14-E
TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Travis Sais, Deputy City Manager
SUBJECT: Consideration and possible action to: 1) Authorize the City Manager to execute an Amendment to the Agency Sublease, in a form approved by the City Attorney, with Hollywood Sports Park , LLC (HSP), to extend the lease term with HSP for the first 10-year option, until October 23, 2035, for use of real property at 9030 Somerset Boulevard and 9108 Somerset B oulevard and; 2) Consider written requests from the Managing Partners of HSP to assign their respective beneficial shares in HSP to their designated Trusts.
Date: November 12, 2024
EXECUTIVE SUMMARY
On May 13, 2024, the City Council authorized the City Manager to issue a letter to Hollywood Sports Park, LLC (HSP) regarding the City’s intent to approve, upon HSP’s request, the first lease extension option under the Agency Sublease with HSP for use of real property at 9030 Somerset Boulevard and 9108 Somerset Boulevard. The letter was subsequently issued to HSP and is attached to this report. As per the lease agreement with HSP, the earliest it could request to exercise the lease option to extend the term was October 24, 2024, which is twelve months before the initial 25-year term.
On October 24, 2024, the City received a request from HSP to extend the term for three 10-year options. This request is also attached to this report. Following a review, the lease agreement allows for three consecutive additional periods of 10 years each on the same terms and conditions. The proposed action would extend the lease term with HSP for the first 10-year option, until October 23, 2035.
Additionally, the City Manager received separate written requests from the Managing Partners of HSP, Dennis Bukowski and Giovanni D’Egidio, to transfer their respective shares of Hollywood Sports Park, LLC, to their designated Trusts. Their requests are attached to this report for consideration. Mr. Bukowski and Mr. D’Egidio specified in their requests they are in the process of estate planning, which is the reason for these requests. Furthermore, they indicated they would still fully manage Hollywood Sports Park LLC, and nothing should change with regard to company operations. Pursuant to the lease agreement, this transfer of interest constitutes an assignment and requires the City Council’s approval.
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Staff Report – Lease Extension Hollywood Sports Park, LLC & Assignment Request November 12, 2024
RECOMMENDATION TO CITY COUNCIL
It is recommended that the City Council:
1) Authorize the City Manager to execute an Amendment to the Agency Sublease, in a form approved by the City Attorney, with Hollywood Sports Park, LLC (HSP), to extend the lease term with HSP for the first 10-year option, until October 23, 2035, for use of real property at 9030 Somerset Boulevard and 9108 Somerset Boulevard ; and
2) Consider written requests from the Managing Partners of Hollywood Sports Park, LLC to assign their respective beneficial shares in HSP to their designated Trusts; or
3) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
HSP pays rent quarterly at 6% of its gross receipts to the City. Based on the latest four quarters, the annual 6% rent totaled $267,865. Under the lease agreement, the base rent (minimum rent) for HSP is payable quarterly in advance (currently, $33,734 quarterly, or $134,936 annually) and is adjusted by CPI annually. HSP is current with all rent payments.
BACKGROUND
Hollywood Sports Park, LLC has been the tenant of City-owned property at 9030 Somerset Boulevard and 9108 Somerset Boulevard since October 23, 2000. On March 21, 2000, the City and former Bellflower Redevelopment Agency entered into a Disposition and Development Agreement with Hollywood Sports Park, LLC to develop and operate approximately 22 acres into, among other things, an outdoor recreational paintball park and BMX Bike Track. Subsequently, an Agency Sublease ("Sublease") between the former Bellflower Redevelopment Agency and Hollywood Sports Park, LLC was executed on October 23, 2000. The Sublease (which was assigned to the City on February 25, 2013) established a 25-year lease term through October 23, 2025, with three consecutive additional periods of 10 years each on the same terms and conditions contained in the Sublease. Written notice of HSP’s exercise of its option to extend the Term of the Sublease must be given to the City no more than 12 months prior, but no t less than three months before October 23, 2025. HSP holds a significant presence as a well-known business within the community, consistently drawing enthusiasts of paintball and BMX from diverse geographic areas throughout the greater L.A. region and contributes positively to the Bellflower community.
