HomeMy WebLinkAboutHeritage Agreement A-24-575 Amendment III.pdf Agreem Ent No. 24-575
1 AM ENDM ENT NO .3 TO LEASE AG REEM ENT
2 This Am endm ent No. 3 to Lease Agreem ent ("Am endm ent No. 3") is dated
3 November 5, 2024 and is between Heritage Centre, LLC, a California lim ted liability
4 com pany ("Lessor"), and the County of Fresno, a political subdivision of the State of California
5 ("Lessee").
6 Recitals
7 A. On February 22, 2022, Lessor and Lessee entered into Lease Agreement, which is
8 County Agreement Num ber 22-059 ("Lease"), for a lease with a purchase option for the
9 Heritage Centre, as set forth in the Lease.
10 B. On August 8, 2023, Lessor and Lessee signed Amendment No. 1 to the Lease
11 Agreement ("Am endm ent No. 1") to add and otherwise m odify the scope of the Tenant
12 Im provem ents and increase the TI budget to accom m date the m we of several 24-hour m ental
13 health facilities onto the site for the Department of Behavioral Health.
14 C. On Septem ber 24, 2024, Lessor and Lessee signed Am endm ent No. 2 to the Lease
15 Agreement ("Amendment No. 2") The original Lease (County Agreement Num ber 22-059), as
16 amended by Amendment No. 1, is referred to herein as the "Lease"), to add and otherwise
17 m odify the scope of Tennant Im provem ents and increase the TI budget to accom m mute
18 additional large-scale com ponents of Tenant Im provem ents that will be required for these
19 facilities to operate, including new HVAC equipment, the modification of the required kitchen,
20 and several other m hor cam pus im provem ents. In addition to the additions and changes to the
21 Tenant Im provem ents from the Departm ent of Behavioral Health, the Departm Ent of Social
22 Services intends to m odify a portion of the Prem ses to rehouse the Transitional Shelter Care
23 Facility operations that are currently located at M odular Building C on the University M edical
24 Center Cam pas, and in connection therewith requires additions and changes to the Tenant
25 Im prove ents.
26 D. Lessee now desires to execute the negotiated Purchase and Sale Agreem Ent in order to
27 better qualify for com petitive grant funding to m eke additional upgrades to the site to add
28 additional 24/7 treatment facilities beyond those that have previously been under construction.
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1 Capitalized term s used but not defined in this Am endm ent No 3 shall have the m eanings
2 ascribed to such terms in the Lease.
3 E. Lessee and Lessor now desire to am end the Lease to allow for the im m(Bate execution
4 of the Purchase and Sale Agreement.
5 The parties therefore agree as follows:
6 1. -Subsection 38.a of the Lease located at page 38, line 5 through page 39, line 2 of
7 the O nginal Lease is deleted in its entirety and replaced with the following:
8 "a) Exercise of Purchase O Oion
9 i. LESSO Rhereby grants to LESSEE the one-time right and option to purchase
10 the Prem ses (including the Real Property and the Building and all facilities, whether
11 above or below ground, located on the Real Property) on the term sset forth herein, such
12 purchase to close on, and be effective as of, the day im m diately following the
13 Expiration Date (the "Purchase Date"), by executing the Purchase and Sale Agreement
14 in the form of Exhibit G ,which is attached and incorporated by this reference. The
15 purchase price for the Prem ses (including the Real Property and the Building, and all
16 such facilities) under the Purchase O ption shall be one m Ilion dollars ($1,000,000.00)
17 ("Purchase Price").
18 ii. Notwithstanding anything to the contrary contained in this Section 38,
19 LESSEE's exercise of the Purchase O Oion shall be effective only if all of the conditions
20 precedent set forth hereinbelow are true and correct during the period com m 69cing upon
21 the date LESSEE delivers the Purchase O Oion Notice, and continuing until the Closing
22 Date (as that term is defined below), unless LESSO R in LESSO Rs sole discretion,
23 elects to waive any such condition precedent in writing:
24 2. LESSEE shall not then be in default (after expiration of any
25 applicable notice and cure period) under this LEASE; and
26 3. LESSEE shall not have assigned its interest in the LEASE or in
27 the Purchase O Oion."
