Approval of New Master Ground Lease.
 

Staff recommends that the City Council approve the execution of a new Master Ground Lease (“Ground Lease”) between the Landlord and the Tenant for the real property located in the City of Hawthorne, as described in the attached exhibits, and authorize the City Manager to execute any and all documents necessary to implement its terms, including a Consent to Assignment, a Landlord Estoppel Certificate, and an Amended and Restated Memorandum of Lease associated with the transfer of interests to Archer Airport Ground Lease LLC and Archer Airport Improvement LLC.

The Master Ground Lease dated January 3, 2005, as amended multiple times (the “Ground Lease”), including amendments dated November 22, 2005; June 13, 2006; June 28, 2017; and January 24, 2024. The Ground Lease governs the use of certain real property located in Hawthorne, California, as more particularly described in the Exhibits attached hereto (the “Leased Premises”). A Memorandum of Lease reflecting the Ground Lease was originally executed on November 22, 2005, and recorded on February 1, 2006, as Document No. 2006-236886 of the Official Public Records of Los Angeles County (the “Original Memorandum”).

The purpose of this new Memorandum is to replace the description of the Leased Premises and provide notice of the existence and terms of the Ground Lease, including provisions allowing for entry into a new ground lease following a foreclosure, if applicable. The new Memorandum amends and restates the Original Memorandum in its entirety.

The city was notified of the transfer of interest. The tenant has entered into an Agreement for Purchase and Sale of Real Estate, pursuant to which it will sell, assign, transfer, convey, or otherwise dispose of its right, title, and interest in the Hawthorne Subleases to Archer Airport Ground Lease LLC (“Archer Airport”), a Texas limited liability company. Subtenant has entered into an Agreement for Purchase and Sale of Real Estate, pursuant to which it will sell, assign, transfer, convey, or otherwise dispose of its rights in the Hangar Development Ground Sublease 1, Northside Sublease, and T-Hangar Sublease to Archer Airport Improvement LLC (“Archer Improvement,” and together with Archer Airport, “Buyer”).

Master Landlord’s consent to the Hawthorne Subleases and 395 Subleases, and the rights and obligations of Subtenant under Sections 3, 4, and 5 of the Ground Lease, shall inure to the benefit of, and be fully effective for, Tenant, Subtenant, and Buyer, without further consent by Master Landlord, except that any future consent or approval required under the Master Ground Lease shall remain in full force and effect. The Ground Lease is set to expire on December 31, 2055.

Staff recommends that the City Council support the execution of the new Master Ground Lease and authorize the City Manager to take all actions necessary to implement its terms and execute all other required and necessary documents.

Establish priorities for attracting new businesses, supporting existing businesses, and economic development growth.

There is no direct fiscal impact to the City of Hawthorne resulting from the execution of this Ground Lease. The Ground Lease preserves the City’s rights and obligations under the existing lease arrangements while facilitating the transfer of interests to the buyers entities.

72 hours posted notice pursuant to the Ralph M. Brown Act