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7 THE LEASED PROPERTY Lease Payments will be made by the City under the Lease for the use and occupancy of the Leased Property, which is described in greater detail below. Description The Leased Property consists of the City’s main library building, including both land and improvements. The library is a two–floor building with approximately 76,000 square feet located at 300 Estudillo Avenue in the downtown area of the City. The building was built in 1960 and remodeled and expanded in 2001. The City also completed seismic retrofit work on the library building as part of the remodeling in 2001. The City, based on comparable properties, insurance appraisal and other records it maintains, estimates the current fair rental value of the Leased Property to be not less than the amount of the Lease Payments, and reports that the main library building and the other improvements on the Leased Property have an insured value of approximately $37.3 million. Such insured value does not include any value attributable to the land comprising the Leased Property. In 2016, the City entered into an equipment lease-purchase agreement with Bank of America, National Association (the “BofA Equipment Lease”) to finance certain personal property in the total principal amount of approximately $5.4 million, of which approximately $5.2 million was outstanding as of June 30, 2018. In connection with the BofA Equipment Lease, the City granted a security interest in the financed personal property to Bank of America. Although the security interest related solely to the personal property financed in the transaction, some of this personal property estimated to account for approximately $500,000 of the principal amount of the BofA Equipment Lease was installed at the Leased Property, resulting in an encumbrance upon such personal property. Except to the extent of the lien on such personal property pursuant to the BofA Equipment Lease, Bank of America has no claim on the Leased Property. See “THE CITY AND CITY FINANCIAL INFORMATION – General Fund Obligations.” The City may amend the Lease, among other reasons, to obligate the City to pay additional amounts of rental for the use and occupancy of the Leased Property in connection with the issuance of additional bonds or other obligations subject to the satisfaction of certain conditions precedent set forth in the Lease. See “SECURITY FOR THE 2018 BONDS – Additional Bonds.” Modifications and Subleasing of Leased Property Under the Lease, the City has the right during the term of the Lease to make additions, modifications and improvements to the Leased Property or any portion thereof. The Lease requires that such additions, modifications and improvements not in any way damage the Leased Property, or cause the Leased Property to be used for purposes other than those authorized under the provisions of state and federal law; and the Leased Property, upon completion of any additions, modifications and improvements, must be of a value which is not substantially less than the value thereof immediately prior to the making of such additions, modifications and improvements. The City may assign the Lease or sublease the Leased Property, or any portion thereof, without limitation, provided that the Lease and the obligation of the City to make Lease Payments remain obligations of the City and the City provides certain notices, legal opinions