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HomeMy WebLinkAbout2019-01-29; City Council; ; First Amendment to the Retail Lease Agreement with House Martel, LLC to extend the business opening date for the property located within Carlsbad City Library at 1775 DovCA Review we..- (i) CITY COUNC I L Staff Report Meeting Date To: From: Staff Contact: Subject Jan.29,2019 Mayor and City Council Scott Chadwick, City Manager Curtis Jackson, Real Estate Manager curtis .jackson@carlsbadca.gov or 760-434-2836 First Amendment to the Retail Lease Agreement with House Martel, LLC to extend the business opening date for the property located within Carlsbad City Library at 1775 Dove Lane Recommended Action Adopt a Resolution approving the First Amendment to the Retail Lease Agreement with House Martel, LLC ("Chapters," library cafe) to extend the business opening date ("Opening Date") an additional 90 days, from January 31, 2019 to April 30, 2019, for the space located within Carlsbad City Library at 1775 Dove Lane ("Property") and authorizing the City Manager to execute the First Amendment. Executive Summary Chapters has requested an amendment to their Retail Lease Agreement ("Agreement") to extend the business Opening Date an additional 90 days. Chapters has satisfied all other terms of the Agreement, and city staff is recommending that the City Council grant Chapters' request to extend the Opening Date term an additional 90 days, and authorize the City Manager to execute the First Amendment to the Agreement and any future actions related to the Agreement. Discussion On August 2, 2018, City Council approved a five-year Agreement with Chapters to construct and operate a cafe at the Property. The current Agreement requires that Chapters be open for business to the public on or before January 31, 2019. Since that time, Chapters has worked diligently and made good faith efforts to commence construction. However, unforeseen delays obtaining the necessary permits from the County Department of Environmental Health delayed the start of construction activities. Chapters received approval of plans from the County on January 8, 2019. On January 10, 2019, Chapters received their building permit from the city, and have initiated their tenant improvements, but will not be able to complete their work by the original Opening Date on January 31, 2019. Staff is recommending that City Council give authority to the City Manager to approve a 90-day extension on the Opening Date for Chapters, making the new Opening Date April 30, 2019. Jan. 29, 2019 Item #3 Page 1 of 8 Fiscal Analysis The Agreement calls for both the initial five-year lease term period and the payment of rent to commence upon Chapters receiving a Certificate of Occupancy following completion of construction, or upon the opening date. The granting of the 90 day Opening Date extension will not reduce the lease term period or the total amount of rent received over the lease term period. As such, there is no financial impact to this request. Next Steps Chapters and city staff will continue to implement the terms of the Amended Agreement. Environmental Evaluation {CEQA) The proposed action is exempt from the California Environmental Quality Act (CEQA) per State CEQA guidelines 15301-Existing Facilities. Section 15301 exempts the leasing of property involving negligible or no expansion of use beyond that existing at the time of the agency's determination. Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the meeting date and time. Exhibits 1. City Council Resolution Jan. 29, 2019 Item #3 Page 2 of 8 RESOLUTION NO. 2019-010 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD APPROVING THE FIRST AMENDMENT TO THE RETAIL LEASE AGREEMENT WITH HOUSE MARTEL, LLC TO EXTEND THE OPENING DATE OF HOUSE MARTEL, LLC'S BUSINESS, "CHAPTERS," FROM 180 DAYS TO 270 DAYS FOR THE PROPERTY LOCATED WITHIN CARLSBAD CITY LIBRARY AT 1775 DOVE LANE AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE FIRST AMENDMENT. WHEREAS, on Aug. 2, 2018, the city entered into a five-year Lease Agreement with House Martel, LLC ("Chapters"), to renovate and operate a cafe within the Carlsbad City Library located at 1775 Dove Lane ("Property") by Resolution No. 2018-136; and WHEREAS, Chapters has requested to extend the opening date 90 days, from 180 days to 270 days under the terms of their Lease Agreement; and WHEREAS, amending the opening date to allow for an additional 90 days will neither reduce the term of the entire Lease Agreement nor rents to be received under the Lease Agreement. 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. 2. That the City Manager is hereby authorized to execute the First Amendment to Retail Lease Agreement with Chapters, attached hereto as Attachment A, and to act on behalf of the City of Carlsbad in all future decisions and actions necessary to implement the Agreement, as amended, with Chapters to construct and operate a cafe at the Property, and to do so in full compliance with the terms and conditions expressed in the aforementioned Agreement and to the satisfaction of the City Attorney. Jan. 29, 2019 Item #3 Page 3 of 8 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 29th day of January 2019, by the following vote, to wit: AYES : NOES : ABSENT: M. Hall, K. Blackburn, P. Bhat-Patel, C. Schumacher, B. Hamilton. None. None. ATTEST : \~ /2z1Jco1~ ~BARBARA ENGLESON, CITY CLERK {J \SEAL) ,,,, .. ., ,,, ,,'\i.\.SBAD 11 ,, ...... \'-••••··•··• C' ,., ~~91.·· .. '1.,..~ ~l.t....■ ~ \'. ..... :, =Oi' l. :-n:: = >-: ' ' . ' ..... i O = ~':;.'·. , .:~:: ~ I) . ·.• . • ·'.f:" ~ ..... ,._, ·• ... ·.: ...... •· ,,' ,, ' * , ,, ,, \\'I. '''""'''' Jan. 29, 2019 Item #3 Page 4 of 8 Attachment A FIRST AMENDMENT TO RETAIL LEASE AGREEMENT This First Amendment to Lease Agreement ("First Amendment") is effective as of January 29, 2019 (the "Effective Date"), by and between the CITY OF CARLSBAD, a California municipal corporation ("Landlord") and HOUSE MARTEL, LLC, a California limited liability company ("Tenant") and shall be effective and binding upon the parties hereto as of the date of execution hereof by both parties. RECITALS WHEREAS, on August 2, 2018, Landlord and City entered into that certain Lease Agreement ("Agreement") for the property located at 1775 Dove Lane, Carlsbad, California ("Premises") consisting of approximately 750 square feet of commercial building space located within the Carlsbad City Library, by Resolution No. 2018-136; and WHEREAS, Landlord and Tenant are desirous of amending language in the Agreement and adding additional provisions to the Agreement; and WHEREAS, the terms of the Agreement require Tenant to be open for business to the public within 180 days from the Term Commencement Date, which occurred on August 2, 2018; and WHEREAS, Tenant has requested an Amendment to extend the business opening date ninety-days, from 180 days to 270 days, under the terms of the Agreement. NOW, THEREFORE, in consideration of the covenants and conditions contained herein, the parties hereto agree as follows: 1. ARTICLE 1: BASIC LEASE PROVISIONS, Subsection 1.3 Term and Rent Commencement is deleted in its entirety and replaced with the following language: 1.3 Term and Rent Commencement. Approximately five (5) years, commencing upon the date when this Lease has been executed by both parties (the "Term Commencement Date"), and expiring, unless sooner terminated in accordance with this Lease, upon the date that is five (5) years after the Rent Commencement Date (defined below) (the "Expiration Date"), subject to the extension options set forth in Section 3.2 below. Tenant shall commence paying rent under this Lease on the date tenant receives a Certificate of Occupancy following the completion of Tenant's Work or upon the Opening Date set forth in Section 4.2 below, whichever occurs first (the "Rent Commencement Date"); provided, however, that