AGENDA REPORT
Meeting Date: October 18, 2022
Item Number:
To: Board of Directors, Parking Authority of the City of Beverly Hills From: Logan Phillippo, Real Property Development Manager Jonathan Gernes, Management Analyst
Subject: APPROVAL OF SIXTH AMENDMENT TO LEASE BY AND BETWEEN
THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS AND
S-FER INTERNATIONAL, INC. AT 355 NORTH RODEO DRIVE
Attachment: 1. Sixth Amendment to Lease
RECOMMENDATION
Staff recommends the Parking Authority Board of Directors approve the Sixth Amendment to Lease by and between The Parking Authority of the City of Beverly Hills and S-FER International, Inc. at 355 North Rodeo Drive.
INTRODUCTION
The lease agreement with S-FER International, Inc. expires April 14, 2023, and the proposed amendment would extend the term of the lease for ten years.
DISCUSSION
The City entered into an initial retail lease at 355 North Rodeo Drive with S-FER International, Inc. in July 1990. The lease has been subsequently amended to expand the premises and extend the term through April 14, 2023. The lease provides the Tenant with one, five-year option to extend the term, however, S-FER International, Inc. desires to amend the lease to extend the term for a period of ten years.
The proposed Sixth Amendment to Lease provides the following key terms:
Term: The term is extended to April 14, 2033;
Rent: Tenant shall pay $537,859 in monthly base rent beginning April 15, 2023, with annual 3% increases;
Operating Expense: Tenant shall pay $5,168.03 monthly for monthly operating expenses beginning April 15, 2023, with annual 3% increases; and D-1
Meeting Date: October 18, 2022
Limited Waiver of Continuous Operation: Tenant plans to undertake substantial remodeling of the leased premises at its sole cost and will not be required to operate continuously during usual business hours for up to 12 months from the Tenant’s notice of the commencement of the remodeling. All base rent and operating expense obligations shall remain payable during this period.
FISCAL IMPACT
The proposed lease amendment will generate $73,991,408.28 in revenue from monthly base rent through the ten-year extension term expiring April 14, 2033. Staff estimates the amendment will generate $710,947.56 in revenue for the Tenant’s share of building operating expenses and $69,600 in parking revenue for parking passes at the 440 North Camden parking structure, where the tenant is allotted up to four monthly passes at the prevailing parking structure rate.
The Tenant will be required to complete any improvements at the Tenant’s sole cost. The Tenant is required to pay all base rent and operating expenses during the Tenant’s completion of its planned improvements without abatement.
There are no commissions payable by the Parking Authority associated with this lease amendment.
Gabriella Yap,
Deputy City Manager
Approved By
Attachment 1
B0785-0001\2731482v2.doc
SIXTH AMENDMENT TO LEASE
THIS SIXTH AMENDMENT TO LEASE (this “Amendment”) is dated as of October 18, 2022, and is entered into by and between THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS, a parking authority established pursuant to the Parking Law of 1949 of the State of California (“Lessor”) and S-FER INTERNATIONAL, INC., a New York corporation (“Lessee”).
R E C I T A L S
A. The City of Beverly Hills (“City”), as lessor, and Lessee entered into a Lease dated March 20, 1990 and amended it by a First Amendment to Lease dated August 13, 1991, a Second Amendment to Lease dated November 17, 1992, a Third Amendment to Lease dated June 17, 1997, a Fourth Amendment to Lease dated October 7, 1997, and a Memorandum of Lease, and Fifth Amendment to Lease dated April 21, 2011 (the “Lease”) for space (the “Premises”) in the building (the “Building”) owned by Lessor located at 355 North Rodeo Drive, Beverly Hills, California; and
B. The City has conveyed the Building to Lessor subject to the Lease.
C. Lessor and Lessee now desire to further amend the Lease as more specifically set forth below.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing recitals, the covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee hereby agree as follows:
1. Extension of Term; No Extension Options. The term of the Lease is hereby extended to April 14, 2033, and all extension options in the Lease are hereby deleted.
