HomeMy WebLinkAboutContract 1716 GROUND LEASE TERMINATION AGREEMENT
THIS GROUND LEASE TERMINATION AGREEMENT (this "Agreement") is
reference dated as of July 26,2017 and is between(i)Shottenkirk California Properties,LLC,
a Delaware limited liability company (including its successors and assigns to all or any portion
of the Dealership Parcel (defined below), "Future Landlord"), and (ii) the City of Cathedral
City, in its capacity under Health and Safety Code section 34173 as the successor agency
("Successor Agency") to the former Redevelopment Agency of the City of Cathedral City
("RDA"). This Agreement will become effective and binding upon the parties on the date
("Effective Date") of the "Close of Escrow" (as defined in the "Purchase Agreement"
described in Recital A,below).
RECITALS
A. Future Landlord and the City Urban Revitalization Corporation, a California non-
profit corporation ("CURC") have entered into that certain "Vacant Land Purchase Agreement"
dated July 25, 2017, including that certain Addendum #1 of even date therewith (collectively,
including all prior and future amendments thereto, the "Purchase Agreement"), by which
CURC agreed to sell to Future Landlord certain property ("Property") more particularly
described in the Purchase Agreement.
B. Separately, Future Landlord is also purchasing from a third party certain land
adjacent to the Property described as APN's 687-510-043, 044, and 045 ("Conneaut Lots").
Following Future Landlord's acquisition of the Property and the Conneaut Lots,Future Landlord
will merge the Property and the Conneaut Lots (collectively,"Dealership Parcel")and promptly
commence the development of a Lexus automobile dealership ("Dealership") on the Dealership
Parcel.
C. A portion of the Conneaut Lots are currently ground leased to the Successor
Agency pursuant to that certain "Lease" between Tramview Land Company ("Tramview") and
CCC Properties, LLC ("CCC") dated February 15, 2004, as modified by that certain letter
agreement between Tramview and CCC dated May 12, 2004, and that certain Assignment and
Assumption of Lease between CCC and the RDA dated March 7, 2007 (the Lease, collectively
with all subsequent assignments and amendments, the "Ground Lease"). Upon the close of
escrow for Future Landlord's purchase of the Conneaut Lots, Future Landlord will become the
"Landlord"and the Successor Agency will remain the"Tenant" under the Ground Lease. The
portion of the Conneaut Lots that is subject to the Ground Lease is referred to in this Agreement
as the"Premises."
D. Pursuant to Addendum#1 to the Purchase Agreement, one contingency to the
Close of Escrow under the Purchase Agreement for CURC's benefit is that the Successor
Agency and Future Landlord enter into an agreement to terminate the Ground Lease prior to its
current expiration date. This Agreement is the "Ground Lease Termination Agreement"
referenced in Addendum#1 to the Purchase Agreement.
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OPERATIVE PROVISIONS
NOW,THEREFORE,Future Landlord and Successor Agency agree as follows:
1. Quiet Enjoyment. From and after the Effective Date of this Agreement,
Successor Agency releases and waives any right it has to occupy, use, or enjoy the Premises or
otherwise to exercise its rights of quiet enjoyment under the provisions of the Ground Lease.
Future Landlord shall have the right to occupy the Premises exclusively and none of the benefits
of leasehold or use shall accrue to Successor Agency.
2. Permission to Construct. Notwithstanding the continued effectiveness of the
Ground Lease after the acquisition of the Property by Future Landlord, Successor Agency agrees
that, following the Effective Date of this Agreement, Future Landlord may use the Premises for
the purposes of proceeding with construction of the Dealership on the Dealership Parcel,to the
exclusion of Successor Agency, and undertaking any changes to the Premises as may be
necessary or desirable in connection with said construction. In its capacity as the Tenant under
the Ground Lease, Successor Agency agrees to cooperate with Future Landlord in the
construction of the Dealership, including the execution and delivery of all such writings,
documents, applications, permits and instruments as may be reasonably required to obtain
governmental approval for construction of the Dealership or otherwise to commence and
continue construction thereof, so long as the Successor Agency is not required to incur any
material liability or waive any material right or remedy beyond the extent expressly provided for
in this Agreement. The foregoing sentence does not restrict the Successor Agency's police
powers when acting in its land use and regulatory capacity.
3. Termination of Ground Lease. Notwithstanding the date set forth in Section 2
of the Ground Lease for the expiration of the term thereof, the parties agree that, unless sooner
terminated in accord with an applicable provision of the Ground Lease, the Ground Lease will
automatically expire and terminate on the date(the"Termination Date")which is the earlier of:
(i) the seventeenth (17th) month anniversary of the Close of Escrow under the Purchase
Agreement and (ii) the date that Future Landlord completes the development of the Dealership
and opens for business to the general public.
