Percentage Rent Tenant Rent Forgiveness
For most leases which require the payment of percentage rent subject to a minimum or base rent, the Port will forgive all base rents from March 1, 2020 through the earlier of April 30, 2021 or when tenant’s percentage rent equals or exceeds the base rent otherwise payable under the lease for 3 consecutive months. Tenant must execute a lease amendment with the Port to receive forgiveness.
Key Tenant Requirements
- Submit monthly sales reports and pay percentage rent in the amount required under the existing lease during the forgiveness period.
- Comply with all responsibilities under the existing lease.
- Maintain and submit planned hours of operation, with no fewer than 10 operating days per month and as allowed under applicable public health orders.
- Comply with all “back to work” requirements and other workforce-related ordinances, orders, and laws relating to the COVID- 19 pandemic, including those addressing workplace safety and employment rights.
- Execute the Form Lease Amendment without modification. Any amounts received from government-funded financial aid to be used for rent must be reported and will not be forgiven.
Key Tenant Benefits
- Base rents forgiven from March 1, 2020 through the earlier of (a) April 30, 2021 or (b) when a tenant’s percentage rents equals or exceeds the base rent otherwise payable under the lease for 3 consecutive months
- Rent credits may be provided for eligible and documented furniture and equipment costs to safely reopen during the shelter in place restrictions; such rent credits can be applied to rent payable immediately upon execution of the relevant lease amendment and will expire on July 1, 2021.
- Rent credits may be provided for rent paid prior to lease amendment execution that could have been deferred or forgiven; tenants would be able to apply such rent credits to rent payable commencing July 1, 2021 through June 30, 2022.
- Rent credits will first be applied to any amounts owed prior to beginning of the forgiveness period and then prorated monthly.
- If this rent credit applies, but your lease expires prior to June 30, 2022 your lease term may be extended to June 30, 2022 so that you will get the full benefit or, if your lease is now on a mutual holdover basis, the Port would agree not to terminate without cause until the rent credits are applied. If you terminate your lease prior to June 30, 2022, any unused rent credits will be extinguished.
Subsequent Board of Supervisor Approvals
For some percentage rent tenants, a lease amendment will also require Board of Supervisors approval, where the existing lease required Board of Supervisors approval under Charter Section 9.118 because it met the revenue or duration thresholds in the City Charter. An Ordinance authorizing the Port Commission to amend certain leases under the Port’s Rent Forgiveness Program, was introduced at the Board of Supervisors, and is undergoing review. For more information on the legislative process, click here.
Tenants wishing to participate in the Rent Forgiveness Program may be required to submit the following information through an online form or to Port Staff through the lease amendment process:
- Economic impact from COVID-19 and need for relief.
- Business practices for safe operations while COVID-19 is still circulating in the community.
- Revenue projections, understanding fluid economic conditions, indicating whether the tenants can resume current rent payments at the end of the forgiveness program or the end of the rent deferral period, as applicable.
- Documentation of all submittals to federal, state and local relief programs and summary of application or forgiveness status.
- If no such applications were filed, tenant would be asked to explain reasons (ineligibility, etc.).
- Other as-needed documentation
TO APPLY, PLEASE RETURN TO THIS WEBPAGE
ON NOVEMBER 30, 2020