HomeMy WebLinkAboutItem 5c. Authorize Assignment of Facility Ground Lease for 1020 Southwood Drive to Channel Islands YMCA (formerly SLO County YMCA) Item 5c
Department: Parks and Recreation
Cost Center: 7002
For Agenda of: 11/7/2023
Placement: Consent
Estimated Time: N/A
FROM: Greg Avakian, Parks & Recreation Director
Prepared By: Devin Hyfield, Parks and Recreation Manager
Brendan Pringle, Business Analyst
SUBJECT: AUTHORIZE ASSIGNMENT TO AND ASSUMPTION BY THE CHANNEL
ISLANDS YMCA OF AN EXISTING FACILITY GROUND LEASE
BETWEEN THE SAN LUIS OBISPO YMCA AND THE CITY OF SAN LUIS
OBISPO
RECOMMENDATION
Approve the assignment to and assumption by the Channel Islands YMCA of an existing
facility ground use agreement between the San Luis Obispo County YMCA and the City
of San Luis Obispo for the use of a portion of Johnson Park, located at 1020 Southwood
Drive, through February 28, 2050, and authorize the Mayor to execute t he agreement.
POLICY CONTEXT
The City of San Luis Obispo Partnership and Foundation Policy states that “City
resources can be used in partnership with others to create opportunities for otherwise
unfeasible projects or programs.”
The San Luis Obispo County YMCA has a long-standing relationship with the City and is
recognized as a community partner, as memorialized in a separate recreation partnership
agreement, adopted by Council on February 21, 2017 (Attachment A). The Parks &
Recreation Department works collaboratively to offer programming together and avoid
duplication of efforts.
DISCUSSION
Background
On December 31, 1977, the City of San Luis Obispo and the San Luis Obispo County
YMCA entered into a 50-year ground lease for a portion of Johnson Park, which
commenced on March 1, 1978 (Attachment B). The leased property contains the YMCA’s
headquarters facility, from which the YMCA has operated a variety of programs, ranging
from health and fitness to childcare to family activities and community development. Over
the last four decades, this ground lease has been amended three times, most recently in
2021, extending the lease through February 28, 2050. The purpose of this lease
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Item 5c
extension was to provide assurance to donors that philanthropic gifts for facility
maintenance and modifications could be used by the YMCA through their projected useful
life.
Proposed Assumption of Lease by Channel Islands YMCA
Earlier this year, San Luis Obispo County YMCA (SLO YMCA) notified the City that they
had merged with the Channel Islands YMCA. This merger essentially allows for
administrative and other program efficiencies while maintaining a local advisory board
that can work with the Channel Islands YMCA to ensure community and leadership
connections.
On September 12, 2023, Eric Linkugel, Chair of the Board of Directors and Chief
Volunteer Officer for the SLO YMCA, notified the City of the SLO YMCA’s request to
assign the lease to Channel Islands YMCA (Attachment C). No material changes to the
lease agreement are requested by either party; should Council agree to assignment, SLO
YMCA’s rights and obligations under the existing lease will be transferred in their entirety
to Channel Islands YMCA under the same terms and conditions of the 1978 lease as
amended.
As required under the original 1978 ground lease, SLO YMCA’s request to assign the
lease includes a statement of Channel Island YMCA’s qualifications to assume the lease,
and the proposed Assignment agreement (Attachment D) includes an express
assumption by the assignee (Channel Islands YMCA) of all covenants, conditions, terms,
and obligations of this lease.
Previous Council or Advisory Body Action
On December 31, 1977, the City of San Luis Obispo and the SLO YMCA entered into a
50-year ground lease, which commenced on March 1, 1978.
On May 21, 1996, the City Council approved Amendment No. 1 to the Ground Lease,
which confirmed the annual rent as $1 per year for the ground lease and noted that
outstanding debt was forgiven in its entirety.
