HomeMy WebLinkAboutStaff Report 4 01/07/19911
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
DEPARTMENT:
City Manager
REQUEST COUNCIL ACTION:
Adopt the Ordinance.
RECOMMENDATION•
AGENDA ITEM # ` 7 1990
KEY WORD: Golf Course Agreement
DATE: December 10, 1990
P C,'�7
Adopt the ordinance authorizing ground lease with Empire Golf,
Inc. A copy of the agreement is attached.- The ordinance was
introduced at the December 17, 1990 Council Meeting.
ACTION FOLLOWING AUTHORIZATION:
Lease Agreement with Empire Golf Inc. will be executed.
APP'"ove � �� Mrdrnancz� I � 5 ACS,
L E A S E A G R E E M E N T
This Lease Agreement ( "Lease ") is entered into this /uzh
day of Jdnlla 19_U by and between the CITY OF PETALUMA, a
i
public body, corporate and politic of the State of California
( "Lessor "), and EMPIRE GOLF INC., a California corporation
( "Lessee ").
1. LEASED PROPERTY
Lessor leases to Lessee and Lessee leases from Lessor, for the
term and upon the terms and conditions set forth in this Lease,
that parcel or parcels of real property constituting approximately
126 acres on or near the Municipal Airport and described with more
specificity in Exhibit "A ", which is attached to this Lease and
made a part of this Lease for all purposes, along with all
easements, covenants, and other appurtenant rights associated with
said real property (collectively the "Leased Premises ").
2. CONSTRUCTION AND USE OF LEASED PREMISES
Lessee agrees it will use the Leased Premises for the
construction and operation of a public golf course and other
activities customarily associated with or incidental to the
operation of a public golf course, including without limitation,
sale or rental of golf - related merchandise at a golf professional's
shop, furnishing of lessons by a golf professional, operation of a
driving range, and sales of food and beverages, including liquor
sales.
Lessee shall not use the Leased Premises for any unlawful purpose
and shall comply with all valid laws, rules and regulations
applicable to the Leased Premises or the businesses conducted on
the Leased Premises.
3. QUIET ENJOYMENT
Subject only to the terms of this Lease, so long as Lessee
complies with its obligations under this Lease, Lessor shall secure
to Lessee the quiet and peaceful enjoyment of the Leased Premises
and the sole and exclusive possession of the Leased Premises
without objection or interference from Lessor or any party claiming
under Lessor.
4. TERM
4.1 Initial Term
The term of this Lease shall be for forty (40)
years, beginning on the first day of the calendar month following
completion of the Construction Period as that term is hereafter
defined. The Construction Period shall be that period of time
beginning with the execution of this Lease and continuing until
such time as the parties recognize and agree in writing that the
golf course is ready for public play. The standards for agreement
that the golf course is ready for public play shall be: completion
of Lessor's Required Obligations pursuant to subsection 6.1 of this
Lease, completion of the Lessee's Improvements pursuant to
subsection 6.3 of this Lease, issuance of a certificate of
occupancy for the clubhouse and other structural improvements
constructed upon the Leased Premises, installation of the
irrigation system upon the golf course and successful maturation of
the turf grasses and other landscaping required for practical use
2
and play upon the golf course. Lessee's obligations for the
payment of rent pursuant to Section 7 shall not commence until the
first calendar month following the completion of the Construction
Period.
4.2 Optional Term
Lessee is granted one (1) successive twenty (20)
year option to extend the initial term of this lease on all terms,
covenants, and conditions herein continued in accordance with
provision regarding percentage rent in option period through
termination, Lessee shall give written notice of the exercise of
the option to Lessor not later than one hundred eighty (180) days
prior to the expiration of the initial term.
5. LEASE YEAR DEFINED
A "Lease Year" is that period of 12 consecutive calendar
months beginning with the term of the Lease as defined in Section
4. The Lease Year may be changed by written agreement of the
parties. Each Lease Year will constitute a separate accounting
period for the purpose of computing percentage rent, and gross
revenue.for any Lease Year shall not be carried forward or backward
into any other Lease Year. If this Lease is terminated prior to
the end of a Lease Year, minimum rent and percentage rent will be
subject to proration.
6. CONSTRUCTION OF THE GOLF COURSE
6.1 Lessor's Required Obligations
The obligations identified in this subsection 6.1
shall be referred hereafter as "Lessor's Required Obligations."
3
Lessor shall provide to Lessee the real property identified in
Section 1 and Exhibit "A" of this Lease. In order to satisfy
Lessor's Required Obligations under the terms of this subsection,
it is agreed that Lessor shall secure and provide all of the
following without limitation:
(A) Design, easements, and permits for treated
waste water line to golf course site.
(S) Share cost equally of fencing on property
north of East Washington Street to secure golf course from playing
fields and other relational activities in park area, work to be
done by Lessee.
(C) Subordination of land to allow financing
of project.
(D) All necessary archeological, fish and
game, biological soils analysis or other required studies or
approvals necessary to commence construction.
(E) All necessary environmental permits such
as an environmental impact report or negative declaration.
(F) All necessary map recordation, conditional
use permits, easements or zoning approvals.
(G) Indemnification from any toxic waste
liability existing as of the commencement of the Lease.
(H) At the point of ultimate connection, all
necessary and required utilities, including without limitation, but
only if available, electricity, water, sewer, and fire hydrants.
6.2 Irrigation Water
4
Lessor and Lessee acknowledge that the golf course
is to be irrigated with secondary treated effluent in accordance
with any applicable law, regulation or rule including the Use
Permit from the City of Petaluma.
(A) Priority Status. Anything to the contrary
in this Lease notwithstanding, Lessor covenants that it will
provide irrigation water to the Premises and the golf course as
part of its sewage effluent discharge program, for energy pumping
costs only, and in priority to all other customers other than those
with valid and existing contracts which were executed prior to
January 1, 1989, or renewals of said contracts, and will not alter
its discharge program in any respect to change its location in such
a manner as to deprive the Premises or the golf course of such
irrigation water unless supplemented by another source. In the
event federal, state, local, other law, ordinance, rule or
regulation ever require that the sewage effluent used for any
treatment other than that currently used by the Lessor, Lessor
agrees to process the sewage effluent used on the Premises and the
golf course in conformance with such requirement, at Lessor's sole
cost and expense, and to continue to provide the required
irrigation water or alternate source of water agreeable to Lessee,
to the Premises and the golf course as required by this paragraph.
