Loading...
HomeMy WebLinkAboutSite Lease - City of San Luis Obispo 2018 LRRB 4145-9586-7663 v4OH&S Draft 1/29/18 4145-9586-7663 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 April 1, 2018 4145-9586-7663 SITE LEASE This Site Lease, dated as of April 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 to 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; 2 4145-9586-7663 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 the 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 April 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 intends 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 3 4145-9586-7663 described in Exhibit A attached hereto and made a part hereof, together with any additional real property added 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 to 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; 4 4145-9586-7663 (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 shall be in default under the Facility Lease, the Authority may not 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 in 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 said 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 exercise 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 5 4145-9586-7663 Property then in effect 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 under this lease. No member, director, officer, agent, or employee of the Authority shall 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. 6 4145-9586-7663 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] 4145-9586-7663 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 A-1 4145-9586-7663 EXHIBIT A The land referred to herein is situated in the State of California, County of San Luis Obispo, City of San Luis Obispo and is described as shown below: [TO COME] (End of Legal Description) 4145-9586-7663 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) 4145-9586-7663 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 April 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 -i- 4145-9586-7663 SECTION 1. Leased Property ................................................................................... 2 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.................................................................................................. 4 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................................................................................... 5 SECTION 16. Notices ................................................................................................. 6 SECTION 17. Section Headings ................................................................................. 6 SECTION 18. Execution ............................................................................................. 6