SR-800-005-03 (2)
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Santa Monica, California, August 9, 1979
TO:
II F
Mayor and Council
FROM:
City Staff
SUBJECT:
Proposed Lear Siegler Ground Lease
(Parcels, 17, 18 and 21 - Santa Monica Airport)
AUG 1 4 1979
Backg round:
Lear Siegler, Inc currently occupies the approximately 3.6 acres which com-
prise Airport Parcels 17, 18 and 21 under two separate leases which terminate
on November 30, 1983 and June 30, 1991 (including option periods) respectIvely.
The two leases currently generate 5115,000 per year in revenue to the City.
DIScussion:
Lear Siegler has approached the City with a proposal to consolidate the exist-
ing leases in order to facil itate the construction of an approximately 80,000
square foot corporate headquarters on the leased property.
Negotiations were conducted between Lear Siegler and City Staff follOWing the
receipt of an independent appraisal commissioned by the City. The proposed
lease terms have been approved by the Airport Commission at the meeting of
July 11, 1979. The attached lease, which has been reviewed by the City
Attorney's office incorporates the forlowing terms and conditions'
Land Value:
$2,790,000 ($18.00 psf)
Capitalization Rate.
9% per annum
Base Ren t:
$250,000 per annum
Term
55 years
Increase Interval:
Commencing with 6th year and every 5
years thereafter
IIF
AUG 1 4 1979
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TO. Mayor & Council
August 9, 1979
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Bases of Increase:
100% of C.P.I. change occurring
during Interval Period
Subordination by City:
None
Ownership of Improve-
ments.
All real property improvements revert
to the City at the termination of the
lease.
This lease accommodates the current situation which is that Lear Siegler has
not yet completed their preliminary design work and that certain actions, i.e.,
EIR preparation and approval, possible zoning variances, etc. may need to be
accomplished by Lear Siegler before the improvements anticipated by this lease
can be constructed. The lease estab1 ishes a six month period in which Lear
Siegler must obtain all necessary permits and approvals for the construction
of the improvements. Within the established time frame either the approvals
will be obtained and the term of the new lease will commence, or the new
lease will be void and the existing leases will remain in effect under their
present terms and conditions.
The lease recognizes the fact that the City as lessor is also the governing
body of the locality. Specific language has been incorporated into the first
"recital" which affirms that none of the lease provisions will "abrogate or
diminish the Lessor's (City's) rights and responsibilities to exercise its
governmental pO\~ers."
The lease also requires the Lessee to acknowledge that the lease is not con-
ditional upon the continued operation of the Santa Monica Airport as a general
aviation faci1 ity.
As noted above, Lear Siegler intends to construct its corporate headquarters
on the leased land. Certain of the lease provisions have been included in
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TO: Mayor & Council
August 9, 1979
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order to facilitate the construction and permanent financing of the development.
The lease provides that the constructed improvements will become the property of
the City at the termination of the lease. If the lease is terminated prior to
the 55 year expiration date (other than by reason of Lear Siegler's willful
default) the City would be required to compensate Lear Siegler for the fair
market value of the improvements at the time of the termination. The fair mar-
ket value appraisal would take into consideration the remaining term of the
lease as well as the condition of the improvements and comparable market data.
In order to encourage the prompt construction of the proposed development the
lease requires the establ ishment of a $125,000 deposit which would be paid to
the City if the improvements are not completed within three years of the commence-
ment of the term.
Additionally, the full base rent of $250,000 per year will begin no later than
two years from the commencement of the term regardless of whether the improve-
ments were completed (unless the delays were beyond the control of Lear Siegler).
The rent payments during the construction period will be equivalent to the
amounts due under the existing leases.
The lease also allows Lear Siegler the right of first refusal in the event that
the City chooses to sell the land during the term of the lease.
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TO: Mayor & Council
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August 9, 1979
Recommendation:
It is recommended that the Council approve the attached ground lease with
Lear Siegler for Airport Parcels 17, 18 and 21 and authorize the execution
of the document.
Prepared by: John Jal i 1 i
Clyde Fitzgerald
John Heme r
JH'pws
Attachment
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GROUND LEASE
This Ground Lease is made this
day of
, 1979, between the City of Santa
Monica, a municipal corporation ("Lessor"), and LEAR SIEGLER,
INC., a Delaware corporation ("Lesseell).
Recitals
1. Lessor owns certain real property hereinafter
described which, by the terms of this instru-
ment, shall be leased to Lessee. Notwithstanding
the relationship of Lessor and Lessee, nothing
herein shall be deemed to abrogate or diminish
Lessor's rights and responsibilities to exercise
its governmental powers.
2. Lessee presently leases from Lessor the follow-
ing real property under the following leases
(hereinafter called "Prior Leases"):
(a) Parcel 21 as shown on Airport Lease Map
2213, Revision 24, on file in the office
of the Santa Monica City Engineer, under
an unrecorded Lease Agreement dated
December 21, 1974, used by Lessee as a
parking lot; and
(b) Certain portions of Parcels 17 and 18 as
shown on said Airport Lease Map 2213,
Revision 24, under an unrecorded Lease
Agreement dated October 15, 1976, on which
is located the structure commonly known
as The Naval Armory Building, 3400 Airport
Avenue, Santa Monica Municipal Airport,
used by Lessee as an office building.
3. Lessee requires additional space for its needs
and desires to obtain from Lessor a long-term
ground lease for the premises described above
on which to construct a multistory building.
4. Lessor is willing to grant Lessee seid long-
term ground lease, all upon and subject to
the terms, covenants and conditions herein-
after set forth:
NOW, THEREFORE, LESSOR AND LESSEE COVENANT AND AGREE
AS FOLLOWS:
1.
