SR-08-14-1979-10BTO: Mayor and City Council
FROM: City Staff
Santa Monica, California, July 12, 1979
� r
AUG 1 4 19 7
SUBJECT: Council Approval of Bi -Phase Energy Systems Proposed
Sub -lease of a Portion of Basement at 2800 Airport
Avenue (Former Army Reserve Facility) to Bryn Mawr Co.
Introduction
Bi -Phase Energy Systems(Lessee, former Army Reserve Facility,
Lease Contract #3159(C.C.S) is proposing to sub -lease approx-
imately 2000 square feet of the basement area to the Bryn Mawr
Company to conduct wholesale computer equipment operation.
Background
The Airport Commission at its regular meeting Wednesday, July 11,
1979 formally considered and recommended City approval of the
proposed sub - lease. (Note:Said sub -lease term is scheduled to
terminate on December 31, 1981, the same termination date of the
above Master Lease.)
(Additional Note: Pursuant to Paragraph 5 of Bi -Phase Lease
Contract #3159(C.C.S.), lessee is committed to pay 1/2 of any
monthly sub rental in excess of the basic Bi -Phase rental of $6600.00
per month. Bryn Mawr is paying $550.00 per month, thearef ore no
excess payment is required until sub - rentals exceed the $6600.00.)
C
AUG 1 4 1979
Mayor and City Council -2- July 12, 1979
Alternative Solution
None recommended.
Recommendation
Approve proposed sub - lease.
Prepared by: C.V, Fitzgerald, Airport Director
Blvd., Sanle Munn.a, WA 8U4Ub
210 -3,4 91
{
Research- Cottrell
BES -RS -79 -252
June 20, 1979
Mr. Clyde Fitzgerald
Airport Director
Santa Monica Airport
3200 Airport Avenue
Santa Monica, California 90405
Dear Mr. Fitzgerald:
Proposed Sublease to Bryn Mawr
As I discussed with you, Biphase Energy Systems is proposing
to rent a portion of the basement at 2800 Airport Avenue to
the Bryn Mawr Company. Per your request, ten copies of the
proposed sublease and Application for Commercial Operations
permit are enclosed. The originals are in my possession.
Please let us know when this item will appear on the Commis-
sion's agenda so that we may request City approval of the
sublease.
Sin rely,
r
ob'er es
e al Counse
RS:br
Enclosures - noted
" .wnY G�:u'i155IUS idk:d�\
AGENDA.
APPLICATION FOR
COMMERCIAL OPERATIONS PERMIT
AT SANTA MONICA MUNICIPAL AIRPORT
1. NAME: 'S�YN <cAlP4Al Y
Company or Corporation
2. PRESENT ADDRESS:
3. PROPOSED ACTIVITY: I^/HULESAGf Iii(.' i /14T /onJ DiC
�ow:R�71 =,P FE/1 /�i/:rIAL �r>�tiP"2 =w7;
(State fully the proposed type of operation)
4. BASE OF OPERATION: 4jXA —[1— Ave
�0 rot �/�9f_= �•iti�T �'FLIE� .
(Applicant must indicate exact location of proposed operation, giving
lessee's name, street address, parcel number, etc.)
5. Is there a similar activity already in operation at this location!
Yes_ No x (If yes, application is automatically denied.)
6. EXPERIENCE: List fully years of experience - background in activity
applied for - ratings, etc.
` /�Ait oO °nA /io J 3At/cyAw n i e tG�tllla icsj
. MAait <fiNy /i4uFirs�Si�S. AHGJ SALES,
(attach sheet if added space is needed)
7, rin� ICIA, amnTRNRNT: Attach two copies of a bona fide financial statement
of company or individual engaging in activity.
i'
B.;+ REFERENCES: Moral and ethical business background: Attach two letters
{� from responsible citizens attesting to applicants integrity and ability.
