Agenda Item 8I - Matarials Available — Torrance City Council, May 19, 2026

8I
Date: May 19, 2026
To: Honorable Mayor and Members of the City Council
From: Aram Chaparyan, City Manager
By: Carlos Huizar, Management Associate | [email protected] Subject: City Manager – Approve and Authorize the Mayor to Execute Ground Lessor's Consent, Estoppel Certificate and Agreement for Skypark Atrium, LLC for City-Owned Property Located at 2790 Skypark Drive. Expenditure: None.

RECOMMENDATION
Recommendation of the City Manager that City Council approve and authorize the Mayor to execute a Ground Lessor’s Consent, Estoppel Certificate and Agreement with Skypark Atrium, LLC and Preferred Bank for the City-owned property located at 2790 Skypark Drive (C-2399).

FUNDING
None required.

DISCUSSION
The subject property consists of City-owned land currently leased to Skypark Atrium, LLC (Ground Lessee) under a master lease dated January 1, 1983. The Ground Lessee is currently obtaining a term loan in the principal amount of $7,000,000.00 from Preferred Bank (Lender).

As a condition of the financing, the Lender requires the City, as Ground Lessor, to execute an Estoppel Certificate and Consent. This document serves as a formal verification of the lease status and protects the Lender’s leasehold interest.
 Confirms the Ground Lease is in full force and effect with no known defaults by either party.
 Verifies that the current monthly rent is $13,638.34 and the Ground Lessee is current on all payments as of April 30, 2026.
 Confirms the lease expiration date of December 31, 2070, and acknowledges one remaining 15-year extension option.
 Memorializes all seven previous amendments and various assignments of the leasehold interest.
 Formally recognizes Preferred Bank as an "Institutional Lender" and provides them with standard notice and cure rights in the event of a lessee default. 1 City Council
May 19, 2026

Page 2 ends

Staff has reviewed the records and confirmed that the Ground Lessee has satisfied all construction obligations required under the lease. The City Attorney’s Office has reviewed the attached agreement and approved it as to form.

The Lease is currently in full force and effect and the rent is current.

ATTACHMENT

1. Ground Lessor's Consent, Estoppel Certificate and Agreement 2 1 5874041v4

RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:

PREFERRED BANK
601 S. Figueroa Street, 47th Floor
Los Angeles, California 90017
Attention: Note Department
Assessor’s Parcel No.: 8940-413-615

GROUND LESSOR’S CONSENT, ESTOPPEL CERTIFICATE

AND AGREEMENT
This GROUND LESSOR’S CONSENT, ESTOPPEL CERTIFICATE AND
AGREEMENT is dated as of May 19, 2026. The undersigned, (i) the CITY OF TORRANCE, a municipal corporation (“Ground Lessor”), whose address is 3031 Torrance Boulevard, Torrance, CA 90503 as current lessor under that certain Lease dated as of January 1, 1983, a memorandum of which entitled “Memorandum of Lease” dated as of January 1, 1983 was recorded January 25, 1984 as Instrument No. 84 97922 of the Official Records of Los Angeles County, California (together with any and all amendments and extensions thereto or modifications thereof, the “Ground Lease”), covering that certain premises located in the City of Torrance, Los Angeles County, State of California (the “Leased Property”), legally described in Exhibit “A” hereto, and (ii) SKYPARK ATRIUM, LLC, a California limited liability company (“Ground Lessee”), whose address is 2828 Thorndyke Avenue West, Suite 302, Seattle, Washington 98199, as current lessee under the Ground Lease, pursuant to which Ground Lessee owns and holds a leasehold interest in the Leased Property, hereby certify to and agree with PREFERRED BANK, a California banking corporation (“Lender”), whose address is 601 S. Figueroa Street, 47th Floor, Los Angeles, California 90017, Attention: Note Department, as follows:

A. Ground Lessor and Ground Lessee hereby certify, represent and warrant to, and covenant and agree with Lender, as follows:

1. Ground Lessee is obtaining a 5-year term loan , with a maturity date of May 19, 2031, from Lender in the principal sum of $7,000,000.00 (“Loan”). Ground Lessee desires to secure the Loan, in part, by Ground Lessee’s interest in the Leased Property pursuant to the Ground Lease, and Lender is relying, in part, upon this Ground Lessor’s Consent, Estoppel Certificate and Agreement (“Agreement”) in securing the Loan with Ground Lessee’s interest in the Leased Property.