On November 21, 2000, the City approved Amendment No. 2 by resolution, which
extended the lease for five years to February 28, 2033. The amendment instituted several
“clean-up” amendments to the lease agreement, including updating the language to
reflect contemporary uses of the facility, allowing the YMCA to change its fee structure,
and adding the City’s non-discrimination policy.
On November 29, 2021, the City approved Amendment No. 3 by resolution, which
extended the lease by another 17 years, to February 28, 2050.
CONCURRENCE
N/A
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Item 5c
ENVIRONMENTAL REVIEW
As this is a request to assume an existing ground lease agreement with no adjustments
to the type of usage or any foreseen environmental impact. Lease extension under the
existing terms will not result in any impacts and is exempt under Cal. Code Regs. ti t. 14
§ 15378 (b) 5 as the action constitutes an administrative action that will result in any direct
or indirect physical changes to the environment.
FISCAL IMPACT
Budgeted: N/A Budget Year: 2023-2024
Funding Identified: N/A
Fiscal Analysis:
Funding Sources
Total
Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund N/A N/A $ N/A
State
Federal
Fees
Other:
Total $ $ $ N/A
Under the existing agreement, the YMCA is charged $1.00 per year. The City is not
requesting any changes to these terms, so there is no fiscal impact to this action.
ALTERNATIVES
Terminate the existing lease. This is not recommended, as the leased property
contains the San Luis Obispo County headquarters for the Channel Islands YMCA and
runs many existing programs. The organization is also a community partner.
ATTACHMENTS
A - Recreation Partnership Agreement with the San Luis Obispo County YMCA
B - Original Ground Agreement with YMCA and City of San Luis Obispo with Three (3)
Amendments
C - Request from SLO YMCA to assign lease
D - Draft Assignment and Assumption of Ground Lease
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AMENDMENT NO. 3
GROUND LEASE
BETWEEN THE CITY OF SAN LUIS OBISPO
AND THE SAN LUIS OBISPO COUNTY YMCA
The Ground Lease, dated December 31, 1977, between the City of San Luis Obispo, a municipal
corporation, hereinafter referred to as “City” and the San Luis Obispo County YMCA hereinafter referred
to as “Lessee” is hereby amended as follows:
WITNESSETH:
WHEREAS, on December 31, 1977, the City and Lessee entered to a Ground Lease. Attached
hereto as Attachment A is a copy of the Original Ground Lease; and
WHEREAS, the Original Ground Lease’s Article XXII. Miscellaneous Provisions section 22.10 states
that modification to the Ground Lease must be made in writing.
WHEREAS, on May 21, 1996, the City and Lessee entered into an Amendment No. 1 to the Ground
Lease to amend Article VI Rent in the Original Ground Lease. Attached hereto as Attachment B is a copy
of the Amendment No. 1; and
WHEREAS, on December 1, 2000, the City and Lessee entered into an Amendment No. 2 to
the Ground Lease to amend Article II - Term of Lease and Extension of Lease Term, Article III - Use and
Occupancy and Article V - Rates in the Original Ground Lease. Attached hereto as Attachment C is a copy
of the Amendment No. 2; and
WHEREAS, the City and Lessee now seek to further modify Article II - Term of Lease and Extension
of Lease Term, Article III - Use and Occupancy, Article IV - Operating
Schedule and Article XIII - Insurance in the Original Ground Lease; and
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants
hereinafter contained, the parties hereto agree as follows:
1. Article II – Term of Lease and Extension of Lease Term is hereby amended to read
as follows:
ARTICLE II. TERM OF LEASE AND EXTENSIONS OF LEASE TERM
2.02 The TERM “commencement date” as used in this Lease means March 1, 1978. On December
1, 2000, City and Lessee executed Amendment No. 2 to the Ground Lease agreeing to extend the TERM of
this to February 28, 2033. The City and Lessee now agree to extend the TERM of this Lease for an
additional seventeen (17) calendar years beyond the amended TERM. Accordingly, the TERM shall expire
at midnight on February 28, 2050, unless sooner terminated in accordance with the provisions of this
Lease.