1-
Application for Commercial Operations Permit: (Continued)
9. BANK REFERENCE: W�S7r -��✓ �A"�'�' ✓��t7 i���0� 2C<
Savings Checking
10. Signature of Applicant.
toF/
Title:
C
Date:
To be recorded by Airport Department..
Approved by Airport Commissions
Denied by Airport Commission
Date: Permit issued by City Manager:
.q.
N
J
2600 Airport Blvd., Santa Monica, CA 90406
213.391 -0691
Biphase
Energy Systems .. Donald W. Douglas, Jr.
jChairman of the Board \
1
- Research- Cottrell
June 20, 1979
TO WHOM IT MAY CONCERN:
,a Bryn Mawr Company is run by two bright young men, Robert
j Bruce Arnold and Daryl Canfield. I am most happy.to write
this letter of recommendation for them as Robert Arnold is '
my sister's son. tI have known Robert from Day One, so to
speak. His father is the son of H. H. Arnold, the Five -
Star General of World War II fame, whom I also knew well.
Before starting this corporation, Robert was employed by
the Rand Corporation here in Santa Monica, and I can vouch
for his loyalty, integrity and high standards.
I have the opportunity to know Daryl for a few months only,
but he seems to be cut from the same cloth as his partner.
Donald W. Dougl s r.
DWDJR:br
SUBLEASE
THIS SUBLEASE is entered into as of the lst day of April,
1979, between BIPHASE ENERGY SYSTEMS, INC.; a Delaware
corporation (BIPHASE) and BRYN MAWR COMPANY, a partnership
(BRYN MAWR).
BIPHASE, in consideration of the covenants and conditions
herein contained, does hereby lease to BRYN MAWR that certain
portion of premises leased by BIPHASE from the City of Santa
Monica (CITY) under Contract No. 3159 (CCS) and located at
2800 Airport Avenue, Santa Monica, CA 90405;,said certain por-
tion being described as approximately 2,000 square feet of the
lower level of the building, being the northeasterly portion
thereof (SUBLEASED PORTION), together with normal ingress and
egress thereto and therefrom, including use of the main entrance
for delivery purposes. No warranty as to the actual number of
square feet contained is hereby given.
This sublease is made by BIPHASE and BRYN MAWR on the
following terms, 'conditions and covenants:
1. PRIORITY: This is a sublease under a lease between
BIPHASE and CITY and is subject to all terms, conditions, and
covenants in said lease.
2. TERM: The term of this sublease shall be for thirty-
three (33) months beginning 1 April 1979 and ending on 31
December 1981.
3. OPTION: Provided that all terms of this sublease
have been fully complied with and BRYN MAWR is not in default
on the date of notice, BRYN MAWR shall have the right to
exercise any or all of three (3) options to extend the term
of this sublease for an additional two (2) years each, provided
that BIPHASE exercises its option to extend its lease with CITY.
BIPHASE has made no representations to BRYN MAWR about its
intention to exercise its option and BRYN MAWR understand that
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its rights to extend can only be exercised if BIPHASE exercises
its options. In the event BRYN MAWR elects, and is able, to
exercise its option, it shall provide written notice to BIPHASE
At least seventy (70) days prior to expiration of the term of
this sublease.
4. RENTAL: BRYN MAWR shall pay to BIPHASE as rental for
the SUBLEASED PORTION the sum of Sixteen Thousand Five Hundred
Dollars ($16,500.00) payable in monthly installments of Five
Hundred Dollars ($500.00), payable in advance on 1 April 1979
and the first day of each succeeding month, except that the
advance rent for the month of December 1951 shall be paid on
1 April 1979. In addition, BRYN MAWR shall pay to BIPHASE the
sum of Sixteen Hundred and Fifty Dollars ($1,650.00) payable
in monthly installments of Fifty Dollars ($50.00) payable in
advance on 1 April 1979 and the first day of each succeeding
month, except that advance payment for the month of December
1951 shall be paid 1 April 1979 for four (4) parking spaces
plus the use of visitors' spaces as required.