6.3 Lessee's Required Obligations
The obligations identified in this Subsection 6.3 shall
be referred hereafter as "Lessee's Required Obligations." In order
to satisfy Lessee's Required Obligations under the terms of this
5
subsection, it is agreed that Lessee shall secure and provide all
of the following without limitation:
(A) An 18 hole golf course having a length of not
less than 6,200 yard and par of at least 72.
(B) A driving range with a minimum of 30 all grass
tees.
(C) A clubhouse building to include golf shop,
restaurant, bar, kitchen, and rest rooms. Building to be no less
than 6,000 square feet, and designed for future expansion.
(D) Landscape and irrigation improvements,
including an automatic irrigation system, which will be permanent,
for all tees, greens, fairways, and around all structures.
(E) Night lighting for the driving range and
parking lot.
(F) A maintenance building for golf course
equipment, storage, supplies, and repairs.
(G) Necessary mechanical, electrical, and plumbing
installations.
(H) Parking for golf course and driving range.
(I) Cart storage building for the power cart
operations.
(J) Extension of treated water main at the current
end of the line location on the Adobe Creek Golf Course to the golf
course site.
(K) Such other improvements as are required to
develop, maintain and operate a 18 hole golf course facility.
(L) Additional Construction. Subject to written
approval of Lessor, Lessee may elect to construct certain
additional facilities which are compatible with the Required
Construction and which provide optional services for the Leased
Premises including without limitation, banquet facilities, and
outside barbecue facilities.
(M) Lessee shall also provide an additional thirty -
three (33) acres, as specifically described in Exhibit B, adjoining
Lessors property to establish a total of one hundred sixty (160)
acres for the full golf course facility.
(N) Necessary improvements to East Washington
Street crossing connecting golf course on the south side of East
Washington Street with golf course on north side, for golf cart and
pedestrian (golfers) access.
6.4 Construction Plans and Approval
(A) Conceptual. Lessee will submit golf course
route plan and conceptual facilities plan for Phase 1 the golf
course to Lessor not later than thirty (30) days following
execution of this Agreement for Lessor's approval, which is not to
be unreasonably withheld. Lessor's response to the submitted
plans, including any recommendations for change, is to be submitted
to Lessee not later than thirty (30) days following Lessor's
receipt of the schematic plans.
(B) Lessee shall submit for approval all
development and Construction Plans for final approval in the
following phases:
7
Phase 1 Golf Course and Driving Range
Phase 2 Maintenance Building
Phase 3 Clubhouse, Cart Storage Building, Parking Lot
and Street Improvements
Lessor's response to these development and
construction plans, including any recommendations for change, shall
be submitted to Lessee not later than sixty (60) days following
Lessors receipt of plans.
(C) "As Built" Plans. Within sixty (60) days
following completion of construction upon the Leased Premises,
Lessee shall furnish Lessor a complete set of reproducible and two
sets of prints of "as built" plans.
6.5 Construction
Following Lessor's approval of development plan and
construction plans by Phase, Lessee, as the general contractor,
shall cause the commencement of the Required Construction upon a
date mutually agreed upon by Lessor and Lessee. Lessee shall
mutually comply with all approved plans unless a change order or
alteration is otherwise agreed to by Lessor. Lessor shall have the
right to inspect all construction for the purpose of confirming
that Lessee is adhering to the approved plans and specifications.
Lessee shall also construct or cause to be constructed upon the
Leased Premises all lines, structures and facilities required in
order to provide the Leased Premises with all necessary utility
services.
(A) Mechanics Liens or Stop- Notices. Lessee shall
at all times indemnify, defend and hold Lessor harmless from all
claims for labor and materials in connection with the construction,
repair, alteration or installation of structures, improvements,
equipment of facilities upon the Leased Premises and from the cost
of defending against such claims, including reasonable attorney
fees.
In the event a lien or to stop notice is
imposed upon the Leased Premises as a result of such construction,
repair alteration or installation, Lessee shall either:
a) Record a valid release of lien, or
b) Procure and record a bond in accordance
with Section 3143 of the California Civil Code, which frees the
Leased Premises from the claim of the lien or stop- notice and from
any action brought to foreclose the lien.
6.6 Lessee's Assurance of Completion
Prior to commencement of construction. Lessee shall
furnish Lessor suitable evidence of money available, in an amount
of not less than four million dollars ($4,000,000.00) in order to
complete the Required Construction. Such evidence may take the
form of one of the following:
a) a performance bond containing the
provisions of a labor and material bond supplied by Lessee's
contractor or contractors, provided said bonds are issued jointly
to Lessee and Lessor as obligees; or
b) an irrevocable letter of credit, in an
amount not less than $4,000,000.00, or
9
c) cash deposited in an escrow acceptable to
Lessor, with interest to accrue to Lessee, but with instructions to
the escrow agent to the effect that until construction is
completed, funds deposited in the escrow may not be released or
pledged without Lessor's written approval; or
d) any combination of the above. All bonds
and letters of credit must be issued by a company qualified to do
business in the state of California.
6.7 Ownership of Improvements
(A) All buildings, improvements and facilities, other
than trade fixtures and personal property constructed or placed
upon the Leased Premises by Lessee, shall become Lessor's property
upon the termination of the Lease term.
(B) Lessee's land contribution of 33 +/- acres, shall
become property of Lessor upon termination of Lease.
7. RENT
In consideration of Lessor executing this Lease and grant the
rights provided in this Lease, Lessee will pay to Lessor at the
address listed the consideration outlined in Sections 7.1 and 7.2.
