CSU / City of Chula Vista / SDSU Nursing School and Global Campus LOI, Page 1
NON-BINDING LETTER OF INTENT
[SDSU School of Nursing - SDSU Global Campus]
This NON-BINDING LETTER OF INTENT (“LOI”) is entered into effective as of December 10, 2024 (“Effective Date”) by and between The Board of Trustees of the California State University, which is the State of California acting in its higher education capacity, on behalf of San Diego State University, one of twenty -three (23) universities in the California State University system (“ CSU”), and the City of Chula Vista, a chartered municipal corporation (“City”), with reference to the following facts:
A. City owns and operates a public library located at 1775 Millenia Ave., Chula Vista, California 91915 (the “ Library”), including that certain building containing approximately 168,000 square feet of space (the “ Building”) and adjacent parking areas, driveways, sidewalks, and other common areas (indoor and outdoor) available for the use of the general public and/or users and occupants of the Library (collectively, “Common Areas”).
B. CSU desires, subject to the satisfaction of certain terms and conditions, to lease certain portions of the Library (such portions, containing approximately 7,100 net square feet consisting of approximately 6,000 square feet of interior space and 1,100 square feet of exterior patio space (“Patio Space”) , and as shown in Exhibit A attached hereto, collectively the “Premises”) for classroom and related purposes in connection with the San Diego State University School of Nursing (the “SDSU Nursing School”) and for other educational purposes, including other programs associated with the San Diego State University Global Campus (the “SDSU Global Campus”) (collectively, the “Permitted Uses”).
C. Both City and CSU recognize and acknowledge the benefit to each arising from the use of the Premises by CSU for the SDSU Nursing School and SDSU Global Campus, and accordingly, City staff and CSU desire to enter into this LOI to establish the framework, terms and conditions upon which the parties intend to negotiate in good faith a lease for the Premises (the “Lease”) and any other definitive agreements that the parties might find necessary or advisable in connection with these matters, to be presented t o their respective governing boards for their consideration and approval.
1. Nature of the LOI.
1.1 General Purpose. The general purpose of this LOI is to establish a framework and timeline for discussions between CSU and City for the negotiation of the terms and conditions of the Lease, including without limitation the allocation of the parties’ respective rights and obligations relating to the use a nd occupancy of the Premises by CSU and its students, faculty, staff, and guests (collectively, “CSU Users”), and the conditions precedent to the parties execution of the Lease.
1.2 Specific Objectives. During the “Term” (defined below) of this LOI the parties agree to meet and confer in good faith to negotiate the terms upon which the parties may be willing to enter into the Lease and any other definitive agreement(s) with respect to the use and occupancy of the Premises and Common Areas by the CSU Users (each, including without limitation the CSU / City of Chula Vista / SDSU Nursing School and Global Campus LOI, Page 2
Lease, a “Definitive Agreement”). Any Definitive Agreement would be subject to approval by each party’s respective governing board, each acting in its sole discretion. The preliminary terms for such negotiations are set forth in Section 2 of this LOI, below.
1.3 Term. The initial term of this LOI (“Term”) shall commence on the Effective Date and terminate one (1) year thereafter. CSU and the City by mutual consent may elect, to extend the Term for two (2) periods of ninety (90) days each with written notice and confirmation at any time prior to the expiration of the initial Term, or first extension period, as applicable.
1.4 Exclusivity. During the Term of this LOI, each party reserves its absolute right to pursue or evaluate other projects and opportunities, subject to the limitations set forth herein. For CSU, this includes, without limitation, any and all possible additions, or expansions to its existing CSU cam puses, and/or other locations for the SDSU School of Nursing and/or SDSU Global Campus. For City, this includes, without limitation, any and all other potential tenants for space in the Library, except that , notwit hstanding anything in this LOI to the contrary, as a binding obligation on City under this LOI, City will not negotiate with other entities regarding the Premises during the Term, and City will not negotiate with other parties with respect to transactions that would be reasonably expected to have a material adverse effect on CSU’s ability to lease the Premises from the City as described herein or as otherwise intended, or have a material adverse effect on the satisfaction of the conditions precedent to the effectiveness of any Definitive Agreement.