2. Article III – Use and Occupancy is hereby amended to read as follows:
ARTICLE III. USE AND OCCUPANCY
3.01 During the TERM of this Lease, Lessee shall, at Lessee’s sole expense, construct, occupy and
operate on the LEASED LAND a public facility which will include, but is not limited to fitness studios, gym
space, fitness equipment, locker room and restroom facilities for women, men and families, staff offices,
a child watch area and other programs and activities that further the interests of the Lessee͘ථ Furthermore,
Lessee may use the facilities for programs related to health and fitness, child watch, youth-senior
programs, family programs, and staff development/training. Lessee shall have the right to provide
facilities if desired for a snack bar and alcoholic beverages for on-premises͕ĞǀĞŶƚĐŽŶƐƵŵƉƚŝŽŶŽŶůLJ͘ථdŚĞ
plans and specifications for all the above-mentioned facilities must be submitted for approval as required
in the usual permit procedures of the City before construction may begin.
3. Article IV – Operating Schedule is hereby amended to read as follows:
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ARTICLE IV. OPERATING SCHEDULE
4.03 Lessee's facilities may be opened to the public from 5:00 A.M. - 10:00 P.M on weekdays and
7:00 A.M. - 9:00 P.M. Saturdays and Sundays. Lessee will maintain a schedule of weekly class offerings
and child watch. Lessee may adjust and expand its opening and closing times as Lessee’s needs requires,
in Lessee’s sole discretion.
4. Article XIII – Insurance is hereby amended to read as follows:
ARTICLE XIII. INSURANCE
13.01 If the Leased Premises or any other part of the Leased Premises is damaged by fire or other
casualty resulting from any act or negligence of Lessee or any of Lessee 's agents, employees or invitees,
rent shall not be diminished or abated while such damages are under repair, and Lessee shall be
responsible for the costs of repair not covered by insurance.
Without limiting Lessee’s indemnification of City, and prior to commencement
of Ground Lease, Lessee shall obtain, provide and maintain at its own expense during the term of this
Agreement, policies of insurance of the type and amounts described below in a form satisfactory to
Agency.
a. General liability insurance. Lessee shall maintain commercial general liability
insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in
an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for
bodily injury, personal injury, and property damage. The policy must include contractual
liability that has not been amended. Any endorsement restricting standard ISO “insured
contract” language will not be accepted. If alcohol is sold during the permitted activity,
coverage must include full liquor liability. Agency, its officers, officials, agents, and
employees shall be included as additional insureds on the policy.
b. Property insurance. Upon commencement of construction
of Lessee improvements and betterments, or installation of equipment, with approval
of City, Lessee shall obtain and maintain insurance on Lessee’s buildings, improvements,
and betterments. Policy shall be provided for replacement value on an "all risk" basis.
There shall be no coinsurance penalty provision in any such policy.
c.Proof of insurance. Lessee shall provide certificates of insurance to City as
evidence of the insurance coverage required herein, along with a waiver of subrogation
endorsement for workers’ compensation. Insurance certificates and endorsements must
be approved by City’s risk manager prior to commencement of performance. Current
certification of insurance shall be kept on file with City during the term of this
contract. City reserves the right to require complete, certified copies of all required
insurance policies, at any time.
d. Duration of coverage. Lessee shall procure and maintain for the duration of the
contract insurance against claims for injuries to persons or damages to property, which
may arise from or in connection with the performance of the Work hereunder by Lessee,
his agents, representatives, employees, or subconsultants.
e. Primary/noncontributing. Coverages provided by Lessee shall be primary and any
insurance or self-insurance procured or maintained by City shall not be required to
contribute with it. The limits of insurance required herein may be satisfied by a
combination of primary and umbrella or excess insurance. Any umbrella or excess
insurance shall contain or be endorsed to contain a provision that such coverage shall also
apply on a primary and non-contributory basis for the benefit of City before the City’s
own insurance or self-insurance shall be called upon to protect it as a named insured.
