HomeMy WebLinkAbout07/06/1993, C-7 - TERMINATION OF ASSIGNMENT OF GROUND LEASE OF CITY PROPERTY BY SLO COUNTY YMCA, INC. TO COMMERCE BANK OF SAN LUIS OBISPO (CITY PROPERTY 1020 SOUTHWOOD DRIVE) f x'11 f0EETING GATE:
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city o� San Luis OBISpo 7-6-93
ITEM NUMEER•
Miga COUNCIL AGENDA REPORT
FROM: JEFF JORGENSEN, CITY ATTORNE
SUBJECT: TERMINATION OF ASSIGNMENT OFG OUND LEASE
OF CITY PROPERTY BY SLO COUNTY YMCA, INC.
TO COMMERCE BANK OF SAN LUIS OBISPO (City
Property 1020 Southwood Drive)
RECOMMENDATION: ADOPT RESOLUTION APPROVING TERMINATION
OF ASSIGNMENT.
BACKGROUND:
On February 2, 1993 , at the request of Commerce Bank, the City
approved the Assignment of the SLO County YMCA lease of the
racquetball/handball facility on City property at 1020 Southwood
Drive to Commerce Bank in order to facilitate the refinancing of
the YMCA Building (a copy of the prevous staff report is attached) .
Commerce Bank has now determined that the .Assignment was not
necessary and was requested in error. The Bank is now requesting
that we terminate the Assignment of Lease and restore the parties
to their original position prior to February 2 , 1993 .
FISCAL IMPACT:
None.
ALTERNATIVES:
1. The City Council may choose not to consent to the termination
of Assignment if it has a reasonable basis for doing so.
2. The City Council may choose to continue this item if
additional information or discussion is required.
JGJ/sw
Attachments:
1. Resolution
2. Termination of Assignment of Lease Agreement
3 . Letter from Commerce Bank
4. February 2 , 1993 Agenda Report
I
Attachment 1
RESOLUTION NO. (1993 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SAN LUIS OBISPO CONSENTING TO THE TERMINATION
OF ASSIGNMENT OF THE GROUND LEASE OF CITY
PROPERTY AT 1020 SOUTHWOOD DRIVE BY SAN LUIS
OBISPO COUNTY YMCA, INC. TO
COMMERCE BANK OF SAN LUIS OBISPO
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
as follows:
SECTION 1. The City Council hereby consents to the
termination of the Assignment of the Ground Lease of City property
at 1020 Southwood Drive by San Luis Obispo County YMCA, Inc. to
Commerce Bank of San Luis Obispo.
SECTION 2 . The Mayor is authorized and directed to sign the
attached "Termination of Assignment of Lease Agreement" on behalf
of the City.
Upon motion of seconded by ,
and on the following roll call vote:
Ayes:
Noes:
Absent:
the foregoing Resolution was adopted this day of ,
1993 .
Mayor Peg Pinard
ATTEST:
Diane Gladwell, City Clerk
t r
Ll 7�.
RECORDING REQUESTED BY
WHEN RECORDED MAIL TO
COMMERCE BANK OF SAN LUIS OBISPO, N.A.
545 Higuem Street
San Luis Obispo, CA 93401
Re: SLO YMCA,Loan#42843
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
TERMINATION OF ASSIGNMENT OF LEASE AGREEMENT
This Termination of Assignment of Lease Agreement is entered into as of May 18, 1993
between Commerce Bank of San Luis Obispo, N.A. (the "Bank") and San Luis Obispo Y.M.C.A.
(the "Borrower"), with reference to the following facts:
The parties desire to terminate the existing Assignment of Lease Agreement dated January
8, 1993, executed by San Luis Obispo Y.M.C.A. with the intent to provide a collateral security
interest in the "Lease" dated October 4, 1977 and executed by San Luis Obispo Y.M.C.A.
("Tenant") and City of San Luis Obispo ("Landlord") covering property located at 1020
Southwood, San Luis Obispo, CA 93401, legal description attached hereto and made a part
hereof. The parties further agree to execute such other documents as may be legally necessary or
desirable to create a binding security interest in the Lease and the personal property of the
Borrowers located on the premises described in the Lease in favor of the Bank.
Assignment of Lease was recorded February 10, 1993, as Document No. 1993-007101,
Vol 4036, Page 172 of the official records of San Luis Obispo County, State of California.
