Honorable Members of the City Council of the City of Los Angeles CD No. 15

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1 LA THE PORT OF LOS ANGELES 425 S. Palos Verdes Street PostOftice Box 151 Son Pedro, CA w 0151 razroo 310SEA~PORT Eric GarceHi Mayor; CIty of LosAngeles Board of Harbor Cindy Misclkowski David Arion Douglas P.Krause SungWon Sohn, Ph.D. Commissioners President Vice President Geraldine Knotz, Ph.D. I Executive Dfrector July 16, 2013 Honorable Members of the City Council of the City of Los Angeles CD No. 15 Attention: SUBJECT: Mr. Michael Espinosa, City Clerk's Office ORDER NO THIRD AMENDMENT TO CONCESSION AGREEMENT NO. 521 WITH VIA CABRILLO MARINA 2500, LLC. Pursuant to Section 606 of the City Charter, enclosed for your approval is Concession Agreement No. 521 between the City of Los Angeles Harbor Department and Via Cabrillo Marina 2500, LLC. This Agreement was approved by the Board of Harbor Commissioners at its meeting of June 20,2013. RECOMMENDATION: 1. Pursuant to Section 606 of the City Charter, the City Council approve the proposed Third Amendment to Concession Agreement No. 521 with Via Cabrillo Marina 2500, LLC; 2. Adopt the determination by the Los Angeles Harbor Department that the proposed action is exempt from the requirements of the Environmental Quality Act (CEQA) in accordance with Article III Class 1(14) of the Los Angeles City CEQA Guidelines; and 3. Return to the Board of Harbor Commissioners for further processing. Respectfully submitted, ~Ww~ ULiE WICHMANN HUERTA cting Commission Secretary cc: Trade. Commerce & Tourism Committee Councilman Rosendahl, encs. Councilman LaBonge, encs. Councilman Buscaino, encs. Christine Yee Hollis, CLA, encs. Alvin Newman. CAO. encs. Lisa Schechter. CD4. encs. Aaron Gross Government Affairs, encs. RobertHenry, encs. Mandy Mo~aJes, Mayor's office, encs. JUL , AN EQUAL EMPLOYMENT OPPORTUNITY-AFFIRMATIVE ACTION EMPLOYER Prinled on recycled

2 JUNE 5, 2013 RECOMMENDATION APPROVED AND ORDER NO ADOPTED BY THE BOARD OF HARBOR COMMISSIONERS June 20, 2013 IAI liil THE PORT OF LOS ANGELES Executive Director's Report to the Board of Harbor Commissioners FROM: REAL ESTATE SUBJECT: ORDER NO. I ~ - 1-1:78" - THIRD AMENDMENT TO CONCESSION AGREEMENT NO. 521 WITH VIA CABRILLO MARINA 2500, LLC. SUMMARY: Concession Agreement No. 521 (CA 521) is a 50-year agreement which grants Via Cabrillo Marina 2500, LLC, a California Limited Liability Company (Via Cabrillo), use of approximately 39,531 square feet (s.f.) of City of Los Angeles Harbor Department (Harbor Department) land at 2500 Via Cabrillo Marina, San Pedro, for constructing, operating, and maintaining facilities for a convenience restaurant charter vessel facility; vessel brokerage and insurance; sale of marine hardware and sundry items; rental of marine-related office space; marina-related retail sales; and incidental purposes. The proposed Third Amendment to CA 521 will eliminate the percentage rent requirement, while retaining the annual fixed rental compensation tied to the Consumer Price Index, and amend the use requirements to reflect the current marine-related office space use of the improvement. RECOMMENDATION: It is recommended that the Board of Harbor Commissioners (Board): 1. Approve the proposed Third Amendment to Concession Agreement No. 521 with Via Cabrillo Marina 2500, LLC; 2. Direct the Board Secretary to transmit the Third Amendment to Concession Agreement No. 521 to the City Council for approval pursuant to Section 606 of the City Charter; 3. Authorize the Executive Director to execute and the Board Secretary to attest to the Third Amendment to Concession Agreement No. 521 upon approval by City Council; and 4. Adopt Order No. \:)- -=r\0b DISCUSSION: Background and Context - The premises under CA 521, as identified on Harbor Engineering Drawing No (Transmittal 1), is inclusive of a 39,531 s.f. site, 5,000 s.f. of which is at no charge. The no-charge parcel is accessible to the public and is

