HomeMy WebLinkAbout2016-07-26; Public Financing Authority; Resolution 721 RESOLUTION NO. 72
2 ADOPT A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CARLSBAD PUBLIC FINANCING AUTHORITY APPROVING AN3AMENDMENTTOTHEGROUNDLEASEOPTIONWITHGRAND
4 PACIFIC RESORTS FOR THE PROPERTY KNOWN AS THE CROSSINGS
AT CARLSBAD WEST VIEW LOT 9
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6 WHEREAS,the on December 9, 2014, the Carlsbad Public Financing Authority approved a
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ground lease option with Grand Pacific Resorts for the property known as The Crossings at
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Carlsbad West View Lot 9; and
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10 WHEREAS,the amendment of this lease option is required due to unforeseen delays
11 related to the approval of development entitlements and cultural resource issues; and
12 WHEREAS,the initial term of the Lease Agreement expires on December 9, 2016; and
13 WHEREAS,the First Amendment to the Lease Option Agreement with Grand Pacific
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Resorts modifies (1) the Option Term of the agreement from twenty-four (24) months after the
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effective date to thirty (30) months after the effective date; and (2) memorializes Grand Pacific
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17 Resorts election to develop seventy-one (71) hotel rooms and thirty-six (36) Time Share units.
18 NOW,THEREFORE,BE IT RESOLVED by the Public Financing Authority of the City of
19 Carlsbad, California,as follows that:
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1.The above recitations are true and correct.
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2.The City Manager's execution of the First Amendment to the Lease Agreement with
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23 Grand Pacific Resort, attached hereto as Exhibit A,is approved.
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1 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
2 Carlsbad on the 26th day of July, 2016, by the following vote to wit:
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AYES:Hall, Wood, Schumacher, Blackburn, Packard.
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6 NOES:None.
7 ABSENT:None.
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11 MATT HALL,Chairman of the Board
12 ATTEST:
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15 BARBAR NGLESON,Secretary
16 (SEAL)
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EXHIBIT 2
FIRST AMENDMENT OPTION TO LEASE AGREEMENT
THIS FIRST AMENDMENT OPTION TO LEASE AGREEMENT (this,
"Amendment") is made and entered into as of this2rday of 0 uWJ 2016, by and
between the THE CARLSBAD PUBLIC FINANCING AUTHORITY, ajoint powers authority
formed by the City of Carlsbad and the Carlsbad Municipal Water District ("CPFA"),and
GRAND PACIFIC CARLSBAD LOT 9, L.P.,a Delaware limited partnership ("Optionee").
WITNESSETH:
WHEREAS,Optionee and CPFA (collectively referred to herein as the "Parties")entered into
that certain Option to Lease Agreement dated December 9,2014 (the "Option Agreement");
and
WHEREAS,the Parties to desire the Option Agreement to reflect certain changes in the timing
and structure ofthe transactions contemplated under the Option Agreement.
NOW,THEREFORE,in consideration of the performance and observance of the terms,
covenants and conditions hereafter set forth, the parties hereto mutually agree as follows:
1.DEFINED TERMS:Terms not otherwise defined in this Amendment have the meaning
given in the Option Agreement or Lease (as defined in the Option Agreement).
2.OPTION TERM:The first sentence of Section 2 is amended to provide that the Term
shall be thirty (30) months after the Effective Date, which results in an expiration date of
June 9, 2017.The balance of Section 2 after the first sentence thereof is hereby deleted,
except that the definition of "City"(meaning the City of Carlsbad) shall remain.
3.CONDITIONS PRECEDENT:The Parties acknowledge that the Conditions Precedent
set forth in Sections 5 a., b., c., d, and j. of the Option Agreement have been satisfied.
4.LEASES:Section 29 ofthe Lease requires that (i) within forty two (42) months after the
Rent Commencement Date, Tenant elect either (x) to construct additional hotel rooms on
the Premises or (y) to amend the Lease to reduce the size of the Premises and for Tenant
or an Affiliate of Tenant to enter into the Time Share Addition Ground Lease, and (ii) the
expansion of the Hotel Addition or the Time Share Addition, whichever is applicable, to
be completed within sixty (60) months after the Rent Commencement Date.
