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HomeMy WebLinkAboutReso 68-18 Lease Sites 89 89W andd 90 90W!, 0 ', 'O '•, :,Mt: h OF THE CITY OF ..:. ♦ CALIFORNIA, APPROVING AMENDMENT #3 TO THE NEW MASTER LEASE AGREEMENT FOR LEASE SITE 89189W, LOCATED AT 845 EMBARCADERO, W&F ] �' 11111111 Waterfront described as City Tidelands leases and properties; and and is a tenant in good standing; and WHEREAS, on October 11, 2016, Tenant and City entered into that certain new master lease agreement for Lease Site 89/89W (the "New Master Lease Agreement for Lease Site 89/89W'); and HEREAS, Tenant is in escrow to purchase Lease Site 90/90W, where after Tenant intends to undertake significant renovation project on the Lease Site; and WHEREAS, an December 13, 2017, Tenant and City entered into that certain new master lease agreement for Lease Site 90/90W (the "New Master Lease Agreement for Lease Site 90/90W') contingent upon close of said site purchase escrow; and HEREAS, City and Tenant wish to resolve issues over a failing portion of the seawall on Lease Site 89/89W, cure certain site deficiencies on Lease Site 90/90W, and modify various provisions of the two New Master Lease Agreements, including the contingency provisions, by approving Amendment #3 of the New Master Lease Agreement for the Lease Site 89/89W and Amendment #1 of the New Master Lease Agreement for Lease Site 90/90W. NOW, THEREFORE, 12E I RESOLVED by the City Council of the City of Marro Bay, California, as follows: 1. The attached Amendment #3 to the New Master Lease Agreement for Lease Site 89/89W is hereby approved. 2. The attached Amendment #1 to the New Master Lease Agreement for Lease Site 90/90W is hereby approved. 3. The Mayor is hereby authorized to execute said Amendments 3 and #1. PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 28"' day of August, 2018 on the following vote: AYES: Irons, Davis, Makowetski, McPherson NOES: None ABSENT: Headding L. Irons, Mayor ATTEST: Ak j CA 4A.AXOA a Swanson, City Clerk This Amendment (this "Amendment #1") is made and entered into as of this Jay of , 20181 by and among the City of Morro Bay, a municipal corporation of the State of California, hereinafter called "City," Boatyard, LLC, a California limited liability company, hereinafter called "Boatyard" and Fair Sky Properties, a California general partnership, hereinafter called "FSP." (Collectively, City, Boatyard and FSP are sometimes referred to herein as the "Parties.") WG��REA�, the current tenant of Lease Site 90/90W (commonly the "Otter Rock") (the 'Premises") is Joseph Steinmann ("Steinmann") and Boatyard is the current tenant of the adjacent leasehold interest Lease Site 89/89W (commonly the "Boat Yard"), V�V�GJCR� � �, with Steinmann's permission and acknowledgment, Ci'cy and Boatyard executed and entered into that certain Master Lease Agreement effective as of December 13, 2017 (the "Master Lease") for the Premises; WHEREAS, for accounting purposes, Boatyard desires to assign its rights and obligations pursuant to the Master Lease to FSP and FSP desires to assume all of Boatyard's rights and obligations pursuant to the Master Lease; and W���EA�, City and FSP also desire to make cerfiain modifications to the Master Lease. ��O�r�i9 T�E��F®RCS, Boatyard and City agree as follows: 1. l�nless expressly stated herein, words used in this Amendment �1 shall have the same meaning as stated in the Master Lease, except to the extent the context requires otherwise. 2. The foregoing recitals are incorporated into this Amendment wR1 as true and correct. 3. FSP acknowledges any assignment of fhe Master Lease is subject to prior approval by the City's City Council and is also subject to prior e>cecution of this Amendment #1 by FSP and Boatyard. 4. On the Effective Date (defined below), FSP agrees (i) to comply with all the terms and conditions of the Master Lease and this Amendment �#1, (ii) to assume all liabilities required under the Master Lease, this Amendment #1, and (iii) to maintain liability insurance in the manner, form and amount required by Master Lease and any future amendments thereto with the City, its officers, employees 01181.0024/499260.1JWP 1 of 4 and representatives, included as an additional insureds without offset against the City's insurance. 