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20-0121_SJC MISSION VENTURES, LLC_F1b_Agenda ReportCity of San Juan Capistrano Agenda Report TO: Honorable Mayor and Members of the City Council FROM: ,}ffenjamin Siegel, City Manager SUBMITTED BY: Charlie View, Assistant City Manager DATE: January 21, 2020 1/21/2020 F1b SUBJECT : Resolution and Agreement for Lease with Option to Purchase Portions of APN 121-141-25 and 121-141-26 (SJC Mission Ventures LLC) RECOMMENDATIONS : Adopt a resolution approving a lease agreement with SJC Mission Ventures LLC for portions of APN 121-141-25 and 121-141-26; and, authorize the City Manager to execute the agreement. EXECUTIVE SUMMARY: The City owns real property in the Downtown that includes unimproved portions abutting Camino Capistrano, adjacent to the former Mission Grill Restaurant, and improved portions at a lower elevation used for public parking (portion of the Multi-modal Parking Lot). An aerial photo of the City-owned parcels is provided as Attachment 1. San Juan Mission Ventures LLC owns the adjacent former Mission Grill property and is proposing to lease the slope and at-grade portions of the City-owned parcels (outlined in red on the attached aerial photo) to be developed in conjunction with the proposed Capo Brew/Heritage BBQ project. In October 2016, the City-owned parcels were included in an Exclusive Negotiation Agreement (ENA) for a mixed-use project with SJCM LLC, an affiliated entity under the same management as SJC Mission Ventures LLC; the ENA remains in effect through December 2020. While SJCM LLC is continuing to evaluate long-term development options, SJC Mission Ventures LLC is proposing to lease the unused portions of the City-owned parcels. The proposed lease includes a five-year term, with a five-year extension option. The proposed lease also provides for a purchase option available twelve months after receipt of Certificate of Occupancy for the restauranUbrewery (Attachment 2). City Council Agenda Report January 21, 2020 Page 2 of 3 DISCUSSION/ANALYSIS : San Juan Mission Ventures LLC, the owner of the former Mission Grill property located at 31721 Camino Capistrano, is seeking to lease the unused portion of two City-owned parcels located just north of the Mission Grill property. The upper portion of the two City parcels consists of unimproved, earth lots. The balance of the two City parcels are at a lower grade and are developed as paved parking areas included in the Multi-Modal Parking Lot. The property owner has submitted plans for revitalization of the former Mission Grill restaurant into a new concept incorporating a craft beer brewery and barbecue/smoker restaurant (Attachment 3). As part of the project, the property owner is proposing to lease adjacent, vacant City land and incorporate the area into the overall site plan. This proposal would allow for the installation of site improvements including landscaping and outdoor dining amenities such as seating areas and lighting. These improvements would enhance a prominent Downtown site, located directly across from Mission San Juan Capistrano. The proposed initial lease term is for five years, with a five year option available to the tenant subject to compliance with all lease terms. The annual lease payment would be set at 5% of the fair market value of the approximately 4,900 square foot portion of the City properties included in the lease, as determined by an appraisal completed within 90 days of the City Council action. In addition to the lease extension option, the lease includes a purchase option that may be exercised by the lessee twelve months after receipt of an approved Certificate of Occupancy for the restaurant/brewery. The purchase option is only for the portion of the parcels included in the lease. The purchase price would be based on the value established for the lease appraisal with an inflation adjustment factor. As indicated above, the two City parcels, including both the upper and lower portions, are included in the ENA between the City and SJCM LLC that allows for the two parties to negotiate a purchase and sales agreement in support of a development project. Should SJCM LLC undertake to process a future development plan for the entire area of the two City parcels, the City Council could consider amending or terminating the proposed lease. The proposed lease offers an opportunity to support revitalization of this highly visible property directly across from the Mission and enhance the overall Downtown experience. As required by State Law, the lease of this property for commercial purposes requires that the City Council adopt a resolution stating that the property is not required for City purposes. The City Attorney has drafted this Resolution (Attachment 4), which is recommended for approval along with the lease agreement. City Council Agenda Report January 21, 2020 Page 3 of 3 FISCAL IMPACT: The annual rental income would be determined as described in Lease Sections 3 and 24, and is expected to be minimal based on the size of the unimproved property. E NVIR ONM ENTAL REV IEW : In accordance with the California Environmental Quality Act (CEQA) the recommended action is exempt from CEQA per Section 15301, Existing Facilities and Section 15304(b), Minor Alterations to Land. Section 15301 of the CEQA Guidelines allows for minor exterior alterations of existing facilities with negligible or no expansion of an existing use. As mentioned, the project involves minor exterior alterations to an existing commercial use . Section 15304(b) of the CEQA Guidelines allows for new gardening or landscaping, including the replacement of existing conventional landscaping with water efficient or fire- resistant landscaping. Consequently, staff finds that the project meets the criteria for a categorical exemption . PRIOR CITY COUNCIL RE V IEW: On October 18, 2016, the City Council approved the execution of an Exclusive Negotiation Agree ment with SJCM LLC for development of a mixed-use project on the City parcels an d adjacent privately-owned parcels. COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDAT IONS : On November 14, 2019, the Design Review Committee reviewed the proposed development plans for the Capo Brew/Heritage BBQ project and recommended revisions. NOTIFICAT ION : SJC Mission Ventures LLC SJCM LLC Mission San Juan Capistrano Heritage Tourism Association Alexandre Kling, Golcheh Development and Investments ATIACHMENT: Attachment 1-Aerial Photo Attachment 2 -Lease Agreement Michael de la Torre, LINC Housing Paul Fulbright Laura Freese Tom Hribar Attachment 3 -Capo Brew/Heritage BBQ Concept Plans Attachment 4 -Resolution Approving Lease of City Owned Property )> -1 ~ (") I s: m z -1 _.. This map was created as a gecgraphic representation of data . The City of San Juan Capistrano makes any guarantee or accepts any liability for its accuracy. ATTACHMENT 1 City of San Juan Capistrano N 0 25 50 •-==i•c::::::J Feet 1 inch = 50 feet W*E s GROUND LEASE WITH OPTION TO PURCHASE THIS GROUND LEASE WITH OPTION TO PURCHASE (this "Lease") is dated the 21st day of January, 2020 (the "Execution Date"), and entered into by and between CITY OF SAN JUAN CAPISTRANO, a municipal corporation and general law city ("Landlord" or the "City"), and SJC MISSION VENTURES LLC, a California limited liability company ("Tenant"). City and Tenant are hereinafter sometimes individually referred to as "Party" and, collectively , referred to as the "parties." RECITALS A. Landlord owns the unimproved land located in the City of San Juan Capistrano, County of Orange, State of California, comprised of portions of Assessor's Parcel Numbers 121-141-25 and 121-141-26, depicted in Exhibit A (inclusive of the slope) attached hereto (the "Premises"). B. Tenant owns the real property adjacent to the Premises at 31721 Camino Capistrano, San Juan Capistrano, CA ("Tenant's Existing Property"), which is currently improved with a restaurant building. Tenant desires to incorporate the Premises as a part of Tenant's Existing Property and restaurant business (the "Planned Expansion"). C. Tenant desires to lease the Premises from Landlord and Landlord wishes to lease the Premises to Tenant on the terms and conditions set forth herein. NOW THEREFORE, in consideration of the provisions set forth hereinafter, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. PREMISES Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms and conditions contained herein. The Premises are being leased in their "as is" condition. Landlord shall have no obligation to make, construct or install any improvements on or about the Premises whatsoever. Tenant shall prepare, at its sole cost and expense, any request or application required for the Planned Expansion and/or other improvements on the Premises related to Tenant's Existing Property (collectively, the "City Approvals"). The City shall expeditiously process Tenant's applications for the City Approvals. Tenant agrees and acknowledges that the City retains its full and unfettered discretion as to all decisions related to the City Approvals. 2. TERM 2.1 Term. The initial term of this Lease shall be five (5) years (the "Initial Term"), unless sooner terminated as provided herein, commencing ninety (90) calendar 61147.00310\32570502. I 1 ATTACHMENT 2 days after the Execution Date (the "Commencement Date"). Provided that Tenant is not then in default of this Lease, Tenant shall have the option to extend the term of this Lease an additional five (5) years (the "Extended Term"), which option shall be exercised during the twelve ( 12) month window of time prior to the expiration of the Initial Term. The use of the word "Term" in this Lease shall refer to the Initial Term and/or Extended Term, as applicable. 2.2 Holdover. Tenant has no right under the Lease to retain possession of the Premises or any part thereof beyond the Term. In the event the Landlord chooses to accept any holdover possession of the Premises beyond the Term, such holdover tenancy shall be on a month-to-month tenancy basis. 3. RENT. The annual rent for the Premises shall be equal to five percent (5%) of the Premises' Fair Market Value established pursuant to Section 24 below and shall be payable in equal monthly installments commencing on the Commencement Date and continuing on the first business day of each month thereafter. The annual rent for the Premises shall be subject to increase on January 1 of each year commencing January 1, 2021, based upon the increase, if any (though there shall be no decrease), in the "Index" as defined in Section 24 below. 4. USE OF PREMISES 4.1 Use. Tenant and its subtenants may use the Premises in conjunction with and as an expansion of the food and beverage operations to be conducted on Tenant's Existing Property, including seating and landscaping, pursuant to the City Approvals ("Planned Expansion"). 4.2 Nuisance. Tenant shall not use, suffer or permit any person or persons to use the Premises or improvements thereon other than the uses permitted in Section 4.1, nor in any manner that will tend to create waste or a nuisance. 4.3 Condition of Premises. Tenant acknowledges that prior to the delivery of possession of the Premises to Tenant, Tenant inspected the Premises and agreed to take the same "AS IS" and Tenant further acknowledges that the taking of possession of the Premises by Tenant conclusively evidences that the Premises were in satisfactory condition at the time such possession was so taken. 