THE BOARD OF SUPERVISORS OF THE COUNTY OF STANISLAUS ACTION AGENDA SUMMARY

DEPT: Chief Executive Office BOARD AGENDA # *B-15

Urgent Routine eNOO AGENDA DATE October 11,2005 CEO Concurs with Recommendation YES 415 Vote Required YES NO

(Infor ation Attached)

SUBJECT: Approve to Amend the Master Agreement with Westlands Development for Tenant Improvements in the 12th Street Office Building

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STAFF RECOMMENDATIONS:

Authorize the Assistant Chief Executive Officer to execute an amendment to the Master Agreement between Stanislaus County and Westland Development to allow Westland to commence its tenant improvements on the ground floor of the 12th Street condominium project.

FISCAL IMPACT: The total project budget for the 12th Street Office Building and the Parking Garage is $22,676,394. The County's budget for its share is $16,538,739 for three floors of the office building and 552 spaces in the parking garage. StanCERA's total project budget is now $2,477,403.06 for one floor of the office building and 56 parking spaces, and Westland's budget for two floors of the ofice building is now $2,308,900. Westland will also pay a license fee over a 30 year period to pay for Westland's share of costs for 103

(Continued on Page 2)

------__-_-_------_-------------------------------------------------------------------------------------------------. BOARD ACTION AS FOLLOWS: NO. 2005-820

On motion of Supervisor ---- Simon ..................... , Seconded by Supervisor ---- !Maxfiel_4 --------.-------- and approved by the following vote, AY es : Su pew is0 rs:-QIBfi_e_na i$1dL Sirl?!?.n,-QbMartiniA an-! Gh_a_i~rna_n_ Gr_o_v_et - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Noes: Su~erviso~~:-N,o_n~ - _ e - _ e _ e _ e - - _ e _ e _ e - - _ e _ e - _ e _ e _ e - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Excused or Absent: Supewisors:N~~e ........................................................................ Abstaining: Supervis0r:None ................................................................................. I) X Approved as recommended 2) Denied 3) Approved as amended 4) Other: MOTION:

ATTEST: CHRISTINE FERRARO TALLMAN, Clerk File No.

Apfrove to Amend the Master Agreement with Westlands Development for Tenant Improvements in the 12' Street Office Building Page 2

FISCAL IMPACT: (Continued)

parking spaces in the garage which totals $1,351,351, payable through a license fee estimated at $80,000 annually.

Approval of this agenda item does not affect the project budget.

DISCUSSION:

On October 16, 2002, the Board of Supervisors approved the Master Agreement between the County, StanCERA and Westland Development for the design and construction of a six story office building and parking garage located at 12th and I Streets in Modesto, California.

Section 5.7.1 of the Master Agreement allows Westland to enter to construct its own tenant improvements after substantial completion. Westland has asked for permission to allow its contractor, Acme Construction, to enter earlier to begin construction of its tenant improvements on the ground floor of the building. Westland has agreed to pay all costs for its tenant improvements, and indemnify, defend and hold the County harmless from any costs, expenses or claims arising from the construction of its tenant improvements.

Attached is a letter from Westland requesting the modification to the Master Agreement, together with a proposed amendment.

POLICY ISSUES:

Approval of this action would further the implementation of the Downtown Plan, and would promote efficiency in the administration of criminal justice and support the Board of Supervisors priorities for a safe and healthy community, efficient government operations and economic development.

STAFFING IMPACT:

The County's Capital projects staff and construction management staff are dedicated to this oroiect alona with the numerous other downtown efforts. includina ., ., the Gallo Center ior ihe Arts.

AlTORNFYSAT LAW

Gary H. Ruddell

R i c h y d H. C o b

GlarnA. Stanton

D. Zackaq Smith

Michael h Gulla

Matthew W Bixler

Derek E Wsehut

1102 N. Chinowth St.

Vi,CA932914113

Telephone:

559.733.5770

RUDDELL COCHRAN STANTON SMITH GULLA & BIXLER, LLP

October 4, 2005

Patty Hill Thomas Assistant Chief Executive Officer County of Stanislaus 1010 loth Street, Ste. 6800 Modesto, CA 96354

Re: lzth Street Office Building

Dear Ms. Thomas:

This law firm represents Westland Development Co., LLC. As you know, Westland Development Co. is a party to that certain Master Agreement between the County of Stanislaus, Stanislaus County Employees' Retirement Association dated October 16, 2002, pertaining to the lzth Street office building now in construction.

Section 5.7.1. of the Master Agreement provides that Westland shall be allowed to commence tenant improvements upon substantial completion of the County's construction project. We understand that substantial completion is likely to be three to four weeks away. Westland has entered into an Office Lease with the Oak Valley Community Bank pertaining to the first floor of the office building. Oak Valley Community Bank would like immediate access to the first floor of the office building to commence its tenant improvements.

I enclose a simple Amendment to the Master Agreement which would allow Oak Valley Community Bank to access the first floor of the office building for the construction of tenant improvements. Please submit this Amendment to the appropriate County officials and/or Supervisors for review and consideration.

Patty Hill Thomas October 4, 2005 Page Two

RUDDELL COCHRAN STANTON SMITH GULLA & BIXLER, LLP

Westland will be happy to provide any indemnifications required by the County as a condition to this early entry.

Thank you. If you have any questions, please give me a call.

Very truly yours,

GHR : ml k Enclosure cc: Craig Mangano

Niniv Tamimi Teri Rein

Stanislaus County Capital Projects 825 12Ih street, Modesto, CA 95354 Phone: (209) 525-4380 Fax: (209) 525-4385 r. ? I t. r '-;

L:,. . . , .

?r?r ,- ,. 7

TRANSMITTAL ,, , ;.> 1: 55 i.!... .

TO: Niniv Tamimi, Westlands 1500 J Street Modesto, CA 95354

SUBJECT: STANISLAUS COUNTY - 12'~ STREET PROJECT DATE: 10/26/2005

We are sending you attached - under separate cover the following material:

- Shop Drawings - Change Order - Specifications

- Copy of Letter - Plans - Computer Printout

- Prints - Samples - Updates

REMARKS:

For your records.

Note to Board: Approved by the Board on October 11,2005, Item B-15.

DESCRIPTION

Fully-executed Amendment No. 2

COPIES

1

COPIES: Patricia Hill Thomas (Copy) SIGNED: Tom Watson, StanCERA (Original) Leticia Cervantes Teny Rein (Copy) Liz King, Board (Original + Copy) File AA 2.1.1 (1463) File AA 13.6.1

DATE

1011 1/05

SECOND AMENDMENT TO MASTER AGREEMENT BETWEEN

THE COUNTY OF STANISLAUS, STANISLAUS COUNTY EMPLOYEES' RETIREMENT ASSOCIATION

AND WESTLAND DEVELOPMENT CO., LLC

This Second Amendment to Master Agreement between the County of Stanislaus, Stanislaus County Employee's Retirement Association and Westland Development Co., LLC is entered into this 11th day of October, 2005.

R E C I T A L S

A. On October 16, 2002, the County of Stanislaus ("County"), Stanislaus County Employees' Retirement Association ("StanCERA") and Westland Development Co., LLC ("Westland") entered into the Master Agreement pertaining to the development of a six-story office building ("Office Building") in the City of Modesto. Westland, StanCERA and the County approved a First Amendment to the Master Agreement on March 4, 2004. The Master Agreement and the First Amendment to the Master Agreement are collectively referred to herein as "Master Agreement."

