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HomeMy WebLinkAboutLEE & ASSOCIATES - 2003-01-21�,k 03 k�� Carrecy 2C.� ak"k Council/Agency Meeting Held: 3 DeterredfContinued to- pproved J Conditionally Approved ❑ Denied City Clerk's Signat6re Council Meeting Date: January 21, 2003 Department ID Number- AS 03-05 (,- o-I 5�;��-y✓ CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: RAY SILVER, Executive Directoro9o?,P PREPARED BY: DAVID C. BIGGS, Deputy Executive Director CLAY MARTIN, Director of Administrative Services SUBJECT: APPROVE LISTING AGREEMENT WITH LEE & ASSOCIATES FOR SALE OF 438 MAIN STREET Statement of Issue, Funding Source, Recommended Action, Alternative Actionjs), Analysis, Environmental Status, Attachment[sj Statement of Issue: On August 19, 2002, the Redevelopment Agency Board authorized the use of a professional real estate agent for the purpose of marketing 438 Main Street for sale. A listing agreement with Lee & Associates has been prepared which would provide Lee & Associates with an exclusive listing for six months, as well as a 6% commission upon the successful sale of the building. Funding Source: The sale of 438 Main Street would generate one-time revenues for the Redevelopment Agency, which would then facilitate debt repayment to the General Fund. Any sale commission due to Lee & Associates would be paid from net proceeds of the sale of 438 Main Street. Recommended Action: Authorize the Redevelopment Agency's Executive Director to execute a listing agreement with Lee & Associates for the marketing and sale of 438 Main Street, and authorize a broker commission of 6% upon successful completion of a sale. Alternative Action(s): Do not authorize a listing agreement with Lee & Associates and direct the Real Estate Services Division to market the property without the use of a broker. Analysis: In August 2001, the City Council and the Redevelopment Agency jointly approved a process to surplus and sell excess City and Redevelopment Agency owned property that retain no present or future anticipated uses. One of the properties considered for sale was 438 Main Street (see Attachment 1 for location map). The property is improved v.:th a small two-story commercial office building originally built in 1974. The Redevelopment Agency purchased the property in 1988 for $325,000 in a voluntary sale, in anticipation of future redevelopment opportunities in the immediate area. - h I U REQUEST AR REDEVELOPMENT AGENCY ACTION MEETING DATE: January 21, 2003 DEPARTMENT ID NUMBER: AS 03-05 In 1993, the Redevelopment Agency entered into a lease with A -Creative Property Management, whose lease expired in June 2002. A -Creative Property Management is currently on month -to -month tenancy and is aware of the potential sale of the building. In June 2002, staff received bids in conjunction with the sale of 438 Main Street. Staff presented a summary of the bids to the Economic Development Committee (EDC) in July 2002 Given the volatile real estate market in which sale prices often exceeded appraised values, the EDC recommended that the Redevelopment Agency Board reject all bids and solicit the assistance of a professional real estate agent or broker in marketing the property in anticipation of receiving higher bids. On August 19, 2002, the Redevelopment Agency Board concurred with this recommendation, rejected the bids and authorized the use of a professional real estate agent for this purpose. In September 2002, staff solicited proposals from real estate agents through a Request for Qualifications (RFQ) process. RFQs were sent to the top 25 brokerage firms in Orange County as well as the Orange County Board of Realtors in Huntington Beach. The RFQ was also posted on the City's website. Four firms submitted qualifications and all four firms were interviewed and deemed as being responsive to the RFQ. Staff is recommending the use of Lee & Associates for the marketing and sale of 438 Main Street in part because of their direct experience in marketing commercial office space of all sizes within northern Orange County, as well as their experience working in the Huntington Beach market. The attached listing agreement has been prepared, which will provide Lee & Associates with an exclusive listing of the property for six months, commencing February 1, 2003. They will prepare marketing materials and will work with staff to set a market price for the property based on comparable sales of similar properties The listing agreement provides for a 6% commission to be paid by the Redevelopment Agency upon the successful sale of 438 Main Street. The commission would be paid from sale proceeds through escrow Lee & Associates will present all offers to purchase the property to staff for review. If staff believes any of the offers warrant further review, the Economic Development Committee will be requested to recommend acceptance of the offers to purchase. California Health & Safety Code requirements dictate the conditions for disposition of property owned by a Redevelopment Agency; therefore, if legitimate offers to purchase the property are received, staff will seek further authorization from the Redevelopment Agency Board to enter into a Disposition and Development Agreement with the successful bidder at that time. Environmental Status: Not applicable_ D \Documents and Settings\bodeka\My DocumenWRCA Letters\Lee&Assoc_Iistingagmt.438Main _doc -2- 116/2003 4.57 PM REQUEST AR REDEVELOPMENT AGENCY ACTION MEETING DATE: January 21, 2003 DEPARTMENT ID NUMBER: AS 03-05 Attachment(s): RCA Author Bodek x5445 DADocuments and Settingslbodeka\My Documents\RCA Letters\Lee&Assoc.listingagmt. 