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HomeMy WebLinkAbout5.3 Fourth Amendment to the Land Lease with U.S. Bank National Association STAFF REPORT CITY COUNCIL Page 1 of 2 Agenda Item 5.3 DATE: September 16, 2025 TO: Honorable Mayor and City Councilmembers FROM: Colleen Tribby, City Manager SUBJECT: Fourth Amendment to the Land Lease with U.S. Bank National Association Prepared by: Jordan Foss, Senior Management Analyst EXECUTIVE SUMMARY: The City Council will consider a Fourth Amendment to the Land Lease between the City of Dublin and U.S. Bank National Association. STAFF RECOMMENDATION: Adopt the Resolution Approving the Fourth Amendment to the Land Lease Between the City of Dublin and U.S. Bank National Association. FINANCIAL IMPACT: The Lease Amendment will provide the City with rental income for the lease term in the amount of $119,040 for the first year, with subsequent annual adjustments of 1% on November 1 of each year. Staff recommends that all future lease revenue be deposited in a General Fund assigned reserve to fund any future desired building improvements. DESCRIPTION: In May 2007, the City acquired fee title to the real property formerly known as the Dublin Square Shopping Center located at 11759 Dublin Boulevard (APN 941 -1560-007-01) from Berkeley Land Company through a Purchase and Sale Agreement. The City acquired the property for the development of Dublin Heritage Park and Museums. By acquiring the property, the City then became the landlord for U.S. Bank’s Land Lease dated April 14, 1967, and Lease Amendment dated May 9, 1990. Since then, the City has executed two further amendments to extend the term and update the rental rate on December 18, 2007, and July 22, 2019. The current lease amendment is set to expire on October 31, 2027. At this time, the City and U.S. Bank National Association (as tenant) desire to amend th e lease to extend the term by five years and adjust the rent to include an annual escalator. 29 Page 2 of 2 Furthermore, Staff recommends that all lease revenue continue to be deposited in a General Fund assigned reserve to fund building improvements when the City assumes the building. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: The City Council Agenda was posted. ATTACHMENTS: 1) Resolution Approving the Fourth Amendment to the Land Lease Between the City of Dublin and U.S. Bank National Association 2) Exhibit A to the Resolution - Fourth Amendment to the Land Lease Between the City of Dublin and U.S. Bank National Association 30 Attachment 1 Reso. No. XX-25, Item X.X, Adopted 09/16/2025 Page 1 of 1 RESOLUTION NO. XX – 25 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING THE FOURTH AMENDMENT TO THE LAND LEASE BETWEEN THE CITY OF DUBLIN AND U.S. BANK NATIONAL ASSOCIATION WHEREAS, in May 2007 the City acquired the property formerly known as the Dublin Square Shopping Center, located at 11759 Dublin Boulevard (APN 941 -1560-007-01) for the development of Dublin Heritage Park and Museums; and WHEREAS, by acquiring the property, the City became the landlord of U.S. Bank National Association’s Land Lease dated April 14, 1967, which was subsequently amended on May 9, 1990, December 18, 2007, and July 19, 2022; and WHEREAS, the term of the current lease amendment is set to expire on October 31, 2027 and the City and U.S. Bank National Association desire to amend the original Land Lease to extend the lease term by five years and adjust the rent to include an annual 1% escalator ; and WHEREAS, the City and U.S. Bank National Association have negotiated a Fourth Amendment to the Land Lease, attached hereto as Exhibit A. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Fourth Amendment to the Land Lease between the City of Dublin and U.S. Bank National Association. BE IT FURTHER RESOLVED that the City Manager is authorized to execute the Fourth Amendment to the Land Lease , attached hereto as Exhibit A, and make any necessary, non- substantive changes to carry out the intent of this Resolution. PASSED, APPROVED AND ADOPTED this 16th day of September 2025, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: _________________________________ City Clerk 31 Fourth Amendment to Land Lease November 1, 2027 Between the City of Dublin and U.S. National Bank Assoc. Page 1 of 5 FOURTH AMENDMENT TO LAND LEASE THIS FOURTH AMENDMENT TO LAND LEASE (this “Amendment”) is made effective as of _______________________________ (the “Effective Date”), by and between the City of Dublin, a California Municipal Government (“Lessor”), and U.S. Bank National Association, a national banking association (“Lessee”). RECITALS A.Berkeley Land Company (“Original Lessor”) and First National Bank of Pleasanton (“Original Lessee”) entered into that certain Land Lease dated as of April 14, 1967 (the “Original Land Lease”), under which Original Lessor leased to Original Lessee, the real property located at the address commonly known as 11805 Dublin Boulevard, Dublin, California (APN 941-1560-007-01) and