1.5 No Pre-Commitment. The parties expect to cooperate in good faith regarding the matters described in this LOI. Notwithstanding the foregoing, by execution of this LOI, neither party is agreeing to undertake any activity requiring the subsequent approval and execution of any Definitive Agreement. CSU and City reserve full and unfettered discretion to approve or disapprove any subsequent action required by either respective party with respect to the matters described in this LOI, subject to the limited bind ing obligations on City pursuant to Section 1.4 above.
2. Key Terms. Upon the execution of this LOI, City staff (“City Staff”) and CSU staff (“CSU Staff”), and their respective representatives and consultants, if any, shall, in good faith, attempt to negotiate the terms and conditions of the Lease and all other Definitive Agreements (if any). As currently contemplated by the parties, the Lease and any other Definitive Agreement shall contain terms and conditions substantially consistent with the following terms and conditions, and other terms and conditions to be negotiated by the parties:
2.1 Key Lease Terms and Conditions.
(a) In General. The Lease shall grant CSU and the other CSU Users the right to use and occupy the Premises, on an exclusive basis, and all Common Areas, on a non-exclusive basis, during the term of the Lease (the “ Lease Term”). The CSU Users shall have the right to occupy and use the Premises for purposes relating to the SDSU Nursing School and/or SDSU Global Campus, and for such other related uses as may be allowed pursuant to the Lease and any other Definitive Agreement.
CSU / City of Chula Vista / SDSU Nursing School and Global Campus LOI, Page 3
(b) Lease Term . The Lease Term shall be for ten (10) years and shall commence upon the date after City has completed the tenant improvements and delivered the space to CSU, and CSU has completed the installation of all of its systems and equipment so that CSU may commence using the Premises as intended , but no later than one hundred twenty (120) days after initial delivery of space to SDSU . CSU shall have early entry rights to the Premises and Common Areas so that it can perform such installation work. (c) Rentals, Charges and Fees . There shall be no rents, charges and fees payable by CSU under the Lease, other than annual rent of $1.00 to be paid by CSU to City on the commencement of the Lease Term and annually thereafter, and except as set forth below in this Section 2, CSU shall have no obligations or liabilities with respect to any costs, fees, expenses, and charges relating to the operation, maintenance, management, and/or ownership of the Premises, Building, Common Areas, and other parts of the Library , including without limitation all costs relating to operation, maintenance, repair, taxes, insurance, cleaning, and security (collectively, the “ City’s O&M Costs ”), and the City shall be solely responsible for all City’s O&M Costs. Notwithstanding the foregoing and any contrary provision in this LOI, the City O&M Costs shall NOT include, and CSU shall be solely responsible for, (i) liability insurance with respect to the CSU use of the Premises and Common Areas, (ii) property insurance for any CSU owned p roperty, (iii) any improvements to the Premises, subject to approval by the City, not required to be made by the City, (iv) janitorial services for the Premises, (v) any costs associated with information technology for the Premises, (vi) any costs related to claims or liabilities arising out of CSU use of the Premises or any CSU negligent act or omission (vii) cost for furniture, and (viii) separately metered (or submetered) utilities for the Premises. Notwithstanding any contrary provision in this LOI, CSU will agree to indemnify and hold the City harmless for any claims and liabilities related to the CSU’s use of the Premises in accordance with the mutually agreed upon terms of the Lease and any other applicable Definitive Agreement s. Additionally, City hereby agrees that with respect to janitorial services for the Premises, CSU shall have the right, at its election, to contract with City’s janitorial service provider for the Library and/or reimburse the City directly for the costs of janitorial services to the Premises. (d) Tenant Improvements . CSU will provide City with the Tenant Improvement plans and specifications for the buildout of tenant improvements within the Premises exclusive of the Patio Space , and City will be responsible for constructing such tenant improvements at City’s cost and in accordance with a construction schedule approved by CSU. If CSU determines it needs a fence and egress gate in the Patio Space, it may request to install said improvements in the Patio Space with design subject to approval by the City and all costs borne by CSU.
