Loading...
HomeMy WebLinkAbout; City of Carlsbad; 2025-0224516; Lease Related Agreement8/14/25, 3:13 PM PLEASE COMPLETE THIS INFORMATION. RECORDING REQUESTED BY: Carlsbad City Clerk's Office AND WHEN RECORDED MAIL TO: City Clerk City of Carlsbad 1200 Carlsbad Village Dr. Carlsbad, CA 92008 APN: 203-295-01, 203-295-02 The undersigned granter declare(s): Documentary transfer tax is$ 0.00 Batch 19685804 Confirmation DOC# 2025-0224516 111111111111 lllll 1111111111111111111111111111111111111111 IIIII IIII IIII Aug 14, 2025 02:48 PM OFFICIAL RECORDS JORDAN Z. MARKS, SAN DIEGO COUNTY RECORDER FEES: $185.00 (SB2 Atkins: $150.00) PCO~: N/A PAGES: 8 THIS SPACE FOR RECORDER'S USE ONLY [] computed on the full value of the interest or property conveyed; or [] computed on the full value less the value of liens or encumbrances remaining thereon at the time of sale. [] Unincorporated area: [x] City of Carlsbad Document: First Amendment to Unrecorded Lease Agreement Dated: July 17, 2025 https://gs.secure-erds.com/Batch/Confirmation/19685804 1/2 Attachment B FIRST AMENDMENT TO LEASE AGREEMENT Ji This First Amendment to the Lease Agreement dated July 27, 2021 ("First Amendment") is effective as of U \ ~ I 1 , 2025 (the "Effective Date"), by and between the CITY OF CARLSBAD, a California municipal corporation ("Landlord") and NEW VILLAGE ARTS, INC., a California tax exempt non-profit public benefit corporation under Section 501(c)(3) of the U.S. Internal Revenue Code ("Tenant") (collectively, "Parties"). RECITALS WHEREAS, on July 27, 2021, Tenant and Landlord entered into that certain Lease Agreement for the property located at 2787 State Street, Carlsbad, California, consisting of approximately 9,400 square feet of commercial building space, designated as Assessor Parcel Number 203-295-01 and 02 ("Premises"), authorized by Resolution No. 2021-182 ("Lease Agreement"); and WHEREAS, on Oct. 30, 2024, Tenant submitted a request to Landlord initially seeking a $893,259 loan to retire its building renovation loan with Endeavor Bank related to its tenant improvement project; and WHEREAS, Tenant informed Landlord that it was awarded a Prebys Foundation ("Foundation") $1:$1 matching grant for every dollar raised to meet the Foundation's target fundraising goals from October 2024 through December 2025, up to a total of $625,000, which would allow Tenant to raise a total of $1.25M; and WHEREAS, the Foundation also awarded Tenant an additional $125,000 in resources to help guide their capital fundraising campaign over the term of the matching grant through December 2025; and WHEREAS, on Jan. 28, 2025, the City Council adopted Resolution No. 2025-028 thereby appointing the City Manager, or designee, as the city's real estate negotiator to negotiate a loan agreement with modified lease terms with Tenant; and WHEREAS, through negotiations, Tenant reduced its loan request to $500,000; and WHEREAS, Tenant shall pay $393,259 towards the Endeavor Bank loan by July 31, 2025, using its fundraising and matching grant funds, thereby reducing the Endeavor Bank loan balance to $500,000; and WHEREAS, Tenant will use the Foundation's matching grant fundraising opportunity to repay any loan obligations due to Landlord; and • WHEREAS, concurrent with this First Amendment to the Lease Agreement, the Parties executed a Loan Agreement dated d uJ '-O \1 I 2025 for $500,000 to retire Tenant's building renovation loan with Endeavor Bank related to its tenant improvement project wherein any remaining loan balance as of January 31, 2026, will convert into a lease payment obligation ("Loan Agreement"); and WHEREAS, Landlord and Tenant are desirous of amending language and adding additional clauses to the Lease Agreement. AGREEMENT NOW, THEREFORE, in consideration of the covenants and conditions contained herein, the Parties hereto agree as follows: 1 1. ARTICLE 1: BASIC LEASE PROVISIONS, Subsection 1.4 Base Rent is deleted in its entirety and replaced with the following language: 1.4 Loan Agreement and Lease Payment Conversion. Pursuant to the Loan Agreement, Landlord agrees to loan $500,000 to Tenant for the sole purpose of retiring the outstanding capital improvement loan held by Endeavor Bank corresponding to the tenant improvement project. Tenant will make interest- only payments at a fixed rate of 3% per annum in the amount of $1,250 per month from the Effective Date of the Loan Agreement through January 31, 2026. (a) Repayment from Capital Fundraising Campaign. Tenant is concurrently pursuing