5. Boatyard hereby assigns to FSP all rights, title and interest Boatyard has in the Master Lease, effective on the Effective Date. 6. Boatyard confirms to City That Boatyard has no actual knowledge or reasonable cause to believe any release of hazardous substance has come to be located on/or beneath the real property during the term of Assignors' occupation of the leased premises that has not been reported pursuant to Health & Safety Code Section 253597. 7. Upon the Effective Date Boatyard is released from any and all obligations created pursuant only to the Master Lease and this Amendment #1. 8. City and FSP agree that after the Effective Dafe, Boatyard is no longer a necessary party to any future amendment to the Master Lease, 9. City and FSP agree the Premises (as described in Exhibit "A" of the Master Lease) is hereby redefined to include Lease Site 90 and a portion of what is now described as Lease Site 90W (as described in Exhibit "A", attached hereto and incorporated herein by this reference) and to exclude the remaining portion of Lease Site 90W, the latter of which will be added to the description of Lease Site 89/89W and pursuant to an amendment to the current master lease between City and Boatyard for Lease Site 89/89W . Can or before April 1, 2019, the City, at its sole expense, shall provide and record a survey map for the Premises reflecting the portion of former Lease Site 90W that has been added to Lease Site 89W, and City shall additionally prepare and provide a City resolution adopted by the City Council of the City of Morro Bay approving the boundaries and legal description of the new decreased size of the Premises and the new increased size of Lease Site 89W. For example purposes only, attached as Exhibit "B," is Resolution 54-13 and a survey map the City approved for a similar change for Lease Sites 93-95/93W-95W. 10. The Parties hereby agree to allow an existing rear door at the southwesterly side of the current building on the Premises to be used for access to and from the Premises over Lease Site 89/89W. The City, at no additional cost or expense to Boatyard and/or FSP, shall also approve an amendment to Lease Site 89/89VV to allow that same access. 11. City and FSP agree and acknowledge, on the Effective Date, all of the City's governmental land use approvals relating to the Premises that were granted when Boatyard was the tenant of the Premises, including, but not limited to, the right to operate tour boats from the original Lease Site 90W as set forth in CUP# 01181.0024/49K60.1 MP 2 of 4 A00-52 to CUP 16-92 and/or the City approved set of plans for Rehabilitation Plans for Lease Site 90/90W and Lease Site 89/89W create a vested right that run with the Premises once a substantial amount of hard construction costs have been expended on the Rehabilitation Plan improvements. 12. The City consents to FSP amending Exhibit B to that certain Sub -Lease Agreement dated dune 28, 2018, originally entered into by and between Boatyard and Willow Market LLC, and previously approved by the City, to be consistent with Exhibit "A" attached to this Amendment #1 depicting the revised portion of the Premises for Lease Site 90, 13. City will cooperate with the California Department of Alcoholic Beverage Control with regards to the transfer of the existing Otter Rock liquor license to Willow Market LLC. The parties acknowledge that there is a requirement that an assignee/transferee use the liquor license for at least one day within a certain period of time after the assignment/transfer. City agrees that Tenant and/or Willow Market LLC shall have the right to be open for business for a soft opening at some time within 15 days after the assignment/transfer of the liquor license for a period not to exceed eight hours. Tenant and/or Willow Market LLC shall comply with all insurance requirements set forth in the Master Lease and Sub - Lease Agreement, respectively. 14. The Parties agree that all City -required building, planning, engineering and inspection fees, costs, and expenses to be paid by Tenant to City for the Rehabilitation Project shall not exceed Eleven Thousand Eight Hundred Eighty Two Dollars ($11,882.00). 