4.4 Non-Discrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, religion, national origin, ancestry, sex, sexual orientation, age, physical handicap, marital status, or medical condition in the lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Premises or any part of the Premises or any operations or activities conducted on the Premises or any part of the Premises, nor shall Tenant or any person claiming 61147 .00310\32570502. I 2 under or through Tenant establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants, or vendees of the Premises. Any sublease or assignment that may be permitted under this Lease shall also be subject to the non- discrimination clauses contained in this Section 4 .4. 4.5 Right of Entrv/Waiver of Good Faith Improver. Tenant shall have the right to enter upon the Premises after receipt of the City Approvals (whether before or after the Commencement Date) in order to landscape and improve the Premises pursuant to the City Approvals. 5. CONSTRUCTION OF IMPROVEMENTS ON PREMISES Tenant shall, at its sole cost and expense, construct and install in a good and workmanlike manner any improvements desired by Tenant upon the Premises. Tenant shall carry out the construction, installation and maintenance of any improvements on and about the Premises in conformity with all applicable federal, state and local laws, ordinances and regulations ("Governmental Requirements"). Tenant shall, at its own expense, obtain and maintain any and all City Approvals for the construction of the improvements and operation of any activities on the Premises. Tenant shall be responsible for obtaining a permanent certificate of occupancy for the Planned Expansion no later than July 31, 2020. 6. SIGNS Tenant shall have the right to install and maintain, at Tenant's sole cost, one or more signs, provided all such signage shall meet any applicable Governmental Requirements and Tenant has received such permits therefor as may be necessary. 7. TAXES Tenant shall pay before delinquency, and without notice or demand, any and all taxes (including without limitation any gross receipts, income tax or excise tax) assessments, licenses, fees, possessory interest taxes and other public charges or penalties which shall be levied, imposed, or assessed upon any of Tenant's leasehold interest, upon Tenant's business, or upon Tenant for the privilege of conducting business within the Premises, or upon any other property of Tenant within the Premises. Tenant recognizes and understands that this Lease may, but is not intended to, create a real property possessory interest that may be, but is not intended to be, subject to real property taxation, and that Tenant may be subject to the payment of real property taxes levied on such interest. If any possessory interest tax is levied on the Premises, the improvements and/or Tenant's estate created by this Lease, Tenant shall pay such tax before delinquency. City shall have no obligation to pay any possessory interest tax. Under California law, City is not obligated to pay property taxes for its ownership of real property, and shall promptly file for cancellation of any such real property taxes. Tenant 61147.00310\32570502 . I 3 shall be responsible for any possessory interest taxes as may be assessed in accordance with California law. Tenant may, at is sole cost and expense, reasonably contest the legal validity or amount of any taxes for which Tenant is responsible under this Lease, and institute such proceedings as Tenant considers necessary; provided, however, that any such contest shall not result in any lien or claim against Landlord or the Premises, that Tenant shall all at times protect Landlord and the Premises from any lien, and that Landlord shall not be required to join in any proceeding or contest brought by Tenant, unless required by law. 8. INSURANCE 8.1 Insurance. Tenant shall at its sole cost and expense, procure and maintain, or cause to be procured and maintained, during the Term of this Lease the insurance described in this Section. Tenant shall have no right to self-insure. Tenant shall, at its sole cost and expense, during the Term hereof, keep in full force and effect: (i) a policy of public liability and property damage insurance with respect to the Premises, and the business operated by Tenant and any subtenants of Tenant in the Premises, in which the limits of public liability shall be not less than Two Million Dollars ($2,000,000.00) per occurrence, and in which the limit of property damage liability shall be not less than Five Hundred Thousand Dollars ($500,000.00); and (ii) workers compensation coverage as required by law. 8.2 Policy Requi rements. All insurance required to be carried by Tenant under this Lease shall name Landlord as an additional insured as to coverage of the Premises, as its interest may appear, in the form of a separate endorsement containing the language: "This insurance shall be primary and non-contributing with any other insurance carried by Landlord," and certified copies of all policies shall be delivered to Landlord by Tenant at least ten (10) calendar days prior to Tenant's opening for business in the Premises. Each policy of insurance to be obtained by Tenant under this Lease shall (i) be written as primary policies or under one or more umbrella and/or master policies, and (ii) be written by insurance companies having a Best's rating of "A-" or better. 8.3 Wa iver of Subrogation. Landlord and Tenant each hereby waives any and all rights of recovery against the other and against the officers, employees, agents and representatives of the other for loss of or damage to such waiving party of its property or the property of others under its control, arising from any cause insured against under any policy of insurance carried by such waiving party, to the extent that such loss or damage is recoverable under said insurance policies. Tenant and Landlord shall each obtain and furnish evidence to the other, upon request, of the waiver by such party's insurance carrier of any right of subrogation against the other party. 61147.00310\32570502. 1 4 9. UTILITIES Tenant shall pay, directly to the appropriate supplier, for all water, sewage, telephone, computer, telecommunication, cable, gas, power and electric current and all other utilities used by Tenant on the Premises, together with any taxes thereon, from and after the delivery of possession of the Premises by Landlord. If any such charges are not paid when due, Landlord may, after notice to Tenant, pay the same, and any amount so paid by Landlord shall thereupon become due to Landlord from Tenant together with interest thereon. Tenant shall, at Tenant's expense, install its own meter(s) for all utilities utilized in or serving the Premises. 10. INDEMNITY OF LANDLORD Except to the extent attributable to the gross negligence or willful misconduct of Landlord or its Council members, board/commission members, employees , contractors or agents (collectively, "Landlord's Agents"), Tenant shall indemnify, defend by counsel reasonably acceptable to Landlord, protect and hold Landlord and Landlord's Agents harmless from and against any and all claims, liabilities, losses, costs, damages, injuries or expenses, including reasonable attorneys' and consultants' fees and court costs, demands, causes of action, or judgments, directly or indirectly arising out of or related to: (i) claims of injury to or death of persons or damage to property occurring or resulting directly or indirectly from the use or occupancy of the Premises, by Tenant or Tenant's employees, agents, customers, visitors, invitees, licensees, contractors, assignees and subtenants (collectively, "Tenant's Parties"), or from activities or failures to act of Tenant or Tenant's Parties; (ii) claims arising from construction, work or labor performed, or for materials or supplies furnished to or at the request of Tenant in connection with performance of any work done for the account of Tenant within, under or upon the Premises (including any claims that may arise from Tenant's entry onto the Premises pursuant to Section 4.5 hereof); (iii) claims arising from any breach or default on the part of Tenant in the performance of any covenant contained in this Lease; and (iv) claims arising from the negligent or intentional acts or omissions of Tenant or the negligent acts or omissions of Tenant's Parties. All indemnifications within this Lease shall survive the expiration or earlier termination of this Lease. 11. EXEMPTION OF LANDLORD FROM LIABILITY Except to the extent attributable to the gross negligence or willful misconduct of Landlord or Landlord's Agents, Landlord shall not be liable to Tenant and Tenant hereby waives all claims against Landlord for any injury or damage to any person or property in or about the Premises, by or from any cause whatsoever and whether the said damage or injury results from conditions arising upon the Premises or from other sources. The provisions of this Section 11 shall survive the expiration or earlier termination of this Lease. 6 114 7 .00310\32570502. I 5 12. TENANT ESTOPPEL CERTIFICATE Within twenty (20) business days after written request by Landlord, Tenant shall execute and deliver to Landlord an estoppel statement in such form as Landlord may reasonably request. Tenant's failure to deliver such statement within twenty (20) business days of Landlord's written request therefore shall constitute, without limitation of any of Landlord's other rights or remedies with respect to such default, an irrevocable, binding agreement of Tenant (i) that this Lease is in full force and effect, without modification except as may be represented by Landlord, and (ii) that there are no uncured defaults in Landlord's performance hereunder. 13. LANDLORD ESTOPPEL CERTIFICATE Within twenty (20) business days after written request by Tenant, Landlord shall execute and deliver to Tenant an estoppel statement in such form as Tenant may reasonably request, or as an existing Lender, assignee of Lender, prospective Lender, or purchaser of Tenant's interest under this Lease may reasonably request. Any such statement may be conclusively relied upon by any such party. Landlord's failure to deliver such statement within twenty (20) business days of Tenant's written request therefore shall constitute, without limitation of any of Tenant's other rights or remedies with respect to such default, an irrevocable, binding agreement of Landlord (i) that this Lease is in full force and effect, without modification except as may be represented by Tenant, (ii) that there are no uncured defaults in Tenant's performance hereunder nor any fact, act, omission or condition which, with notice or lapse of time or both, would constitute a default of Tenant, and (iii) that all improvements have been constructed in accordance with the requirements of this Lease. 14. REPAIRS AND MAINTENANCE 14.1 Tenant's Obligation to Repair and Maintain. Tenant shall, at its own cost and expense, during the Term of this Lease, keep the Premises, including all improvements constructed by Tenant thereon, in a good, clean, safe and secure condition and shall make all necessary repairs and replacements with materials and workmanship of the same character, kind and quality as the original. Tenant hereby waives the right to make repairs at Landlord's expense under the provisions of any State of California statute permitting repairs by a tenant at the expense of the landlord to the extent such waiver is allowed by law, it being intended that Landlord and Tenant have by this Lease made specific provision for such repairs and have defined their respective obligations relating thereto. 