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HomeMy WebLinkAbout2009-01-27; Housing & Redevelopment Commission; 413; Sowing Sisters Quilt ShopHOUSING AND REDEVELOPMENT COMMISSION - AGENDA BILL AB# 413 MTG. 01/27/09 DEPT. Econ Dev Amendment No. 1 to the Lease Agreement for 2787 State Street Sowing Sisters Quilt Shop DEPT. HEAD (M^W CITY ATTY. (Op* CITYMGR. (^__ RECOMMENDED ACTION: Adopt Resolution No. 464 authorizing the execution of Amendment No. 1 to the Lease Agreement between the Carlsbad Redevelopment Agency and Becky Biddle dba Sowing Sisters Quilt Shop, for the building located at 2787 State Street. ITEM EXPLANATION: On May 7, 2007, the Carlsbad Redevelopment Agency entered into a twenty-five month lease agreement for 3100 square feet of retail space located at 2787 State Street for a retail quilt shop (Sowing Sisters - a Sole Proprietor). As result of decline in retail sales in 2008, the proprietors of the shop became delinquent in their lease payments. In an effort to recover funds and assist a small business in the Village remain viable, a repayment plan was developed to retire the delinquency. Worsening economic conditions made it impossible for Sowing Sisters Quilt Shop to repay their rent delinquency and stay in business, without significantly reducing their operating expenses. In November 2008, City staff met with the owner of Sowing Sisters to evaluate options. One option which the owner believed would allow them to stay in business and retire their debt to the Redevelopment Agency was to reduce the square footage of their store and thereby reduce their lease expense. The owner worked with staff and determined that they could operate out of 1500 square feet at the existing rental lease rate, and pay the Redevelopment Agency an additional $1500 per month toward repayment of their debt. In order to accommodate this plan, the lease agreement is being amended to change the following terms: 1. The term of the Lease Agreement will be extended from June 30, 2009, to July 31, 2010, with one (1) additional one (1) year extension. 2. The new rent amount will be $2805 per month, for 1500 square feet of retail space. 3. An additional minimum payment of $1500 will be paid at the same time as the lease payment toward retirement of delinquent rent. 4. Early termination will be allowed by the Lessee upon 90 days written notice, provided that all delinquent rent has been repaid in full to the Redevelopment Agency. All other terms of the original agreement will remain in full force and effect for the duration of the new lease term. The balance of the retail site will be marketed and made available for a short term lease. If a new tenant is located, some modification to the premises will need to be made in order to divide the retail space into two separate spaces. DEPARTMENT CONTACT: Cynthia Haas 760-602-2732 chaas@ci.carlsbad.ca.us FOR CITY CLERKS USE ONLY. COMMISSION ACTION: APPROVED JS. DENIED D CONTINUED D WITHDRAWN D AMENDED D CONTINUED TO DATE SPECIFIC D CONTINUED TO DATE UNKNOWN D RETURNED TO STAFF D OTHER - SEE MINUTES D Page 2 FISCAL IMPACT: Currently the Redevelopment Agency is owed $26,832 through the month of January 2009 for delinquent rent. Beginning February 1, 2009, the new rent amount will be $2805.00 per month ($1.87 per square foot). In addition to the rent payment, an additional $1500.00 per month will be paid by the Lessee to retire the rent delinquency amount. The lease term is being extended to July 31, 2010 to allow for full repayment of the delinquency. February 2009-December 2009 Lease Payments $30,855 January 2010-July 2010 Lease Payments $20.420 Total Lease Revenue (Sowing Sisters) $51,275 Delinquent Rent Repayment Amount $26,832 (Minimum Monthly Payment = $1500) ENVIRONMENTAL IMPACT: The Planning Director has determined that the project is 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 involving no expansion of use. Lease of public property for operation of a retail establishment, with an existing use as a retail establishment, and no other plan for development of that property, is such an activity. Should the Agency or City decide to pursue development of the site at a future date, additional environmental review will be conducted. EXHIBITS: 1. Resolution No. 464 2. Amendment No. 1 to the Lease Agreement between the Carlsbad Redevelopment Agency and Becky Biddle dba Sowing Sisters Quilt Shop - a Sole Proprietor. 