B. The parties desire to amend the Master Agreement as hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions hereinafter set forth, the parties agree as follows:

1. Section 5.7.1. of the Master Agreement is amended to read as follows:

"5.7.1. Subject to coordination with the construction contractor of Office Building, Westland and StanCERA will be allowed to commence its tenant improvements upon substantial completion of the County's construction project; provided that Acme Construction shall be allowed access to the first floor of the Office Building commencing October 11, 2005, for construction of Westland's tenant improvements on the first floor of the Office Building. Westland shall complete its tenant improvements for its two units within 180 days of substantial completion of the Office Building. Westland shall indemnify, hold harmless, and defend the County from all claims

and liability of every kind, including court costs and attorney fees, arising in any way from any cost, claim, liability, cause of action or occurrence on the first floor of the Office Building, or related to the use or occupancy of the first floor of the Off ice Building. Westland shall require Acme Construction to carry a policy of general liability insurance in the amount of $2,000,000 with a separate endorsement naming Westland, the County and StanCERA as additional insureds."

2. In all other respects, the Master Agreement shall remain in full force and effect.

THE COUNTY OF STANISLAUS

.,- -3 p&;&G A/./-

BY Chief Executive Officer

DL',/ m. C EL)

Approved as to form: c STANCERA - BY 4'TkdN&\h\hd, BY Michael H. Krausnick, Tom Watson County Counsel

Approved as to form:

February 23,2006

CHIEF EXECUTNE OFFICE

Richzrd W. Robinson Chief Executive 067cer

Patricia Hill Thomas Chief Opeiations m c r /

h S k t d " t Exmtiw mer

Monica Nino-Reid hisfant Exemtive OITxer

Stan Risen h i i l a n t Executive O67cer

1010 I@ street sutte 6800, Modesto, 95354 P.O. BOX 3404, Modesto, C4 95353-3404

Phone: 209.525 6333 Fax: 209.5254033

Craig Mangano Westlands Development Corp. C/O Niniv Tamimi 1500 J Street Modesto. CA 95354

Dear Craig and Niniv:

I am please to transmit one originalsigned Interim Condominium Plan-Lease Agreement Between Stanislaus County and Westlands Development, LLC for the 12th Street Office Building. This agreement will be in place until the final condominium actions are complete.

On behalf of Stanislaus County, we appreciate the unique partnership and collaboration between Westlands. Stanislaus County and the Stanislaus County Retirement Association that has allowed the vision of a shared public and building to become a reality.

I am sure you share our pride in the uniqueness of the collaboration and the beautiful and statuesque building that has been created as a result. Thank you for all your efforts to make this happen.

With our continued respect and appreciation,

Patricia ~i Thomas Chief Operations Officer1 Assistant Executive Officer

cc: Terry Rein Niniv Tamimi Thomas Watson

H e r k of the Board of Supervisors Capital Prajects

INTERIM CONDOMINIUM PLAN - LEASE BETWEEN STANISLAUS COUNTY

AND WESTLAND DEVELOPMENT, LLC

1. BASIC LEASE PROVISIONS:

a. PARTIES: This lease ("Lease"), dated as of February 15,2006 is made by and between the County of Stanislaus (herein called "Landlord") and Westland Development Company, LLC (herein called "Tenant").

b. PREMISES: The Premises are the f ~ s t and second floors of the Building located at 1200 1 Street, Modesto, Califomia (the "Premises").

c. BUILDING: The Building is located at the street address of 1200 I Street, Modesto, California and 832 12th Street, Modesto, California.

d. MASTER AGREEMENT. The Landlord and Tenant have entered into a Master Agreement dated October 16,2002, the First Amendment to the Master Agreement dated March 2,2004, and the Second Amendment to the Master Agreement dated October 11,2005 (collectively, the "Master Agreement"). The Landlord and Tenant acknowledge that the rights, duties and obligations of the Landlord and Tenant relating to the Building are based on or derived from the Master Agreement. The Master Agreement contemplates that Tenant will possess a condominium interest in the Premises. This Lease is intended to provide Tenant with full access to the Premises until the Condominium Plan and related documents are recorded with the Stanislaus County Recorder's Office and the Premises are conveyed by Grant Deed to Tenant pursuant to the terms of the Master Agreement. This Interim Condominium Plan Lease agreement does not supercede any other previous agreements between the parties, including the Master Agreement and Parking Garage License Agreement, and the rights and responsibilities of the parties set forth in those agreements remain in full force and effect.

