Administrative
Report
H.4., File # 23-5512 Meeting Date: 8/8/2023
To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATERFRONT & ECONOMIC DEVELOPMENT DIRECTOR TITLE
APPROVE THE AMENDED AND RESTATED LESSOR ESTOPPEL CERTIFICATE AND CONSENT
TO DEED OF TRUST BETWEEN THE CITY OF REDONDO BEACH AND PORTOFINO HOTEL PARTNERS, L.P. A CALIFORNIA LIMITED PARTNERSHIP
EXECUTIVE SUMMARY
Pursuant to the terms of the Lease between the City of Redondo Beach (the “City”) and Portofino Hotel Partners, L.P. (the “Lessee”), the City has received a request to execute and deliver an Amended and Restated Lessor Estoppel Certificate and Consent to Deed of Trust as security for a mortgage loan by Rockbridge Hospitality Fund VIII L.P. for the Lessee. The amended Estoppel Agreement does not change any terms or conditions of the Lease, nor does it modify the lease requirement for the City’s Consent to any future refinancing, or significant changes to the loan. The Estoppel Agreement certifies the current status of lease matters such as rent payments, the amount of tenant deposits, whether there are any current breaches of the lease by the Hotel operator, etc.
The Estoppel Agreement is needed for the lessee to finalize loan refinancing.
BACKGROUND
Portofino Hotel Partners, L.P. is the current leaseholder of the “Portofino Hotel” under a lease that was executed on April 1, 2006 (the “Lease”). The Portofino Hotel leasehold occupies the far western portion of the area within King Harbor known as Mole C. The Portofino operations include a hotel and related banquet facility, marina, restaurant, rental apartments, and a boat refueling station.
Under the terms of the City’s 2006 lease of the Portofino Hotel site to Portofino Hotel Partners, L.P., the Hotel may request that the City provide an Estoppel Agreement which certifies the current status of lease matters such as rent payments, the amount of tenant deposits, whether there are any breaches of the lease by the Hotel, etc. The City has provided Estoppel Agreements for the Hotel in the past, with the last one dated June 2021 which enabled Portofino Hotel Partners, L.P. to finalize a loan refinancing for the Portofino Hotel leasehold.
The proposed Estoppel Agreement certifies that the Hotel is up to date in its payment of rent and is in compliance with the other requirements of the Lease. Under this Estoppel Agreement the City also consents to the financing that has been obtained for the Hotel from Rockbridge Hospitality and its affiliate, as well as the credit facility provided by Western Alliance Bank in connection with the financing. No refinancing has occurred since the previous June 2021 Estoppel Agreement and the proposed Estoppel Agreement does not modify the lease requirement for City’s consent to any future
H.4., File # 23-5512 Meeting Date: 8/8/2023
refinancing or significant changes to the loan.
COORDINATION
The Waterfront and Economic Development Department collaborated with the City Attorney’s Office on this report. The City Attorney’s Office has approved the document as to form.
FISCAL IMPACT
Approval of the Amended and Restated Lessor Estoppel Certificate and Consent to Deed of Trust does not have a financial impact on the City.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Lease between the City of Redondo Beach and Portofino Hotel Partners, L.P. · First Amendment to the Lease between the City of Redondo Beach and Portofino Hotel Partners, L.P.
· Approved Amended and Restated Estoppel Certificate and Consent to Deed of Trust (June 1, 2021)
· Proposed Amended and Restated Estoppel Certificate and Consent to Deed of Trust