DATE: August 8, 2017
SUBJECT:
Title
ORDINANCE GRANTING AMENDMENT NO. 1 TO LEASE WITH SOUTHWESTERN YACHT CLUB, LOCATED AT 2702 QUALTROUGH STREET, IN THE CITY OF SAN DIEGO TO SET FIXED SCHEDULED RENT INCREASES FOR THE REMAINDER OF THE TERM IN PLACE OF FUTURE RENT REVIEWS, AND UPDATE CERTAIN LEASE PROVISIONS
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EXECUTIVE SUMMARY:
Southwestern Yacht Club, a California non-profit mutual benefit corporation (SWYC), leases land and water from the District at 2702 Qualtrough Street in the City of San Diego pursuant to a Lease expiring December 31, 2048. SWYC consists of approximately 384 boat slips used for the promotion of San Diego harbor and navigation, and for State-wide public recreational activities.
Pursuant to the current lease1, a rent adjustment is required for the ten-year period from January 1, 2017 through December 31, 2026 to be mutually agreed upon by Lessor and Lessee. Rather than only agree to a 10-year rent rate, District staff and SWYC have agreed to a proposed Lease Amendment No. 1 (Amendment) which sets the percentage rent rate by which gross income is multiplied for the remaining rental periods of the Lease in place of future rent reviews, states the calculation of Minimum Annual Rent (MAR), clarifies and limits certain deductions from gross income upon which percentage rent is based, and clarifies SWYC's responsibility for maintenance of the premises, including dredging.
RECOMMENDATION:
Recommendation
Adopt an Ordinance Granting Lease Amendment No. 1 to Lease with Southwestern Yacht Club, Located at 2702 Qualtrough Street, in the City of San Diego to Set Fixed Scheduled Rent Increases for the Remainder of the Term in Place of Future Rent Reviews, and Update Certain Lease Provisions
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FISCAL IMPACT:
Under Lease Amendment No. 1, the percentage rent rate increases over the remainder of the Lease term from the current percentage. Certain allowable deductions from gross revenue are restricted, preventing unlimited reductions in...
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