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HomeMy WebLinkAbout2014-06-03; City Council; 21608; Approval Amendment 1 Extend Lease with Callaway Golf Company, Authorize Mayor to Execute DocumentsCITY OF CARLSBAD - AGENDA BILL 1 AB# 21.608 APPROVAL OF AMENDMENT NO. 1 TO EXTEND THE EXISTING GROUND LEASE AGREEMENT WITH CALLAWAY GOLF COMPANY AND AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS. DEPT.DIRECTOR (^ ^ MTG. 6/3/2014 APPROVAL OF AMENDMENT NO. 1 TO EXTEND THE EXISTING GROUND LEASE AGREEMENT WITH CALLAWAY GOLF COMPANY AND AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS. CITY ATTY. 1^^^ DEPT. PW-PEM APPROVAL OF AMENDMENT NO. 1 TO EXTEND THE EXISTING GROUND LEASE AGREEMENT WITH CALLAWAY GOLF COMPANY AND AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS. CITY MGR. /V/ , RECOMMENDED ACTION: Adopt Resolution No. 2014-105 approving Amendment No. 1 to extend the existing ground lease agreement with Callaway Golf Company for property owned by the City of Carlsbad, California consisting of 0.843 acres, identified as assessor's parcel number 212-270-08-00, and authorizing the Mayor to execute all documents. ITEM EXPLANATION: The City of Carlsbad is the owner of real property identified as assessor's parcel number 212-270-08-00, which consists of approximately 0.843 acres of land. In 2004, Callaway Golf Company executed a lease with the City of Carlsbad for expansion of their golf course test range. The City Council approved a ten (10) year ground lease agreement with an option for two (2) additional five (5) year terms. The proposed lease amendment will extend the existing lease term from August 1, 2014 through July 31, 2019. Late last year, the leased property was remapped and issued a new assessor's parcel number. The lease area changed from a portion of APN 212-082-05-00 to the entire APN 212-270-08-00. This change has also been reflected in the proposed lease amendment. All other terms and conditions of the lease agreement will remain in full force and effect. The renewal of the Callaway Golf Ground Lease will further the goals and objectives set forth in the 2014 City Council Priority Projects, which places a strategic focus on the creation of quality jobs and implementation of strategies to retain innovative companies and jobs in Carlsbad. Calloway Golf is one of the City of Carlsbad's largest employers and a critical component of the action sports manufacturing industry business cluster. FISCAL IMPACT: The initial term ofthe lease extension is five (5) years with an option to extend one (1) additional five (5) year period. The base rent payable pursuant to the original ground lease shall increase by 3.5% on each anniversary ofthe Commencement Date. DEPARTMENT CONTACT: Joe Garuba 760-434-2893, ioe.garuba@carlsbadca.gov FOR CLERK USE. COUNCIL ACTION: APPROVED X CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • CONTINUED • RETURNED TO STAFF • WITHDRAWN • OTHER-SEE MINUTES • AMENDED • REPORT RECEIVED • Below is a summary ofthe monthly base rent for each year ofthe extended term. Year 11 Year 12 Year 13 Year 14 Year 15 $2,232.96 per month, or $26,795.52 annually $2,311.11 per month, or $27,733.32 annually $2,392.00 per month, or $28,704.00 annually $2,475.72 per month, or $29,708.64 annually $2,562.37 per month, or $30,748.44 annually ENVIRONMENTAL IMPACT: The City Planner has determined that leasing activities are exempt from the California Environmental Quality Act, pursuant to Section 15301 of the CEQA Guidelines. Section 15301 exempts projects or activities that consist of leasing of existing public facilities. EXHIBITS: 1. Resolution No. 2014-105 approving Amendment No. 1 to extend the existing ground lease agreement with Callaway Golf Company for property owned by the City of Carlsbad consisting of 4.77 acres, identified as assessor's parcel number 212-270-08-00, and authorizing the Mayor to execute all documents. 