5. IMPROVEMENTS: BIPHASE shall improve the SUBLEASED
PORTION in behalf of BRYN MAWR at the start of occupancy. In
consideration of said improvements, BRYN MAWR will pay to
BIPHASE the sum of Three Hundred and-Fifty Dollars ($350.00)
for each and every month of the term of the lease. BRYN MAWR
agrees to accept the SUBLEASED PORTION as it exists after said
improvements are made, and agrees, at its own expense, to keep
the SUBLEASED PORTION in as good condition and repair as it
was at such time as improvements are completed, ordinary wear
and tear excepted. Upon termination of this sublease, all
improvements become the property of _B.IPHASE.
6. OPTION RENTAL: At the commencement of the initial
option term, the rental shall be adjusted by multiplying the
monthly base rent and parking rent, to wit, Five Hundred and
Fifty Dollars ($550.00) by the same factor by which BIPHASE's
rent payment under its lease with CITY will be increased.
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The rental for the first option term shall be twenty -four times
said increased amount, payable in twenty -four equal install-
ments, payable in advance on the first day of each month. A
similar adjustment shall be made for each succeeding option
term.
7. ASSIGNMENT AND SUBRENTAL: BRYN MAWR shall neither
assign this sublease nor sublet the SUBLEASED PORTION without
first obtaining the written consent of BIPHASE to do so, which
consent shall not be unreasonably withheld. BRYN MAWR under-
m v s'r (ft�6l
stands that BIPHASE may have to obtain consent from CITY prior
to consenting and that consent to one assignment or subletting
shall not be deemed a consent to any subsequent assignment or
subletting. Any assignment or subletting without prior written
consent of BIPHASE shall be void and may, at the option of
BIPHASE, terminate this sublease. BIPHASE: shall be entitled to
one -half (1/2) of rental collected by BRYN MAWR in excess of the
basic rental paid to BIPHASE by BRYN MAWR, including one -half
(1/2) of any advance rental. BRYN MAWR shall keep and maintain
accurate records and BIPHASE shall have the right to audit same
periodically for purposes of verification.
8. MAINTENANCE: BRYN MAWR shall pay for all maintenance
in the SUBLEASED PORTION except roof and exterior building
maintenance costs.
9. TAXES PROPERTY, INSURANCE UTILITIES: BRYN MAWR shall
pay to BIPHASE a pro rata share, based on occupied square foot-
age, and usage of all taxes, property insurance, and utilities
(electricity, gas, water). Based on this formula, BRYN MAWR
agrees that eight and six tenths percent (8.6 %) represents the
approximation of their usage under this sublease.
10. LIABILITY
at its own expense
of Combined Single
insurance insuring
arising out of the
INSURANCE: BRYN MAWR will maintain in effect, /j
during the term of this sublease a policy �tyt
Limit, Bodily Injury and Property Damage Mj
BRYN MAWR and BIPHASE against any liability
use, occupancy, or maintenance of the SUBLEASED
3 -
PORTION. Such insurance shall be a combined single limit policy
in an amount not less that $300,000. The policy shall contain
cross liability endorsements and shall insure performance by
BRYN MAWR of the indemnity provisions of this Paragraph 10.
The limits of said insurance shall not, however, .limit the
liability of BRYN MAWR hereunder. Said insurance shall have a
Lessor's Protective Liability endorsement attached thereto. If
BRYN MAWR shall fail to procure and maintain said insurance,
BIPHASE may, but shall not be required to, procure and maintain
the same, but at the expense of BRYN MAWR.
11. TERMINATION: BIPHASE shall have the right, on ninety
(90) days' written notice to BRYN MAWR, to require that BRYN
MAWR vacate the SUBLEASED PORTION so that BIPHASE can use said
SUBLEASED PORTION for its :own, and no other, use. Such vacat-
ing of the SUBLEASED PREMISES shall terminate this sublease.