5 STREET. 6 7 8 g to remain viable; and 10 11 12 13 14 15 16 17 18 24 25 26 RESOLUTION NO. 464 A RESOLUTION OF THE HOUSING AND REDEVELOPMENT COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA APPROVING AMENDMENT NO 1 OF THE LEASE AGREEMENT BETWEEN THE CARLSBAD REDEVELOPMENT AGENCY AND BECKY BIDDLE DBA SOWING SISTERS QUILT SHOP FOR 2787 STATE WHEREAS, the economic downturn has caused retail sales to decline causing many local businesses to cease operations, or implement cost cutting measures in order WHEREAS, in an effort to assist Sowing Sisters Quilt Shop remain a viable business in the Carlsbad Village area, their existing Lease Agreement is being amended to reduce their square footage of retail space leased to 1500 square feet; and WHEREAS, Sowing Sisters became delinquent in paying rent over a seven month period; and WHEREAS, Sowing Sisters is agreeing to a repayment plan to retire the debt owed to the Carlsbad Redevelopment Agency, to be paid over an eighteen (18) month period; and 19 WHEREAS, the Lease term will need to be extended in order to accommodate the 20 rent delinquency repayment schedule. 21 NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment 22 Commission of the City of Carlsbad, California, as follows: 23 1. That the above recitations are true and correct. 2. That the Chairman of the Housing and Redevelopment Commission is authorized to execute Lease Amendment No. 1 of the Lease Agreement 27 between Becky Biddle dba Sowing Sisters and the Carlsbad Redevelopment 28 Agency. 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 Special Meeting of the Housing and Redevelopment Commission of the City of Carlsbad on the 27tb day ofJanuary 2009, by the following vote to wit: AYES: Board Members Lewis, Kulcbin, Hall, Packard and Blackburn. NOES: None. ABSENT: None. ATTEST: LISA HILDABRAND, Secretary (SEAL) , ~ of ESTABLISHED \\'-_ - 5> : : w -197° 5 AMENDMENT NO. 1 TO LEASE AGREEMENT BETWEEN THE CARLSBAD REDEVELOPMENT AGENCY AND BECKY BIDDLE dba SOWING SISTERS QUILT SHOP 2787-A STATE STREET, CARLSBAD CA 92008 THIS FIRST AMENDMENT to the Lease Agreement is made and entered into this 7\°[ -day of Afuu<ft/u/y~, 2009, by and between the CARLSBAD REDEVELOPMENT AGENCY ("Lessor") and Becky Biddle, a sole proprietor, dba Sowing Sisters Quilt Shop ("Lessee"), and is made with reference to the following facts: RECITALS A. WHEREAS, on May 1, 2007, the Housing and Redevelopment Agency entered into a twenty five month Lease Agreement beginning May 1, 2007 and ending June 30, 2009 with Sowing Sisters Quilt Shop for use of Agency owned property located at 2787-A State Street, as a retail quilt shop; and B. WHEREAS, Lessee has requested that the existing Lease Agreement be amended to reduce the square footage utilized for retail activity from approximately 3100 square feet to approximately 1500 square feet with a corresponding reduction in rent; and C. WHEREAS, Lessee has also requested a repayment plan to repay delinquent rent monies owed to the Lessor in the amount of twenty-six thousand eight hundred thirty-two dollars ($26,832) as of January 21, 2009, over a time period not to exceed eighteen (18) months, or July 31, 2010; and D. WHEREAS, Lessee has also requested the Lease Term be extended to July 31, 2010 to accommodate the proposed delinquent rent repayment plan; and Lease Amendment No. 1 E. WHEREAS, The Agency has determined use of the property located at 2787-A State Street for an extended lease period benefits the Village Redevelopment Area and meets the goals of the Agency. 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 Paragraphs 1, 2 and 4 of the Lease Agreement dated April 24, 2007 shall be amended, in their entirety to read as follows: 1. TERM. The term of the lease shall be extended for a period of eighteen months beginning February 1, 2009, and ending on July 31, 2010. At Lessor's sole discretion, Lessee may extend the term for one (1) additional one (1) year period, upon the same terms and conditions stated herein. Lessee must request the extension in writing at least 120 days prior to initial lease term's expiration. 