Premises. Lessor leases to Lessee, and Lessee leases
from Lessor, that certain land and building located in the City
of Santa Monica, County of Los Angeles, State of California
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described in Exhibit A and outlined in red on Exhibit B,
together with all rights, privileges, easements and appurten-
ances to such land ('lthe premisesll).
2.
Termj Possession
2.1 Term. The term of this Lease shall be fifty-
five (55) years and shall commence upon the satisfaction of
all of the following conditions (anyone or mDre Df which may
be waived by Lessee);
(a) The expiration of thirty (30) days follow-
ing the filing by Lessor with the Los Angeles County Clerk Df
a notice, pursuant to Section 21152 of the Public Resources
Code to the effect that an environmental impact repDrt pursuant
to the Environmental Quality Act Df 1970, as amended, has been
prepared and filed concerning this Lease or that such report
is not required, during which 30-day periDd no lawsuit or
other proceeding has been filed or commenced, which, in the
opinion of counsel for Lessee, could have the effect of
preventing the parties hereto from entering into this Lease
or substantially affecting performance by either party hereunder;
(b) All required governmental approvals have
been Dbtained to permit Lessee to construct a multistory Dffice
building on the premises exceeding the present forty-five (45)
foot building height limit applicable to the premises under
existing ordinances and regulations; and
(c) The approval by LeSSDr of Lessee's prelimin-
ary plans and sketches for said office building, in accordance
with paragraph 5.7 hereof.
2.2 Time Period for Co~ditions ~!ecedent. If all
of the foregoing conditions have not been satisfied (Dr waived
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by Lessee) on or before January 31, 1980, this Lease shall
terminate and the Prior Leases shall be reinstated and
revived.
2.3 Coo?eration and Assistance. Lessor agrees to
fully cooperate with and assist Lessee in obtaining any
required permits, waivers, variances and other governmental
approvals, including those which Lessor as a municipality
has the power to issue, in order to satisfy the foregoing
conditions precedent and to facilitate Lessee's construction
and completion of the initial improvements desired to be con-
structed by Lessee on the premises.
2.4 Possession. Lessee is in possession of the
premises under the Prior Leases and shall continue in possession
under the terms thereof until commencement of the term hereof.
Thereafter Lessee's possession shall continue under the
terms of this Lease.
2.5 Agreement Establishing Commencement Date. The
parties agree to enter into a mutual acknowledgement, in
recordable form. as to the commencement date of the term hereof,
when all of the conditions in paragraph 2.1 have been satisfied.
3. Rent.
3.1 Basic Rent. Lessee agrees to pay. as rental
for the premises:
(a) From the commencement of the term hereof
until the earlier of the expiration of two years from said
commencement date or the date a notice of completion is
recorded covering the office building to be constructed on
the pr~mises as hereinafter provided, the aggregate amount of
monthly rental payable under the Prior Leases; and thereafter,
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(b) A basic annual rent of two hundred fifty
thousand dollars ($250,000), payable at the monthly rate of
twenty thousand eight hundred thirty-three dollars and thirty-
three cents ($20,833.33) on or before the 10th day of each
month during the continuance in force of this Lease.
Rent for any partial month shall be pro-
rated at the rate of 1!30th of the applicable monthly rent
per day.
3.2 Periodic Cos~ of Livin~ Adjustment. The basic
monthly rent provided for in Section 31. (b) shall be subject
to adjustment at the commencement of the sixth year of the
term and every five (5) years thereafter ("the adjustment
date") as follows:
The base for computing the adjustment is The Consumer
Price Index for All Urban Consumers (base year 1967=100) for
Los Angeles-Long Beach, published by the United States
Department of Labor, Bureau of Labor Statistics ("Index"),
which is published for the month nearest the date of the
commencement of the term ("Beginning Indexll). If the Index
published nearest the adjustment date ("Adjustment Indexll) has
changed over the Beginning Index, the basic monthly rent for
the following five years (until the next rent adjustment) shall
be set by multiplying the basic monthly rent set forth in
Section 3.1 (b) by a fraction, the numerator of which is the
Adjustment lndex and the denominator of which is the Beginning
Index. On adjustment of the basic monthly rent as provided in
this Lease, the parties shall immediately execute an amendment
of the Lease stating the new basic monthly rent.
If the Index is changed so that the base year differs
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from that used as of the month immediately preceding the month
in which the term commences, the Index shall be converted in
accordance with the conversion factor published by the United
States Department of Labor, Bureau of Labor Statistics. If
the Index is discontinued or revised during the term, such
other government index or computation with which it is replaced
shall be used in order to obtain substantially the same result
as would be obtained if the Index had not been discontinued
or revised.
4. Use. Lessee shall have the right to use the premises
for any lawful use, which includes but is not limited to
office space, storage, research and development, and manu-
facturing. Lessee may enter into agreements restricting use
of, and granting easements or licenses over the premises, and
may obtain zoning changes or conditional use permits. If
Lessee so requests, Lessor agrees to initiate proceedings for
a zoning change or to join with Lessee in applications and
proceedings for entitlements to use from other governmental
agencies.
5. Improvementsi Constructioni Alterations.
5.1 Ownership of Improvements. The parties agree
that during the term title to all new improvements constructed
on the premises are and will be vested in Lessee, and that
such improvements are real property. The word "improvements"
as used in this Lease includes, without limitation, all
buildings, structures, fixtures (including the trade fixture
of subtenants), paving, landscaping and other physical improve-
ments on the premises.