The parties agree as follows:
1. Termination of Lease Assignment. The Lease Assignment is hereby terminated,
which termination shall be effective as of the date of this Termination Agreement. The Bank shall
have no further liability under the Lease Assignment for any period after the effective date of this
Termination Agreement. The Borrowers shall defend, indemnify and save harmless the Bank and
the agents and employees of the Bank from and against any and all loss, damage, injury or lien,
including claims and reasonable attorney's fees relating to any of the foregoing, under or relating
to the Lease Assignment.
2. Execution of Additional Documentation. The Bank and the Borrowers shall
execute such additional documents as may be reasonably necessary for the Bank to obtain a
security interest in the Lease to secure the Borrowers' existing obligation to the Bank. The
Borrowers further agree to cooperate in all reasonable respects with the Bank to obtain the
—consent of the Landlords and any other third party as may be necessary or desirable for the Bank
to obtain a valid security interest in the Lease and the personal property of the Borrowers located
on the premises described in the Lease.
Attachment 2 /f Q
(: r�"d
3. No Alteration of Existing Obligation. Nothing in this Termination Agreement shall
alter in any respect the rights and obligation of the parties in connection with the Borrowers'
existing obligations to the Bank.
4. Resolution of Disputes. If any legal action is brought for the enforcement of this
Termination Agreement or because of any alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Termination Agreement, the successful or prevailing
party shall be entitled to recover reasonable attorney's fees and other costs incurred in that action
or proceeding, in addition to any other relief to which it or they may be entitled.
5. Governing Law. This Termination Agreement shall be construed in accordance
with, and governed by, the laws of the State of California as applied to contracts executed,
delivered, and performed solely within that state.
6. Counterparts. This Termination Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same agreement.
BANK: BORROWERS:
Commerce Bank of San Luis Obispo, N.A. San Luis Obispo Y.M.C.A.
1
By:
Anita M. Robinson, EVP Mark J31oodgood, President
TENANT:
San Luis ispo Y.M.C.
Nfarr�
k loodgood, Pre ent
}
STATE OF CALIFORNIA }as.
COUNTY OF SAN LUIS OBISPO }
On this 5116 day of -Sin the year
before me L ;l to the undersigned Notary Public, b rs w
personally appealed � ,,• ....
�.'.;. i
personally known to me(at proved :m':!: X
a i die basis of satisfactory evidence)m be the persoa(s)who executed the within ;i. . _
instrument in his/her/their authorized capacity,and that by his/her/their signaturerr95 y;,o nrn._•,,.a; _J,. ;5
on the instrument the person(s),or the entity upon behalf of which the person(s)acted, yyIRA 19*MW1V91QjGVc�
executed the instrument.
WITNESS my hand and official seal.
Signature (Ibis area for official notarial seal)
LEGAL DESCRIPTION
Parcel 1
That portion of the South half of Section 36 in Township 30
South, Range 12 East, Mount Diablo Base and Meridian, according
to the official plat or plats of the survey of said lands
returned to the General Land Office by the Surveyor General,
described as follows:
Beginning at a point on the Northwesterly line of County Road No.
324 as conveyed to the County of San Luis Obispo, by deed dated
September 5 , 1946 and recorded in Book 424, at page 179 of
Official Records of San Luis Obispo County, which is South 30 '
41' West 1248 .71 feet from the intersection of said Northwesterly
line with the Southerly line of County Road No. 2.57 as shown on
map of a portion of said Section 36, recorded in Book 3 , at page
34, of Records of Surveys; thence leaving said Northwesterly line
North 72 ' West a distance of 826 feet to a point, said point
being the Southwesterly corner of the property conveyed to Emily
Allen Baker, by deed dated April 13 , 1949 and recorded May 11,
1949 in Book 522, at page 134 of Official Records; thence North
30' 41' East along the Northwesterly line of the property so
conveyed a distance of 43 . 00 feet, thence North 59' 19 ' West a
distance of 7. 00 feet to the true point of beginning, thence
North 28' 08 ' 30" East a distance of 134 . 67 feet; thence North
61' 51' 30" West a distance of 97 . 33 feet; thence South 28 ' 08 '
30" West a distance of 104 . 00 feet; thence North 61' 51 ' 30" West
a distance of 6. 00 feet; thence South 28' 08 ' 30" West a distance
of 36 . 67 feet; thence South 61' 51' 3011 East a distance of 36 . 00
feet; thence North 28 ' 08 ' 30" East a distance of 6 . 00 feet;
thence South 610 51' 30" East a distance of 67 . 33 feet to the
true point of beginning.
