Resolution No. 85601 RESOLUTION NO. 8560
2
3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF
4 AN EXCLUSIVE MARKETING AGREEMENT WITH KEARNY REAL
ESTATE COMPANY IN CONNECTION WITH REAL ESTATE HELD
5 BY THE CITY OF VERNON
6
7 WHEREAS, the City of Vernon is the owner of real property
8 located at 5001 S. Soto Street (formerly owned by Chef Solutions) in
9 the City of Vernon (the "Property"); and
10 WHEREAS, the City desires to enter into an exclusive
11 marketing agreement with Kearny Real Estate Company ("Kearny") to
12 develop the Property in connection with the industrial development
13 program in the City; and
14 WHEREAS, Kearny is a developer that is experienced in
15 leasing and developing buildings similar to that contemplated to be
16 built on the Property and possesses the skills and experience
17 necessary to lease space in the buildings on the Property; and
18 WHEREAS, on October 6, 2004, the Finance Committee
19 considered the recommendation of Bruce V. Malkenhorst, Director of
20 Finance, dated September 30, 2004, that an Exclusive Marketing
21 Agreement with Kearny be approved and executed.
22 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
23 CITY OF VERNON AS FOLLOWS:
24 SECTION 1: The City Council of the City of Vernon hereby.
25 finds and determines that the recitals contained hereinabove are true
26 and correct.
27 SECTION 2: The City Council of the City of Vernon hereby
28 approves the Exclusive Marketing Agreement with Kearny, a copy of
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which is attached hereto as Exhibit A and incorporated by reference.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor and the City Clerk to execute said Agreement for,
and on behalf of, the City of Vernon.
SECTION 4: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send two fully executed
Agreements to:
Kearny Real Estate Company
c/o Sandra Slon
Troy and Gould
1801 Century Park East, 26th Floor
Los Angeles, CA 90067
SECTION 5: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 6th day of October, 2004.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MA BURG, flayor
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
8560, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday, October 6,
2004, and thereafter was duly signed by the Mayor of the City of
Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
- 3 -
EXHIBIT
VI&
EXCLUSIVE MARKETING AGREEMENT
THIS EXCLUSIVE MARKETING AGREEMENT ("Agreement") is made as of the 6 u
day of October 2004 (the "Execution Date"), by and between City of Vernon ("Owner"), and
KEARNY REAL ESTATE COMPANY("Developer").
OWNER AND DEVELOPER have entered into this Agreement on the basis of the
following facts:
A. Owner is the owner of that certain real property located in Vernon, California,
consisting of the following: Northeast corner of Atlantic and Bandini, Vernon, California (formerly
owned by United States Postal Service) and 5001 S. Soto Street, Vernon, California (formerly
owned by Chef Solutions) (each, individually, a "Parcel" and collectively, the "Parcels").
B. Developer has experience in leasing and developing buildings similar to that
contemplated to be built on the Parcels and its personnel possess the skills and experience necessary
for the efficient leasing of space in the buildings comprising both of the Parcels.
C. Owner desires to grant to Developer the exclusive listing to market a new
development at each of the Parcels on the terms and conditions of this Agreement.
Therefore, the parties agree as follows:
1. Term. This Agreement is for a term expiring 120 days from the
Execution Date (the "Term").
2. General Duties. Developer shall use all commercially reasonable efforts to obtain
qualified tenants for each of the Parcels at the highest net rental rate achievable. Developer shall
also fulfill the following obligations and responsibilities as the exclusive agent for the Parcels at
Developer's sole cost and expense:
2.1 Publicity and Advertising. Developer shall prepare and distribute publicity
releases and related advertising materials. Any such publicity releases and advertising materials
shall be subject to Owner's prior written approval, which approval may be withheld in Owner's sole
discretion. Owner may revoke any such approval in the future upon prior notice to Developer.
2.2 Marketing Brochure. If requested by Owner, Developer shall prepare,
pursuant to Owner's requirements, a marketing brochure and other leasing and/or advertising
materials describing the space available for lease. Any such brochures or other leasing and/or
advertising materials shall be subject to Owner's prior written approval, which approval may be
withheld in Owner's sole discretion.
2.3 Signs. Developer may place appropriate "For Lease" signs for each of the
Parcels. The form, content, location and removal procedures of any such signs shall be subject to
the prior written approval of Owner, which approval shall not be unreasonably withheld.