7.1 Annual Rent
a) Lessee shall pay Lessor the following
annual rent in the first ten (10) years of the lease:
Years 1 through 5 $1,000 per year
Years 6 through 10 $10,000 per year
b) Payment of Annual Rent. In the years one
(1) through ten (10) of this lease the annual rent payment shall
o
be due no later than fifteen (15) days following the first month
of each "Lease year" as defined in Section 5.
7.2 Percentage Rent
a) Percentage rental shall begin in the
eleventh (11th) year of this lease. The first payment of
Percentage Rental shall occur in arrears in the second (2nd) month
of the eleventh (11th) year of the lease. Schedule of Rent shall
be as follows:
Percentage Rent Schedule
YEARS
11 -15
16 -20
21 -25
26 -40
41+
GREEN FEES
5.0%
7.5%
10.0%
10.0%
16.0%
CARTS
5.0%
7.5%
7.5%
10.0%
10.0%
RANGE
5.0%
7.5%
7.5%
10.0%
10.0%
OTHER REVENUE
0.0%
0.0%
2.5%
5.0%
5.0%
b) Monthly Statement. On or before the 15th
day of each calendar month starting in the second (2nd) month of
the eleventh (11th) year of the lease. Lessee shall deliver to the
Lessor a written statement certified as correct by Lessee, of the
amount of Lessee's Gross Revenue during the preceding calendar
month.
C) Records. Lessee shall, with respect to
business done on Premises, keep true and accurate accounts,
records, books and dates (hereinafter called "records ") , in a form
11
satisfactory to the Lessor, which shall contain a breakdown between
Gross Revenue from the categories set out in "Percentage Rent
Schedule" in 7.2a). The Lessor may, at the Lessor's expense,
require an audit of each annual statement.
Accurate receipt printing registers shall be installed
and kept by Lessee on the premises, which shall show and record
each and every sale transacted. Rentals and fees shall be recorded
when made or performed.
d) Inspection of Records: Audit. The Lessor
shall be entitled at any time throughout the initial and optional
term and for one (1) year thereafter to question the accuracy of
any statement furnished by Lessee hereunder. For such purpose
Lessee shall keep safe and intact for at least four (4) years after
the end of each lease year all of Lessee's records, sales slips,
and other material Lessee is required to maintain hereunder with
respect to Gross Revenue. Lessee shall upon written request, make
the same available for examination at any reasonable time for one
(1) year after the end of lease year to which such records relate.
Lessee hereby agrees that the Lessor, its employees, agents and
representatives, at all reasonable times, shall have the right to
inspect and examine all such records, sales slips and other
material by which the Lessor may be enabled to ascertain the amount
of Lessee's Gross receipts hereunder. Lessee agrees to furnish the
Lessor true and complete copies of its annual retail sales and use
tax returns at the time such is filed with the State of California
12
relative to its operations at the golf course. Upon written
request by the Lessor, Lessee agrees to immediately furnish the
Lessor with a copy of such records and materials for the reasonable
cost of producing same.
8. GROSS REVENUE
For purposes of calculating Percentage Rent, in Section 7.2
"Gross Revenue" shall mean all money received by Lessee as a result
of the sales of goods or the provision of services on the Leased
Premises, but shall not include:
(1) Cash refunds or credits allowed on returns by customers;
(2) Sales taxes, excise taxes, gross receipts taxes and other
similar taxes now or later imposed upon the sale of food,
beverages, merchandise or services and paid by Lessee to the
appropriate taxing authority, whether added to or included in the
selling price;
(3) The actual uncollectible amount of any check or bank
draft including costs of collection received by Lessee as payment
for goods or services and returned to Lessee from a customer's bank
as being uncollectible (commonly "non- sufficient funds" checks),
but only after Lessee has made reasonable efforts to collect on the
check;
(4) The actual uncollectible amount of any charge or credit
account (commonly "bad debts ") incurred including costs of
collection by Lessee for the sale of merchandise or services;
provided, however, that the credit was extended to the customer by
Lessee, and that reasonable efforts to collect said account have
13
been made;
(5) The actual uncollectible amount of any sale of
merchandise or services for which Lessee accepted a credit card;
including costs of collection provided, however, that Lessee has
made reasonable efforts to collect the debt after being notified by
the issuing bank of the invalidity or uncollectibility of the
charge;
(6) Interest or other charges paid by customers for extension
of credit;
(7) Sales or trade -ins of machinery, vehicles, trade fixtures
or personal property used in connection with Lessee's operation of
the Leased Premises;
(8) The value of any merchandise, supplies or equipment
exchanged or transferred from or to other locations of business of
Lessee where such exchange or transfer is not made for the purpose
of avoiding a sale which would otherwise be made from or at the
Leased Premises;
(9') Receipts in the form of refunds from or the value of
merchandise, supplies or equipment returned to shippers, suppliers
or manufacturers;
(10) The amount of any cash or quantity discounts received
from sellers, suppliers or manufacturers;
(11) The amount of any gratuities paid or given by customers
to or for employees of Lessee;
(12) Receipts from the sales of uniforms or clothing required
14
to be worn by employees;
(13) Amounts attributed to meals served or provided to
employees of Lessee;
(14) Receipts from the sale of waste or scrap materials
resulting from Lessee's operations;
9. FEES AND CHARGES
Lessee shall establish and keep current a comprehensive
schedule of fees for golf play and cart rentals.
9.1 Establishing of Fees Fees for golf shall be determined
in the following manner annually.
(A) Survey the regular 18 hole weekday and
regular 18 hole weekend green fees from the following five ( 5 ) area
courses. Initial survey and setting of fees shall be done sixty
(60) days prior to course opening, and thereafter on the
anniversary date annually.
1) Peacock Gap Golf Course
2) Windsor Golf Course
3) Mt. Shadows North Golf Course
4) Indian Valley Golf Course
5) Oakmont West Golf Course
(B) Compute the average fee charged for the
aforementioned categories, from the five courses.
(C) The charge for said service charged by
Lessee shall be no greater than the average of these five courses.
(D) A comprehensive review of applicability of
"surveyed" courses shall occur every five (5) years. Any course
15
that changes their operating policies significantly shall be
replaced at time of annual review by mutual consent of Lessor and
Lessee.
