HomeMy WebLinkAboutMINUTES - 05032011 - C.16RECOMMENDATION(S):
APPROVE and AUTHORIZE the Director of Airports, or designee, to execute on behalf of
the County a Consent to Assignment of Lease and Conditional Amendment to Lease
between the County and the current tenant, Lithia Real Estate, Inc., and the new tenant,
Crown Automotive, Inc. for the property located at 4901 Marsh Drive, Concord.
FISCAL IMPACT:
The Airport Enterprise Fund will continue to receive lease and other revenues provided for
in the Lease. The County General Fund will continue to receive property, sales and
possessory interest tax revenues from the Lease.
BACKGROUND:
The subject property is used in the operation of an automobile dealership, including the sale
of new and used vehicles, vehicle leasing and rental, vehicle repairs, and other related
services. The current tenant, Lithia Dodge, has entered into an agreement to sell its business
to Crown Automotive, Inc. (Crown). To effect the sale, the lease must be assigned to
Crown. An assignment of the lease requires the prior written consent of the County. Under
the terms of the
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 05/03/2011 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I
Supervisor
Gayle B. Uilkema, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Karen Mitchoff, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Beth Lee, (925)
646-5722
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: May 3, 2011
David J. Twa, County Administrator and Clerk of the Board of Supervisors
By: Carrie Del Bonta, Deputy
cc:
C. 16
To:Board of Supervisors
From:Keith Freitas, Airports Director
Date:May 3, 2011
Contra
Costa
County
Subject:Approval of Consent to Assignment and Conditional Amendment to Lease between Contra Costa County,
Lithia Real Estate, Inc. and Crown Automotive, Inc.
BACKGROUND: (CONT'D)
lease, if the County refuses its consent, the lessee may terminate the lease with 30 days
notice to the County.
In addition to consenting to the assignment of the lease to Crown, the Consent requires
Lithia to step in as a replacement lessee of the subject property if Crown defaults on its
obligations under the lease within three years of the effective date of the Consent. If
Crown defaults, Lithia is obligated to (i) cure any breach by Crown that remains uncured,
and (ii) fulfill all obligations under the lease until April 2016. At the end of that five-year
period, either the lease will terminate or Lithia can elect to extend the term through
August 31, 2020 (its current expiration date).
The goal of keeping Lithia as a potential replacement lessee is to protect both the
County’s and Lithia’s interests under the lease. The result is a conditional amendment to
the lease in that the term of the lease could be shortened if Lithia steps back in as lessee
but does not extend its obligation beyond April 2016.
Over its remaining term, the lease will provide significant revenue to the Airport
Enterprise Fund and the County General Fund. The lease is comparable to other executed
leases and is consistent with the Airport Master Plan.
CONSEQUENCE OF NEGATIVE ACTION:
The County will not consent to the assignment of the lease and Lithia will have the option
to terminate the lease.
CHILDREN'S IMPACT STATEMENT:
Not applicable
ATTACHMENTS
Lithia Consent to Assignment w/condition