2.4 Other Duties. Developer recognizes that the mutual goal of the parties
hereto is to create the highest value for the Parcels by prompt development and leasing at the highest
rents possible to an appropriate tenant mix. The specific use parameters that have been established
by Owner for appropriate tenants of both of the Parcels are set forth in Exhibit "A" attached hereto
01910/0001 107697.1
and incorporated herein by this reference. Developer shall use all commercially reasonable efforts,
and, in addition, Developer shall cause its employees and independent contractors to use all
commercially reasonable efforts to obtain potential tenants who will use the Parcels in a manner
consistent with the requirements of the Owner.
2.5 Demolition. To improve the marketability of the Parcel(s), Developer may
recommend to Owner that existing structures on the parcel(s) be demolished. If Developer
recommends and Owner approves the demolition, Developer shall pay the costs for such demolition.
In the event this Agreement is terminated and Owner and Developer have not entered'into a ground
lease for the Parcel(s) on which Developer paid the costs of demolition, Owner shall reimburse
Developer for all actual, out of pocket costs that Developer paid to third parties for the demolition
within thirty (30) calendar days following Owner's receipt and approval of (a) invoices, (b)
evidence of Developer's payment of the invoices, and (c) unconditional lien releases signed by the
contractors who handled the demolition work.
3. Compensation.
3.1 Ground Lease. If, during the term of this Agreement, Developer identifies an
appropriate tenant for either or both of the Parcels that meets the criteria set forth in Exhibit "A"
and is approved by Owner in Owner's sole and absolute discretion, Developer and Owner will
endeavor to enter into a ground lease for the applicable Parcel(s) on terms and conditions mutually
acceptable to Developer and Owner, and Developer will enter into a lease with the approved
tenant(s) on terms and conditions acceptable to Developer and the tenant(s). The basic terms of the
ground lease are set forth in Exhibit "B." No commission will be payable to Developer, and
Developer's compensation for obtaining a tenant for either or both Parcels will be earned through
the lease payments made by the tenant(s) to Developer that exceed the ground lease rental payable
by Developer to Owner for the applicable Parcel(s). Except as set forth in Paragraph 3.2 below, if
Developer identifies appropriate tenant(s), but Developer and Owner do not enter into a ground
lease for the applicable Parcel within 45 days after the date on which Owner has approved the
tenant, Developer will not be entitled to any compensation or commission in connection with
identifying such tenant.
3.2 Commission. If Developer and Owner do not enter into a ground lease, as
described in Paragraph 3.1 above, but Owner enters into a direct lease with a tenant introduced to a
Parcel by Developer (as described below), Owner shall pay to Developer a commission on the terms
and conditions set forth below, assuming the lease will be a triple net lease:
If there is no broker representing the prospective tenant, Developer (and its selected
broker) shall together be paid 4% of the gross rent payable during the first five years of the lease
term and 1.5% of the gross rent payable during the second five years of the lease term, with no
further commission payable after the first 10 years.
If there is a broker representing the prospective tenant, Developer (and its selected
broker) shall together be paid 5% of the gross rent payable during the first five years of the least
terms and 2.5% of the gross rent payable during the second five years of the lease term, with no
further commission payable after the first 10 years, and such commission is to be shared with the
broker representing the prospective tenant.
Such commission (the "Commission") shall be payable if and only if Owner and a
tenant execute a lease for a Parcel during the term of this Agreement or within 90 calendar days
01910/0001 107697.1
after the termination date of this Agreement (or any written extension period) to a tenant or that
person's related entity ("Prospective Tenant") (i) who physically entered and was shown one or
both of the Parcels during the term of this Agreement (or any written extension) by Developer or a
cooperating broker; or (ii) for whom Developer or any cooperating broker submitted to Owner a
signed, written offer to lease one or both of the Parcels during the term of this Agreement (or any
written extension). Owner, however, shall have, no obligation to Developer unless, not later than 3
calendar days after the termination date of this Agreement (or any written extension), Developer has
given Owner a written notice of the names of such Prospective Tenants. The Commission is
payable after the lease has been executed and the tenant has taken occupancy of the Parcel. The
amount of the Commission is the total amount payable by Owner, and is therefore to be split by
Developer and any cooperating broker.