14.2 Landlord's Right to Make Repairs. If Tenant fails to maintain the Premises, or any part thereof, in good condition, within thirty (30) business days after written notice from Landlord specifying the work required (unless the nature thereof reasonably requires additional time), then in such event Landlord shall have the right to 61147 .003 10\32570502. I 6 perform the maintenance on behalf of and for the account of Tenant and all costs reasonably incurred by Landlord to perform such maintenance shall be paid to Landlord by Tenant within ten (10) business days after Landlord's demand therefor with supporting documentation. 14.3 Emergency Repairs by Landlord. In the event of any life-threatening or property-threatening emergency, Tenant hereby grants to Landlord the immediate right to enter upon the Premises without prior notice to Tenant and to make such repairs on behalf of and for the account of Tenant. In such event, Landlord shall notify Tenant of such work immediately thereafter, and the cost of such work reasonably incurred shall be paid for by Tenant upon Landlord's demand therefore with supporting documentation. 15. ALTERATIONS 15.1 Approved Alterations. Without the consent of Landlord but subject to the City Approvals, Tenant may make any alterations or improvements to the Premises in connection with the Planned Expansion. Any improvements not related to the Planned Expansion shall require the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Any and all improvements to the Premises shall be in conformance with the requirements of all Governmental Requirements. 15.2 Conditions Precedent. Any improvements in or about the Premises that Tenant shall desire to make shall be conditioned upon Tenant acquiring a permit to do the work prior to the commencement of the work, and the compliance by Tenant with all conditions of said permit and Governmental Requirements in a prompt and expeditious manner. 15.3 Work Standards. In performing the work of any improvements, Tenant shall use a qualified, licensed contractor. Before commencing any such improvements in or about the Premises, Tenant shall notify Landlord in writing of the expected date of commencement thereof. Landlord shall have the right at any time and from time to time to post and maintain on the Premises such notices as Landlord deems necessary to protect the Premises and Landlord from the liens of mechanics, laborers, material men, suppliers or vendors . 15.4 Mechanic's and Other Liens. Tenant shall (a) keep, the Premises at all times during the Term hereof free from Liens and other liens of like nature created or claimed by reason of transactions made by Tenant; and (b) at all times fully protect, defend and indemnify Landlord against all such liens or claims which may ripen into such liens and all expenses arising from such liens or claims. If Tenant shall elect to contest any such claim or lien, it shall furnish Landlord a bond of a responsible corporate surety, in one hundred fifty percent (150%) of the amount claimed, conditioned on the discharge of said claim or lien and, if requested by Landlord, shall 61147.00310\32570502. I 7 cause such matter to be released from record. If a final judgment establishing the validity of said lien or claim for any amount is entered and no appeal is taken from such judgment that would effect a stay of enforcement of the judgment pending the outcome of the appeal, then Tenant shall pay and satisfy the same at once. Tenant agrees that its improvement work is being performed for Tenant's benefit and is not being performed at the direction or request of Landlord. 16. TITLE TO IMPROVEMENTS 16.1 Tenant shall have title to all improvements on or to the Premises constructed by Tenant prior to or after Commencement Date, including without limitation, all structures and other improvements installed, relocated, constructed or erected by Tenant, and such title shall remain in Tenant during the Term of this Lease. Upon termination of this Lease, whether by expiration, cancellation or otherwise, title to all improvements on the Premises shall pass to and vest in Landlord unless removed prior to the end of the Term by Tenant. If not removed, all structures and other improvements installed, relocated, constructed or erected by Tenant upon the Premises shall remain upon and be surrendered with the Premises as part thereof upon termination of this Lease. Title to all equipment, furnishings and trade fixtures placed by Tenant upon the Premises shall remain in Tenant, and replacements, substitutions and modifications thereof may be made by Tenant throughout the Term of this Lease, and Tenant may remove the same upon termination of this Lease; provided that Tenant shall repair to the satisfaction of Landlord any damage to the Premises caused by such removal. Any equipment, furniture, furnishings and trade fixtures remaining upon the Premises after termination of this Lease shall become the property of Landlord. 17. DAMAGE AND DESTRUCTION 17.1 Right of Parties. In the event of the partial or total damage or destruction of the Premises and/or the improvements thereto from any cause, Tenant shall promptly repair and reconstruct the same to substantially the same condition which the same were in immediately prior to such damage or destruction, provided such repairs or reconstruction can be made under then existing Governmental Requirements, or raze any structures or other improvements and cover the Premises with an appropriate ground cover including without turf, decomposed granite or pavement. Tenant and Landlord hereby waive the provisions of any laws in existence, or which may hereafter be enacted during the term of this Lease, authorizing the termination of a lease upon the complete or partial destruction of improvements to the Premises. 17.2 No Termination of Lease. Any damage or destruction resulting from any casualty shall in no way annul, terminate or void this Lease. 61147.00310\32570502. I 8 18. CONDEMNATION 18.1 Total Taking. If the whole of the Premises should be taken by any public or quasi-public authority under the power or threat of eminent domain, then, in such event, such taking shall be deemed to have occurred on the later of the date on which the right to compensation and damages accrues under the law applicable to the Premises, or the date on which said public or quasi-public agency takes actual physical possession of the Premises, and thereupon this Lease shall terminate with respect to Landlord's and Tenant's future obligations hereunder, but said termination shall not affect Landlord's and Tenant's rights to any compensation or damages for, on the account of, or arising out of such taking. 18.2 Partial Taking; Termination . If a substantial portion of the Premises should be taken so as to impair materially the use of the Premises as contemplated by this Lease as determined in the reasonable discretion of Tenant, then on the later of the date on which the right to compensation and damages accrues under the law applicable to the Premises, or the date on which such public or quasi-public agency takes possession of such portion of the Premises and Tenant no longer has full possession of such portion, this Lease shall, at Tenant's election, terminate with respect to the future obligations of Landlord and Tenant hereunder, but said termination shall not affect Landlord's or Tenant's rights to any compensation or damages for, on account of, or arising out of such taking. In the event of such a taking, Landlord shall be entitled to receive all sums in the award of damages and compensation arising by reason of such taking allocable to the fee title to the Premises valued as unimproved and encumbered by this Lease and Tenant shall be entitled to receive an amount therefrom equal to the value of the improvements and the value of Tenant's Leasehold Estate. 18.3 Partial Taking; No Termination; Reconstruction. If a taking shall occur which does not result in termination of this Lease as provided in Sections 18.1 and 18.2 above, but which requires the portion of the Premises not so taken to be reconstructed and restored so as to be constituted an architecturally complete unit suitable for use by Tenant, all compensation and damages payable for or on account of such taking shall be paid to Tenant. Such compensation and damages shall be used by Tenant to reconstruct and restore the portion of the Premises not so taken to an architecturally complete unit suitable for use by Tenant. The balance of any compensation and damages remaining after the reconstruction and restoration contemplated by this Section 18.3 shall be paid to Landlord to the extent of the value of fee title to the portion of the Premises taken valued as unimproved and encumbered by this Lease and the balance shall be paid to Tenant. 18.4 Partial Taking: No Termination; No Reconstruction . If a taking shall occur which does not result in a termination of this Lease as provided in Sections 18.1 and 18.2 above, and which does not require any portion of the Premises not so taken to be reconstructed and restored so as to constitute an architecturally complete unit suitable for use by Tenant, Landlord shall be entitled to receive that portion of the award 61147.00310\32570502. I 9 allocable to the fee title to the portion of the Premises taken valued as unimproved and encumbered by this Lease and Tenant shall be entitled to : (a) the value of that portion of Tenant's improvements and Leasehold Estate taken; and (b) any compensation payable in respect of Tenant's trade fixtures or relocation expenses . 18.5 Taking of Leasehold Estate . No taking of Tenant's leasehold estate in the Premises or any part thereof without a taking of the fee shall terminate or give Tenant the right to surrender this Lease, nor excuse the taker of such leasehold estate , including any successor in interest thereto, from full performance of the covenants for the payment of rent and other charges or any other obligations hereunder capable of performance by the taker of such leasehold estate, including any successor in interest thereto, after any such taking, but in such case, all compensation and damages payable for or on account of such taking shall be payable to and be the sole property of Tenant. 18.6 Relocation Benefits and Goodwill. Anything contained in this Section 18 to the contrary notwithstanding , all compensation , damages , reimbursements or other benefits payable to Tenant or Tenant's subtenants, licensees and concessionaires for or in connection with any relocation, displacement, inability to relocate, loss of business or loss of goodwill resulting from or in connection with any taking covered by this Section 18 and which are specifically and separately awarded to Tenant or Tenant's subtenants, licensees and concessionaires, shall be payable to and be the sole property of Tenant or Tenant's subtenants , licensees and concessionaires, as appropriate. 18. 7 Trade Fixtures and Eq ui pment. In the event of any taking of any portion of the Premises, Tenant shall be entitled to receive all compensation and damages arising from such taking and payable for or on account of Tenant's trade fixtures and equipment at any time located on the portion of the Premises so taken. 