEL CLARK , City Clark STATE OF CALIFORNIA ) SS ! COUNTY OF SAN BERNARDINO ) On before me, a Notary Public in and for said County and State, personally appeared and , known to m—e—to-67e the ayor and C ty Clark of e ty of an Bernardino. the municipal corporation that executed the within instrument and acknowledged to me that they executed the same on behalf of the municipal corporation. WITNESS my hand and official seal. 1 Notary ub c n and for sa ounty and State 1�; Eaerow No. 13216 -35 Pays 1 DESCRIPTION THE EASTERLY 127.00 TEST OF SAID LOT 2 AND THE WESTERLY 35 lEST OF SAID LOT 3. I LBASE t6 POLICE HEADQUARTERS BUILDING PROPERTY: 466 West Fourth Street 1. PARTIES. This lease, dated for reference between purposes only of the is made by and RIdevOelonment aanw of the City of San BP*'nardine " if (herein called Landlord") and (herein called "Tenant"). 2. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases from Landlord that certain space (herein called "Premises" known as 466 West Fourth Street) and delineated on Exhibit "A" attached hereto and incorporated by reference herein. Said Premises are located in the City of $an Lernar 1M, County of $an Bernardino, State of California. Said Lease is subject to the terms, covenants and conditions herein set forth and the Tenant covenants as a material part of the consideration for this Lease to keep and Perform each and all of said terms, covenants and conditions by it to be kept and performed. 3• USE. Tenant shall use the Premises for a Police Headovartera Fa sis- 4. TERM. The Initial Lease Term shall be for and ending on June 30, 1993. There are months beginning Lease Term. Each such extension shall be for successive options to extend the terms of the Addendum No.l to Lease. This Lease may be terminated upon the days written notice by either party. Y (30) S. MINIMUM RENT. Tenant agrees to pay- to Landlord as Minimum Rent, without notice or demand, the monthly sum described in Exhibit "B" (Rent Schedule) commencing on and thereafter in advance on or before the first day of each and every successive calender month thereafter during the term hereof. Payments shall be paid to Without deduction or offset, in lawful money of the United States of America,Latdsuch, place as Landlord may from time to time designate in writs with Landlord upon the execution hereof T month's Tenant shall deposit amount of N/A manta first month a Minimum Rent in the Dollars. 6. USES PROHIBITED. Tenant shall not do or permit anything to be done in or about the Premises nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the Builds contents, or cause a cancellation of any insurance n8 °r any of its any part thereof or any of its contents. Tenant shall inotcdoeor permit Building to done in or about the Premises which will in p anything to be rights of other tenants or occupants of the Building obstruct or interfere with the allow the Premises to be used for � or Injure or annoy them or use or any improper, immoral, unlawful or objectionable. purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or allow to be committed any waste in or upon the Premises. — 1 — Tenant's Initials LandLord•s Initials Exr�t-c r3r i u�u -_ • 7. COMPLIANCE WITH LAM. Tenant shall not use the Premises or permit In or about the Premises, which will in ' p anything to be done ordinance or governmental rule or regulation now cInf force wor which lmay hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant's improvements or acts. The Judgement of any court of competent Jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any law, statute, ordinance or governmental rule, regulation or requirement., shall be conclusive of that fact as between the Landlord and Tenant. 8. ALTERATIONS AND ADDITIONS. Tenant shall not make or allow to be made any alterations, additions, or improvements to or of the Premises or any part thereof without the written consent of Landlord first had and obtained and any alterations, additions or improvements to or of said Premises, including but not limited to, wall covering, paneling and built-in cabinet work, but excepting movable furniture and trade fixtures, shall at once become a part of the realty and belong to the Landlord and shall be surrendered with the Premises. In the event Landlord consents to the making of any alterations, additions or improvements to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense. Upon the expiration or sooner termination of the term hereof, Tenant shall, upon written demand by Landlord, given at least thirty (30) days prior to the end of the term, at Tenant's sole cost and expense, forthwith and with all due diligence, remove any alterations, additions or improvements made by Tenant designated by Landlord to be removed, and Tenant shall, forthwith and with all due diligence, at its sole cost and expense, repair any damage to the Premises caused by such removal. Notwithstanding the above, no such alteration, addition or improvement shall require Landlord consent if the cost is $25,000 or less, as long as such alteration, addition, or improvement is not exterior or structural,_-- -� - - 9. REPAIRS. A. By entry hereunder, Tenant shall