Item D-4 Agenda Report — Beverly Hills City Council, September 12, 2023

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AGENDA REPORT
Meeting Date: September 12, 2023
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 SECOND AMENDMENT OF LEASE BY AND

BETWEEN THE PARKING AUTHORITY OF THE CITY OF BEVERLY
HILLS AND JOHNSON & JOHNSON, LLP AT 439 NORTH CAÑON
DRIVE, SUITE 200
Attachment: 1. Second Amendment of Lease

RECOMMENDATION
Staff recommends The Parking Authority Board of Directors approve the Second Amendment of Lease by and between The Parking Authority of the City of Beverly Hills and Johnson & Johnson, LLP (the “Tenant”) for the property located at 439 North Cañon Drive, Suite 200.

INTRODUCTION
The Parking Authority’s lease agreement with Johnson & Johnson, LLP expires September 30, 2023, and the proposed amendment would extend the term for two additional years.

DISCUSSION
The City entered into a lease agreement with Johnson & Johnson, LLP at 439 North Cañon Drive, Suite 200 in September 2005. The Tenant operates as a law firm specializing in entertainment litigation. The lease has since been restated and amended and is scheduled to expire on September 30, 2023, unless amended. The Tenant declined to exercise its five-year extension option under the lease in 2022, seeking a rental rate lower than the rate payable under the extension option.

The proposed Second Amendment of Lease provides the following key terms:
 Term: The term of the lease is extended to September 30, 2025; Meeting Date: September 12, 2023

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 Base Rent:
o $16,553.25 per month beginning October 1, 2023 through September 30, 2024; and
o $17,049.85 per month beginning October 1, 2024 through September 30, 2025.

The base rent payable beginning October 1, 2023 is a $4,526.20 per month decrease from the rent payable under the current lease agreement. This change is representative of the increased vacancy rate in the commercial real estate office market and the associated decrease in office rents over the past several years.

FISCAL IMPACT
The proposed lease amendment extends the lease expiration date from September 30, 2023 to September 30, 2025. In total, $403,237.20 would be collected in base rent during the two-year extension. The Parking Authority would also continue to collect monthly operating expenses that are subject to annual adjustments based on annual changes in the Consumer Price Index (CPI).

There are no broker’s commissions associated with this lease amendment.

Ryan Gohlich,
Assistant City Manager
Approved By
Attachment 1
B0785-0001\2848156v1.doc

SECOND AMENDMENT OF LEASE
THIS SECOND AMENDMENT OF LEASE (this “Second Amendment”) is dated as of September ____, 2023, and is entered into by and between THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS (“Landlord”), and JOHNSON & JOHNSON, LLP, a California limited liability partnership (“Tenant”).

R E C I T A L S
A. Landlord and Tenant entered into that certain Office Lease dated July 18, 2018 and amended it by an Amendment of Lease dated January 12, 2021 (the “Lease”), pursuant to which City agreed to lease and demise to Tenant, and Tenant agreed to lease and accept from City, a portion of that certain real property located in the City of Beverly Hills, County of Los Angeles, State of California, commonly known as Suite 200 (the “Premises”) in the building (“Building”) located at 439 N. Canon Drive.

B. A Memorandum of Lease dated July 18, 2018 was recorded on October 29, 2018 as Document No. 20181093009 in the Official Records of Los Angeles County.

C. The Lease is guaranteed by a Guaranty of Lease dated September 7, 2018 (“Lease Guaranty”) executed by Neville Johnson and Douglas Johnson (“Guarantors”).

D. Landlord and Tenant now desire to further amend the Lease as hereinafter set forth, and desire the Guarantors to reaffirm the Lease Guaranty as to the Lease as amended by this Second Amendment.

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, Landlord and Tenant agree as follows:

1. Condition Precedent. This Second Amendment is conditioned upon the Guarantors execution and delivery to Landlord of the Reaffirmation of Lease Guaranty attached to this Second Amendment.

2. Extension of Term; No Extension Options. The Term of the Lease is hereby extended to September 30, 2025, and all of the terms of the Lease shall apply to the extension, including, without limitation terms as to rent and all other payments of the type and in the amount(s) payable under the Lease for the month prior to the first month of the extension (including without limitation payments under Section 6(b) of the Lease). Tenant shall have no extension options or other rights to extend the Term beyond September 30, 2025.

3. Base Rent. The base monthly rent under the Lease shall change to Sixteen Thousand Five Hundred Fifty-Three and 25/100 Dollars ($16,553.25) on October 1, 2023, and to Seventeen Thousand Forty-Nine and 85/100 Dollars ($17,049.85) on October 1, 2024.

DocuSign Envelope ID: 59B8C224-FA36-4AD7-9338-72AC679058BD B0785-0001\2848156v1.doc

4. Counterparts. This Second 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.

5. Executive Director Authority. The Executive Director of Landlord shall have the authority to execute the Amendment to Memorandum of Lease and any other documents contemplated by this Second Amendment.

6. Amendment of Recorded Memorandum of Lease. Upon its execution and delivery of this Second Amendment, Tenant shall concurrently execute and deliver a duly acknowledged counterpart of an Amendment to Memorandum of Lease in the form attached hereto as Exhibit “A”.

7. DocuSign. The parties may use DocuSign to execute and deliver this Second Amendment, but Tenant must deliver an executed original of the Amendment to Memorandum of Lease to Landlord, duly acknowledged, so that it can be executed and recorded by Landlord.

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment of Lease as of the date first written above.