5.2 Construction and Alteration. At any time and
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from time to time during the term of this Lease, Lessee may,
but is not obligated to, construct or otherwise make new
improvements on any part or all of the premises (except as
provided in paragraph 10), and may (but is not obligated to
except as provided in paragraph 10) demolish, remove, replace,
alter, relocate, reconstruct, or add to any existing improve-
ment on the premises in whole or in part, and to modify or
change the contour or grade, or both, of the land. All
salvage shall belong to Lessee and all such improvements shall
fully comply with applicable laws and procedures.
Specifically, Lessee shall have the right, on the
terms and conditions provided for in this Article, to demolish
and remove existing improvements on the premises and to
construct new improvements on the premises, which improvements
shall include, without limitation, an office building and
related on-site and off-site improvements, including required
parking spaces. The entire cost and expense of construction
of new improvements on the premises, including plans,
specifications and permits in connection therewith, shall be
borne entirely by Lessee.
5.3 Completion of Construction and Alteration. Once
any work of construction, alteration, improvement, or demolition
has begun, Lessee shall with reasonable diligence prosecute the
same to conclusion. All construction, alteration, and work of
improvement shall be performed in a good and workmanlike manner,
and shall comply with all applicable governmental permits and
laws.
5.4 Notice of Construction; Mechanics I Liens.
Lessee agrees that Lessor shall have the right to enter upon
the premises to post notices of nonresponsibility and Lessee
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shall post such notices on Lessor's behalf upon request.
Lessee shall pay and discharge all expenses incurred
by Lessee for the services of mechanics or for the cost of
goods and materials delivered by materialmen, and to save and
hold harmless the Lessor from any claims by such mechanics or
materialmen for labor or services performed or goods delivered
at the instance or request of the Lessee. Lessee shall have
the right to contest the validity or amount of any asserted
lien, claim, or demand, and in such case Lessee shall defend,
at its own expense, any such suits, and shall discharge and
satisfy any judgments taken on account of claims of lien filed
by mechanics or manterialmen for work ordered by Lessee.
5.5 Lessor's Waiver. Lessor agrees from time to
time during the term upon written request from Lessee. to
execute and deliver any instrument, release, or other document
that may be required by any equipment supplier, vendor and/or
lender whereby Lessor waives and/or releases any rights it
may have or acquire with respect to any equipment or trade
fixtures Lessee or any subtenant may affix to the premises
and agreeing that the same do not constitute realty regardless
of the manner same are attached to the premises.
5.6 Security for Completion. To secure Lessee's
obligation to complete construction of said office building
Lessee agrees, at Lessee's sole option, upon the commencement
of the term hereof, to:
(a) Deposit in a trust fund or escrow account
for the benefit of Lessor (with all earnings thereon to accrue
to the benefit of Lessee) the sum of One Hundred Twenty-Five
Thousand Dollars ($125,000) (which sum is hereinafter referred
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to as the "Liquidated Damages"); or
(b) Obtain a Letter of Credit from a bank with
total assets of at least $10,000,000 in favor of Lessor in
the amount of the Liquidated Damages; or
(c) Obtain a completion bond covering the
construction of said office building in the amount of the
Liquidated Damages.
The governing instruments under the alternative
selected by Lessee shall provide, in addition to the usual
and customary terms in such instruments,
(i) That if Lessee fails to complete said
office building, as evidenced by recording of a notice of
completion, wi thin three years after commencement of the
term hereof, except due to causes beyond Lessee's reasonable
control excluding financial inability, said Liquidated Damages
shall be paid to Lessor, and
(ii) Upon recording of said notice of
completion, Lessor's right to receive payment thereunder shall
cease and any funds on deposit shall be returned to Lessee.
5.7 Consent of Lessor to Improvements. Lessee
shall be required to obtain Lessor's approval, which shall
not be unreasonably withheld, of the preliminary plans and
sketches for the office building referred to in paragraph
5.2 above. Thereafter, Lessor's consent, which shall not
be unreasonably withheld, shall be required only for any
improvement constructed on the premises after completion
of said office building, the cost of which will exceed fifteen
percent (15%) of all improvements on the premises.
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Lessor hereby irrevocably delegates to the then
incumbent City Manager of Lessor (or City official having
substantially equivalent powers and duties if the office of
City Manager is abolished) the sole power and responsibility
to consider and act upon all such requests for consent or
approval.
6. Repairs and Maintenance.
6.1 Lessor's Nonresponsibili~v. During the term of
this Lease, Lessor shall not be required to maintain or make
any repairs, or replacements of any nature or description
whatsoever to the improvements located on the premises. Lessee
hereby expressly waives the right to make repairs at the
expense of Lessor as provided for in any statute or law in
effect at the time of execution of this Lease, or in any other
statute or law which may hereafter be enacted.
6.2 Lessee's Duty to MaintainPremises. Throughout
the term of this Lease, Lessee shall, at Lessee's sole cost,
maintain the improvements on the premises in accordance with
all applicable laws, and shall make whatever repairs and
replacements are required by such laws.
6.3 Contest of Governmental Orders. Lessee has
the right to contest by appropriate judicial or administrative
proceedings, without cost to Lessor, the validity or applica-
tion of any law requiring that Lessee repair, maintain, alter
or replace the improvements now or hereafter located on the
premises in whole or in part, and Lessee shall not be in default
for failing to do such work until a reasonable time following
final determination of Lessee's contest.
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7. Assi~ent; Sub1ettingj Lessee's Encumbrances.
7.1 Assignment. Lessee shall not have the right to
assign, sellar otherwise transfer (hereinafter referred to
collectively as Ilassignment") Lessee's interest, in whole or
in part, in this Lease and the estates created by this Lease,
without Lessor's prior written consent, which shall not be
unreasonably withheld, except to (i) a leasehold mortgagee
who succeeds to Lessee's rights hereunder, (ii) to any
corporation with which Lessee may hereafter merge or consolidate,
or (iii) to a purchaser of substantially all of Lessee's
business and assets.