2. Location Map - Callaway Golf Lease Property. 3. Amendment No. 1 to Extend the Ground Lease Agreement between the City of Carlsbad and Callaway Golf Company from August 1, 2014 to July 31, 2019. 4. Amended Memorandum of Lease - Callaway Golf Lease Property. 1 RESOLUTION NO. 2014-105 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, 2 CAUFORNIA, APPROVING AMENDMENT NO. 1 TO EXTEND THE EXISTING GROUND LEASE AGREEMENT WITH CALLAWAY GOLF COMPANY FOR PROPERTY OWNED BY THE CITY OF CARLSBAD 4 CONSISTING OF 0.843 ACRES, IDENTIFIED AS ASSESSOR'S PARCEL NUMBER 212-270-08-00, AND AUTHORIZING THE MAYOR TO 5 EXECUTE ALL DOCUMENTS. 3 6 7 8 9 10 WHEREAS, The City Council of the City of Carlsbad, California has determined that it is in the best interest ofthe City to extend the existing Ground Lease agreement with Callaway Golf Company for real property located in the City of Carlsbad, California, consisting of 0.843 acres, APN 212-270-08-00; and 11 WHEREAS, the five-year lease extension of the existing Callaway Golf Ground Lease will 12 further the goals and objectives set forth in the 2014 City Council Priority Projects, which places a strategic focus on the creation of quality jobs and implementation of strategies to retain innovative companies and jobs in Carlsbad; and WHEREAS, Calloway Golf is one ofthe City of Carlsbad's largest employers and a critical 13 14 15 16 Y] component ofthe City of Carlsbad's action sports manufacturing industry business cluster; and 18 WHEREAS, Callaway Golf Company has agreed to terms and conditions of the ground lease. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows that: 1. The above recitations are true and correct. 19 20 21 22 23 24 2. That Lease Amendment No. 1, identified as Exhibit 3, between the City of 25 Carlsbad and Callaway Golf Company is approved. 3. That the Mayor is authorized to execute all documents related to leasing of APN 212-270-08-00. 5 27 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City of Carlsbad on the 3"'^ day of June, 2014, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood, Schumacher and Blackburn. None. ABSENT: None. ATTEST: "^^^^^i^-A^^^v- (^^Jc^x^ i, Cf!y Clerk BARBARA ENGLESON, LOCATION MAP • IIUIiiUPM! MU -p <*1 o SALK .41/ \ I o 9> GOV APN 212-270-08-00 Callaway Golf Lease Property .OGG 4to <3\ \ \ em 53u •^NSTONE RD ^ z Q 5 g « V ••<••••--», : u (jn BEACON BW OR ' LtGtmfouse/^ K UNOS'WIOXT ': I. s I "^IPOSA RD " PLUM TREE RO I Bett.EFtpWfR RD \ r •• •^i. @ NOT ro $MtE>- CAMINO OEtASONDAS o 1.. i QJ™, Q S ' :?'i/ n 50 VICINITY MAP PROJECT NAME Callaway Golf Lease Property EXHIBIT 1 Path; J:\Requests2010Plus\PropEnviron\MuniProp\5279259_14\CallawayAgendaBill.mxd 5 AMENDMENT NO. 1 TO EXTEND THE GROUND LEASE AGREEMENT BETWEEN THE CITY OF CARLSBAD AND CALLAWAY GOLF COMPANY FROM AUGUST 1, 2014 TO JULY 31, 2019 THIS FIRST AMENDMENT to the Lease made and entered into this day of Jjury^ 2014, by and between the City of Carlsbad ("Lessor") and Callaway Golf Company, ("Lessee"), is made with reference to the following facts: RECITALS 1. WHEREAS, The City Council of the City of Carlsbad has determined that it is in the best interest of the City to extend the existing Ground Lease agreement with Callaway Golf Company for real property located in the City of Carlsbad, consisting of 0.843 acres, also identified as APN 212-270-08-00; and 2. WHEREAS, the five-year lease extension of the existing Callaway