438Mai n_doc -3- 11612003 4:57 PM • i ATTACHMENT #1 1/6/2003 5.02.54 PM 529 - ` s�S . -.. - i 527 530 9 �>` ' I 526 613 611 522 --j 5 520 - - s�• 520 - - 5 L 518 -..... 516 -- 514 J -_ } 512 -- 5; - - { 508 i 510 51 \ 508 1 505 �506 5 - 504 504 51 htiti 201 502 Pecan Ave. -- - - -- — h� Townsquare L _..-. 41 `h�./� • 419 438 439 i 41 ti 417 424 l 437 ! 41 \ \ -9 411 - j �O 424 435-- I 41 ' 429 \ t �O j ✓ p?� i--- - i I 3 < �O\ \ Vo? �f� `� \ \ 31 -- 21 0.9 302\�p>\ \ \ . v 1: \ 90 2� \ ` ` \ / 2! N 1. El E::] 438 MAIN s City of Huntington Beach Scare. r = 156' C� • ATTACHMENT #2 INSURANCE AND INDEMNIFICATION WAIVER H MODIFICATION REQUEST 1. Requested by: Clay Martin 2_ Date: January 7. 2003 3. Name of contractorlpermittee: Lee & Associates 4. Description of work to be performed: Listing Agreement - Represent Redevelopment Aaencv to find buvers-for orooerty located at 438 Main Street 5. Value and lengt#fof contract: Commission based 1 expires July 31 2003 6. Waiver/modification request: Indemnify in event of Agency's failure to disclose 7. Reason for request and why it should be granted: Necessary to effectuate listing agreement 8 Identify the risks to the City in approving this waiver/modification- Low in that Agency will indemnify only in the event of its failure to provide full disclosures required by law Dep.adment e�`Signature Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted_ Approval from the City Administrators Office is only required if Risk Management and the City Attorney's Office disa ree. 1. Risk Management L4I'Approved ❑ Denied / Signature a e 2. City ttorney's Office Approved El Denied l 10 Signature Date 3. City Administrator's Office Approved ❑ Denied a' -Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Administrative Services Insurance & Indemnification Waiver 1!7l2003 9-05 AM • 1� 0 STANDARD OWNER -AGENCY AGREEMENT FOR SALE OR LEASE OF REAL PROPERTY (Non -Residential) AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 1. BASIC PROVISIONS ("BASIC PROVISIONS"). 1.1 Pasties: This Owner -Agency Agreement ("Agreement"), dated for reference purposes only January 6 , 2003 , is made by and between —City of Huntington Beach —Redevelopment Agency _ whose address is 2000 Main Street. Huntington Beach, CA 92648 telephone number (714) 536-5445 ("Owner'), and _ Lee b Associates - Newport Beach, Inc whose address is 3991 MacArthur Blvd., Suite 100, Newp telephone number (949) 724-1000 ("Agent"). Fax No- (714) 374-1743 rt Beach, CA 92660 Fax No. (949) 633-0608 1-2 PropertyrPmmisea: Thereat property, or a portion thereof, which is the subject of this Agreement is commonly known by the street address of 438 Main Street located in the City of Huntington Beach . County of Orange , State of California , and generally described as (describe briefly the nature of the property): a freestanding office building of approximatelV 4,250 square feet _ ("Property")- (See also Paragraph 3)- 1-3 Term of Agreement: The term of this Agreement shall commence on _ February 1, 2003 and expire at 5:00 p.m, on July 31, 2003 _ , except as it may be extended ('Term"). (See also paragraph 4) 1.4 Transaction: The nature of the transaction concerning the Property for which Agent is emptoyed ("Transaction") is (check the appropriate box(es)): (a) 0 A sale for the following sale price and terms: at terms and conditions as acceptable to owner and other additional standard terns reasonably similar to those contained in the `STANDARD OFFER. AGREEMENT AND ESCROW INSTRUCTIONS FOR THE PURCHASE OF REAL ESTATE' published by the American Industrial Real Estate Association ("AIR"), or for such other price and terms agreeable to Owner (b) ❑ A lease or other tenancy for the following rent and terms: and other additional standard terms reasonably similar to those contained in the appropriate AIR lease form or for such other rent and terms agreeable to Owner_ 2. EXCLUSIVE EMPLOYMENT AND RIGHTS. 2 1 Owner hereby employs Agent as Owner's sole and exclusive agent to represent Owner in the Transaction and to find buyers or lesseeshenants ("lessees"), as the case may be, for the Property. Agent shall use reasonably diligent efforts to find such buyers or lessees- All negotiations and discussions for a Transaction shall be conducted by Agent on behalf of Owner_ Owner shall promptly disclose and refer to Agent all written or oral inquiries or contacts received by Owner from any source regarding a possible Transaction. 