AGENDA REPORT
Meeting Date: November 7, 2023
Item Number:
To: Board of Directors, Parking Authority of the City of Beverly Hills From: Logan Phillippo, Real Property Development Manager Jonathan Gernes, Senior Management Analyst
Subject: APPROVAL OF THIRD AMENDMENT OF LEASE BY AND
BETWEEN THE PARKING AUTHORITY OF THE CITY OF BEVERLY
HILLS AND SOUTHWEST WINE & SPIRITS, LLC AT 447 NORTH
CAÑON DRIVE
Attachment: 1. Third Amendment of Lease
RECOMMENDATION
Staff recommends The Parking Authority Board of Directors approve the Third Amendment of Lease by and between The Parking Authority of the City of Beverly Hills and Southwest Wine & Spirits, LLC (the “Tenant”) for the property located at 447 North Cañon Drive.
INTRODUCTION
Southwest Wine & Spirits, LLC exercised a lease renewal option in 2022 extending the term from December 20, 2022 to December 19, 2027. The proposed amendment would establish the base rent schedule for the duration of this extension term.
DISCUSSION
The Parking Authority of the City of Beverly Hills entered into a lease agreement with Southwest Wine & Spirits, LLC’s predecessor-in-interest at 447 North Cañon Drive in September 2011. The lease was subsequently amended and assigned, with the Tenant exercising the first option term under the lease in 2022. The lease is scheduled to expire on December 19, 2027, unless further extended.
Per the terms of the lease, the Tenant has continued to pay monthly rent at the same rate immediately preceding the start of the option term whilst The Parking Authority and the Tenant reached a fair market rent determination. The proposed Third Amendment of Meeting Date: November 7, 2023
Lease addresses the monthly rent payable by the Tenant for the duration of the first option term and the rent owed beginning December 20, 2022. The key terms are as follow:
Base rent shall be $41,008.40 per month beginning December 20, 2022 through December 19, 2023, with 3% annual increases beginning December 20, 2023; and
The Tenant shall pay $105,765.18 upon its signature of the Third Amendment representing monthly rent outstanding from December 1, 2022 through November 30, 2023.
FISCAL IMPACT
The proposed lease amendment increases the rent payable to $41,008.40 effective December 20, 2022 and increases the rate by 3% annually thereafter. In total $2,612,629.80 would be collected in base rent during the five-year extension term. 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
-1-
B0785-0001\2881433v1.doc
THIRD AMENDMENT OF LEASE
This THIRD AMENDMENT OF LEASE (this “Third Amendment”) is dated as of November 7, 2023, and is entered into by and between THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS (“Landlord”), and SOUTHWEST WINE & SPIRITS, LLC, a California limited liability company (“Tenant”).
R E C I T A L S
A. Tenant’s predecessor-in-interest (Strouk Group, LLC, f/k/a Strouk Group, Inc. (the “Original Tenant”)) and Landlord’s predecessor-in-interest (the City of Beverly Hills) entered into that certain Lease dated September 27, 2011 which was amended by a First Amendment of Lease dated December 18, 2012 and a Second Amendment of Lease dated June 17, 2014 (as amended, the “Lease”), pursuant to which Landlord leased and demised to Tenant, and Tenant leased and accepted from Landlord, certain space in the building located in the City of Beverly Hills, County of Los Angeles, State of California, commonly known as 447 N. Cañon Drive (the “Property”), as provided in the Lease; and
B. A Memorandum of Lease dated September 27, 2011 was recorded on December 16, 2011 as Document No. 20111710796 in the Official Records of Los Angeles County, California, and the Second Amendment of Lease dated June 17, 2014 was recorded on July 17, 2014 as Document No. 20140739274 in such Official Records; and C. Tenant and Landlord now desire to further amend the Lease as hereinafter set forth.
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, Tenant and Landlord agree as follows:
1. Rent. Concurrently with its execution and delivery of this Third Amendment, Tenant shall pay to Landlord without offset or deduction the sum of ONE HUNDRED FIVE THOUSAND SEVEN HUNDRED SIXTY-FIVE AND 18/100 DOLLARS ($105,765.18), representing unpaid rent now due for the period from December 1, 2022 through November 30, 2023 under the following adjusted schedule of Monthly Rent.
Monthly Rent for the Premises shall be as follows:
Period Monthly Base Rent
12/20/2022-12/19/2023 $41,008.40
12/20/2023-12/19/2024 $42,238.65
12/20/2024-12/19/2025 $43,505.81
12/20/2025-12/19/2026 $44,810.98
12/20/2026-12/19/2027 $46,155.31
DocuSign Envelope ID: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 -2-
B0785-0001\2881433v1.doc
2. Condition of Premises. The Landlord has not caused the Premises to have been inspected by a Certified Access Specialist (CASp). A Certified Access Specialist (CASp) can inspect the Premises and determine whether the Premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the Premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the Premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.
In that regard, the parties agree that in the event Tenant requests a CASp inspection, Tenant shall pay any such inspection fees and the cost of making any such repairs to the Premises (to the extent such repairs are possible).
3. Recordable Amendment of Memorandum of Lease. Upon its execution and delivery of this Third Amendment, Tenant shall concurrently execute and deliver to Landlord a duly acknowledged recordable original counterpart of an Amendment to Memorandum of Lease in the form attached to this Amendment as Exhibit “A”.
