TITLE
Recommendation to authorize City Manager, or designee, to execute the First Amendment to Lease No. 26120 with White Buffalo Holdings, LLC, for City-owned property at 2745-2883 East Spring Street. (District 5)
DISCUSSION
In 1996, the City executed Lease No. 26120 with Westland Construction (Westland) for the development of City-owned property located at the corner of Spring Street and Temple Avenue at the Long Beach Airport (Airport). Westland developed the property into what is now known as the Daugherty Sky Harbor development, more commonly referred to at the Airport as Parcel J, which largely supports the Airport’s general aviation activities. As Parcel J was developed, individual parcels were subdivided from Lease No. 26120 and leased separately to other tenants. Consisting of ten parcels, Parcel J is operated by seven tenants under the terms of similar leases, sharing common space (primarily parking areas) spanning the entire development.
In 2011, Lease No. 26120 for Parcels J-2 through J-4 was acquired by White Buffalo Holdings, LLC (Lessee). Under the terms of the Lease, a Fair Market Value (FMV) appraisal process is to occur every ten years to determine the adjusted rent based on the prevailing rate of return. Lessee will then have 60 days from the determination of the adjusted rent to pay the difference between the current rent and the adjusted rent.
In March 2019, the Airport conducted an appraisal process to determine the adjusted rent, resulting in months of negotiation with the Lessee. The negotiations concluded in May 2020, and the process determined an increase of $4,791 in monthly rent from $15,159 to $19,950, which is retroactively effective March 12, 2019. The Lessee commenced paying the new rate of $19,950 on June 1, 2020. The outstanding balance owed for the period of March 12, 2019 through May 31, 2020 is $70,166.
On March 17, 2020, the City Council took several actions to address the impacts of the COVID-19 pandemic on the...
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