2.2 Owner authorizes Agent to: (a) Place advertising signs on the Property: (b) Place a lock box on the Property if vacant. (c) Accept deposits from potential buyers or lessees, and (d) Distribute Information regarding the Property to participants In THE MULTIPLE ("MULTIPLE") of the AIR and/or any other appropriate local commercial multiple listing service, to other brokers, and to potential buyers or lessees of the Property Owner shall identify as 'confidential' any information provided to Agent that Owner considers confidential and does not want disclosed_ All other information provided by Owner may be disclosed as Agent may deem appropriate or necessary. After consummation of a Transaction. Agent may publicize the terms of such Transaction- 2-3 Agent shall comply with the Rules of Professional Conduct of the AIR, if a member or if not, the Rules of Professional Conduct of the Society of Industrial and Office Realtors, and shall submit the Property to the MULTIPLE- Agent shall cooperate with participants in the MULTIPLE and may, at Agent's election, cooperate with other real estate brokers (collectively "Cooperating Broker'). A Cooperating Broker may, as a third -party beneficiary hereof, enforce the terms of this Agreement against Owner or Agent- 2-4 If the Transaction is a sale and Agent finds a prospective buyer for the Property, or if the Transaction is a lease and Agent finds a prospective lessee for the Property, Owner hereby authorizes Agent also to represent and act as the agent for such buyer or lessee, and Owner consents to such dual agency. If a Cooperating Broker finds such a buyer or lessee, then Agent shall act as agent for Owner only, the Cooperating Broker shall act as agent for the buyer or lessee only, and the Cooperating Broker shall not be Owners agent, even though the Cooperating Broker may share in the commission paid by Owner to Agent A Cooperating Broker shall not be an agent or subagent of Owner or Agent_ 2.5 Owner agrees that Agent may, during the ordinary and normal course of marketing the Property, respond to inquiries on the Property by showing and providing information on the Property, as well as on other competing properties, to prospective buyers and lessees and that such activities may result in the payment of a commission to Agent by a third party- 3. PROPERTY. 3 1 The term -Property' shall include all of the following which are currently located on the Property and owned by Owner: permanent improvements, electrical distribution systems (power panels, buss ducting, conduits, disconnects, lighting fixtures, etc.), telephone distribution systems (lines, jacks and connections), space heaters, air conditioning equipment, air lines, carpets. window coverings, wall coverings, partitions, doors, suspended ceilings, built-ins such as cabinets, and (if there are no additional items write "NONE'). If the Transaction is a sale, the term "Property" shall additionally include, to the extent owned by Owner, oil and mineral rights, ceases and other agreements which will continue in effect after Owner's transfer of title to the Property- 3-2 Within five business days after the commencement of the Term hereof, Owner shall provide Agent with the following: Initials 01997 - American Industrial Real Estate Association Page 1 of 3 REVISED Initials FORM OA-1-6/97E (a) A duty completed and fully executed P rty Information Sheet on the most current form pubs by the AIR; (b� Copies of all leases, subleases, renIAWments, option rights, rights of first refusal, rights t offer, or other documents containing any other limitations on Owner's right, ability and capacity to consummate a Transactton, and (c) If available to Owner, copies of building plans, and if the Transaction is a sale, title reports, boundary surveys, and existing notes and trust deeds which will continue to affect the Property after consummation of a sale. 3 3 Agent shall have no responsibility for maintenance, repair, replacement, operation, or security of the Property, all of which shall be Owner's sole responsibility_ Unless caused by Agent's gross negligence. Agent shall not be liable for any loss, damage, or injury to the person or property of Owner, any lessees of the Property. any buyer, prospective buyer, lessee, or prospective lessee, including, but not limited to, those which may occur as a result of Agent's use of a lock box- 4. EXTENSION OF TERM. If the Transaction is a sale, and a sale is not consummated for any reason after Owner accepts an offer to purchase the Property ("Sale Agreement"), then the expiration date of the Term of this Agreement shall be extended by the number of days that elapsed between the date Owner entered into the Sale Agreement and the later of the date on which the Sale Agreement is terminated or the date Owner is able to convey title to a new buyer free and clear of any claims by the prior buyer of the Property; provided, however, In no event shall the Tenn be so extended beyond one year from the date the Term would have otherwise expired. 5. COMMISSION. 