15. On or before the mutual execution of Amendment #3, Tenant shall deliver to City proof of a deposit of $150,000 from Willow Market LLC into the escrow with First American Title Company ("FATCO") for the purchase and sale of the Otter Rock Cafe liquor license and assets, and shall also provide proof of an additional $50,000 deposit by Willow Market LLC into the escrow with FATCO for the purchase and sale of the leasehold interest in Lease Site 90. Tenant's failure to provide that copy and proof shall not relieve Tenant or any of its successors or assigns from any other obligations pursuant to this Amendment #3 and the Master Lease, 16. Except as expressly stated herein, all provisions of the Master Lease shall remain in full force and effect. 17. The effective date of this Amendment #1 is the date first written above (Effective Date). 01181.0024/499260.1JWP 3 Of4 �N VhVI I LESS WHEREOF, the parties hereto have executed this Amendment 1P i as or the date written above. AI�PR�VE� AS T® F®RhVI: ��na Swanson, City Clerl� CliiFo�d Qrach , GVi anagincJ hU�ember Smith family Trust, dated September 137 20041 General Partner Jar�Es Edmund Smith, Trustee -r 4 e Beverly 'elder Smith, Trustee Cli��ord S��anch I rust dated January 11, 2006, General Parfiner 6y: Clifford branch, Trustee 01181.0024/499260.1JWP Q- OT � mantra, 00 IN MIIF #Its 1 1 EXISTING BUILDINNPIWG •;"':' i I I LEASE SITE 91Ol ' IF 1Is No v.k."T' IF bi N t-ol is Ili still 1.% 10 Pilots* W—F si"Al FEE' NET' S41 IMtopi I'stol I, g';,MME"I.V I I Not is I Mt,la » ...M ME ME rr s , 9� 1 l I� 1��INIF I N Yll ill\ tiJ} e — Q _IMF ITT EXISTING FF=9p44' nr. 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NO. 5702 R_ a� OF r PREVIOUSLY A®DUSTED PER MORRO BAY CITY COUNCIL RESOLUTION #42®13 GRAPHIC SCALE IN FEET P7T ffl13Iv I — FORMER WATER LEASE LINE N13030'46"W 93.79'MLJ z I FORMER LEASE LINE PREVIOUSLY ADJUSTED PER MORRO BAY CITY COUNCIL 1 RESOLUTION #42-13 ( 1 0 j WATER LEASE SITES I93W9 94W & 95W1 i 1 I N13°30`46"W 135.07' kirdRENDIMEiAT nQ TO THE LEASES A0 EEMEN � FO LE A,SE Si T E 69��9�V3 This Amendment #3 (this "Amendment #33)) is made and entered into as of this F `day of - , 20187 by and between the City of Morro Bay, a municipal corporation of the State of California, hereinafter called "City," and Boatyard, LLC, a California limited liability company, hereinafter called "Tenant." (Collectively, City and Tenant are sometimes referred to herein as the "Parties".) W��E EASI effective October 111 2010 the Parties entered into that certain lease for Lease Sites 89/89W ("Master Lease"); CrEGEAS, the Pales arrtended the Master` Lease by efcecuting Amendment 1, effective December 12, 2017 ("Amendment 1"), and Amendment #2, effective July 10, 2018 ("Amendment 2"); _ �:'i�v���ui�AS9 the Master Lease, Arnendmer�t 1 and Amendment �2 are hereinafter collectively referred to as the "Amended Master Lease", „�nG�E'�E�S, the Pa��ties again desire fo amend the Amended Master Lease to make certain modifications thereto; i�C��i�� ���E�EFCG E3 Tenant and Cify agree, as follows: 1. �Dnless expressly stated herein, words used in Phis Amendment �3 shall have the sa��e meaning as stated in the Amended Master Lease, except to the extent the context requires otherwise. 2. The foregoing recitals are incorporated into this Arnendrnent �3 as true and correct. 3. The Parties acknowledge and agree fihe Master Lease and all of the terms and conditions of the Master Lease are in Ball force and effect, including but not limited to, the tolling period to bring any claim or action until the Commencement Date of the Amended Master Lease, 4. City and Tenant agree that a portion of the current Cifiy of Morro Bay Lease Site 90W shall be added to and included in Lease Site 89W as generally depicted in Exhibit "A," attached hereto. As of the effective date of the Amended Master Lease, the definition of the "Premises" shall include all of the area generally depicted in Exhibit "A." On or before April 1, 2019, the City, at its sole expense, shall provide and record a survey map for the Premises reflecting the portion of former Lease Site 90VV that has been added to Lease Site 89W of the Premises, and City shall additionally prepare and provide a City resolution adopted by the City Council of the City of Morro Say approving the boundaries and legal description of the new increased