be deemed to have accepted the Premises as being in good, sanitary order, condition and repair. Tenant shall at Tenant's sole cost and expense, keep the Premises and every part thereof in good condition and repair (except as hereinafter provided with respect to Landlord's obligations) including without limitation, the maintenance, replacement and repair of any storefront, doors, window casements, glazing, plumbing, pipes, electrical wiring and conduits. Tenant shall, upon the expiration or sooner termination of this lease hereof, surrender the Premises . to the Landlord in good condition, broom clean, ordinary wear and tear and damage from causes by Tenant's use of the Premises shall be repaired at the sole cost and expense of the Tenant. All personal property, leasehold equipment and leasehold fixtures shall have been removed. B. In addition to the provisions of Article A. hereinabove, Tenant shall repair and maintain the structural portions of the Building, including the exterior walls and roof. Tenant waives the right to make repairs at Landlord's expense under any law, statute or ordinance now or hereafter in effect. 2 - Tenant's Initials LandLord's Initials 1, r.✓ .�.� .... .•rte •• 10. LIENS. Tenant shall keep the Premises and the property in Which the Premises are situated free from any liens arising out of any work performed, materials furnished or obligations incurred by Tenant. 11. ASSIGNMENTS AND SUBLETTING. Tenant shall not either voluntarily, or by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber this lease or any interest therein, and shall not sublet the said Premises or any part thereof, or any right or privilege appurtenant thereto, or allow any other person (the employees,, agents, servants and invitees of Tenant excepted) to occupy or use said Premises, or any portion thereof, without the written consent of Landlord first had and obtained, which consent shall not be unreasonably withheld or delayed. A consent to one assignment, subletting, occupation or use by any other person shall not be deemed to be a consent to any subsequent assignment, subletting, occupation or use by another person. Consent to any such assignment or subletting shall in no way relieve Tenant of any liability under this lease during the initial term of this lease. Consent to any such assignment or subletting without such consent shall be void, and shall at the option of the Landlord constitute a default under the terms of this Lease. Upon a Landlord approved assignment, Tenant responsibility under this Lease shall terminate one (1) year after such assignment, however, in the event Tenant subleases this Lease they shall remain responsible for the entire term of this Lease. In the event that Landlord shall consent to a sublease or assignment hereunder, Tenant shall pay Landlord reasonable fees, not to exceed One Hundred and no/100 Dollars ($100.00), incurred in connection with the processing of documents necessary to giving of such consent. Notwithstanding the above, the initial assignment or sublease shall be without charge. 12. HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord against and from any and all claims arising from Tenant's use of the Premises or from the conduct of its business or from any activity, work or other things done, permitted or suffered by the Tenant in or about the premises, and shall further indemnify and hold harmless Landlord against and from any and all claims arising from any breach -or--default in the performance of any obligation on Tenant's part to.be performed under the terms of this Lease, or arising from any act or negligence of the Tenant, or any officer, agent, employee, guest or invitee of Tenant, and from all costs, attorney's fees and liabilities incurred in or about the defense of any such claim or any action or proceeding brought against Landlord by reason of such claim, Tenant upon notice from Landlord shall defend the same at Tenant's expense. Tenant as a material part of the consideration to Landlord hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises, from any cause other than Landlord's negligence, and Tenant hereby waives all claims in respect thereof against Landlord. Landlord or its agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Building or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the negligence of Landlord, its agents, servants or employees. Landlord or its agents shall not be liable for interference with the light or air to the Premises. Tenant shall give prompt notice to Landlord in case of casualty or accidents in the Premises. — 3 — Tenant's Initials _ LandLord's Initials 13. SUBROGATION. As long as their respective insurers so permit, Landlord and Tenant hereby mutually waive their respective rights to recovery against each other for any loss insured by fire, extended coverage and other property insurance policies existing for the benefit of the respective parties. Each party shall apply to their insurers to obtain said waivers. Each party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver. 14. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and keep in force during the term of this Lease a policy of comprehensive public liability insurance Insuring Landlord and Tenant against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be in the amount of not less than $1,000,000.00 for iaj ury or death of one person in any one accident or occurrence and in the amount of not less than $500,000.00 for injury or death of more than one person in any one accident or occurrence. Such insurance shall further insure Landlord and Tenant against liability for property damage of at least $509000.00. The limit of any such insurance shall not, however, limit the liability of the Tenant hereunder. Tenant may provide this Insurance under a blanket policy, provided that said insurance shall have a Landlord's protective liability endorsement attached thereto. If Tenant shall fail to procure and maintain'said insurance, Landlord may, but shall not be required to, procure and maintain same, but at the expense of Tenant. Tenant shall deliver to Landlord, prior to right of entry, copies of policies of liability insurance required herein or certificates evidencing the existence and amounts of such insurance with loss payable clauses satisfactory to Landlord. No Policy shall be cancelable or subject to reduction of coverage. All such policies shall be written as primary policies not contributing with and not in excess of coverage which Landlord may carry. Landlord acknowledges that Tenant is self insured and Landlord agrees to accept certification under such self insurance in satisfaction of this Section 14. 15. UTILITIES. Tenant shall pay for all metered utilities including gas, electric, HVAC, telephone service and all other-services and utilities -supplied to the Premises, together with any taxes thereon. 16. PERSONAL PROPERTY TAXES. Tenant shall pay, or cause to be paid, before delinquency, any and all taxes levied or assessed and which become payable during the term hereof upon all Tenant's leasehold improvements, equipment, furniture, fixtures and any other personal property located in the Premises. In the event any or all of the Tenant's leasehold improvements, equipment, furniture, fixtures and other personal property shall be assessed and taxed with the real property. Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant's property. 17. HOLDING OVER. If Tenant remains in possession of the Premises or any part thereof after the expiration of the term hereof with the express written consent of Landlord, such occupancy shall be a tenancy from month to month at a rental in the amount of the last Monthly Minimum Rent, plus all other charges payable hereunder, and upon all the terms hereof applicable to a month to month tenancy. — 4 — Tenant's Initials LandLord's Initials 18. ENTRY BY LANDLORD. Landlord reserves, and shall at any and all times have the right to enter the Premises to inspect the same, to submit said Premises to prospective purchasers or tenants, to post notices of non-responsibility, to repair the Premises and any portion of the Building of which the Premises are a part that Landlord may deem necessary or desirable, without abatement of rent, and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be blocked thereby, and further providing that the business of the Tenant shall not be interfered with unreasonably. Tenant hereby waives any claim for damages or for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. 19. TENANT'S DEFAULT. The occurrence of any one or more of the following constitute a default and breach of this Lease by Tenant: events shall a) the vacating or abandonment of the Premises by Tenant; b) the failure by Tenant to make any payment of rent or any other payment required to be made by Tenant hereunder, as and when due, vheresuch failure shall continue for a period of ten (10) days after written notice thereof by Landlord to Tenant. C) The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Tenant, other than described in Article b) above, where such failure shall continue for a period of thirty (30) days after written notice hereof by Landlord to Tenant; provided, however, that if the nature of Tenant's default is such that more than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. d) The:making by-Tenant -of any general assignment or 'general arrangement for the benefit of creditors, or the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days) or the appointment of a trustee or a receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days, or the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged in thirty (30) days. 20. REMEDIES IA DEFAULT. In the event of any such default or breach by Tenant, Landlord may at any time thereafter, with or without notice or demand and without limiting Landlord in the exercise of a right or remedy which Landlord may have by reason of such default or breach: a) Terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately - S - Tenant's Initials LandLord's Initials surrender possession of the Premises to Landlord. In such event Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default, including but not limited to, the cost of recovering possession of the Premises, expenses of reletti z necessary renovation and