AGENDA REPORT
Meeting Date: September 19, 2023
Item Number:
To: Parking Authority Board of Directors
From: Logan Phillippo, Real Property Development Manager Jonathan Gernes, Management Analyst
Subject: BROKER LEASING COMMISSION AGREEMENT BY AND BETWEEN
THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS AND
CUSHMAN & WAKEFIELD OF CALIFORNIA, INC. FOR THE LEASE
OF TENANT SPACE AT 445 NORTH CAÑON DRIVE
Attachments: 1. Broker Leasing Commission Agreement
RECOMMENDATION
Staff recommends The Parking Authority Board of Directors approve a broker leasing commission agreement by and between The Parking Authority of the City of Beverly Hills and Cushman & Wakefield of California, Inc. (“Cushman & Wakefield”) for the lease the tenant space at 445 North Cañon Drive.
INTRODUCTION
The City tenant space at 445 North Cañon Drive is currently vacant and available for lease.
The recommended brokerage agreement will assist the City in marketing for and negotiating with prospective tenants for the first floor restaurant space.
DISCUSSION
The City has previously engaged Cushman & Wakefield to provide professional brokerage services at this same location in 2018 through 2021. The brokerage successfully identified prospective tenants and assisted the City with negotiating key lease terms.
An initial lease agreement, negotiated in 2019, was rescinded in September 2020 and a subsequent lease agreement, negotiated in 2021, was recently terminated in August 2023.
The property is currently vacant and the City is seeking a new tenant. Pursuant to the terms of the 2021 lease, the City paid the brokerage a commission installment of $24,537.53 upon signing the lease. The current broker agreement memorializes this commission installment issued to Cushman & Wakefield for the now-terminated 2021 Meeting Date: September 19, 2023
lease and memorializes that no additional commission payments are owed to Cushman & Wakefield related to the former 2021 lease.
Broker Carter Magnin with Cushman & Wakefield will be the primary service provider involved with the transaction; the broker has substantial retail and restaurant expertise and is familiar with City requirements. Services include:
Providing professional consultation regarding market value; Conducting strategic marketing for restaurant uses;
Organizing and hosting property walkthroughs/showings; Providing progress updates and maintaining timely contact with assigned staff; Assisting in negotiating the terms of a lease;
Listing the property on all appropriate forums;
Coordinating with prospective lessees; and
Providing professional photography.
The brokerage agreement’s term is through September 18, 2024. The agreement authorizes the City Manager to approve up to two contract extensions of six months each.
FISCAL IMPACT
There is no fiscal impact or request for funding at this time.
The broker has agreed to a commission consisting of 4% of the base/fixed rent for the first five years of the term and 2% of the base/fixed rent for years six through ten of the term.
If the tenant has a broker as well, the commission would equal 5% of the base/fixed rent for the first five years of the term and 3% of the base/fixed rent for years six through ten of the term. The commission would be paid in five equal installments, with one-fifth upon the execution of the lease and one-fifth on each anniversary of the commencement of the lease term, subject to the prospective tenant not being in default as of the date payment is due. The broker will be required to share the commission payment with the tenant’s broker, if the tenant has a broker. The total commission is estimated to be between $206,191.51 and $288,668.15 for a ten-year lease however this agreement will be subject to the base rent negotiated.
Per the terms of the agreement, the City is not required to make commission payments to the landlord broker if the City was already in lease discussions with a prospective tenant prior to the brokerage agreement’s effective date; the agreement includes a list of such excluded tenants.
Ryan Gohlich,
Assistant City Manager
Approved By
Attachment 1
B0785-0001\2858645v2.doc
BROKER LEASING COMMISSION AGREEMENT
This BROKER LEASING COMMISSION AGREEMENT is dated as of September 19, 2023 and is entered into by and between THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS (“Landlord”) and CUSHMAN & WAKEFIELD OF CALIFORNIA, INC. (“Broker”) with respect to the leasing by Landlord of vacant space at 445 North Cañon Drive, Beverly Hills, CA (“Premises”).