4. Notices. Any and all notices,demands,or other communications made under this
Agreement will be in writing and delivered by receipted overnight courier to the intended
recipient at the addresses set forth below, or at such other address as any party hereto may
hereafter designate by notice to the other. All notices will be deemed given one business day
after being delivered to said overnight courier.
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01186-009-3195078.I
CIAL
If to Successor Agency: If to Future Landlord:
City of Cathedral City Shottenkirk California Properties,LLC
Attn:City Clerk Attn: Gregory J. Shottenkirk
68-700 Avenida Lalo Guerrero Shottenkirk Automotive Group
Cathedral City,CA 92234 309 South Gear Avenue
West Burlington,IA 52655
With a Copy to: With a Copy to:
Burke,Williams& Sorensen,LLP Burr&Forman LLP
Attn: Eric Vail Attn: George M.Taylor,III
1600 Iowa Avenue, Suite 250 420 North 20th Street, Suite 3400
Riverside, CA 92507-7426 Birmingham,AL 35203
5. Limitation of Liability. This Agreement does not relieve either Successor
Agency or Future Landlord from the performance of any obligation under the Ground Lease
accruing prior to the Termination Date, nor does this Agreement limit or otherwise affect either
party's right to exercise any right or remedy under the Ground Lease accruing prior to the
Termination Date.
6. Future Cooperation. The parties will execute any additional documents or
affidavits or take such further reasonable actions as may be reasonable, necessary, or convenient
to evidence the termination of the Ground Lease as provided in this Agreement.
7. Miscellaneous. Except as expressly modified by this Agreement, the Ground
Lease and all of the terms and provisions thereof will remain unmodified and in full force and
effect as originally written until the Termination Date. In the event of any conflict or
inconsistency between the provisions of the Ground Lease and the provisions of this Agreement,
the provisions of this Agreement will control. This Agreement is binding upon and inures to the
benefit of the parties and their respective representatives, heirs, beneficiaries, and voluntary and
involuntary successors and assigns.
8. Counterparts. This Agreement will be construed and enforced without regard to
any presumption or other rule requiring construction against the party causing this Agreement to
be drafted. This Agreement may be executed in counterparts and will constitute an agreement
binding on all parties notwithstanding that all parties are not signatories to the original or the
same counterpart, provided that all parties are furnished a copy or copies thereof reflecting the
signature of all parties.
9. Attorneys' Fees; If any legal action (including arbitration) is commenced to
enforce or interpret any provision in this Agreement, then the prevailing party shall, in addition
to any other legally available relief, be entitled to recover its reasonable attorneys' fees and costs
of litigation(including expert witness fees).
[Signatures on next page]
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IN WITNESS WHEREOF,the undersigned have executed this Agreement as of the day
and year first above written.
SUCCESSOR AGENCY: FUTURE LANDLORD:
CITY OF CATHEDRAL CITY, in its capacity SHOTTENKIRK CALIFORNIA
as the successor agency to the former PROPERTIES,LLC,a Delaware limited
Redevelo ,1 ent Agency of the City of liability co •any
Cath-•, :d ity �/+
By:
By rName: 'frlf�. i ! l1117 '
Charles P.McClendon Title: ',J.
Ci. Manager Date: Z1
Date: OF.O 2 ZUl
Attest:
City Clerk
Approved as to legal form
Burke Williams&Sore -n,LLP
B
Y•
Eric Vail
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C1186.009••3195078 1
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This Notary Acknowledgement is attached to a document entitled GROUND LEASE
TERMINATION AGREEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual •
•
who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or
validity of that document.
STATE OF CALIFORNIA
COUNTY OF )
On before me,
(insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s),or the entity upon behalf of which the person(s)acted,executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
{
Signature (Seal)
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CI 186-009-3195078 1
This Notary Acknowledgement is attached to a document entitled GROUND LEASE
TERMINATION AGREEMENT
STATE OF IOWA
COUNTY OF DES MOINES ) cc,,,_,
On -lilt3� 17 before me, G,r�oit old k
( rt name and title of the officer)
the undersigned notary in and for said county and said state, did personally appear Gregory J.
Shottenkirk, who is personally known to me and who being duly deposed did state that he
executed the above and foregoing instrument in his capacity as Manager of Shottenkirk
California Properties, LLC,with full authority,voluntarily and for the purposes indicated.
NANCY A.F
WITNESS my hand and official seal. V'-\C Commission Number 192311
My Commission Exp
... :' $ep mbar J, 24
Ii. .ate , (Seal)
N•TAR rs PUBLIC
My Commission Expires: q" S lg
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