19. DEFAULTS BY TENANT AND LANDLORD'S REMEDIES 19.1 Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Tenant: A. Any failure by Tenant to pay the rent required hereunder or to make any other payment required to be made by Tenant hereunder, as and when due, where such failure continues for ten (10) or more business days after written notice thereof from Landlord. B. Any failure by Tenant to observe and perform any other provision of this Lease to be observed or performed by Tenant (including, without limitation, Tenant's failure to meet its obligation to obtain the certificate of occupancy within the time required by section 5 hereof), where such failure continues for thirty (30) business days (or, if this Lease specifically sets forth a shorter time period for performance, where such failure continues for such shorter time) after written notice thereof by Landlord to Tenant; provided, that if the nature of such default is such that the same 6ll47.003 10\32570 502. I 10 cannot be reasonably cured within such thirty (30) business day period Tenant shall not be deemed to be in default if Tenant shall within such thirty (30) business days commence such cure and thereafter diligently prosecute the same to completion. 19.2 Landlord's Option to Terminate or Seek Specific Performance. In the event of any default by Tenant after expiration of any applicable cure period, then in addition to any other remedies available to Landlord at law or in equity, Landlord shall have the option to terminate this Lease and all rights of Tenant hereunder by giving written notice of such intention to terminate. If Landlord shall so elect to terminate this Lease, then Landlord shall be entitled to all remedies provided by law and if Landlord elects not to terminate this Lease, then Landlord shall be entitled to seek specific performance and recover from Tenant all attorney's fees and costs incurred by Landlord in connection therewith. In the event that Landlord shall so elect to terminate this Lease then Landlord may recover from Tenant: A. The worth at the time of award of any unpaid rent which had been earned at the time of such termination; plus 8. The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss Tenant proves could have been reasonably avoided; plus C. The worth at the time of award of the amount by which the unpaid rent for the balance of the term (including any exercised extension term) after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus D. Any other amount reasonably necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result there from; and E. At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law. As used in subparagraphs A. and B. above, the "worth at the time of award" is computed by allowing interest at the rate set forth in Section 19.5 below. As used in subparagraph C above, the "worth at the time of award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent. 19.3 Lahdlord 's Right of Entrv. In the event of any such default by Tenant, Landlord shall also have the right, with or without terminating this Lease, to reenter the Premises and remove all persons and property there from by summary proceedings or 61147 .00310\32570502. I 11 otherwise, such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. 19.4 No Election to Terminate Without Written Notice. No reentry or taking possession of the Premises by Landlord pursuant to this Section shall be construed as an election to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Landlord may at any time after such reletting elect to terminate this Lease for any such default by Tenant. 19.5 Interest. Except as otherwise expressly provided herein, should Tenant fail to pay any amount due to Landlord within ten (10) business days after the date the same is due and payable, the amount past due and unpaid shall commence to bear interest on the eleventh (11th) business day after the due date at the prime rate then being charged by the Bank of America, N.A., or its successor, plus three percent (3%) per annum, but not to exceed the maximum rate of interest allowed by law. Payment of such interest shall not excuse or cure any default by Tenant under this Lease. 19.6 Late Charge. Tenant acknowledges that late payment by Tenant to Landlord of Rent under this Lease will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult or impracticable to fix. Such costs include, but are not limited to, processing and accounting charges, or late charges and penalties due to late payment of real property taxes due on the Premises. Therefore, if any installment of Rent or any other charge due from Tenant is not received by Landlord within ten (10) business days after the date such payment is due (the "Grace Period"), Tenant shall pay to Landlord an additional sum equal to three percent (3%) of the amount overdue as a late charge for every month or portion thereof that the Rent remains unpaid, plus $100 shall be added to the payment and the total sum shall become immediately due and payable. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of the late payment by Tenant. Acceptance of any late charge shall not constitute a waiver by Landlord of Tenant's default with respect to the overdue amount and shall not prevent Landlord from exercising any of the other rights and remedies available to Landlord for any other breach of Tenant under this Lease. 20. WAIVER OF CALIFORNIA CODE SECTIONS Tenant and Landlord waive (for themselves and all persons claiming under them) the provisions of Civil Code Sections 1932(2) and 1933(4) with respect to the destruction of the Premises. Tenant waives (for itself and all persons claiming under tenant) the provisions of Civil Code Sections 1941 and 1942 with respect to Landlord's repair duties and Tenant's right to repair. Landlord and Tenant waive (for themselves and all persons claiming under them) the provisions of Code of Civil Procedure Section 1265.130, allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises by condemnation as herein defined. This 6 ll47.00310\32570502. I 12 waiver applies to future statutes enacted in addition or in substitution to the statutes specified herein. 21. MEMORANDUM OF LEASE A Memorandum of Lease, substantially in the form attached to this Lease as Exhibit B, shall be completed and executed by both parties concurrently with the execution of this Lease. Such Memorandum of Lease shall be recorded forthwith upon execution of this Lease. 22. ASSIGNMENT, SUBLETTING AND ENCUMBRANCE Tenant may sublet the whole or any part of the Premises. Subject to the foregoing, Tenant shall not assign or transfer this Lease or any interest herein or right granted hereby without the written consent of Landlord, which shall not be unreasonably withheld, delayed or conditioned. 23. MISCELLANEOUS 23.1 Notices. Any notice or document required or permitted to be delivered hereunder shall be deemed to be delivered and received whether actually received or not: (i) twenty-four (24) hours after sent by UPS, Airborne, Federal Express, or a comparably reliable national air courier service (i.e., one which delivers service in at least 48 states) provided that any such courier service provides written evidence of delivery; or (iii) seventy-two (72) hours after deposited in the United States Mail, postage prepaid, Registered or Certified Mail, Return Receipt Requested, addressed to the parties hereto at the respective addresses set out opposite their names below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith: LANDLORD: TENANT: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager SJC Mission Ventures LLC 610 Newport Center Drive, Suite 1520 Newport Beach, CA 92660 Attention: Dan M. Almquist 23.2 No Waiver. One of more waivers of a breach of any covenant, term or condition of this Lease by either party shall not be construed by the other party as any waiver of a subsequent breach of the same covenant, term or condition. The consent or approval of either party to or of any act by the other party of a nature requiring consent 6114 7 .00310\32570502 . I 13 or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent or similar act. 23.3 No Partnership . Nothing herein contained, either in the method of computing rent or otherwise, shall create between the parties hereto, or be relied upon by others as creating, any relationship of partnership, association, joint venture, or otherwise. The sole relationship of the parties hereto shall be that of landlord and tenant. 23.4 Governing Law. The laws of the State of California shall govern the validity, performance and enforcement of this Lease. Should either party institute legal suit or action for the interpretation of this Lease or the enforcement of any obligation contained herein, the venue of such action shall be in Orange County, California, and both parties expressly consent to such venue. Although any printed provisions of this Lease may have been drawn by one party or the other, this Lease represents the negotiated agreement of the parties and shall not be construed against either party as a result thereof. 23.5 Attorneys' Fees. If at any time during the Term of this Lease, or thereafter, either Landlord or Tenant shall institute any action or proceeding against the other relating to the provisions of this Lease or any default hereunder, then the unsuccessful party in such action or proceeding shall reimburse the prevailing party therein for the actual attorneys' fees and costs of suit reasonably incurred by the prevailing party. The "prevailing party" as used in this Lease includes a party who dismisses an action for recovery hereunder in exchange for sums allegedly due, performance of covenants allegedly breached or consideration substantially equal to the relief sought in the action. 23.6 Binding Effect. The terms and agreements as contained in this Lease shall apply to, run in favor of and shall be binding upon and inure to the benefit of the parties hereto, and their respective heirs, executors, administrators, personal representatives and assigns and successors in interest. 23. 7 No Prior Agreements. It is understood that there are no oral agreements or representations between the parties hereto affecting this Lease, and this Lease supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements or representations and understandings, if any, between the parties hereto or displayed by either party to the other with respect to the subject matter thereof, and none thereof shall be used to interpret or construe this Lease. Except as otherwise expressly set forth herein, there are no other representations or warranties between the parties and all reliance with respect to representations is solely upon the representations and agreements contained in this document. Notwithstanding the foregoing, the Exclusive Right to Negotiation, dated October 18, 2016, which the Parties executed shall be unaffected by this Lease and shall continue to operate according to its terms. 6114 7 .00310\32570502. I 14 23.8 Authority of Signatories. The parties executing this Lease on behalf of Tenant hereby covenant and warrant that Tenant is a duly qualified and existing California limited partnership and all franchise and other taxes have been paid to date; and all future forms, reports, fees and other documents necessary to comply with applicable law will be filed when due. Each individual executing this Lease on behalf of Tenant represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of Tenant in accordance with the bylaws or other governing documents of Tenant, and that this Lease is binding upon Tenant in accordance with its terms. The parties executing this Lease on behalf of Landlord hereby represent and warrant that this Lease is authorized in accordance with all applicable Governmental Requirements, and upon execution by the signatories for Landlord, this Lease is binding upon Landlord in accordance with its terms. Each individual executing this Lease on behalf of Landlord represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of Landlord. 