Ground Lease Estoppel Certificate i
THIS DOCUMENT PREPARED BY
AND WHEN RECORDED RETURN TO:
Daniel J.Perlman, Esq.
Kirkland&Ellis LLP.
300 North LaSalle Street
Chicago,Illinois 60654
GROUND LEASE ESTOPPEL CERTIFICATE
To: LIFT Collins Avenue, LLC, which is a
wholly owned subsidiary of Jones Lang
LaSalle Income Property Trust, Inc.
("Purchaser")
c/o LaSalle Investment Management
100 East Pratt Street, 20th Floor
Baltimore,MD 21202
Attn: Richard R. Reese, Jr.
From: City of Miami Beach,Florida("City")
1700 Convention Center Drive, Fourth Floor
Miami Beach, Florida 33139
Ladies&Gentlemen:
A. On the 1St day of December, 1999, City entered into a land lease with Pelican Development, LLC
("Pelican Development") for certain land (the "Land") located at 1027 Collins Avenue and 1041 Collins
Avenue, Miami Beach, Florida, as recorded in Official Records Book 18938, Page 2422, of the Public
Records of Miami-Dade,County, Florida (the "Ground Lease"). The Land is described in more detail on
Exhibit "A" attached hereto. Pelican Development constructed a parking garage ("Garage") with ground
floor retail space on the Land (the "Improvements") (The Garage and the Improvements may also be
collectively referred to herein as the "Project"). Pelican Development's interest in the Ground Lease and
the Project were subsequently assigned and conveyed to Ocean Blvd. II,-LLC ("Ocean Blvd. II"), and
Ocean Blvd. II became the successor to all of Pelican Development's right, title, and interest under the
Ground Lease. Ocean Blvd. II's interest in the Ground Lease and the Project were subsequently assigned
and conveyed by Ocean Blvd. II to Pelican Investment Holdings, LLC ("Pelican Investment" and,
together with its permitted assigns under the Ground Lease, "Tenant"), and Tenant became the successor
to all of Ocean Blvd. II's right, title, and interest under the Ground Lease. Purchaser is now considering
acquiring Tenant's interest in the Ground Lease and is relying on the contents of this Estoppel Certificate.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Ground
Lease.
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This Ground Lease Estoppel Certificate (the "Estoppel Certificate") is being executed and delivered by
City to the Purchaser, together with Purchaser's successors and assigns (and the successors and assigns
thereof) and any lender of the foregoing parties making a loan relating to the Ground Lease and any
successors or assigns thereof (including a party that acquires title to the Ground Lease pursuant to a
Foreclosure Transfer) and Tenant (collectively, the "Reliance Parties"), with the understanding that the
statements set forth below will be relied upon by the Reliance Parties; provided, however, that
notwithstanding the preceding,the foregoing reliance by the Reliance Parties is in no way intended to,nor
does it, waive any of the City's rights under the Ground Lease to make an evaluation of, and/or consent
to, any subsequent Transfers, Subleases, or Sales of the Project (including, without limitation therein, an
evaluation and/or consent to a Recognized Mortgagee).
B. City hereby certifies to the Reliance Parties that:
1. The Ground Lease is unmodified and in full force and effect. A true, correct and
complete copy of the Ground Lease is attached to this Estoppel Certificate as Exhibit"B"
hereto. Except as reflected in the Ground Lease, there are no other agreements between
City and Tenant.
2. The Commencement Date of the Ground Lease is December 1, 1999.
3. The Delay Date occurred on September 30, 2001, the CO Date occurred on October 31,
2002 and the Possession Date occurred on January 10, 2000. Pursuant to Section 2.1 of
the Ground Lease, the term of the Ground Lease will expire on September 30, 2041,
subject to Tenant's ability to extend the said term by ten (10) years in accordance with
the terms of the Ground Lease.
4. The Base Rent under the Ground Lease as of the date of this Estoppel Certificate is
$94,080.00 per year, subject to adjustments as provided in the Ground Lease and is paid
in monthly installments of$7,840.00 plus applicable sales tax. Such Base Rent has been
paid through December 31,2013.
5. The Percentage Rent under the Ground Lease as of the date of this Estoppel Certificate is
two and one half percent (2 1/2%) of Project Revenue for each Lease Year and is due in
annual installments, in arrears, within sixty (60) days after the end of each Lease Year.
Percentage Rent for the Lease Year ending December 31, 2012 has been paid.
6. All Impositions payable by Tenant to City which are due and payable under the Ground
Lease as of the date of this Estoppel Certificate have been paid, except as set forth on the
attached Exhibit"C".
7. To the actual knowledge of the City, but without independent inquiry, neither City nor
Tenant is presently in default under the Ground Lease and no condition exists which,
with the giving of notice or passage of time, or both,would constitute a default by City or
Tenant under the Ground Lease. Notwithstanding the foregoing, the City does not waive
any default or claim not currently known to City or which arises after the date hereof;
nor, without limiting the generality of the foregoing, does the City waive any currently
unknown claim, liability, default and/or obligation arising out of a breach of the Ground
Lease by Tenant, or any currently unknown act or omission by Tenant, that occurred
prior to Purchaser's acquisition of Tenant's interest in the Ground Lease.
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8. In reliance upon Purchaser's representations and warranties to the City, as set forth in
Section 7(c) of the Assignment and Assumption Agreement between Tenant and
Purchaser, City acknowledges that LAZ Parking meets the criteria for an Acceptable
Operator under Section 1.1 of the Ground Lease.