9.2 Residents Discount All residents of the City of
Petaluma shall receive a 20% discount off any published green fee.
The method of administering the discount shall be mutually agreed
upon by Lessee and the City of Petaluma Parks and Recreation
Department.
9.3 Senior /Junior Discounts All resident Seniors (62 years
old and older) and Juniors ( 18 years old and under) shall receive
a minimum of an additional 100 off the regular resident weekday
green fee. Days and hours of availability of discount shall be
determined by Lessee, not to be unreasonably restricted.
All other fees, including without limitation, fees for range
balls, lessons, rentals, food and beverage, and golf shop
merchandise shall be at sole discretion of Lessee.
A register receipt, showing date and time of issue, and
amount paid, shall be tendered to every person paying for fees or
service's.
10. SERVICES TO BE PROVIDED BY LESSEE
Pursuant to this Agreement, Lessee shall provide the services
and operate the golf course facilities as described below.
10.1 Management Lessee agrees to operate and manage the golf
course facilities and services offered in a high quality manner
comparable to other courses providing similar facilities and
services during the entire Lease term. Lessee shall provide, at a
16
minimum, a full time Head Golf Professional who shall be a "Class
A" member of the Professional Golfers Association of America, and
a full time Golf Course Superintendent who is a "Class A" member of
the Golf Course Superintendents Association of America. Lessee
agrees it shall operate and maintain a standard of service at least
equal to that of the golf course facilities aforementioned in
9.1(A).
10.2 Hours of Operation Lessee will establish hours of
operation, subject to Lessor's approval. Lessee agrees it will
conduct business on the Leased Premises in conformance with
published hours and days of operation, as established, unless an
exception or change is otherwise approved by Lessor.
10.3 Lessee's Employees Lessee will ensure that its
employees shall at all times conduct themselves in a credible
manner. Lessee shall maintain a staff adequate to operate and
administer all facilities located on the Leased Premises.
10.4 Dress and Conduct Standards Lessee shall set dress and
conduct standards, subject to Lessor's approval, and shall be
permitted to deny entry or permission to play to anyone who fails
to conform to those standards. Lessee shall have the right to, in
its sole judgement, refuse admission and /or service to persons who
are drunk, disorderly, under the influence of drugs, or who conduct
themselves in a manner that could result in injury or harm to
persons or property on the Leased Premises. Lessee shall also have
the right to suspend privileges as he deems necessary.
10.5 Tournaments Lessor shall have the right two times
17
4
during each Lease year to schedule a tournament or tournaments for
the full day. Lessee and Lessor will agree in advance, once a
year, on the dates for such tournaments. Tournament participants
will pay the then - prevailing rates for golf tournament fees and
services.
10.6 Public Course: Non - Discrimination Fair and equal use
of the Premises and facilities and hiring, treatment and
advancement of employees there at by Lessee shall not in any manner
be denied or abridged on the basis of sex, race, color, religion,
ancestry, national origin, or in any other manner discriminatory
under federal, state or local law.
10.7 Clubs, Tournaments and Special Events
(A) Clubs. Lessee agrees to encourage formation of
recognized golfers' organizations by users of the golf facility.
The parties hereto agree that gender specific clubs, for example
men's and women's clubs, seniors clubs, or junior clubs, can be
important to the success of a golf course; and Lessee shall have
the right, in Lessee's reasonable business judgement, to establish
such clubs or other similar clubs may be granted certain
privileges, including, but not limited to, starting time
preferences and annual use playing cards, with a first preference
given to Petaluma residents.
(B) Tournaments and Specific Events. Lessee agrees
to accommodate and encourage tournaments and to consider favorably
suggestions for events calculated to accommodate the public,
increase golf play at the course, and otherwise mutually benefit
1s
the parties hereto. The scheduling of and rules for all
tournaments shall be determined by Lessee. Lessor and Lessee
acknowledge that these types of events by their very nature curtail
the public access to the course during such events.
10.8 Lessor's Right of Inspection Lessor, acting through its
director of Parks and Recreation ( "Director "), shall have the right
to enter upon and inspect the Leased Premises at any time during
normal business hours.
11. TAXES
Lessee will pay all taxes, license fees or other
governmental charges assessed or imposed on the personal property
and improvements owned by Lessee located on the Leased Premises or
upon the business operations of Lessee conducted on the Leased
Premises.
12. UTILITIES
Lessee will pay before delinquency all charges for utilities,
including electricity, gas, heating, cooling, telephone and water,
used by Lessee on the Leased Premises.
13. CAPITAL IMPROVEMENTS
13.1 Initial Term
Starting in year thirty -one (31), Lessee will begin a
major renovation and modernization program. Work shall be
conducted by Lessee. Payment will be provided by creating a
capital improvement trust fund of an additional three percent (30)
of the gross green fee revenues annually commencing in year thirty -
one (31). This will be deposited in an account annually approved
19
by Lessor, all interest to go to
approval will make improvements to
on a basis as agreed by parties.
gross green fee revenue shall be
and is an addition to percentages
13.2 Optional Term
account. Lessee with Lessor's
golf course facility annually or
This three percent (3 %) of the
paid pursuant to subsection 7.2,
set forth in 7.2.
Starting in year forty -one (41), or the first year of the
Optional Term, said capital improvement trust fund as described in
13.1 shall be increased from an additional three percent (3 %) to an
additional four percent (4 %) of gross green fee revenue. Fund
shall be administered as detailed in 13.1, and is an addition to
percentages set forth in 7.2.
14. MAINTENANCE AND REPAIRS
Lessee acknowledges it is acquiring the Leased Premises in
their current "as is" condition, except as provided in subsection
14.1 below.
14.1 Lessee's Obligations
Lessee assumes sole responsibility for maintenance and
repair 'of the Leased Premises and Lessee will maintain the Leased
Premises in good order and in sanitary and safe condition at
Lessee's sole expense. Lessee agrees it will maintain the Leased
Premises in conformance with the maintenance standards specified in
Exhibit "C ", which is attached to this Lease and made a part of
this Lease by this reference.