23.9 Titles for Convenience Only. The titles of articles and sections herein are for convenience only and do not in any way define, limit or construe the contents thereof. 23.10 Invalidity of Provisions. If any provision of this Lease shall be determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provisions of this Lease and all such other provisions shall remain in full force and effect; and it is the intention of the parties hereto that if any provision of this Lease is capable of two constructions, only one of which would render the provision valid, then the provision shall have the meaning which renders it valid. 23.11 Excusable Delay. Any prevention , delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefore, governmental restrictions, governmental regulations, governmental controls, governmental delays, enemy or hostile governmental action, civil commotion, fire or other casualty, natural disaster and other causes beyond the reasonable control of the party obligated to perform any term, covenant or condition of this Lease (each an "Excusable Delay"), shall excuse the performance by such party for a period equal to any such prevention, delay or stoppage. The inability of the Tenant to obtain a satisfactory commitment from a construction lender for the improvement of the Premises or to satisfy any other condition of this Lease relating to the development of the Premises shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them that may have provided a basis for entering into this Lease and that occur at any time after the execution of this Lease, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking that may arise under this Lease. Each 61147 .003 10\32570502. I 15 party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Lease could impose an inconvenience or hardship on the continued performance of such party under this Lease, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Lease. 23.12 Hazardous Materials. The parties agree as follows : A. At all times and in all respects, Tenant shall comply with all Governmental Requirements, including, but not limited to, the Federal Water Pollution Control Act (33 U.S.C. Section 1251, et seq.). Resource Conversation & Recovery Act (42 U.S.C. Section 6901 et seq.), Safe Drinking Water Act (42 U.S.C. Section 300(f) et seq.), Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), Comprehensive Environmental Response of Compensation and Liability Act (42 U.S.C . Section 9601 et seq .), California Health & Safety Code (Sections 25100 et seq. and 39000 et seq.), California Water Code (Section 13000 et seq.), and other comparable state laws ("Hazardous Materials Laws") relating to industrial hygiene, environmental protection or the use, analysis, generation, manufacture, storage, disposal or transportation of any oil, flammable explosives, asbestos, urea formaldehyde, radioactive materials or waste, or other hazardous, toxic, contaminated or polluting materials, substances or wastes, including, without limitation, any "hazardous substances", "hazardous wastes'', "hazardous materials" or "toxic substances" under any such Hazardous Materials Laws (collectively "Hazardous Materials"). B. Tenant shall in all respects handle, treat, deal with and manage any and all Hazardous Materials in, on, under or about the Premises in total conformity with all applicable Hazardous Materials Laws and prudent industry practices regarding management of such Hazardous Materials. C. Tenant and Landlord shall immediately notify the other in writing of: (i) any enforcement, cleanup, removal or other governmental or regulatory action instituted, completed or threatened pursuant to any Hazardous Materials Laws; (ii) any claim made or threatened by any person against Tenant, the Premises, or any building relating to damage, contribution, cost recovery compensation, loss or injury resulting from or claimed to result from any Hazardous Materials; and (iii) any reports made to any environmental agency arising out of or concerning hazardous substances located upon the Premises pursuant to the provisions of California Health and Safety Code Section 25359.7. The parties hereby agree that this Section 23.12 constitutes the notice required pursuant to said statute and the parties hereby waive their right to further notice pursuant to such statute to the extent described herein. The parties acknowledge that Tenant shall maintain and use certain substances upon the Premises, which may be classified as "hazardous substances" to clean, maintain and operate the Premises. The parties acknowledge that the use of any of such substances which may be a "hazardous substance" within the scope of Health and Safety Code Section 61147.00310\32570502. 1 16 25359. 7 shall not constitute a breach of this Lease and shall require no further notice from Tenant. Tenant agrees, however, that the use of other hazardous substances upon the Premises are not subject to the terms of this notice and waiver and Tenant shall be obligated to report the existence of such other hazardous substances pursuant to the requirements of Health and Safety Code Section 25359.7. In no event shall Tenant be responsible for the removal of hazardous substances or Hazardous Materials from the Premises that were in existence on the Execution Date. 23.13 No Relocation Assistance. Tenant acknowledges that it is not entitled to relocation assistance or any other benefits under the California Relocation Assistance Act (Government Code Section 7260, et seq.), the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C.A. §4601, et seq.), or any other provisions of law upon cancellation or termination of this Lease. 23.14 Possessorv Interest Tax. By executing this Lease and accepting the benefits thereof, Tenant may be creating a property interest known as "possessory interest" which may be subject to property taxation. Tenant, as the party in whom the possessory interest is vested, shall be responsible for the payment of all property taxes, if any, levied upon such interest. Tenant acknowledges that the notice required under California Revenue and Taxation Code section 107.6 has been provided. 23.15 Quiet Enjoyment. Tenant shall and may peaceably and quietly have, hold, and enjoy the Premises in accordance with the provisions hereof. 23.16 Determination. Except as otherwise expressly provided herein, all approvals, elections, consents, agreements, determinations, options and actions of City required pursuant to this Lease shall not be unreasonably withheld, determined, made or taken. 23.17 Time. Time is of the essence with respect to the performance or observance of each of the obligations, covenants and agreements under this Lease. Except where expressly stated to be "business days", the word "days" shall mean "calendar days", and shall include any holiday. "Business day" shall mean any day on which the City Hall is open to the public for City operations. 23.18 Gender. As used herein, the neuter gender includes the feminine and masculine, the masculine includes the feminine and the neuter and feminine includes the masculine and the neuter, and each includes, limited liability companies, partnerships or other legal entities when the context so requires. 23.19 Counterparts. This Lease may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. The parties may execute and electronically deliver copies of this Lease and/or counterpart signature pages, which 61147.00310\32570502. I 17 electronic copies shall be equally as effective as delivery of original executed counterparts. 23.20 Amendments . Landlord and Tenant may amend this Lease at any time provided that such amendments make specific reference to this Lease, are executed in writing, approved by the City Council following any required public hearing or noticing, and are signed by a duly authorized representative of each organization. Amendments shall not invalidate this Lease but may relieve or release either party from certain obligations contained herein. 24. OPTION TO PURCHASE. In consideration for the execution and delivery of this Lease and payment by Tenant to Landlord of the sum of One Hundred and 00/100 Dollars ($100.00), Landlord hereby grants to Tenant the sole and exclusive right and option to purchase the Premises ("Option") from Landlord exercisable by Tenant at any time following the date that is at least twelve (12) months following the issuance of the final certificate of occupancy for the Planned Expansion, with the option purchase price ("Purchase Price") to be established by an appraisal to be prepared by an appraiser mutually acceptable to Landlord and Tenant. The Purchase Price shall be equal to the fair market value of the Premises as of the Execution Date, valued as unimproved ("Premises Fair Market Value"). The Premises Fair Market Value shall be established within ninety (90) days after the Execution Date. The Tenant and Landlord shall mutually agree on the appraiser to be used for purposes of determining the Premises Fair Market Value. Tenant may exercise the Option upon written notice to Landlord ("Notice of Exercise"), but only following a date that is at least twelve (12) months following the issuance of the final certificate of occupancy for the Planned Expansion. Upon Tenant's delivery of a Notice of Exercise to Landlord, Landlord and Tenant shall forthwith execute, date and deliver the form of Agreement of Purchase and Sale and Joint Escrow Instructions in substantially the form attached hereto as Exhibit C (the "Purchase Agreement"), with the Purchase Price inserted into Section 1.2 thereof and one executed original Purchase Agreement to be deposited with Ticor Title Company ("Escrow Holder"), and shall thereafter close the purchase and sale of the Premises in accordance with the Purchase Agreement. Landlord and Tenant shall execute and deliver to Escrow Holder such supplemental, "standard" and/or additional instructions as may be reasonably required by Escrow Holder. The Purchase Price shall be subject to increase on January 1 of each year commencing January 1, 2021, based upon the increase, if any, in the "Index", as defined below determined by multiplying the Purchase Price by a fraction, the numerator of which is the "Current Index Number" and the denominator of which is the "Base Index Number". The "Base Index Number" shall be the level of the Index for January 1, 2020; the "Current Index Number" shall be the level of the Index for the month of December immediately preceding the increase effective date; the "Index" shall be the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics of the United States Department of Labor for Los Angeles-Long Beach-Anaheim (comprised of Los Angeles and Orange Counties in the State of California), All Items ( 1982-84=100), or any successor index thereto as hereinafter provided. If publication of the Index is discontinued, or if the basis of 61147.00310\32570502 . I 18 calculating the Index is materially changed, then the parties shall substitute for the Index comparable statistics as computed by an agency of the United States Government or, if none, by a substantial and responsible periodical or publication of recognized authority most closely approximating the result which would have been achieved by the Index. Landlord shall not encumber the Premises or grant any easement or other right therein without the written approval of Tenant, which approval shall not be unreasonably withheld. In the event a parcel map or lot line adjustment is required in order to convey the Premises pursuant to this Option, Tenant shall prepare and submit, at Tenant's sole cost and expense, the necessary application for such entitlement. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above written. TENANT: SJC MISSION VENTURES LLC, a California limited liability company Dan M. Almquist , Manager LANDLORD: CITY OF SAN JUAN CAPISTRANO By: _______________ _ Benjamin Siegel, City Manager ATTEST : Maria Morris, City Clerk Approved as to Form : Jeff Ballinger, City Attorney 61147.00310\32570502 . I 19 6 1147 .00310\32570502. I EXHIBIT A DEPICTION OF THE PREMISES 20 D DEPICTION OF THE PREMISES EXHIBIT B MEMORANDUM OF LEASE When recorded, return to: SJC MISSION VENTURES LLC c/o Frontier Real Estate Investments 610 Newport Center Drive, Suite 1520 Newport Beach, CA 92660 Attn: Dan M. Almquist APN: Portions of 121-141-25 & 26 (Space Above for Recorder's Use) MEMORANDUM OF GROUND LEASE WITH OPTION TO PURCHASE This MEMORANDUM OF GROUND LEASE WITH OPTION TO PURCHASE ("Memorandum"), dated to be effective as of , 2020, is entered into by CITY OF SAN JUAN CAPISTRANO, a municipal corporation and general law city ("Landlord"), and SJC MISSION VENTURES LLC, a California limited liability company ("Tenant"). 1. Grant of Lease; Term. Landlord leases to Tenant, and Tenant leases from Landlord, those certain premises in the City of San Juan Capistrano, County of Orange, State of California more particularly described on Exhibit A attached hereto and incorporated herein ("Premises"), for an initial term of five (5) years, with an option for Tenant to extend for an additional five (5) years, subject to the provisions of that certain Ground Lease with Option to Purchase between the parties hereto, dated ______ , 2020 ("Lease"). The provisions of the Lease are incorporated herein by this reference. Pursuant to the Lease, Tenant has the option to purchase the Premises for fair market value as established by appraisal. 2. Purpose. This Memorandum is prepared for the purpose of recordation only, and it in no way modifies the provisions of the Lease. In the event of any inconsistency between the provisions of this Memorandum and the Lease, the provisions of the Lease shall prevail. 3. Miscellaneous. The parties have executed this Memorandum of Lease as of the date first set forth above on the dates and at the places indicated in their acknowledgments below. 61147.00310\32570502. 1 21 4. Termination. When the Lease expires or is terminated by reason of Tenant's exercise of the option to purchase the Premises, Tenant and Landlord shall execute and deliver a termination of this Memorandum in form for recordation. TENANT: SJC MISSION VENTURES LLC, a California limited liability company By : ____________ _ Dan M. Almquist, Manager LANDLORD: CITY OF SAN JUAN CAPISTRANO By: ______________ ~ Benjamin Siegel, City Manager ATTEST: Maria Morris, City Clerk Approved as to Form : Jeff Ballinger, City Attorney 61147 .00310\325705 02. I 22 ACKNOWLEDGMENT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached , and not the truthfulness , accuracy, or validity of that document. STATE OF CALIFORNIA ) ) SS . COUNTY OF ORANGE ) On , 2020, before me, ___________ ,a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the Stateof California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ____________ _ (Seal) 61147 .00310\32570502 . I 23 ACKNOWLEDGMENT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) SS . COUNTY OF ORANGE ) On , 2020, before me, , a Notary Public, personally appeared DAN M. ALMQUIST, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the Stateof California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ____________ _ (Seal) 61147 .00310\32570502. I 24 °' .,. _, 0 0 "' 9 "' N V\ _, 0 V\ 0 N "' 01 ~:J~ I I D c m ,, 0 -t 0 z 0 'Tl -t ::c m ,, ::ti m 3:: Cii m U> 0 m en (") :::a "tJ ::! 0 m z >< 0 :c 'T1 Cl -t =i :c )> m "tJ :::a m s: en m en EXHIBIT C AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (this "Agreement") is made as of the _ day of 202_ (the "Effective Date"), by and between CITY OF SAN JUAN CAPISTRANO, a municipal corporation and general law city ("Seller"), and SJC MISSION VENTURES LLC, a California limited liability company, or assignee or nominee ("Buyer"). Recitals A. Seller is the owner of certain real property located in the City of San Juan Capistrano, County of Orange, State of California, more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"). B. Seller, as Landlord, and Buyer, as Tenant, have previously executed a Ground Lease with Option to Purchase dated as of , 2020, regarding the Property (the "Option Agreement"). Buyer has exercised its option to purchase the Property pursuant to the Option Agreement and this Agreement is being executed and delivered by the parties pursuant to such exercise. Capitalized terms not defined herein shall have the meanings set forth in the Option Agreement. C. Seller desires to sell the Property to Buyer and Buyer desires to purchase the Property from Seller on the terms and conditions contained in this Agreement. THE PARTIES AGREE AS FOLLOWS: 1. Sale of Property; Purchase Price 1.1 Sale of Property. Seller shall sell to Buyer and Buyer shall purchase from Seller, the Property at the price and upon the terms and conditions set forth in this Agreement. 1.2 Purchase Price. Buyer shall pay to Seller as the total purchase price for the Property (the "Purchase Price") the sum of and 00/100 Dollars ($ .00). Buyer shall deposit such amount in immediately available funds into Escrow (as defined below) no later than one (1) business day before the Closing Date (as defined below). 2. Escrow; Closing Conditions; Certain Agreements of the Parties 2.1 Escrow: No later than five (5) business days after the Effective Date, Buyer and Seller shall open an escrow (the "Escrow") with Ticor Title Company (the "Escrow Holder") and shall deliver a fully executed copy of this Agreement to Escrow 61147 .00310\32570502 . I 26 Holder. The deposit with Escrow Holder of a fully executed original of this Agreement shall constitute the opening of Escrow and authorization to Escrow Holder to act in accordance with the terms of this Agreement. Escrow Holder's standard provisions shall apply and become a part hereof; provided, however, if there is any conflict or inconsistency between such standard provisions and this Agreement, then this Agreement shall be controlling. 2.2 Closing Date. Escrow shall close on or before thirty (30) days after Buyer has given its Notice of Exercise pursuant to the Option Agreement ("Closing Date"). Notwithstanding the foregoing, Buyer's obligation to consummate the purchase of the Property shall be subject to and conditioned upon the satisfaction or waiver of all conditions to the Closing set forth in this Agreement (including, without limitation, (i) the condition that all items described in Paragraph 2.5 below shall have been deposited with Escrow Holder, and (ii) the condition that the Title Company (as defined in Paragraph 2.3 below) has unconditionally committed to issue the Title Policy (as defined in Paragraph 2.3 below)), and the Closing Date shall be extended until all such conditions have been satisfied or waived. 2.3 Title and Title Insurance. Seller shall convey title to the Property to Buyer by a grant deed in the form attached hereto as Exhibit B (the "Grant Deed"). At the Closing, Ticor Title Company (the "Title Company"), shall issue at Seller's expense, through Escrow a CL TA Owner's Policy of Title Insurance (the "Title Policy") insuring fee title to the Property vested in Buyer with liability in the amount of the Purchase Price, subject only to the title exceptions approved in writing by Buyer ("Approved Exceptions"). Buyer may elect to obtain ALT A extended coverage and in such case Buyer shall pay the additional cost of such coverage pursuant to Paragraph 2.4.2 below. 2.4 Costs . 2.4.1 Escrow Holder's fees with respect to the Escrow shall be divided equally between Seller and Buyer. 2.4.2 Seller shall pay the premium for a CL TA extended Standard Policy of Title Insurance. The additional cost for an AL TA Owner's Policy, if selected by Buyer, and any endorsements to the Title Policy requested by Buyer shall be paid for by Buyer. Buyer shall pay all costs and expenses, if any, incurred in connection with obtaining a survey of the Property. 2.4.3 Seller shall pay all expenses and charges incurred in connection with the discharge of monetary liens or monetary encumbrances on the Property, other than those created by or made through Buyer. 2.4.4 Each party shall be responsible for payment of the fees and expenses of its counsel relating to this Agreement and the transactions contemplated hereby. 61147 .003 10\32570502 . I 27 2.4.5 Any city or county documentary or transfer taxes shall be paid by Seller. The Buyer shall pay any recording fees, survey fees, and costs of preparing and recording the Grant Deed. 2.4.6 Any other closing costs or charges shall be paid by the party that customarily pays such costs or charges in the County of Orange, California. 2.4.7 Rent shall be prorated as of the Closing and Buyer shall be credited with any rents for the period from and including the day of the Closing. 2.5 Deposit of Documents and Funds by Seller. Seller shall deposit with Escrow Holder the following items no later than one ( 1) business day prior to the Closing Date, duly executed and acknowledged where required: 2.5.1 The Grant Deed. 2.5.2 A completed California Franchise Tax Board Form 593-C and an affidavit certifying that Seller is not a "foreign person" as defined in the Internal Revenue Code. 2.5.3 All funds and documents as may be reasonably required by Escrow Holder or the Title Company to close the Escrow in accordance with this Agreement. 2.6 Deposit of Documents and Funds by Buyer. Buyer shall deposit with Escrow Holder the following items no later than one (1) business day prior to the Closing Date, duly executed and acknowledged where required: 2.6.1 The balance of the Purchase Price plus such additional funds as are required to pay Buyer's costs and prorations as provided in Paragraph 2.4 above, less any credits Buyer is entitled to hereunder. 2.6.2 A completed and originally executed Preliminary Change of Ownership Report in the form required by the Orange County Recorder's Office (the "Change of Ownership Report"). 2 .6 .3 All other funds and documents as may be reasonably required by Escrow Holder or the Title Company to close the Escrow in accordance with this Agreement. 2. 7 Delivery of Documents and Funds at Closing. The performance of the acts set forth in this Paragraph shall constitute the "Closing " as such term is used in this Agreement. The Escrow Holder shall conduct the Closing by recording and distributing the following described documents and funds in the following manner: 6 1147 .003 10\32570 502. 