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HomeMy WebLinkAbout6C(1) Bombay Boutique Lease AmendmentTo: Redevelopment Commission From: Staff — Debrah Jennings, Property Manage a Subject: Bombay Boutique Lease Amendment Date: April 26, 2011 Bombay Boutique has been a retailer in the downtown South Bend area since 2006. As with several retailers experiencing a slump in business, Bombay was no exception, and as a result the business fell behind in their monthly rental payments. Bombay has requested a rent concession for one year, which is the duration of their lease term. Bombay acknowledges $4,839.84 delinquent rent owed to date. They would like to make monthly payments of $403.32 for the next twelve (12) months on the delinquency. Bombay has also requested a reduction in their base rent and Common Area Maintenance to a total of $10,000.00 per year ($833.33 per month). Currently their base rent is $1,159.00 per month, and (CAM) is $495.69 per month, for a total monthly rent and CAM of $1,654.69. With the new Lease Amendment Bombay Boutique agrees to pay $1,236.65 per month (833.33 rent and CAM plus $403.32 delinquent rent) commencing on May 1, 2011 and ending on April 30, 2012. Additionally, Bombay agrees to pay 10% in extra rent on gross sales over $100,000.00 annually. Bombay will be required to forward cash sales accounting monthly. As an incentive for Bombay to pay as agreed $1,427.08 in late fees is not be included in the delinquent rent however, if they do not follow the terms of the amended agreement the late fees will be restored to the account and the terms will revert from the amendment to original lease terms. In summary, with our long time relationship with Bombay and in view of their recent financial problems due to the economy we would like to keep Bombay as one of our downtown South Bend businesses. Staff recommends approval of the proposed Lease Amendment. HAWPDATA \correct memo.doc AMENDMENT TO LEASE BETWEEN SOUTH BEND REDEVELOPMENT COMMISSION AND BOMBAY BOUTIQUE, INC. THIS AMENDMENT TO LEASE is made and entered into this 19th day of April, 2011 by and between the South Bend Redevelopment Commission ( "Landlord ") and Bombay Boutique, Inc. ( "Tenant "). WHEREAS, Landlord and Tenant are parties to an agreement entitled "Lease" commencing May 1, 2006 (the "Lease ") and expiring on April 30, 2012 for the premises located at 119 South Michigan Street, South Bend, Indiana; and WHEREAS, over the course of the lease term, the Tenant has fallen behind in lease payments and as of July 1, 2010 had a rental payment deficiency of $4,519.56 (the "Old Deficiency "); and WHEREAS, the Landlord and the Tenant entered into an agreement to reduce the monthly rent and CAM payment and to liquidate the Old Deficiency through additional monthly payments, but the agreement was not reduced to writing (the "Unwritten Agreement "); and WHEREAS, on August 1, 2010, the Tenant began making payments as contemplated by the Unwritten Agreement; and WHEREAS, as a result of such additional payments, the Tenant was able to reduce the Old Deficiency to the sum of $2,636.41 as of December 31, 2010; and WHEREAS, during the first quarter of 2011, the Tenant was able to further reduce the Old Deficiency to the sum of $1,129.89 as of April 30, 2011; and WHEREAS, during the first quarter of 2011, the Tenant again fell behind in payments and had an additional rental payment deficiency of $4,839.84 as of April 30, 2011 (the "New Deficiency "); and WHEREAS, this agreement is entered into as the "Amendment to Lease" to recognize the Unwritten Agreement and to further modify the terms and conditions in the Lease. NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, the parties make this Amendment to Lease as follows: 1. Tenant acknowledges that Tenant currently owes Landlord the sum of $4,839.84 (the "New Deficiency ") for monthly installments of Base Rent and Additional Rent payable by Tenant to Landlord under the Lease during the first quarter of 2011. Tenant acknowledges that Tenant currently owes Landlord the sum of $1,129.89 (the "Old Deficiency ") for monthly installments of Base Rent and Additional Rent payable by Tenant to Landlord under the Lease prior to the first quarter of 2011. The Tenant agrees to pay Landlord the New Deficiency as follows: a. Commencing on May 1 st, 2011 and continuing on the first day of the month, for the following 12 months, the tenant agrees to pay $403.32, in addition to the new rent and common area maintenance charges. The monthly payment for the next twelve (12) months will be $1,236.65, comprised of the following: New Rent & CAM: $833.33 Repayment $403.32 Total Monthly Payment $1,236.65 b. In addition to the foregoing, effective May 1, 2011, the Total Monthly Rent shall further include ten percent (10.00 %) of the Tenant's annual gross revenues that exceed One Hundred Thousand and 00 /100 Dollars ($600,000.00) calculated from May 1, 2011 to April 30, 2011, which portion of the Total Monthly Rent for that month shall be due based upon the prior month's additional increment to gross revenues. In the event that the Lease is terminated prior to April 30, 2012, the foregoing additional Rent due shall be prorated by