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f. Agency’s rights of enforcement. In the event any policy of insurance required
under this Ground Lease does not comply with these specifications or is canceled and not
replaced, City has the right but not the duty to obtain the insurance it deems necessary,
and any premium paid by City will be promptly reimbursed by Lessee or City will withhold
amounts sufficient to pay premium from Lessee payments. In the alternative, City may
cancel this Agreement.
g. Acceptable insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact business of
insurance or is on the List of Approved Surplus Line Insurers in the State of California, with
an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or
larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise
approved by the City’s Risk Manager.
h. Waiver of subrogation. All insurance coverage maintained or procured pursuant
to this agreement shall be endorsed to waive subrogation against City, its elected or
appointed officers, agents, officials, employees, and volunteers or shall specifically
allow Lessee or others providing insurance evidence in compliance with these
specifications to waive their right of recovery prior to a loss. Lessee hereby waives its own
right of recovery against City and shall require similar written express waivers and
insurance clauses from each of its subconsultants.
i. Enforcement of contract provisions (non estoppel). Lessee acknowledges and
agrees that any actual or alleged failure on the part of the City to inform Lessee of non-
compliance with any requirement imposes no additional obligations on the City nor does
it waive any rights hereunder.
j. Requirements not limiting. Requirements of specific coverage features or limits
contained in this section are not intended as a limitation on coverage, limits or other
requirements, or a waiver of any coverage normally provided by any insurance. Specific
reference to a given coverage feature is for purposes of clarification only as it pertains to
a given issue and is not intended by any party or insured to be all inclusive, or to the
exclusion of other coverage, or a waiver of any type. If the Lessee maintains higher limits
than the minimums shown above, the City requires and shall be entitled to coverage for
the higher limits maintained by the Lessee. Any available insurance proceeds in excess of
the specified minimum limits of insurance and coverage shall be available to the City.
k. Notice of cancellation. If any required insurance coverage is subject to
cancellation due to nonrenewal or nonpayment, the Lessee will contact the City in writing
to coordinate and secure continuous coverage.
l. Additional insured status. General liability policies shall provide, or be endorsed
to provide, that City and its officers, officials, employees, agents, and volunteers shall be
additional insureds under such policies. This provision shall include endorsement covering
liabilities arising out of the Lessee 's "operations" in the leased space. This provision shall
also apply to any excess/umbrella liability policies.
m.Prohibition of undisclosed coverage limitations. None of the coverages required
herein will comply with these requirements if they include any limiting endorsement of
any kind that has not been first submitted to City and approved of in writing.
n. Separation of insureds. A severability of interests provision must apply for all
additional insureds ensuring that Lessee insurance shall apply separately to each insured
against whom claim is made or suit is brought, except with respect to the insurer’s limits
of liability. The policy(ies) shall not contain any cross-liability exclusions.
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o. Pass through clause. Lessee agrees to ensure that its subconsultants,
subcontractors, and any other party involved with the project who is brought onto or
involved in the project by Lessee, provide the same minimum insurance coverage and
endorsements required of Lessee. Lessee agrees to monitor and review all such coverage
and assumes all responsibility for ensuring that such coverage is provided in conformity
with the requirements of this section. Lessee agrees that upon request, all agreements
with consultants, subcontractors, and others engaged in the project will be submitted
to City for review.
p. Agency’s right to revise specifications. The City reserves the right at any time
during the term of the contract to change the amounts and types of insurance required
by giving the Lessee ninety (90) days advance written notice of such change. If such
change results in substantial additional cost to the Lessee, the City and Lessee may
renegotiate Lessee’s compensation.
q. Self-insured retentions. Any self-insured retentions must be declared to and
approved by City. City reserves the right to require that self-insured retentions be
eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to
comply with these specifications unless approved by City.
r. Timely notice of claims. Lessee shall give City prompt and timely notice of claims
made or suits instituted that arise out of or result from Lessee’s performance under this
Agreement, and that involve or may involve coverage under any of the required liability
policies.