legally described in the Original Lease (the “Premises”). The Original Land Lease was subsequently extended by letter dated December 5, 1986. B.Original Lessor and Community First National Bank, as successor-in-interest to Original Lessee, entered into that certain Lease Amendment dated as of May 9, 1990 (the “First Amendment”). C.Lessor succeeded to the interest of Original Lessor pursuant to that certain Assignment and Assumption of Leases dated May 9, 2007, under which Lessor acquired all of Original Lessor’s right, title and interest in, to and under the Original Lease, as amended. D.Lessor and Lessee subsequently entered into that certain Second Amendment to Land Lease dated as of December 18, 2007 (the “Second Amendment”). E.Lessor and Lessee subsequently entered into the Third Amendment to Land Lease dated as of July 19, 2022 (the “Third Amendment”). F.The Original Lease, the First Amendment, Second Amendment, and Third Amendment shall hereinafter be collectively referred to as the “Lease”. G.The term of the Lease is set to expire on October 31, 2027, and Lessor and Lessee desire to amend the Lease to alter certain provisions thereof upon the terms and conditions set forth below. NOW, THEREFORE, for valuable considerations, the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee agree as follows. 1.Term. The term of this Lease shall be extended for an additional period of five (5) years commencing on November 1, 2027 and expiring on October 31, 2032 (the “Extended Term”). Lessee is to provide Lessor with at least twenty-four (24) months written notice inquiring about any future term extension. The Lessor will be required to respond in writing within sixty (60) days of receiving the written notice from the Lessee with either: (i) Lessor’s rejection of any further extension of the Term, or (ii) the terms on which Lessor will agree to extend the Term of the Lease. If Lessee accepts such terms, within 60 days following such written notification of Lessee’s acceptance, the parties shall memorialize such extension of the Lease in a written amendment to the Lease. Attachment 2 Exhibit A to Resolution 32 Fourth Amendment to Land Lease November 1, 2027 Between the City of Dublin and U.S. National Bank Assoc. Page 2 of 5 2. Rent. Commencing on November 1, 2027, Lessee shall pay to Lessor annual rent in the amount of One Hundred Nineteen Thousand Forty and 00/100 Dollars ($119,040.00) in advance in equal monthly installments of Nine Thousand Nine Hundred Twenty and 00/100 Dollars ($9,920.00). Beginning on November 1, 2028, and on each subsequent anniversary of this date, the annual rent shall increase by one percent (1%) of the previous year’s annual rent. 3. Directional Signage. U.S. Bank shall have the right, at its sole cost and expense, to install directional signage on the Premises for purposes of directing the flow of traffic to, from and within the Premises. 4. Surrender. The parties deem Lessee to be the owner of the approximately 3,100 square foot building and improvements located on the Premises (the “Improvements”) so long as the Lease remains in effect. Upon expiration of this Lease, Lessee shall surrender the Premises to Lessor and leave any Improvements in their as-is, where-is condition. Lessee, at its sole cost and expense, shall remove Lessee’s signs, including directional signage, furniture, equipment (other than building service equipment, such as HVAC equipment), appliances, trade fixtures, personal property and inventory at the expiration of the Lease Term. The Improvements and the appurtenances thereto remaining upon the Premises after surrender thereof shall automatically become the property of the Lessor from and after the expiration of the Lease term. Upon the expiration of this Lease, or the sooner termination thereof, upon Lessor’s written request, Lessee agrees to execute, acknowledge, and deliver to Lessor a proper instrument in writing drafted by Lessor, at its sole expense, releasing, and quitclaiming to Lessor all right, title, and interest of Lessee in and to the Premises and all improvements thereon. Notwithstanding anything herein to the contrary, Lessor must provide Lessee with written notice of any claim or demand relating to this Section or the surrender condition of the Premises on or before the thirtieth (30th) day after the earlier of the day on which (i) Lessee surrenders the Premises to Lessor, or (ii) the Lease term expires or the Lease otherwise terminates. If Lessor fails to provide such notice, Lessor shall be deemed to have waived all claims against Lessee for any damages that arise out of or money owed as a result of Lessee’s surrender of the Premises. Nothing by way of this section is intended to relieve Lessee of its obligation to surrender the Premises at the expiration of the Lease Term. This Section 4, is intended to, and expressly does, replace and supersede Section 10, Option to Purchase Building of the Original Land Lease. 