HomeMy WebLinkAboutRedline Site Lease - City of San Luis Obispo 2018 LRRBOH&S Draft 1/2229/18
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Recording requested by and return to:
CITY OF SAN LUIS OBISPO
c/o Orrick, Herrington & Sutcliffe LLP
1120 NW Couch St., Suite 200
Portland, Oregon 97209
Attention: Angie Gardner, Project Manager
This transaction is exempt from California documentary transfer tax pursuant to Section 11929 of
the California Revenue and Taxation Code. This document is recorded for the benefit of the City
of San Luis Obispo and the recording is fee-exempt under Section 6103 of the California
Government Code.
SITE LEASE
between the
CITY OF SAN LUIS OBISPO
and
SAN LUIS OBISPO PUBLIC FINANCING AUTHORITY
Dated as of MarchApril 1, 2018
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SITE LEASE
This Site Lease, dated as of MarchApril 1, 2018, by and between the CITY OF SAN LUIS
OBISPO, a municipal corporation duly organized and existing under the Constitution and laws of
the State of California (the “City”), as lessor, and SAN LUIS OBISPO PUBLIC FINANCING
AUTHORITY, a public entity and agency, duly organized and existing pursuant to an Agreement
entitled “Joint Exercise of Powers Agreement” by and between the City of San Luis Obispo and
the Parking Authority of the City of San Luis Obispo (the “Authority”), as lessee;
W I T N E S S E T H:
WHEREAS, the Authority is a joint exercise of powers authority duly organized and
operating pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of
California;
WHEREAS, Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the
State of California authorizes and empowers the Authority t o issue bonds to assist local agencies in
financing projects and programs consisting of certain public improvements or working capital or
liability and other insurance needs whenever a local agency determines that there are significant
public benefits from so doing;
WHEREAS, the City previously entered into a lease agreement (the “1996 Lease”)
with the City of San Luis Obispo Capital Improvement Board (the “Board”) for the purpose of
financing the acquisition and construction of various properties to be used for municipal purposes
of the City;
WHEREAS, the Board previously issued its 1996 Lease Revenue Bonds (County
of San Luis Obispo, California) (the “1996 Bonds”) pursuant to an Indenture of Trust dated as of
June 1, 1996, by and between the Board and First Trust of California, as trustee, in the aggregate
principal amount of $7,100,000;
WHEREAS, the City previously further entered into a lease agreement (the “2005
Lease”) with the Board for the purpose of refinancing the 1996 Lease and to allow for the
defeasance and refunding of the outstanding 1996 Bonds;
WHEREAS, the Board previously further issued its 2005 Refunding Lease
Revenue Bonds (the “2005 Bonds”) pursuant to an Indenture of Trust dated as of May 1, 2005, by
and between the Board and U.S. Bank National Association, as trustee, in the aggregate principal
amount of $6,550,000;
WHEREAS, the City previously further entered into a lease agreement (the “2006
Lease”) with the Board for the purpose of financing the acquisition and construction of facilities
located in the City to be used for public parking and City administrative office purposes;
WHEREAS, the Board previously further issued its 2006 Lease Revenue Bonds
(919 Palm Street Public Parking and City Office Project) (the “2006 Bonds”) pursuant to an
Indenture of Trust dated as of April 1, 2006, by and between the Board and U.S. Bank National
Association, as trustee, in the aggregate principal amount of $16,160,000;
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WHEREAS, the City previously further entered into a lease agreement (the “2009
Lease” and, collectively with the 2005 Lease and the 2006 Lease, the “Prior Leases”) with the
Board for the purpose of financing the acquisition and construction of facilities located in the City
to be used for a public safety dispatch center and Fire Department storage facility, and
improvements to the City’s radio system for public safety communications purposes;
WHEREAS, the Board previously further issued its 2009 Lease Revenue Bonds
(Public Safety Communications and Emergency Operations Center Project) (Bank Qualified) (the
“2009 Bonds” and, collectively with the 2005 Bonds and the 2006 Bonds, the “Prior Bonds”)
pursuant to an Indenture of Trust dated as of March 1, 2009, by and between the Board and U.S.