7.2 Subletting.
(a) Subleases.
Lessee shall have the
right at any time and from time to time during the term to
sublet all or any part or parts of the premises and to assign,
encumber, extend, or renew any sublease, provided that:
(i) Lessee remains primarily obligated
to perform Lessee's obligations hereunder.
(ii) Lessee shall use reasonable efforts
to ensure that each sublease entered into after the term of
this Lease commences shall contain a provision requiring the
sublessee, so long as the terms of such sublease are recognized
and honored, to attorn to Lessor, or, in the event of any
proceeding to foreclose any Leasehold Mortgage, to the Lease-
hold Mortgagee, or any person designated in a notice from such
Leasehold Mortgagee, if Lessee defaults under this Lease, and
if the subtenant is notified.
(b) Non-Disturbance Agreement. Lessor agrees
that it will from time to time enter into a so-called "non~
disturbance agreement" with any subtenant of Lessee which
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in bankruptcy of Lessee or by Lessee as debtor in possession.
No termination of this Lease or termination of Lessee's right
of possession of the premises or reletting of the premises by
Lessor predicated on the giving of any notice shall be
effective unless Lessor gives to the Leasehold Mortgagee
written notice or a copy of its notice to Lessee of such
default or termination, as the case may be.
7.3.3 Grace Periods. In the event of any
default by Lessee under the provisions of this Lease, the
Leasehold Mortgagee will have the same concurrent grace periods
as are given Lessee for remedying such default or causing it
to be remedied, plus, in each case, an additional period of
thirty (30) days after the expiration thereof or after Lessor
has served a notice or a copy of a notice of default upon the
Leasehold Mortgagee, whichever is later.
7.3.4 Right to Cure. In the event that
Lessee shall default under any of the provisions of this Lease,
the Leasehold Mortgagee, without prejudice to its rights
against Lessee, shall have the right to make good such default
within the applicable grace periods provided for in the
preceding section of this Article whether the same consists
of the failure to pay rent or the failure to perform any other
matter or thing which Lessee is hereby required to do or
perform, and Lessor shall accept such performance on the part
of the Leasehold Mortgagee as though the same had been done
or performed by Lessee. For such purpose Lessor and Lessee
hereby authorize the Leasehold Mortgagee to enter upon the
premises and to exercise any of Lessee's rights and powers
under this Lease, and subject to the provisions of this Lease,
under the Leasehold Mortgage. In the event of any default
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under this Lease, and if prior to the expiration of the
applicable grace period specified in Section 7.3 of this
Article, the Leasehold Mortgagee shall give Lessor written
notice that it intends to undertake the curing of such default)
or to cause the same to be cured, or to exercise its rights to
acquire the leasehold interest of Lessee by foreclosure or
otherwise, and shall promptly commence and then proceed with
reasonable diligence to do so, whether by performance on
behalf of Lessee of its obligations under this Lease, or by
entry on the premises by foreclosure or otherwise, then
Lessor will not terminate or take any action to effect a
termination of this Lease or re-enter) take possession of
or relet the premises or similarly enforce performance of this
Lease so long as the Leasehold Mortgagee is, with reasonable
diligence and in good faith, engaged in the curing of such
default, or effecting such foreclosure, provided, however,
that the Leasehold Mortgagee shall not be required to continue
such possession or continue such foreclosure proceedings if
such default shall be cured.
7.3.5 New Lease. In the event that this Lease
is terminated by Lessor or in the event Lessee's interest
under this Lease shall be sold, assigned or transferred pursuant
to the exercise of any remedy of the Leasehold Mortgagee, or
pursuant to judicial proceedings, and if (i) no rent or other
charges shall then be due and payable by Lessee under this
Lease, and (ii) the Leasehold Mortgagee shall have arranged
to cure any other default of Lessee under this Lease) then
Lessor, within thirty (30) days after receiving a written
request therefor, which shall be given within sixty (60) days
after such termination or transfer and upon payment to it of
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8.
Taxes and Utilities. Lessee shall pay all validly
assessed taxes and all charges for water, electricity, gas,
telephone or any other utilities and services furnished
and rendered to the premises during the term.
9. Indemnity; Liability Insurance.
9.1 Indemnity. Lessee shall hold harmless Lessor
from all damages arising out of any damage to any person or
property occurring in, on or about the premises except that
Lessor shall be liable to Lessee for damages to Lessee arising
out of any damage to any person or property occurring in,
on, or about the premises resulting from the acts or
omissions of Lessor or its authorized representatives, and
with respect to such damages Lessor shall hold harmless Lessee
from all such damages.
9.2 Public Liability Insurance. Throughout the
term of this Lease, Lessee shall at its sole cost, keep or
cause to be kept in force, in which Lessor is an additional
insured, combined bodily injury and property damage liability
insurance with a minimum coverage of $1,000,000 per occurrence.
Such insurance shall be issued by a company or
companies licensed to do business in California, or one of the
states of the United States. On commencement of the term
Lessee shall deliver to Lessor certificates of insurance
indicating that Lessee has complied with the provisions of
this paragraph. Such policies shall also provide that they
will not be cancelled or materially changed except after
ten (10) days notice to Lessor.
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10. Destruction; Fire Insurance.
lO.l Insured Casualty - Proceeds Available. If the
improvements on the premises are damaged or destroyed totally
or partially by a risk which is insured against by the
insurance referred to in paragraph lO.4, Lessee shall repair
and rebuild the damaged or destroyed improvements within a
reasonable time after Lessee receives the insurance proceeds
payable as a result of the damage or destruction. Lessee
reserves the right during the repair of damage or destruction
to make changes in the building or, subject to Lessor's
consent, which shall not be unreasonably withheld, to erect
a different type of building.