2. Ground Lessor is the current ground lessor under the Ground Lease.

Ground Lessor is also the exclusive fee simple owner of the Leased Property

3. Ground Lessee is the current ground lessee under the Ground Lease.

Ground Lessor has not assigned or conveyed or agreed to assign or convey Ground Lessor’s interest under the Ground Lease in whole or in part, except in connection with 3 ATTACHMENT 1
2 5874041v4
the Loan. There has been no assignment, encumbrance or conveyance of Ground Lessee’s interest under the Ground Lease in whole or in part.

4. The Ground Lease is in full force and effect, and there have been no amendments, modifications, changes, additions or assignments since its execution, except as follows:
(a) Amendment to Lease dated as of March 13, 1984, executed by and between Ground Lessor and Arthur L. Valdez and G. Arleen Valdez, husband and wife (“Valdez”);
(b) Second Amendment to Lease dated as of June 15, 1984, executed by and between Ground Lessor and Valdez (the “Second Amendment”); (c) Third Amendment to Lease dated as of January 12, 1987, executed by and between Ground Lessor and Valdez (the “Third Amendment”); (d) Letter agreement, styled “Re: Modification of Rental Rate”, executed by Valdez on December 22, 1993 and executed by Ground Lessor on November 4, 1994;
(e) Fifth Amendment to Lease dated as of January 1, 1997, executed by and between Ground Lessor, and Arthur L. Valdez and G. Arleen Valdez; (f) Assignment and Assumption of Lease dated as of September 14, 1998, by and between, Valdez, as assignor, and Executive Quarters, LLC, a California limited liability company (“EQ LLC”), as assignee, and together with the Landlord’s Consent executed by Ground Lessor attached thereto, and which Assignment and Assumption of Lease was recorded in Official Records of Los Angeles County, California, on September 25, 1998 as Document No. 98 1738861; (g) Sixth Amendment to Lease dated as of September 24, 2002, executed by and between Ground Lessor and EQ LLC (the “Sixth Amendment”); (h) Assignment and Assumption of Lease dated as of August 30, 2006, by and between, EQ LLC, as assignor, and Skypark Atrium I, LLC, a California limited liability company, Nobuhiro Sotowa, as Trustee of the Survivor’s Trust under the 1988 Sotowa Revocable Trust, and Nobuhiro Sotowa, as Trustee of the Residual Trust under the 1988 Sotowa Revocable Trust, as tenants-in-common, as assignee, and together with the Landlord’s Consent executed by Ground Lessor attached thereto, and which Assignment and Assumption of Lease was recorded on July 31, 2006 in Official Records of Los Angeles County, California, as Document No. 06 1685224;
(i) Assignment and Assumption of Lease dated as of February 22, 2007, by and between, Skypark Atrium I, LLC, a California limited liability company, Nobuhiro Sotowa, as Trustee of the Survivor’s Trust under the 1988 Sotowa Revocable Trust, and Nobuhiro Sotowa, as Trustee of the Residual Trust under the 1988 Sotowa Revocable Trust, as tenants-in-common, as assignor, and Ground Lessee, as assignee, and 4 3 5874041v4
which Assignment and Assumption of Lease was recorded on March 26, 2007 in Official Records of Los Angeles County, California, as Document No. 20070693185; and (j) Seventh Amendment to Lease dated as of April 4, 2017, executed by and between Ground Lessor and Ground Lessee (the “Seventh Amendment”).

The Ground Lease constitutes the full and entire understanding and agreement between Ground Lessor and Ground Lessee pertaining to the Ground Lease and the Leased Property.

5. Ground Lessee has accepted the Leased Property.

6. The next rent payment by Ground Lessee is due on June 1, 2026, and Ground Lessee has made all rent payments required to be made under the Ground Lease.

The amount of the current monthly ground rent payment is $13,638.34.

7. No rent has been paid by Ground Lessee more than thirty (30) days before its due date (except for any security deposit). No security deposit has been paid by Ground Lessee to Ground Lessor.

8. Ground Lessor is not in breach or default of any of the terms, conditions or provisions of the Ground Lease.

9. Ground Lessor does not have any claims, causes of action, judgments, liabilities or demands of any kind, nature or character against Ground Lessee concerning the Ground Lease.

10. The Ground Lease is in full force and effect and Ground Lessee is not, in any respect, in default under the terms and provisions of the Ground Lease. Further, Ground Lessor knows of no event which would constitute a default under the terms of the Ground Lease by either Ground Lessee or Ground Lessor.

12. The Ground Lease is for a term of eighty-eight (88) years. The term of the Ground Lease commenced on January 1, 1983 and shall expire on December 31, 2070.

Ground Lessee has no option to extend the term of the Ground Lease, except for one (1) option to extend the term for fifteen (15) years. Ground Lessee has no right to purchase the Leased Property.