AREA FOR MAINTENANCE, INGRESS AND EGRESS EASEMENT: Parcel 2.
That portion of the South half of Section 36 in Township 30
South, Range 12 East, Mount Diablo Base and Meridian, according
to the official plat or plats of the survey of said lands
returned to the General Land Office by the surveyor General,
described as follows:
�-r-s
Beginning at a point on the Northwesterly line of County Road No.
324 as conveyed to the County of San Luis Obispo, by deed dated
September 5 , 1946 and recorded in Book 424 , at page 179 of
Official Records of San Luis Obispo County, which is South 30'
41 ' West 1248 .71 feet from the intersection of said Northwesterly
line with the Southerly line of County Road No. 257 as shown on
map of a portion of said Section 36, recorded in Book 3 , at page
34 , of Official Records of Surveys; thence leaving said
Northwesterly line North 72 ' West a distance of 826 feet to the
true P.O. B. , said point being the Southwesterly corner of the
property conveyed to Emily Ellen Baker, by deed dated April 13 ,
1949 and recorded May 11, 1949 in Book 552 , at page 13 of
Official Records ; thence North 304 41 ' East along the
Northwesterly line of the property so conveyed a distance of
180. 67 feet; thence North 59' 19 ' West a distance of 180 . 33 feet;
thence South 30' 41' West a distance of 165 . 00 feet; thence South
18 ° 00 ' West to the Northerly line of Southwood Drive; thence
South 72 ' 00 ' East to the true P. O. B.
Excepting therefrom Parcel 1.
END CF L^C'�,r.E.1 T
Recle , vel)
COMMERCE BANK 91993
OF SAN LUIS OBISPO N-A. CP
June 8, 1993
Mr. Jeff Jorgensen
City Attorney
City of San Luis Obispo
990 Palm St.
San Luis Obispo, CA 93401
Re: Lease between City of San Luis Obispo and the Y.M.C.A.
Dear Mr. Jorgensen:
Please find enclosed an original Termination of Assignment of Lease
Agreement for your review and to obtain Mayor Pinard's signature.
The bank's attorney has decided that our Deed of Trust includes
appropriate language to secure our interest in the ground lease
between the City of San Luis Obispo and the Y.M.C.A. .
The Assignment of Lease Agreement (copy of which is enclosed)
previously executed by all parties, is a duplication of the
language already contained in the Deed of Trust.
Completing the Assignment of Lease Agreement resulted in an
instantaneous assignment of the ground lease rather than a
collateral assignment, which was the intent of the parties.
Therefore, to correct the error, please have Mayor Pinard execute
the enclosed Termination of Assignment of Lease and return to the
undersigned at your earliest convenience.
If you should have any questions, please let me know.
Sincerely,
Charlie Fruit
Vice President
lal/
encl.
545 Hieuera Street 1360 Grand Avenue 310 Morro Bay Boulevard 1204 Spring Street
San Luis Obispo.CA 93401 Arroyo Grande,CA 93420 Morro Bay.CA 93112 Paso Robles.CA 93446
(905)541-1166 111051173-0312 (805)771-6173 (805)'_39-9505
Attachment 3 2 -7-7
w.EETING DATE:
�� ��h�p;;p�l ►��6� city o� san Luis omspo 2-2-93
ITEI.A NUNBEF:
COUNCIL AGENDA REPORT
FROM: Jeffrey G. Jorgensen, City Attorney
SUBJECT: Assignment of Ground Lease of City Property by SLO County
YMCA, Inc. to Commerce Bank of San Luis Obispo (City
Property - 1020 Southwood Drive)
RECOMMENDATION:
Adopt Resolution Approving Consent to Assignment
BACKGROUND:
In 1977 , the City entered into a long-term ground lease for the development
of a racquetball/handball facility on City property located at 1020
Southwood Drive. In 1981 the City consented to an assignment .of the ground
lease to SLO County YMCA, Inc. The YMCA is currently operating the
facility and approximately 25 years remain on the ground lease term. The
YMCA desires to refinance a $385, 000 loan on the building. After a
competitive process, Commerce Bank was selected to provide the refinancing.
