HomeMy WebLinkAboutitem 11b - Amendment to Arcadia Hospital Lease Agreement
DATE: November 21, 2023
TO: Honorable Mayor and City Council
FROM: Michael J. Maurer, City Attorney
SUBJECT: RESOLUTION NO. 7536 APPROVING A NINTH AMENDMENT TO THE
AGREEMENT AND LEASE BY AND BETWEEN THE CITY OF ARCADIA
AND METHODIST HOSPITAL OF SOUTHERN CALIFORNIA
CEQA: Not a Project
Recommendation: Adopt and Approve
SUMMARY
The City of Arcadia owns and leases the land on which USC Arcadia Hospital is
located. Over the years, the Agreement and Lease for use of that property has been
amended numerous times, capturing changes in conditions and ownership. The ninth
amendment proposed to the Agreement and Lease will authorize a transfer of the lease
to reflect a change in corporate entity, effective July 1, 2023. All other terms of the
Agreement and Lease will remain in effect. It is recommended that the City Council
adopt Resolution No. 7536 and approve the assignment of the lease from USC Health
System to USC Arcadia Hospital.
DISCUSSION
The City currently leases to USC Health System the property where the USC Arcadia
Hospital is located. The lease was originally entered in 1953 with the Hospital
Foundation of the Methodist Church. It has been amended throughout the years as
needed to reflect changes in conditions and was eventually assigned to Methodist
Hospital of Southern California. In 2022, the City Council approved an eighth
amendment to the lease, consenting to an assignment from Methodist to USC Health
System, and the name of the hospital was changed to USC Arcadia Hospital.
USC Health System has now requested that the corporate entity on the lease be
changed to USC Arcadia Hospital. Both entities are California nonprofit public benefit
corporations. USC Health System is the sole corporate member of the hospital, and
USC Arcadia Hospital is the operator of the hospital and is governed by a local Board of
Directors. The proposed Ninth Amendment to the Agreement and Lease will assign,
with the City’s consent, all rights and obligations of USC Health System to USC Arcadia
Hospital, and the assignment will be backdated to be effective July 1, 2023. From the
Amendment to Hospital Lease Assignment
November 21, 2023
Page 2 of 2
City’s perspective, this is a technical change only; the Lease will not otherwise be
modified by this action and will remain in full force and effect.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), based on Section 15061(b)(3) of the CEQA Guidelines, as it can
be seen with certainty that it will have no impact on the environment. Thus, this matter is
exempt under CEQA.
FISCAL IMPACT
There is no fiscal impact resulting from the City Council assigning the lease to USC
Arcadia Hospital.
RECOMMENDATION
It is recommended that the City Council determine this action does not constitute a
project under the California Environmental Quality Act (“CEQA”); and adopt Resolution
No. 7536 and approve the assignment of the lease from USC Health System to USC
Arcadia Hospital.
Attachment: Resolution No. 7536 (Proposed Ninth Amendment and
Memorandum of Lease Amendment)
RESOLUTION NO. 7536
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, APPROVING AN NINTH AMENDMENT TO
THE AGREEMENT AND LEASE BY AND BETWEEN THE
CITY OF ARCADIA AND METHODIST HOSPITAL OF
SOUTHERN CALIFORNIA
WHEREAS, on May 28, 1953, the City of Arcadia, a municipal corporation, as
lessor, and Hospital Foundation of the Methodist Church, Southern California-Arizona
Conference, a nonprofit California corporation, executed an Agreement and Lease
covering the real property described therein, which Agreement and Lease was recorded
January 11, 1955, in Book 46609, Page 39 of the Official Records of Los Angeles
County, California; and
WHEREAS, on August 9, 1955, the parties to said Agreement and Lease
executed an amendment thereto, which amendment was recorded August 25, 1955, in
Book 48769, Page 295, Official Records of Los Angeles County, California; and
WHEREAS, also on August 9, 1955, Hospital Foundation of the Methodist
Church, Southern California-Arizona Conference with the written consent of the City
assigned its interest in said Agreement and Lease to Methodist Hospital of Southern
California, a nonprofit California corporation, which corporation assumed all of the
obligations of the Hospital Foundation of the Methodist Church, Southern California
Arizona Conference under said Agreement and Lease; and
WHEREAS, said Agreement and Lease was further amended by a Second
Amendment to Lease dated July 5, 1956, and recorded on August 22, 1956, in Book
52099, Page 103, Official Records of Los Angeles County, California; and 1
NINTH AMENDMENT
TO
AGREEMENT AND LEASE
This Ninth Amendment to Agreement and Lease (“Ninth Amendment”) is effective as of
November _____, 2023, by and between the CITY OF ARCADIA, a municipal corporation (“City”)
and USC HEALTH SYSTEM, a California nonprofit public benefit corporation (“USCHS”), to
transfer the Lease to USC ARCADIA HOSPITAL, a California nonprofit public benefit corporation.