3.3 Sale. If Developer procures a buyer (the "Buyer") for the applicable Parcel(s),
and (a) Owner and Buyer execute a purchase and sale agreement for the Parcel(s) during the term of
this Agreement, and the Buyer purchases the Parcel(s), or (b) Owner and Buyer execute a purchase
and sale agreement for the Parcel(s) within 90 days after the termination of this Agreement (or any
written extension period) and either (i) the Buyer physically entered and was shown one or both of
the Parcels during the term of this Agreement (or any written extension) by Developer or a
cooperating broker; or (ii) Developer or any cooperating broker submitted to Owner a signed,
written offer by Buyer to purchase one or both of the Parcels during the term of this Agreement (or
any written extension), and the Buyer purchases the Parcel(s). Owner, however, shall have no
obligation to Developer unless, not later than 3 calendar days after the termination date of this
Agreement (or any written extension), Developer has given Owner a written notice of the names of
such Buyers. The commission shall be 5% of the gross sales price, and is payable at the closing of
the escrow. The amount of the commission is the total amount payable by Owner, and is therefore
to be split by Developer and any cooperating broker.
4. Confidentiality. Developer shall keep in strict confidence all information furnished
to or secured by it relating to the Parcels or Owner's business, including, without limitation,
information gathered from Owner's books or records. In no event shall Developer issue or make any
statement concerning Owner's interest in the Parcels or any other statement attributable to Owner to
the press or any other media without Owner's prior written approval in each instance, which
approval may be withheld by Owner in its sole discretion.
5. Owner's Rights. Owner is not under any obligation to enter into a ground lease with
Developer on any terms or to accept any offer to lease the Parcels to any party for any purpose at any
price, and Owner shall determine, in its sole and absolute discretion, whether to enter into a ground
lease with Developer or standard lease with a tenant and the terms of such ground lease or standard
lease. All appraisals, documents, plans, drawings, correspondence or other materials furnished by
01910/0001 107697.1
Owner to Developer shall remain the property of Owner and, upon the termination of this Agreement
or upon Owner's earlier request, shall be returned to Owner.
Executed as of the day and year first above written.
DEVELOPER:
KEARNY REAL ESTATE COMPANY
LIM
Its:
ACCEPTED AND AGREED this
day of , 2004:
OWNER: City of Vernon
M-
ATTEST:
By:
Bruce V. Malkenhorst, City Clerk
APPROVED AS TO FORM
Eric T. Fresch, City Attorney
4
01910/0001 107697.1
Leonis C. Malburg, Mayor
EXHIBIT
EXHIBIT A
USAGE PARAMETERS
Business Characteristics / City of Vernon Properties
Because the basic purpose of the City of Vernon's land acquisition program is to redirect land use
and facility development toward more manufacturing and less warehousing, the City has established
several benchmarks to be utilized in evaluating the suitability of a prospective business.
Employment: The City limits the businesses that utilize City owned property to those that
will employ at least 15 people per acre of land utilized. Businesses that project higher employment
levels will be given preference.
Utility Usage: The City requires all businesses that utilize City owned property to
consume at least 38 KwH's annually for each square foot of land utilized (1.7 million KwH / acre).
Wages: The City would like (but does not require) the companies utilizing City owned
property to maintain an average hourly wage of at least $15.00 / hr.
Business Investment: The City would like (but does not require) the companies utilizing
City owned property to invest at least $1,000,000 per acre, of land utilized, in improvements and/or
equipment.
Multi -tenant: The City would like (but does not require) that each City owned property
contain a single company user, rather than several users.
Viability: The City would like to have reasonable assurances that a user company has
a viable long-term business strategy and can be reasonably expected to survive and prosper over the
coming decades.
5
01910/0001 107697.1
EXHIBIT
EXHIBIT B
Ground Lease Terms
Lessee: Kearny Real Estate Company; or affiliated and creditworthy assignee
reasonably approved by Lessor
Lessor: City of Vernon
Location: Site Acres Former User
NE Corner — AtlanticBandini 7.00 USPS
5001 South Soto Street 5.24 Chef Solutions
12.24
Initial Term: 50 years
Options: Two (2) twenty-year options to extend at 110% of the rent being charged
prior to the extension. Lessee shall provide eighteen (18) months prior notice.