s.Additional insurance. Lessee shall also procure and maintain, at its own cost and
expense, any additional kinds of insurance, which in its own judgment may be necessary
for its proper protection. Lessee’s personal property, fixtures, equipment, inventory and
vehicles are not insured by City against loss or damage due to fire, theft, vandalism, rain,
water, criminal or negligent acts of others, or any other cause.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed on the ____ day of
_______________, 2021.
CITY OF SAN LUIS OBISPO
A Municipal Corporation
_____________________________________________________
Mayor Erica A. Stewart
LESSEE:
_____________________________________________________
By: Monica Grant
Its: Chief Executive Officer
ATTEST:
_____________________________________________________
Teresa Purrington, City Clerk
_____________________________________________________
By: Cheryl Cuming
Its: Board Secretary
APPROVED AS TO FORM:
_____________________________________________________
J. Christine Dietrick, City Attorney
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SAN LUIS OBISPO COUNTY YMCA
1020 Southwood Drive, San Luis Obispo, CA 93401
P 805 543 8235 F 805 543 6202 www.sloymca.org
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ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
THIS ASSIGNMENT AND ASSUMPTION OF GROUND LEASE Assignment
is dated as of _________________ Effective Date
among THE CITY OF SAN LUIS OBISPO, a municipal corporation Landlord SAN
LUIS OBISPO COUNTY Y.M.C.A., a California Nonprofit public benefit corporation
Assignor CHANNEL ISLANDS YOUNG MEN'S CHRISTIAN ASSOCIATION, a
California Nonprofit public benefit corporation DBA Channel Islands YMCA Assignee
with respect to the following:
RECITALS
A. Landlord and Assignor (by and through its predecessors-in-interest) have
previously entered into that certain Ground Lease dated December 31, 1977 as amended
May 21, 1996, December 1, 2000 and November 21, 2021 (collectively, Lease
regarding the Property located at 1020 Southwood Dr, San Luis Obispo, CA (the
Property ularly described in the Lease. Unless otherwise defined
herein, all capitalized terms used in this Assignment shall have the same meanings as
set forth in the Lease. A complete copy of the Lease is attached to this Assignment as
Exhibit A.
B. Assignor and Assignee are each California non-profits, designated as
charitable organizations by the Internal Revenue Service under Section 501(c)(3) of the
Internal Revenue Code of 1986, each providing programs and services to their respective
memberships and participants in keeping with their respective missions.
C. Assignor, as Transferor, and Assignee, as Transferee, have entered into
that certain Asset Transfer Agreement dated as of July 1, 2023 (as amended, the
"Transfer Agreement") and have agreed to a transfer of assets from Assignor to
Assignee, together with a commitment by Assignee to thereafter provide facilities,
programs and services to the Assignor's program area (the "Transaction ");
D. As part of the Transaction, Assignor has agreed to assign to Assignee, and
Lease pursuant to the terms and conditions set forth below.
NOW THEREFORE, in consideration of the foregoing Recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord, Assignee and Assignor hereby agree as follows:
1.Assignment and Assumption. Assignor hereby assigns, conveys,
transfers and sets over unto Assignee any and all right, title and interest of Assignor in
and to and duties and obligations under the Lease, and Assignee hereby accepts said
the Lease commencing as of the date this Assignment is fully executed by the parties.
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Assignee hereby assumes and accepts such assignment and delegation and agrees to
keep, perform and be bound by all terms, covenants, conditions and to discharge all
obligations under the Lease Agreement which arise, accrue or are incurred on or after the
date hereof.
2.Consent to Assignment of Lease. Landlord hereby consents to the
assignment of the Lease by Assignor to Assignee subject to the terms and conditions of
this Assignment. Notwithstanding any provision in the Lease or this Assignment to the
contrary, the consent of Landlord shall not be construed to modify, waive or affect any of
the provisions of the Lease, or to waive any breach or default by Lessee under the Lease
prior to the Effective Date.
3.Indemnity.