e. USE: The Tenant is authorized to use the Premises in a manner consistent with the Master Agreement.

f. TERM: The term of this Lease shall commence on February 15,2006 and shall terminate when the Condominium Plan and related documents are recorded with the Stanislaus County Recorder's Office and the Premises are conveyed by Grant Deed to Tenant pursuant to the terms of the Master Agreement.

g. BASE RENT: $1 .OO for the entire term of the Lease, plus operating expenses, as set forth below.

2. PREMISES, PARKING AREA AND COMMON AREA.

a. PREMISES: The Premises are a portion of the Building identified in paragraph l(c) of the Basic Lease Provisions. The Premises, the Building, the land upon which the same are located, and improvements thereon or thereunder, are herein collectively referred to as the Office Building Project. Landlord hereby leases to Tenant and Tenant leases fkom Landlord for the term, at the rental, and upon all of the conditions set forth herein, the real property referred to in the Basic Lease Provisions, paragraph l(b), as the "Premises".

b. VEHICLE PARKING: When the Parking Garage is safe for public use and insurance is secured for the Parking Garage, the County's Assistant Chief Executive Oficer will authorize Tenant's use of the 12th Street Parking Garage as set forth in the Parking License Agreement between Landlord and Tenant dated October 16,2002 ("Parking License Agreement"). Tenant acknowledges that Tenant's use of the parking garage is earlier than contemplated in the Parking License Agreement. Tenant shall comply with all of the terms and conditions of the Parking License Agreement and with the reasonable rules and regulations of the County's Assistant Chief Executive Officer relating to the use of the Parking Garage.

c. OPERATION AND MAINTENANCE OF THE BUILDING AND PREMISES. For the term of this Lease, the Landlord and Tenant agree to manage the Building and the Premises in accordance with the terms and conditions of the draft Condominium Agreement attached hereto as Exhibit A. Tenant agrees to serve in the capacity of a member of the Management Committee as set forth in the draft Condominium Agreement.

3. TERM: The Commencement Date of this Lease is Febmary 15,2006. The term of this Lease shall be as specified in paragraph i(f) of the Basic Lease Provisions.

4. RENT: Tenant shall pay to Landlord the Base Rent for the Premises as set forth in Paragraph l(g) of the Basic Lease Provisions, without offset or deduction.

5. OPERATING EXPENSES: Tenant shall pay to Landlord its share of operating expenses and assessments as set forth in the draft Condominium Agreement attached hereto as Exhibit A.

6. TENANT'S DUTIES: In addition to paying rent and operating expenses as set forth in the draft Condominium Agreement, Tenant shall provide its own tenant improvements, furniture, fixtures and equipment; data and telecommunications service; CATV or satellite service; security for the Premises; and any equipment or service that serves only Tenant or the Premises. Tenant shall promptly pay, as they become due, all costs and charges for electricity, telephone, data communications and any other utilities or s e ~ c e s furnished directly to or used by Tenant for the Premises. Tenant shall be responsible for janitorial services within the Premises and the maintenance of the interior of the Premises.

7. USE: The Premises shall be used and occupied only for the purposes set forth in paragraph l(e) of the Basic Lease Provisions or any other use which is reasonably comparable to that use and for no other purpose.

8. COMPLIANCE WITH LAWS: Tenant shall, at Tenant's expense, comply with all applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements of any fire insurance underwriters or rating bureaus, now in effect or which may hereafter become in effect. Tenant and its subtenants shall conduct their businesses in a lawful manner and shall not use or permit the use of the Premises or Common Area in any manner that will tend to create waste or nuisance or tend to disturb other occupants of the Office Building Project.