4. Counterparts. This Third 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.
6. Brokers. Each party represents to the other that no brokers were involved in connection with this Third Amendment. Landlord shall defend, indemnify and hold Tenant harmless from any claims, costs, expenses or liabilities for any compensation, commission or charges to realtors, brokers or agents claiming by, through or on behalf of Landlord with respect to this Third Amendment and/or the negotiation hereof. Tenant shall defend, indemnify and hold Landlord harmless from any claims, costs, expenses or liabilities for any compensation, commission or charges to realtors, brokers or agents claiming by, through or on behalf of Tenant with respect to this Third Amendment and/or the negotiation hereof.
7. Full Force and Effect. Notwithstanding anything to the contrary, and except as expressly modified herein, the Lease shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of the date first written above.
DocuSign Envelope ID: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 -3-
B0785-0001\2881433v1.doc
LANDLORD: TENANT:
THE PARKING AUTHORITY OF THE
CITY OF BEVERLY HILLS
By:
Julian A. Gold, M.D., Chairman
SOUTHWEST WINE & SPIRITS, LLC
By:
Keith Bjelajac, Chief Financial Officer
ATTEST:
Huma Ahmed, Clerk
APPROVED AS TO FORM:
Laurence S. Wiener, City Attorney
APPROVED AS TO CONSENT:
Nancy Hunt-Coffey, Executive Director
DocuSign Envelope ID: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 B0785-0001\2881433v1.doc
EXHIBIT “A”
FORM OF AMENDMENT TO MEMORANDUM OF LEASE
(Attached.)
DocuSign Envelope ID: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 B0785-0001\2881433v1.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 “Memorandum Amendment”) is dated as of November 7, 2023, and is entered into by and between THE PARKING AUTHORITY OF THE CITY OF BEVERLY HILLS (“Landlord”), and SOUTHWEST WINE & SPIRITS, LLC, a California limited liability company (“Tenant”).
R E C I T A L S
A. Tenant’s predecessor-in-interest (Strouk Group, LLC, f/k/a Strouk Group, Inc. (the “Original Tenant”)) and Landlord’s predecessor-in-interest (the City of Beverly Hills) entered into that certain Lease dated September 27, 2011 which was amended by a First Amendment of Lease dated December 18, 2012 and a Second Amendment of Lease dated June 17, 2014 (as amended, the “Lease”), pursuant to which Landlord leased and demised to Tenant, and Tenant leased and accepted from Landlord, certain space in the building located in the City of Beverly Hills, County of Los Angeles, State of California, commonly known as 447 N. Cañon Drive (the “Property”), as provided in the Lease; and
B. A Memorandum of Lease dated September 27, 2011 was recorded on December 16, 2011 as Document No. 20111710796 in the Official Records of Los Angeles County, California, and the Second Amendment of Lease dated June 17, 2014 was recorded on July 17, 2014 as Document No. 20140739274 in such Official Records; and C. Landlord and Tenant have entered into a Third Amendment of Lease (“Amendment”) dated substantially concurrently herewith.
D. Landlord and Tenant desire to record this Memorandum Amendment in order to amend the existing Memorandum, and comply with California law as to the recording of municipal leases.
A G R E E M E N T
The existing Memorandum is hereby amended to reflect that the Lease has been as amended by the First Amendment, the Second Amendment, and the Third Amendment, which are incorporated herein by this reference.
DocuSign Envelope ID: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 B0785-0001\2881433v1.doc
IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum Amendment.
LANDLORD: THE PARKING AUTHORITY OF THE CITY
OF BEVERLY HILLS
By:
Nancy Hunt-Coffey, Executive Director
TENANT: SOUTHWEST WINE & SPIRITS, LLC
By:
Keith Bjelajac, Chief Financial Officer
DocuSign Envelope ID: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 B0785-0001\2881433v1.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: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 B0785-0001\2881433v1.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: 2CDC4107-637C-45CF-A01C-EC7CD6B80B25 Certificate Of Completion
Envelope Id: 2CDC4107637C45CFA01CEC7CD6B80B25 Status: Sent Subject: Complete with DocuSign: Third Amendment of Lease - Southwest Wine & Spirits, LLC (Revised).pdf Source Envelope:
Document Pages: 8 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
10/24/2023 8:51:02 AM
Holder: Jonathan Gernes
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Keith Bjelajac
[email protected]
Chief Financial Officer
Security Level: Email, Account Authentication
(None) Signature Adoption: Pre-selected Style
Using IP Address: 98.152.107.146
Sent: 10/24/2023 9:15:05 AM
Resent: 10/27/2023 4:19:28 PM
Viewed: 10/27/2023 4:27:53 PM
Signed: 10/27/2023 4:27:59 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: 10/27/2023 4:28:00 PM
Viewed: 10/30/2023 7:27:01 AM
Signed: 10/30/2023 7:27:07 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: 10/30/2023 7:27:09 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Nancy Hunt-Coffey
[email protected]
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Julian A. Gold, M.D.
[email protected]
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Huma Ahmed
[email protected]
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Logan Phillippo
[email protected]
Real Property Development Manager
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 10/24/2023 9:15:05 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
Keith Sterling
[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
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Envelope Summary Events Status Timestamps
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