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Home My WebLink About08 SECOND AMENDMENT TO LEASE AGREEMENT BETWEEN THE CITY & OUTFRONT MEDIA, LLCAgenda Item 8 Reviewed: AGENDA REPORT City Manager Finance Director N/A MEETING DATE: AUGUST 20, 2019 TO: MATTHEW S. WEST, CITY MANAGER FROM: ECONOMIC DEVELOPMENT DEPARTMENT SUBJECT: SECOND AMENDMENT TO LEASE AGREEMENT BETWEEN THE CITY OF TUSTIN AND OUTFRONT MEDIA, LLC SUMMARY: Second Amendment to Lease Agreement (Agreement) between the City of Tustin and Outfront Media, LLC (Outfront) for the billboard at the SR -55 Freeway and Edinger Avenue. RECOMMENDATION: That the City Council authorize the City Manager to execute the Agreement, subject to any non -substantive modifications as may be deemed necessary and/or recommended by the City Attorney. FISCAL IMPACT: Under the terms of the Agreement, which is effective from August 1, 2019 to July 31, 2020, Outfront will pay the City an annual base rent of Sixty Thousand Dollars ($60,000) within thirty (30) days of the Agreement's execution. Prior to execution, Outfront has paid the City a total of $1,833.33 for rent under the terms of the current agreement. This amount will be credited towards Outfront's first annual payment of rent, leaving a balance due of $58,166.67. Should the Agreement be extended beyond the initial one- year term, rent shall increase 3% annually and the annual payment shall be made in advance of August 1, 2020. CORRELATION TO THE STRATEGIC PLAN: Goal A — Economic and Neighborhood Development BACKGROUND: On December 19, 1994, the former Tustin Community Redevelopment Agency, as successor -in -interest to Case -Swayne Company, Inc, assumed a billboard lease agreement with Gannett Outdoor Company, Inc. The monthly lease payment was One Agenda Report August 20, 2019 Page 2 Thousand Two Hundred and Fifty Dollars ($1,250). Subsequently, Outfront assumed the billboard lease from Gannett. In January 2016, the property on which the billboard is located was transferred to the City and staff began studying changes to the current sign ordinance. Initial discussions with Outfront about amending the terms of the lease were put on hold while changes to the sign ordinance were being considered. Rather than continue to wait, staff is recommending the lease be amended from month-to-month at $1,250 per month ($15,000 annually) to a one-year term for $60,000. The one-year term significantly increases the rent while maintaining flexibility for the City to amend the lease if changes are made to the sign ordinance. Staff is recommending City Council approve the Agreement. ohn uchananJerry Craig ctor of Economic Development Deputy Dire for o us' ess Services and Housing Attachment: Second Amendment to Leasee Aareer�ient SECOND AMENDMENT TO LEASE AGREEMENT Lease No. 14631 (55 frwy/Edinger) This Second Amendment to Lease Agreement ("Amendment") is made and entered into by and between the City of Tustin ("Lessor") and Outfront Media LLC ("Lessee") to be effective August , 2019 ("Effective Date). RECITALS WHEREAS, Lessor (as successor in interest to Case -Swayne Co., Inc., and the Tustin Community Redevelopment Agency) and Lessee (as successor in interest to Gannett Outdoor Co., Inc., et al.) are parties to that certain Lease Agreement dated 11/20/92 as amended by addenda/amendment(s) dated 12/19/94 (together, the "Lease"), which are incorporated herein by this reference; and WHEREAS, Lessor and Lessee now desire to amend the Lease pursuant to the terms and conditions of this Amendment. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: 1. Incorporation of Recitals. The foregoing recitals are true and correct and are incorporated herein by this reference. 2. Capitalized Terms. All capitalized terms used herein, unless otherwise defined herein, have the same meanings ascribed to them in the Lease. 3. Term of the Agreement. Paragraph 2 of the Lease is hereby amended in its entirety to read as follows: "2. The initial term of the Agreement shall be for a period of one (1) year, commencing August 1, 2019 and ending July 31, 2020. Thereafter, the Agreement shall automatically extend annually for successive one-year term(s) unless terminated by either party in accordance with Paragraph 5." 4. Rent Payment. Paragraph 3 of the Lease is hereby amended in its entirety to read as follows: "3. Lessee shall pay to Lessor $60,000 annual rent. Should the Agreement be extended beyond the initial one-year term, rent shall increase 3% annually and the payment shall be made in advance of August 1. 1429303.1 5. First Annual Payment. Lessor and Lessee agree and acknowledge that prior to the Effective Date, Lessee has paid to Lessor a total of $1,833.33 for rent in accordance with the terms of the then -current Lease. This amount will be credited toward Lessee's first annual payment of rent under this Amendment. Within 30 days following the Effective Date, Lessee shall pay to Lessor $58,166.67 ($60,000 annual rent less $1,833.33 credit). 6. Termination for Cause. Paragraph 5 of the Lease is hereby amended in its entirety to read as follows: "5. Lessor may terminate this Lease for cause in the event of a default by Lessee. The occurrence of any one or more of the following events shall constitute a default by Lessee, subjecting Lessee to termination for cause: i. Lessee's failure to pay rent in accordance with Paragraph 3 of this Lease Agreement, or any other sum payable hereunder, as and when due, where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee is provided. The ten (10) day notice shall be in lieu of, and not in addition to, any notice required under the unlawful detainer statutes California Code of Civil Procedure Section 1161 et seq. ii. Lessee's failure to observe or perform any other provisions of this Lease Agreement where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee is provided. Any such notice shall be in lieu of, and not in addition to, any notice required under the unlawful detainer statutes California Code of Civil Procedure Section 1161 et seq. However, if the nature of such failure is such that it can be cured by Lessee, but more than ten (10) days are reasonably required for its cure (for any reason other than financial inability), then Lessee shall not be deemed to be in default if Lessee shall commence such cure within said ten (10) days, and thereafter diligently prosecutes such cure to completion. iii. Lessor or Lessee may terminate the Agreement for any reason and without cause at any time after the initial one-year term by notifying the other party in writing at least 90 days prior to the end of the term. Notices shall be given by first-class, United States mail, postage prepaid, addressed to the Lessee at the address set forth below. ]429303.] Lessee: Outfront Media 7. Amendment Controls. Except as otherwise set forth herein, all of the terms and conditions of the Lease shall remain in full force and effect. In the event of a conflict between the terms and conditions of this Amendment and the terms and conditions of the Lease, the terms and conditions of this Amendment shall govern. 8. Counterparts. This Amendment may be executed in one or more counterparts and delivered by regular, certified, registered or electronic mail (in pdf format), each of which shall be deemed an original hereof and all of which together shall be deemed to be one and the same instrument. «««««««««« Signature Page Follows»»»»»»»»»» 1429303.1 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first set forth above. "Lessor" CITY OF TUSTIN Matthew S. West City Manager APPROVED AS TO FORM David E. Kendig City Manager "Lessee" OUTFRONT MEDIA LLC 1429303.1