Golf Ground Lease will further the goals and objectives set forth in the 2014 City Council Priority Projects, which places a strategic focus on the creation of quality jobs and implementation of strategies to retain innovative companies and jobs in Carlsbad; and 3. WHEREAS, Calloway Golf is one of Carlsbad's largest employers and a critical component of the City's action sports manufacturing industry business cluster. NOW THEREFORE, incorporating the above recitals and in consideration of the covenants and obligations set forth herein, the parties hereto agree as follows: 1. That the above Recitals are True and Correct. 2. Except as expressly modified herein, the remaining terms and conditions of the Lease Agreement shall remain in full force and effect. 3. That Paragraph 1.2 and of the Ground Lease Agreement dated August 1, 2004 shall be amended, in its entirety to read as follows: 1.2 PREMISES. That certain real property, consisting of 0.843 acres of Planned Industrial zoned property, located in the City of Carlsbad, County of San Diego, State of California, now identified by APN 212-270-08-00 due to a remapping of the Premises as previously described in the initial Lease. A legal description of the premises, including any appurtenances, is included in Exhibit "A" attached to this lease. That Paragraph 1.4 and of the Ground Lease Agreement dated August 1, 2004 shall be amended, in its entirety to read as follows: 1.4 TERM. The term of the lease shall be extended for a period of five (5) years beginning August 1, 2014, and ending on July 31, 2019. Lessee and Lessor, if mutually agreed, may extend the term for one (1) additional five (5) year period, upon the same terms and conditions stated herein. Lessee must request the extension in writing at least 180 days prior to initial lease term's expiration. FOR LESSEE FOR LESSOR Callaway Golf Company Bradley J. Holiday Senior Executive Vice President Chief Financial Officer 2180 Rutherford Road Carlsbad, CA 92008 City of Carlsbad 405 Oak Avenue Carlsbad, CA 92008 JEE: BY: Vj/Aklt^^if^J-J^:^k>^^ BY: BRADLDf Z HOLIDAY^ SENIOR EXEC. VICE-PRESIDENT/ CHIEF FINANCIAL OFFICER CALLAWAY GOLF COMPANY LESSOR: DATE: MATT HALL MAYOR CITY OF CARLSBAD DATE: 3ur\e^ ^o(i4- Note: Signature of Lessee must be notarized, and Authority to Bind attached. APPROVED AS TO FORM: BY: CEL/A A. BREWER TY ATTORNEY DATE: ^?V9^ LEGAL DESCRIPTION FOR LEASE PARCEL BEING A PORTION OF LOT 69 OF CARLSBAD TRACT NO. 81-46, UNIT NO. 3, IN THE CITV OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 11289 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 16,1985, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHEASTERLY BOUNDARY LINE OF SAID LOT 69. DISTANT THEREON, 65.50 FEET FROM THE MOST NORTHEASTERLY CORNER THEREOF, THENCE SOUTHWESTERLY ALONG SAID SOUTHEASTERLY BOUNDARY LINE, S.32''04'25"W. 374.77 FEET TO THE INTERSECTION WITH THE NORTHEASTERLY SIDELINE OF AN EXISTING EASEMENT, 20.00 FEET IN WIDTH IN FAVOR OF SAN DIEGO GAS AND ELECTRIC COMPANY FOR THE RIGHT AND PRIVILEGE TO TRIM TREES OUTSIDE OF THE 100,00 FOOT WIDE EXISTING EASEMENT FOR ELECTRICAL POWER TRANSMISSION PER DOCUMENT NO. 49242, RECORDED APRIL 15,1954, IN BOOK 5205 AT PAQE 419 OF OFFICIAL RECORDS; THENCE NORTHWESTERLY ALONG SAID NORTHEASTERLY EASEMENT SIDELINE, N.47''28'18"W. 140.00 FEET; THENCE DEPARTING SAID NORTHEASTERLY EASEMENT SIDELINE, N.38°35'43" E, 182.04 FEET TO AN ANGLE POINT; THENCE N.43''23 '01" E. 86.68 FEET TO AN ANGLE POINT; THENCE S.65''34'0r E. 41.37 FEET TO AN ANGLE POINT; THENCE N.69»10'40' E. 97.80 FEET TO THE POINT OF BEGINNING. CONTAINING AN AREA OF 0.843 ACRE. (36,740 SQUARE FEET) ACKNOWLEDGMENT State of California County of San Diego On May 12, 2014 before me, Moira Garcia, Notary (insert name and title of the officer) personally appeared Bradley J. Holiday 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 ofthe State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ff^OiAun. S^A-K-CV (Seal) VioiRA GARCIA t COMM. #1996294 m NotMyPuW(>CaWomto B SAN WEOO COUNTY ^ UyC(iinm.Ey.