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Recommendation to Approve a Consent to Assignment of Lease and Leasehold Deed of Trust with SHM Ballena Isle, LLC for the Current CLP Ballena Marina, LLC, Formerly Known As CNL Income Ballena Marina, LLC at Ballena Marina. (Community Development 216)
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To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Recommendation to Approve a Consent to Assignment of Lease and Leasehold Deed of Trust with SHM Ballena Isle, LLC for the Current CLP Ballena Marina LLC, Formerly Known As CNL Income Ballena Marina, LLC at Ballena Marina.
BACKGROUND
The City entered into a lease agreement with Ballena Isle Marina (BIM), LP, in 1979, for 27 acres of submerged land and 27 acres of dry land, located at 1150 Ballena Boulevard. The lease term was for 25 years with an option, exercised in January 1988, to renew for an additional 25 years. Under the current lease, which expires December 31, 2028 (which includes the remaining time on the original term), the annual rent is $40,400 for the entire property, increasing to $55,000 in the last year. In March 2010, the City approved a Consent to Assignment of Lease between BIM and CLP Ballena Marina, LLC (formerly CNL Income Ballena Marina, LLC. In July 2015, SHM Ballena Isle, LLC (SHM) proposed acquisition of Ballena Isle Marina from CNL Lifestyle Properties (CLP Ballena Marina, LLC). Under the terms of the lease agreement, the City Council is required to consent to any assignment of the lease and leasehold deed of trust (Exhibit 2).
DISCUSSION
In July 2007, the City Council approved a Master Lease that divided the BIM leasehold estate into three separate leasehold estates (Exhibit 3). The Master Lease was to become effective when BIM sold the commercial buildings located on a portion of the leased premises. BIM requested, and negotiated with staff, the Master Lease agreement to facilitate BIM's ability to trifurcate the lease into three portions selling off t...
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