As a part of the bank's loan process, it requires an assignment of the
ground lease to protect the bank's interest in the event of a default.
YMCA will remain liable for the performance of the terms and provisions of
the ground lease. Article XIV of the original ground lease requires city
.:onsent to any assignment, which shall not be unreasonably withheld.
FISCAL IMPACT: None.
ALTERNATIVES:
1. The City Council may choose not to consent to the assignment of the
lease agreement if it has a. reasonable basis for doing so. Such a
decision would result in the YMCA not being able to refinance its loan
through Commerce Bank.
2. The City Council may choose to continue this item if additional
information or discussion is required.
JGJ/sw
Attachments:
1. Resolution
2. Assignment•of Lease Agreement
3 . Letter front Commerce Bank
I
Attachment 4
RESOLUTION NO. (1993 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SAN LUIS OBISPO CONSENTING TO ASSIGNMENT
OF THE GROUND LEASE OF CITY PROPERTY AT 1020
SOUTHWOOD DRIVE BY SAN LUIS OBISPO COUNTY
YMCA,, INC. TO COMMERCE BANK OF SAN LUIS OBISPO
WHEREAS, The SLO County YMCA, Inc. , located on City-leased
property at 1020 Southwood Drive wishes to refinance a $385, 000
loan on its building; and
WHEREAS, as a condition of refinancing, Commerce Bank of San
Luis Obispo requires an assignment of the ground lease to protect
the Bank's interests in the event of a default,
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
SAN LUIS OBISPO as follows:
SECTION 1. The City Council hereby consents to assignment of
the Ground Lease of City property at 1020 Southwood Drive by San
Luis Obispo County YMCA, Inc. to Commerce Bank of San Luis Obispo,
provided San Luis Obispo County YMCA, Inc. shall at all times
remain liable for the performance of the terms and provisions of
the ground lease.
SECTION 2. The Mayor is authorized and directed to sign the
attached "Assignment of Lease Agreement" on behalf of the City.
Upon motion of , seconded by
and on the following roll call vote:
Ayes:
Noes:
Absent:
the foregoing Resolution was adopted this day of ,
1993 .
Mayor Peg Pinard
ATTEST:
Diane Gladwell, City Clerk
-Altachment- 1 '
RESOLUTION NO. (1993 Series)
Page Two
APPROVED:
City Administrative Officer
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n[egnuwc nebu[sTeg av r
AND WHEN nEcofluEb ASArL To
�t CaTmcrcc Ikink of San Luis 01 spo, N.A. (f
snmll 545 Iliguera Street
uueu S
ala San Luis Obispo, CA 93401
':Illi
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(SrnCE ABOVE THIS LINE ran nEConoEn•S USES
ASSIGNMENT OF LEASE AGREEMENT
This Assignment of Leaw Agrmnent is made and rnit:red into this ath day of January
1993•try and between SAN LUIS OBISPO Y.M.C.A.
fherdnouer retorted to as"A;igrw")wlmsc adores is: 1020 Southwood, San Luis Obispo, CA 93401
and CCTD4'7=. BANK Or SAN LUIS OBISPO, N.A.
(heranaller ictnred to as"Assignee").wdunc address is:545 IIiguera Street, San Luis Obispo, CA 93401
WIVIEAS.Assignor as Tenant and City of San Luis Obispo
(hereinafter related Was"Landlord"1 ordered into a Lease Agreement dared Decanter 31, ,17 77—unmrnl..nirl:,++,�uMr.
dlcrI*:a3=Exhim I I, -mega,a I cram lot that certain properly located at 1020 Southwood,
czan Tei s Ohi sm,. CA 93401
Ilse wMI wen We..l
and legally described as follows:_Sec Kiel description attacher] hereto and made a part hereof.
Ile. - I"liar Gera I
(Ilml:nuner related to as Ilse—leased pra ows");and
III 1111M.As Agnur now desires to assign all at its rights,title and Interest as Ilse Tcnam under said Lease to Assignee and Assignee desires to receive
and accept such asugmnm.