5-1 Owner shall pay Agent a commission ❑ in the amount of 0 in accordance with the commission schedule attached hereto ("Agreed Commisslon"), for a Transaction, whether such Transaction is consummated as a result of the efforts of Agent, Owner, or some other person or entity- Such Agreed Commission is payable- (a) if the Transaction is a sale, (i) a buyer is procured who is ready, willing and able to buy the Property at the price and on the terms stated herein, or on any other price and terms agreeable to Owner; (ii) Owner breaches or repudiates any Sale Agreement, escrow instructions or other documents executed by Owner regarding the sale of the Property: (iii) the Property or any interest therein is voluntarily or involuntarily sold, conveyed, contributed or transferred. (ev) the Property or any interest therein is taken under the power of Eminent Domain or sold under threat of condemnation, or (v) if Owner is a partnership. joint venture, limited liability company, corporation, trust or other entity, and any interest in Owner is voluntarily or involuntarily sold, contributed, conveyed or transferred to another person or entity that, as of the date hereof, does not have any ownership interest in Owner: (b) if the Transaction is a lease, () a lease of the Property, or a portion thereof is executed; or (ii) a lessee is procured who Is ready, willing and able to lease the Property on the terms stated herein, or on any other rent and/or terms agreeable to Owner, or (c) If Owner (i) removes or withdraws the Property from a Transaction or the market. (ii) acts as if the Property is not available for a Transaction. (iii) treats the Property as not available for a Transaction; (iv) breaches, terminates, cancels or repudiates this Agreement: (v) renders the Property unmarketable: or (v) changes the status of the Property's title, leases, agreements, physical condition or other aspects thereof, which such change adversely impacts the value, use, desirability or marketability of the Property. 5.2 If the Transaction is a sale, the purchase agreement and/or escrow instructions to be entered into by and between Owner and a buyer of the Property shall provide that (a) Owner irrevocabty instructs the escrow holder to pay from Owner's proceeds accruing to the account of Owner at the close of escrow the Agreed Commission to Agent: (b) A contingency to the consummation of the sale shall be the payment of the Agreed Commission to Agent at or prior to close of the escrow: and (c) No change shall be made by Owner or buyer with respect to the time of, amount of, or the conditions to payment of the Agreed Commission, without Agent's written consent_ 6. ALTERNATIVE TRANSACTION. If the Transaction changes to any other transaction, including, but not limited to, a sale, exchange, option to buy, right of first refusal, ground lease, lease, sublease or assignment of lease (collectively "Alternative Transaction"), then Agent shall automatically be Owner's sole and exclusive Agent for such Alternative Transaction and represent Owner In such Alternative Transaction, under the terms and conditions of this Agreement. If, during the Term hereof, an Alternative Transaction Is entered into, then Owner shall pay Agent the Agreed Commission. 7. EXCLUDED AND REGISTERED PERSONS. 7.1 Owner shall, within five business days after the date hereof. provide Agent, in writing, with the names of those persons or entities registered with Owner by any other broker under any prior agreement concerning the Property {"Excluded Persons", see paragraph 7.5). Owner shall also specify for each Excluded Person the type of transaction the consummation of which during the Term of this Agreement entitles such other broker to any compensation ("Excluded Transaction")- If Owner timely provides Agent with the names of the Excluded Persons and specifies the Excluded Transaction for each Excluded Person, then the Agreed Commission paid to Agent with respect to consummation of such an Excluded Transaction with an Excluded Person shall be limited as follows: if such Excluded Transaction is concluded within the first thirty days of the commencement of the Term hereof, then Agent shall be paid a commission equal to the reasonable out-of-pocket expenses incurred by Agent in the marketing of the Property during said thirty days: or if such Excluded Transaction is concluded during the remainder of the Tenn hereof, then Agent shall be entitled to a commission equal to one-haH of the Agreed Commission_ If the specified information concerning Excluded Persons and Transactions is not provided as set forth herein, then it shall be conclusively deemed that there are no Excluded Persons- 7.2 Agent shall, within five business days after the expiration of the Term hereof, provide Owner, in writing, with the name of those persons or entities with whom Agent either directly or through another broker had negotiated during the Term hereof ("Registered Persons", see paragraph 7.5), and specify the type of transaction of the Property for which such negotiations were conducted ("Registered Transaction") Those persons or entities who submitted written offers or letters of intent shall, however, automatically be deemed to be Registered Persons for the type of transaction which was the subject of such offer or letter of intent- If Agent fails to timely notify Owner of the existence of any other Registered Persons, then it shall be conclusively deemed that there are no other Registered Persons- A person or entity shall not be a Registered Person if Agent fails to timely specify a Registered Transaction for such person or entity. If Agent wishes to register the client of a Cooperating Broker, Agent must obtain and submit to Owner written approval of such registration signed by such Cooperating Broker_ The parties are aware that the registration of certain individuals and/or entities might create a Dual Agency, and Owner hereby consents to any such Dual Agency. 