RECITAL
Landlord desires to engage Broker through its agent Carter Magnin to obtain prospective tenants and to negotiate proposed "business" terms for leases for the Premises.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other consideration, the sufficiency of which is hereby acknowledged, Landlord and Broker hereby agree as follows:
1. Prior Commission Agreement. Landlord has paid a leasing commission under a previous commission agreement with Broker in the amount of Twenty-Four Thousand Five Hundred Thirty-Seven and 53/100 Dollars ($24,537.53) for a lease at the Premises with Negroni Beverly Hills, LLC, which defaulted under such lease and then failed to timely cure the default, resulting in termination of that lease. Broker hereby stipulates and agrees that it is owed no other commissions or other payments in connection with such lease, and hereby waives any and all rights it may have to any such commissions or payments and hereby covenants not to sue Landlord for any such commissions or payments.
2. Term. The term of this Agreement shall commence on the date hereof and shall expire on September 18, 2024; provided, however, that Landlord’s Executive Director may extend the initial term for up to two (2) additional periods of six (6) months each by written notice to Broker.
3. Lease Commissions. Broker will be paid a leasing commission by Landlord, as set forth below, only if Landlord actually enters into a lease with a prospective tenant procured by Broker (“Prospective Tenant”), and the phrase “Prospective Tenant” shall exclude Negroni and affiliates, Wally’s and affiliates, and Saint Ambreous and affiliates.
If there is no tenant’s broker:
4% of base fixed rent paid for years 1-5 of the Lease term, and 2% of such rent for years 6-10.
If there is a tenant’s broker:
5% of base/fixed rent paid for years 1-5, and 3% for such rent paid for years 6-10.
DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 B0785-0001\2858645v2.doc
4. Payment of Commission. The commission for a lease shall be amortized and paid over the first five years of the lease term. One fifth shall be paid upon lease execution, and one fifth on each anniversary of the commencement of the lease term; however, if the tenant is in default as of the date a commission payment is due, the payment shall not be made unless and until the tenant cures the default.
No commission is payable for any options or extensions.
5. Sharing of Commission with Tenant Brokers. If a Prospective Tenant is represented by a broker, Broker shall share its commissions with the Prospective Tenant’s broker in accordance with the custom and practice in the City of Beverly Hills.
6. Authority of Broker. Broker shall have no authority to bind Landlord, but shall attempt to negotiate basic business terms for leases that benefit Landlord, considering market conditions for the Property, and that are acceptable to Landlord. Broker shall make clear to Prospective Tenants (and their brokers, if any) that Landlord will not be bound unless and until its Landlord approves the applicable lease in its sole and absolute discretion.
7. Insurance.
(a) Broker shall at all times during the term of this Agreement carry, maintain, and keep in full force and effect, insurance through third party insurers, self-insurance, or Cushman & Wakefield’s wholly owned captive insurance company as follows (with limits that may be met by a combination of primary and excess policies):
(1) A policy or policies of Comprehensive General Liability Insurance, with limits of Five Million Dollars ($5,000,000) for each occurrence and in the aggregate, combined single limit, against any personal injury, death, loss or damage resulting from the wrongful or negligent acts by Broker. (2) A policy or policies of Comprehensive Vehicle Liability Insurance covering personal injury and property damage, with limits of Five Million Dollars ($5,000,000) per occurrence combined single limit, covering any vehicle utilized by Broker in performing the Scope of Work required by this Agreement.
(3) Workers’ compensation insurance as required by the State of California. (4) Professional Liability Insurance
A policy or policies of Professional Liability Insurance (errors and omissions) with limits of Five Million Dollars ($5,000,000) per claim and in the aggregate. Any deductibles or selfinsured retentions attached to such policy or policies must be declared to and be approved by Landlord. Further, Broker agrees to maintain in full force and effect such insurance for one year after performance of work under this Agreement is completed. (b) The policy or polices required by this Agreement shall be issued by an insurer admitted in the State of California and with a rating of at least a A;VI (or equivalent DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 B0785-0001\2858645v2.doc
rating) in the latest edition of Best’s Insurance Guide or alternatively through selfinsurance or Cushman & Wakefield’s wholly owned captive insurance company. (c) Broker agrees that if it does not keep the aforesaid insurance in full force and effect Landlord may immediately terminate this Agreement.