2. Monthly Rent. The Monthly Rent for the period from April 15, 2023 through April 14, 2033 shall be as follows (and shall be subject to and paid in accordance with the applicable terms of the Lease):
Period Monthly Rent
4/15/2023 - 4/14/2024 $537,859.00
4/15/2024 - 4/14/2025 $553,994.77
4/15/2025 - 4/14/2026 $570,614.61
4/15/2026 - 4/14/2027 $587,733.05
4/15/2027 - 4/14/2028 $605,365.04
4/15/2028 - 4/14/2029 $623,525.99
4/15/2029 - 4/14/2030 $642,231.77
4/15/2030 - 4/14/2031 $661,498.72
4/15/2031 - 4/14/2032 $681,343.68
4/15/2032 - 4/14/2033 $701,783.99
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 2
3. CAM Charges. Lessee shall also pay fixed monthly sums, as additional rent, for Lessee’s share of the Building common area expenses, as follows (and shall be subject to and payable in accordance with the applicable terms of the Lease):
Period Monthly CAM
4/15/2023 - 4/14/2024 $5,168.03
4/15/2024 - 4/14/2025 $5,323.07
4/15/2025 - 4/14/2026 $5,482.76
4/15/2026 - 4/14/2027 $5,647.24
4/15/2027 - 4/14/2028 $5,816.66
4/15/2028 - 4/14/2029 $5,991.16
4/15/2029 - 4/14/2030 $6,170.89
4/15/2030 - 4/14/2031 $6,356.02
4/15/2031 - 4/14/2032 $6,546.70
4/15/2032 - 4/14/2033 $6,743.10
4. Conditional and Limited Waiver of Continuous Operation Covenant. Lessor acknowledges that Lessee will be undertaking substantial remodeling of the Premises in connection with the extension of the term of the Lease, and in conjunction therewith waives the provisions of Section 10 of the Lease during the period of such remodeling but not longer than twelve (12) months from the date on which Lessee notifies Lessor of the commencement of the remodeling (which shall be delivered prior to commencement of remodeling), and only if Lessee provides such written notice to Lessor. There shall be no abatement of the payments described in Sections 2 or 3 above during such remodeling.
5. Permitted Transfers. Notwithstanding anything to the contrary contained in the Lease, Lessee shall have the right, without Lessor’s consent, to assign the Lease to a parent, affiliate or subsidiary of Lessee or in connection with a merger or consolidation of Lessee or sale of substantially all of the assets or a majority of the equity of Lessee, provided (i) neither Lessee nor Guarantor shall be released from liability under the Lease and Guaranty, respectively, and (ii) Lessee shall provide Lessor with ten (10) days’ prior written notice of such assignment (unless confidentiality requirements prohibit Lessee from doing so, in which event, Lessee shall provide notice as soon as permitted). In no event shall the public sale or transfer of the equity of Lessee be deemed an assignment under the Lease.
6. Default. A default by Lessee hereunder shall constitute a default by Lessee under the Lease.
7. Brokers. Lessor and Lessee each represent and warrant that except for Newmark (Jay Luchs) and CBRE (Andrew Goldberg) (collectively, “Broker”), which represent Lessee and whose fees and commissions shall be paid by Lessee (not Lessor) pursuant to a separate agreement, it has had no dealings with any real estate broker, or agent in connection with the negotiation of this Amendment, and that it knows of no real estate broker or agent who is or DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 3
might be entitled to a commission or fee in connection with this Amendment. In the event of any other claim for broker’s or finder’s fees or commissions in connection with this Lease, Lessor shall indemnify, hold harmless and defend Lessee from and against any and all liability, claims, demands, damages and costs (including, without limitation, reasonable attorneys’ fees and other litigation expenses) on account of such claim if it shall be based upon any statement, representation or agreement claimed to have been made by Lessor, and Lessee shall indemnify, hold harmless and defend Lessor from and against: (i) any and all liability, claims, demands, damages and costs (including, without limitation, reasonable attorneys’ fees and other litigation expenses) on account of such claim if it shall be based upon any statement, representation or agreement claimed to have been made by Lessee; and (ii) all fees, commissions and other sums payable to the Broker. Lessor shall not be responsible for payment of any fee or commission to the Broker.