10.2 Insured or Uninsured Casualty-Proceeds Not
Available. If the improvements on the premises are damaged or
destroyed totally or partially by a risk which is insured
against by the insurance referred to in paragraph 10.4, but
the insurance proceeds are not available to Lessee because
the holder of the encumbrance which covers the premises at the
time elects to have the proceeds applied to the debt secured
by such encumbrance, or if the improvements on the pr~mises
are damaged or destroyed totally or partially by a risk not
insured against by the insurance referred to in paragraph 10.4,
Lessee shall have the following elections:
(a) Obtain a construction loan secured by a
new Leasehold mortgage; or
(b) To elect to terminate this Lease.
Lessee shall make its election as herein provided
within 60 days after it is determined that the insurance
proceeds will be unavailable to Lessee.
If Lessee elects under subparagraph (a), Lessee
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shall repair and rebuild the damaged or destroyed improvements
within a reasonable time after the proceeds for repairs and
rebuilding are made available to Lessee. If Lessee elects under
subparagraph (b), Lessee shall demolish and remove the damaged
improvements.
10.3 Damage Or Destruction During Last Part of
Term. Notwithstanding paragraphs lO.l and 10.2 to the
contrary, if there is damage or destruction to the improvements
on the premises during the last 5 years of the term, Lessee
shall have the election to terminate this Lease as herein
provided, in which event any insurance proceeds shall be paid
to Lessor.
10.4 Fire Insurance. Lessee at its cost shall
maintain on the improvements on the premises a policy of standard
fire and extended coverage insurance, with vandalism and malicious
mischief endorsements, to the extent of at least 90% of full re-
placement value. The insurance policy shall be issued in the
names of Lessor, Lessee, and any lender, as their interes~appear.
The insurance policy shall provide that any proceeds shall be
made payable to Lessee, and Lessee shall apply and use such
proceeds as required by this paragraph lO, subject to the
righ ts of any lender.
Such insurance shall be issued by a company or
companies licensed to do business in California. On commence-
ment of the term Lessee shall deliver to Lessor certificates
of insurance indicating that Lessee has complied with the
provisions of this paragraph. Such policies shall also
provide that they will not be cancelled or materially changed
except after 10 days notice to Lessor.
11. Cond~ation.
ll.l Definitions. The following words and phrases
shall have the following meanings for the purposes of this
paragraph:
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(a) "Cond2nmation" means (i) the exercise of
any governmental power, whether by legal proceedings or other-
wise, by a condPmnor, and (ii) a voluntary sale or transfer
by Lessor to any condemnor, either under threat of condemnation
or while legal proceedings are pending.
(b) "Date of taking" means the date the
condemnor takes possession of the property being condAmned
or the date the condemnor acquires title to the property,
whichever first occurs.
(c) "Award" means all compensation, sums, or
anything of value awarded, paid, or received on a total or
partial condemnation.
(d) "Condemnor" means any public or quasi-
public authority, or private corporation or individual, having
the power of condemnation, excluding Lessor or its affiliates,
which shall not have such power with respect to the premises.
11.2 Rights and Obli~ations of Parties. If, during
the term, there is any condemnation of all or any part of the
premises or any interest in this Lease, the rights and obliga-
tions of the parties shall be determined pursuant to this
paragraph 11.
11.3 Total Taking - Effect on Lease. If the total
premises are taken by condemnation, this Lease shall terminate
on the date of taking.
11.4 Partial Taking - Effect on Lease. If any
portion of the premises is taken by condpmnation this Lease
shall remain in effect, except that Lessee shall have the
election to terminate this Lease if Lessee determines that
the remaining portion of the premises will be uneconomical for
Lessee's continued use, operation and management, as determined
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by Lessee in its sole discretion. Lessee's election must
be made within 60 days after the date of taking.
ll.5 Partial Taking ~ Reduction of Rent.
If any portion of the premises is taken by condemnation,
and this Lease remains in full force and effect, the basic
annual rent shall be reduced, commencing on the date of
taking, in the same proportion that the area of the portion
of the pre~ises taken by the cond~m~or bears to the total
area of the premises immediately before the date of taking.
ll.6 Restoration of Premises. If there is
a partial taking of the premises and this Lease remains in
full force and effect pursuant to paragraph 11.4, Lessee
shall restore any partially taken improvements and make such
changes it deems appropriate so as to render the same a
complete architectural unit to the extent permitted by the
severance damages Lessee shall receive. Rent shall be abated
or reduced during the period from the taking until the
completion of restoration, but all other obligations of
Lessee under this Lease shall remain in full force and effect.
The abatement or reduction of rent shall be based on the
extent to which the restoration interferes with Lessee's use,
operation and management of the premises.
ll.7 Distribution of Award. The condemnation
award shall be apportioned between Lessor and Lessee as
follows:
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(l) For Lessee: That amount of said award attribu-
table to the value of the improvements then existing on the
premises, the value of Lessee's leasehold interest in the
premises, and severance damages; (2) For Lessor: The
remainder of said award.
11.8 Condemnation By Assessment D~strict. Notwith-
standing anything contained to the contrary in this paragraph
ll, if any such condemnation be by an assessment district or
other governmental agency whereby the cost of acquiring the
property is assessed against the premises, Lessee shall
exercise one of the following options by notice to Lessor
prior to the date of taking: (i) Lessor shall receive the
award for the land taken and thereafter pay the assessment
attributable to the cost of acquiring the land, or (ii) Lessee
shall receive the award for the land taken and thereafter shall
pay the assessment attributable to the cost of acquiring the
land. If Lessee elects under item (i), and Lessor thereafter
shall default in the payment of any installment of such assess-
ment, then Lessee in addition to all other rights and remedies
available to Lessee shall have the right to pay any such
installments and deduct the amount so paid from the next rents
due Lessor until Lessee shall be fully reimbursed.