(d) At all times during the term of this Agreement, Broker shall maintain on file with the Secretary of Landlord a certificate or certificates of insurance in a form acceptable to Landlord, attached hereto and incorporated herein, showing that the aforesaid policies are in effect in the required amounts. Broker shall, prior to commencement of work under this Agreement, file with the Secretary such certificate or certificates. The general liability insurance shall contain an endorsement including the Landlord and the City of Beverly Hills as an additional insureds. All of the policies required under this Agreement shall contain an endorsement providing that the policies cannot be canceled or reduced except on thirty (30) days prior written notice to Landlord, and specifically stating that the coverage contained in the policies affords insurance pursuant to the terms and conditions as set forth in this Agreement. (e) The insurance provided by Broker shall be primary to any coverage available to Landlord. The policies of insurance required by this Agreement shall include provisions for waiver of subrogation; however, Broker will not waive its subrogation rights if a loss is caused by the Landlord’s gross negligence. (f) Any deductibles or self-insured retentions must be declared to and approved by Landlord.
8. Professional Advice. Broker recommends that Landlord obtain legal, tax or other professional advice relating to this Agreement and the proposed Lease of the Property as well as the condition and/or legality of the Property, including, but not limited to, the Property's improvements, equipment, soil, tenancies, title, environmental aspects and compliance with the Americans with Disabilities Act. Landlord shall also be responsible in making the final determination regarding the financial soundness of any Prospective Tenant. Broker will have no obligation to investigate any such matters unless expressly otherwise agreed to in writing by Landlord and Broker.
9. Agency Disclosure. Landlord acknowledges that it has received a copy of Broker’s Disclosure Regarding Real Estate Agency Relationship and that Landlord has returned a signed copy thereof to Broker.
10. Broker Regulatory or Statutory Provisions. The following provisions must be included in brokerage agreements in the State of California: (a) it is illegal for either party to discriminate against any person because of one's membership in a protected class (e.g., race, color, religion, national origin, sex, ancestry, age, marital status, physical or mental handicap, familial status, or any other class protected by law); (b) Landlord acknowledges receipt of a copy of Notice to Owners, Buyers and Tenants Regarding Environmental Matters, Americans With Disabilities Act and Related Laws, Flood Disclosure, Zoning/Use DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 B0785-0001\2858645v2.doc
Disclosure and Alquist-Priolo Special Earthquake Fault Zoning Act; and (c) Landlord acknowledges receipt of a copy of the Agreement and this Schedule of Commissions.
11. Assignment. Broker may not assign its rights or obligations hereunder, in whole or in part, without the prior consent of Landlord, which consent may be given or withheld in Landlord’s sole and absolute discretion.
12. Attorneys’ Fees. If any party institutes legal action to enforce its rights under this Agreement, the prevailing party (as determined by the trier of fact) will be entitled to recover its reasonable attorneys’ fees and costs from the other party(s).
13. Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement.
14. Entire Agreement. This Agreement constitutes the entire agreement between Landlord and Broker with respect to the subject matter hereof.
15. Applicable Law. This Agreement shall be governed by the laws of the State of California.
16. Addresses for Notices. Notices hereunder shall be in writing, shall be addressed as follows, and shall be delivered by certified mail, return receipt requested (and deemed delivered on the date of delivery or refusal of acceptance shown on the return receipt):
Landlord: The Parking Authority of the
City of Beverly Hills
455 N. Rexford Drive
Beverly Hills, CA 90210
Attn: Logan Phillippo
Broker: Cushman & Wakefield of California, Inc.
10250 Constellation Blvd., Suite 2200
Los Angeles, CA 90067
Attn: Phil Brodkin
with a copy to: Cushman & Wakefield
900 Wilshire Boulevard, Suite 2400
Los Angeles, CA 90017
Attn: Legal Department
17. Time of Essence. Time is of the essence of every provision hereof in which time is a factor.
18. Broker Default. Landlord may terminate this Agreement upon a default by Broker which is not cured within ten (10) days after written notice from Landlord.
19. DocuSign. This Broker Leasing Commission Agreement may be executed by using DocuSign.
DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 B0785-0001\2858645v2.doc
20. OFAC. Each party represents and warrants to the other that it, and all persons and entities owning (directly or indirectly) an ownership interest in it: (a) are not, and will not become, a person or entity with whom a party is prohibited from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including, but not limited to, those named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order or other governmental action; and (b) are not knowingly engaged in, and will not knowingly engage in, any dealings or transactions or be otherwise associated with such persons or entities described in clause (a) above.