Optionee has made an early election for the Time Share Addition (and not the expansion
of the Hotel Addition)to be constructed and,therefore,at the time the Option is
exercised, the Parties shall enter into (i) the Lease, which shall be revised to reduce the
size of the Premises in accordance with Section 29 of the Lease,(ii)the Time Share
Addition Ground Lease, and (iii)the easement agreement referred to in Section 29 of the
Lease (the "Easement Agreement").
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The Parties have also agreed on the following:(A)that the Hotel Addition Outside
Completion Date shall be modified to be the date which is the number of days between
June 9, 2017 and the exercise of the Option in accordance with the terms of the Option
Agreement, plus eighteen (18) months, measured from the later of the Commencement
Date,the removal pursuant to Section 31 of the water tank on the Premises,and
completion of the Archeological Data Recovery Plan approved by the San Luis Rey Band
of Mission Indians, Optionee and the City (with completion being determined by the on-
site archeologist),as such date is extended for each day of delay caused by matters
described in Section 21 of the Lease,(B)if the Hotel Addition is not Substantially
Completed by the modified Hotel Addition Outside Completion Date then so long as
Tenant has used and is continuing to use its diligent efforts to complete the Hotel
Addition, the only consequence shall be the commencement of Rent upon the modified
Hotel Addition Completion Date, and (C) under the Time Share Addition Ground Lease,
the tenant thereunder shall be obligated to commence construction of the Time Share
Addition no later than twenty-four (24) months after the Time Share Addition Ground
Lease is entered into and Substantially Complete the Time Share Addition no later than
eighteen (18) months thereafter,as such period of time is extended for each day of delay
caused by matters described in Section 21 of the Time Share Addition Ground Lease.
To accomplish the foregoing, CPFA and Optionee shall work together to (x) modify the
form of Lease to reduce the size of the Premises in accordance with Section 29 of the
Lease, (y) create the form of the Time Share Addition Ground Lease with the changes
described above and in Section 29 of the Lease, and (z) agree upon a form ofthe
Easement Agreement so that each of the same is completed reasonably prior to the
anticipated Option exercise date.Optionee shall endeavor to notify CPFA 120 days prior
to the date Optionee anticipates exercising the Option pursuant to the terms of Section 8
ofthe Option Agreement.When the same have been agreed to, the mutually agreed upon
modified form of Lease and the Time Share Addition Ground Lease shall be deemed to
be attached to the Option Agreement as Exhibit A and all references under the Option
Agreement to the Lease shall be interpreted to refer to such agreed upon modified form
of Lease and form of Time Share Addition Ground Lease and all references under the
Option Agreement to the Memorandum of Lease and the Completion Guaranty shall be
interpreted to refer to the exhibits of the same attached to both such form of Lease and
Time Share Addition Ground Lease.
To implement the foregoing City staff shall be authorized to take all actions reasonably
necessary to finalize the form of the Lease, the Time Share Addition Ground Lease and
the Easement Agreement on terms consistent with the foregoing as need to fully reflect
the intention of this Amendment.
5.NO OTHER AMENDMENT:Except as modified by this Amendment,the Option
Agreement remains if full force and effect.
6.COUNTERPARTS AND SIGNATURE PAGES:For convenience,CPFA and
Optionee may execute this Amendment on separate counterpart pages,which when
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attached to this Amendment shall constitute one fully-executed complete original
Amendment.
[Balance ofpage intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF,the parties hereto have executed this Amendment as of the day and
the year first above written.
CPFA:THE CARLSBAD PUBLIC FINANCING
AUTHORITY,
a joint powers authority formed by the City of
Carlsbad and the Carlsbad Municipal Water
District
By:
Name:Ma t Hall
Title:Chairman of the Board
Attest:
Barbara Engelson.Secretary
(Seal)
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Approved as to form and legality:••7
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Celia Brewer. City Attorney
OPTIONEE:GRAND PACIFIC CARLSBAD LOT 9,L.P.,a
Delaware limited partnership
By:Grand Pacific Carlsbad Lot 9,Inc.,
a Delaware corp ation, its General Partner
By:
David S.Brown, Co-President
By:\44/bk (•imothy J.t i Co-."resident
[Signature page to First Amendment to Option to Lease Agreement]