15. LESSOR'S COOPERATION
City recognizes and acknowledges that Lessee will need the
a*
assistance and cooperation of City in order to properly perform and
fulfill Lessee's covenants and obligations under this Lease.
Therefore, City agrees it will secure for Lessee, with Lessee's
assistance as needed, all permits or licenses that are within the
jurisdiction and authority of City or within the jurisdiction and
authority of City's various departments, agencies officers, boards
or councils, and that are required in order for Lessee to fulfill
its obligations under this Lease. City agrees it will designate a
specific officer or agent (City's "Coordinator ") having appropriate
experience and authority whose responsibility it is to work with
Lessee in assuring that Lessee obtains the full cooperation and
assistance of City, subject to the terms of this Lease and all
applicable laws.
15.1 Initial Construction Phase
During the initial construction phase, the Coordinator
shall organize meeting with all appropriate agencies for the
purpose of acquiring design and construction information; submit
and secure the necessary planning approvals, mass grading permits
building construction permits; and shall aid in developing
alternative solutions to issues raised in the planning and plan
check phases.
16. INSURANCE
The following types of insurance coverage relating to the
Leased Premises and Lessee's operations of the Leased Premises
shall be maintained at all times throughout the Lease Term:
16.1 Liability Insurance
21
Lessee will maintain, at Lessee's sole expense, a policy
or policies of comprehensive general liability insurance, naming
Lessor and Lessee as insureds, with coverage of not less than one
million dollar ($1,000,000.00) combined single limit for bodily
injury and property damage. The liability limit of $1,000,000 per
occurrence shall be reviewed every five years, Lessor shall
reevaluate said liability limits and such limits shall be adjusted
as determined by the Lessor. Said adjustments shall be reasonable
and shall be determined based on golf course operations of similar
types.
16.2 Worker's Compensation
Lessee will maintain, at Lessee's sole expense, a policy
or policies of worker's compensation insurance in compliance with
applicable California law.
16.3 Fire Insurance
Lessee shall maintain, at Lessee's sole expense, a
standard form policy or policies of fire and special form insurance
on the Leased Premises, including the clubhouse and related
buildings and all personal property, furnishings and equipment
owned by Lessee, in an amount equal to the replacement cost. Said
fire policy shall provide that the Lessor and Lessee are to be co-
recipients of any insurance proceeds.
Lessor, will request Lessee to provide Lessor with
suitable evidence of insurance coverage. Such a request will be
satisfied by submission of a copy of the policy or policies then in
effect or a certificate of coverage and proof of payment of
22
premiums. Any insurance required to be carried under this Lease
may be included as part of any blanket or other policy or policies
of insurance, subject to the provisions of this Lease. Lessor, its
officers, employees and agents shall be named as additional
insureds under Lessee's policy and that policy shall operate as
primary insurance such that no other insurance obtained by Lessor
will be obligated to contribute to any insured loss.
17. INDEMNITY
Lessee shall indemnify, defend and hold Lessor harmless from
all claims, demands, causes of action and liability resulting from
injury to persons or damage to property sustained on or about the
Leased Premises and arising from Lessee's operations or as a
proximate result of the acts or omissions of Lessee or its
employees or agents. This provision does not apply, however, to
any such liability as may be the result of the direct and proximate
negligence or willful misconduct of Lessor or Lessor's employees or
agents acting within the scope of their employment or agency.
18. DAMAGE AND RESTORATION
If, the building or other improvements on the Leased Premises,
or the personal property leased under this Lease, should be
partially damaged or totally destroyed by fire or other casualty,
Lessee will repair, reconstruct or replace the buildings,
improvements or personal property to a condition as nearly similar
as possible. If repair, reconstruction or replacement is
prohibited under then - existing laws, or if the parties should
decide among themselves that reconstruction or replacement is not
23
warranted, this Lease shall terminate without further obligation on
the part of either party.
18.1 Rental Abatement and Term Extension
If Lessee is unable to use all or a significant portion
of the Leased Premises during repair, reconstruction or replacement
as provided for in this section, Lessee's rental obligations under
Section 5 shall be abated or reduced or adjusted by a percentage
amount equal to the percentage loss of gross revenue as defined in
paragraph 8 and attributable to such interruption as appropriate
until such time as Lessee is again able to use the Leased Premises
for their intended purpose. The term of this Lease shall also be
extended for a period equivalent to the length of time needed for
Lessor to restore the Leased Premises and make them available to
Lessee for Lessee's use pursuant to Section 2 of this Lease.
19. EMINENT DOMAIN
In the event that title to any portion of the leased premises
is taken by condemnation or by right of eminent domain, the lease
shall- not be terminated, but all rent and other payments due the
Lessor during the remaining term of the lease shall- be reduced by
a percentage amount equal to the percentage of gross revenue as
defined in paragraph 8 attributable to such taking.
If there is a taking by right of eminent domain, the award
shall belong to and be paid to Lessor, except that Lessee shall
receive from the award the following: (a) a sum attributable to
the value of Lessee's leasehold estate, and (b) a sum
attributable to loss of good will.
24
20. FRUSTRATION OF PURPOSE
At any time during the term of this Lease, if the governing
body of any political subdivision having competent jurisdiction
over the Leased Premises should enact any valid zoning ordinance,
law or regulation which prohibits the use of the whole or a
substantial part of the Leased Premises for the purposes as
provided in Section 2 of this Lease, or if an event of force
majeure occurs, including without limitation, declared or
undeclared war, sabotage, riot or other acts of civil disobedience,
acts of government, labor disputes, shortages of fuel, accidents,
fires, explosions, floods, earthquakes,, or other acts of God, which
substantially prevents Lessee's fulfillment of its obligations as
provided for in Section 2 of this Lease, it is agreed that Lessee
may elect, within one hundred twenty ( 120 ) days after the effective
date of such ordinance, law, regulation or the occurrence of the
event of force majeure, to cancel this Lease and surrender
possession of the Leased Premises. Any such cancellation and
surrender will act to release and discharge Lessee from any further
obligation under this Lease.