On May 13, 2024, the City Council authorized the City Manager to issue a letter to HSP regarding the City’s intent to approve, upon HSP’s request, the first lease extension option under the Agency Sublease with HSP for use of real property at 9030 Somerset Boulevard and 9108 Somerset Boulevard. This letter was issued to HSP to signify the City's commitment to retaining HSP as a valued tenant and community partner. -2-
Staff Report – Lease Extension Hollywood Sports Park, LLC & Assignment Request November 12, 2024
BACKGROUND – Continued
Although HSP is requesting to exercise all three 10-year options, the lease agreement provides that these options are three individual option terms. The proposed action would extend the lease term with HSP for the first 10-year option, until October 23, 2035.
ATTACHMENT
May 13, 2024 Letter to HSP………………………….…………………………………………4
Lease Term Extension Request Letter from HSP…….……………………………………...5 HSP LLC Share Transfer Request Letter from Mr. Bukowski……….……...……….………6 HSP LLC Share Transfer Request Letter from Mr. D’Egidio……….……...……….……….7
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0E BELLFLO ”The City of Bellflower 06“ “’81,.
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16600 Civic Center Drive, Bellflower, CA 90706 I, i‘ 0 Tel 562.804.1424 Fax562.925.8660 www.bellflower.org ROWING 100M May 13, 2024
Dennis Bukowski
Hollywood Sports Park, LLC
90 Marbella
San Clemente, CA 92673
SUBJECT: Option to Extend - Agency Sublease between the City of Bellflower and Hollywood Sports Park, LLC
Dear Mr. Bukowski:
Thank you for your company’s ongoing partnership with the City of Bellflower (“City"). The City Council values the many years your company has demonstrated good corporate citizenship and looks fonNard to many more. Toward that end, this letter expresses the City’s intent to approve, upon your company’s request as outlined in your lease agreement, the next option on the lease with Hollywood Sports Park, LLC for use of real property at 9030 Somerset Boulevard and 9108 Somerset Boulevard. As you know, formal acceptance of HSP’s request for an extension may not happen until October of this year, but should you desire to make that request, it is the City’s intent to continue our partnership for many more years.
The City is committed to facilitating a smooth and seamless renewal process and, as always, I am available to address any questions or concerns you may have. Please do not hesitate to contact me at (562) 804-1424 ext. 2207 or via email at [email protected].
Sincerely,
Ryan 412$]
City Manager
— The City of Bellflower
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16600 Civic Center Drive, Bellflower, CA 90706 ~ 6
0 Tel 562.804.1424 Fax 562.925.8660 www.bellflower.org ROWING 1002“” May 13, 2024
Dennis Bukowski
Hollywood Sports Park, LLC
90 Marbella
San Clemente, CA 92673
SUBJECT: Option to Extend — Agency Sublease between the City of Bellflower and Hollywood Sports Park, LLC
Dear Mr. Bukowski:
Thank you for your company’s ongoing partnership with the City of Bellflower (“City”). The City Council values the many years your company has demonstrated good corporate citizenship and looks forward to many more. Toward that end, this letter expresses the City’s intent to approve, upon your company’s request as outlined in your lease agreement, the next option on the lease with Hollywood Sports Park, LLC for use of real property at 9030 Somerset Boulevard and 9108 Somerset Boulevard. As you know, formal acceptance of HSP’s request for an extension may not happen until October of this year, but should you desire to make that request, it is the City’s intent to continue our partnership for many more years.
The City is committed to facilitating a smooth and seamless renewal process and, as always, I am available to address any questions or concerns you may have. Please do not hesitate to contact me at (562) 804-1424 ext. 2207 or via email at [email protected].
Sincerely,
Ryan 4&1
City Manager
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HOLLVWOOD SPORTS PFIRK, LLC
HSP HOLDINGS LLC
October 24, 2024
City of Bellflower
16600 Civic Center Drive
Bellflower, CA 90706
Dear Bellflower City Manager,
Pursuant to the provisions of our lease agreement with the City of Bellflower, we request to exercise our lease option for three ten (“10”) year option extensions, effective immediately upon approval by the City of Bellflower.
Any questions or concerns, please contact our Administrative Manager, Leilanie Marshall at 562- 867-9600, me at 562-307-5510 or Giovanni at 626-429-4871.