13. Ground Lessor has not encumbered its fee interest in the Leased Premises to any lender or financial institution, whether by way of mortgage, deed of trust or other security instruments.

14. Ground Lessor acknowledges that it has received the documents in connection with the Loan and, in accordance with Section 23.A.(3) of the Ground Lease, hereby irrevocably consents to the extension of credit by Lender and the encumbrance of Ground Lessee’s interest in the Ground Lease pursuant to a deed of trust by Ground 5 4 5874041v4
Lessee in favor of Lender (“Leasehold Deed of Trust”). Ground Lessor acknowledges that this Agreement constitutes notice to Ground Lessor.

15. Ground Lessor has been further advised by Ground Lessee that Lender has required, in order to induce Lender to make the Loan, among other matters, the delivery of the following statements, agreements, and representations by Ground Lessor to Lender:
a. Ground Lessor agrees and acknowledges that Lender is an “institutional lender” (as described in Section 23.A. of the Ground Lease) and is a “Leasehold Mortgagee” (as defined in Section 23.A. of the Ground Lease), and the Deed of Trust shall be deemed a "Leasehold Mortgage" (as defined in Section 2 of the Second Amendment). Furthermore, Ground Lessor agrees and acknowledges upon the making of the Loan, Lender shall be entitled to all rights, benefits and privileges of a “Lessee” (as defined in the Ground Lease) and a “Leasehold Mortgagee” under the Ground Lease (including, without limitation, under Section 23 of the Ground Lease, Sections 2 and 12 of the Second Amendment, and Section 3 of the Third Amendment). Accordingly, Lender shall be a direct beneficiary of all the rights and privileges of a Lender and Ground Lessor shall owe directly to Lender all of the duties that the Ground Lessor owes to an “institutional lender” and an “Leasehold Mortgagee” under the Ground Lease. b. During the term of the Loan, Ground Lessor will not change or amend the Ground Lease or any interest of the Ground Lessee thereunder without Lender’s prior written consent.
c. Ground Lessor shall deliver to Lender a copy of any notice relating to a default by Ground Lessee under the Ground Lease at the time it gives such notice to Ground Lessee. All such notices shall be given to Lender in accordance with the Ground Lease, at PREFERRED BANK, 601 S. Figueroa Street, 47th Floor, Los Angeles, California 90017, Attention: Note Department, or to such other address as Lender may hereinafter designate in writing and delivered in the manner provided for notice to be given under the Ground Lease.
d. Ground Lessor shall not terminate the Ground Lease because of any default or breach of the Ground Lease by Ground Lessee, if the same can be cured by the payment or expenditure of money (“monetary default”), unless within thirty (30) days after Lender’s receipt of such written notice by Ground Lessor to Lender of such default or breach of the Ground Lease by Ground Lessee, Lender fails to cure such monetary default (unless a longer period of time to cure such monetary default is provided under the terms of the Ground Lease, in which case Lender shall have such longer cure period). e. In the event of a non-monetary default by Ground Lessee under the Ground Lease, the Ground Lessor agrees that Lender shall have the right (but not the obligation) to cure such non-monetary default within sixty (60) days after service of written notice by Ground Lessor to Lender of such default or breach (unless a longer period of time to cure such non-monetary default is provided under the terms of the Ground Lease, in which case Lender shall have such longer cure period). Further, 6 5 5874041v4
Ground Lessor agrees that Ground Lessor shall not terminate the Ground Lease in connection with any such non-monetary default which Lender has elected to remedy or cause to be remedied even if said non-monetary default is not remedied within the time period provided for in the Ground Lease, or such sixty (60)-day period, as applicable; provided, that Lender has commenced remedying or causing to be remedied such default with reasonable diligence, and continues the process with reasonable diligence to completion, and taking into account that Lender may be required to take possession of the Leased Property or obtain the appointment of a receiver to take possession of the Leased Property; provided, further, that during the time that Lender is curing such non-monetary defaults, Lender also cures any monetary defaults as provided in paragraph 15d. f. If the Ground Lease is terminated for any reason