12. Joinder By Lessor In Application For Permits? Licenses,
Etc. Lessor agrees that within ten (10) days after receipt of
written request from Lessee so to do, Lessor shall:
(a) Execute any and all releases referred to
in paragraph 5.5; and/or
(b) Join in and execute any and all documents
of any nature whatsoever in connection with Lessee's dealings
with Assessment Districts; and/or
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(c) Join in and execute any and all applications
for permits, licenses or other authorizations or documents
required by any governmental or other body claiming juris-
diction in connection with any construction and/or demolition
work which Lessee may perform on the premises; and/or
(d) Join in any reasonable grants for ease-
ments for electric, telephone, gas, water, sewer and such
other public utilities and facilities as may be reasonably
necessary in the use, operation and management of the premises
or of any improvements that may be erected thereon; and/or
(e) Execute any and all grants and other
documents necessary to effectuate dedications of portions of
the premises for public use which dedications shall be re-
quired by any governmental or other body claiming jurisdiction
in connection with Lessee's development of the premises.
If, at the expiration of such ten (10) day
period, Lessor shall not have performed its obligations as
hereinabove provided, Lessee shall have the right to execute
such documentation and grants in the name of Lessor, and, for
that purpose, Lessor hereby irrevocably appoints Lessee as
its attorney-in-fact to execute same on behalf of Lessor.
13. Notice of Default. In the event Lessee shall fail
to perform any of the provisions contained herein on Lessee's
part to be performed, Lessee shall not be deemed to be in
breach or default hereunder unless Lessor shall first have
given Lessee sixty (60) days written notice of any alleged
breach or default, other than non-payment of rent, and not less
than thirty (30) days written notice in reference to payment of
rent, and Lessee shall have such periods of time within which
to remedy or cure any such alleged breach or default. Any such
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written notice shall specify the alleged breach or default.
If any default, other than non-payment of rent, cannot reason-
ably be cured within 60 daY8~ the commencement of the cure of
such default within such 60 day period shall be deemed to be
a cure of such default, provided such cure is diligently
prosecuted to completion.
l4. Estoppel Certificates. Lessee and Lessor shall, at
any time and from time to time during the term hereof and upon
not less than ten (10) days prior request by the other party,
execute, acknowledge and deliver to Lessor, or Lessee, as the
case may be, a statement in writing certifying that this Lease
is unmodified, and in full force and effect (or if there have
been any modifications, that the same is in full force and
effect as modified and stating the modifications) and, if so,
the dates to which the fixed rent and other charges have been
paid in advance, it being intended that any such statement
delivered pursuant to this paragraph may be relied upon by
any prospective purchaser, encumbrancer, or assignee of the
premises.
If, at the expiration of such ten (10) day period,
a party shall not have performed its obligations as herein-
above provided C1defaulting partyll), the other party shall
have the right to execute such statement in the name of the
defaulting party~ and, for the purpose~ eachof the parties
hereto irrevocably appoints the other as its attorney-in-fact
to execute same on its behalf.
15. Approval By Leasehold Mortgagees. Approval of the
provisions of this Lease may be required by Leasehold Mortgagees.
I f any such Mortgagee should require any modifications of the
provisions of this Lease, Lessor will approve and execute any
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such modifications, provided, no such modification shall
relate to the rent payable hereunder, the length of the term,
or materially change the rights and obligations of Lessor and
Lessee.
16. Notices. Wherever this Lease provides for notices,
communications or demands between the parties, or by Lessor
or Lessee to any mortgagee, or wherever the law requires or
gives the right of serving a notice, the same shall be served
by registered or certified mail, addressed to LESSOR and LESSEE
as follows:
(a) If to LESSOR:
City of Santa Monica
Santa Monica City Hall
l685 Main Street
Santa Monica, California 90401;
(b) If to LESSEE:
The President
Lear Siegler, Inc.
3171 South Bundy Drive
Santa Monica, California 90406,
With a copy to:
General Counsel, at the above address;
(c) To any Leasehold Mortgagee as directed at the
address specified in a Leasehold Mortgage or at such other
address as may be specified by a Leasehold Mortgagee in writing
by notice addressed to the Lessor and Lessee in the manner
prescribed by this paragraph.
Lessor, Lessee and any mortgagee may, at any time
change the place of receiving notice by written notice of such
change of address given in the manner herein provided.
17. Costs of Suits. If legal action shall be brought by
either of the parties hereto for the unlawful detainer of the
premises, for the recovery of any rent due under the provisions
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.
of this Lease, or because of the breach of any provision
hereof, the party prevailing in said action (Lessor or Lessee
as the case may be) shall be entitled to recover from the party
not prevailing costs of suit and reasonable attorney's fees
which shall be fixed by the judge of the court.
l8. Right of First Refusal to Purchase Premises. If,
during the term of this Lease, Lessor elects to sell the
premises, Lessor shall promptly give written notice to Lessee
("Notice of Sale") and Lessee shall, for a period of sixty
(60) days have the right to commence proceedings to purchase
the premises at the thenmir market value of the premises as
determined by a panel of three independent appraisers mutually
selected by Lessor and Lessee (or by a court of competent
jurisdiction in the event Lessor and Lessee are unable to
agree upon such selection within sixty (60) days after the
Notice of Sale). Once selected, said appraisers shall complete
their appraisal within forty-five (45) days.