21. Anti-Bribery & Corruption. Each party represents and warrants to the other that it (and any party acting on its behalf) has not, in order to enter into this agreement, offered, promised, authorized or made any payments or transfers of anything of value which have the purpose or effect of public or commercial bribery, kickbacks or other unlawful or improper means of doing business (“Prohibited Activity”) and will not engage in Prohibited Activity during the term of this agreement. In the event of any violation of this section, the non-offending party shall be entitled to immediately terminate this agreement and take such other actions as are permitted or required to be taken under law or in equity.
22. Agency; Dual Agency. Carter Magnin is Landlord’s designated agent to the exclusion of all of Broker’s other licensees. All other licensees of Broker are “Non-Listing Team Agents” and shall be considered cooperating brokers. Landlord acknowledges that Broker is an international brokerage firm and that it may represent prospective tenants, thereby creating a dual agency. Landlord hereby consents to Broker’s representation of such prospects. Landlord acknowledges that Non-Listing Team Agents owe duties of trust, confidence and loyalty exclusively to their clients. In the event that Broker has a potential conflict of interest (such as Broker proposing to act as a dual agent), then Broker will disclose the conflict to Landlord and obtain Landlord’s written consent to the conflict in advance of any negotiations with a potential tenant. Carter Magnin and Non-Listing Team Agents shall not disclose the confidential information of one principal to the other.
LANDLORD:
THE PARKING AUTHORITY OF THE
CITY OF BEVERLY HILLS
By:
Julian A. Gold, M.D., Chairperson
BROKER:
CUSHMAN & WAKEFIELD OF
CALIFORNIA, INC.
By:
Phil Brodkin, Managing Principal
Attest:
Huma Ahmed, Secretary
DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 B0785-0001\2858645v2.doc
APPROVED AS TO FORM:
Laurence S. Wiener, General Counsel
APPROVED AS TO CONTENT:
Nancy Hunt-Coffey, Executive Director
Sharon L’Heureux Dressel, Risk Manager
DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 B0785-0001\2858645v2.doc
NOTICE TO OWNERS, BUYERS AND TENANTS REGARDING
ENVIRONMENTAL MATTERS,
AMERICANS WITH DISABILITIES ACT AND RELATED LAWS,
FLOOD DISCLOSURE, ZONING/USE DISCLOSURE AND
ALQUIST-PRIOLO SPECIAL EARTHQUAKE FAULT ZONING ACT
ENVIRONMENTAL MATTERS
It is essential that all parties to real estate transactions be aware of the health, liability and economic impact of environmental factors on real estate. Cushman & Wakefield does not conduct investigationsor analyses of environmental matters and, accordingly, urges the parties to a real estate transaction to retain qualified environmental professionals to determine whether hazardous ortoxic wastes or substances (such as asbestos, PCBs and other contaminants or petro-chemical products stored in underground tanks) or other undesirable materials or conditions are present at the property and, if so, whether any health danger or other liability exists. Such substances may have been used in the construction or operation of buildings or may be present as a result of previous activities at the property.
Various laws and regulations have been enacted at the federal, state and local levels dealing with the use, storage, handling, removal, transport and disposal of toxic or hazardous wastes and substances. Depending upon past, current and proposed uses of the property, it may be prudent to retain an environmental expert to conduct a site investigation and/or building inspection. If hazardous or toxic substances exist or are contemplated to be used at the property, special governmental approvals or permits may be required. In addition, the cost of removal and disposal of such materials may be substantial. Consequently, legal counsel and technical experts should be consulted where these substances are or may be present.
AMERICANS WITH DISABILITIES ACT AND RELATED LAWS
As an Owner or tenant of real property, you may be subject to the Americans with Disabilities Act (the ADA), a Federal law codified at 42 USC Section 12101 et seq. Among other requirements of the ADA that could apply to your property, Title IIIoftheADArequires Owners andtenantsof"public accommodations"to remove barriers to access by disabled persons and provide auxiliary aids and services for hearing, vision or speech impaired persons by January 26, 1992. The regulations under Title III of the ADA are codified at 28 CFR Part
36. We recommend that you and your attorney review the ADA and the regulations, and, if appropriate, your proposed lease or purchase agreement, to determine if this law would apply to you, and the nature of the requirements. These are legal issues. Cushman & Wakefield cannot give you legal advice on these issues.
