Friendly advice from a Commercial Real Estate Attorney:
Years ago, I and my investment partners owned a large parking lot in Minneapolis and I negotiated a 30 year lease with a medical/dental group who built a clinic on part of our lot, and paid us monthly on a land lease with rent escalators.
After 30 years, the doctors and dentists retired, vacated the clinic, and I took title to the building, as agreed in the lease, and sold the clinic building to a new doctor/dentist group, along with some of the land under the clinic, with adjacent parking spaces.
It was a Long, and Very complicated lease negotiation, with many contingencies and indemnity clauses.
The city council does not realize one BIG issue, that should be addressed as a "Red Flag", BEFORE proceeding:
This proposed "55 year land lease" is actually a "55 year partnership with the developer".
It requires strong indemnity provisions and multiple complicated, precise GUARANTEES !
For example:
What if the developer sells to a New Owner?
Is the new owner "Acceptable"?
Can the city object? On what grounds?
Who pays for an "Additional Insured Rider? What are the limits? Who comes first on claims? And much more . . .
It requires strong indemnity assurances, and insurance guarantees, and many "Contingencies" !
This council is unqualified to proceed, and "Yes on P" is essential.
Frankly, my advice to both the city council AND the developer:
"Walk Away"
Michael C. DeMoss,
Menlo Park Resident
Sent from my iPhone