(e) Maintenance and Repair. CSU shall be solely responsible for janitorial and cleaning services for the Premises (subject to the last sentence of subclause (c) above) , and for repairing any material damage to the Library to the extent caused by negligent acts, omissions, or willful misconduct of any CSU User, but otherwise all maintenance and repair of the Premises shall be the City’s obligation at its sole cost and expense. The City shall also maintain all Common Areas at its sole cost and expense, with no costs, fees, or charges being passed through to CSU. (f) Parking. Notwithstanding any contrary provision in this LOI, the CSU Users will have the right, at no additional cost, charge or fee to CSU, to use the parking areas CSU / City of Chula Vista / SDSU Nursing School and Global Campus LOI, Page 4
serving the Library on a non-exclusive basis, and City will not impose any cost, charge, or fee for parking during the Lease Term.
(g) Technology. CSU shall have the right, at its cost and subject to City approval, to install its information technology equipment and systems in the Premises, and portions of the Common Areas as may be reasonably required, including cabling, WiFi, and such other equipment and systems as CSU desires, and to operate such equipment and s ystems during the Lease Term. Neither City nor any other user of the Library shall be allowed to access or use such equipment or systems, and without limiting CSU’s other right s to be set forth in the Lease, CSU shall have the right to install security to prevent any unauthorized use. If required to share common MDF/ID, CSU and City agree to use individual secured cabinets to ensure integrity of each respective party’s equipment.
(h) Access; Security. Notwithstanding CSU’s exclusive rights with respect to the Premises, the CSU Users shall have the right to access and use the Premises and Common Areas at all times designated by CSU with written notice to City, and to the extent that the Library is not open to the public at all such times the City shall allow CSU Users to still have the ability to access and use Premises and Common Areas. CSU shall have the right, at their cost and subject to approval by the City, to install a security system at the Premises which may include key card access and other equipment, if the City’s access and security systems are unable to satisfy all legal requirements that CSU is obligated to comply with under Federal and/or State and local laws, or insufficient to comply with CSU access and security standards and protocols for its facilities. City shall reasonably cooperate with CSU in connection with the design, installation, and operation of any security system installed by CSU.
(i) Right of First Offer. If at any time during the Lease Term vacant space becomes available for rent on the lower level of the Building, CSU shall have one right to offer to lease such space from the City upon City’s notice that space is available , with costs and terms to be negotiated between the City and CSU . If the parties do not agree , working in good faith, on lease costs and terms of any additional space in the lower level of the Building within six (6) months of City’s notice that space is available, then CSU’s right of first offer shall terminate and City will have no obligation to offer CSU such additional space in the lower level of the Building. (j) Vendors; Service Providers . City shall provide CSU with the names and contact information for the vendors and service providers used by the City at the Library and CSU shall have the right, but not obligations, to contract with such vendors and service providers, if elected by CSU, for any services that CSU needs or desires at the Premises.
2.2 Termination of LOI.
(a) For Breach. In the event either party fails to fulfill its obligations under this LOI, the non -defaulting party shall have the right to terminate the agreement for cause, after providing notice and a reasonable opportunity to cure.
(b) Other Rights of Termination . CSU shall have the right to terminate its obligations under this LOI in the event that (a) CSU is unable to secure sufficient funding for the use and operation of the Premises as intended by CSU (including sufficient funding for all CSU / City of Chula Vista / SDSU Nursing School and Global Campus LOI, Page 5
equipment needed for such use and operation), and/or (b) CSU determines, in its sole discretion, that it no longer desires to lease the Premises. These LOI termination rights only apply if the termination is initiated prior to the parties signing any Definitive Agreement and before City begins Tenant Improvements for CSU.
