R112191
City Council Meeting: December 17, 2019 Santa Monica, California
RESOLUTION NUMBER 11219 (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA TO ENTER INTO AN AMENDED AND RESTATED
PERMIT FOR IMPROVEMENTS AND LEASE OPTION AGREEMENT WITH THE
JONATHAN CLUB
WHEREAS, the State of California (State), the City of Santa Monica (City) and the
Jonathan Club (Club) were involved in the early 1980s in lengthy and complex litigation
(People of the State of California v. Jonathan Club, et al., Los Angeles Superior Court
Case Nos. 35486 and WEC 50506 (consolidated)) (Boundary Line Litigation), concerning
the correct location of the boundary between the tidelands and submerged lands owned
in trust by the State and City and the privately owned uplands belonging to the Club; and
WHEREAS, the State, the City and the Club resolved said litigation by means of a
three-part settlement consisting, in part, of the Boundary Line Agreement recorded
December 27, 1984, as Instrument No. 84-1509822 and the original "Permit for
Improvements and Lease Option Agreement” effective as of January 1, 1985 (Original
Lease) for the lease of three parcels (Parcels 1, 2 and 3) seaward of the boundary line.
The Original Lease was for a term of twenty-five (25) years commencing January 1, 1985,
with an option to extend for an additional ten (10) year period subject to conditions,
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including the State and the City making a prior written finding “that there has been no
material change in the need of the State or City for the use of each of the Parcels”; and
WHEREAS, at its meeting on September 8, 2009, the City Council of the City of
Santa Monica adopted Resolution No. 10426 to enter into a First Amendment of the
Original Lease with the Jonathan Club. Resolution No. 10426 found that there had been
no material change in the City’s need to use each of the parcels, and authorized the City
Manager to enter into a lease amendment in accordance with the Club’s then proposal to
extend the term by ten (10) years, for payment of annual rent in the amount of $125,000,
for payment of a contribution of $75,000 per annum to the City which was allocated by
the City to the Santa Monica Beach Improvement Fund, and for mutual release of the
claims for overpayment of rent in the amount of $212,300 and for encroachment; and
WHEREAS, the parties entered into a “First Amendment to Permit for
Improvements and Lease Option Agreement” dated October 26, 2009 (First Amendment).
The First Amendment extended the term up through December 31, 2019, increased the
annual rent payment to the City to $125,000, provided for annual payments to the City in
the amount of $75,000 for Santa Monica Beach Improvements, and provided for a release
of the Club’s claim for overpayment of rent in the estimated amount of $212,300 and a
release of the City’s claim of encroachments by the Club onto the public portion of Santa
Monica State Beach adjacent to the leased parcels; and
WHEREAS, during the term of the First Amendment, the Club requested an
extension of the term for an additional ten (10) year period, with two additional separate
options to renew until December 31, 2050 (“Extension Request”); and
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WHEREAS, the City and Club, with consent from the State, now seek to enter into
an Amended and Restated Permit for Improvements and Lease Option Agreement
(Restated Lease) to extend the term by ten (10) years, with options to extend for an
additional ten (10) and eleven (11) years subject to conditions, containing the following
terms: (i) as consideration for a release for past encroachment, the payment of $575,000
by the Club; (ii) the increase in the total leasehold size to approximately 52,820 square
feet in a rectangular shape consisting of the currently leased Parcels 1, 2, 3 with an
additional Parcel 4; (iii) the addition of compliance measures; (iv) an increased rental rate
of $5.50 per square foot, subject to CPI; and (v) an increase in the annual contribution for
Santa Monica Beach Improvements in the amount of $100,000 per year, subject to CPI.
The Restated Lease will amend and supersede the Original Lease and the First
Amendment; and
WHEREAS, the City Council finds that the ten (10) year extension of the Jonathan
Club lease will benefit public use of the Santa Monica Beach overall by providing
revenues necessary for the maintenance and operation of the Santa Monica Beach and
capital improvements thereon. Upon balancing the public need for each of the individual
leasehold parcels consisting of Parcels 1, 2, 3 and 4 against the benefits in revenue
provided by the Club pursuant to the Restated Lease, the City determines that there is no
material change in need for the public use of Parcels 1, 2, 3 or 4 at this juncture.
Accordingly, the extension of the term pursuant to the Restated Lease for an additional
ten (10) years is appropriate.
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Manager is authorized to negotiate and enter into a
Restated Lease with the Jonathan Club to extend the term by an additional ten (10) year
period from January 1, 2020, up through December 31, 2029, for Parcels 1, 2, 3 and 4.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
_________________________
LANE DILG
City Attorney
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Adopted and approved this 17th day of December 2019.
__________________________
K e v i n M c K e o w n , M a y o r
I, Denise Anderson-Warren, City Clerk of the City of Santa Monica, do hereby
certify that Resolution No. 11219 (CCS) was duly adopted at a meeting of the Santa
Monica City Council held on the 17th day of December 2019, by the following vote:
AYES: Councilmembers Davis, Himmelrich, Morena, Winterer,
Mayor Pro Tem O’Day, Mayor McKeown
NOES: None
ABSENT: Councilmember Jara
A T T E S T :
_____________________________________
Denise Anderson-Warren, City Clerk
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