1 28 2.7.1 Deliver to Seller on the Closing Date immediately available funds in the sum of the Purchase Price, and such other funds, if any, due Seller by reason of prorations, less Seller's closing costs and prorations, if any, as provided in Paragraph 2.4 above, and any credits Buyer is entitled to hereunder. 2. 7.2 Pay the costs referred to in Paragraph 2.4 above . 2.7.3 Record the Grant Deed in the Office of the County Recorder of Orange County and simultaneously deliver the Change of Ownership Report to such Office. 2.7.4 Obtain and deliver the original Title Policy to Buyer and a copy to Seller. 2.8 Contingencies. The following shall be contingencies to Buyer's obligations under this Agreement: 2.8.1 All agreements pertaining to the Property, other than agreements that constitute Approved Exceptions, shall be terminated at or prior to Closing by Seller at Seller's sole cost and Seller shall pay all sums due with respect thereto and keep the Property free of any liens therefrom. All representations and warranties of Seller shall be true and correct at and as of the date of execution of the Option Agreement and this Agreement, as well as at and as of the Closing Date. Seller shall not be in breach or default of any of its obligations hereunder or under the Option Agreement. 2.8.2 Issuance of Title Policy. The Title Company shall have irrevocably committed to issue the Title Policy as of the Closing. 2.8.3 Waiver. The foregoing conditions set forth in Paragraphs 2.8.1 and 2.8.2 above are for the benefit of Buyer and may be waived by Buyer in writing delivered to Seller and Escrow Holder. In satisfying the foregoing conditions, Buyer and Seller shall each exercise good faith, reasonableness and diligence. However, decisions authorized to be made in the sole discretion of either Buyer or Seller shall be final and not subject to review or challenge on any basis. 2.8.4 Buyer's Conditions to Closing. Buyer shall not be obligated to proceed to the Closing and the Closing shall not occur unless and until, in addition to all other conditions contained in this Agreement, the contingencies set forth above have been satisfied or waived in writing by Buyer. 2.9 Seller's Conditions to Closing. Seller shall not be obligated to proceed to the Closing and the Closing shall not occur unless on or prior to the Closing Date, Buyer shall have performed all of Buyer's obligations herein that are to be performed prior to the Closing. 61147.00310\32570502. I 29 2.10 Termination. Upon any termination of this Agreement and the Escrow (if applicable) for any reason other than either party's default hereunder: (i) each party shall execute such documents as Escrow Holder may reasonably require to evidence such termination; (ii) Escrow Holder shall charge its fees and expenses to both parties equally; (iii) subject to the provisions of Paragraph (ii) above, Escrow Holder shall return all documents and funds to the party who deposited them; and (iv) all obligations of either party relating to this Agreement and the Property shall terminate. 3. Seller's Representations and Warranties. Seller hereby represents and warrants to Buyer that: (a) Seller has the right and authority to sell the Property to Buyer in accordance with this Agreement; (b) all representations and warranties of Seller under the Option Agreement are true and correct at and as of the date of execution of the Option Agreement and this Agreement, as well as at and as of the Closing Date; and (c) the transfer of the Property will not result in the violation of any law, ordinance or regulation. 4. Buyer's Representations and Warranties. Buyer hereby represents and warrants to Seller that at the date of execution hereof and at and as of the Closing Date: (a) Buyer is a limited liability company (i) validly existing and in good standing and (ii) duly authorized, qualified and licensed under any and all laws, ordinances, rules, regulations and requirements of all governmental authorities to do all things required of it under or in connection with this Agreement; and (b) this Agreement and all agreements, instruments and documents herein provided to be executed or to be caused to be executed by Buyer are duly executed and binding on Buyer. 5. Buyer's Examination of the Property. Buyer represents and agrees as follows : (i) Prior to the Closing, Buyer will have made its own independent investigation of the Property and all other aspects of this transaction, including, without limitation, the financial value of the Property and projected future income and expenses for the Property, and has relied entirely thereon and on the advice of its independent consultants (if any) in entering into this Agreement, and not on any information or material supplied by or on behalf of Seller. 61147 .00310\32570502. 1 30 (ii) Prior to the Closing, Buyer will have reviewed all instruments, records and documents which Buyer deemed appropriate or advisable to review in connection with the Property and this transaction, and Buyer will have determined that the information and data contained therein or evidenced thereby was satisfactory to Buyer. (iii) Prior to the Closing, Buyer will be fully satisfied that the Purchase Price is fair and adequate consideration for the Property. 6. Advice of Counsel. Each party hereby agrees, represents and warrants that it has had advice of counsel of its own choosing in negotiations for and the preparation of this Agreement that it has read this entire Agreement, that it has had this Agreement and each and every provision contained therein fully explained by such counsel, and that it is fully aware of the contents and legal effect thereof. 7. Commissions and Brokers. Buyer and Seller each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder in connection with the negotiations of this Agreement and/or the consummation of the purchase and sale contemplated herein, and no broker or other person, firm or entity is/are entitled to any commissions or finder's fee with connection to this transaction as the result of any dealings or acts of such party. Buyer and Seller do each hereby indemnify, defend, protect and hold other harmless from and against any costs, expenses or liability for compensation, commissions, or charges which may be claimed by any broker, finder, or other similar party by reason any dealings or act of the indemnifying parties. 8. Attorneys' Fees. If any action or proceeding shall be brought by either party in order to enforce the provisions of this Agreement, or to collect damages as a result of the breach of any of the provisions of this Agreement, whether or not such action or proceeding is pursued to a judgment, the prevailing party shall be entitled to recover all reasonable attorneys' fees incurred in connection therewith, including costs. 9. Notices. Whenever Escrow Holder or any party hereto shall desire to deliver to the other any notice, demand, request or other communication, each such notice, demand, request or other communication shall be in writing, shall be given by personal delivery, by registered or certified United States mail, return receipt requested, or by overnight courier, postage prepaid, addressed as follows: TO BUYER: SJC MISSION VENTURES LLC 610 Newport Center Drive, Suite 1520 Newport Beach, CA 92660 Attn: Dan Almquist Phone: 949.302.1389 Fax: 419.502.1343 Email: dan@frontierrei.com 61147.00310\32570502. I 31 TO SELLER: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager TO ESCROW HOLDER: TICOR TITLE COMPANY 1500 Quail Street, 3rd Floor Newport Beach, CA 92660 Attn: Dawn Niehaus Direct: 714.289.3349 Fax: 949.258.5395 Email: dawn.niehaus@ticortitle.com Any such notice, demand, request or other communication shall be deemed effective on the day of actual delivery or refusal to accept as shown by the addressee's return receipt. If the date on which any notice required to be delivered hereunder falls on a weekend or legal holiday, then such notice may be delivered on the next business day immediately following such weekend or holiday. If the date of Closing shall fall on a weekend or legal holiday, then such date shall automatically be extended to the next business day immediately following such weekend or holiday. The foregoing addresses may be changed by notice given in accordance with this Paragraph. 10. Amendment: Complete Agreement. All amendments and supplements to this Agreement must be in writing and executed by Buyer and Seller. All understandings and agreements between the parties regarding the Property are merged into this Agreement and the Option Agreement, which together fully and completely express the agreement of the parties regarding the Property. This Agreement has been entered into after full investigation of the facts by both parties and neither party has relied on any statement or representation not embodied in either this Agreement or the Option Agreement. This Agreement has been drafted through a joint effort of the parties and their counsel and therefore shall not be construed against either of the parties as the draftsperson. 11. Governing Law. This Agreement shall be governed under the laws of the State of California. 12. Counterparts, Headings and Defined Terms. This Agreement may be executed in several counterparts each of which shall be an original, but all of such counterparts shall constitute one such Agreement. The headings used herein are for convenience only and are not to be construed to be part of this Agreement. For the purposes of this Agreement, (a) the term "including" means "including without limitation," and (b) when a time period is specified in this Agreement for the performance of an act or the 61147.00310\32570502. I 32 occurrence of an event, "days" shall mean "calendar days," unless otherwise specified herein. 13. Time of the Essence. Time is of the essence of this Agreement. 14. Waiver. The waiver by one party of performance of any covenant, condition or promise shall not invalidate this Agreement, nor shall it be considered to be a waiver by it of any other covenant, condition or promise. The waiver by either or both parties of the time for performing any act shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time. The exercise of any remedy provided in this Agreement shall not be a waiver of any other remedy provided by law. 15. Severability. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 16. Additional Documents. Each party hereto agrees to perform any further acts and to execute and deliver any further documents, which may be reasonably necessary to carry out the provisions of this Agreement. 