21. ASSIGNMENT
Except as otherwise provided below, Lessee shall not assign
this Lease or sublet all of the Leased Premises without the prior
written consent of Lessor, and such consent shall not be
unreasonably withheld. Lessee shall notify Lessor of any proposed
assignment or subletting at least sixty (60) days prior to the
proposed effective date of such assignment or subletting. In the
25
event that any such assignment or subletting is approved by Lessor,
the assignee or sublessee shall agree in writing to be bound by all
of the covenants of this Lease required of Lessee and Lessor shall
thereafter release Lessee from liability under this Lease.
21.1 Right of First Refusal
In the event that prior to the stated expiration date of
the Lease term, Lessee should elect to assign all of its interest
in this Lease pursuant to the provision of Section 21 above, Lessee
shall submit the proposed terms and conditions of any such
assignment, in writing, to Lessor or Lessor's nominee shall then
have no more than sixty (60) days from the date of such submission
within which to exercise a right of first refusal to acquire
Lessee's leasehold rights on terms and conditions no more favorable
than those offered by the prospective assignee. Failure. to
exercise such right of first refusal shall constitute approval of
the prospective assignee under paragraph 21. In either event,
Lessee shall be released from any and all further liability under
this lease other than for events which may have occurred during the
term of Lessee's operation of the leased premises.
22. BREACH AND REMEDIES
The following conditions will constitute a breach of this
Lease and a default thereunder:
22.1 Conditions of Default
(a) If Lessee fails to pay rent or fulfill any other
monetary obligation of Lessee to Lessor, and Lessee fails to cure
26
such monetary default within thirty (30) days after written notice
from Lessor to Lessee of such monetary default.
(b) If either party fails to perform any of its other
non - monetary obligations under this Lease when due or called for,
and the party in default fails to cure such non - monetary default
within sixty (60) days after written notice from the non - defaulting
party of such non - monetary default; provided, however, that if the
nature of the non - monetary default is the result of a force majeure
occurrence or is otherwise of a nature such that it cannot be fully
cured within that sixty (60) day period, the party in default shall
have such additional time as is reasonably necessary to cure the
default so long as the party in default is proceeding diligently to
complete the necessary cure after service of notice by the non -
defaulting party.
(c) If Lessee shall be adjudged bankrupt, or a receiver
be appointed for Lessee's property, or if Lessee's interest in this
Lease shall pass by operation of law to any person other than
Lessee and such adjudication, appointment or order is not vacated,
dismissed, or set aside within one hundred twenty (120) days from
its entry.
(d) In the event the Lessee does not cause golf course
completion and open for play, as described in subsection 4.1, prior
to December 31, 1994, Lessor shall have the option to terminate the
Lease.
22.3 Remedies
If any of the conditions identified in sub - section 22.1
27
above should occur and the party in default does not cure the
default, the non - defaulting party may elect to terminate this Lease
immediately and seek all remedies as provided under law and equity
If Lessee is the party in default. Lessor may terminate Lessee's
right to possession without termination of the Lease. If Lessor
elects to continue the Lease and so informs Lessee in writing,
Lessor will retain the right to recover rent and all other payments
at such time as they become due under this Lease and, Lessee may
assign its interest in the Lease pursuant to Section 18 of this
Lease. Lessor may also elect to rent the Leased Premises to any
other party at a rental rate and for such terms as Lessor deems
practicable, and the rent so received shall be credited to the
account of Lessee, less any expense of repossession and re- renting.
During the unexpired remainder of the Lease Term. Lessee will be
liable for any deficiency that results from Lessor re- renting the
Leased Premises at a lesser amount than the minimum rent called for
in this Lease.
If either party at any time by reason of the other
party's' default pays any sum or does any act that requires payment
of any sum, the sum paid by the non - defaulting party shall be
immediately due and owing by the defaulting party to the non -
defaulting party at the time the sum is paid, and if paid at a
later date shall bear interest at the rate of ten percent (10%) per
annum from the date the sum is paid by the non - defaulting party
until the non - defaulting party is reimbursed by the defaulting
party.
28
If either Lessor or Lessee should find it necessary to
bring an action in a court of law to enforce any of its rights or
remedies under this Lease, both parties agree that the prevailing
party in any such litigation shall be entitled to a recovery of
reasonable attorneys' fees and costs incurred by way of such
action.
23. NOTICES AND ADDRESSES
All notices, demands, requests or replies provided for or
permitted by this Lease shall be in writing and may be delivered by
any one of the following methods: (1) by personal delivery; (2) by
deposit with the United States Postal Service as certified or
registered mail, return receipt requested, postage prepaid to the
addresses stated below; (3) by prepaid telegram; or (4) by deposit
with an overnight express delivery service. Notice deposited with
the United States Postal Service in the manner described above
shall be deemed effective three (3) business days after deposit
with the Postal Service. Notice by telegram or overnight express
delivery service shall be deemed effective one (1) business day
after transmission to the telegraph company or after deposit with
the express delivery service. Notice by personal delivery shall be
deemed effective at the time of personal delivery.
For purposes of notice, demand, request, reply or
payment, the address of Lessor shall be:
City of Petaluma
C/O City Manager
11 English Street
Petaluma, CA 94952
With a copy to:
29
Director of Parks and Recreation
City of Petaluma
C/0 City Hall
11 English Street
Petaluma, CA 94952
The address of the Lessee shall be:
Empire Golf Inc.
Attn: Rod Metzler, President
7 Fourth Street, Suite 61
Petaluma, CA 94952
Each party shall have the right to designate a different
address within the United States of America by the giving of notice
in conformity with this section.
24. GOVERNING LAW
This Lease and the right and liabilities of the parties to the
Lease shall be governed by the laws of the State of California. If
any provision of this Lease is invalidated by judicial decision or
statutory enactment, the invalidity of any such provision will not
effect the validity of any other provision of the Lease.