Per Net Land
Annual Rent: Amount* Square Foot*
USPS TBD TBD
Chef Solutions TBD TBD
* Dependent on final structure of ground lease and limits on ultimate
users/tenants. It is assumed that Lessee will meet all statutory guidelines and
additionally will not be allowed to develop cold storage as its primary business
activity.
Condition of Sites: City of Vernon will deliver the sites in broom clean condition with all
environmental remediation complete. Kearny will be responsible for demolition of existing
structures.
6
01910/0001 107697.1
SUPPORTING
DOCUMENTS
0
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro-Tem
WM. "BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL McCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
Chief Executive Officer of
Light & Power
FAX: (323) 826-1438
October 7, 2004
W-A,41,9 0,4/wrz)
ERIC T. FRESCH
City Attorney
FAX: (323) 826-1439
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
Via Federal Express
Sandra Slon, Esq.
Troy & Gould
1801 Century Park East, 16th Fl.
Los Angeles, CA 90067-2367
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
LEWIS J. POZZEBON
Director of Environmental Health
FAX: (323) 588-4320
Re: Exclusive Marketing Agreements for Lincoln Property .Company
Commercial, Inc. and Kearny Real Estate Company
Dear Sandra:
Enclosed please find two original Exclusive Marketing Agreements
with each developer which have been executed by the City.
Once the Agreements have been signed by the respective
developer, please return to me one fully executed Agreement for
the City's files.
If you have any questions, please call me.
Sincerely,
��, 8,U� ,;g,)
Eric T. Fresch,
City Attorney
jl
Enclosures
EXCLUSIVE MARKETING AGREEMENT
THIS EXCLUSIVE MARKETING AGREEMENT ("Agreement") is made as of the 6 h
day of October 2004 (the "Execution Date"), by and between City of Vernon ("Owner"), and
KEARNY REAL ESTATE COMPANY ("Developer").
OWNER AND DEVELOPER have entered into this Agreement on the basis of the
following facts:
A. Owner is the. owner of that certain real property located in Vernon, California,
consisting of the following: Northeast corner of Atlantic and Bandini, Vernon, California (formerly
owned by United States Postal Service) and 5001 S. Soto Street, Vernon, California (formerly
owned by Chef Solutions) (each, individually, a "Parcel" and collectively, the "Parcels").
B. Developer has experience in leasing and developing buildings similar to that
contemplated to be built on the Parcels and its personnel possess the skills and experience necessary
for the efficient leasing of space in the buildings comprising both of the Parcels.
C. Owner desires to grant to Developer the exclusive listing to market a new
development at each of the Parcels on the terms and conditions of this Agreement.
Therefore, the parties agree as follows:
1. Term. This Agreement is for a term expiring 120 days from the
Execution Date (the "Term").
2. General Duties. Developer shall use all commercially reasonable efforts to obtain
qualified tenants for each of the Parcels at the highest net rental rate achievable. Developer shall
also fulfill the following obligations and responsibilities as the exclusive agent for the Parcels at
Developer's sole cost and expense:
2.1 Publicity and Advertising. Developer shall prepare and distribute publicity
releases and related advertising materials. Any such publicity releases and advertising materials
shall be subject to Owner's prior written approval, which approval may be withheld in Owner's sole
discretion. Owner may revoke any such approval in the future upon prior notice to Developer.
2.2 Marketing, Brochure. If requested by Owner, Developer shall prepare,
pursuant to Owner's requirements, a marketing brochure and other leasing and/or advertising
materials describing the space available for lease. Any such brochures or other leasing and/or
advertising materials shall be subject to Owner's prior written approval, which approval may be
withheld in Owner's sole discretion.
2.3 Sips. Developer may place appropriate "For Lease" signs for each of the
Parcels. The form, content, location and removal procedures of any such signs shall be subject to
the prior written approval of Owner, which approval shall not be unreasonably withheld.
2.4 Other Duties. Developer recognizes that the mutual goal of the parties
hereto is to create the highest value for the Parcels by prompt development and leasing at the highest
rents possible to an appropriate tenant mix. The specific use parameters that have been established
by Owner for appropriate tenants of both of the Parcels are set forth in Exhibit "A" attached hereto
01910/0001 107697.1
and incorporated herein by this reference. Developer shall use all commercially reasonable efforts,
and, in addition, Developer shall cause its employees and independent contractors to use all
commercially reasonable efforts to obtain potential tenants who will use the Parcels in a manner
consistent with the requirements of the Owner.