RECITALS
WHEREAS, on May 28, 1953, the City of Arcadia, a municipal corporation, as lessor, and
Hospital Foundation of the Methodist Church, Southern California-Arizona Conference, a nonprofit
California corporation, executed an Agreement and Lease covering the real property described therein,
which Agreement and Lease was recorded January 11, 1955, in Book 46609, Page 39 of the Official
Records of Los Angeles County, California; and
WHEREAS, on August 9, 1955, the parties to said Agreement and Lease executed an
amendment thereto, which amendment was recorded August 25, 1955, in Book 48769, Page 295,
Official Records of Los Angeles County, California; and
WHEREAS, also on August 9, 1955, Hospital Foundation of the Methodist Church,
Southern California-Arizona Conference with the written consent of the City assigned its interest
in said Agreement and Lease to Methodist Hospital of Southern California, a nonprofit California
corporation, which corporation assumed all of the obligations of the Hospital Foundation of the
Methodist Church, Southern California-Arizona Conference under said Agreement and Lease; and
WHEREAS, said Agreement and Lease was further amended by: a Second Amendment to
Lease dated July 5, 1956, and recorded on August 22, 1956, in Book 52099, Page 103, Official Records
of Los Angeles County, California; a Third Amendment to Lease dated September 18, 1961, and
recorded on January 27, 1966, in Book M2109, Page 272, Official Records of Los Angeles
County, California; a Fourth Amendment to Lease dated December 23, 1963, and recorded May
11, 1964, in Book M1518, Page 761, Official Records of Los Angeles County, California; a Fifth
Amendment to Agreement and Lease dated August 5, 1980, and recorded on June 10, 1981, as
Document Number 81-578698, in the Official Records of Los Angeles County, California; a Sixth
Amendment to Lease dated February 1, 2009, and recorded February 2, 2009, as Document No.
09-132665 in the Official Records of Los Angeles County; and a Seventh Amendment to Lease
dated November 18, 2015, (as amended, the “Lease”); and
WHEREAS, on April 5, 2022, through an Eight Amendment to Lease, Methodist Hospital
of Southern California assigned all of its right, title, and interest in and to the Lease to USCHS,
and USCHS assumed all of Methodist Hospital of Southern California’ obligations, duties,
responsibilities, and liabilities under the Lease and agreed to be bound by all of the terms,
covenants, conditions, and provisions of the Lease; and
Exhibit "A"
WHEREAS, USCHS has requested, and City consents, to transfer the Lease to USC
Arcadia Hospital, a California nonprofit public benefit corporation.
NOW, THEREFORE, the parties hereto agree that said Lease is hereby amended as
follows:
AGREEMENT
1. Assignment of Lease to USC Arcadia Hospital. USCHS hereby assigns all of its right, title, and
interest in and to the Lease to USC Arcadia Hospital.
2. Assumption of Lease by USC Arcadia Hospital. USC Arcadia Hospital hereby assumes all of
USCHS’s obligations duties, responsibilities, and liabilities under the Lease and agrees to be bound by
all of the terms, covenants, conditions, and provisions of the Lease from and after the Assignment Date
for the remainder of the term of the Lease. USC Arcadia Hospital acknowledges that it has received a
copy of the Lease from USCHS and has read and understands the Lease in its entirety.
3. City’s Consent to Assignment. City here by consents to the assignment by USCHS pursuant to
the terms hereof and acknowledges that from and after the effective date of this Ninth Amendment as
first written above, USC Arcadia Hospital has assumed all of USCSH’s obligations with regard to the
Lease.
4. Assignment Date. The assignment shall be effective as of July 1, 2023 (“Assignment Date”).
5. Miscellaneous. Except as expressly amended by this Ninth Amendment, the Lease shall remain
unmodified and in full force and effect. This Ninth Amendment shall represent the final and entire
agreement of the parties regarding the subject hereof and may not be contradicted by evidence of prior,
subsequent, or contemporaneous communications or agreements of the parties. USCHS and USC
Arcadia Hospital represent and warrant that each has full legal right, power and authority to enter into
and deliver this Ninth Amendment, to consummate the transaction, and to perform all terms and
conditions to be performed by each of them respectively. The execution and delivery of this Ninth
Amendment has been duly and validly authorized by all requisite corporate action of USCHS and USC
Arcadia Hospital. This Ninth Amendment may be executed in two or more counterparts. Any party to
this Ninth Amendment or the Lease may record a memorandum of this Ninth Amendment with the
County Recorder of Los Angeles County.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOLLOWS]
In Witness Whereof, the parties have executed this Ninth Amendment effective as of the
effective date.
CITY OF ARCADIA, a municipal
corporation
By: _____________________________
Dominic Lazzaretto
City Manager
ATTEST:
________________________________
City Clerk
APPROVED AS TO FORM:
Best Best & Krieger, LLP
By: ____________________________
Michael J. Maurer
City Attorney
USC HEALTH SYSTEM, a California
nonprofit public benefit corporation
By: _______________________________
Name: _____________________________
Its: ________________________________
By: _______________________________
Name: _____________________________
Its: ________________________________
USC ARCADIA HOSPITAL, a California
nonprofit public benefit corporation
By: _______________________________
Name: _____________________________
Its: ________________________________
By: _______________________________
Name: _____________________________
Its: ________________________________