Meeting Date: November 6, 2018 Item Number: To: From: Subject: F lu AGENDA REPORT Honorable Mayor & City Council Chad Lynn, Assistant Director of Public Works Logan Phillippo, Policy & Management Analyst CONSENT TO ASSIGNMENT AND SECOND AMENDMENT TO WIRELESS TELECOMMUNICATIONS LEASE WITH T-MOBILE WEST LLC AT 1100 COLDWATER CANYON DRIVE Attachment: 1. Consent to Assignment and Second Amendment to Lease Agreement RECOMMENDATION Staff recommends City Council approve a Consent to Assignment and Second Amendment to Lease Agreement with T-Mobile West LLC ( T-Mobile ). INTRODUCTION T-Mobile currently leases approximately 300 square feet of outdoor ground space located at Fire Station 2 at 1100 Coldwater Canyon Drive. This Second Amendment consents to the assignment of the Lease to T-Mobile West, LLC, extends the termination date to October 1, 2023, modifies monthly rent to $5,100, and includes a $37,500 onetime extension fee paid to the City. DISCUSSION In 2001 the City entered into the Lease with Pacific Bell Wireless, LLC to lease approximately 300 square feet of ground space for an outdoor equipment shelter along with license to attach antennas and related equipment on the existing hose tower at Fire Station 2 located at 1100 Coldwater Canyon Drive. Pacific Bell Wireless, LLC change its name to TMO LA/NV, LLC and assigned the original Lease to (by merger/operation of law) to T-Mobile West Corporation, which then changed its name to T-Mobile West, LLC. Page 1 of 2 10/31/2018
Meeting Date: November 6, 2018 The original Lease included an initial term of 10 years with two five-year Tenant options to extend, The Tenant exercised its first option in 2011, extending the term through August 2016. However, the Tenant did not exercise its second option to extend by the required deadline as stipulated in the Lease. As such, the original Lease expired in August 2016 and T-Mobile has since occupied the premises, paying a holdover rate of 150% of the rental rate in effect immediately prior to expiration of the lease. This holdover rate is $5,778.69 per month. Most City leases contain a holdover provision whereby, with City s consent, the tenant may remain in possession of the premises after expiration or termination of the lease. In these circumstances, the tenant is deemed to be on a month-to-month tenancy. Both parties have since negotiated a renewal under the following terms: 1. The City, as landlord, consents to the assignment to T-Mobile West Corporation, which has since changed its name to T-Mobile West, LLC; 2. The City will receive $5,100 per month in rent, subject to annual escalations indexed to a consumer price index; 3. The City will receive a one-time $37,500 extension/renewal fee; 4. The agreement will expire on October 1, 2023; and 5. The Tenant will have one option to extend the term for five years, with a requirement to provide notice of the extension to the City on or before April 1, 2023. FISCAL IMPACT Prior to the lease s expiration on August 1, 2016, the City collected $3,422.86 per month in rent. Under this renewed lease, the City will collect $5,100 per month, subject to annual escalations, While T-Mobile had been paying $5,788.69 per month as a holdover rate, this rate did not necessarily reflect market conditions. The negotiated $5,100 tate will continue for the next five yeats. In addition to the increased monthly rental tate, the City has negotiated a one-time extension/renewal fee of $37,500, which will be paid concurrently with the execution of this amendment. Over the five-year initial term of the amendment (which will be 59 months in total if approved on November 6, 2018), the approximate value of the lease is $338,400. This total includes the extension/renewal fee, but does not include annual base rent escalations. No commission fees apply to this transaction. Mahdi Aluzri Approved By Page 2 of 2 10/31/2018
Attachment 1
CONSENT TO ASSIGNMENT SECOND AMENDMENT TO LEASE AGREEMENT This CONSENT TO ASSIGNMENT; SECOND AMENDMENT TO LEASE AGREEMENT (this Second Amendment ) is dated as of 201$, and is entered into by and between the CITY Of BEVERLY HILLS, a municipal corporation ( City ), and T-MOBILE WEST LLC, a Delaware limited liability company (formerly known as T-Mobile West Corporation, as successor in interest to TMO LAINV LLC, formerly known as Pacific Bell Wireless, LLC) ( Tenant ). RECITALS A. City and Tenant are parties to that certain Lease Agreement dated August 14, 2001, which was amended by a first Amendment Lease Agreement dated March 5, 2002 (the Original Lease ), whereby the City leased to Tenant that certain space (the Leased Premises ) containing approximately three hundred (300) square feet of ground space outside the fire station (the Building ) located in the City of Beverly Hills, County of Los Angeles, State of California, commonly known as 1100 Coldwater Canyon Drive, Beverly Hills, California, for a term of approximately ten (10) years in order to allow Tenant to operate its wireless communications facilities thereon, upon the terms and conditions set forth therein. The location and dimensions of the Leased Premises are delineated on Exhibit A attached to the Original Lease. B. Pacific Bell Wireless, LLC changed its name to TMO LA/NV, LLC and assigned the Original Lease (by merger/operation of law) to T-Mobile West Corporation (the Assignment ), which then changed its name to T-Mobile West, LLC. C. The Original Lease expired on September 1, 2016. Tenant has been occupying the Leased Premises and paying rent under the terms of Section 29 (HOLDING OVER) of the Lease. Such holdover rent is currently $5,778.69 ( Holdover Rent ), and Tenant shall continue to pay such rent through the end of the calendar month of the date of this Second Amendment. D. City and Tenant desire to document City s consent to the Assignment, end Tenant s month-to-month tenancy at the Holdover Rate, and convert such tenancy to a fixed term ending on September 1, 2023 with an option in favor of Tenant to extend for five (5) years (to September 1, 2028). NOW, THEREFORE, the parties hereby agree as follows: 1. Capitalized Terms. Except as otherwise defined herein, all capitalized terms used herein shall have the meanings assigned in the Original Lease. The Lease shall mean the Original Lease as amended hereby. 2. Consent to Assignment. City hereby consents to the Assignment. 3. Conversion to Term Lease; Extension Option. As of the date hereof, the existing month-to-month tenancy shall end, and the Lease shall be extended to October 1, 2023, subject to further extension by Tenant to October 1, 2028 by written notice to Landlord given on or before April 1, 2023. B07$5-0001 \2206370v4.doc 1
4. Rent. Holdover Rent shall be payable through the end of the calendar month of the date of this Second Amendment. As of the first day of the following month, the Monthly Rent shall become Five Thousand One Hundred and No/l00 ($5,100.00) per month payable in accordance with the terms of Section 4A of the Lease, subject to annual adjustment on each anniversary of October 1, 2018 (including during the five year extension term, if any) (each, an Adjustment Date ) in accordance with the terms of the second and third paragraphs of Section 4B of the Lease, but using the Consumer Price Index for All Urban Consumers for the Los Angeles-Long Beach-Anaheim Metropolitan Area. 5. ExtensionlConversion Fee. Concurrently with its execution and delivery of this Second Amendment, and as a condition to the effectiveness of this Second Amendment, Tenant shall pay to Landlord as a one-time extension/conversion fee, without offset or deduction, the sum of Thirty Seven Thousand five Hundred and No/100 Dollars ($37,500.00). 6. Time of the Essence. Time is of the essence in the performance of this Second Amendment and every portion thereof. 7. Attorneys Fees. In the event any dispute betveen the parties hereto should result in litigation or arbitration, the prevailing party shall be reimbursed for all reasonable costs in connection therewith, including, but not limited to, reasonable attorneys fees and defense costs. 8. Continuation of the Lease. Except as expressly amended hereby, the terms and conditions of the Original Lease shall remain unmodified and in full force and effect. In the event any provision of this Second Amendment conflicts with the Original Lease, this Second Amendment shall control. 9. Integration. The Original Lease and this Second Amendment constitute the entire understanding between the parties with respect to the Leased Premises. No subsequent amendment will be effective unless it is in writing and executed by the parties hereto. 10. Counterparts. This First Amendment may be executed in counterparts, each of which when executed and delivered shall be an original. IN WITNESS WHEREOF, City and Tenant have duly executed this Second Amendment as of the day and year set forth above. TENANT : T-MOBILE WEST LLC, a Delaware limited liability company CITY CITY Of BEVERLY HilLS, a municipal corporation By: enwra PrtiiiName: -%?i Fnnørng By. Title: zz Julian A. Gold, M.D., Mayor J Oikifl J Velasquez Digitally signed by John J. Velasquez B07$5-0001\2206370v4 doc 2
ATTEST: Lourdes Sy-Rodriguez, Assistant City Clerk APPROVED AS TO FORM:..... Laurence S. Wiener, City Attorney APPROVED AS TO CONTENT: Mahdi Aluzri, City Manager -/