Bank National Association, as trustee, in the aggregate principal amount of $10,705,000;
WHEREAS, the City proposes to refinance the Prior Leases to allow for the
defeasance and refunding of the Prior Bonds;
WHEREAS, the City has determined that the consummation of the transactions
contemplated in the Site Lease and Facility Lease (each as hereinafter defined), including the lease
from the City of the Leased Property (as hereinafter defined) and lease back to the City of the
Leased Property, and this Trust Agreement will result in significant public benefits;
WHEREAS, the Authority is empowered pursuant to the aforementioned Article 4
to issue its bonds and to apply t he proceeds thereof to assist in refinancing the Prior Leases to allow
for the defeasance and refunding of the Prior Bonds;
WHEREAS, in order to reduce the borrowing costs of the Authority, and to provide the
funds necessary to refinance the Prior Leases and defease and refund the Prior Bonds, the
Authority’s Lease Revenue Refunding Bonds, Series 2018 (the “Bonds”) shall be issued pursuant
to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of State of California and
the Trust Agreement (the “Trust Agreement”), dated as of MarchApril 1, 2018, by and between the
Authority and U.S. Bank National Association, as trustee;
WHEREAS, the City intends to lease the Leased Property (as hereinafter defined) to the
Authority pursuant to this lease, and the Authority i ntends to lease back the Leased Property to the
City by a sublease, entitled “Facility Lease” and dated as of the date hereof and recorded
concurrently herewith (the “Facility Lease”); and
WHEREAS, under the Facility Lease, the City will be obligated to make base rental
payments to the Authority for the lease of the Leased Property, which base rental payments shall
be applied to pay principal of and interest on the Bonds; and
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED as follows:
SECTION 1.Leased Property.
The City hereby leases to the Authority and the Authority hereby hires from the City, on
the terms and conditions hereinafter set forth, the real property and improvements thereon situated
in the City of San Luis Obispo, County of San Luis Obispo, State of California, and described in
Exhibit A attached hereto and made a part hereof, together with any additional real property added
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thereto by any supplement or amendment hereto, or any real property substituted for all or any
portion of the Leased Property in accordance with this lease and the Trust Agreement; subject,
however, to any conditions, reservations, and easements of record or known to the City (herein
collectively called the “Leased Property”).
SECTION 2.Term.
The term of this lease shall commence on the date of recordation of this lease in the office
of the County Recorder of San Luis Obispo County, State of California, or on [_________], 2018,
whichever is earlier, and shall end on [___________]1, 20__, unless such term is extended or
sooner terminated as hereinafter provided. If on [___________]1, 20__, the Bonds shall not be
fully paid, or if the rental payable under the Facility Lease shall have been abated at any time and
for any reason, then the term of this lease shall be extended until ten (10) days after the Bonds shall
be fully paid, except that the term of this lease shall in no event be extended beyond [__________]
1, 20__. If prior to [__________]1, 20[__], the Bonds shall be fully paid, the term of this lease
shall end ten (10) days thereafter or ten (10) days after written notice by the City to the Authority,
whichever is earlier.
SECTION 3.Site Lease Rent.
The Authority shall pay to the City as and for rental hereunder the proceeds of the Bonds,
such proceeds to be deposited in the funds specified in the Trust Agreement and applied as
specified in the Trust Agreement and the Facility Lease.
SECTION 4.Purpose.
The Authority shall use the Leased Property solely for the purpose of refinancing the Prior
Leases and defeasing and refunding the Prior Bonds, the leasing of the Leased Property to the City
pursuant to the Facility Lease and for such purposes as may be incidental thereto; provided, that in
the event of default by the City under the Facility Lease the Authority may exercise the remedies
provided in the Facility Lease.
SECTION 5.Warranties of the City.
The City covenants and warrants to the Authority:
(1)That the City has good and marketable title to the Leased Property, has good
authority t o enter into, to execute and to deliver this Site Lease and the Facility Lease, and has duly
authorized the execution and delivery of this Site Lease and the Facility Lease;
(2)That except for Permitted Encumbrances, the Leased Property is not subject to any
dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or
encumbrance which would prohibit or materially interfere with the financing as contemplated by
the Facility Lease;
(3)That all taxes, assessments, or impositions of any kind with respect to the Leased
Property, except current taxes, have been paid in full;
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(4)That the Leased Property is properly zoned for its intended purposes; and
(5)That if a problem with the title to the Leased Property or the use thereof should
develop, the City shall exercise its condemnation power to the extent permitted by law to obtain
the necessary rights in the Leased Property that will enable the parties hereto to perform the
transactions contemplated by the Facility Lease and this Site Lease.