9. CONDITION OF PREMISES: Landlord shall deliver the "core and shell" of the Premises to Tenant on the Lease Commencement Date, except as otherwise improved by Tenant.

10. MAINTENANCE, REPAIRS, ALTERATIONS: The repair, maintenance and alteration of the Building and Premises shall be in accordance with the Draft Condominium Agreement.

11. INSURANCE AND INDEMNIFICATION: The Landlord and Tenant agree to maintain the insurance a s set forth in the draft Condominium Agreement. The insurance and indemnification provisions of the draft Condominium Agreement are hereby incorporated into this Lease by this reference.

12. ASSIGNMENT AND SUBLETTING: Tenant may sublet all or any part of the Premises without the prior approval of Landlord if the use is authorized by the draft Condominium Agreement.

13. EVENTS OF DEFAULT: Each of the following shall constitute an event of default under this Lease (each shall be considered an "Event of Default"): (i) Any party's failure to make any payment required under this Lease when due; (ii) the failure of any party to perform any of the covenants, conditions, or provisions of this Lease, where this failure continues for a period of fifteen (1 5) days after Written notice to the nonperfonning party except the requirement to make payments to Landlord under this Lease. However, if the

3

nature of the failure reasonably requires more than fifteen (15) days to cure, the party failing to perform sball not be deemed to be in default if it commences to cure within the fifteen (15) day period and thereafter diligently continues this cure to completion; or (iii) the vacation or abandonment of the Premises by Tenant. Upon the occurrence of an Event of Default, Landlord may avail itself of any rights and remedies available to Landlord in law or equity.

14. GENERAL PROVISIONS:

a. AUTHORITY: Landlord hereby appoints and designates the County's Assistant Chief Executive Officer as the agent of Landlord with authority to make decisions and act on behalf of Landlord with respect to matters pertaining to the implementation of Lease. Tenant hereby appoints and designates Craig Mangano as the agent of Tenant with full authority to make decisions and act on behalf of Tenant with respect to matters pertaining to this Lease.

b. INTERPRETATION: If any provision of this Lease is held by a court of competent jurisdiction to be either invalid or unenforceable, the remaining provisions of this Lease sball remain in effect unimpaired. T i e is of the essence under this Lease. This Lease sball be governed by Califomia law. Any litigation concerning this Lease between the parties shall be initiated in a court having jurisdiction and venue in Stanislaus County, Califomia. No provision of this Lease shall be interpreted against a party by virtue of that party having drafted it.

c. WAIVER: No waiver by Landlord or Tenant of any provisions in this Lease shall be deemed a waiver of any other provision of this Lease. A party's consent to or approval of any act by the other party shall not waive the necessity for that party's consent to or approval of any subsequent act by the other party.

d. ENTRY: Landlord and its agents may enter the Premises at any reasonable time, and immediately in the case of emergency, for the purpose of inspecting the Premises; supplying any service to be provided by Landlord to Tenant; making necessary alterations, additions, or repairs; performing Tenant's obligations when Tenant has failed to do so after written notice &om Landlord; and responding to an emergency. Landlord shall have the right to use any means Landlord deems necessary and proper to enter the Premises in an emergency. Any entry into the Premises obtained by Landlord in accordance with this Paragraph shall not be a forcible or unlawful entry into the Premises, or an eviction, actual or constructive, of Tenant from the Premises.

15. EXHIBITS: The exhibits enumerated in this Paragraph and attached to this Lease are incorporated herein by this reference and are to be conshued as a part of this Lease.

Exhibit "A" Draft Condominium Agreement

16. This Agreement may be signed in counterpart with each constituting an original and all counterparts constituting the same instrument.

IN WITNESS WHEREOF, the parties have executed this Lease as of the date first set forth above.

LANDLORD: TENANT:

STANISLAUS COUNTY WES

Patricia Hill Thomas

Approved as to form: ~.

Michael H. Krausnick Stanislaus County Counsel