5. Operating. Notwithstanding anything to the contrary contained in the Lease, Lessee shall not be required to operate at the Premises and shall not be subject to any operating restrictions within any distance or geographic area surrounding the Premises. 6. Self-Insurance. Notwithstanding anything to the contrary contained in the Lease, Lessee shall have the right to self-insure, in whole or in part, for any insurance requirement contained in the Lease. 7. Confidentiality. Lessor acknowledges that Lessee is a federally regulated financial institution that must comply with the safeguards for customer information contained in the Gramm-Leach-Bliley Act and regulations promulgated pursuant to the Gramm-Leach-Bliley Act. Lessee agrees to take reasonable measures to protect its confidential and proprietary information, including but not limited to Lessee’s customer, commercial or technical information (collectively, “Confidential Information”). 33 Fourth Amendment to Land Lease November 1, 2027 Between the City of Dublin and U.S. National Bank Assoc. Page 3 of 5 In certain situations contemplated under this Lease, Lessor may have access to the Premises and, therefore, to Lessee’s Confidential Information. Lessor hereby agrees that it shall not reproduce or disclose any of Lessee’s Confidential Information to any third party nor may it remove any such Confidential Information from the Premises. Notwithstanding anything to the contrary in this Lease, upon expiration of this Lease, if any Confidential Information remains on the Premises, Lessor shall either return the same to Lessee or destroy it. If Lessor or any of its representatives or agents breaches the covenants set forth in this paragraph, irreparable injury may result to Lessee or such third parties entrusting Confidential Information to Lessee. Therefore, Lessee’s remedies at law may be inadequate and Lessee shall be entitled to seek an injunction to restrain any continuing breach. If Lessor or any of its agents knows or reasonably believes that any Confidential Information in Lessor’s control has been stolen, disclosed, lost, or is unaccounted for (collectively, a “Disclosure”), Lessor must immediately notify Lessee and take commercially reasonable measures to assist Lessee in determining the extent of the Disclosure. 8. Authority. Lessor and Lessee represent and warrant that each has all the necessary approvals and authority to enter into this Lease and shall indemnify and hold each other harmless for any breach of this representation and warranty. 9. No Existing Defaults. Lessor and Lessee represent and warrant that there are currently no defaults by either party under the Lease. 10. Notices. Any notices to Lessor and/or Lessee under this Lease must be in writing and must be hand- delivered, sent by prepaid certified mail or by reputable overnight courier addressed to the following, all other notice requests shall remain as stated herein: Lessee: U.S. Bank National Association Attn: Corporate Real Estate 800 Nicollet Mall, BC-MN-H15F Minneapolis, Minnesota 55402 With a copy to: U.S. Bank National Association 800 Nicollet Mall, BC-MN-H21R Minneapolis, Minnesota 55402 Attn: Corporate Real Estate Counsel Lessor: City of Dublin 100 Civic Plaza Dublin, California 94568 Attn: Colleen Tribby, City Manager With a copy to: Redwood Public Law, LLP 409 13th Street, Suite 600 Oakland, California 94612 Attn: John D. Bakker, City Attorney 11. Counterparts and Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one 34 Fourth Amendment to Land Lease November 1, 2027 Between the City of Dublin and U.S. National Bank Assoc. Page 4 of 5 agreement. Counterparts delivered and/or signatures executed by City-approved electronic or digital means shall have the same force and effect as the use of a manual signature. Either Party may revoke its agreement to use electronic signatures at any time by giving notice to the other Party. 12. Ratification. All of the terms of the Lease, as amended hereby, are hereby ratified and confirmed. 13. Defined Terms. Unless otherwise stated, all capitalized words in this Amendment that are not normally capitalized shall have the meaning ascribed in the Lease. 14. Entire Agreement. This Amendment, together with the Original Land Lease contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior oral or written agreements between the Parties with respect thereto. [Space Intentionally Left Blank; Signature Page Follows] 35 Fourth Amendment to Land Lease November 1, 2027 Between the City of Dublin and U.S. National Bank Assoc. Page 5 of 5 IN WITNESS WHEREOF, LESSOR AND LESSEE have executed this Amendment on the date first above written. LESSOR: LESSEE: CITY OF DUBLIN, U.S. BANK NATIONAL ASSOCIATION, A California Municipal Government a national banking association By: Colleen Tribby By: _______________________________________ Its: City Manager Its: _______________________________________ Attest: Marsha Moore, City Clerk Approved as to Form: City Attorney Digitally signed by Brian Collins Date: 2025.08.19 12:53:49 -04'00' 36