size of the Premises and new reduced size of Lease Site 90W. For example purposes only, attached as Exhibit "B," is 01079,0024/499231.3 Page 1 of 4 Resolution No. 54-13 and a sourvey asap the City approved for a sirmiar change for Lease Sites 93-95/93W-95W. Additionally, on or before April 1, 2019, the City agrees, at Citys sole expense, to take all actions necessary fo remove from title and terminate the following encumbrances recorded against the Premises: A: The fen (10) foot lease area per 1%) C.R. 153 and shown on City of 11/lo110 Say Lease Sites Map Sheet 1 of 13 and as shown on the attached Record of Survey attached hereto as Exhibit "C" which may be accomplished by recordation of a new survey rilapI arVd �: The Deed Restriction recorded in the official records of the County of San Luis Obispo on or about April 14, 2015, as instrument No. 2015-17121, if that Deed Restriction remains an exception to the title policy issued by First American Title Cornpany (FATCO) for Lease Site 90/90W. 5. The Parties acicnawledge and agree the Rehabiiitafian Project includes a notation on the plans, which is attached to Amendment #2, as shown on the modified Sheet 3, as Schedule "I," and part of Exhibit B to the Amended Master Lease. The plan notation on page 3 calls out a ten (10) foot dimension to reflect a two (2) foot expansion of the Harbor Walk, as required by the California Coastal Commission. The Parties agree that the ten (10) foot wide dimension for the new Harbor Walk will be measured from the base of the exterior wall of the existing building, to the outside edge of the walk. 6. The Parties agree and acknowledge, on the Effective Dafe of fhe Amended 11/laster Lease, ail of the City's governmental land use approvals relating to the portion of former Lease Site 90W that was added to the Premises, including, but not limited to, the right to operate tour boats from the original Lease Site 90W as set forth in CUP# A00-52 to CUP 18-92 and/or the City approved set of plans for Rehabilitation Project for Lease Site 90/90W and Lease Site 89189W shall create a vested right once a substantial amount of hard construction costs have been expended on the Rehabilitation Project improvements. 7. The Parties hereby agree to allow an existing rear daor at the southv�festerly side of fhe curront building on Lease Site 90/90W to be used for access to and from Lease Site 90/90W over the Premises. The City shall also approve an amendment to Lease Site 90/90W to allow that same access. 8. Section 8 of Amendment #2 is hereby replaced in its entirety with the %Mowing: On or before January 1, 2020, City agrees to remove or cause to be remJ. oved from fhe Premises the portion of the deck encroaching on and across the lot line between the Premises and Lease Site 87-88/87W-88W ("beck") with concrete and snatching bricks, as necessary, so the structural and aesthetic integrity of the existing brick walkway located on the Premises, is maintained. City agrees that concrete and matching brick work shall be completed within thirty (30) days after the removal of the Deck. 01079.Od24/499231.3 9a City and Tenant agree that all City -required building, planning, engineering and inspection fees, costs, and expenses to be paid by T enant to City for the Rehab ili atian Project shall not exceed Thirty-five Thousand Seven hundred Seventy-eight Dollars ($351778.00). 10, upon the mutual execution of this Amendment #3, item kmof t11e first paragraph of Section 5 of the Amended Master Lease, which establishes the closing -date -deadline contingency for the closing of the utter Rock Cafe asset escrow and leasehold interest in Lease site 90/90VV escrow both Nrvith Steinmann and J. Parker, shall be deemed deleted and of no further force and effect. 11. Tenant has provided the City a cagy the e; ecuted contract witlt Associated Pacific Constructors, Inc. ("APC Contract") and, on or before the mutual execution of this Amendment #3, shall additionally provide proof of the initial minimum payment of $131,000 to Associated Pacific Constructors, Inc. in order to begin the repairs on or about January 2, 2019, as outlined in the APC Contract. Tenant's failure to provide that copy and proof shall not relieve (Tenant or any of its successors or assigns from an�r other obligations pursuant to this Amendment #3 and the Amended (faster Lease. 