LANDLORD: THE PARKING AUTHORITY OF THE CITY

OF BEVERLY HILLS
By:

Julian A. Gold, M.D., Chairperson
ATTEST:
____________________________
Huma Ahmed, Secretary
APPROVED AS TO CONTENT:
______________________________
Nancy Hunt-Coffey, Executive Director
APPROVED AS TO FORM:
______________________________
Laurence S. Wiener, General Counsel
DocuSign Envelope ID: 59B8C224-FA36-4AD7-9338-72AC679058BD B0785-0001\2848156v1.doc
TENANT: JOHNSON & JOHNSON, LLP,
a California limited liability partnership
By:

Douglas L. Johnson, Partner
By:

Neville Johnson, Partner
REAFFIRMATION OF LEASE GUARANTY:

The undersigned as guarantors under the
Guaranty of Lease dated October 9, 2018
hereby reaffirm their obligations under such
Guaranty of Lease with respect to the Lease as
amended by the foregoing Second Amendment.
_______________________________
Douglas L. Johnson
Neville Johnson
DocuSign Envelope ID: 59B8C224-FA36-4AD7-9338-72AC679058BD B0785-0001\2848156v1.doc
EXHIBIT “A”

FORM OF AMENDMENT TO MEMORANDUM OF LEASE
(Attached.)
DocuSign Envelope ID: 59B8C224-FA36-4AD7-9338-72AC679058BD B0785-0001\2848156v1.doc

RECORDING REQUESTED BY, AND
WHEN RECORDED MAIL TO:

The Parking Authority of the City of Beverly Hills
455 North Rexford Drive
Beverly Hills, California 90210
Attn: City Clerk
(Space Above Line For Recorder’s Use)
Exempt from Recording Fees under California Government Code 27383.

AMENDMENT TO MEMORANDUM OF LEASE
THIS AMENDMENT TO MEMORANDUM OF LEASE (this “Amendment”) is dated as of September ___, 2023, and is entered into by and between the CITY OF BEVERLY HILLS (“Landlord”), and JOHNSON & JOHNSON, LLP, a California limited liability partnership (“Tenant”).

R E C I T A L S
A. Landlord and Tenant entered into that certain Office Lease dated July 18, 2018 (the “Lease”), pursuant to which City agreed to lease and demise to Tenant, and Tenant agreed to lease and accept from City, a portion of that certain real property located in the City of Beverly Hills, County of Los Angeles, State of California, commonly known as Suite 200 (the “Premises”) in the building (“Building”) located at 439 N. Canon Drive.

B. A Memorandum of Lease dated July 18, 2018 was recorded on October 29, 2018 as Document No. 20181093009 in the Official Records of Los Angeles County.

C. Landlord and Tenant have entered into an Amendment of Lease dated January 12, 2021 and a Second Amendment of Lease dated substantially concurrently herewith (“Lease Amendments”) and, consequently, Landlord and Tenant desire to amend the Memorandum.

A G R E E M E N T
NOW, THEREFORE, Landlord and Tenant hereby amend the Memorandum to reflect that the Lease has been amended as set forth in the Lease Amendments, which are incorporated herein by this reference.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment.

LANDLORD: THE PARKING AUTHORITY OF THE CITY

OF BEVERLY HILLS
By:

Nancy Hunt-Coffey, Executive Director
DocuSign Envelope ID: 59B8C224-FA36-4AD7-9338-72AC679058BD B0785-0001\2848156v1.doc
TENANT: JOHNSON & JOHNSON, LLP,
a California limited liability partnership
By:

Douglas L. Johnson, Partner
By:

Neville Johnson, Partner

DocuSign Envelope ID: 59B8C224-FA36-4AD7-9338-72AC679058BD B0785-0001\2848156v1.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.

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.

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.

DocuSign Envelope ID: 59B8C224-FA36-4AD7-9338-72AC679058BD Certificate Of Completion
Envelope Id: 59B8C224FA364AD7933872AC679058BD Status: Sent Subject: Complete with DocuSign: Second Amendment of Lease - Johnson & Johnson, LLP Source Envelope:

Document Pages: 9 Signatures: 5 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: 104.175.192.151
Record Tracking
Status: Original
9/1/2023 10:59:38 AM
Holder: Jonathan Gernes
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Douglas L. Johnson
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 23.241.166.179
Sent: 9/1/2023 11:16:04 AM
Viewed: 9/3/2023 11:57:36 AM
Signed: 9/3/2023 11:59:58 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Neville Johnson
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 76.53.111.46
Sent: 9/1/2023 11:16:04 AM
Viewed: 9/3/2023 12:33:38 PM
Signed: 9/3/2023 12:33:55 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: 208.87.235.180
Sent: 9/3/2023 12:33:56 PM
Resent: 9/5/2023 8:19:00 AM
Viewed: 9/5/2023 8:29:23 AM
Signed: 9/5/2023 8:29:31 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Logan Phillippo
[email protected]
Real Property Development Manager
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 9/5/2023 8:29:32 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Nancy Hunt-Coffey
[email protected]
Security Level: Email, Account Authentication
(None)
Signer Events Signature Timestamp
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Julian A. Gold, M.D.
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
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
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Logan Phillippo
[email protected]
Real Property Development Manager
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 9/1/2023 11:16:04 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)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Megan Grilley
[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 9/1/2023 11:16:05 AM
Payment Events Status Timestamps

Beverly Hills City CouncilSeptember 12, 2023

Beverly Hills City Council
September 12, 2023