concurrently with the execution of this Lease, Tenant shall pay to Landlord the Base Rent for the first (1st) full month beginning on the Rent Commencement Date. As used in this Lease, "Lease Year" means each twelve (12) month period (or portion thereof) during the Term commencing with the Rent Commencement Date. 2. ARTICLE 4: CONSTRUCTION AND OPENING DATE, Subsection 4.2 Opening Date is deleted in its entirety and replaced with the following language: 4.2 Opening Date. Tenant shall be open for business to the public in the Premises on or before April 30, 2019 (the "Opening Date") and shall continuously operate Tenant's business in accordance with this Lease. 3. 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 1 Jan. 29, 2019 Item #3 Page 5 of 8 provisions of the Lease. 4. All provisions in the Agreement that are not specifically addressed and amended in this First Amendment shall remain unmodified and in full force and effect. 5. The individuals executing this First Amendment each represent and warrant that they have the legal power, right, and actual authority to bind Lessee to the terms and conditions of this First Amendment. [Signatures on Page 3] 2 Jan. 29, 2019 Item #3 Page 6 of 8 IN WITNESS WHEREOF, the parties hereto for themselves, their heirs, executors, administrators, 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. Cl RLSBAD "LESSEE" HOUSE MARTEL, LLC ~Q} Name:U~ f!b{ -B2 / Title: o,_;t1.{2( /ceo . Date: / /LP· JO/ APPROVED AS TO FORM: By 11.tiL City Attorney By: ___________ _ Name: __________ _ Title: ___________ _ Date: NOTARY ACKNOWLEDGEMENT OF LESSEE'S SIGNATURE(S) MUST BE ATTACHED 3 Jan. 29, 2019 Item #3 Page 7 of 8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 1 a a a a a a 11111•11 a 1HOOOa a a a aa a 11ft aa llOOOI a aa a lll80888UI a a oaa a II a a•• a a 110 aaa a~:aJ0Bfl000806 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 attach ed, and not the truthfulness, accuracy, or validity of that document. State of California } Countyof :ho D,~o On 0QO\l0.1; \Lo, d:Q\ q before me, b,n.°'-m . D~n( s ate Here Insert Name and Title of the Officer personally appeared ____ L--"-'-i """'S'--CL-'-'----'-('(\o.., _ __c=._\------'K..;-~\ ______________ _ Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(~ whose name(~a~ subscribed to the w ithin instrument and acknowledged to me that Ae/she/t-1:tey executed the same in ~her/~ authorized capacity(iest, and that by ~/her/~ signature(r) on the instrument the person(i), or the entity upon behalf of which the person(1) acted, executed the instrument. f ............................................... , ·----··rnNA·r;ni~iiiS-···, N .· · COMM . #2106928 .,. !; NOTARY PUBLIC • CALIFORNIA i i-· . . SAN DIEGO COUNTY "" ~ ~ Commission Expires April 14, 20191 ~~·-··············• .. •·• .. • .. • .... • .. • .. •·•.l;{f.• ... -.......... Jt.•.• .. • .. • ................... . Place Notary Seal and/or Stamp Above I certify under PENAL TY 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 ~ Quu.,o].~JMA Signature of Notary Public OPTIONAL Completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: \ S\-~(""'Y'.eY"\ r -\"b Qe.,k,(, ' V-~-e~w,.. \- DocumentDate: San \ l.o, ~\. q Number of Pages: t.f Signer(s) Other Than Named Above: ____ _._~-"--'------------------ Capacity(ies) Claimed by Signer(s) Signer's Name: ___________ _ D Corporate Officer -Title(s): ______ _ □ Partner -□ Limited □ General D Individual D Trustee D Other: o Attorney in Fact □ Guardian of Conservator Signer is Representing: _________ _ Signer's Name: □ Corporate Officer -Title(s): ______ _ o Partner -o Limited o General o Individual o Attorney in Fact □ Trustee o Guardian of Conservator D Other: ______________ _ Signer is Representing : _________ _ 1 aooo c1ooe10 oaaauao 110 aa 111 aaa s a a a ao a aoaaaoaa a a o o a oo a a o oa a a aa o au 110 a aaa a a a a a a aio ©2017 National Notary Association Jan. 29, 2019 Item #3 Page 8 of 8