9. City has not assigned, conveyed, transferred, encumbered or mortgaged its interest in the
Ground Lease or the Land
10. City owns fee simple title to the Land.
11. There are twenty-eight (28) undesignated parking spaces (the "KTKL Spaces") in the
Garage (which spaces are located upon the Land) which are subject to a leasing
arrangement as set forth below. On October 31, 20025 City agreed to lease the KTKL
Spaces to K.T.K.L. Corporation, a Florida corporation ("KTKL") (the "Lease").
Simultaneously, on October 31, 2002, KTKL agreed to lease back those same spaces to
City (the "Lease Back"). The Lease and Lease Back each have a concurrent term of
thirty (30)years, which terms commenced on October 31, 2002, and end on October 30,
2032. No rent is payable by KTKL with respect to the Lease and no default is possible
under the Lease. The only obligation of City under the Lease Back is to make annual
rental payments to KTKL as set forth in that certain amendment to court settlement
agreement issued in September of 2010, which is attached hereto as Exhibit "D" (the
"Settlement Agreement"). The City acknowledges that Purchaser does not have an
obligation to make any of the City's payments to KTKL under the Settlement Agreement.
Pursuant to the Settlement Agreement, KTKL has been dissolved and Anthony
Karpawich, Kent Karpawich, and Lisa Karpawich (together, the "Current KTKL
Parties")are the assignees of KTKL.
12. The aforementioned leasing arrangement with respect to the KTKL Spaces is in place
because of a dispute that arose between City and KTKL in connection with a 1993
Purchase Agreement with respect to a portion of the Land.
13. The City currently believes it is entitled to the use of the KTKL Spaces. Notwithstanding
the preceding, and in consideration of a one-time payment by Pelican Investment in the
amount of$250,000.00, which amount shall be due and payable to the City at closing of
the Sale to Purchaser, the City agrees to relinquish any rights it may have to use the
KTKL Spaces during the Term of the Ground Lease. As a result of such relinquishment,
City hereby confirms that, upon the payment by Pelican Investment of the
aforementioned sum, the KTKL Spaces shall be included in the Project leased pursuant to
the Ground Lease.
14. To the actual knowledge of the City, but without independent inquiry, the City is not
presently in default under the KTKL Settlement Agreement and no conditions exist
which with the giving of notice or passage of time, or both, would constitute a default by
the City under the KTKL Settlement Agreement. All payments to be made by the City
under the Lease Back are current. City has made the 2013 payment to the Current KTKL
Parties under the Lease Back in the amount shown on the Settlement Agreement with
respect to 2013.
15. In the event that City receives a notice from the Current KTKL Parties (or any successor
thereof) with respect to the Lease Back, City agrees to promptly provide a copy of same
to Purchaser. If City does not make or will not make a rental payment to the Current
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KTKL Parties in connection with the Lease Back, City agrees to promptly notify
Purchaser and give Purchaser the option to make such payment on behalf of City. If
Purchaser makes any such payments, the amount of such payment may be offset against
any future Rental payments due from Purchaser to City pursuant to the Ground Lease
(including any Percentage Rent). Additionally, City agrees that in the event that (i)
Purchaser reasonably makes cure rental payments to the Current KTKL Parties under the
belief that the Current KTKL Parties are entitled to such sums under the Lease Back and
(ii) City disputes such payments to the Current KTKL Parties, City's only recourse shall
be against the Current KTKL Parties and City shall not have a claim against Purchaser
with respect to such sums.
16. The statements contained herein may be relied upon by the Reliance Parties.
17. City understands that Purchaser's sole Member and Managing Member is Jones Lang
LaSalle Income Property Trust, Inc., a public Real Estate Investment Trust with continual
share offerings and redemptions (the "REIT"). Accordingly, City acknowledges and
agrees that the issuance, transfer, and sale of shares of stock in the REIT (the "REIT
Transfers") shall not be subject to Section 10.3(c) of the Ground Lease, so long as Jones
Lang LaSalle Income Property Trust, Inc. remains the sole Member and Managing
Member of Purchaser.
18. Purchaser may record this Estoppel Certificate at its sole cost and expense.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF the undersigned, who is authorized to execute this Estoppel Certificate
this day of , 2014.
WITNESSES: CITY OF MIAMI BE CH, FLORIDA, a municipal
""~ corporat' n of the St e of Florida
Signa /�r ` By:
Name
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Print Name:
County of
State of --�.�
Sworn to and subscribed before me this D day of -. 2014, by
.� mrn o;ad e who (�was personally known to me or ( ) produced
as identification.
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Exhibit"A"
LEGAL DESCRIPTION
North 1 foot of Lot 11, and all of Lots 12, 13, and 14, of Block 15, OCEAN BEACH ADDITION NO.2,
according to the Plat thereof, recorded in Plat Book 2, Page 56, of the Public Records of Miami-Dade
County, Florida.
Exhibit"B"
Ground Lease
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Exhibit"C"
1. See attached Lien Search(Exhibit"C-1")
2. Final Invoice from Kroll, in the amount of$17,474.80(Exhibit"C-2").
3. Tenant is in the process of gathering proof that applicable sales tax, in connection with the
payment of Rental for the past three(3)years, has been paid.
Exhibit"C-1"
Lien Search
Exhibit"C-2"
Final Kroll Invoice
Exhibit"D"
KTKL Settlement Agreement