FEBRUARY 21, 2012
BELINDA B. ESPINOSA, CITY MANAGER
MICHELLE FITZER, ASSISTANT CITY MANAGER
SUBJECT: ADOPT A RESOLUTION APPROVING PANERA BREAD, LLC AS A
PROPOSED TENANT AT THE PINOLE VISTA CROSSINGS
That the City Council adopt a resolution approving Panera Bread, LLC as a
proposed tenant at the Pinole Vista Crossings Shopping Center.
Under the 1995 Disposition and Development Agreement (DDA) and Ground Lease
with TKG Pinole, LLC (TKG), the Redevelopment Agency must approve all tenant
leases for the Pinole Vista Crossings Shopping Center. Section 607 (c) of the
Ground Lease states that each sublease or the substantive terms of each sublease
shall be submitted to the Landlord for its prior written approval which shall not be
unreasonably withheld or delayed if the sublease is SUbstantially consistent with the
Marketing Plan and the standard form of sublease.
On February 24, 2011, the Agency conveyed fee title and all Agency rights in the
Pinole Vista Crossings Shopping Center to the City through the execution of
disposition and development agreements and related assignment and assumption
On December 6, 2011, the Council and the Agency Board adopted resolutions to
enter into a Purchase and Sale Agreement with TKG Pinole, LLC, for the disposition
of the City's fee interest in the Center. The property is currently in escrow.
REVIEW AND ANALYSIS
Until escrow closes, the term of the DDA and Ground Lease requiring the
City/Agency to approve all new leases is in force. TKG Pinole, LLC is proposing
Panera Bread, LLC as a new tenant to enter into a lease for a 4,000 square foot
store in the Pinole Vista Crossings Shopping Center. The following is a brief
summary of the proposed terms for the Panera Bread lease agreement:
City Council Report 2012 - 34
Panera Bread, LLC - 4,000 square feet (in the former Blockbuster site)
• Tenant Use: Operation of a bakery-cafe restaurant
• Lease Term: 15 Years (with 3 five-year renewal options)
• Rent: Years 1-5 $3.25 per square foot plus CAM
• Landlord Allowance $50.00 psf ($200,000)
• Rental Increases: Every 5 years as per schedule (Attachment B)
There is no fiscal impact to approve proposed tenant.
B: Panera Bread Executive Summary
RESOLUTION NO. 2012 - _______
A RESOLUTION OF THE CITY OF PINOLE APPROVING PANERA BREAD, LLC AS A TENANT AT
PINOLE VISTA CROSSINGS SHOPPING CENTER
WHEREAS, the Agency entered into that certain Ground Lease, Reciprocal Easement, Declaration of Covenants
Running with the Land, and Development Agreement by and between the Agency and TKG Pinole Vista, LLC (the “Lessee”)
with respect to the Pinole Vista Crossing Shopping Center (the “Shopping Center”), (the “Agreement”) whereby the
Agency had approval rights over the tenants; and
WHEREAS, On February 24, 2011, the Agency conveyed fee title and all Agency rights in the Pinole Vista
Crossings Shopping Center to the City through the execution of disposition and development agreements and related
assignment and assumption agreements; and
WHEREAS, On December 6, 2011, the City adopted a resolution to enter into a Purchase and Sale Agreement
with TKG Pinole, LLC for the disposition of the City’s fee interest in the Pinole Vista Crossings Shopping Center; and
WHEREAS, The property disposition is in escrow, so the term of the DDA and Ground Lease requiring City
approval of leases is in force; and
WHEREAS, Lessee desires to negotiate a 15-year retail lease, with three 5-year options for extension of the term,
for approximately 4,000 square feet of commercial retail space in the Pinole Vista Crossing Shopping Center with Panera
Bread, LLC, for the operation of a bakery-café restaurant; and
WHEREAS, Lessee will negotiate a lease agreement with Panera Bread, LLC in substantially the form on file with
the City Clerk or approved by the City Attorney.
NOW, THEREFORE, THE CITY OF PINOLE DOES RESOLVE AS FOLLOWS:
Section 1. The City hereby finds that Panera Bread, LLC is the type of subtenant desired for the Shopping
Center and approves Panera Bread, LLC as a subtenant for the Shopping Center.
Section 2. The City hereby finds and determines that the Sublease will be substantially consistent with the
requirements of the Ground Lease and Agreement.
APPROVED AND ADOPTED this 21 st day of February 2012.
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
Patricia Athenour. CMC
PINOLE VIST C G-EXECUTIVE SUMMARY-PROPOSED PANERA BREAD LEASE
DECEMBER 31, 2011
BELINDA ESPINOSA @ CITY OF PINOLE; NANCY KIVELSON @ TKG
The following is a summary of the basic terms of the proposed Panera
Bread lease at the Pinole Vista Crossing Shopping Center. This summary is based on a
letter ofintent signed as ofAugust 31, 2011 (a copy ofwhich is attached). The lease will
be on the Tenant's form but modified to conform with the Landlord's lease form.
Premises - Approximately 4,000 square feet in Outlot A (part of the old
Term - 15 years, with 3 renewal options, each for an additional 5 years.
The term will commence upon Landlord's delivery ofthe Premises. Rent will commence
120 days after the later of (i) the date Landlord delivers the Premises to Tenant with
Landlord's work completed, or (ii) the date the Tenant obtains its building permits.
Landlord's Work - Tenant to take the Premises "as is", except that
Landlord shall make certain utility, HVAC and trash enclosure improvements, as
identified in the LO!. See attached Summary of Estimated Lease Costs. In addition, the
Landlord is required to re-align the drive aisle immediately in front of Outlot A and
provide Tenant with an outdoor patio area ofapproximately 800 square feet.
Tenant Improvement Allowance - Landlord to provide a tenant
improvement allowance equal to $50.00 per square foot ($200,000).
Rent - the rent schedule for the initial term and the three renewal terms is
set forth below:
1 st Option Term (11-15)
2 nd Option Term (16-20)
3 rd Option Term (21-25)
Annual Rent per square foot
214 GRANT AVENUE. SUITE 325
SAN FRANCISCO, CA 94108
(415) 434-4030 PHONE (41 S) 434-8980 FAX
Pass Throughs - Tenant is to pay its prorata share of operating expenses,
insurance expenses and property taxes. Tenant is not required to pay for an increase in
property taxes due to a sale more than once every 5 years.
Security Deposit: Percentage Rent - Tenant will not be obligated to
provide a security deposit or to pay any percentage rent.
Use - Operation ofa bakery-cafe restaurant.
Exclusive Use - Excluding existing tenants of the Center, Landlord will
not lease space in the center to any other retailer whose business sells bagels, baked
goods and breads (limited use pennitted at less than 500 sfor 15% ofsales).
Maintenance and Repairs - Landlord shall maintain HVAC
equipment serving the Premises, with the costs passed through to the
Tenant. Tenant to maintain its Premises.
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