17. AS-IS Condition of Property. Buyer hereby acknowledges that, except as expressly stated otherwise in this Agreement, Buyer is purchasing the Property in its existing condition, strictly "AS-IS", and will, by the time called for herein, make or have waived all inspections of the Property that Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. Buyer acknowledges that, except as otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws, or any other act, ordinance or law, have been made by Seller, or relied upon by Buyer. In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway, then in that event Buyer waives any right that it may have to bring an action or proceeding against Seller regarding said representation or warranty. Any environmental reports, soils reports, surveys, feasibility studies, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives, have been or will be delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. Buyer acknowledges and agrees that prior to the expiration of the time specified for the approval, disapproval or waiver of Buyer's Contingencies, Buyer will have had disclosure of and full opportunity to review the information contained in the Seller's 61I4 7 .00310\32570502. I 33 Mandatory Disclosure Statement, the Property Information Sheet, and any other reports and information provided by Seller to Buyer, in addition to full opportunity to inspect and investigate the Property, its condition and Buyer's intended use and development thereof to the fullest extent deemed necessary or advisable by Buyer. Buyer further acknowledges all uses and conditions of the Property identified in such Seller's Mandatory Disclosure Statement, the Property Information Sheet, and any other reports and information provided by Seller to Buyer, with Buyer hereby waiving any and all claims and accepting all risks, costs, expenses, liabilities and obligations associated therewith and/or arising therefrom. Buyer acknowledges that it is a sophisticated owner and operator of real property and acknowledges that Buyer has accounted for all of the foregoing in connection with its determination to enter into this Agreement, including without limitation Buyer's determination of the Purchase Price and the "AS-IS" nature of Buyer's purchase contemplated under this Agreement. For purposes of this Agreement, and notwithstanding any other provisions of this Agreement that may be construed to the contrary, the representations and warranties of Seller in this Agreement shall be deemed to be made only to the actual knowledge of the undersigned officer(s) of the Seller as of the Date of Agreement, without any duty of independent investigation or inquiry. Except for Seller's express representations and warranties as modified and limited pursuant to the foregoing, Buyer's election to purchase the Property will be based upon and will constitute evidence of Buyer's independent investigation and complete acceptance of the Property, its use, development potential and suitability for Buyer's intended use, including without limitation the following: the feasibility of developing the Property for the purposes intended by Buyer and the conditions of approval for any governmental approvals and entitlements; the size and dimensions of the Property; the availability, cost and adequacy of water, sewerage and any utilities serving or required to serve the Property; the presence and adequacy of current or required infrastructure or other improvements on, near or affecting the Property (including relating to potential for subsidence); any surface, soil, subsoil, fill or other physical conditions of or affecting the Property, including without limitation the existence of Hazardous Substance Conditions, the potential for subsidence, and/or above or below ground storage tank or clarifier conditions, climate conditions, geological conditions, drainage conditions, air, water or mineral conditions; the condition of title to the Property; the existence of governmental laws, statutes, rules, regulations, ordinances, limitations, restrictions or requirements concerning the use, density, location or suitability of the Property for any existing or proposed development or use thereof, including but not limited to zoning, building, subdivision, environmental or other such regulations; the necessity or availability of any general or specific plan amendments, rezoning, zoning variances, conditional use permits, building permits, business permits, environmental impact reports, parcel or subdivision maps and public reports, requirements of any improvement agreements; requirements associated with any redevelopment district or redevelopment project area, requirements of the California Subdivision Map Act, and any other governmental permits, entitlements, authorizations, approvals or acts (collectively "Permits"); the necessity or existence of any dedications, taxes, fees, charges, costs or assessments which may be imposed in connection with any governmental regulations or the obtaining of any required Permits; the presence of 61147. 00310\32570 502. 1 34 endangered plant or animal species upon the Property; and all of the matters concerning the condition, use, development or sale of the Property. Buyer hereby waives any and all claims arising from any of the foregoing and Seller shall not be liable for any loss, damage, injury or claim by Buyer or any person or property arising from or caused by any of the foregoing and/or the use or development of the Property by Buyer. Except with respect to a breach of Seller's express warranties and representations contained herein as modified and limited pursuant to the foregoing or a default by Seller of its obligations under the Agreement, Buyer hereby waives all of its rights in connection with or arising under the matters referenced in this Section 26.1, including without limitation Buyer's rights granted under California Civil Code Section 1542, which provides as follows: "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. BUYER: SJC MISSION VENTURES LLC, a California limited liability company By : __________ _ Dan Almquist, Manager SELLER: CITY OF SAN JUAN CAPISTRANO By : ____________ _ ,Mayor Maria Morris, City Clerk Approved as to Form: Jeff Ballinger, City Attorney 61147.00310\32570502. I 35 61147.00310\32570502. l EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY [TO BE PROVIDED IF OPTION IS EXECUTED] -36 - EXHIBIT B GRANT DEED Recording Requested By: TICOR TITLE Mail Tax Statement and When Recorded Mail Document To: SJC MISSION VENTURES LLC 610 Newport Center Drive, Suite 1520 Newport Beach, CA 92660 Attn: Dan Almquist Order No .: APNs: Portions of 121-141-25 and 121-141-26 (Space above this Line for Recorder's Use Only) The Undersigned Grantor Declares: DOCUMENTARY TRANSFER TAX$ ; CITY TRANSFER TAX$0; [ X l computed on the consideration or full value of property conveyed, OR [ l computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, ] unincorporated area; [X] City of SAN JUAN CAPISTRANO GRANT DEED FOR A VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, CITY OF SAN JUAN CAPISTRANO, A MUNICIPAL CORPORATION AND GENERAL LAW CITY, HEREBY GRANTS TO SJC MISSION VENTURES LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, THE REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED IN EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF. Dated: ____ _, 202_ CITY OF SAN JUAN CAPISTRANO, a municipal corporation and general law city By: __________ _ ,Mayor Maria Morris, City Clerk Approved as to Form : Jeff Ballinger, City Attorney 61147.003 I 0\32570502.1 -37 - Mail Tax Statements to: SAME AS ABOVE ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF ORANGE ) ) ) On , 202_, before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature _____________ _ 61147.00310\32570502.1 -38 - 61147.00310\32570502.l EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY [TO BE PROVIDED IF OPTION IS EXECUTED] -39 - ATTACHMENT 3 1 2 3 4 5 RESOLUTION NO. 20-01-21-XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, APPROVING A LEASE AGREEMENT WITH THE SJC MISSION VENTURES LLC, A CALIFORNIA LIMITED LIABILITY COMPANY WHEREAS, the City of San Juan Capistrano owns that certain real property comprised of portions of Assessor's Parcel Numbers 121-141-25 and 121-141-26 in the City of San Juan Capistrano, County of Orange, California ("Property"); and WHEREAS, SJC Mission Ventures LLC, a California limited liability company ("SJC Mission") owns the real property adjacent to the Property, at 31721 Camino Capistrano, San Juan Capistrano, CA, which is currently improved with a restaurant building. SJC Mission desires to incorporate the Property as a part of its existing property and restaurant business (the "Planned Expansion"); and WHEREAS, the City of San Juan Capistrano ("City") desires to enter into a short term lease with SJC Mission, to allow SJC Mission to improve and use the Property for the Planned Expansion, as set forth more fully in the accompanying Agreement, defined below; and WHEREAS, City is authorized, pursuant to Government Code Section 37395, to lease land for commercial development for a period not to exceed 55 years if the City determines by ordinance or resolution that the property is not required for other City purposes; and WHEREAS, the Property is currently vacant and underutilized by the City; and WHEREAS, the City does not anticipate needing the Property for other City purposes within the next few years; and WHEREAS, SJC Mission will be paying the fair market rent for the Property during the term of the lease; and WHEREAS, the City and SJC Mission have negotiated the terms of a Ground Lease with Option to Purchase ("Agreement"), a copy of which is attached to this Resolution as Exhibit A, in order to set forth the terms and conditions by which SJC Mission will lease the Property from the City; and WHEREAS, City staff has determined that the City's approval of the Agreement is exempt from the California Environmental Quality Act ("CEQA"), pursuant to CEQA Guidelines Section 15332, Class 32 (In-fill Development Projects); and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. ATTACHMENT 4 NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Juan Capistrano does hereby resolve as follows. SECTION 1. Recitals. The above recitals are true and correct, and are incorporated into this Resolution by reference as though fully set forth herein . SECTION 2. Findings. The City Council hereby finds and declares that the Property is underutilized currently, is not needed by the City for other purposes, and entering into the Agreement is in the best interest of the community as it will result in the beneficial use of a vacant lot. SECTION 3. Approval of Agreement. The City Council hereby approves the Agreement substantially in the form attached to this Resolution as Exhibit A. The City Council hereby authorizes the City Manager, with the concurrence of the City Attorney, to execute and deliver on behalf of the City the Agreement and such other documents and instruments as may be necessary or convenient in furtherance of the actions authorized in this Resolution. SECTION 4. Authorization. The City Council hereby authorizes and directs City staff to do all that is necessary to effectuate the intent of the Agreement and this Resolution, including but not limited to, causing the Agreement to be recorded against the Property. SECTION 5. CEQA Compliance. The City Council hereby authorizes and directs City staff to file a Notice of Exemption under CEQA with the Clerk of Orange County within five (5) calendar days following approval of this Resolution. SECTION 6. Effective Date. immediately upon its adoption. This Resolution shall become effective SECTION 7. Certification. The City Clerk of the City of San Juan Capistrano shall certify as to the adoption of this Resolution . PASSED APPROVED, AND ADOPTED on January 21, 2020 . HON. TROY A. BOURNE, MAYOR ATTEST : MARIA MORRIS, CITY CLERK APPROVED AS TO FORM : City Attorney 2 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF SAN JUAN CAPISTRANO ) I, MARIA MORRIS, City Clerk of the City of San Juan Capistrano, do hereby certify that the foregoing Resolution No. 20-was duly adopted by the City Council of the City of San Juan Capistrano at a regular meeting thereof, held the _ day of _______ , 2020, by the following vote: AYES: NOES : ABSENT: ABSTAIN : MARIA MORRIS, City Clerk 3 EXHIBIT A Ground Lease with Option to Purchase [Attached behind this cover page] 4