For City Council Meeting and Rialto Utility Authority [January 9, 2018]
TO: Honorable Mayor and City Council
FROM: Robb R. Steel, Interim City Administrator/Development Services Director
Title
Request Rialto Utility Authority to Approve the First Amendment to the Ground Sublease by and between the Rialto Utility Authority and Rialto Bioenergy Facility LLC.
Body
BACKGROUND:
On March 22, 2016, the Rialto Utility Authority (RUA) approved a Ground Sublease Agreement ("Sublease" attached hereto as Exhibit A) by and between the RUA and Rialto Bioenergy Facility LLC (RBF) and various other agreements intended to facilitate the reuse of the former Enertech Environmental Facility ("Site") located adjacent to the Wastewater Treatment Plant.
On July 26, 2016, the RUA approved a Facility Operation Agreement to operate the Facility to process various sources of organic waste including food waste in the form of source separated organics and wet fraction from mixed waste sources, liquid waste, digestate, and biosolids from treatment plants throughout the region and convert such materials for use as an alternative fuel or for other industrial applications.
On November 1, 2016, the parties satisfied all of the conditions precedent to effectiveness of the sublease identified in Section 20.1 of the Sublease and established the Commencement Date for purposes of setting the Term of the Sublease and the start date for payment of rent. RBF pays $10,000 per month to the RUA.
ANALYSIS/DISCUSSION:
Section 20.2 of the Sublease established various Conditions Subsequent that the responsible party must satisfy within 18 months after the Commencement Date (or June 1, 2018). Section 20.2 authorizes the RUA Executive Director to extend the outside date for up to 90 days with good cause (or September 1, 2018). Either party may terminate the Sublease if the Conditions Subsequent are not satisfied within the allowed time.
The Conditions Subsequent are:
(a) Authority shall use its best ...
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