7.3 If, within one hundred eighty days after the expiration of the Term hereof, Owner enters into a contract with a Registered Person for consummation of a Registered Transaction, then Owner shall, upon consummation of such Registered Transaction, pay Agent the Agreed Commission for the Registered Transaction. 7.4 If, within one hundred eighty days after the expiration of the Term hereof, Owner enters into another owner -agency or listing agreement with a broker other than Agent for any transaction concerning the Property, then Owner shall provide to Owners new broker the names of the Registered Persons and the Registered Transaction for each Registered Person, and provide in such new agreement that the new broker shall not be entitled to receive any of the compensation payable to Agent hereunder for consummation of a Registered Transaction with a Registered Person_ 7.5 In order to quality to be an Excluded Person or a Registered Person the individual or entity must have: toured the Property, submitted a letter of interest or intent, and/or made an offer to buy or lease the Property_ In addition, Excluded Persons may only be registered by a broker who previously had a valid listing agreement covering the Property, and such broker may only register individuals and entities actually procured by such fisting broker_ 8. OWNER'S REPRESENTATIONS. 8 1 Owner represents and warrants that - (a) Each person executing this Agreement on beha" of Owner has the full right, power and authority to execute this Agreement as or on behalf of Owner. (b) Owner owns the Property and/or has the full right, power and authority to execute this Agreement and to consummate a Transaction as provided herein, and to perform Owners obligations hereunder. (c) Neither Owner nor the Property is the subject of a bankruptcy, insolvency, probate or conservatorship proceeding; (d) Owner has no notice or knowledge that any lessee or sublessee of the Property, if any, Is the subject of a bankruptcy or insolvency proceeding; (e) There are no effective, valid or enforceable option rights, rights of first refusal, rights of first offer or any other restrictions, impediments or limitations on Owners right, ability and capacity to consummate a Transaction, except as disclosed in writing pursuant to Paragraph 3.2(b). • or on the Property InformlUOn $heft_ Initials 01997 -American Industrial Real Estate Association Page 2 of 3 REVISED C41 Al ly Inl itials FORM OA-1-6197E 9., OWNSR'S ACKNOWLEDGMENTS. Owner a&ledges that it has been advised by Agent to cons& retain experts to advise and represent rt concerning the legal and tax effects of this Agreement and consummation of a Transaction or Alternative Transaction, as well as the condition and/or legality of the Property, including, but not limited to, the Property's Improvements, equipment, soil, tenancies, title and environmental aspects. Agent shall have no obligation to investigate any Such matters unless expressly otherwise agreed to in writing by Owner and Agent- Owner further acknowledges that in determining the financial soundness of any prospective buyer, lessee or security offered. Owner will rely solely upon Owners own investigation. notwithstanding Agent's assistance in gathering such information. 10. MISCELLANEOUS. 10-1 This Agreement shall not be construed either for or against Owner or Agent, but shall be interpreted, construed and enforced in accordance with the mutual intent of the parties ascertainable from the language of this Agreement. 10.2 All payments by Owner to Agent shall be made in lawful United States currency. If Owner fails to pay to Agent any amount when due under this Agreement, then such amount shall bear interest at the rate of 15% per annum or the maximum rate allowed by law, whichever is less. 104-00 Of 1149 P�QpdFlly. OF ally 99 jbGFR616mGmAg UPOOF OF F06VA149 10 this A09"M81111 01: 41119 PFOPGAY. 