or is, in connection with any bankruptcy proceeding, rejected or terminated by a trustee, a debtor in possession or by operation of law, Ground Lessor shall, at Lender’s written request within thirty (30) days after the date of any such rejection or termination, enter into a new lease of the Leased Property with Lender for the remainder of the term of the Ground Lease, effective as of the date of such rejection, at the rent and upon the same terms, provisions, covenants and agreements as are contained in the Ground Lease (except for any requirements which have been satisfied by or on behalf of Ground Lessee prior to such rejection or termination); provided, that Lender shall, upon execution of the new lease, pay to Ground Lessor any and all sums which would have been due under the Ground Lease as of the time of execution and delivery of the new lease, but for the rejection or termination thereof. Upon execution of said new lease, Ground Lessor shall assign to Lender Ground Lessor’s interest, if any, in any subleases on the Leased Property. g. Ground Lessor shall not terminate the Ground Lease or invoke its right to take possession of the Leased Property if within sixty (60) days after Lender receives notice from Ground Lessor of the occurrence of an event of default under the Ground Lease, Lender commences foreclosure or other proceedings in order to enforce Lender’s rights under the Leasehold Deed of Trust and Lender diligently proceeds in good faith to enforce its foreclosure or other remedies, including appointment of a receiver.
h. If Ground Lessee’s interest in the Ground Lease is acquired by Lender or a wholly owned subsidiary corporation or other entity of Lender, by reason of foreclosure or other proceedings brought to enforce Lender’s rights under the Leasehold Deed of Trust or any other security document, or by deed in lieu of foreclosure, or by any other method, the Ground Lease and the rights of the Ground Lessee thereunder shall continue in full force and effect and shall not be terminated or disturbed by Ground Lessor, except in accordance with the terms of the Ground Lease and this Agreement. Upon such acquisition by Lender, Lender shall attorn to Ground Lessor as landlord under the Ground Lease, which attornment shall be effective and self-operative without the execution of any other instrument on the part of any party hereto, immediately upon Lender’s succeeding to the interest of Ground Lessee under the Ground Lease. In the event Lender desires to enter into a new lease with Ground Lessor upon Lender’s acquisition of Ground Lessee’s interest in the Ground Lease, Ground Lessor shall enter 7 6 5874041v4
into a new lease with Lender upon Lender’s request to Ground Lessor within thirty (30) days after such acquisition by Lender.
i. If Lender, or a wholly owned subsidiary corporation or other entity of Lender, acquires title to Ground Lessee’s interest in the Ground Lease by foreclosure of the Leasehold Deed of Trust or by assignment or deed in lieu of foreclosure, or otherwise, or under a new lease pursuant to this Agreement, Lender or such subsidiary or other entity of Lender may assign the Ground Lease or the new lease without need for any further consent from Ground Lessor, and shall thereupon be released from all liability for the performance or observance of the covenants and conditions contained in the Ground Lease or such new lease required on said Ground Lessee’s part to be performed and observed from and after the date of such assignment.
j. Any right of first refusal or option to purchase under the Ground Lease which Ground Lessor or Ground Lessee may have with respect to the Leased Property (if any) is hereby subordinated to Lender’s security interest in the Leased Property pursuant to the Leasehold Deed of Trust, and the exercise of any such right of first refusal or option to purchase will not operate to defeat, render invalid, or extinguish Lender’s security interest in the Leased Property, the Ground Lease, or any other property or interest acquired by Ground Lessee by the exercise of said rights and options. k. Ground Lessor and Ground Lessee acknowledge and agree that, except as may otherwise be expressly permitted in writing by Lender, Ground Lessee shall not purchase or otherwise acquire the fee interest to the Leased Property unless and until the obligations of Ground Lessee secured by the Leasehold Deed of Trust are first satisfied in full. Any instruments transferring fee title to the Leased Property to Ground Lessee in violation of this Paragraph (k) shall be automatically void and of no effect.