8. Continuing Effect. Except as specifically modified hereby, the Lease shall remain unaffected and unchanged. The Lease is hereby ratified and affirmed by Lessor and Lessee and remains in full force and effect as modified hereby.
9. Counterparts. This Amendment may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall be deemed to be one and the same instrument.
10. Executive Director Authority. The Executive Director of Lessor shall have the authority to execute this Amendment and any and all documents contemplated by this Amendment.
11. Recordable Amendment of Memorandum of Lease. Concurrently with its execution and delivery of this Amendment, Lessee shall execute and deliver to Lessor (with signatures duly acknowledged) an Amendment of Memorandum of Lease in the form attached hereto as Exhibit “A”.
12. DocuSign. The parties may use DocuSign to execute and deliver this Amendment (and for that purpose, DocuSign emails can be sent to Lessee at [email protected]), but Lessee must deliver an executed original of the Amendment to Memorandum of Lease to Lessor, duly acknowledged, so that it can be executed and recorded by Lessor.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the date and year first above written.
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 4
LESSOR: THE PARKING AUTHORITY OF THE
CITY OF BEVERLY HILLS,
a parking authority established pursuant to the
Parking Law of 1949 of the State of California
By:
Lili Bosse, Chairperson
APPROVED AS TO CONTENT:
_____________________________
George Chavez, Executive Director
ATTEST:
Huma Ahmed, Secretary
APPROVED AS TO FORM:
Laurence S. Wiener, General Counsel
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 5
LESSEE: S-FER INTERNATIONAL, INC.,
a New York corporation
By:
Daniella Vitale, Regional CEO
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 6
REAFFIRMATION OF LEASE GUARANTY
Ferragamo USA Inc., a New York corporation (“Guarantor”), hereby consents to the foregoing Sixth Amendment to Lease dated October 18¸ 2022 between The Parking Authority of the City of Beverly Hills, as lessor, and S-Fer International, Inc., as lessee, and hereby agrees that the Guaranty of Lease dated in March, 1990 executed by Moda Imports, Inc. (which changed its name to Ferragamo USA Inc.) shall not be reduced or impaired thereby, but shall apply to the Lease, as so amended, and Guarantor hereby reaffirms all of its obligations under, and the continuing effectiveness of, such Guaranty of Lease.
FERRAGAMO USA INC.,
a New York corporation (formerly known as Moda
Imports, Inc.)
By:
Daniella Vitale, Regional CEO
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 7
EXHIBIT "A"
FORM OF AMENDMENT MEMORANDUM OF
LEASE
(Attached.)
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 8
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
The Parking Authority of the City of Beverly Hills
455 North Rexford Drive
Beverly Hills, California 90210
Attention: City Clerk
[Space Above For Recorder’s Use Only]
The undersigned declare that this Amendment of Memorandum of Lease is exempt from Recording Fees pursuant to California Government Code Section 27383.
AMENDMENT OF MEMORANDUM OF LEASE
THIS AMENDMENT OF MEMORANDUM OF LEASE (this “Amendment”) is dated as of October 18, 2022, and is entered into by and between THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS, a parking authority established pursuant to the Parking Law of 1949 of the State of California (“Lessor”), and S-FER INTERNATIONAL, INC., a New York corporation (“Lessee”).
R E C I T A L S:
A. The City of Beverly Hills (“City”), as lessor, and Lessee entered into a Lease dated March 20, 1990 and amended it by a First Amendment to Lease dated August 13, 1991, a Second Amendment to Lease dated November 17, 1992, a Third Amendment to Lease dated June 17, 1997, a Fourth Amendment to Lease dated October 7, 1997, and a Memorandum of Lease, and Fifth Amendment to Lease dated April 21, 2011 (the “Lease”) for space (the “Premises”) in the building (the “Building”) owned by Lessor located at 355 North Rodeo Drive, Beverly Hills, California.