12. Cn or before thus Emutual e�cecution of Amendment 3, Tenant shall deliver to City proof of a deposit of $150,000 from Willow Market LLC into the escrow with FATCQ for the purchase and sale of the Otter Rock Cafe liquor license and assets, and shall also provide proof of an additional $50,000 deposit by Willow Market LLC- into the escrow with FATC® for the purchase and sale of the leasehold interest in Lease Site 90/90W. Tenant's failure to provide that copy and proof shall not relieve T enant or any of its successors or assigns from any other obligations pursuant to this Arnendment #3 and the Amended Master Lease 13. The [parties agree the Arrtended fl/iaster Lease is amended so the nurraber of seimi- annual rent credits granted to Tenant are increased from 20 to 22 semi-annual rent credits. The dollar amount of each individual semi-annual rent credit shall remain unchanged at $24,650 per rent credit. 14. The City, at the City's sale expense, shall provide, at its option and far the entire term of the amended Master Lease as amended, either (i)n easement al4owing for the pubic ingress and egress for the door/awning located on the southeasterly side of the current building located on the south side of Lease Site 89/89VV or (ii) a binding written commitment stating that any new project design for Lease Site 87- 88/87W-88W shall not prevent public ingress and egress to the same door/awning, and, until the new project on Lease Site 87-88/87W-88W is complete, the door/awning shall remain available for public ingress and egress at all times. 15. [wring the course of construction of the Rehabilitation Project, the City shall provide suitable accommodation for beat storage far the existing 5 electric beats and Lost isle tour boat currently located on the Premises for a period of ninety (90) days beginning January 2, 2019 and ending on April 15, 2019. 01079.0024/499231,3 Page 3 of 4 16. Except as expressly stated herein, all provisions of the Amended Master Lean,ve shall remain in Ball force and effect. 17. The effective date of this amendment 43 is the date first written above. @N WITNESS WHEREOF, the parties hereto have executed this Amendment 3 as of the date written above. Cliff branch, Manager Joseph W. 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PAS ;aIVD AND AJ)01°41111) tEIQ City CChts€tci� oi ffil! C-`iit' of TV�i1QYO Bt��� ;;�.'. �n�iT7�cYQi. a.�:!i; III .►;�s_ tF: �c�i!ti-izd�r, C°aid, t;[��°� .AND s r \,J C.. NO. 5702 z L,A- L 101 Ed V r \J\ %7 PREVIOUSLY ADJUSTED PER dAORRO DAY CITY COUNCIL o�ESOLUTION -(42-13 r� ���� ✓ � I I I II l SPORE CONTROL LINE w � ILo � R LEAGE ITE 96W � `" FORMER WATER LEASE LINE I ,: Ni 3°3O'Q-6°°W 93.79°1\fl �, I I I FORMER LEASE LINELi i PREVIOUSLY ADJUSTED PER " I MORRO BAY CITY COUNCIL RESOLUTION42 13 i o VATER LEASEI W & 95W I 1 f I 1 N13°3O'46"W 135,07; { 1� ,- { .:- -- a� .ram, ♦ a �. _.� �' � (' R � � -� � - �g�oo � � � ���� � � � � � . � �p��� � Q � � �� � �� � ��'� ��� �� � � � U g � � 0. P � g���� �+ a W � � �� O ��q � £ � � � � ' o � os�� � o _'� �� 0 �� s���� � a � � �� Q^ g. ro r R. Sao � cy� ,��� §�'0 2 �� �$ �, m � �R � �� m� �' . 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ANEEt=hMUU WM IT �2 TO THE LEASE AUREEGiMNE FOR LEASE SOTS 0UIOVVV9 L®LpATE® EM BARCADERO This Amendment ("Amendment #2") is made and entered into as of this day of 2018, by and among the City of Morro Bay, a municipal corporation of the Slate of California, hereinafter called "City," and Boatyard, LLC, a California limited liability company, hereinafter called "Tenant." (Collectively, City and Tenant are sometimes referred to herein as the "Parties.") WHEREAS, this Amendment �2 is fo that certain Lease, which was signed on behalf of the Parties and is effective as of October 11, 2016 (the "Master Lease") and that certain Amendment #1 dated December 12, 2017; WHEREAS, the California Coastal Commission has indicated that as part of the approval process of the Rehabilitation Project, they will likely require a two (2) foot expansion in the width of a section of the Harbor Walk on Premises (the "CCC Additional Condition"); WHEREAS, due solely to the CCC Additional Condition, without waiving any rights or