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1 2. Exhibit G of the Lease located at page 58 through 111 is deleted in its entirety and
2 replaced with Exhibit G attached to this Amendment No. 3.
3 3. The portion of Subsection 10.k of the Lease located at page 15, lines 20-28 and
4 page 16, lines 1-2 of the O nginal Lease (as am ended by Section 3 of Am Endment
5 No. 1 and as further am Ended by Section 3 of Am Endm Ent No. 2) is deleted and
6 replaced with the following:
7 (k) "TI CO SF REIM BURSEM ENT. In consideration of the TI Costs incurred by
8 Lessor in connection with this Section 10, Lessee shall pay Additional Rent to
9 Lessor, which shall be calculated by Lessor and paid by Lessee in accordance with
10 the following provisions ("TI Rent"):
11 "a. (i) The am cunt of the cost for each com pleted separate Tenant Im provem Ent
12 "Task" up to a m axim urn of$6,525,578 (the "TI Rent Threshold"), as listed on the
13 schedule in Exhibit C (whether a Tenant Im provem Ent has been com pleted shall
14 be determ ned in accordance with Section 10.j above) shall be increased at the
15 rate of 8% per annum from the date expended through the first day of the
16 calendar m cnth following Task com pletion (as so increased, collectively, the
17 "Task TI Cost").
18 (ii) Lessor will, by the 20t" of each m cnth, invoice Lessee for actual expenses
19 incurred in the previous m cnth for TI Costs as listed on Exhibit C (whether a TI
20 has been com pleted shall be determ ned in accordance with Section 10.j above)
21 for TI Costs incurred over and above the initial TI Rent Threshold. These
22 separately invoiced costs shall not exceed the difference between $16,200,000
23 and the TI Rent Threshold. Invoices shall be accompanied by documentation in
24 support of the expense. Lessee agrees to reim burse Lessor within 45 days of
25 receipt and approval of the invoice. Lessor shall subm il: invoices referencing the
26 provided agreem Ent num ber to Departm Ent of Behavioral Health — Invoices,
27 3151 N. M ilbrook Ave, Fresno, CA 93703 ( tbh-invoices(a�fresnocountyca.gov).
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1 (iii) Lessor will, by the 2011 of each m anth, invoice Lessee separately for actual
2 expenses incurred in the previous m cnth for TI Costs as listed in Exhibit K,
3 attached and incorporated by this reference. These separately invoiced costs
4 shall not exceed $1,500,000. Invoices shall be accom panied by docum antation
5 in support of the expense. Lessee agrees to reim burse lessor within 45 days of
6 receipt and approval of the invoice. Lessor shall subm I invoices referencing the
7 provided agreement num ber to Department of Social Services - Invoices, 205 W.
8 Pontiac Way, Clovis, CA 93612 (dsscontractpaym efts@fresnocountyca.gov)."
9 4. The last sentence of subparagraph (c) of Subsection 10.k of the Lease (located at
10 page 16, lines 14-15) and Exhibit C to the Lease are am Ended as follows: (i) all
11 references therein to the am cunt of 110,000,000" are hereby am ended to read
12 instead as "$6,525,578" and the exam pies of estim eted M cnthly Tenant
13 Im p-ovem ant Paym ents set forth therein are hereby changed from "$141,366.79" to
14 "$114,414.53" but will be finally determ ined upon com Oetion of the Tenant
15 1 m p-ovem ants.
16 5. Lessee shall also have the right to elect, at its sole option, to further reduce the TI
17 Rent Threshold set forth in Subsection 10.k.a(i) of the Lease, as am ended hereby,
18 by any am cunt it chooses, in which case an am cunt of Lessor's TI Costs equal to the
19 am cunt of such reduction in the TI Rent Threshold shall instead be reim bursed by
20 Lessee in cash in accordance with the term sof Subsection 10.k.a(ii) of the Lease,
21 and such am cunt shall be disregarded in the calculation of TI Rent. Any such
22 election by Lessee shall be m Em crialized in an am endm ant to the Lease executed
23 by the parties.