Notwithstanding anything contained in this Paragraph 11, BIPHASE
may not exercise its right prior to 1 January 1980 to make BRYN
MAWR vacate by 1 April 1980, at the earliest.
12. LEGAL USE: BRYN MAWR shall maintain SUBLEASED PORTION
in a good, sanitary and clean.condition and shall not commit,
suffer or permit any waste of the SUBLEASED PORTION or any acts
to be done thereon in violation of any law and ordinance and
not use or permit the use of said SUBLEASED PORTION for any
illegal purpose.
13. ALTERATIONS: BRYN MAWR shall not make material alter-
ations or additons upon or to the SUBLEASED PORTION without the
prior written consent of BIPHASE and CITY.
14. LAWS and REGULATIONS: BRYN MAWR shall abide by all
current and future laws and regulations (noise or otherwise)
and hereby waives any and all rights it may have against
BIPHASE and CITY arising from damage which may accrue from "said
laws and regulations.
15. INDEMNITY: BRYN MAWR shall hold BIPHASE and CITY
harmless from any loss or damage arising out of.the use or
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occupancy of SUBLEASED PORTION.by BRYN MAWR, its servants, guests,
or sub - tenants.
16. NOTICES: All notices that may be required to be given
under .this. Lease may be served by certified mail, postage pre-
paid, addressed.to the parties as follows:
CITY OF SANTA MONICA
Attention: Mr. Clyde Fitzgerald,
Airport Director
1685 Main Street
Santa Monica, California 90401
BIPHASE ENERGY SYSTEMS
Attention: Chairman of the Board
2800 Airport Avenue
Santa Monica, California.. 90405
BRYN MAWR COMPANY
Attention: Robert Arnold
2800.Airport Avenue
Santa Monica, California 90405
17'. GOVERNMENT RIGHT: This SUBLEASE and all the provisions
hereof shall he subject to the paramount rights which the United
States Government now has or in the .future may have or acquire,
affecting the control, operation, regulation and taking over the
Airport for the exclusive or non - exclusive use of the Airport
by the United States during time of war or national emergency.
18. CONDEMNATION: If any portion of the SUBLEASED PORTION
is taken by condemnation, this SUBLEASE shall remain in effect,
except that BRYN MAWR may elect to terminate this SUBLEASE if
the remaining portion of the SUBLEASED PORTION is rendered un-
suitable for BRYN MAWR's continued use of the SUBLEASED PORTION
or if because of circumstances arising out of the same condem-
nation BIPHASE decides to exercise its right to terminate its
lease. In the event of such election by BRYN MAWR, notice
thereof shall.be given to BIPHASE no more than fifteen (15)
days after the nature and extent of the taking is finally
determined. If any portion of the SUBLEASED PORTION is taken
by a condemnation and this sublease remains in full.force and
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effect, the minimum rent shall be adjusted to reflect the
impairment of.use. Said adjustment shall be negotiated
with BIPHASE.
19. ARBITRATION: Any controversy which shall arise
between BRYN MAWR and BIPHASE regarding the rights, duties,
or liabilities hereunder of either party shall be settled by
arbitration. Such arbitration shall be before one disinter-
ested arbitrator if one can be agreed upon, otherwise before
three disinterested arbitrators, one named by BRYN MAWR, and
one by BIPHASE and one by the two thus chosen. The arbitrator
or arbitrators shall determine the controversy in accordance
with the laws of California as applied to the facts found by
him or them. The cost of the arbitration proceeding shall
be borne equally by the parties.
Executed at Santa Monica, California, on S I d, 1979
CITY OF SANTA MONICA
by:
Charles K. McClain
City Manager
A O .1 AS TO FORM
b�:SSJtar4c
RICHARD L. KNICKERBOCKER
BIPHASE ENERGY SYSTEMS, INC.
by: ilGt2cz t S
Lance Hays, resident
BRYN MAWR
Robert �irnold, artnner
by' >D /
Robert Daryl Canf
Partner