25. CAPTIONS
Captions in this Lease are included for convenience only and
are not to be taken into consideration in any construction or
interpretation of this Lease or any of its provisions.
EXECUTED in multiple original counterparts, which constitute
the same single Lease instrument, on the date stated above.
0
EMPIJR-F� GOLF INC. (Lessee)
Roa Metzler
President
Its
CITY OF PETALUMA (Lessor)
City/ Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
32
Exhibit "A"
a. -e
4
•PPP
bd
5 ��1liiiilr �
r aa
rrasaass G
- -- -- wrwAuwwna
Leased land in highlighted areas
(approximations)
C�
- 1
2
EXHIBIT "B"
LESSEE'S LAND CONTRIBUTION
Being a portion of Lot 250, as said lot is numberea and designated upon
Rowe's Map of the Petaluma Rancho recorded in the office of the
County Recorder of Sonoma County on September 7, t866 in Hook 8 of
Maps, page 15, Sonoma County Records, said portion being more
particularly described as follows to-
wit:-
Beginning at point on the Southeasterly line of Washington Street,
said point being on the division line between Lots 243 and 250; thence
from said point of beginning along the Southeasterly line of Washington
Street North 350 East 2019.60 feet, more or-less, to the most Westerly
corner of Lot to as shown and designated upon Map of East Side, a
portion of Lot 250, Petaluma Ranchgj, recorded February 9, 1912 in
Hook 27 of Maps, page 16, Sonoma county Records thence along the
Southwesterly line of said Subdivision North 54 39' East 2140.38 feet,
more or less, to the intersection thereof with the Southeasterly line
of Lot 250 of said Petaluma Rancho, ' thence Southerly along sa i d
Southeasterly 11ne to the common corner of Lots. 242,. 243, 250 and 251;
thence North 54* 33' West,a-long the division line between Lots 243 and
250, 2143.4 feet to the point of beginning..
Excepting therefrom that portion as described.in-a Final Order of
Condemnation to the City of Petaluma recorded June 11, 1986 under
Document No. eS041912, of Official Records of Sonoma County, and
being more particularly described as fbllowss 4_
PARCEL "H"
A portion of the lands conveyed to Cramer by Deed recorded in Book
2485 of Official Records, page 285, Sonoma County Records, in
Allotment 250, Rowe's Map-of Petaluma Rancho, recorded in Hook 8
of Maps, page 15, and more particularly described as follows:
Beginning at a point on the line between Allotments 243 and 250 as
shown on said map, on the Southeasterly line of Washington Street, 60
feet Wide,, from which corner a found 112 inch iron pipe, untagged,
bears South 54� 33' East, 0.23 feet; thence along said line of
Allotments 243 and 250 South 54* 33' East. 2141.59 feet to a set iron
pipe at the most Southerly corner of said lands,, from which corner a
found 1/2 inch iron pipe, untagged, bears North 35a 25' 34" East 5.25
feet; thence along the Southeasterly line of said lands North 35" 25'
34" East 857.45 feet to a set iron pipe; thence North 54* 331 West
2142.75 feet to a set iron pipe on said Southeasterly line of
Washington Street; thence along said line South 35'" 20. 55" West 857.45
feet to the point of beginning.
PARCEL "B -1"
A portion of the lands conveyed to Cramer by Deed recorded in Book
2485 of Official Records, page 285, Sonoma County Records, in
Allotment 250, Rowe's Map of Petaluma Rancho, recorded in Book 9
of Maps, page 15, and more particularly described as follows=
Beginning at a get iron pipe on the Strut st- 1 i rW df Wash i ne ton
Street, 60 feet wide, distant along said linfa North 3S® 20' 55" East
657.45 feet from its intersECtion with thw lUm- .AllOtments 243
and 250 as shown on said map; thence al-CM. Said: -MVW, North: 35' 20' S5"
East 500.00 feet to a set iron pipes thavnm:'SWth,- 5r+k� .-Mv East 2143.43
feet to a set iron pipe on the Southeasteriy boundary of said lands=
thence along said boundary South 35* 25' 34•" West 500.00 feet to a set
iron pipe; thence North 54® 33' West 2142.75 feet to the point of
beginning.
of
�x
r
1 EXHIBIT "C"
2 TECHNICAL SPECIFICATIONS FOR THE
3 MAINTENANCE OF COTTONWOOD GOLF COURSE
4 CITY OF PETALUMA, CALIFORNIA
5 Lessee shall utilize these specifications as a minimum. Standards
6 and frequencies may be modified as effected by growing seasons for
7 the proper maintenance of the golf course. Lessee will be expected
8 to maintain the Premises in a good, playable condition at least
9 comparable to other public golf courses in Sonoma County of this
10 type and caliber, with similar fee schedules. As used in this
11 Exhibit "C ", the term "as needed" shall mean at such frequency and
12 in such manner as is necessary to keep the Course (and the
13 particular aspect of the Course which is the subject of any
14 provision hereof) in a good, playable condition at least comparable
15 to other public courses in Sonoma County of this type and caliber,
16 with similar fee schedules.
17 1. Maintain all GREENS observing the following minimum
18 requirements:
19 a. Change cups and repair all ball marks as
20 needed.
21 b. Mow as needed at a height of 3/8" or less and
22 remove clippings.
23 C. Verticut as needed on a year -round basis.
24 d. Aerate a minimum of twice a year.
25 e. Topdress, as needed, following each
26 aerification and verticutting with a soil
27 mixture compatible to the soil structure.
28 Additionally, all greens should be topdressed
29 following over seeding twice a year.
30 f. Treat in a preventative manner for control of
31 insects, disease, weeds and other pests to
32 insure a year round healthy turf that is
33 conducive to the established turf.
34 g. Apply fertilizer as determined by soil test
35 results.
36 2. Maintain all TEES observing the following minimum
37 requirements:
38 a. Move markers and benches as needed.
39 b. Mow as needed at a height of 1/2" or less.
1
b.
Mow as needed at a height of 1/2" or less.
2
C.
Aerify at least four times per year.
3
d.
Repair worn and damaged turf areas as they
4
occur to insure playable tees at all times.