16. All of the obligations of the Ground Lessee under the Ground Lease with respect to construction in Sections 6A, B and C of the Ground Lease have been satisfied.

17. The Reciprocal Parking Agreement Consent and Agreement dated January 2, 1983 is of no further force or effect.

B. Ground Lessor and Ground Lessee hereby agree with and for the benefit of Lender that:

1. Ground Lessor hereby intentionally and unconditionally subordinates its lien or charge upon the Leased Property in favor of the lien or charge of Lender upon the Leased Property.

2. Notwithstanding any Ground Lease provisions to the contrary, policies of fire, casualty, and extended coverage insurance shall be carried by the Ground Lessee covering the building or buildings constructed on the Leased Property with loss payable clause to Lender, as beneficiary under the Leasehold Deed of Trust, and any disposition of the proceeds thereof in case of loss shall be subject to the rights of Lender therein as provided in the Leasehold Deed of Trust and thereafter as the interests of the parties appear.
8 7 5874041v4

3. Any and all eminent domain or condemnation awards or damages recoverable by the Ground Lessee shall first be applied in payment of the then outstanding balance, if any, of the Loan and the balance of such awards and damages, if any, shall be paid to Ground Lessor and Ground Lessee, as their interest may appear.

4. Ground Lessor hereby waives the right to obtain, for any liability of Ground Lessee that arises, accrues, or is the subject of legal action while the Leasehold Deed of Trust is in existence a lien on any equipment or furnishings of Lessee that may constitute a part of the improvements on the Leased Property.

5. Unless this Agreement contradicts a term or provision of the Ground Lease, it is the parties’ intent that this Agreement and the Ground Lease be construed as though no conflict exists between their terms. In the event of a conflict between the terms of the Ground Lease and this Agreement as it relates to Lender, the terms of this Agreement shall control; provided that in the event the Ground Lease provides greater rights to Lender than this Agreement in any respect, then Lender shall enjoy such greater rights under the Ground Lease in such respect.

6. Lender shall be entitled to all of the benefits of the Ground Lease, subject to Lender’s compliance with the provisions thereof.

C. Ground Lessor and Ground Lessee acknowledge and agree with Lender that Ground Lessee has complied with the terms, provisions set forth in Section 3 of the Sixth Amendment and Section 3 of the Seventh Amendment.

D. Ground Lessor and Ground Lessee further acknowledge and agree that neither Lender nor any purchaser of the Leased Property at any foreclosure sale nor any grantee of the Leased Property named in a deed-in-lieu of foreclosure, nor any heir, legal representative, successor, or assignee of Lender or of any such purchaser or grantee, has or shall have any personal liability for the obligations of Ground Lessee under the Ground Lease, except to the extent of the rents, security deposits, and insurance and condemnation proceeds actually received and the equity in the Leased Property then owned by such party.

E. Any notices to be given to Ground Lessor and/or Ground Lessee, whether by law or under this Agreement or the Ground Lease, shall be given at the addresses of Ground Lessor and Ground Lessee set forth in this Agreement. Any notices to be given to Lender, whether by law or under this Agreement or the Ground Lease, shall be given at the address set forth on the first page of this Agreement.

F. This Agreement may be executed in any number of counterparts, and any party hereto or thereto may execute any counterpart, each of which, when executed and delivered, will be deemed to be an original, and all of which counterparts of this Agreement, as the case may be, taken together will be deemed to be but one and the same instrument. The execution of this Agreement by any party or parties hereto or thereto will not become effective until counterparts hereof or thereof, as the case may be, have been executed by all the parties hereto or thereto.
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G. Upon the execution of this Agreement, this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their successors, transferees and assigns. In the event of any inconsistency or conflict with the provisions of this Agreement and the provisions of the Ground Lease, the provisions of this Agreement shall control.

[Signature page to follow.]
10 [Signature Page to Ground Lessor’s Consent, Estoppel Certificate and Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Ground Lessor’s Consent, Estoppel Certificate and Agreement as of the date first above written. “GROUND LESSOR”:

CITY OF TORRANCE, ATTEST:
a municipal corporation

________________________ _____________________ George K. Chen Rebecca Poirier, MMC
Mayor City Clerk

APPROVED AS TO FORM:

PATRICK Q. SULLIVAN

CITY ATTORNEY

________________________
By: Tatia Y. Strader
Assistant City Attorney

[SIGNATURES CONTINUE ON NEXT PAGE]
11 [Signature Page to Ground Lessor’s Consent, Estoppel Certificate and Agreement]

“GROUND LESSEE”:

SKYPARK ATRIUM, LLC,
a California limited liability company

By: Skypark Atrium I, LLC,
a California limited liability company
Its: Manager

By:

Name: Steven Loo
Its: Executive Manager

[SIGNATURES CONTINUE ON NEXT PAGE]
12 [Signature Page to Ground Lessor’s Consent, Estoppel Certificate and Agreement]

“LENDER”:

PREFERRED BANK,
a California banking corporation

By:

Name:

Title:

[ALL SIGNATURES MUST BE ACKNOWLEDGED]
13 [Notary Page to Ground Lessor’s Consent, Estoppel Certificate and Agreement]

STATE OF CALIFORNIA )
) ss

COUNTY OF )
On , before me, , a 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.

Notary Public
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.
14 [Notary Page to Ground Lessor’s Consent, Estoppel Certificate and Agreement]

STATE OF CALIFORNIA )
) ss

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.

Notary Public
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.
15 [Notary Page to Ground Lessor’s Consent, Estoppel Certificate and Agreement]

STATE OF CALIFORNIA )
) ss

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.

LEGAL DESCRIPTION

Torrance City CouncilMay 19, 2026

Torrance City Council
May 19, 2026