If Lessee elects to purchase the premises at the
purchase price cetermined by said panel, Lessee shall give
written notice to Lessor within thirty (30) days following
completion of the appraisal ("Purchase Notice"). Lessor and
Lessee shall open an escrow within ten (lO) days following
receipt of the Purchase Notice by Lessor with a title insurance
company or bank selected by Lesseet which shall close within
sixty (60) days after opening. The purchase price shall be
paid in cash at the close of escrow and marketable title shall
be conveyed to Lessee by grant deed, subject only to conditions,
covenants, restrictions, easements and encumbrances (other
than mortgages or trust deeds of the fee interest in the
premises) of record. Lessor shall at Lessor's expense provide
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Lessee with a CLTA Standard Coverage Policy of Title Insurance
in the amount of the purchase price. All other costs and
expenses of the appraisal proceeding and escrow shall be
shared equally by Lessor and Lessee.
If Lessee does not give Lessor a Purchase Notice,
Lessor shall be free to offer the premises on the open market
for 180 days. If thereafter at any time during the continuance
in force of this Lease Lessor receives a bona fide offer to
purchase the premises at a purchase price less than the price
determined by said panel of appraisers, Lessor shall not accept
said offer without first offering to Lessee the right to purchase
the premises upon the same terms and conditions and at the same
price as contained in said offer, for a period of thirty days.
19. Surrender of Premises; Title to Improvements. Upon
expiration of the term all improvements then existing upon the
premises shall become the property of Lessor, provided, if this
Lease shall terminate for any reason other than Lessee's wilfull
default prior to the expiration date, Lessor shall pay Lessee
the then fair market value of the improvements constructed on
the premises by Lessee and Lessee's subtenants as determined by
an independent appraiser mutually selected by Lessor and Lessee
(or appointed by a court of competent jurisdiction if Lessor
and Lessee are unable to agree upon the selection of such
appraiser). Lessor and Lessee mutually undertake to cause
such selection, appraisal and payment of the appraised value to
proceed with all reasonable dispatch following such termination.
20. Miscellaneous Provisions.
20.1 Recordation. This Lease shall not be recorded;
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only an abstract of this Lease shall be recorded, which shall
be in form and substance as Exhibit C. The abstract shall be
recorded upon the execution of this Lease.
20.2 ~~me of Essence. Time is of the essence of
each provision of this Lease.
20.3 California Law. This Lease shall be construed
and interpreted in accordance with the laws of the State of
California.
20.4 I~te~rated ~reement; Modification. This Lease
contains all the agreements of the parties with respect to
the tenancy created by this Lease and cannot be amended or
modified except by a written agreement.
20.5 Use of Definitions. The definitions contained
throughout this Lease and in paragraph 20.6 shall be used to
interpret this Lease.
20.6 D~finitions. As used in this Lease, the
following words and phrases, and their inflectional forms,
shall have the following meanings:
Authorized representatives - any officert agent
employee, or independent contractor retained or employed by
either party, acting within authority given him by that party.
Dama~e - injury, deterioration, or loss to a
person or property caused by another person's acts or
omissions. Damage includes death.
Damages - a monetary compensation or indemnity
that can be recovered in the courts by any person who has
suffered damage to his person, property or rights through
another's act or omission.
Destruction - any physical damage, as defined
herein to, or disfigurement of, the premises.
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Encumbrance - any deed of trust, mortgage or
other written security device or agreement affecting the
premises, and the note or other obligation secured by it,
that constitutes security for the payment of a debt or perform-
ance of an obligation.
Expiration - the coming to the end of the time
specified in the Lease as the duration of the term.
Hold harmless - to defend and indemnify from
all liability, losses, penalties, damages as defined herein,
costs, expenses (including, without limitation, attorneys'
fees), causes of action, claims, or judgments arising out of
or related to any d~mage, as defined herein, to any person
or property.
Laws - all judicial decisions, statutes, charters,
constitutions, ordinances, resolutions, regulations, rules,
administrative orders, and other requirements of all municipal,
county, state, federal, and other government agencies and
authorities having jurisdiction over the parties or the
premises, or both, in effect either at the time of execution
of the Lease or at any time during the term, including, without
limitation, the regulations or orders of quasi-official
entities or bodies (e.g., boards of fire examiners and public
utilities).
Lender - the beneficiary, mortgagee, secured
party, or other holder of an encumbrance as defined herein.
Lien - a charge imposed on the premises by
someone other than Lessor by ~hich the premises are made
security for the performance of an act. The references in this
Lease are primarily to mechanics' liens.
Provisions - all terms, agreements, covenants,
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conditions, clauses, qualifications, restrictions, reservations,
and other stipulations in the Lease that define or otherwise
control, establish, or limit the performance required or
permitted by either party.
Rent - Basic annual and monthly rent and other
similar charges payable by Lessee under this Lease.
Termination -
the ending of the term for any
.
.
reason before expiration as defined herein.
20.7 Exhibits. All exhibits referred to are
attached to this Lease and incorporated by reference.
20.8 Prepaid and Unearned Rent. If this Lease
shall terminate, and Lessee shall not be in default at the
time, Lessor will immediately return to Les~ee all prepaid
and unearned rent.
20.9 Grammatical Intentj Heirs. The words "Lessor"
and "Lessee" as used herein shall include the plural as well
as the singular. The covenants and agreements contained
herein shall be binding upon and be enforceable by the parties
hereto and their respective heirs, executors, administrators,
successors and assigns.
21.
Streets; Access.