alteration of the Premises, reasonablenattorney's fees, the worth at the time of award by the court having Jurisdiction thereof the amount by which the unpaid rent and other charges and Adjustments called for herein for the balance of the term after the time of such award exceeds the amount of such loss for the same period that Tenant proves could be _ reasonably avoided, and that portion of any leasing commission Landlord and applicable to the unexpired paid by Installments of rent or other sums shall bear interestLfrom•thendate due at the commercial prime rate established from time to time by Bank of America. b) Maintain Tenant's right to possession, in which case this Lease shall continue in effect whether or not Tenant shall have abandoned the Premises. In such event Landlord shall be entitled to enforce all of landlord's rights and remedies under this Lease, including the right to recover the rent and any other charges and Adjustments as may become due hereunder, or: i C) Pursue any other remedy now or hereafter available to Landlord under the laws or Judicial decisions of the State in which the Premises are located. 21. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord fails to perform material obligations required by Landlord under this Lease within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have therefore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obligation; however, that if the nature of Landlord's obligation is such that more tha saidided, thirty (30) days are required to complete such material obligations, Landlord shall .not be in default provided Landlord commences such material obligations within said thirty (30) day period and thereafter diligently prosecutes the same to completion. 22. RECONSTRUCTION. In the event the Premises are damaged by fire or an y er cause, Tenant agrees to forthwith repair same, and this Lease shall remain Inofull force and effect. Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises and Landlord shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any leasehold improvements, fixtures or other personal property of Tenant. 23. EMINENT DOMAIN. If more than twenty-five percent (25X) of the Premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, either party shall have the right, at its option, within sixty (60) days after said taking to terminate this Lease upon thirty (30) days written notice. If either less than or more than twenty-five percent (25X) of the Premises are taken (and neither party elects to terminate as herein provided), the Minimum Rent thereafter to be paid shall be equitably reduced. If any part of the Office Building Premises may be so taken or appropriated, Landlord shall within sixty other than the said taking have the right at its option to terminate this Lease upon writtenynotice to Tenant. In the event of any taking or appropriation whatsoever, Landlord shall be entitled to any and all awards and/or settlements which may be given and Tenant shall - 6 - Tenant's Initials Landlord's Initials J � have no claim against Landlord for the value of aTenant may however, pursue Tenant's right, separate ffroem Landlord, against these. appropriate public authority to recover any settlement for which Tenant may be entitled. 24. TENANT'S STATEMENT. Tenant shall, at any time and from time to time upon not less than ten (10) days prior written notice from Landlord execute, acknowledge and deliver unmodified to Landlord a statement in writing (a) certifying that this Lease is And in full force and effect (or, if modified by mutual agreement of Tenant and Landlord in writing stating the nature of such modification and certifying that this Lease as so modified is in full force and effect), and the date to which the rental and other charges are paid-in advance, if any, and (b) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of the Landlord hereunder, or specifying such defaults if any are claimed, and (c) setting forth the date of commencement of rents and expiration of the term hereof. Any relied upon by any prospective purchaser encumbrancer of all or such n statement may be real property of which the Premises are a part. +� portion of the 25. NON-DISCRIMINATION. The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns and all persons through him or her, and this lease is made and acepted upon and subjectmto ng theder or folloving conditions; That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the lease himself, or premises herein leased nor shall the any person claiming under or through his or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, leases, sublessees, subtenants, or vendees in the premises herein leased. 