(a) Assignor shall indemnify, defend, protect and hold harmless
Assignee and its officers, employees, agents and assigns from and against all claims,
demands, losses, costs (including attorney's fees and costs) or liabilities (a) arising under
the Lease as a c
under the Lease first accruing prior to the Effective Date, or as a result of any action,
of its agents', contractors', employees', invitees' use or occupancy of the Property prior to
the Effective Date, (b) to the extent arising under the Lease prior to the Effective Date as
result of the negligence or willful misconduct of Assignor or its employees, agents,
invitees or contractors, or (c) to the extent arising under the Lease prior to the Effective
Date under a theory of strict liability.
(b) Assignee shall indemnify, defend, protect and hold harmless
Assignor and its officers, employees, agents and assigns from and against all claims,
demands, losses, costs (including attorney's fees and costs) or liabilities (a) arising under
the Lease as a c
under the Lease first accruing prior to the Effective Date, or as a result of any action,
of its agents', contractors', employees', invitees' use or occupancy of the Property on or
after the Effective Date, (b) to the extent arising under the Lease on or after the Effective
Date as result of the negligence or willful misconduct of Assignee or its employees,
agents, invitees or contractors, or (c) to the extent arising under the Lease on or after the
Effective Date under a theory of strict liability.
(c) The foregoing indemnity provisions shall survive the expiration or
termination of the Lease or this Assignment.
4.Miscellaneous .
(a) Successors and Assigns. This Assignment shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs, successors-in-interest
and assigns; provided, however, the consent by Landlord hereby shall not be construed
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as a consent by Landlord to, or as permitting, any further or other assignment by
Assignee, except as permitting by the terms of the Lease.
(b) Severability. If any term or provision of this Assignment is, to any
extent, held to be invalid or unenforceable, the remainder of this Assignment will not be
affected, and each term or provision of this Assignment will be valid and be enforced to
the fullest extent permitted by law.
(c) Modification. No modification, waiver, amendment, discharge or
change of this Assignment shall be valid unless the same is in writing and signed by the
party against whom the enforcement of such modification, waiver, amendment, discharge
or change is or may be sought.
(d). In the event of any action between Assignor and
Assignee seeking enforcement of any of the terms and conditions to this Assignment, the
prevailing party in such action, whether by fixed judgment or settlement, shall be entitled
to recover, in addition to damages, injunctive or other relief, its actual costs and expenses,
ost-
judgment motions, (b) contempt proceedings, (c) garnishment, levy and debtor and third-
party examination, (d) discovery, and (e) bankruptcy litigation.
(e) Counterparts. This Assignment may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall constitute
one and the same Assignment. Delivery of any signature page to this document may be
transmitted by facsimile, or by email of a .PDF or .JPEG attachment, or electronically
through DocuSign or comparable electronic document execution software, any of which
shall be valid and enforceable to the same extent as an original signature, and the parties
agree to accept the same and be bound thereby.
(f) Headings. The section headings used herein are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this
Assignment.
(g) Governing Law. This Assignment shall be governed by and
construed in accordance with the laws of the State of California without regard to its
conflicts of law principles.
[signatures on following page]
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IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
as of the Effective Date set forth above.
ASSIGNOR:
SAN LUIS OBISPO COUNTY Y.M.C.A.,
a California Nonprofit public benefit
corporation
By:
Name: Eric Linkugel
Title: Chief Volunteer Officer
By:
Name: Cheryl Cuming
Title: Board Secretary
ASSIGNEE:
CHANNEL ISLANDS YOUNG MEN'S
CHRISTIAN ASSOCIATION, a
California Nonprofit public benefit
corporation
By:
Name: Margo Byrne
Title: CEO
By:
Name: Bob Williams
Title: Board Secretary
The undersigned as Landlord under the Lease, hereby acknowledges and consents
to this Assignment.
LANDLORD:
CITY OF SAN LUIS OBISPO, a Municipal corporation
By:
Name: Erica A. Stewart
Title: Mayor
ATTEST:
________________________________
Teresa Purrington, City Clerk
APPROVED AS TO FORM:
________________________________
J. Christine Dietrick, City Attorney
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