3 DATE: ( JUNE 5, 2013 ( PAGE 20F 3 SUBJECT: PROPOSED THIRD AMENDMENT FOR VIA CABRILLO MARINA also utilized by the adjacent Doubletree by Hilton Hotel. Tenant-owned improvements include a three-story office building (25,115 s.f.). See Transmittal 2 for site map. Since the compensation reset, approved in 2010, provided for a zero payment of percentage rent, it is requested that the Section 4 Rent clause of CA 521, as amended by the Second Amendment, be revised to eliminate all percentage rental payments and establish annual compensation adjustments every July 1, based on the Consumer Price Index for All Items, All Urban Consumers for the Los Angeles - Riverside and Orange Counties, as published by the U.S. Department of Labor, Bureau of Labor Statistics, as Series CUURA421 SAO for March of each year (CPI-U). Approval of the proposed Third Amendment to CA 521 will eliminate the percentage rent language which in part requires the tenant to submit reports which now show a zero percentage rent calculation. The premises under CA 521 were originally part of a larger development, Permit No. 520 (P-520), which was entered into September 1982 with California Coast Development Group, Inc. As a result of bankruptcy and previous amendments, the original P-520 premises is now divided among three separate tenants, LA Sky Harbor, LLC., Los Angeles Yacht Club, and Via Cabrillo. Approval of the proposed Third Amendment (Transmittal 3) will modify the Section 5 Uses clause of CA 521 and remove the unrelated uses of constructing, operating, and maintaining facilities for a convenience restaurant; charter vessel facility; vessel brokerage and insurance; sale of marine hardware, sundry items; and marina-related retail sales. The proposed Third Amendment will revise the Uses clause to indicate that the premises shall be used for the operation and maintenance of structures and facilities for rental of marine-related office space and incidental purposes, and no other purpose without prior written approval of the Board. A proposed Order to reset compensation is being presented to the Board concurrently with this proposed Third Amendment to CA 521. The proposed Order to reset compensation,subject to Board approval, will establish compensation for the five-year period effective September 1,2012 through August 31,2017, beginning at $66, annually and adjusting each year by the CPI-U. All remaining terms and conditions of CA 521 shall remain the same. ENVIRONMENTAL ASSESSMENT: The proposed action is approval of a Third Amendment to CA 521 with Via Cabrillo to eliminate the percentage rent requirement and amend the use requirements. As an activity involving an amendment to an agreement to use an existing facility involving negligible or no expansion of use, the Director of Environmental Management has determined that the proposed action is exempt from the requirements of the California Environmental Quality Act in accordance with Article III Class 1 (14) of the Los Angeles City CEQA Guidelines.

4 DATE: JUNE 5, 2013 PAGE 3 OF 3 SUBJECT: PROPOSED THIRD AMENDMENT FOR VIA CABRILLO MARINA ECONOMIC BENEFITS: This Board action will have no direct, employment impact. FINANCIAL IMPACT: Approval of the proposed Third Amendment to CA 521 will eliminate the percentage rent requirements from the tenant's permit, since percentage rent would be inappropriate for the revised marine-related office space. use of the property. The tenant will continue to pay fixed minimum rent with the addition of a CPI index tied to compensation. CITY ATTORNEY: The proposed Third Amendment and Order (Transmittal 4) have been approved as to form and legality by the Office of the City Attorney. TRANSMITTALS: 1. Engineering Drawing 2. Site Map 3. Third Amendment 4. Order FIS Approval: ~ (Initials) CA Approval:~(lnitials) APPROVED: /.~ fe. KA RYN McDERMOTT Deputy Executive Director GK:KM:JCH:CCW:EAB:KLS:raw Author: Kenneth Stanberry BL447raw Via Cabrillo 3rdAmendment

