To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATERFRONT & ECONOMIC DEVELOPMENT DIRECTOR
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ADOPT BY TITLE ONLY RESOLUTION NO. CC-2510-079, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY TO 211 CRYSTAL COVE APTS, LLC, A DELAWARE CORPORATION
APPROVE A GROUND LESSOR ESTOPPEL CERTIFICATE AND AN AMENDMENT TO THE LEASE TO INCLUDE A NON-MERGER CLAUSE FOR 211 CRYSTAL COVE APTS, LLC
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EXECUTIVE SUMMARY
The 211 Crystal Cove Apartments, LLC is in the process of refinancing their existing mortgage loan. Pursuant to the terms of the Lease between the City of Redondo Beach (Landlord) and 211 Crystal Cove Apartments, LLC (Lessee), prior to execution of a new loan agreement, the City as Landlord must execute and deliver a Ground Lessor Estoppel Certificate, which confirms the status of the lease for the lender on items such as rent payments, the amount of tenant deposits, and whether there are any outstanding lease violations. This Estoppel Certificate is being requested as part of the Lessee's effort to refinance its existing debt. No new debt (cash-out) is being issued as part of the re-financing.
As an additional condition of the refinancing, the lender providing the refinancing opportunity to the Lessee requires that the Ground Lease be amended to insert a non-merger clause, which is commonly found in financeable ground leases to ensure that the leasehold and fee interests remain legally distinct.
City staff have reviewed the payment history for the Crystal Cove Apartments, which is contained in the Lease with 211 Crystal Cove Apartments, LLC, and confirmed that the Lessee is current with all lease requirements. In addition, the City's outside legal counsel prepared the proposed Ground Lease Amendment to include a non-merger clause, which has been reviewed by the City Attorney's Office. At this time, staff recommends the Council approve both the Estoppel Certificate and Amendment to the...
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