Furthermore, all California commercial leases regardless of size executed on or after July 1, 2013 must contain a provision disclosing whether the premises have been inspected by a government-approved Certified Access Specialist (CASp) and if so, whether the premises have been determined to be in compliance with all applicable construction-related disability accessibility standards. The law (California Civil Code §1938) does not require a landlord to conduct a CASp inspection of the property; however, it does require that the landlord disclose whether or not an inspection has been completed and if so, whether the property meets the applicable accessibility standards.
DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 B0785-0001\2858645v2.doc
FLOOD DISCLOSURE
If the premises is located in a Federally Designated Flood Zone, the Tenant’s real and personal property situated on or in the premises is not protected by the hazard insurance policy for the property carried by the Owner. The Tenant is responsible for investigating the Flood Zone status of the premises and obtaining insurance to cover the Tenant's property if it so desires.
ZONING/USE DISCLOSURE
Prior to executing a lease, the Tenant is responsible for determining that the zoning applicable to the property allows the Tenant to use the premises for the Tenant’s intended use, and that all building codes, parking requirements, and other governmental requirements, improvements required, and permits necessary have been met or are available to Tenant. Cushman & Wakefield has made no representations, except in writing, if any, concerning the zoning and allowable use of the premises and any requirements that may be imposed upon the Tenant by any governmental agency. If the Tenant's use of the premises requires a Use Permit or other permits from a governmental authority it could take several months to obtain same, and Tenant may still be responsible for the payment of rent and other charges whether or not such permits are ultimately obtained.
ALQUIST-PRIOLO SPECIAL EARTHQUAKE FAULT ZONING
ACT
The property may be situated in an Earthquake Fault Zone as designated under the Alquist-Priolo Earthquake Fault Zoning Act, Sections 2621-2630 inclusive, of the California Public Resources Code; and, as such the construction of development on the property of any structure for human occupancy may be subject to the findings of a geologic report prepared by a geologist registered with the State of California, unless such report is waived by the city or county under the terms of that Act. No representations on this subject are made by Cushman & Wakefield or its agents or employees, and the Tenant/Purchaser is advised to make its own inquiry into this situation prior to entering into a lease or sale agreement.
By your signature below, you acknowledge that you have read and understand this disclosure and have received a copy:
Received on , 20
Signature:
Printed Name:
DocuSign Envelope ID: C955E298-C86E-4AAE-AC06-9D30DBBA1848 Certificate Of Completion
Envelope Id: C955E298C86E4AAEAC069D30DBBA1848 Status: Sent Subject: Complete with DocuSign: Cushman & Wakefield - Broker Leasing Commission Agreement - 445 N Canon Source Envelope:
Document Pages: 8 Signatures: 3 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
9/11/2023 11:26:24 AM
Holder: Jonathan Gernes
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Phil Brodkin
[email protected]
Managing Principal
Cushman & Wakefield
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 76.79.141.218
Sent: 9/11/2023 11:33:15 AM
Resent: 9/12/2023 8:35:16 AM
Viewed: 9/12/2023 9:01:46 AM
Signed: 9/12/2023 9:01:58 AM
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: 9/12/2023 9:02:00 AM
Viewed: 9/12/2023 9:04:54 AM
Signed: 9/12/2023 9:05:01 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Sharon L'Heureux Dressel
[email protected]
Risk Manager
Sharon Dressel
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 198.245.189.166
Sent: 9/12/2023 9:02:01 AM
Resent: 9/13/2023 8:11:44 AM
Viewed: 9/13/2023 8:40:42 AM
Signed: 9/13/2023 8:40:48 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: 9/13/2023 8:40:49 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
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Carbon Copy Events Status Timestamp
Carter Magnin
[email protected]
Director
Security Level: Email, Account Authentication
(None)
Sent: 9/11/2023 11:33:15 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: 9/11/2023 11:33:16 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
Carbon Copy Events Status Timestamp
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 9/11/2023 11:33:16 AM
Payment Events Status Timestamps