SECTION 6.Warranties of the Authority.
The Authority covenants and warrants to the City that the Authority has the power and
authority to enter into and deliver the Facility Lease, the Site Lease and the Trust Agreement, and
to perform all of its duties and obligations thereunder, and has duly authorized the execution and
delivery of this Site Lease, the Facility Lease and the Trust Agreement. The Authority will record
this Site Lease to secure its interest hereunder.
SECTION 7.Assignments and Subleases.
Unless the City s hall be in default under the Facility Lease, the Authority m ay n ot assign its
rights under this lease or sublet the Leased Property (except pursuant to the Trust Agreement),
without the written consent of the City.
SECTION 8.Right of Entry; Easements.
The City reserves the right for any of its duly authorized representatives to enter upon the
Leased Property at any reasonable time to inspect the same or to make any repairs, improvements
or changes necessary for the preservation thereof.
SECTION 9.Termination.
The Authority agrees, upon the termination of this lease, to quit and surrender the Leased
Property i n the same good order and condition as the same were in at the time of commencement of
the term hereunder, reasonable wear and tear excepted, and agrees that any permanent
improvements and structures existing upon the Leased Property at the time of the termination of
this lease shall remain thereon and title thereto shall vest in the City.
Upon the exercise of the option to purchase set forth in Section 7.03 of the Facility Lease
and upon payment of the option price required by s aid section, the term of this lease shall terminate
as to the portion of the Leased Property that is purchased.
SECTION 10.Default.
In the event the Authority shall be in default in the performance of any obligation on its
part to be performed under the terms of this lease, which default continues for thirty (30) days
following notice and demand for correction thereof to the Authority, the City may e xercise any and
all remedies granted by law, except that no merger of this lease and of the Facility Lease shall be
deemed to occur as a result thereof; provided, however, that the City shall have no power to
terminate this lease by reason of any default on the part of the Authority if such termination would
affect or impair any assignment or sublease of all or any part of the Leased Property then in effect
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between the Authority and any assignee or subtenant of the Authority (other than the City under
the Facility Lease). So long as any such assignee or subtenant of the Authority shall duly perform
the terms and conditions of this lease and of its then existing sublease (if any), such assignee or
subtenant shall be deemed to be and shall become the tenant of the City hereunder and shall be
entitled to all of the rights and privileges granted under any such assignment; provided, further,
that so long as any Bonds are outstanding and unpaid in accordance with the terms thereof, the
rentals or any part thereof payable to the Trustee shall continue to be paid to the Trustee.
SECTION 11.Quiet Enjoyment.
The Authority at all times during the term of this lease, subject to the provisions of Section
9 hereof, shall peaceably and quietly have, hold and enjoy all of the Leased Property.
SECTION 12.Waiver of Personal Liability.
All liabilities under this lease on the part of the Authority shall be solely liabilities of the
Authority, as a public entity and agency, and the City hereby releases each and every member,
director, officer, agent, or employee of the Authority of and from any personal or individual
liability u nder this lease. No member, director, officer, agent, or employee of the Authority s hall at
any time or under any circumstances be individually or personally liable under this lease to the
City or to any other party whomsoever for anything done or omitted to be done by the Authority
hereunder.
SECTION 13.Taxes.
The City covenants and agrees to pay any and all assessments of any kind or character and
also all taxes, including possessory interest taxes, levied or assessed upon the Leased Property
(including both land and improvements).
SECTION 14.Eminent Domain.
In the event the whole or any part of the Leased Property or the improvements thereon is
taken by eminent domain proceedings, the interest of the Authority shall be recognized and is
hereby determined to be the amount of the then unpaid or outstanding Bonds attributable to such
part of the Leased Property and shall be paid to the Trustee, and the balance of the award, if any,
shall be paid to the City.
SECTION 15.Partial Invalidity.
If any one or more of the terms, provisions, covenants or conditions of this lease shall to
any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a
court of competent jurisdiction, the finding or order or decree of which becomes final, none of the
remaining terms, provisions, covenants and conditions of this lease shall be affected thereby, and
each provision of this lease shall be valid and enforceable to the fullest extent permitted by law.