2.5 Demolition. To improve the marketability of the Parcel(s), Developer may
recommend to Owner that existing structures on the parcel(s) be demolished. If Developer
recommends and Owner approves the demolition, Developer shall pay the costs for such demolition.
In the event this Agreement is terminated and Owner and Developer have not entered into a ground
lease for the Parcel(s) on which Developer paid the costs of demolition, Owner shall reimburse
Developer for all actual, out of pocket costs that Developer paid to third parties for the demolition
within thirty (30) calendar days following Owner's receipt and approval of (a) invoices, (b)
evidence of Developer's payment of the invoices, and (c) unconditional lien releases signed by the
contractors who handled the demolition work.
Compensation.
3.1 Ground Lease. If, during the term of this Agreement, Developer identifies an
appropriate tenant for either or both of the Parcels that meets the criteria set forth in Exhibit "A"
and is approved by Owner in Owner's sole and absolute discretion, Developer and Owner will
endeavor to enter into a ground lease for the applicable Parcel(s) on terms and conditions mutually
acceptable to Developer and Owner, and Developer will enter into a lease with the approved
tenant(s) on terms and conditions acceptable to Developer and the tenant(s). The basic terms of the
ground lease are set forth in Exhibit "B." No commission will be payable to Developer, and
Developer's compensation for obtaining a tenant for either or both Parcels will be earned through
the lease payments made by the tenant(s) to Developer that exceed the ground lease rental payable
by Developer to Owner for the applicable Parcel(s). Except as set forth in Paragraph 3.2 below, if
Developer identifies appropriate tenant(s), but Developer and Owner do not enter into a ground
lease for the applicable Parcel within 45 days after the date on which Owner has approved the
tenant, Developer will not be entitled to any compensation or commission in connection with
identifying such tenant.
3.2 Commission. If Developer and Owner do not enter into a ground lease, as
described in Paragraph 3.1 above, but Owner enters into a direct lease with a tenant introduced to a
Parcel by Developer (as described below), Owner shall pay to Developer a commission on the terms
and conditions set forth below, assuming the lease will be a triple net lease:
If there is no broker representing the prospective tenant, Developer (and its selected
broker) shall together be paid 4% of the gross rent payable during the first five years of the lease
term and 1.5% of the gross rent payable during the second five years of the lease term, with no
further commission payable after the first 10 years.
If there is a broker representing the prospective tenant, Developer (and its selected
broker) shall together be paid 5% of the gross rent payable during the first five years of the least
terms and 2.5% of the gross rent payable during the second five years of the lease term, with no
further commission payable after the first 10 years, and such commission is to be shared with the
broker representing the prospective tenant.
Such commission (the "Commission") shall be payable if and only if Owner and a
tenant execute a lease for a Parcel during the term of this Agreement or within 90 calendar days
2
01910/0001 107697.1
after the termination date of this Agreement (or any written extension period) to a tenant or that
person's related entity ("Prospective Tenant") (i) who physically entered and was shown one or
both of the Parcels during the term of this Agreement (or any written extension) by Developer or a
cooperating broker; or (ii) for whom Developer or any cooperating broker submitted to Owner a
signed, written offer to lease one or both of the Parcels during the term of this Agreement (or any
written extension). Owner, however, shall have no obligation to Developer unless, not later than 3
calendar days after the termination date of this Agreement (or any written extension), Developer has
given Owner a written notice of the names of such Prospective Tenants. The Commission is
payable after the lease has been executed and the tenant has taken occupancy of the Parcel. The
amount of the Commission is the total amount payable by Owner, and is therefore to be split by
Developer and any cooperating broker.