^OCT.29^2016^^ RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Carlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 AMENDED MEMORANDUM OF LEASE This Amended Memorandum of Lease, hereinafter "Memorandum", dated May 12, 2014, between the CITY OF CARLSBAD (LESSOR), and Callaway Golf Company, (LESSEE), concems the Leased Premises described as a portion of Lot 69 of CT No. 81-46, Unit No. 3, Carlsbad, Califomia 92008, Assessor's Parcel Number 212-270-08-00. For good and adequate consideration, LESSOR leases the Leased Premises to LESSEE for the term and on the provisions contained in the Amendment No. 1 to Ground Lease Agreement dated May 12, 2014, the Amended Memorandum of which is recorded hereby, including without limitation provisions prohibiting assignment, subleasmg, and encumbering said leasehold, as more specifically set forth in said Lease, which said lease is incorporated in this Amended Memorandum by this reference. The term of this lease is five (5) years beginning August 1, 2014 and ending July 31, 2019, with one (1) additional five (5) year period if mutually agreed by Lessee and Lessor. Rent is due and payable on or before the first day of each and every month and is to be delivered to the Finance Department ofthe City of Carlsbad at 1635 Faraday Avenue, Carlsbad, Califomia 92008. The initial monthly rent is two thousand two hundred thirty-two and ninety-six cents ($2,232.96) dollars per month. This Amended Memorandum is not a complete summary of the Lease. Provisions in this Amended Memorandum shall not be used in interpreting the Lease provision. In the event of conflict between this Memorandum and other parts of the lease, the other parts shall control. ESf WITNESS WHEREOF, each of the undersigned has executed this Memorandum as of the dates set forth in the respective notary acknowledgements attached hereto. LESSEE: CALLAWAY GOLF COMPANY Print Name: Bradley J. Holiday Title: Sr. Executive Vice President, CFO LESSOR: CITY OF CARLSBAD, A CHARTERED MUNICIPAL CORPORATIC Print Name: Matt Hall Title IViayor APPROVED AS TO FORM: Date: Jan4/Mobaldi, Assistant City Attomey 3.9,014 CA 4/9/2014 ACKNOWLEDGMENT State of California County of San Diego On May 12, 2014 before me, Moira Garcia, Notary (insert name and title of the officer) personally appeared Bradley J. Holiday 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. cJ (Seal) MOIRA GARCIA \ COMM. #1996294 ra Notary PubNfrCrifomia g SSSMWEOO COUNTY CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT State of California County of San 1^^^ On \[XMJL before me, personally appeared I (Here in^sJtname and title of th^o^icer)' who proved to me on the basis of satisfactory evidence to be the person^) whose name^s) is/«re-subscribed to the within instrument and acknowledged to me that he/shc/the^' executed the same m his/hef/teir authorized capacity(ies), and that by his/hsfAbeir signature(s-) on the instmment the personfs), 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 Califomia that the foregoing paragraph is tme and correct. WITNESS my hand and official seal. MDRGENFftY. , Commission #1918442 Notary Piibilc - Calilomia Signature of Notary Public (Notary Seal) ^NSSBC san Diego County = J ^3!S^ UM Comm. 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