41019 Pf8V21l6A§ pefly Ghall he paid MIM ailiamay- goes and COMP101111d A 00009140POS With My rows too sGuedt4e, but sham ba MR an spr4up! ila twily Fembutsis all anorney's illsqs masanably inaw"ed in good 10_4 Owner agrees to indemnify, defend (with counsel reasonably acceptable to Agent), and hold Agent harmless from and against any claim or liability asserted against Agent as a result of the failure of Owner to make a full and complete disclosure pursuant to law and paragraph 3.2(a) or as a result of the fact that any of the representations made by Owner (see paragraph 8) were not true at the time that this Agreement was signed - 10.5 Owner hereby releases and relieves Agent. and waives Owner's entire right of recovery against Agent, for direct or consequential loss or damage arising out of or incident to the penis covered by Insurance carried by Owner, whether or not due to the negligence of Agent 10.6 In the event that the Transaction is not an outright sale, Owner agrees that d Agent is not paid the Agreed Commission provided for herein within thirty days of the date due, that Agent shall have a lien in the amount of such Commission, and may record a notice of such hen, against the Property- 12. Additional Provisions: Additional provisions of this Agreement are set forth in the following blank lines or in an addendum attached hereto and made a part hereof consisting of paragraphs 13 through 13 (if there are no additional provisions write 'NONE')- 13. Owner hereby authorizes Agent. W notify all multiple listing 5ervtces as to changes in listing expiration date. asking rental or Sales pnce5, or any other chsn0e3 in terms or availability agreed to by Owner and communicated orally or in writing to Agent. "OWNER" City of Huntington Beach Redevelopment Agency ti By - Name Printed: Title- Date- � - 4 • U : APBy MUTYCI DETTORNEY kj1 r03 "AGENT' Lee & Associates -- Newport Beach, Inc. By - By: %,, Date: _ /1f�t(J j NOTICE: These forms are often modified to meet changing requirements of law and industry needs Always write or call to make sure you are utilizing the most current form: American Industrial (teal Estate Assoclation, 7D0 So. Flower St-, Ste 600, Los Angeles, CA 9D017. Telephone No. (213) 687-8777. Fax No.: (213) 687-8616_ STALDEPJCI_Y OF HB-OWNER AGENCY Initials 01997 - American Industrial Real Estate Association Page 3 of 3 REVISED In ials FORM OA-1 4I197E REAL ESTA31: SERVICES SCHEDULE OF COMMISSIONS A. SALES, EXCHANGES, AND OTHER TRANSFERS 1. Unimproved Property (substantially lacking amenities necessary for urban development, such as roads, utilities or zoning): 10% of the gross sales price. 2. Improved Property 6% of the gross sales price. 3. Exchange: Each party to the exchange shall pay a full sales commission based on the type of property in accordance with this Schedule - 4. Joint Venture. If a joint venture is effected in lieu of a sale, a full sales commission shall be paid on the basis of the value of the property as determined for purposes of the joint venture agreement and the percentage interest thereof which is being conveyed to the joint venture or the joint venturers. 5. Business Opportunity: 10% of the gross safes price- B.LEASES GROSS LEASE (in which tenant pays all real property taxes) 7% of the rent for the first year, 6% of the rent for the second year, 5% of the rent for the third year, 4% of the rent for the fourth year; 4% of the rent for the fifth year, 3% of the rent for the next five years; 2% of the rent for the balance of the term NET LEASE 7% of the rent for the first year, 7% of the rent for the second year, 6% of the rent for the third year; 5% of the rent for the fourth year, 5% of the rent for the fifth year, 4% of the rent for the next five years: 3% of the rent for the balance of the term 1. Term of More Than 30 Years: Including Ground Leases, if the initial lease term is in excess of 30 years, then the commission shall be calculated only upon the rental to be paid during the first 30 years of the term of the lease- 2- Sublease or Assignment: 6% of the rent payable under the assignment or subleasing of a gross lease during the balance of the term, or 7% in the case of a net lease_ If a cash bonus or jump sum is paid by the successor tenant, a sales commission shall also be paid in accordance with this Schedule- 3 Month -to -Month Tenancy: The commission shall be 506/6 of the first month's rent but in no event less than $400 In the event a month -to -month tenant subsequently executes a lease, either direct with Owner or through Broker, within 24 months from the date of occupancy of the month -to -month tenant, then Broker shall receive a leasing commission in accordance with the provisions of this Schedule. 4. Extension of Lease or Additional Space Taken: Should the term of the lease be extended or the tenant occupy additional space, then a leasing commission shall be paid when said term is extended or said additional space is occupied_ The leasing commission shall be computed in accordance with the provisions of this Schedule and by using the rates applicable as if the initial term of the lease had included said extension period or the premises initially demised had included said additional space- 5- Purchase of Property by Tenant: Should tenant, his successors, or assignees purchase the subject property during the term of the lease or any extension thereof or within 180 days after expiration thereof, then a sales commission shall be paid when the purchase is effected. Said sates commission shall be computed in accordance with the provisions of this Schedule, less the amount of paid lease commissions related to that portion of the lease term extending beyond the effective date of said purchase. C. PAYMENT OF EARNED COMMISSIONS I- Commissions