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SECTION 16.Notices.
All notices, statements, demands, consents, approvals, authorizations, offers, designations,
requests or other communications hereunder by either party to the other shall be in writing and
shall be sufficiently given and served upon the other party if delivered personally or if mailed by
United States registered or certified mail, return receipt requested, postage prepaid, and, if to the
Authority, addressed to the Treasurer of the Authority,in care of the Finance Director of the City
of San Luis Obispo, 990 Palm Street, San Luis Obispo, California 93401, or if to the City,
addressed to the Finance Director of the City of San Luis Obispo, 990 Palm Street, San Luis
Obispo, California 93401, in either case with a copy to the Trustee, or to such other addresses as
the respective parties may from time to time designate by notice in writing.
SECTION 17.Section Headings.
All section headings contained herein are for convenience of reference only and are not
intended to define or limit the scope of any provision of this lease.
SECTION 18.Execution.
This lease may be executed in any number of counterparts, each of which shall be deemed
to be an original, but all together shall constitute but one and the same lease. It is also agreed that
separate counterparts of this lease may separately be executed by the City and the Authority, all
with the same force and effect as though the same counterpart had been executed by both the City
and the Authority.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the City and the Authority have caused this lease to be
executed by their respective officers thereunto duly authorized, all as of the day and year first
above written.
CITY OF SAN LUIS OBISPO, Lessor
By
Derrick J. Johnson,City Manager
SAN LUIS OBISPO PUBLIC FINANCING
AUTHORITY, Lessee
By
Xenia Bradford, Treasurer
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EXHIBIT A
The land referred to herein is situated in the State of California, County o f San Luis Obispo, City o f
San Luis Obispo and is described as shown below:
[TO COME]
(End of Legal Description)
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy or validity of that document.
State of )
County of )
On before me, , Notary Public (here
insert name and title of the officer), personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
OHSUSA:767757575
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy or validity of that document.
State of )
County of )
On before me, , Notary Public (here
insert name and title of the officer), personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
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CERTIFICATE OF ACCEPTANCE
In accordance with section 27281 of the California Government Code, this is to certify that
the interest in the real property conveyed from the City of San Luis Obispo, a municipal
corporation duly organized and validly existing under the Constitution and laws of the State of
California (the “City”), to the San Luis Obispo Public Financing Authority, a joint exercise of
powers authority organized and existing pursuant to the laws of the State of California (the
“Authority”), under the Site Lease between the City and the Authority dated as of MarchApril 1,
2018, is hereby accepted by the undersigned on behalf of the Authority as authorized by a
resolution of the Governing Board of the Authority adopted on February 20,2018, and the
Authority consents to recordation of this Site Lease by its duly authorized officer.
Dated: [___________], 2018
SAN LUIS OBISPO PUBLIC FINANCING
AUTHORITY
By:
Xenia Bradford, Treasurer
TABLE OF CONTENTS
Page
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SECTION 1.Leased Property ....................................................................................3
SECTION 2.Term .....................................................................................................3
SECTION 3.Site Lease Rent .....................................................................................3
SECTION 4.Purpose .................................................................................................3
SECTION 5.Warranties of the City...........................................................................3
SECTION 6.Warranties of the Authority ..................................................................4
SECTION 7.Assignments and Subleases ..................................................................4
SECTION 8.Right of Entry; Easements ....................................................................4
SECTION 9.Termination ..........................................................................................4
SECTION 10.Default ..................................................................................................5
SECTION 11.Quiet Enjoyment ...................................................................................5
SECTION 12.Waiver of Personal Liability.................................................................5
SECTION 13.Taxes.....................................................................................................5
SECTION 14.Eminent Domain ...................................................................................5
SECTION 15.Partial Invalidity ...................................................................................6
SECTION 16.Notices ..................................................................................................6
SECTION 17.Section Headings ..................................................................................6
SECTION 18.Execution ..............................................................................................6
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Document 1 ID netdocuments://4145-9586-7663/3
Description Site Lease -City of San Luis Obispo 2018 LRRB
Document 2 ID netdocuments://4145-9586-7663/4
Description Site Lease -City of San Luis Obispo 2018 LRRB
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