a capital fundraising goal of $250,000 between July 1, 2025 and December 31, 2025, which, if met, will be matched by a $250,000 grant from the Prebys Foundation. The funds raised and matched shall be utilized to repay the $500,000 loan amount by January 31, 2026. Fundraising Goal/Matching Grant Fundraising Period Fundraising Goal Prebys Match Total July 1, 2025 to December $250,000 $250,000 $500,000 31,2025 (b) Conversion to Long-Term Lease Payments. Any remaining unpaid principal balance on the $500,000 Loan Agreement amount remaining as of January 31, 2026, shall convert into a lease payment obligation structured as an equivalent monthly rent payment and amortized over the applicable term according to the schedule below: Remaining Principal Balance Payment Term Interest Rate Estimated Monthly Rent Up to $25,0000 5 Years 4% Up to $4,604.13 $250,001 -$500,000 12 Years 5% Up to $4,624.45 All rent payments shall be due and payable monthly on the first (1st) day of each calendar month. If Tenant fails to pay rent within five (5) days of when rent becomes due and payable, Tenant shall pay Landlord a 2% late fee to compensate Landlord for its administrative expenses and/or losses. Tenant acknowledges that late payment by Tenant to Land lord shall cause Landlord to incur costs or losses not contemplated by this Lease, the exact amount of which would be extremely difficult to ascertain. The Parties agree that the 2% late fee represents a fair and reasonable estimate of the costs or losses that Landlord will incur by reason of late payment of rent by Tenant. Tenant may prepay all or part of the remaining principal loan balance at any time without penalty. Once Tenant has fulfilled its repayment obligations pursuant to the schedule above, the rent payment will revert to the sum of one dollar ($1.00) per year. (c) Financial Reporting and Documentation Requirements. Beginning February 1, 2026, on a semi-annual basis, Tenant shall submit financial statements to the City, which must include a complete Profit and Loss Statement and Balance Sheet for the prior six- month period. These reporting obligations shall remain in effect for the duration of the lease or until any converted lease obligation resulting from the City loan has been fully repaid. (e) Payment Instructions. Rent shall be delivered to the Finance Department of the City of Carlsbad at 1635 Faraday Avenue, Carlsbad, California, 92008. The designated place of payment and filing may be changed at any time by Landlord upon ten (10) days written notice to Tenant. Tenant assumes all risk of loss if payments are made by mail. 7 2. ARTICLE 9: INSURANCE, is amended to add Section 9.8: 9.8 Failure to Maintain Insurance. If Tenant fails or refuses to procure or maintain insurance as required by this Lease, Landlord shall have the right, at the Landlord's election, and upon ten {10) days prior notice to Tenant, to declare Tenant in breach of this Lease or procure and maintain such insurance. The premiums paid by the Landlord shall be treated as amounts due to the Landlord from Tenant, to be paid on the first day of the month following the date on which the premiums were paid. Landlord shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured{s). 3. ARTICLE 11: MAINTENANCE AND REPAIR, Section 11.2 "Tenant's Obligations" is deleted in its entirety and replaced with the following language: 11.2 Tenant's Obligations. {a) In General. Except for Landlord's obligations as set forth in Section 11.3 "Landlord's Obligations," Tenant shall, at Tenant's sole expense, keep the Premises, Utility Installations {intended for Tenant's exclusive use, no matter where located), and Alterations in good order, condition and repair {whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Tenant, and whether or not the need for such repairs occurs as a result of Tenant's use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment, systems, or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fixtures, walls {interior and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, skylights, landscaping, fences, retaining walls, signs, located in, on, or adjacent to the Premises. Tenant, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. Tenant's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. Tenant shall, during the term of this Lease, keep the exterior appearance of the Premises in a first-class condition {including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the building. All such maintenance, repair, and