3.3 Sale. If Developer procures a buyer (the "Buyer") for the applicable Parcel(s),
and (a) Owner and Buyer execute a purchase and sale agreement for the Parcel(s) during the term of
this Agreement, and the Buyer purchases the Parcel(s), or (b) Owner and Buyer execute a purchase
and sale agreement for the Parcel(s) within 90 days after the termination of this Agreement (or any
written extension period) and either (i) the Buyer physically entered and was shown one or both of
the Parcels during the term of this Agreement (or any written extension) by Developer or a
cooperating broker; or (ii) Developer or any cooperating broker submitted to Owner a signed,
written offer by Buyer to purchase one or both of the Parcels during the term of this Agreement (or
any written extension), and the Buyer purchases the Parcel(s). Owner, however, shall have no
obligation to Developer unless, not later than 3 calendar days after the termination date of this
Agreement (or any written extension), Developer has given Owner a written notice of the names of
such Buyers. The commission shall be 5% of the gross sales price, and is payable at the closing of
the escrow. The amount of the commission is the total amount payable by Owner, and is therefore
to be split by Developer and any cooperating broker.
4. Confidentiality. Developer shall keep in strict confidence all information furnished
to or secured by it relating to the Parcels or Owner's business, including, without limitation,
information gathered from Owner's books or records. In no event shall Developer. issue or make any
statement concerning Owner's interest in the Parcels or any other statement attributable to Owner to
the press or any other media without Owner's prior written approval in each instance, which
approval may be withheld by Owner in its sole discretion.
5. Owner's Rights. Owner is not under any obligation to enter into a ground lease with
Developer on any terms or to accept any offer to lease the Parcels to any party for any purpose at any
price, and Owner shall determine, in its sole and absolute discretion, whether to enter into a ground
lease with Developer or standard lease with a tenant and the terms of such ground lease or standard
lease. All appraisals, documents, plans, drawings, correspondence or other materials furnished by
01910/0001 107697.1
Owner to Developer shall remain the property of Owner and, upon the termination of this Agreement
or upon Owner's earlier request, shall be returned to Owner.
Executed as of the day and year first above written.
DEVELOPER:
KEARNY REAL ESTATE O
By:
Its: t %A t 1
ACCEPTED AND AGREED this
(,,A day of 00-6 6 eg , 2004:
OWNER: City of Vernon
Leonis C. Malburg, M yor
ATTEST -
By: B /<--__ Bruce V. Malkenhorst, City Clerk
APPROVED AS TO FORM
Eric T. Fresch, City Attorney
01910/0001 107697.1
EXHIBIT A
USAGE PARAMETERS
Business Characteristics / City of Vernon Properties
Because the basic purpose of the City of Vernon's land acquisition program is to redirect land use
and facility development toward more manufacturing and less warehousing, the City has established
several benchmarks to be utilized in evaluating the suitability of a prospective business.
Employment: The City limits the businesses that utilize City owned property to those that
will employ at least 15 people per acre of land utilized. Businesses that project higher employment
levels will be given preference.
Utility Usage: The City requires all businesses that utilize City owned property to
consume at least 38 KwH's annually for each square foot of land utilized (1.7 million KwH / acre).
Wages: The City would like (but does not require) the companies utilizing City owned
property to maintain an average hourly wage of at least $15.00 / hr.
Business Investment: The City would like (but does not require) the companies utilizing
City owned property to invest at least $1,000,000 per acre, of land utilized, in improvements and/or
equipment.
Multi -tenant: The City would like (but does not require) that each City owned property
contain a single company user, rather than several users.
Viability: The City would like to have reasonable assurances that a user company has
a viable long-term business strategy and can be reasonably expected to survive and prosper over the
coming decades.
5
01910/0001 107697.1
EXHIBIT B
Ground Lease Terms
Lessee: Kearny Real Estate Company, or affiliated and creditworthy assignee
reasonably approved by Lessor
Lessor: City of Vernon
Location: Site Acres Former User
NE Corner — Atlantic/Bandini 7.00 USPS
5001 South Soto Street 5.24 Chef Solutions
12.24
Initial Term: 50 years
Options: Two (2) twenty-year options to extend at 110% of the rent being charged
prior to the extension. Lessee shall provide eighteen (18) months prior notice.
Per Net Land
Annual Rent: Amount* Square Foot*
USPS TBD TBD
Chef Solutions TBD TBD
* Dependent on final structure of ground lease and limits on ultimate
users/tenants. It is assumed that Lessee will meet all statutory guidelines and
additionally will not be allowed to develop cold storage as its primary business
activity.
Condition of Sites: City of Vernon will deliver the sites in broom clean condition with all
environmental remediation complete. Kearny will be responsible for demolition of existing
structures.
6
01910/0001 107697.1