8J Consent 2009 0706 - Laserfiche WebLink

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CITY OF SAN LEANDRO AND REDEVELOPMENT AGENCY STAFF REPORT DATE: June 30, 2009 TO: Steve Hollister, City Manager and Executive Director APPROVED AND FORWARDED TO CITY COUNCIL/ REDEVELOPMENT AGENCY Stephen L. Hollister, City Manager/ Executive Director FROM: Luke Sims, Community Development Director j,~ BY: Jeff Kay, Business Development Analyst 9''~ SUBJECT: RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN LEANDRO APPROVING THE FOURTH AMENDMENT TO THE GROUND LEASE FOR THE AUTOMALL READER BOARD SIGN AND ACCOMPANYING MEMORANDUM OF LEASE BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN LEANDRO AND THE BATARSE FAMILY TRUST TO EXPAND THE RIGHT TO ENCUMBER THE LEASEHOLD ESTATE BY $1,250,000 SUMMARY AND RECOMMENDATION The proposed amended Ground Lease for the Automall Reader Board Sign expands the right of The Batarse Family Trust ("Tenant") to encumber the leasehold estate created by the Lease by one Leasehold Deed of Trust. Under the existing agreement, the sole permitted use of such a Deed of Trust was the financing and purchase of the reader board sign, with the loan not to exceed $250,000. Under the proposed fourth amendment, the right to encumber the leasehold estate would be expanded to permit a second Leasehold Deed of Trust of up to $1,250,000, the proceeds of which must be applied to operation of the tenant's automobile dealerships adjacent to the reader board sign. This expanded right will help to increase the dealerships' access to capital, thus enhancing their long-term economic viability. Staff recommends that the Redevelopment Agency Board approve the Fourth Amendment to the Ground Lease for the Automall Reader Board Sign ("Lease") and authorize the Executive Director to execute an accompanying Memorandum of Lease between the Redevelopment Agency of the City of San Leandro and the Tenant. BACKGROUND AND ANALYSIS The Redevelopment Agency and The Batarse Family Trust first entered into a Ground Lease on May 7, 1997. The intent of the Lease was to permit the Tenant to construct, maintain, and operate a reader board sign advertising the Tenant's adjacent automobile dealerships. The subject property is located within San Leandro Ballpark adjacent to the Nimitz Freeway. In accordance with the terms of the Lease, the Tenant is responsible for all real and personal property taxes levied on or assessed by any governmental agency against the Tenant's interest in personal property located on or in the land or improvements. The Ground Lease was amended through a First Amendment on June 4, 1997 to incorporate an appurtenant access easement into the subject property. A Second Amendment, executed on