24 6. Section 45 ENTIRE LEASE of the Lease located on page 45 lines 1-7 \ (as amended
25 by Section 6 of Amendment No. 1) is deleted and replaced with the following:
26 "This Lease Agreem Ent constitutes the entire Lease Agreem Ent between the
27 Lessor and the Lessee with respect to the subject m atter hereof and supersedes
28 all previous Lease Agreem Ent negotiations, proposals, com mtim Ents, writings,
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1 advertisements, publications, and understandings of any nature whatsoever
2 unless expressly included in this Lease Agreem Ent. In the event of any
3 inconsistency in interpreting the documents which constitute this Lease
4 Agreem Ent, the inconsistency shall be resolved by giving precedence in the
5 following order of priority: (1) the text of this Am endm ent No. 3 including all
6 exhibits, (2) the text of Amendment No. 2 including all exhibits, (3) the text of
7 Amendment No. 1 including all exhibits, and (4) the Lease including all exhibits.
8 7. Wien both parties have signed this Amendment No. 3, the Lease, Amendment No.
9 1, Amendment No. 2 and this Amendment No. 3 together constitute the Lease.
10 8. Lessor represents and warrants to Lessee that:
11 a. Lessor is duly authorized and em powered to sign and perform its obligations
12 under this Am endm Ent No. 3.
13 b. The individual signing this Amendment No. 3 on behalf of Lessor is duly
14 authorized to do so and his or her signature on this Am endm ant No. 3 legally
15 binds Lessor to the term sof this Am endm ent No. 3.
16 9. The parties agree that this Am endm ent No. 3 m air be executed by electronic
17 signature as provided in this section.
18 a. Pn "electronic signature" m eans any sym bol or process intended by an
19 individual signing this Am endm Ent No. 3 to represent their signature, including
20 but not lim ted to (1) a digital signature; (2) a faxed version of an original
21 handwritten signature; or (3) an electronically scanned and transm tted (for
22 exam ple by PDF docum Ent) version of an original handwritten signature.
23 b. Each electronic signature affixed or attached to this Amendment No. 3 is
24 deem ed equivalent to a valid original handwritten signature of the person
25 signing this Amendment No. 3 for all purposes, including but not lim ted to
26 evidentiary proof in any adm histrative or judicial proceeding, and (2) has the
27 sam eforce and effect as the valid original handwritten signature of that person.
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1 c. The provisions of this section satisfy the requirem Ents of Civil Code section
2 1633.5, subdivision (b), in the Uniform Electronic Transaction Act (Civil Code,
3 Division 3, Part 2, Title 2.5, beginning with section 1633.1).
4 d. Each party using a digital signature represents that it has undertaken and
5 satisfied the requirem ents of G o✓ernm Ent Code section 16.5, subdivision (a),
6 paragraphs (1) through (5), and agrees that each other party m ay rely upon that
7 representation.
8 e. phis Am endm Ent No. 3 is not conditioned upon the parties conducting the
9 transactions under it by electronic m eans and either party m ay sign this
10 Am endm ent No. 3 with an original handwritten signature.
11 10. This Am endm Ent No. 3 m ay be signed in counterparts, each of which is an original,
12 and all of which together constitute this Am endm Ent No. 3.
13 11. The Lease as amended by this Amendment No. 3 is ratified and continued. All
14 provisions of the Lease and not am ended by this Am endm ent No. 3 rem an in full
15 force and effect.
16 [SIG NATURE PAG EFO LLO W,$
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1 The parties are signing this Amendment No. 2 on the date stated in the introductory
2 clause.
3
HERITAJC 14T I RE LLC COUNTY OF FRESNO
4
5 IM
6 J.R. ort6n, III, Manager Nathan Magsig, Chairman of the Board of
7 Supervisors of the County of Fresno
Attest:
8 Bernice E. Seidel
Clerk of the Board of Supervisors
9 County of Fresno, State of California
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By: 1� � l.�-�---
11 Deputy
12 For accounting use only:
13 Department of Behavioral Health
Org No.: 5630
14 Account No.: 7340
Fund No.: 0001
15 Subclass No.: 10000
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18 Department of Social Services
Org No.: 56107001
19 Account No.: 7385
Fund No.: 0001
20 Subclass No.: 10000
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