5
e.
Treat in a preventative manner for the control
6
of insects, disease, weeds and other pests to
7
insure a year round turf that is conducive to
8
the established turf.
9
f.
Apply fertilizer as determined by soil test
10
results.
11
g.
Maintain ball washer with clean water and soap
12
daily. Provide clean tee towels on a daily
13
basis or as dictated by use.
14
3. Maintain all FAIRWAYS and IRRIGATED ROUGHS observing
15
the following minimum requirements:
16
a.
Mow FAIRWAYS at least twice per week at 1"
17
height or less.
18
b.
Mow IRRIGATED ROUGHS at least once per week at
19
1 -3/4" height or as determined by Lessee.
20
C.
Aerify all FAIRWAY as needed and as required
21
by soil conditions.
22
d.
Aerify all IRRIGATED ROUGHS as needed and as
23
required by soil conditions.
24
e.
Overseed and topdress (or resod) worn or bare
25
areas of FAIRWAYS and IRRIGATED ROUGHS as they
26
occur.
27
f.
Treat turf in a preventative manner to control
28
weeds, disease, insects and other pests to
29
insure a year round healthy turf that is
30
conducive to the established turf.
31
g.
Apply fertilizer as determined by soil test
32
results.
33
4. Maintain DRIVING RANGE TURF and MISCELLANEOUS
34
LANDSCAPE LAWN areas
observing the following minimum requirements:
35
a.
Now at least once per week at 1 -1/2" height or
36
less.
C: \PCCONT
REVIS: 12/28/90
e
1 b. Aerify at least two times per year.
2 C. Overseed and topdress (or re -sod) worn or bare
3 spots in turf as they occur.
4 d. Treat turf in a preventative manner to control
5 weeds, diseases, insects and other pests to
6 insure a year round healthy turf that is
7 conducive to the established turf.
8 e. Apply fertilizer as determined by soil test
9 results.
10 5. Establish and maintain at all times a sod nursery
11 (one each) for greens, tees and fairways.
12 a. Greens.
13 1) Establish nursery green with soil
14 structure and grass species as existing
15 on course.
16 2) Maintain according to greens maintenance
17 specifications.
18 3) Following removal of sod replace soil and
19 re -seed.
20 b. Tees and Fairways.
21 1) Establish tee and fairway nursery with
22 soil structure and grass blend as
23 existing on the course.
24 2) Maintain according to tee and fairway
25 maintenance specifications or as approved
26 by County.
27 3) Following removal of sod replace and re-
28 seed or stolonize.
29 6. Maintain all golf course accessory equipment in
30 clean, safe, functioning conditions at all times, replacing
31 equipment and /or materials as necessary, including but not limited
32 to the following:
33 a. Signs
34 b. Tee benches
C: \PCCONT
REVIS: 12/28/90
1 C. Tee markers
2 d. Ball washer, including towels and soap
3 e. Out -of- bounds markers
4 f. Distance markers
5 g.
6 h.
7 i.
8 j.
9 k.
10 1.
Greens, flags, and cups (annually)
Green flag poles
Practice green markers and cups (annually)
Trash receptacles
Shoe spike brushes
Sand trap rakes, access and maintenance
11 7. Maintain access and maintenance roadways and their
12 slopes free of brush, weeds and debris at all times.
13 8. Remove all litter daily from golf course grounds and
14 driving range. Remove all trash and debris resulting from golf
15 course maintenance as it occurs. Clean, repair and replace trash
16 receptacles as necessary to maintain clean, safe, and sanitary
17 conditions at all times.
18 9. Maintain the entire irrigation system, including
19 pump station, gate valve assemblies, main lines, electric valves,
20 lateral lines, sprinkler heads, controllers, water supply lines in
21 good repair, functioning as designed by manufacturer and conforming
22 to all related codes and regulations at all times.
23 10. Irrigate all turf and landscape planting as
24 necessary to maintain healthy growth at all times.
25 11. Maintain all shrub, ground cover planting and lawn
26 areas -in a manner to promote proper healthy growth and an
27 aesthetically pleasing appearance and weed free condition at all
28 times.
29
12.
Maintain
all trees
in safe, healthy and
30
aesthetically
pleasing condition
at
all times, keeping adjacent
31
turf mowed and
trimmed to
the trunks
of trees on golf course.
32
13.
Sand traps
to be raked
as needed and kept edged and
33
in weed -free
condition at
all times,
replacing sand and rakes as
34
necessary.
C: \PCCONT
REVIS: 12/28/90
1 14. Take whatever preventative steps are necessary to
2 protect all slope areas from erosion, fire and rodent damage at all
3 times.
4 15. Control rodent and other animal pests as necessary
5 to prevent erosion, interference with play and destruction of
6 plantings on golf course property at all times.
7 16. Maintain water hazards at proper depth and free of
8 algae and debris.
9 17. Maintain flow lines, swales, sub - surface drainage
10 systems in clear, weed free and proper functioning condition at all
11 times.
12 18. Observe all legal requirements and safety
13 regulations in the use and storage of chemicals, hazardous
14 materials, supplies and equipment at all times.
15 19. Maintain golf maintenance storage building and yard
16 in a clean, orderly and safe condition at all times, conforming to
17 all applicable laws and regulations.
18 20. Protect golfers from injury and the golf course from
19 damage in periods of frost, rainy weather and other unusual
20 conditions at all times.
21 21. Maintain exterior drinking water stations in a
22 clean, sanitary and safe operating condition.
23 22. Maintain bridge abutments and approaches in safe,
24 stable condition at all times.
25 23. Maintain walkways, handrails on walkways, and cart
26 paths in a graded, smooth surface, clean edged, safe and weed free
27 conditions at all times.
28 24. Maintain all fencing, netting and fence lines in
29 safe, Secure and aesthetically pleasing conditions at all times.
30 25. Maintain all roads, parking lots and driveways
31 within said premises in clean, safe and weed free condition at all
32 times with all paved surfaces in good repair.
C: \PCCONT
REVIS: 12/28/90