2. RENT. (a) As and for rent, Lessee agrees to pay to Lessor a Base Rent in the sum of two thousand eight hundred and five dollars ($2805.00) per month for the first twelve months of the amended term, beginning February 1, 2009. All subsequent payments shall be payable in advance on or before the first day of each month and every month thereafter during the term of this agreement. Lease Amendment No. 1 y (b) Lessee agrees to pay to Lessor additional amounts as Delinquent Rent, each month as repayment of rent monies owed from prior nonpayment. Lessee agrees that such Delinquent Rent shall be a minimum payment to Lessor in the amount of one thousand five hundred dollars ($1500.00), but may be paid in greater amounts, or in full prior to the term expiration, and shall be payable in advance to Lessor on or before the first day of each month and every month thereafter until all delinquent amounts have been paid in full. (c) Base Rent and Delinquent Rent shall be delivered to the Finance Department of the City of Carlsbad at 1635 Faraday Avenue, Carlsbad, California, 92008. The designated place of payment and filing may change at any time by Lessor upon ten (10) days written notice to Lessee. Lessee assumes all risk of loss if payments are made by mail. (d) In the event Lessee is delinquent in remitting the monthly Base Rent or Delinquent Rent due in accordance with the rent provisions of this lease, then the Base Rent or Delinquent Rent not paid when due shall bear interest at the rate of Ten Per Cent (10%) per annum compounded from the date due until paid. The Executive Director of the Carlsbad Redevelopment Agency shall have the right to waive for good cause any interest payment for any delinquency period upon written application of Lessee. (e) Lessee agrees to pay four percent (4%) annual increases in Base Rent payments beginning in the 13th month (February 20010) of the new lease term. The lease rate beginning February 1, 2010 shall be two thousand nine hundred seventeen dollars ($2917.00) Lease Amendment No. 1 (e) Lessee has paid a Security Deposit in an amount equal to five thousand five hundred and eighty dollars ($5580.00). Security Deposit shall be held in an interest bearing account, however Lessor shall not be required to keep the Security Deposit separate from its general accounts. Upon expiration of this lease, assuming no default by Lessee, Lessee shall be entitled to all interest accrued over said lease term. If Lessee fails to pay Rent or Delinquent Rent, or otherwise defaults on its obligations under the Lease Agreement, Lessor may apply all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason of said default. If Lessor uses or applies all or any portion of said Security Deposit, Lessee shall within ten (10) days after written request therefore deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit is in the same proportion to the increased Base Rent as the initial Security Deposit was to the initial Base Rent 4. EARLY TERMINATION. Lessee or Lessor shall have the right to terminate the Lease Agreement under the following conditions; (1) upon 90 days written notice of termination to the other party, and (2) as to Lessee, upon payment in full of all Delinquent Rent to Lessor. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the month, day and year above written. CARLSBAD REDEVELOPMENT COMMISSION Lease Amendment No. 1 BY: Secretary C-^-- \OQ'. ^ jl ESTABLISHED''^' - 55: ': 55~~ ?,\ 1970 ;g Lease Amendment No. 1 Becky Biddle, dba Sowing Sister's Quilt Shop BY: . /) Owner/Sole Proprietor APPROVED AS TO FORM Ci^Kttorney / Lease Amendment No. 1 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of _ 1 4, 3.0C& before me te ' personally appeared ^^ 1\eb<gg.£.(X-. . Here Insert Name arfd Title of the Offi tcs Name(s) of Signer(s) Comntotiofl # 1S19950 Notary fMMic - CaWornii SM Ditoo County Mv CMMR. Expires Npv23.2gi2 ORIGINAL Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(s)- whose name(e) is/ate subscribed to the within instrument and acknowledged to me that he/she/tbey executed the same in hts/her/tbeir authorized capacity(ies), and that by tos/her/therr signature(s) on the instrument the person(e), 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. Signature OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:. Document Date:. ^3 Number of Pages:. 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