replacements shall be performed with due diligence, lien-free, and in a good and workmanlike manner by experienced, licensed contractors who are selected by Tenant and approved by Landlord, or by others as may be approved by the City; provided, however, any work requiring the issuance of a permit by any governmental authority will require a licensed contractor, and any other minor maintenance work or repairs must also be performed by a licensed contractor unless otherwise approved in writing by the City Manager, or designee. {b) Service Contracts. Tenant shall, at Tenant's sole expense, procure and maintain contracts, with copies to Landlord, in customary form and substance, for all Tenant obligations pursuant to Section 11.2{a), including but not limited to, {i) HVAC equipment, (ii) boiler and pressure vessels, {iii) landscaping and irrigation systems, {iv) roof covering and drains, {v) plumbing, {vi) electrical. However, Landlord reserves the right, upon notice to Tenant, to procure and maintain any or all of such service contracts, and Tenant shall reimburse Landlord, upon a thirty {30) day written demand, for the cost thereof. {c) Failure to Perform. If Tenant fails to perform Tenant's obligations under this Section 11.2, Landlord may enter upon the Premises after 10 days' prior written notice to Tenant {except in the case of an emergency, in which case no notice shall be required), perform such obligations on Tenant's behalf, and put the Premises in good order, condition and repair, and Tenant shall promptly pay to Landlord a sum equal to 115% of the cost thereof upon thirty {30) days written demand. 3 (d) Legal Compliance. Nothing in this Section 11.2 shall relieve Tenant of its obligation to keep fully informed offederal, state, and local laws and ordinances and regulations, which in any manner affect its performance under this Lease, including without limitation, Section 12.6 "Compliance with Prevailing Wage Laws." 4. ARTICLE 11: MAINTENANCE AND REPAIR, Section 11.3 "Landlord's Obligations" is deleted in its entirety and replaced with the following language: 11.3. Landlord's Obligations. From the Effective Date until the expiration or termination of this Lease, it is intended by the Parties that Landlord have no obligation, except for the fire alarm and sprinkler system as well as sidewalks and parkways, to repair or maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Tenant. It is the intention of the Parties that the terms of this Lease Amendment govern the respective obligations of the Parties as to maintenance and repair of the Premises. 5. ARTICLE 12: ALTERATIONS AND ADDITIONS, is amended to add Section 12.7: 12.7 Consent; Liens; Bonds. (a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Tenant's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the Premises, including the Tenant Improvement Project, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Alterations and/or Utility Installations" shall not include Tenant's Property as defined in Sections 2.5 and 13.1 of the Lease Agreement. (b) Consent. Tenant shall not make any Alterations or Utility Installations to the Premises without Landlord's prior written consent. Tenant may, however, make nonstructural alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Landlord, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life sc1fety systems, do not trigger the requirement for additional modifications and/or improvements to the Premises resulting from any applicable requirements, including but not limited to, compliance with Title 24. Notwithstanding the foregoing, Tenant shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Landlord. Landlord may, as a precondition to granting such approval, require Tenant to utilize a contractor chosen and/or approved by Landlord. Any Alterations or Utility Installations that Tenant shall desire to make and which require the consent of the Landlord shall be presented to Landlord in written form with detailed plans. Consent shall be deemed conditioned upon Tenant's: (i) acquiring all applicable governmental permits, (ii) furnishing Landlord with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other applicable requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Tenant shall promptly upon completion furnish Landlord with as-built plans and specifications. (c) Liens; Bonds. Tenant shall keep the Premises and any interest therein, free and clear of all mechanics' liens and all other liens. Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at or for use on the Premises. Tenant shall give Landlord immediate written notice of any lien filed against the Premises or any interest therein related to or arising from work performed by or for the Tenant. Tenant shall give Landlord not less than 10 days' notice prior to the commencement of any work in, on or about the Premises, and Landlord shall have the right to post 4 notices of non-responsibility. If Tenant shall contest the validity of any such lien, claim or demand, then Tenant shall, at its sole cost and expense indemnify, defend, and hold harmless, Landlord and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Landlord shall require, Tenant shall furnish a surety bond, licensed by the Insurance Commissioner of the State of California and meeting any requirements set forth by the Finance Department, in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Landlord against liability for the same. If Landlord elects to participate in any such action, Tenant shall pay Landlord's attorneys' fees and costs. Landlord shall have the right to declare this Lease in breach in the event the bond required by this paragraph has not been deposited with Landlord within thirty {30) days after written request has been delivered to Tenant. 6. Unless otherwise defined, or the context otherwise indicates, the terms as used herein have the meaning defined in the Agreement. The provisions of this First Amendment shall control over any inconsistent provisions of the Lease. All provisions in the Agreement that are not addressed and amended in this First Amendment shall remain in full force and effect and are hereby ratified and reaffirmed. 7. The individuals executing this First Amendment to the Lease Agreement each represent and warrant that they have the legal power, right, and actual authority to bind Tenant to the terms and conditions of this First Amendment. [Signature Page to Follow] 5 The individuals executing this First Amendment to the Lease Agreement represent and warrant that they have the right, power, legal capacity and authority to enter into and to execute this Lease on behalf of the respective legal entities of Tenant and Landlord. IN WITNESS WHEREOF, the Parties hereto for themselves, successors, and assigns do hereby agree to the full performance of the covenants herein contained and have caused this First Amendment to be executed by setting hereunto their signatures on the day and year respectively written herein below. Executed by New Village Arts this 10th day of July, 2025. NEW VILLAGE ARTS, INC., a California non- profit public benefit corporation By: (sign here) Directors CITY OF CARLSBAD, a municipal corporation of the State of California By: ~ Y-\-___ City Manager ATTEST: SHERRY FREISINGER, City Clerk By: NOTARY ACKNOWLEDGEMENT OF TENANT'S SIGNATURE(S) MUST BE ATTACHED APPROVED AS TO FORM: CINDIE K. McMAHON, City Attorney 6 C.A.LfFORNlA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 . . . 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 SAt--> l>\~ ) On 7 } 10 ltS:: before me, C111-1) S J Ill<:.~ t t-->0 "fAL~ 'PuJ l-1 C Oate Here Insert Name and Title of the Officer personally appeared ______ .,_M--=-=--A---=t..=Yi___.:::c~=~=f..:;_(l_=-------------- Name(s) of Signer(s) . . . who proved· to m·e 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 PENAL 1Y OF PERJURY under the laws of the State of CaHfo that the foregoing paragr ph is true and correct. i a o a t e n,o a e n s • 1 ;1, CURTIS JaCkSOM : • Notary l'ubllt . C.Ufornla I l ~ San Di._o County . Commlnlon /12517931 My Comm. Expires MAy 10, 2029 Place Notary Seal Above ---------------OPTIONAL --------------- Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attache_d Document Title or Type of Document: ___________________________ _ Document Date: __________________ Number of Pages: _____ _ Signer(s) Other Than Named Abpve: _______________________ _ Capacity(ies) Claimed by Signer(s) Signer's Name: ___________ _ Signer's Name: ___________ _ D Corporate Officer -Title(s): ______ _ D Corporate Officer -Title(s): ______ _ D Partner -D Limited D General D Partner :..... D Limited D General 0 Individual O Attorney in Fact D lndividuai D Attorney in Fact D Trustee D Guardian or Conservator D Trustee D Guardian or Conservator D Other: ______________ _ 0 Other: _____________ _ Signer Is Representing: ________ _ Signer Is Representing: ________ _ ~~~~-@.,~ ©2015 National Notary Association· www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907