26. GENERAL PROVISIONS. (i) Plats and Riders. Clauses, plats, riders and addendums if this Lease are a part hereof. may, affixed to Waiver. The vaiver by Landlord of any term, covenant or condition herein contained shall not be deemed to be a vaiver of such term, covenant or condition or any subsequent breach of the same or any condition herein contained. The subsequent acceptance ooferent hereundernby or Landlord shall not be deemed to be a vaiver of any preceding default by Tenant of any term, covenant or condition of this Lease, other than the failure of the Tenant to pay the particular rental so accepted, regardless of Landlord's knowledge of such preceding default at the time of the acceptance of such rent. (iii) Joint Obligation. If there be more than one Tenant, the obligations hereunder imposed shall be joint and several. (iv) Marginal Readings. The marginal headings and article titles to the articles of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof. - 7 - Tenant's Initials LandLord's Initials 1�, (v) Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor. ' (vi) Successors and Assigns. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto.' (vii) Recordation. Neither Landlord nor Tenant shall record this Lease, but a short form memorandum hereof may be recorded at the request of Landlord. (viii) Quiet Possession. Upon Tenant paying the rent reserved hereunder and observing and performing all of the covenants conditions and provisions on- Tenant's part to be observed and performed hereunder, Tenant shall have Possession of the Premises for' the entire term hereof, subject to all quiet provisions of this lease. the (ix) Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Landlord by terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any sum due from Te be received by Landlord or Landlord's designee within ten (1 Tenant shall not Te days after such amount shall be due, then, without any requirement for notice to Tenant, Tenant shall pay to Landlord a late charge equal to five per e t Tenant, such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. Acceptance of such late charges by Landlord shall is no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of rent,- then rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding any other provision of the lease to the contrary. (x) Prior Agreements. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matter shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both parties hereto. (xi) Inability to Perform. This Lease and the obligations of the Tenant hereunder shall not be affected or impaired because the Landlord is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts of God or a other cause beyond the reasonable control of Landlord. ny — 8 — Tenant's Initials LandLord's Initials (iii) Partial Invalidity. Any provision of this Lease which shall prove to Invalid, void, or illegal shall in no way affect, impair or Invalidatebany other provision hereof and such other provision and effect. shall remain is full force (xiii) Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. (xiv) Choice of Law. This Lease shall be governed by the lava of the State in which the Premises are located. (xv) Attorney's Fees. In the event of any action or party against the other under this Lease, the prevailing party brought by either entitled to recover for the fees of its attorneys in such action horl be proceeding, including costs of appeal, if any, in such amount as the court may adjudge reasonable as attorney's fees. In addition, should it be necessary for Landlord or Tenant to employ legal counsel to enforce any of the provisions herein contained, Landlord and Tenant, hereby agree to pay all attorney's fees and court costs reasonably incurred against the other for such enforcement. (Zvi) Sale of the Premises by Landlord. In the event of any sale of by Landlord, Landlord shall be and is hereby entirely freed and the all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the premises shall be deemed, without any further agreement between the parties or their successor in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of the Landlord under this Lease. (xvii) Subordination, Attornment. Upon request of the Landlord, Tenant will in writing subordinate its rights hereunder to the lien of any mortga of trust, to any bank, insurance company or other lending institut get or deed ion, now or hereafter in force against the Premises, and to all advances made or hereafter to be made upon the security thereof. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Landlord covering the Premises, the Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease. The provisions of the Article to the contrary notwithstanding, and so long as Tenant is not in default hereunder, this Lease shall remain in full force and effect for the full term hereof. (xviii) Notices. All notices and demands which may or are to be required or permitted to be given by either party on the other hereunder, shall be in - 9 — Tenant's Initials LandLord's Initials -- writing. All notices and demands by the Landlord to the Tenant shall be sent by United States Mail, postage prepaid, addressed to the Tenant at the Premises, and to the address herein below, or to such other place as Tenant may from time to time designate in a notice to Landlord. All notices and demands by the Tenant to the Landlord shall be sent by United State Mail, Postage prepaid, addressed to the Landlord at the address set forth herein, and to such other person or place as the Landlord may from time to time designate in a notice to the Tenant. TO LANDLORD AT: CITY OF SAN BERAARDINO LANDLORD: ECONOMIC DEVELOPMENT AGENCY -- 3RD FLOOR By: 201 NORTH "E" STREET Kenneth J. Henderson SAN BERNARDINO, CA 92401 Executive Director PHONE' ' (714) 384-5081 Development Department TO TENANT AT: REAL PROPERTY SECTION CITY OF SA_R BHRNABDINO �� 300 NORTH "D" STREET BY: SAN BERNARDINO, CA 92405 W.R. Holcomb PHONE: (714) 384-5602 Mayor APPROVED AS TO FORM Attest: AND LEGAL CONTENT: City Clerk / ency Counsel APPROVED AS TO FORM AND LEGAL CONTENT: James F. penman City Attorney 58198 — 10 — Tenant's Initials LandLord's Initials MMIBIT "A" 466 WEST FOURTH STREET SAP BERNARDIAO, CALIFORNIA L E G A L D B S C R I P T I 0 N ALL THAT PROPERTY SITUATED IN THE DESCRIBED AS FOLLOWS: STATE OF CALIFORNIA, COUNTY OF SAP BERNARDINO THE SOUTHERLY 190 FEET OF LOTS 2 AND 3o BLOCK 29, CITY OF SAN BERNA.RDINO, AS PER PLAT RECORDED IN BOOR 7 OF MAPS, PAGE 1, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PORTIONS: THE EASTERLY 127.00 FEET OF SAID LOT 2 AND THE WESTERLY 35 FEET OF SAID LOT 3. Tenant's Initials LandLord's Initials ffiIBIT "B" RENT SCHEDiii.R 1. INITIAL LEASE TERM; $1 per month. 2. OPTION PERIOD ONE; $179992 per month or such other amount as may be negotiated and agreed to by the parties hereto. 3. OPTION PERIOD TWO; Prior year ending rent plus 3x. Tenant's Initials LandLord's Initials r ADDIMMSRI E 11'0 xac�e OPTION TO RENEW. Landlord hereby grants to Tenant two (2) options ("Option") to extend the term of the Lease provided Tenant is not in material default under this Lease and all applicable notices and cure periods have not of twelve (12) months ("Option Period"). Landlord hereby expired, for one (1) period on all the same terms and conditions contained in the Lease rexcept ofor Minimum hRention during the Option Period as outlined below. Tenant shall exercise the Option by and only by delivering to Landlord, not less than thirty (30) days prior to the expiration date of the Term of the Lease, Tenant's written notice of its exercise of the Option (the "Option Notice"). In the event Tenant exercises an Option as provided for in this Addendum, Tenant covenants and agrees to pay to Landlord rent, in monthly installments in the amounts specified in Exhibit "B" Rent Schedule. ' If Tenant fails to timely comply with any of the provisions of this Tenant's right to exercise the Option shall be extinguished aragraph, automatically terminate as of the nguished and the Lease shall without any extension, and without transfer date of the current Term of the Lease, without any liability to Landlord. Any attempt to assign any right or interest created by this paragraph separate and apart from any assignment or transfer of this Lease shall be void from its inception. Tenant shall have no other right to extend the Term beyond the Option Period as outlined herein. Unless agreed to in writing signed by Landlord and Tenant, any extension of the Term, whether created by an amendment to this Lease or by a holdover of the Premises by Tenant, or otherwise, shall be deemed a part of of the Option Period permitted by this paragraph. Tenant's Initials LandLord's Initials k � 2 ?OiRISR ADDITIONAL ASSESSED TARES. Lessee shall pay, prior to delinquency, all taxes, including Possessory interest and "Real Property Taxes" and if any, properly due against and levied upon tenant improvements, trade fixtures,- furaishing, equipment or other personal property of Lessee contained in the Premises or elsewhere. trade fixtures, furniahi When possible, Lessee shall cause said ngs, equipment and all other personal property to be assessed and billed separately from t property of Lessor. DEFINITION OF "REAL PROPERTY TAR". As used herein, the term "real property tax" shall include any form of real estate tax or assessment, general, special, ordinary extraordinary,and any license fee, commercial rental tax, improvement bond orb bonds, levy tax (other than inheritance, personal income or estate taxes), imposed on the Premises by or any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or. in the real property of which the Premises are a part, as against Lessor's right to rent or other income therefrom, and as against Lessor's business of leasing the Premises. The term "real property tax", or (ii) the nature of which was hereinabove Included within the definition of "real property tax", or (iii) which is imposed for a service or right not charged prior to the execution date hereof, or (iv) which is imposed as a result of a transfer, either partial of total, of Lessor's interest in the Premises or which is added to a tax or charge hereinabove included within the definition of real property tax by reason of such transfer, or (v) which is imposed by reason of this transaction, any modifications or changes hereto or any transfers hereof. Tenant's Initials LandLord's Initials 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO MAKING FINDINGS AND DETERMINATIONS AS TO THE 3 BENEFIT OF UNDERTAKING CERTAIN BLIGHT REDUCING ACTIVITIES FOR THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA AND THE 4 CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA OF THE AGENCY. 