HomeMy WebLinkAbout6A(5) Central High Apartments Lease Extension('" P- C S-)
LEGAL DEPARTMENT
INTEROFFICE MEMORANDUM
TO: Redevelopment Commissioners
FROM: Lawrence J. Meteiver
Assistant City Attorney
DATE: April 6, 2011
RE: Stephenson Mill and Central High Lease Extensions
Stephenson Mill Lease
In 1994, the Commission entered into a 30 year lease agreement with Heartland Fund
Management, Inc., now Stephenson Mill Associates, LLC, effective September 1, 1994 and
terminating September 1, 2024. At the termination of the lease, the tenant has an option to
purchase the property for the cost of the improvements done by the Commission in 1994.
Central High Lease
In 1995, the Commission entered into a 20 year lease agreement with The Alexander Company,
Inc., now Central High Associates, LLC, effective December 29, 1995 and terminating
December 28, 2015. At the termination of the lease, the tenant has the option to purchase the
property for the sum of $299,000.00.
Current Status
Currently both properties are being refinanced by Kimberly -Clark Corporation (KKC), the
managing member of both tenants. In order to refinance, KKC must show a long term interest in
both properties for the length of payments of the new loan obligation. For that reason, KKC has
requested extensions of both leases.
For the Stephenson Mill lease, KKC proposes to simply extend the term of the lease for 35 years.
For the Central High lease, KKC proposes to make a balloon payment of $100,000.00 against the
purchase option now, with level amortizing payments over the life of the lease extension.
I ask for your favorable consideration of the proposals made by Kimberly -Clark Corporation.
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Lamir, Joe
From., Lamir, Joe
Sent: Thursday, March 31, 2011 1:59 PM
To* Imetelve0southbendin,gov'(1metelve Onsouthbond1n.gov)
Cc: Mexandrou, Drew
Su0ject: Central High and Stephenson Mill Lease Extension Proposals
Attachments: Central High First Amendment to Parking Lease 3-24-11 -doc, $t9phanson Mills First
Amendment to Parking Lease 3-30-11 cloc
Hi Larry
Attaqhed please find proposals for the extension of the leasO term for Stephenson Mills Associates, LLC and Central High
Associates, LLC parking lots.
For Stephenson Mills, we propose a simple extension of the lease term until 35 years beyond the date of the refinancing,
For Central High, we propose a $100,000 up front payment as of execution of the OFreement, with annual amortization
of the balance each anniversary over the next 34 years and a final payment of $1,00;
$299,000 Face Value
($100,000 Up Front Payment
$199,000 Balance / 34 years payable each anniversary date of the agreement = $5,853
Final payment of $1.00 to take possession of the property.
Please let us know if these terms seem satisfactory to you and If you can present these proposals to the board at the
next meeting,
Thanks
Joe Lamir
Real Estate Business Analyst
Kimberly-Clark Corporation
1400 Holcomb Bridge Rd
Roswell, GA 30076
(770) 557-8368 Direct
(920) 969-4492 Fax
C ",OUl
ITy C)F h 'H BEND
DEPARTMENT OF LAW
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FIRS1 AMENDMENT NT 1 V I A- -RKJi�1: -G LEASE
This First Amendment to Parking Lease ("First Amendnicut ") is entered into as of this
day of , 2,011 by and betwacn the CITY OF SOUTH BEND, .INDIANA,
D,Er:PAR MEN 1' OF REDEVELOPMENT, acting by and through the SOUTH BEND
REDEVELOPMENT COMMISSION ( "Landlord "), and CENTRAL HI+GI:I ASSOCIATES,
LLC:, ai Wisc onsiti limited liability c onipwiy ("Tenant').
WITNESSETH:
WHEREAS, Landlord acid Tenant, entered into that c ertai i Agreement to Ixase (as
amended, the "Lease") dated effective December 29, 1995 pertaining to the lease by Tenant of a
certain parcel on which, Landlord subsequently completed improvements (the "Lease Parcel "),
Such Lease Parcel providing paved parking for Tenant's multi - family housing pn1ject adjoining
the U,ase Parcel (the "Central High School Project Sfite "); and
WHERE-AS, Tenant his applied for a HLJrj refinancing of the Central High School
Project Site (the "Refinancing ") and in connection therewith, the lender providing the
Rofinaiwing, St. Janes Capital e' Leader"), has Conditioned the Refinancing, upon an extension
of the term of the Leaso, thCrcby itnaking the termination elate of the Uase the last day of the yoar
that the Refinancing nniatures; and
W F ERFAS, in order to satisfy the Lender's above-described requirement in connection
with the Refinance, Tenant has requested and Lender has agreed to extend the Lease on and
subji:ct to the terms contained in this First Amendment;
NOW, THEREFORE -,, in consideration of the foregoing and for other consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree that the
Lease is hereby amended as follows:
L Capitalized Terms_ Capitalized terms used and not otherwise defined herein
shall have the meaning's ascribed to such terms in the Lease. All references, to "Alexander" or
"The Alexander Company, Inc." in the Lease shall be removed and replaced with "Housing
Horizons, LLC ", the new managing member of the Tenant.
