TITLE
Recommendation to authorize City Manager, or designee, to execute any and all documents necessary for the Third Amendment to Lease No. 9351 with Million Air North, Inc., a California corporation, for City-owned property at 4401 Donald Douglas Drive at the Long Beach Airport. (District 5)
DISCUSSION
In January 1968, the City of Long Beach (City) executed Lease No. 9351 (Lease) with Millie and Severson, Inc., for approximately 5.7 acres of land at 4401 Donald Douglas Drive (Leased Premises), for the development of an office building, under a 55-year total term. Since that time, the Leased Premises have been reduced to approximately 3.58 acres and the Ground Lease has been assigned three times, most recently to Million Air North, Inc. (Tenant), in 2009. Tenant currently subleases portions of the Leased Premises to several entities including NuSpace, an aerospace manufacturing firm, the Transportation Security Administration, and the Airport Department to house its Engineering, Accounting and Security Divisions.
The current term of the Lease will expire on January 2, 2023. Tenant has identified a series of capital improvements needed for the Leased Premises and has requested an extension of the Ground Lease to amortize its investment in the capital improvements over a ten-year additional term. Negotiations between staff and Tenant have resulted in a proposed Third Amendment to Lease No. 9351 containing the following major terms and provisions:
· Landlord: City of Long Beach, a municipal corporation.
· Tenant: Million Air North, Inc., a California corporation.
· Leased Premises: Approximately 3.58 acres of land at 4401 Donald Douglas Drive at the Long Beach Airport.
· Term: The Lease will be extended for a period of approximately ten years and will terminate on January 31, 2033.
· Rent: The current ground rent for the Leased Premises is $18,346 per month ($0.118 per square-foot). Effective January 1, 2023, the ground rent will increase to $25,918 ...
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