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7 THIRD AMENDMENT TO CONCESSION AGREEMENT NO. 521 BETWEEN THE CITY OF LOS ANGELES AND VIA CABRILLO MARINA 2500, LLC. Concession Agreement No. 521 granted to VIA CABRILLO MARINA 2500, LLC. is hereby amended a Third time as follows: 1. Section 4. Rent, of CONCESSION AGREEMENT No. 521 is amended by deleting the original subs~ction (a) and inserting in its place: (a) During the five year period beginning September 1, 2012 and ending August 31, 2017, Concessioner shall pay in advance to City each and every month a fixed minimum monthly rental of Five Thousand Five Hundred Forty-Three Dollars and Eighty-Four cents ($5,543.84). Said rental shall be due and payable on or before the first day of each month during the term and shall be made' payable to Board of Harbor Commissioners and mailed to the following address: 425 S. Palos Verdes Street, P.O. Box 151, San Pedro, CA or to such other address as the Executive Director may designate in writing. Adjustments. Following the. first (1 SI ) anniversary of the Effective Date of the Amendment and through the remainder of the Term, the Annual Rent shall be adjusted annually and automatically on July 1 by application of the Consumer Price Index for All Items, All Urban Consumers for the Los Angeles - Riverside and Orange Counties, as published by the U.S. Department of Labor, Bureau of Labor Statistics, as Series CUURA421 SAO for March of each year ("CPI-U"). The Annual Rent shall equal the prior year's Annual Rent adjusted for inflation by multiplying the prior year's Annual Rent by the CPI-U of the current year and then dividing it by the CPI-U of the prior year (Adjusted Annual Rent = prior year's Annual Rent x (CPI-U July 20CY(CY=Currenl Year).,. CPI-U July 20PY(PY=Prior Year». If the publication of the CPI-U is discontinued, then a successor index selected by the Executive Director in his/her sole but reasonable discretion shall be substituted. 2. Section 4. Rent of AGREEMENT NO. 521 is further amended by deleting entirely the words and figures previously added by the first Amendment Section 1.(2) - (10) and which read: (2) Concessioner shall pay to City for each and every month of the first five (5) years of the Agreement, the following percentage rents equivalent to the amount, if any, by which the cumulative total of percentages of the gross receipts exceeds the fixed minimum monthly rent payable: (i) (ii) 5% of gross receipts from office rental. 1 Y, % of gross retail sales from retail store operations. 1

8 ( ( (iii) 55 of the gross income from any coin-operated machines or devices owned or rented by Tenant or sublessee. (3) During the second five (5) years of this Agreement Concession shall pay in advance to City each and every month, a fixed minimum monthly rental of Two Thousand Dollars ($2,000) as rental for use of the premises in lawful money of the United States. Said rental shall be due and payable on or before the first day of each month during the second five (5) years period and shall be made payable to the Board of Harbor Commissioners at the address set forth above. (4) Concessioner shall pay to City for each and every month of the second five (5) years of the Agreement, the following percentage rents equivalent to the amount, in any, by which the cumulating total of percentages of the gross receipts exceeds the fixed minimum monthly rent payable: (i) (ii) (iii) 10% of gross receipts from office rental. 3% of gross retail sales from retail store operations. 55 of the gross income from any coin-operated machines or devices owned, leased or rented by Tenant or sublessee. (5) Concessioner shall have prepared and delivered to City within thirty (30) days after the end of each month, on a form prepared by the Los Angeles Harbor Department or in a format approved by the Los Angeles Harbor Department, 'a written statement signed by Concessioner's duly authorized officer or a representative showing in reasonable detail the elements and amount of gross receipts during the preceding month. Payment of the percentage rent shall accompany the writer statement. Concessioner shall further have prepared and delivered to City on or before the sixtieth (60 th ) day after the end of the term of this Agreement, a complete, certified, audited annual statement, prepared by a Certified Public Accountant and signed by Concessioner's duly authorized officer or representative, showing in reasonable detail the elements and amounts of gross receipts during the preceding year or fraction thereof. At the time the annual statement is submitted by Concessioner to City, Concessioner shall pay to City the amount of percentage rent, if any due, and still unpaid, for the preceding Agreement year. (6) The percentage rent is due and payable within thirty (30) day following the end if the preceding month, Should the term of this agreement commence on a day other than the first day of a calendar month, the percentage rent for the first fractional month and the month beginning immediately thereafter shall be due within fifteen (15) days following the end of the month beginning immediately after the first 2

