AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
HONORABLE CHAIR
AND MEMBERS OF THE CITY COUNCIL AS SUCCESSOR AGENCY
FROM: CARLO TOMAINO
CITY MANAGER/ADMINISTRATIVE OFFICER
BY: ALFA LOPEZ
ASSISTANT TO THE CITY MANAGER/ECONOMIC DEVELOPMENT MANAGER
SUBJECT:
title
APPROVAL OF TRANSFER OF LEASE AND SUBLEASE, AND AUTHORIZATION TO EXECUTE TRANSFER OF OWNERSHIP DOCUMENTS RELATED TO THE MERCEDES BENZ OF LONG BEACH MASTER LEASE AGREEMENT
summary
Summary:
The Mercedes Benz of Long Beach Dealership in the Signal Hill Auto Center is being acquired by new ownership. Aman Abraham, and affiliated business entities are interested in acquiring the dealership. Under an existing Lease Agreement, the Signal Hill City Council as Successor Agency must approve a transfer of ownership of the dealership. The Successor Agency will consider authorizing the City Manager to sign a Notice to Lessor and related documents as it relates to the City’s sublease with Mercedes Benz (Lessee) for the property located at 2300 East Spring Street.
Strategic Plan Goal(s):
Goal No. 1 Financial Stability: Ensure the City’s long-term financial stability and resilience.
Goal No. 3 Economic & Downtown Development: Improve the local economy, support local businesses, and create a vibrant downtown core.
recommendation
Recommendations:
1. Staff recommends the City Council approve the transfer of lease and sublease interests from Signal Hill Properties, LLC., to Addis Properties Long Beach LLC., facilitating the continuation of operations at the Mercedes-Benz of Long Beach dealership under new ownership.
2. Authorize the City Manager to sign the Notice to Lessor in regard to the sublease with Long Beach Euro Cars, LLC (a.k.a. Mercedes Benz).
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Fiscal Impact:
The Signal Hill Auto Center and Mercedes Benz of Long Beach Dealership are significant sources of revenue that support the City’s ability to provide services to the community. Enabling the recommended transfer of the lease and sublease supports the City’s efforts to retain and support this local business. The recommended approval of the lease transfer would not change the existing lease payments to the City.
Background and Analysis:
Mercedes Benz (“MBZ”) opened its doors in Signal Hill in 2002 at 2300 East Spring Street. The former redevelopment agency, the Lessor, entered into a 55-year sublease with MBZ for its dealership property located on Spring Street; the property is approximately 8-acres. The City, as the original sublessor, has a real property interest through a master ground lease agreement with the Robinette Family Trust.
The original Master Lease was established in December 1993 between Velma M. Robinette, as Trustee of the Alda C. Jones Trust, and the Signal Hill Redevelopment Agency (RDA). Subsequently the RDA assigned the lease to the City of Signal Hill as sublessor and in September 2002, Signal Hill Properties, LLC became the subtenant under a Sublease Agreement for the Mercedes-Benz dealership property. Signal Hill Properties, LLC now intends to sell the dealership to Aman Abraham and his affiliated business entities, which includes transferring the sublease interest to Addis Properties Long Beach LLC.
The City Attorney reviewed and approved as to form; the following three documents required for the transfer of ownership:
1. Non-Disturbance Agreement
2. Sublease Consent and Estoppel Agreement
3. Lessor Estoppel and Master Lease
The successful execution of these documents is necessary for the completion of the sale and transfer of the Mercedes-Benz of Long Beach dealership. Staff recommends the City Council authorize the City Manager to execute these documents as presented.
Reviewed for Fiscal Impact:
_________________________
Sharon del Rosario
Attachments:
A. Non-Disturbance Agreement
B. Sublease Consent and Estoppel Agreement
C. Lessor Estoppel for the Master Lease