TITLE
Recommendation to authorize City Manager to execute the First Amendments to leases for Parcels 3 and 5 of Parcel Map No. 15307 with Tarmac Holdings, LP, a Delaware limited partnership, for City-owned property at the Long Beach Airport Business Park at 5000 and 5001 Airport Plaza Drive. (District 5)
DISCUSSION
On April 21, 1981, the City Cou ncil approved Master Lease No. 15383 with Long Beach Airport Business Park (LBABP), composed of Signal Development Corporation and Carlton Browne and Company, Inc., for the development of City-owned property (Site) at the southeast corner of Lakewood Boulevard and Spring Street. The Master Lease provides for a 50-year term and will expire July 7, 2032.
The Site was divided into 12 parcels each with its own individual lease, which were subleased for development (see Attachment "A"). The 45.1-acre Site is currently composed of eight multi-story office buildings containing approximately 830,000 square feet of office space, a 311-room hotel, and surface and structured parking. Parcels 3 and 5 of the Site have been subleased and assigned to various entities over the years.
In 2000, all rights, title and interest in the leases for Parcels 3 and 5 were assigned to Tarmac Holdings, LP, doing business as Investcorp.
Investcorp has requested 18-year extensions of the term of the leases for Parcels 3 and 5 in order to refinance its long-term investment in the two existing office buildings of approximately 74,000 and 51,000 square feet and adjacent parking lots. Keyser Marston Associates (KMA) was retained by the City to analyze and determine the appropriate compensation for the value of the extended term of the leases, which Investcorp has agreed to pay in a lump sum. Consistent with KMA's recommendation, a one-time payment of $1 ,326,000 reflects the value of the extended term of the leases.
This amount would be paid to the Airport Enterprise Fund upon execution of the First Amendment. Terms and conditions of the existing lea...
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