HomeMy WebLinkAbout2017-12-12; City Council; ; First Amendment to the Retail Lease Agreement with Shorehouse Kitchen Carlsbad, LLC to extend the business opening date for the property located at 2833 State StreetCA Review ?.(
� CITY COUNCIL
'11:I Staff Report
Meeting Date
To:
From:
Staff Contact:
Subject
December 12, 2017
Mayor and City Council
Kevin Crawford, City Manager
Curtis M. Jackson, Real Estate Manager
Curtis.jackson@carlsbadca.gov or 760-434-2836
First Amendment to the Retail Lease Agreement with Shorehouse Kitchen
Carlsbad, LLC to extend the business opening date for the property located
at 2833 State Street.
Recommended Action
Adopt a Resolution approving the First Amendment to the Retail Lease Agreement with
Shorehouse Kitchen Carlsbad, LLC (Shorehouse Kitchen) to extend the business opening date
from 120 days to 210 days after building permit issuance for the property located at 2833 State
Street (Property) and authorizing the City Manager to execute the First Amendment.
Executive Summary
Shorehouse Kitchen has requested an amendment to their Retail Lease Agreement (Agreement)
to extend the business opening date an additional ninety days, from 120 days to 210 days.
Shorehouse Kitchen has satisfied all other terms of the Agreement, and city staff is
recommending that the City Council grant Shorehouse Kitchen's request to extend the business
opening date ("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 February 14, 2017, City Council approved a 10 year Agreement with Shorehouse Kitchen to
renovate and operate a full service restaurant at the Property. Since that time, Shorehouse
Kitchen has worked diligently on the project, has pulled their building permit, and is currently
under way with construction. The current Agreement requires that Shorehouse Kitchen be
open for business to the public within 120 days after building permit issuance, which occurred
on September 6, 2017. As such, Shorehouse Kitchen is required to be open for business on or
before January 4, 2018. Due to unforeseen and extraordinary issues related to the dilapidated
condition of the building, as well as scheduling issues associated with the installation of a new
natural gas utility line to the Property, construction activities will not be completed in time to
meet the Opening Date term in the current Agreement.
Staff is recommending that City Council give authority to the City Manager to approve the
requested 90 day extension on the Opening Date in exchange for Shorehouse Kitchen waiving
any and all claims against the City related to the condition of the Property.
December 12, 2017 Item #2 Page 1 of 9
Fiscal Analysis
The Agreement calls for both the initial 10 year lease term period and the payment of rent to
commence upon Shorehouse Kitchen receiving a Certificate of Occupancy following completion
of construction. 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
Shorehouse Kitchen 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.
2. Construction Photos.
December 12, 2017 Item #2 Page 2 of 9
December 12, 2017 Item #2 Page 3 of 9
RESOLUTION NO. 2017-233
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE FIRST AMENDMENT TO THE RETAIL LEASE
AGREEMENT WITH SHOREHOUSE KITCHEN CARLSBAD, LLC TO EXTEND
THE OPENING DATE OF SHOREHOUSE KITCHEN'S BUSINESS FROM 120
DAYS TO 210 DAYS AFTER RECEIVING BUILDING PERMITS FOR THE
PROPERTY LOCATED AT 2833 STATE STREET AND AUTHORIZING THE CITY
MANAGER TO EXECUTE THE FIRST AMENDMENT.
Exhibit 1
WHEREAS, on February 14, 2017, the city entered into a ten-year Lease Agreement with
Shorehouse Kitchen Carlsbad, LLC ("Shorehouse Kitchen"), to renovate and operate a full service
restaurant at 2833 State ("Property") street by Resolution No. 2017-021; and
WHEREAS, Shorehouse Kitchen has requested to has requested to extend the opening date 90
days, from 120 days to 210 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;
WHEREAS, Shorehouse Kitchen shall execute a waiver on behalf of the city related to the
condition of the Property prior to the execution of this First Amendment.
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 Amended Lease Agreement with
Shorehouse Kitchen, 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 Amended Lease
Agreement with Shorehouse Kitchen to renovate and operate a full service restaurant 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.
December 12, 2017 Item #2 Page 4 of 9
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 12th day of December 2017, by the following vote, to wit:
AYES: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard.
NOES: None.
ABSENT: None.
ATTEST:
Attachment A
FIRST AMENDMENT TO RETAIL LEASE AGREEMENT
This First Amendment to Lease Agreement ("First Amendment") is effective as of December 12, 2017 (the
"Effective Date"), by and between the CITY OF CARLSBAD, a California municipal corporation ("Landlord") and
SHOREHOUSE KITCHEN, 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 February 14, 2017, Landlord and City entered into that certain Lease Agreement
("Agreement") for the property located at 2833 State Street, Carlsbad, California ("Premises") consisting of
approximately 1,850 square feet of commercial building space on a .11 acre lot, designated as Assessor Parcel
Numbers 203-294-02-00 and 203-294-03-00 by Resolution No. 2017-021; 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 120
days after building permit issuance, which occurred on September 6, 2017; and
WHEREAS, Tenant has requested an Amendment to extend the business opening date ninety-days, from
120 days to 210 days, under the terms of the Agreement; and
WHEREAS, Tenant shall execute a waiver on behalf of the city related to the condition of the Premises prior
to the execution of this First Amendment.
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 ten (10) 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 ten (10) 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.
1 December 12, 2017 Item #2 Page 5 of 9
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 within two
hundred and ten (210) days building permit issuance (the "Opening Date") and shall continuously
operate Tenant's business in accordance with this Lease.
(a)Waiver and Release. As additional consideration for the extension of the Opening Date,
Tenant hereby forever waives and releases and discharges Landlord, the Landlord Parties and their
respective successors and assigns from any and all causes of action, obligations, indebtedness,
damages, losses, claims, suits, costs, liabilities, expenses, attorneys' fees and demands (hereafter,
"Claims"), whether known or unknown, arising prior to the effective date of this Amendment in
connection with the Lease or the Premises, including (without limitation) any Claims relating to the
condition of the Premises or any failure to disclose any issues relating to such condition. This waiver
and release includes Claims of which Tenant is presently unaware or does not presently suspect to exist
in its favor which, if known by Tenant, would materially affect Tenant's release of the other Party. IN
CONNECTION WITH THE GENERAL RELEASE SET FORTH IN THIS PARAGRAPH, TENANT SPECIFICALLY
WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR."
Tenant's Initials ( ) (. __ _
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 provisions of
the Lease.
4. 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.
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 December 12, 2017 Item #2 Page 6 of 9
December 12, 2017 Item #2 Page 7 of 9
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.
11LESSOR11
CITY OF CARLSBAD
APPROVED AS TO FORM:
By:~~/-j]~
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"LESSEE"
By: By:
Name: / Name:
Title: /l!Z77vl9Jc~ Title:
Date: /J-~0 ~ )2 Date:
NOTARY ACKNOWLEDGEMENT OF LESSEE'S SIGNATURE(S) MUST BE ATTACHED
3
CALIFORNIA 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 S::l!1 Q·, e30
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My Comm. Expires Aug 26, 2021
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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 4-ti-c;,;;i T. � Signature of NotaPublic
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Capacity(ies) Claimed by er(s) Signer's Name: ______________ _ D Corporate Officer -Title(s): ___ __,_-.,.,,=_ D Partner - D Limited D General D Individual D Attorney in F D Trustee D Guardi r Conservator D Other: -------_.----------
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December 12, 2017 Item #2 Page 8 of 9
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Exhibit 2
December 12, 2017 Item #2 Page 9 of 9