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HomeMy WebLinkAboutMINUTES - 07102012 - C.12RECOMMENDATION(S): APPROVE and AUTHORIZE the Director of Airports, or designee, to execute on behalf of the County a Consent to Assignment of Lease between the County and the current tenant, Rabobank, N.A., and the new tenant, NWK2, Inc. 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: Under a ground lease dated March 15, 2005, the County leased the subject property to APEX Aviation Corporation (APEX) for the purpose of providing specialty aviation services at Buchanan Field Airport. As permitted under the lease, APEX entered into a leasehold mortgage to finance improvements to the property. Under the leasehold mortgage, the lender was granted a lien in the leasehold estate. The holder of the leasehold mortgage, Rabobank, N.A. (Bank), has foreclosed and is now the tenant under the lease. The APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 07/10/2012 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, 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: July 10, 2012 David Twa, County Administrator and Clerk of the Board of Supervisors By: STACEY M. BOYD, Deputy cc: C. 12 To:Board of Supervisors From:Keith Freitas, Airports Director Date:July 10, 2012 Contra Costa County Subject:Approval of Consent to Assignment of Lease between C.C. County & Rabobank, N.A., & NWK2, Inc. for the property located at 1448 & 1450 Sally Ride Dr. BACKGROUND: (CONT'D) Bank desires to assign all of its interest in the lease to an affiliate of the Bank, NWK2, Inc. (NWK2). An assignment of the lease requires the prior written consent of the County. NWK2 owns and manages bank-owned property for the Bank. NWK2 will contract with a third party that will operate an aviation business on the Property as contemplated by the lease. CONSEQUENCE OF NEGATIVE ACTION: The County will not consent to the assignment of the lease and Rabobank will not be able to assign its interest in the lease. CHILDREN'S IMPACT STATEMENT: Not Applicable ATTACHMENTS Consent to Assignment SF 1331357v5 Page 1 of 5 Consent to Assignment of Lease: Contra Costa County, Rabobank, N.A. and NWK2, Inc. CONSENT TO ASSIGNMENT OF LEASE This consent to assignment of lease (“Consent”) is dated ___________, 2012 and is between the County of Contra Costa, a political subdivision of the State of California (“County”), Rabobank, N.A., a national banking association and successor-in-interest to Napa Community Bank (“Assignor”), and NWK2, Inc., a California corporation (“Assignee”). RECITALS A. The County owns and operates Buchanan Field, a public airport located at Concord, California (the “Airport”), as shown on the Airport Layout Plan, which plan is on file in the office of the County Director of Airports (the “Director of Airports”). B. The County leased that portion of the Airport commonly known as 1448 Sally Ride Drive and 1450 Sally Ride Drive (the “Premises”) to APEX Aviation Corporation (“Apex”) pursuant to a lease dated March 15, 2005 (the “Lease”). The tenant’s rights and obligations under the Lease are the “Leasehold Estate.” C. On May 18, 2012, Assignor foreclosed on the Leasehold Estate, pursuant to the terms of a deed of trust dated December 26, 2002. Assignor was the successful bidder for the Leasehold Estate at the foreclosure sale. As a result, Assignor became the owner of the Leasehold Estate and the tenant under the Lease. D. Assignor now desires to assign all of its right, title, interest, and obligations, in, to and under the Lease and the Leasehold Estate to an affiliate, Assignee (the “Assignment”). Assignee desires to accept the Assignment. E. The parties hereto understand that neither Assignor nor Assignee are capable of operating an aviation business without contracting with a third party that is capable of operating an aviation business, that Assignee intends to engage such a third party to operate an aviation business as contemplated by the terms of the Lease in the Premises, and only on that basis, Assignee makes the representations set forth in this Consent. F. The terms of the Assignment are set forth in that certain Assignment and Assumption of Lease dated as of June 13, 2012 between Assignor and Assignee (the “Assignment Agreement”). G. The Lease requires that Assignor and Assignee receive County’s written consent to the Assignment. H. In consideration of County’s consent to the Assignment, and other valuable consideration, the receipt and adequacy of which is hereby acknowledged, Assignor SF 1331357v5 Page 2 of 5 Consent to Assignment of Lease: Contra Costa County, Rabobank, N.A. and NWK2, Inc. has agreed to deliver certain documents to County and to make certain payments to the County. I. In consideration of all of the terms and conditions contained herein, County agrees to consent to the Assignment. County, Assignor, and Assignee therefore agree as follows: AGREEMENT 1. Defined Terms. Defined terms used but not defined in this Consent are as defined in the Lease. 2. Security Deposit. The County will continue to hold the security deposit previously paid to the County under the Lease in accordance with the terms of the Lease. 3. Representations and Warranties of Assignor and Assignee. Each of Assignor and Assignee hereby represents and warrants that: a. Assignee’s intended use of the Premises is consistent with Apex’s use of the Premises and is not inconsistent with the use permitted under the Lease and will not require alteration of the Premises. b. Assignee is a California corporation in good standing. c. Assignee’s intended use of the Premises will not increase the use or storage of hazardous substances on the Premises (as compared with such use or storage by Apex) and will not otherwise adversely affect the County’s interest in the Premises. d. Assignee will contract with a third party that is capable of operating an aviation business to operate an aviation business on the Premises as contemplated by the terms of the Lease. e. Assignee’s financial condition is sufficient to support the obligations of Tenant under the Lease. f. Assignor and Assignee have the legal right and authority to enter into this Consent and each has received all necessary approvals to do so. 4. Assignment and Assumption Agreement. Assignor and Assignee are entering into the Assignment Agreement under which the Assignment will be effected. SF 1331357v5 Page 3 of 5 Consent to Assignment of Lease: Contra Costa County, Rabobank, N.A. and NWK2, Inc. 5. Conditions Precedent to Execution of Consent. County’s consent to the Assignment is subject to the satisfaction of the following conditions: a. The Director of Airports must review and approve the form of the Assignment Agreement. b. The Director of Airports must receive an executed copy of the Assignment Agreement. c. Prior to the effective date of the Assignment, the Assignor shall pay any Rent that has become due under the Lease, including late fees and interest, and other payments due under the Lease, and shall cure any existing default. d. Prior to the effective date of the Assignment, the Assignor shall pay the County a Transaction Fee of $3,000.00. e. As soon as practicable following the effective date of the Assignment, the Assignor shall pay the County an amount equal to the actual costs (but not greater than $5,000) incurred by the County in connection with this Consent and the assignment of the Lease, including but not limited to, legal fees. 6. Consent of County. In reliance on the representations and warranties of Assignor and Assignee and upon satisfaction of the terms and conditions set forth herein, County consents to the Assignment. 7. Consent to Assignment Only. This Consent does not amend the Lease. If there is any confusion or contradiction between any term of the Lease and this Consent, the terms of the Lease will prevail. 8. Governing Law. The laws of the State of California govern all matters arising out of this Consent, with venue in the Superior Court of the County of Contra Costa, California. 9. Survival. The provisions of this Consent shall survive both the execution and delivery of this Consent. 10. Recitals. The Recitals are true and correct and are incorporated herein by reference. [Remainder of Page Intentionally Left Blank] SF 1331357v5 Page 4 of 5 Consent to Assignment of Lease: Contra Costa County, Rabobank, N.A. and NWK2, Inc. 11. Notice. From and after the effective date of the Assignment, all notices given to Tenant under the Lease will be mailed to: NWK2, Inc. Attn: Mr. Raymond Sereni 915 Highland Pointe Drive, Suite 350 Roseville, CA 95678 With a copy to: NWK2, Inc. Attn: Craig Hunter, Esq., Vice President and Corporate Counsel 915 Highland Pointe Drive, Suite 350 Roseville, CA 95678 The parties are signing this Consent as of the date set forth in the introductory paragraph. COUNTY ASSIGNOR CONTRA COSTA COUNTY, a political Rabobank, N.A. Subdivision of the State of California By______________________________ By____________________________ Keith Freitas Karin Koers Director of Airports Senior Vice President RECOMMENDED FOR APPROVAL: By___________________________ Raymond Sereni Vice President By______________________________ ASSIGNEE Karen Laws Principal Real Property Agent NWK2, Inc. By______________________________ By___________________________ Beth Lee Raymond Sereni Assistant Director of Airports Vice President [Signatures continued on page 5] SF 1331357v5 Page 5 of 5 Consent to Assignment of Lease: Contra Costa County, Rabobank, N.A. and NWK2, Inc. [Signatures continued from page 4] APPROVED AS TO FORM: By Sharon L. Anderson, County Counsel By______________________________ Kathleen M. Andrus, Deputy County Counsel