B. The City has conveyed the Building to Lessor subject to the Lease.
C. The Memorandum of Lease, and Fifth Amendment to Lease was recorded on June 9, 2011 as Document No. 20110791752 in the official Records of Los Angeles County, California.
D. Lessor and Lessee have agreed to further amend the Lease on the terms, and subject to the conditions, set forth in that certain Sixth Amendment to Lease dated substantially concurrently herewith (the “Sixth Amendment”).
E. Lessor and Lessee desire to record this Amendment of Memorandum of Lease to give record notice of the Sixth Amendment and comply with applicable law requiring that municipal leases be recorded.
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc 9
A G R E E M E N T:
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee agree as follows:
1. Amendments to Lease. The terms of the Sixth Amendment are hereby incorporated herein by reference.
2. Counterparts. This Memorandum may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
LESSOR:
THE PARKING AUTHORITY OF THE
CITY OF BEVERLY HILLS, a parking
authority established pursuant to the Parking
Law of 1949 of the State of California
By:
George Chavez, Executive Director
LESSEE:
S-FER INTERNATIONAL, INC.,
a New York corporation
By:
Daniella Vitale, Regional CEO
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc
State of California )
County of Los Angeles )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(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 (Seal)
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.
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C B0785-0001\2731482v2.doc
State of New York )
County of New York )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(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 New York that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
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.
DocuSign Envelope ID: A9EFF09C-171C-4F36-9C97-5711E9992E1C Certificate Of Completion
Envelope Id: A9EFF09C171C4F369C975711E9992E1C Status: Sent Subject: Complete with DocuSign: Sixth Amendment to Lease - S-FER International, Inc.
Source Envelope:
Document Pages: 11 Signatures: 2 Envelope Originator:
Certificate Pages: 3 Initials: 0 Jonathan Gernes
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
455 N. Rexford Drive
Beverly Hills, CA 90210
[email protected]
IP Address: 198.245.189.166
Record Tracking
Status: Original
10/11/2022 2:58:36 PM
Holder: Jonathan Gernes
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Daniella Vitale
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Drawn on Device
Using IP Address: 63.106.21.38
Signed using mobile
Sent: 10/11/2022 3:34:58 PM
Resent: 10/12/2022 7:28:38 AM
Resent: 10/12/2022 3:08:19 PM
Viewed: 10/12/2022 3:08:39 PM
Signed: 10/12/2022 3:09:01 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Bruce Galloway for
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 208.87.234.180
Sent: 10/12/2022 3:09:03 PM
Viewed: 10/12/2022 3:12:10 PM
Signed: 10/12/2022 3:12:18 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Logan Phillippo
[email protected]
Senior Management Analyst
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 10/12/2022 3:12:20 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
George Chavez
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Lili Bosse
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Signer Events Signature Timestamp
Huma Ahmed
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
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Carbon Copy Events Status Timestamp
Andrew Goldberg
[email protected]
Security Level: Email, Account Authentication
(None)
Sent: 10/11/2022 3:34:56 PM
Viewed: 10/11/2022 6:00:10 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Jay Luchs
[email protected]
Security Level: Email, Account Authentication
(None)
Sent: 10/11/2022 3:34:57 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Logan Phillippo
[email protected]
Senior Management Analyst
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 10/11/2022 3:34:57 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Todd Stecker
[email protected]
Chief Operations Officer
Security Level: Email, Account Authentication
(None)
Sent: 10/11/2022 3:34:57 PM
Viewed: 10/12/2022 7:53:01 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Adrianne Tarazon
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Dorina Mohan
[email protected]
Security Level: Email, Account Authentication
(None)
Carbon Copy Events Status Timestamp
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Flora Flowers
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Michael Dunn
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Witness Events Signature Timestamp
Notary Events Signature Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 10/11/2022 3:34:58 PM
Payment Events Status Timestamps