2l.l Access. Lessor grants to Lessee and its
successors, invitees and assigns during the lease term the
non-exclusive right to use the non-dedicated streets and
means of access outlined in blue on Exhibit B as a means of
access to and from the leased premises. Lessor reserves the
right to dedicate the streets and Lessee agrees to execute any
documents that may be necessary for such dedication. Lessor
also reserves the right to file such subdivision maps as
Lessor desires, and Lessee agrees to join in and execute such
maps if Lessor so desires. All of the foregoing will be done
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at no cost or liability to Lessee. Lessor shall maintain such
non-dedicated streets and means of access in good condition
and repair at its own cost and expense throughout the lease
term. or at Lessor's sole cost and expense provide alternate
streets and means of access of equivalent utility in light of
the then use of the premises.
21.2 Street Widenin~. If at any time Lessor widens
the non-dedicated street known as "Airport Avenue" from Bundy
Drive to Walgrove Avenue, Lessee agrees to pay a fair pro-
portionate share of Lessor's actual cost of widening that
portion of Airport Avenue which is contiguous with the
northwesterly property line of the premises, being approx-
imately 715 feet in length.
22. Termination of Existin~ Leases. Upon the commence-
ment of the term hereof the Prior Leases shall terminate.
provided, however, that in the event Lessee exercises its
right to terminate this Lease pursuant to any right of termin-
ation granted to Lessee hereunder, the Prior Leases shall be
reinstated and revived, effective upon such termination at
Lessee' s option.
23. Lease Not Conditional. Except as expressly set
forth herein the obligations of Lessee and Lessor are not
conditioned upon the occurrence of any event or events and.
specifically, the obligations of Lessee hereunder are not
conditioned upon the continued operation of the Santa
Monica Airport as a general aviation facility.
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The foregoing Lease, consisting of 30 pages, has
been executed on the date first set forth above.
LESSOR,
CITY OF SANTA MONICA,
a municipal corporation
By
City Manager
ATTEST:
City Clerk
Approved as to form this
day of
, 1979.
City Attorney
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On this day of , 1979, before
me appeared , known
to me to be the City Manager of the City of Santa Monica,
California, and acknowledged that he, as such officer, being
authorized so to do, executed the foregoing instrument for
the purposes therein set forth, by signing the name of the
City by him as such officer.
In witness whereof, I have hereunto set my hand and
official seal.
Notary Public
[Notarial Seal]
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tt
~X::r!BI':' ~ TO GROUND LEASE
DESCUP'I':O~ OF PRE"USES
Legal Oescr1ption of Parcels 17. 18, and 21
per Map No. 2214 of the Santa Monica Mun1cipal
Airport Lease Map.
February 7. 1979
Those port1ons of lots 156-164 and 169 of Tract No. 10529 in the City
of Santa Monica, County of Los Angeles, State of California, as per
~ao recorded in ~ap Book 160, pages 21 through 25, in the off1ce of
the Recorder of said County, within the lines described as follows:
Commencing at the ~ost easterly corner of said Lot 164 also belng the
most easterly corner of the City of Santa ~onica; thence southwesterly
along the southeasterly C1ty L1mits line and tract line 6.96 feet to
the point of beginning; thence continuing south 57015'23" 'ilest along
said City Limits and tract line 736.91 feet; thence ~arth 34056'37"
:Jest 210.82 feet more or less to the southeasterly l1ne of Airoort Ave.,
38 feet wide; thence North 57027'13" East along the sQutheasterly line
of ~i~port Ave. 715.~9 feet to the beginning of a tangent curve,
concave southerly and havlng a rad1US of 30 feet; thence easterly
along said curve an arc distance of 47.08 feet to a point of tangency
on the southwesterly line of Bundy Drive, 80 feet wide; thence south-
easterly along said soutnwesterly line of Bundy Drive 177.97 feet
more or less, to sald point of beginning.
The above parcel contains 154,941 square feet.
P""epared by:
Cnecked by:
Toivo E. Marjanen )
3il1 Conklin )
both in the Engineering Department
of the City of Santa Monica
EXHIBIT A
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E2:QIIBIT l? TO GROUND ~
PLOT PLAN or P,REMISES MTD ACCESS ROAD
LESSOR:
The City of Santa Monica
LESSEE:
Lear Siegler, Inc.
PREMISES: Parcels 17, 18 and 21 as shown on Map
No. 2214 of the Santa Monica Municipal
Airport Lease Map.
[Outline land area of premises in red]
[Outline Airport Avenue from Bundy to Walgrove in Blue]
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.
.
"
6. STREETS AND ACCESS. Reference is particularly made
to paragraph 21 and Exhibit liB" to the Lease wherein Lessor
agrees to maintain certain non-dedicated streets and means
of access to the premises or, at Lessor's sole cost and
expense, provide alternate streets and means of access of
equivalent utility.
7. PURPOSE OF MEMORANDUM OF LEASE. This Memorandum of
Lease is prepared for the purpose of recording, and in no
way modifies the express and particular provisions of the
Lease.
EXECUTED on the above stated date.
CITY OF SANTA MONICA,
a municipal corporation
ATTEST:
By
"LESSOR"
LEAR SIEGLER, INC.,
a Delaware Corporation
ATTEST:
By
lILESSEEIJ
[Add Notarial Acknowledgments]
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EXHIBIT ~ TO GROUND LEASE
PLOT PLAN OF PREMISES AND ACCESS ROAD
LESSOR:
The City of Santa Monica
LESSEE:
Lear Siegler, Inc.
PREMISES: Parcels 17, 18 and 21 as shown on Map
No. 2214 of the Santa Monica Municipal
Airport Lease Map.
[Outline land area of premises in red]
[Outline Airport Avenue from Bundy to Walgrove in Blue]
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