dividing the annual gross revenue threshold based upon a three hundred sixty (360) day year. C. The tenant shall submit a monthly income statement by the 10th of each month commencing May 10th, 2011 to the property manager. The tenant will also submit additional rent due each month concurrently with the income statement submittal. d. The Old Deficiency will be waived in the event that the Tenant complies with all other terms of the original Lease as amended by this Amendment to Lease. e. The account currently has $1,427.08 in late fees that will be waived and have not been included in the overdue rent. If the tenant violates the amendment terms, late fees will be restored to the account and the terms will revert from this Amendment to Lease to the original Lease terms. f. It is the express intention of the parties hereto that upon the expiration or earlier termination of the Lease Term for any cause whatsoever, that Landlord be reimbursed the total unpaid balance of all Overdue Rent at the Default Rate. g. In the event of Tenant's failure to make the foregoing payments as and when due pursuant to the terms hereof or any other default by Tenant under the Lease, or in the event of an assignment of this Lease or a sublease of all or any part of the Premises, Landlord may, at its option, declare the then unpaid balance of the Overdue Rent, at the Default Rate, to be immediately due and payable in full, in addition to exercising any of the rights or remedies available to Landlord under the Lease, at law, in equity or otherwise in the event of nonpayment of rent. h. Any amounts due Landlord pursuant to the provisions of this Paragraph that are not paid when due shall bear interest thereafter at the Default Rate from the date due until paid. All applicable late fees will be re- added. 2. Tenant will not disclose any part of this Agreement to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of default under the Lease. 3. This Agreement contains the entire understanding of the parties with respect to the subject matter covered hereby and no provision hereof can be waived or modified except by a written instrument duly signed by the parry against whom enforcement of any waiver or modification is sought. The parties expressly intend that such requirements be strictly adhered to and strictly interpreted and enforced by any court which may be asked to consider the matter. Nothing contained herein constitutes a full or partial waiver by Landlord of any defaults by Tenant under the Lease nor (except as specifically contemplated hereby) any rights or remedies exercisable by Landlord under the Lease. Except as expressly provided herein, all of the terms, conditions and provisions of the Lease shall remain in full force and effect and are hereby ratified, confirmed and approved in all respects. Tenant acknowledges that it has no claims, defenses or offsets regarding the performance of any of its obligations under the Lease. 4. Submission of this Agreement to Tenant is not to be construed as an offer, nor will Tenant have any rights with respect hereto unless and until Landlord executes a copy of this Agreement and delivers it to Tenant. 5. Notwithstanding anything contained in the Lease to the contrary, only the authorized signatory of this Agreement, and officers of the trustee of Landlord, are authorized to act on behalf of Landlord to amend, renew or terminate the Lease, as amended herein, or to compromise any of Landlord's claims under the Lease, as amended herein, or to bind Landlord in any manner. Without limiting the effect of the previous sentence, no property manager or broker shall be considered an authorized agent of Landlord to amend, renew or terminate the Lease, as amended herein, to compromise any of Landlord's claims under the Lease, as amended herein, or to bind Landlord in any manner. 6. Except as otherwise defined herein or as capitalized in ordinary usage, all capitalized terms used herein shall have the same meaning as set forth for such terms in the Lease. 7. This Agreement will bind and inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns. IN WITNESS WHEREOF, the parties have caused this Amendment to Lease to be executed for and on their behalf effective May 1, 2011. LANDLORD: SOUTH BEND REDEVELOPMENT COMMISSION Signature Printed Name and Title ATTEST: Signature Printed Name and Title TENANT: BOMBAY BOUTIQUE, INC. Signature Printed Name and Title STATE OF INDIANA ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public, in and for said County and State, personally appeared and , known to me to be the and respectively, of the South Bend Redevelopment Commission and acknowledged the execution of the foregoing Amendment to Lease. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day of , 2011. My Commission Expires: STATE OF INDIANA ) SS: ST. JOSEPH COUNTY ) , Notary Public Residing in St. Joseph County, IN Before me, the undersigned, a Notary Public, in and for said County and State, personally appeared to Lease. of Bombay Boutique, Inc. and acknowledged the execution of the foregoing Amendment IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day of , 2011. Notary Public Residing in , IN My Commission Expires: