Stradling Yocca Carlson & Rauth
Draft of 9/19/22
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RECORDING REQUESTED BY:
Anaheim Public Financing Authority
AND WHEN RECORDED RETURN TO:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Brian Forbath, Esq.
[Space above for Recorder’s use.]
This Ground Lease is recorded for the benefit of the City of Anaheim and is exempt from California documentary transfer tax pursuant to Section 11928 of the California Revenue and Taxation Code and from recording fees pursuant to Sections 6103, 27383 and 27388.1 (a)(2)(D) and (d)(2) of the California Government Code. Lease term less than 35 years.
GROUND LEASE
by and between
CITY OF ANAHEIM
and
ANAHEIM PUBLIC FINANCING AUTHORITY
Dated as of ______ 1, 2023
Relating to
$________
ANAHEIM PUBLIC FINANCING AUTHORITY
TAXABLE LEASE REVENUE BONDS
(ANAHEIM ARENA IMPROVEMENT PROJECT)
2023 SERIES A
and
$________
ANAHEIM PUBLIC FINANCING AUTHORITY
TAXABLE LEASE REVENUE BONDS
(ANAHEIM ARENA IMPROVEMENT PROJECT)
2023 SERIES B
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GROUND LEASE
THIS GROUND LEASE (this “Ground Lease”), executed and entered into as of ______ 1, 2023, is by and between the CITY OF ANAHEIM (the “City”), a municipal corporation and charter city duly organized and existing under and by virtue of its charter and the Constitution and laws of the State of California, as lessor, and the ANAHEIM PUBLIC FINANCING AUTHORITY (the “Authority”), a joint exercise of powers entity duly organized and existing under the laws of the State of California, as lessee.
WITNESSETH:
WHEREAS, the City and the Authority desire to finance and/or refinance the costs of the acquisition, design, construction, installation and/or equipping of certain capital improvement projects of the City (the “Project”);
WHEREAS, in order to finance the Project, the City will lease the real property described in Exhibit A hereto and the improvements thereon (collectively, the “Property”) to the Authority pursuant to this Ground Lease, and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of ______ 1, 2023 (the “Lease Agreement”); WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to finance the Project through the issuance by the Authority of bonds pursuant to a Master Indenture, dated as of ______ 1, 2023 (as supplemented from time to time in accordance with the terms thereof) (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) and payable from the Base Rental Payments (as defined in the Lease Agreement) to be made by the City under the Lease Agreement;
WHEREAS, all rights of the Authority to receive the Base Rental Payments and other Lease Revenues have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of ______ 1, 2023 (the “Assignment Agreement”) by and between the Authority and the Trustee; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Ground Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Ground Lease;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Except as otherwise defined herein, or unless the context clearly otherwise requires, words and phrases defined in the Lease Agreement shall have the same meaning in this Ground Lease. 2 4855-4133-3770v8/022363-0037
ARTICLE II
LEASE OF THE PROPERTY; RENTAL
Section 2.01 Lease of Property. The City hereby leases to the Authority, and the Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Property and all rights appurtenant thereto, including, but not limited to, rights of access, subject only to Permitted Encumbrances, to have and to hold for the term of this Ground Lease.
Section 2.02 Rental. The Authority shall pay to the City as and for rental of the Property hereunder, the sum of $1.00, the receipt of which is hereby acknowledged, and shall enter into the Lease Agreement.
ARTICLE III
QUIET ENJOYMENT
Section 3.01 The Authority at all times during the term of this Ground Lease shall peaceably and quietly have, hold and enjoy all of the Property.
ARTICLE IV
SPECIAL COVENANTS AND PROVISIONS
Section 4.01 Waste. The Authority agrees that at all times that it is in possession of the Property, it will not commit, suffer or permit any waste on the Property, and that it will not willfully or knowingly use or permit the use of the Property for any illegal purpose or act.
Section 4.02 Further Assurances and Corrective Instruments. The City and the Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Ground Lease, the Indenture and the Lease Agreement.
Section 4.03 Waiver of Personal Liability.
(a) All liabilities under this Ground Lease on the part of the Authority shall be solely liabilities of the Authority as a joint exercise of powers entity, and the City hereby releases each and every director, officer and employee of the Authority of and from any personal or individual liability under this Ground Lease. No director, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the City or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder.
(b) All liabilities under this Ground Lease on the part of the City shall be solely liabilities of the City as a municipal corporation, and the Authority hereby releases each and every member, officer and employee of the City of and from any personal or individual liability under this Ground Lease. No member, officer or employee of the City shall at any time or under any 3 4855-4133-3770v8/022363-0037
circumstances be individually or personally liable under this Ground Lease to the Authority or to any other party whomsoever for anything done or omitted to be done by the City hereunder.
Section 4.04 Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Property; provided, however, that such amounts shall be paid solely from amounts available therefor in the Account Collateral and from the Gross Revenues.
Section 4.05 Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same.
Section 4.06 Representations and Warranties of the City. The City represents and warrants as follows:
(a) the City has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution of this Ground Lease;
(b) except for Permitted Encumbrances, including the Lease Agreement while the same remains in effect, the Property is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the use of the Property for purposes as contemplated by the Collateral Documents; and
(c) all taxes, assessments or impositions of any kind with respect to the Property, except current taxes, have been paid in full.
Section 4.07 Representations and Warranties of the Authority. The Authority represents and warrants that the Authority has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Ground Lease.
ARTICLE V
ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 5.01 Assignment and Subleasing. Immediately following execution of this Ground Lease, the Authority and the City shall enter into the Lease Agreement. Furthermore, the Authority or the Trustee (as its assignee) may sell or assign this Ground Lease or sublease the Property, in whole or in part, without the necessity of obtaining the consent of the City, if an event of default occurs under the Lease Agreement. The Authority shall, within 30 days after such an assignment, sale or sublease, furnish or cause to be furnished to the City a true and correct copy of such assignment, sale or sublease, as the case may be.
Section 5.02 Restrictions on City. The City agrees that, except with respect to Permitted Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Property or any portion thereof during the term of this Ground Lease.
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ARTICLE VI
TERM; TERMINATION
Section 6.01 Term. The term of this Ground Lease shall commence on the Delivery Date and shall remain in full force and effect from such date to and including _____ 1, 20__ (the “Scheduled Termination Date”), unless such term is extended or sooner terminated as hereinafter provided.
Section 6.02 Extension; Early Termination. If, on the Scheduled Termination Date, the Bonds shall not be fully paid, or provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments shall remain due and payable, then the term of this Ground Lease shall be automatically extended until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, except that the term of this Ground Lease shall in no event be extended beyond ten years after the Scheduled Termination Date.
If, prior to the Scheduled Termination Date, all Bonds shall be fully paid, or provisions therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, the term of this Ground Lease shall end simultaneously therewith.
ARTICLE VII
SUBSTITUTION OR RELEASE OF ADDITIONAL PROJECT PROPERTY
Section 7.01 Substitution or Release of Additional Project Property. The City shall have the right to substitute alternate real property for any portion of the Additional Project Property or release a portion of the Additional Project Property from this Ground Lease, except, in each case, for the Parking Areas (as defined in the Management Agreement). All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of any Additional Project Property pursuant to this Section 7.01, there shall be no reduction in the Base Rental Payments due from the City under the Lease Agreement as a result of such substitution or release. Any such substitution or release of any portion of the Additional Project Property (except for the Parking Areas) shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:
(a) an independent certified real estate appraiser selected by the City shall have found (and shall have delivered a certificate to the City and the Trustee setting forth its findings) that the Property, as constituted after such substitution or release (i) has a fair replacement value at least equal to the aggregate principal amount of the Bonds then Outstanding, and (ii) has a useful life equal to or greater than the useful life of the Property, as constituted prior to such substitution or release;
(b) the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount of the fair market value of such substituted property (which fair market value shall have been determined by an independent certified real estate appraiser), of the type and with the endorsements described in Section 5.06 of the Lease Agreement; and
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(c) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the Orange County Recorder, any document necessary to reconvey the portion of the Additional Project Property being released and to include any substituted real property in the description of the Property contained herein and in the Lease Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Binding Effect. This Ground Lease shall inure to the benefit of and shall be binding upon the City, the Authority and their respective successors and assigns.
Section 8.02 Severability. In the event any provision of this Ground Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
Section 8.03 Amendments, Changes and Modifications. This Ground Lease may be amended, changed, modified, altered or terminated only in accordance with the provisions of the Lease Agreement. This Ground Lease may be amended to reflect any substitution or release of property under Section 7.01 hereof without the consent of any Owners of the Bonds.
Section 8.04 Assignment to Trustee. The Authority and City acknowledge that the Authority has assigned its right, title and interest in and to this Ground Lease (but none of its obligations and none of its rights to provide consents or approvals hereunder) to the Trustee pursuant to the Assignment Agreement. The City consents to such assignment.
Section 8.05 Execution In Counterparts. This Ground Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 8.06 Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the State of California.
Section 8.07 Captions. The captions or headings in this Ground Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Ground Lease.
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IN WITNESS WHEREOF, the Authority and the City have caused this Ground Lease to be executed by their respective officers hereunto duly authorized, all as of the day and year first above written.
CITY OF ANAHEIM
By:
James Vanderpool
City Manager
ATTEST:
Theresa Bass
City Clerk
ANAHEIM PUBLIC FINANCING AUTHORITY
By:
Deborah A. Moreno
Executive Director
ATTEST:
Theresa Bass
Secretary
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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the Property conveyed under the Ground Lease to the Anaheim Public Financing Authority, a joint exercise of powers entity duly organized and existing under the laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the Board of Directors of the Anaheim Public Financing Authority, pursuant to authority conferred by resolution of the said Board of Directors adopted on __________, 2022, and the grantee consents to recordation thereof by its duly authorized officer.
Dated: ________, 2022
ANAHEIM PUBLIC FINANCING AUTHORITY
By:
Deborah A. Moreno
Executive Director
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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 )
) ss.
COUNTY OF ORANGE )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(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
SIGNATURE OF NOTARY PUBLIC
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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 )
) ss.
COUNTY OF ORANGE )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(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
SIGNATURE OF NOTARY PUBLIC
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EXHIBIT A
DESCRIPTION OF THE PROPERTY
Land:
All that real property situated in the City of Anaheim, County of Orange, State of California, described as follows:
[ARENA PROPERTY]
Additional Project Property:
All that real property situated in the City of Anaheim, County of Orange, State of California, described as follows:
[PARKING AREAS AND ALL OTHER PROJECT PROPERTY OTHER THAN THE ARENA]