contingencies, the parties do not believe that all Permits can reasonably be obtained without material design and/or structural change required to the Rehabilitation Project on or before October 31, 2018; WHEREAS, Tenant and Joseph Steinmann ("Steinmann") and Jaime Parker (°'J. Parker) entered into escrows for Tenant to purchase the Otter Rock Cafe and the Otter Rock Cafe leasehold interest for Lease Site 90/90W; WHEREAS, Tenant and Steinmann and J. Parker are negotiating an extension of the c{osing date of both the Otter Rock Cafe and the Offer Rock Cafe leasehold interest for Lease Site 90/90W to on or before October 31, 2018; WHEREAS, Tenant a€1d Willow Market, LLC a California limited liability company ("Willow Market"), are in negotiations to enter into a sublease with an option to purchase the lease for Lease Site 90 (does not include Lease Site 90W), if and when Tenant closes the Otter Rock Cafe escrow and the Otter Rock Cafe leasehold interest with Steinmann and J. Parker; WHEREAS, before Willow Market will enter into any sublease with Tenant, Willow Market is requiring as a condition precedent that all necessary governmental permits will be obtained for the Rehabilitation Project(s); WHEREAS, City and Tenant agree the CCC Additional Condition allows Tenant, at Tenant's option, to terminate the Master Lease, but rather than exercise that right of termination, Tenant has proposed changes to the Master Lease; and WHEREAS, will proceed. the Parties desire to amend the Master Lease so the Rehabilitation Project 434056.9 JWP Page 1 of 4 Initials / N0TV THEREFORE, Tenant and City agree, as follows: 1. Unless expressly stated herein, words used in this Amendment i�m2 shall have the same meaning as stated in the Master Lease and Amendment #1, except to the extent the context requires otherwise. 2. T he foregoing recitals are incorporated into this Amendment rr2 as true and correct. 3. The Parties acknowledge and agree the Current Lease Agreement and all of the terms and conditions of the Current Lease Agreement are in full force and effect, including but not limited to the tolling period to bring any claim or action until the Commencement Date of the Master Lease. 4. If fihe California Coastal Commission requires CCC Additional Condition, fihen the parties agree to modify the plans for the Rehabilitation Project, attached as Exhibit B to Amendment #1 by replacing in its entirety Sheet 3 of the plans for the Rehabilitation Project with the new Sheet 3 attached hereto as Schedule Willi and such modification shall be considered minor by City and City's Community Development Director shall authorize such modification, pursuant to the authority set forth in the Morro Bay Municipal Code. 5. The first paragraph of Section 1.02 of Amendment �1 is hereby amended and restated in its entirety to read as follows: TENANT shall have the right to give CITY written notice of termination of this Lease, if, (i) all Permits as defined in Subdivision 13.03 A.) cannot be obtained without any material design and/or structural change required to the Rehabilitation Project (excluding a potential two (2) foot wide expansion of the Harbor Walk on the Premises) on or before October 31, 2018; and/or (ii) the seawall/revetment on Lease Site 89/89VV has collapsed prior to TENANT'S contractor's commencement of the Rehabilitation Project for the repair of the seawall/revetment to the extent a material design and/or structural change is then required to repair the seawall/revetment; and/or (iii) TENANT does not close the escrow for the purchase of the Otter Rock Cafe and/or escrow for the purchase of the leasehold interest for Lease Site 90/90W with Steinmann and J. Parker; and/or (iv) if CITY'S Harbor Director has not approved Willow Market as the sublessee of the lease for Lease Site 90 (excluding Lease Site 90W) within three weeks after CITY'S Harbor Director has received from TENANT and/or Willow Market: (a) a completed CITY application payment of the applicable fee, (b) a copy of the final version of for sublease approval, including the proposed sublease between Page 2 of 4 434056.9 JWP Initials / TENANT and Willow Mairket, (c) proof of Willow Market's business tax certificate having been issued by CITY, and (d) proof of Willow Market's general liability insurance, including an endorsement naming CITY and its officers, employees and agents as additionally insureds, Upon the occurrence of any o�` those Conti€agencies, TENANT may deliver �rvritten notice to CITY of termination of this Lease, and neither Party shall have any further obligation to the other Party and this Lease shall be null and void, and the Current Lease Agreement shall continue in full force and effect. The parties agree, prior to the effective date of this Amendment a timely application has been filed with City and with the California Coastal Commission. 