9 fractional month. The payment for the last fractional month shall be made within thirty (30) days following the end of the term of this Agreement. (7) Percentage rent for any month-to-month tenancy beyond the term of this Agreement shall be paid in the same manner as if the term of this Agreement had commenced with the first day of such holdover. (8) In the event seasonal business causes the amount of percentage rent for a permit year to fluctuate, Concessioner may be eligible for a refund. The amount of the refund is the difference between (1) the amount of rent actually paid during the year (assuming Concessioner has paid all rent as it becomes due during the year), and (2) the total of Concessioner's annual gross receipts for each category set forth above multiplied by the applicable percentage for each category. In no event shall Concessioner's total rental compensation be less than the fixed minimum. Concessioner shall be entitled to the credit only if the rental payments due during the year are current. (9) The term "gross receipts," as used herein, shall include all charges, sales, fees and commissions from retail sales made or earned by Concessioner, its assignees, subconcessionees, licensees and permittees, whether collected or accrued, from any retail, use or operation, or any combination thereof, originating, transacted or performed or emanating from the premises pursuant to this Agreement. "Gross receipts" applies to retail sales, exclusive of retail sales taxes, excise taxes, other direct taxes and consumer rebates and refunds emanating from the premises and not office use. No set off or deduction against gross receipts is permitted unless provided for herein. Upon Board Approval of any subconcession, Board shall determine in writing whether such subconcession is subject to percentage rent. (10) For any period during which Concessioner has ceased or substantially curtailed the operation and conduct of its business under this Agreement for reasons other than partial or total destruction of. the demised premises. Concessioner shall pay percentage rent for that period at the rate at which percentage rent was paid during the three (3) immediately prior years of the term of this Agreement has been in effect, which is the shorter period of time. 3. Section 5. Uses, of CONCESSION AGREEMENT No. 521 is amended by deleting the original subsection (a) and inserting in its place: The premises hereby granted shall be used for the following purposes: the operation and maintenance of structure and facilities for rental of marinerelated office space and purposes incidental thereto and for no other purpose without prior written approval of the board, and subject to such restrictions, limitations and conditions as may be imposed by the Board. 3

10 ( ( 4. The Effective Date of this Third Amendment shall be the date it is executed by the Executive Director of the Harbor Department following approval by the City Council. Except as amended herein, as previously amended, all remaining terms and conditions of Concession Agreement No. 521 shall remain the same. IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to Agreement No. 521 on the date to the left of their signatures. Dated: JUL _ THE CITY OF LOS ANGELES, by its Board of Harbor Commissioners A~,~c-re~ta-~ VIA CABRILLO MARINA 2500, LLC. Dated: ~ ~I I ".Ust'3 Attest (Type/Print Name and Ti e) APPROVED AS TO FORM AND LEGALITY G 4

11 IT IS HEREBY ORDERED by the Board of Harbor Commissioners that the THIRD AMENDMENT TO CONCESSION AGREEMENT NO. 521 granted by the City of Los Angeles,acting by and through its Board of Harbor Commissioners, to VIA CABRILLO MARINA 2500, LLC, is hereby approved and the Executive Director and the Secretary of the Board are hereby authorized and directed to execute and attest to the same on behalf of the City of Los Angeles upon this Order being approved by the City Council as described below. The Secretary shall certify to the adoption of this Order by the Board of Harbor Commissioners of the City of Los Angeles and shall cause a copy of the same to be presented to the City Council as provided in Section 606 of the Charter of the City of Los Angeles. If the Council shall approve this Order within 30 days after such Order shall have been presented to it, or if the Council shall fail to disapprove this Order within said 30 days, the Order shall be deemed approved and shall become effective upon such approval without publication. The Amendment approved by this Order shall become effective immediately upon execution by the City Executive Director and Board Secretary after such Council approval of the Order. I HEREBY CERTIFY that the foregoing Order was adopted by the Board of Harbor commissioness of the City of Los Angeles at its meeting of _~\.vv'\o~2,c) (2 \)\~. d ~JULIE W. HUERTA Commissioner Secretary APPROVED AS TO FORM ~ 2-3,2013 CARMEN. RUTANICH City Attorney BL447raw Order 606