NOW.TIIEnE17011E,it is agreed between the parties hereto as[allows:
t. Incomidualim+allhesumo[ rt'=cc TTry151=d ricThty—five Thousand and 00/100* * • "
(S-3A5,000.00 )dWLats and other valuable consideration,receipt of Which Is hereby acknowledged by Assignor.Assignor hereby
assigns and Irarfslers to Assignee an of hs rights,liltc and interest in Ilse Lcasc and the leased premises and Assignee hereby accepts said assignment and
hereby assumes and agrees to perform ham and aper the date this Agreement becomes effective,as a direct obligation to Ilia Landlord,all of the terms and
provisions of the Lease.
2. The assignment of Ilia Leve as plaided lar in this agreement shall lake client on January 8,
and Assignor shall give possession of the leased premises to Assignee on that dale.
3. A portion of Ilia consideration lot this Assignment is that Assignee hereby agrees In assume all at[lie obligations and perform all of Ilia conditions and
covenants of said Lease ad Assignee herehy agrees to make all the payments provided for In said Lease now or hereafter to become due thereunder,
including the payment of all renals specified In said Lease.II Assignee defaults under Ilia Lease,Assignee shall Indemnify and hold Assignor harmless
timing Ilia damages resuning from any such default.II Assignee dclaults In Its obligations under the Lease and Assignor must pay rent of any other
charges to the Laniard under the Lcasc due to such lagure in fullbis any of Assignee's other obligadtonts under the Lease in order to cure or prevent
Assignee front being in gelatin.Assignee slag Immediately reimburse Assignor for the amount of ren[or other amounts paid or costs Incurred by Assignor to
IuIIID Assignee's oblymions under the Lc=or this Assignor at Levo Agreement.logether wnh Interest ItuuCon at the rate of ten(10%)parcel per annum.
4. Assignor paehy represents la Assignee that ilia Lasa Is in fug force and affecting that Assignor,as Tenant under Said Lease,isnal in default under any
of Ito firms,clun iuens,and provisions mnhvncd in the Lease an the pan of the Twort to be kept and perfarmcd thereof.
J ,. The parties hereto acknowledge Itat Landlord now holds Na sum of zero
(f_0-00 )dollars as a secutgy deposit and/or prepaid rent pursuant to Article of Ilia Lease.to be applied subject to
fife provisions at Ilio Lease.Assignor hereby releases all claims to said sum,and said sum shall be held by the Landlord tar Ile benefit of Assignee subject
to the provisions of the Lease.
G. this Assignment shall be bin"uprm and bore to the benefit of the parties hereto,their heirs.personal teprescnahves,suera:ssors and assigns.
IN WITNESS IEIIEOF,Iltc parlls haelo have--cs//reulN Ilfls AssignmI"of Lease Agroment on the day and year first above written.
s nsstr o = LL ispp^•M•Si11• ASSICNE flank of San Luis Obispo, N.A.
G at.ly yr. gx:_C �
i II�ooclg osic� t Charles Fruit, Vice President
Ity:
By:
I,
Lanigan in the I=described aowc.Imchy tonsil to Ile above Assignment W Lease.provided that Illi,mnsm shag rel In arty way to decrial to be a canscii
to any Iullm as:igmmd.ugh lurgfor provided flat Assignor shall at all lines remain liable lar Ilia performance of the toms and prawsimns of ilia Lease.
IIATrg: 19_
LANDLORD: City of San Luis Obispo
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-�Attachmcnt 2 �z/q
COMMERCE: 13ANK
OF SAN LUIS OBISPO I .A.
PZECEIVED
January 15, 1993 jAN 15 1993
OFFICE OF
CRY ATFORMCY
3:
30 P/k
Mr. Jeff Jorgenson
City Attorney
P. O. Box 8100
San Luis Obispo, California 93403
RE: Assignment of Ground Lease
YMCA Facility
Dear Jeff:
Commerce Bank is preparing to fund a $385, 000 . 00 loan to refinance
the YMCA building at 1020 Southwood, San Luis Obispo. The YMCA
building is on leased property from the City of San Luis Obispo.
As part of our loan documentation, we require an assignment of the
ground lease to protect the Bank's interest in the event of a
default. 1
We are enclosing the original "Assignment of Lease Agreement" for
the City's review and execution. Unfortunately, we cannot close
this loan escrow until the City executes the Agreement. Therefore,
we would appreciate your earliest attention to this matter.
I would appreciate a call if I can answer any questions or be of
assistance in this matter.
Best Regards,
Char ie Fruit
Vice President
CF:mb
Enclosure
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