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. Expires Dec 24.2014 j
ADDITIONAL OPTIONAL INFORMATION
DESCRIPTION OF THE ATTACHED DOCUMENT
(Title or description of attached document)
(Title or description Attached docutaent contm ntle or descriptii
Number of Pages
continued)
Document Date
(Additional information)
CAPACITY CLAIMED BY THE SIGNER
• Individual (s)
• Corporate Officer
(Title)
• Partner(s)
• Attorney-in-Fact
• Trustee(s)
• Other
INSTRUCTIONS FOR COMPLETING THIS FORM
Any acknowledgment completed in California must contain verbiage exactly as
appears above in the notary section or a separate acknowledgment form must be
properly completed and attached to that document The only exception is if a
document is to be recorded outside of California. In such instances, any alternative
acknowledgment verbiage as may be printed on such a document so long as the
verbiage does not require the notary to do something that is illegal for a notary in
California (i.e. certifying the authorized capacity of the signer). Please check the
document carefully for proper notarial wording and attach this form if required.
• State and County information must be the State and County where the document
signer(s) personally appeared before the notary public for acknowledgment.
• Date of notarization must be the date that the signer<s) personally appeared which
must also be the same date the acknowledgment is completed.
• The notary public must print his or her name as it appears within his or her
commission followed by a comma and then your title (notary public).
• Print the name(s) of document signer(s) who personally appear at the time of
notarization.
• Indicate the correct singular or plural forms by crossing off incorrect forms (i.e.
he/she/thoy, is/we) or circling the correct forms. Failure to correctly indicate this
information may lead to rejection of document recording.
• The notary seal impression must be clear and photographically reproducible.
Impression must not cover text or lines. If seal impression smudges, re-seal if a
sufficient area permits, otherwise complete a different acknowledgment form,
• Signature of the notary public must match the signature on file with the office of
the county clerk.
• Additional information is not required but could help to ensure this
acknowledgment is not misused or attached to a different document.
• Indicate litle or type of attached document, number of pages and date.
•> Indicate the capacity claimed by the signer. If the claimed capacity is a
corporate officer, indicate the title (i.e. CEO, CFO, Secretary).
• Securely attach this document to the signed document
2008 Version CAPA vl2.10,07 800-873-9865 www.NotaryClasses.com