2. Extension of Lease T erin. The Lease is currently due to expire on December 28,
2015, The parties hereby agree that in consideration of the payment by Tenant (if certain
amortizing lease payments (as described below in Section 3), the Term of the Lease shall be
extended to December 31, 2046. Upon the closing and funding of the Refinancing, the parties
licreto shall enter into a Menihrandurn to First l.eme Amendment confirming the termination
date of the Lease. Notwithstanding anything to the contrary herein, the ef'f'ectiveness of this First
Amendment. is Conditioned upon the closing and funding of the Refinaincing no latter than
December 31, 2011. If such closing and funding has not occurred on or before such date, the
terms and conditions of this First Amendment shall be null and void.
3. Amortizing Rent EgXmen"y TenaYrt, In consideration of Landlord
agreement to extend the Tornn of the I..easc, Tenant will make; the following paymenL% to
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l.Auidlord (Gotlectivcly, the "Exteiislon Pay;nents ") in irni�nediately available funds on the dates
indicated below_ Such payments will be made to Landlord in lieu of the current annual rent
payments in the ainount of $1.00 as provided in Section 4.01 and 4.02 of the lease, If Tenant
fails to make tticse paymeuts On the,: dates provided below and doer not cure such failure within
!if'tecti (15) days following Lacidlord's written notice of such failure, Tenant shall be in default of
its obligations under the Lease and Landlord shall be entitled to its remedies under Section 16.03
of the U-asv.
(a) Upon the execution of this First Amendment, Tenant shall pay to Landlord the
amount of $100,000,00; and
(Ii) C:011utti:iiciII9 Ott tile, First anniversary of this First Amendment and continuing on
reach anniversary thereafter for thirty -four (34) consecutive years until the first
day of the last year of the Lease, Tenant shall pay to Landlord the arno unt of
$.5,8.53.ta)
4. t) tion to Purchase. Section 21.01 of the Lease is hereby amended to provide
that Tenant',,; option to Purchase may he exercised, at Tenant's option, upon the new expiration
(late of the Lease (its amended above in Section 2). Section 21.901 (b) of the Lease is amended
to provide that the purchase price for the Leased Premises shall be $1.00,
5, No Defaults. Landlord and Tenant each represent and warrant that there are no
Uncured defaults under the Lease and that to the extent either party previously failed to perforrn
an obligation under the Lease, the perforinallm of such obligation is hereby waived,
61 C'.timrtfissit►ns, Landlord and 'Tenant represent to each other that they have not
authorized any brokcr to act on such party's behalf in connection with this First Amendment.
7. Kontinued_Yalidity. Except as expressly modified hereby, the remaining terms
and cvonditions of the Lease shall remain in full force and effect.
8. Representations and Warranties.
(a) Tenant hereby represents and warrants that (i) Tenant is duly organized, validly
existing and in good standing (if applicable) in accordance with the .laws of the State under
which it was orgwiized; (ii) Tenant is authorized to do business in tire; State where the Premises
is locrtted; and (iii.) the individual executing and delivering this First Amendment on behalf of
Tenant has botu properly authorized to do so, and such execution and delivery shall hind Tenant
to ils terms_
(h) Landlord hereby represents and warrants that (i) TAndlord is duly organized,
validly existing and in good standing (if applicttblc) in acaorda.noc with the IsWS of the state
under which it was organized; (ii) Landlord is authorized to do business in the State where the
Premises is located; and (iii) the individual executing and delivering this First Amendment on
behalf of Landlord has been properly authorized to do so, and such execution and delivery :;hall
Bind Landlord to its torture.
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9. C iunterparti, Contlicti. This First Amendment may be executed in multiple
c ounterpart.ti, e;ich of which shall Im deemed an original and together will constitute one and the
same cloctiment. To the extent of a conflict. or inconsistency between the terms of this Second
Amendment and the terms contained in the Le.xse, the teens of this First Amendment 04111.
prevail,
-M Go,�ver ing,,,La„ . This First Aniendmont snail lac govorned by the taws of the
Slate. of 111tli.alui.
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IN WITNESS WHEREOF, the patties hereunto ll,'Ive exeCuted this First Amendment is
of the date Fir-,I. written above.
LANDLORD:
CITY OF SOUTH BENA INDIANA,
DEPARTMENT OF RP013VELOPMENT, acting
Icy and through the SOUTH BEND
Rrr)r-,v'm,oPmENT commissioN
By.-
Name:
Title,
TENANT!
CENTRAL HIGH ASSOCIATES, LLC, a
Wisconsin limited liability cot-npafly
BY: HOUSING ROkILONS, LLC, a Texas limited
partnership, its manager
BY:
Name: Leonard J. Anderson
Title; Vice President and Chief Operating Officer
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