5 WHEREAS, the City of San Bernardino, (the "City" ), is a 6 municipal corporation and a charter city duly created and existing 7 pursuant to the Constitution of the laws of the State of 8 California; and 9 1 WHEREAS, the Community Development Commission of the City of 10 San Bernardino (the "Commission" ) on behalf of the Redevelopment 11 Agency of the City of San Bernardino (the "Agency" ), is a 12 redevelopment agency, a public body, corporate and politic of the 13 State of California, organized and existing pursuant to the 14 Community Redevelopment Law (Part 1 of Division 24) commencing 15 with Section 33000 of the Health and Safety Code of the State of 16 California (the "Act" ); and 17 WHEREAS, the Agency may, in furtherance of its redevelopment 18 purposes, undertake redevelopment projects either within or 19 without redevelopment project areas of the Agency to the extent 20 that it determines that such projects are of benefit to the 21 projept areas of the Agency; and 22 WHEREAS, the Agency may undertake various blight reducing 23 redevelopment activities (the "Blight Reducing Activities" ) 24 including but not limited to the acquisition of the old police 25 facility for land assembly which is located within the Central 26 City North Redevelopment Project Area but will benefit the 27 Southeast Industrial Park Redevelopment Project Area if the Agency 28 determines: ( 1) that such Blight Reducing Activities are of DiAB:kfw[BLICZr WM1 Deosber 17. 1992 / 1 benefit to the redevelopment project areas of the Agency or the 2 immediate neighborhoods in which the projects are and (2) that no 3 other reasonable means of financing such Blight Reducing 4 Activities is available to the community; and 5 WHEREAS, it is in the interests of the City and the Agency 6 that the Agency causes the undertaking of the Blight Reducing 7 Activities in order to reduce blighting conditions from the 8 downtown area of the City which area has a direct effect on the 9 viability, growth and development of the Southeast Industrial Park 10 Redevelopment Project Area of the Agency; and 11 WHEREAS, the undertaking of the Blight Reducing Activities 12 will promote the development of redevelopment project areas within 13 the City which project areas include: the Central City North 14 Project Area and the Southeast Industrial Park Redevelopment 15 Project Area to the extent that it will make such project areas 16 more desirable for industrial, commercial or residential 17 development which in turn will assist in the elimination of blight 18 within such areas; and 19 WHEREAS, in order to promote the City's health, safety and 20 welfare and ensure the orderly development of the Agency's various 21 project areas, it is important that the Blight Reducing Activities ` 22 be financed by the Agency; and 23 WHEREAS, it is appropriate at this time for the Mayor and 24 Common Council of the City (the "Council" ) to make certain 25 findings and determinations and take certain action with respect 26 to the financing of the Blight Reducing Activities. 27 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 28 DM:kft[RL1GW2.R=1 2 December 17. 1992 �l I SECTION 1. The Recitals hereinabove are true and correct 2 and are incorporated herein by this reference. 3 SECTION 2. The Council consents to the payment by the 4 Agency of the costs of the Blight Reducing Activities in order to 5 implement the redevelopment plans of the Agency for the reasons 6 set forth in the Recitals hereinabove. The Council further finds 7 and determines that no other reasonable means of financing the 8 Blight Reducing Activities is presently available to the City or 9 the Agency and that the City and the Agency require the use of 10 revenues generated from the various project areas of the Agency in 11 order to fund the Blight Reducing Activities. 12 SECTION 3. The undertaking of the Blight Reducing 13 Activities will allow the Agency to promote redevelopment within 14 the project areas of the Agency by eliminating blighting 15 conditions in the downtown area which in turn will help stimulate 16 development of such project areas and their immediate 17 neighborhoods. 18 SECTION 4. The City Clerk is hereby authorized and directed 19 to cause this Resolution to be transmitted to the Agency for 20 appropriate action by that body. 21 SECTION 5. This Resolution shall take effect upon the date 22 of its adoption. 23 24 25 26 27 28 DM:krM(BL1 fM.xKSJ 3 r 17. 1"2 1 RESOLUTION UNDERTAKING CERTAIN BLIGHT REDUCING ACTIVITIES FOR THE SOUTHEAST INDUSTRIAL PARK REDEVELOPMENT PROJECT AREA AND 2 THE CENTRAL CITY, NORTH REDEVELOPMENT PROJECT AREA OF THE AGENCY. 3 4 I HEREBY CERTIFY that the foregoing resolution was duly 5 adopted by the Mayor and Common Council of the City of San 6 Bernardino at a meeting thereof, held on the 7 day of 1992, by the following vote, to wit: 8 Council Members: AYES NAYS ABSTAIN ESTRADA 9 REILLY 10 HERNANDEZ 11 MAUDSLEY 12 MINOR 13 POPE-LUDLAM 14 MILLER 15 16 17 City Clerk 18 The foregoing resolution is hereby approved this day of 1992. 19 20 W. R. Holcomb, Mayor 21 City of San Bernardino Approved as to 22 form and legal content: 23 JAMES F. PENMAN, City Attorney 24 25 By: 26 27 28 DM:Ift[BUGM.R=1 4 December 17. 1992