shall be paid through escrow upon the dosing of sales and exchange transactions, absent an escrow-, commissions shall be paid upon recordation of a deed or upon delivery of such deed or other conveyance if recordation is deferred more than one month thereafter_ In the event of a Contract or agreement of sales, joint venture agreement, business opportunity or other transaction not involving the delivery of a deed, commissions shall be paid upon execution and delivery of the instrument of conveyance or establishment of the entitlement of ownership- 2_ Leasing and subleasing commissions shall be paid upon execution and delivery of a lease by Owner and tenant_ 3. Broker is hereby authorized to deduct its commission pursuant to this Schedule from funds held in its trust account; Owner shall promptly pay any difference in cash in accordance herewith. D. MISCELLANEOUS 1. If Owner fails to make any payment at the time required herein, the delinquent sums) shall bear interest at the maximum rate permitted by law or 15%, whichever is less. 2_ This Schedule and the Agreement to which it is attached are binding on Broker only when executed by both parties without modification of the printed terms; provided that any such unauthorized modifications will be enforceable by Broker at its option, provided further that any officer of Broker is authorized to modify such terms by executing such Agreement or by initialing such modifications 3. This Schedule shall be used only for transactions in which Lee & Associates — Newport Beach, Inc. is involved and shall not be distributed to any other party. The undersigned hereby acknowledges receipt of a copy of this schedule and agrees to pay a commission(s) as provided herein. Dated: F - 4 - 03 '2602 Dated _ 1 / b LO? 2002 OWNERILESSOR OR SUBLESSOR: City of Huntington B h-Redevelopyy cy By. C . Address:2000 Main Street Huntington Beach, CA 92648 Telephone APRN*UkAA TO FORM 4.111 By: DEPUTY CITY ATTORNEY iiblo3 BROKER: Lee & Associates — Newport Beach, Inc. By: Address: 3991 MacArthur Blvd., Suite 100 _ Newport Beach, CA 92660 Telephone (949) 724-1000 GEF: ILE'-0ATA%Srnldert4GREF-AtEbVehedwle ojCommusions-City of HR doc 111lllb t AMER&N INDUSTRIAL REAL ESTATE SOCIATION PROPERTY INFORMATION SHEET (Non -Residential) PREFACE: Purpose: This Statement is NOT a warranty as to the actual condition of the Property/Premises- The purpose Is, instead, to provide the brokers and the Potential buyerAessee with important information about the PropertylPremises which is currently in the actual knowledge of the Owner and which the Owner is required by law to disclose. Actual Knowledge: For purposes of this Statement the phrase 'actual knowledge' means: the awareness of a fact, or the awareness of sufficient information and circumstances so as to cause one to believe that a certain situation or condition probably exists. TO WHOM IT MAY CONCERN: City of Huntington Beach -Redevelopment Agency ('Owner'), owns the PropertylPremises commonly known by the street address of 438 Main Street located In the City of Huntington Beach County of, Orange State of California and generally described as (describe briefly the nature of the premises or property) _ a freestanding office building of approximately 4,250 square feet (herein after 'Property-). and certifies that: 1_ Material Physical Defects. Owner has no actual knowledge of any material physical defects in the Property or any improvements and structures thereon, including, but not limited to the roof, except (if there are no exceptions write `NONE')- 2. Equipment. A Owner has no actual knowledge that the heating, ventilating, air conditioning, plumbing, loading doors, electrical and lighting systems, life safety systems, security systems and mechanical equipment existing on the Property as of the date hereof, if any, are not in good operating order and condition. except (if there are no exceptions write 'NONE'): B_ Owner has no actual knowledge of any leases, financing agreements, liens or other agreements affecting any equipment which is being Included with the Property, except (if there are no exceptions write 'NONE'). 3_ Soll Conditions. Owner has no actual knowledge that the Property has any slipping, sliding, settling, flooding, ponding or any other grading, drainage or soil problems, except (if there are no exceptions write 'NONE')= 4. Utilities. Owner represents and warrants that the Property is served by the following utilities (check the appropriate boxes) ❑ public sewer system and the cost of installation thereof has been fully paid ❑ private septic system. ❑ electricity. ❑ natural gas. ❑ domestic water, ❑ telephone. and ❑ other: _ 5. Natural Hazard Zone. Owner has no actual knowledge that the Property is located within a delineated flood, earthquake, or other natural hazard zone, except (if there are no exceptions write 'NONE'): 8. Compliance With laws. Owner has no actual knowledge of any aspect or condition of the Property which violates applicable laws. rules, regulations. codes, or covenants, conditions or restrictions. or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable government agency or of any casualty insurance company that any work of Investigation. remediation, repair, maintenance or improvement is to I>e performed on the Property. except (if there are no exceptions write `NONE-): 7. Hazardous Substances. A_ Owner has no actuat knowledge of the Property ever having been used as a waste dump, of the past or present exlstence of any above or below ground Storage tanks on the Property. or of the current existence on the Property of asbestos, transformers containing PCB's or any hazardous. toxic or infectious substance whose nature andfor quantity of existence, use, manufacture or effect render it Subject to Federal, state or local regulation. investigation, remedlation or removal as potentially injurious to public health or welfare, except (if there are no exceptions write 'NONE'): B. Owner represents and warrants that it is not currently, and never has been engaged in the business of hauling waste, and never stored hazardous substances on the Property, except (if there are no exceptions write 'NONE'). Page t of 2 MOO - American Industrial Real Estate Association REVISED FORM PI-34100E -8. Fire Damage. Owner has no actual knowledgy structure on the Property having suffered matero damage. except (if there are no exceptions vOrite~NO lE-)= 9. Actions, Suits or Proceedings. Owner has no actual knowledge that arty actions, suits or proceedings are pending or threatened before any court. arbitration tribunal, governmental department, commission, board, bureau, agency or instrumentality that would affect the Property or the right or abitity of an owner or tenant to convey, occupy or utilize the Property, except (if there are no exceptions write 'NONE'): 10_ Governmental Proceedings. Owner has no actual knowledge of any existing or contemplated condemnation, environmental, zoning, redevelopment agency plan or other land use regulation proceedings which could detrimentally affect the value, use and operation of the Property, except (if there are no exceptions write'NONE`)- 11. Unrecorded Title Matters. Owner has no actual knowledge of any encumbrances, covenants, conditions, restrictions. easements. licenses, liens. charges or other matters which affect the title of the Property that are not recorded In the official records of the county recorder where the Property is located. except (if there are no exceptions write 'NONE'): 12. Leases. Owner has no actual knowledge of any leases. subleases or other tenancy agreements affecting the Property, except (if there are no exceptions write 'NONE')- 13. Options. Owner has no actual knowledge of any options to purchase, rights of first refusal. rights of first offer or other simitar agreements affecting the Property, except (if there are no exceptions write 'NONE'): 14. Other. (it will be presumed that there are no additional items which warrant disclosure unless they are set forth herein): The statements herefn will be relied upon by brokers. buyers, lessees. lenders and others. Therefore. Owner and/or the Owner's Property fvtanager has reviewed and modified this printed statement as necessary to accurately and completely state all the known material facts concerning the Property. To the extent such modifications are not made, this statement may be retied upon as printed. This statement, however, shall not relieve a buyer or lessee of responsibility for independent investigation of the Property. Owner agrees to promptly notify, in writing, all appropriate parties of any material changes which may occur In the statements contained herein from the date this statement is signed until title to the Property is transferred, or the lease is executed. Date: 4 . 200 (Fill in date of execution) pptl�S,;q FORM gy; �� DEPUTY CITY ATTORNEY "OWNER" City of Hantin ton Beach—Redevelo-nent Agency By: Name Printed: A o I Title: Buyer/lessee hereby acknowledges receipt of a copy of this Propery Information Sheet on By Name Printed: Title: NOTICE: These forms are often modified to meet changing requirements of law and industry need$- Always write or call to make sure you are utilizing the most current form: American Industrial Real Estate Association, 700 South Flower Street. Suite 600. Los Angeles. CA 90017. Telephone No_: (213) 687-8777 Fax No.: (213) 687-8616_ 5TALDER/GITYOF 1-113-FROFFRTY INFO Page 2 of 2 (D2000 - American Industrial Real Estate Association RI:VSEt] FORM PI-3-8100E RCA ROUTING SHEET INITIATING DEPARTMENT: ADMIN. SERVICES SUBJECT: APPROVE LISTING AGREEMENT WITH LEE & ASSOCIATES FOR SALE OF 438 MAIN STREET COUNCIL MEETING DATE: January 21, 2003 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (wlexhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Attached Contract/Agreement (wlexhibits if applicable) (Signed in full by the Cit AHome Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attome Not Applicable Certificates of Insurance (Approved by the City Attomey) Attached Financial Impact Statement (Unbud et, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator (initial) City Administrator (Initial) City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: RCA Author: Bodek x5445