Respectfully,
\
Dennis Bu wski
Partner
Corporate Address: 9030 Somerset Blvd. Bellflower, CA 90706 * Tel: 562-867—9600 * Email: info@hollywoodsp_o_rts.com
www.hollywoodsports.com
HOLLH’WOOD SPORTS PFIRK, LLC
HSP HOLDINGS LLC
October 24, 2024
City of Bellflower
16600 Civic Center Drive
Bellflower, CA 90706
Dear Bellflower City Manager,
Pursuant to the provisions of our lease agreement with the City of Bellflower, we request to exercise our lease option for three ten (“10”) year option extensions, effective immediately upon approval by the City of Bellflower.
Any questions or concerns, please contact our Administrative Manager, Leilanie Marshall at 562- 867-9600, me at 562-307-5510 or Giovanni at 626-429-4871.
Respectfully,
Dennis Bu wski
Corporate Address: 9030 Somerset Blvd. Bellflower, CA 90706 * Tel: 562-867-9600 * Email: info©hollvwoodsoorts.com
www.hollywoodsports.com
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Corporate Office: 9030 Somerset Blvd. Bellflower, CA 90706 Tel: 562-867-9600 * Email: [email protected]
January 11, 2024
Ryan Smoot
City Manager
City of Bellflower
16600 Civic Center Drive
Bellflower, CA 90706
Dear Mr. Smoot,
As majority shareholder of Hollywood Sports Park LLC along with my spouse, Judith Bukowski, we are in the process of doing estate planning. We would like to put our shares of Hollywood Sports Park LLC in an irrevocable Dynasty Trust. We would still fully manage Hollywood Sports Park LLC, and nothing should change with regard to company operations.
Could you kindly review this letter drafted to me by my attorney to see if the proposed plan is feasible with the City of Bellflower.
I will be out of the country for the next three weeks, however, Leilanie Marshall, our Park Director, can assist with any information or correspondence. You may email me at [email protected] as well as Leilanie at lmarshallGJDhollvwoodsports.com.
Thank you so much and I appreciate your time.
Respectfully,
Dennis Bukowski
Corporate Office: 9030 Somerset Blvd. Bellflower, CA 90706 Tel: 562-867-9600 * Email: [email protected]
January 11, 2024
Ryan Smoot
City Manager
City of Bellflower
16600 Civic Center Drive
Bellflower, CA 90706
Dear Mr. Smoot,
As majority shareholder of Hollywood Sports Park LLC along with my spouse, Judith Bukowski, we are in the process of doing estate planning. We would like to put our shares of Hollywood Sports Park LLC in an irrevocable Dynasty Trust. We would still fully manage Hollywood Sports Park LLC, and nothing should change with regard to company operations.
Could you kindly review this letter drafted to me by my attorney to see if the proposed plan is feasible with the City of Bellflower.
I will be out of the country for the next three weeks, however, Leilanie Marshall, our Park Director, can assist with any information or correspondence. You may email me at dennisbukowski8@,gmail.com as well as Leilanie at [email protected].
Thank you so much and I appreciate your time.
Respectfully,
Dennis Bukowski
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Corporate Office: 9030 Somerset Blvd. Bellflower, CA 90706 Tel: 562-867-9600 * Email: [email protected]
September 30, 2024
Ryan Smoot
City Manager
City of Bellflower
16600 Civic Center Drive
Bellflower, CA 90706
Dear Mr. Smoot,
As a shareholder of Hollywood Sports Park, LLC, I am in the process of doing estate planning. I would like to put my shares of Hollywood Sports Park, LLC into a Trust. I would still manage Hollywood Sports Park, LLC, and nothing should change with regard to company operations.
Thank you so much and I appreciate your time.
' -: er
(1 Sports Park, LLC
626-429-4871
Corporate Office: 9030 Somerset Blvd. Bellflower, CA 90706 Tel: 562-867-9600 * Email: [email protected]
September 30, 2024
Ryan Smoot
City Manager
City of Bellflower
16600 Civic Center Drive
Bellflower, CA 90706
Dear Mr. Smoot,
As a shareholder of Hollywood Sports Park, LLC, I am in the process of doing estate planning. I would like to put my shares of Hollywood Sports Park, LLC into a Trust. I would still manage Hollywood Sports Park, LLC, and nothing should change with regard to company operations.
Thank you so much and I appreciate your time.
: v ood Sports Park, LLC
626-429—4871