6. Secfion 2.07 Amenoment 1 is hereby amended and restated in its entirety to read as follows: �e�f�o�n 2e07 5����u�arnna�a0 CUe��lt In partial consideration of completion of the Rehabilitatian Project and Release, established by Section 7.11 and changes made to Section 1.02 and Subdivision 13.03 A. by that certain Amendment #1 to this Lease, effective December 12, 2017) CITY agrees to credit against each semi- annual payment of both the Minimum Rent and Percentage Rent, as reconciled annually and as otherwise due to CITY pursuant to this Lease, $24,650 for twenty consecutive semi-annual payments due to CITY, commencing with the first full semi-annual payment due after the Commencement Date. Notwithstanding anything in this paragraph above, if the foregoing credit is greater than the total amount of the Minimum Rent and Percentage Rent that TENANT owes CITY during any annual reconciled period from July 1st to June 30th, the Parties agree that the excess credit shall not be refunded or carried over as a credit for any subsequent July 1st to June 30th period. For illustration purposes only, attached hereto is Schedule "2" that shows an example of how the semi-annual credits shall be applied on the City's current Annual Report of Gross Receipts form. 7. If Willow Market and/or Smith Livestock LLC, or any entity owned by Sonny Smith exercises any option to purchase the lease for Lease Site 90, then City and Tenant agree to amend the Master Lease to add Lease Site 90W to Lease Site 89/89W as part of the definition of the "Premises," 8. On or before January 1, 2020, City agrees to remove or cause to be removed from the Premises the portion of the Off the Hook deck encroaching on and across the lot line between the Premises and the Off the Hook. 9. Except as expressly stated herein, all provisions of the .Master Lease and Page 3 of 4 484056.9 MT Initials''/ mendment#1 shall remain in Tall force and efeect. 10. The effective date of this Amendment d+2 is the date first written above. Ilv WI I NLZSS WHEREOF, the parties hereto have executed this Amendment 2 as of the date written above. CITY OF MORF�O BAY APP{�OVED AS TO FOf�M: Joseph W. Pannone, City Attorney ATTEST: Dana Swanson, City Glerk BOATYAf�D, LLG Gliff Branch, Manager 484056.9 JWP Page 4 of 4 00 1co ;oo LQGVMEM®6'v E AU ffi2 0 VHS LEA M blia UIEEMM NJ FOO L� L �- CB=LQ LP= r4L,z O�ij/ oii v�OF ,, e u r 2c) LEABE WE 89/391 I WIN tINGIMMILVINVAINUINIIIn ��. � �:- nx: ra .' a i .''"�' ul . Tie Fiscal fear. You must incJlude a I Tenant and Subtenant businesses which are required toreport gross receipts per yourlease agreement your lease agreoirrerat for re- qu red pas ceazasges, CIE��SS BUSMSS NA I� E & Operation RECEIPTS IPT'S TOTAL % AYI®U11 DUE 1.. Fease see attc hed $1900949240000000 Saomf® gO9���10�0 2. 3. 4, 50 6. 7. 8. 9. 10, TOTALS...... ooa0000ao,asooa000ao.oso<oo< � � g(�,���o�© Less xnrnimu m guaranteed rent payments madea R'11a1llllbt pCrfi»f1 of tienll-Antlual Credit for the l �d�"� i��f I�� €�_� a)- _'.y �P� �.Il;•� !�- it � u�� a`� al'� � ia_�" il, Oi '!(fii '�1� I'_'-_ - r I hereby certify the foregoing is a true and correct statement of R:oss receipts under the tens of the lease agreement for Lease Site 89/89�J for the stated period. :�Ilc"3.I1 G C"l�?I-a'l.11li.r f1°!lt C,�I"bjl'.� �f ��il!)�IhC. t(1 _ilC.' vlllll;lll!!1", ��_ili CI11• Il(J J�!�� �n :�i)'? 0• �!�:� : ��t�r Lr�•i�_:. �:li�i'1' I:', f •>1 r�f•�i!ri��t��� t��, I?1"i "r i;ll'T�tlll? �rril .?_ � �� r, l: tail January I st of each year IE the sernimannual rent credits are larger Than the Minimum :� .,L�, Rent due, Tenant'sRemaining portion of Rent paid or credited to Tenant is subtracted from Percentage Rent. f,.