3. General Provisions.
3.1 Integration. This LOI expresses the complete understanding of the parties with respect to the subject matter herein and supersedes all prior proposals, agreements, representations and understandings. This LOI may not be amended except in a writing signed by both parties.
3.2 Further Assurances. The parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this LOI and the intentions of the parties.
3.3 Each Party to Bear its Own Costs . Unless otherwise expressly agreed in writing, each party acknowledges and agrees that it shall bear its own costs incurred in connection with the implementation of this LOI without expectation or right of reimbursement from the other party.
3.4 No Third-Party Beneficiaries. Except as specified in this Section 3.4, there are no third-party beneficiaries with respect to any party’s obligations under the terms of this LOI, nor any third party or agent entitled to any commission, finder’s fee or other compensation as a result hereof. The City has an Exclusive Lease Listing Agreement with CBRE Group, Inc. for Millenia Lots 1 and 7. CSU shall not be responsible for any brokerage fees under that listing agreement, to the extent applicable.
3.5 Ongoing Evaluation of Legal Restrictions . Implementation of this LOI is subject to all applicable laws and the parties will continue to evaluate the impact of applicable laws to the transactions contemplated by this LOI and in the event such applicable laws limit, make impractical or unlawful any of the provisions contemplated by this LOI the Parties will negotiate in good faith alternate terms. The Lease and any other Definitive Agreement is intended to address the terms of this LOI in light of applicable legal requirements and restrictions.
3.6 Counterparts. This LOI may be executed in any number of counterparts and each counterpart shall be deemed to be an original document. All executed counterparts together shall constitute one and the same document, and any counterpart signature pages may be detached and assembled to form a single original document.
3.7 Incorporation. The Exhibits attached hereto are hereby incorporated by this reference into this LOI.
3.8 Drafting. In the event of a dispute between any of the parties hereto over the meaning of this LOI, both parties shall be deemed to have been the drafter hereof, and any applicable law that states that contracts are construed against the drafter shall not apply.
3.9 Notices. Any notice that may or must be given by either party under this LOI shall be in writing and shall be delivered (i) personally, or (ii) by a nationally recognized overnight courier, addressed to the party to whom it is intended. A notice shall be deemed delivered on the CSU / City of Chula Vista / SDSU Nursing School and Global Campus LOI, Page 6
date received or when delivery is refused. Any notice given to City or CSU shall be sent to the respective address set forth below, or to such other address as that party may designate.
City
276 Fourth Ave.
Chula Vista, CA 91910
Attn: City Manager
with a copy to:
276 Fourth Ave.
Chula Vista, CA 91910
Attn: City Attorney
CSU
401 Golden Shore
Long Beach, CA 90802
Attn: Office of General Counsel
with a copy to:
SDSU
5500 Campanile Drive
San Diego, CA 92182
Attn: Vice President for Business & Financial
Affairs, CFO
3.10 Governing Law. This LOI will be governed by and in all respects construed in accordance with the laws of the State of California.
[NEXT PAGE IS SIGNATURE PAGE]
CSU / City of Chula Vista / SDSU Nursing School and Global Campus LOI, Signature Page
SIGNATURE PAGE TO
NON-BINDING LETTER OF INTENT
[SDSU School of Nursing - SDSU Global Campus]
IN WITNESS WHEREOF, by signing below the parties agree to enter into and abide by the terms of this LOI as of the Effective Date.
THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY, the State of California acting in its higher education capacity, on behalf of San Diego State University
Approved by: ________________________________
Name: __________________________
Title: __________________________
Date: _________________, 2024
Recommended by: _______________________________
Name: _________________________
Title: _________________________
Date: _________________, 2024
CITY OF CHULA VISTA
By: ____________________________________
John McCann, Mayor
Approved as to Form:
By: __________________________
Marco A. Verdugo, City Attorney
EXHIBIT A
Premises