HomeMy WebLinkAboutAgenda Bill 6.B 07/12/2004r M CITY OF P-ETALUMA, CALIFORNIA- 1 8W1% 9
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AGENDA B IL L i U 1 Y � L,
Agenda Title
Meeting Date: July 12, 2004
Discussion and Approval of Lease Amendment with 'Redwood
Empire Sportsplex, LLC.
Meeting Time ® 3:00 PM
❑ 7:00 PM
Category (check one) ❑ "Consent Calendar Public Hearin
❑ g New Business
❑ Unfinished Business ❑ Presentation.
Department
Director .
Contact Person
Phone Number
City Manager
Michael_ Bierman
Michael Bierman
778 -4345
Cost of Proposal n/a
Account Number
Amount Budgeted
Name of Fund:
Attachments to Agenda Packet hem:
1. Letter from Mr. Martin Hromek
.2. Lease term pages of current agreement
3. Resolution
summary Statement
Mr. Martin Hronec, Managing General, Partner of Redwood Empire Sportsplex, LLC (RESA), has
requested that the current lease with RESA 'be extended by five years. This would allow RESA to obtain
f nancing from the Small Business Administration (SBA) 5,04 loan product (see attached letter).
:The extension of the lease option period from 10 to 15 years would be the easiest way to accommodate this
request.
Recommended City Council Action /Suggested Motion
Approve the request and authorize the City Manager to sign lease amendment.
Reviewed by Finance. Director:
Reviewed : V rk At'torne r :
z e: _.,
A rov . City Maria t f
. Date:
Dater
Today's 'Date
Revision #and Date Revised:
File Code:
WIM
CE ER
MAY 17 2004
CITY MANAGER
Mike Bierman, January 9, 2004 .�
i s
Petaluma City Manager
Dear Mike,
While obtaining, financing from the SBA(Small Business Administration), one of their
requirements of their "loan 504 product is that the ownership or lease double the number of
years of the financed period. In this case the loan period is 20 years. Since they cannot change
the rules of the program, .I need to ask the City for an extra 5 years be�added on to the lease. This
would increase the total term of„the lease to 40 years. -During negotiations of°the present lease it
was noted and agreed to on both sides that some requirements of the bender would or might
require that the lease be altered to meet the lending institutions requirements.
I believe the best way to meet this request would be to extend the lease option. period to
15 years. instead of the present 1.0 years. Hopefully this can be accomplished in an expeditious
manner.
Thank you for your cooperation in this matter.
Sincerely,
Martin Hronec,
Managing General Partner;
Redwood Empire Sportsplex; L'LC
1 LEASE AGREEMENT
2
3
4. This Lease Agreement. (the "Lease ") is entered into this day of
,, ,
5 t^! 2:003, between THE CITY OF . PETALUMA, a political
6 subdivision of the State of California ( "Lessor ") and REDWOOD EMPIRE
7 SPORTSPLEX, LLC. ( "LESSEE'').
8
9 For and in consideration of the mutual terms, covenants land conditions herein,
10 Lessor and Lessee hereby agree as follows:
11 .
12 1. LEASED PREMISES Lessor hereby leases to Lessee and Lessee hereby
13 leases from Lessor, upon the terms and conditions set forth in tliis Lease,
14 that certain real property (the "Premises ") Which is that certain real property
15 located in the City of I Petaluma, . County of Sonoma, State of California, as
16. shown on the site. map attached as Exhibit "A" hereto (the "Site Map ") and
17 more particularly described in Exhibit `B " attached hereto.
18
2. TERM
20 (a) This Lease shall' be for a tenn of twenty -five (25) years with an option
21 held by Lessor to extend the teml ten (10) additional years
22 commencing with the last to occur - of 'the following:
23 (i) One: hundred twenty -five .(125) days after final acceptance of
24 the City's required environmental review and study by the City
25 of Petaluma and approval of any ,and all necessary land use and
26 other entitlements concerning the construction and operation of
27 the project:contemplated.
28 (ii) The date of approval of the plans and specifications for the
29 I;rnprovements, defined in Section 4 below, by the Lessor by
30 and through 'its City Manager or his designee.
31 (iii) In the event there is a challenge or, litigation commenced within
32 ;one `hundred twenty -five (125); days after final action by the
33 Lessor pertaining to en and land use review and
34 approval's, the date that, said challenge or litigation is
35 concluded.
. 3'6
(b) It is understood and agreed that all required rnitigation..measures
adopted through the environmental review process are incorporated
3.9 herein and made a part of this, Lease. Lessee hereby understands and
40 agrees that Lessee, at Lessee's cost, shall comply with any conditions
i
41 or required nutigation. measures set forth and /or adopted per the
42 environmental or land use process, prior to the commencement of the
43 complex operation.
44
45 (c) Lessee shall niae all required applications and submittals at Lessee's
46 sole cost and shall' pursue approvals diligently.
47
48 (d) When the Commencement Date of this Lease has become
49 ascertainable as provided above,. Lessor and Lessee shall specify the
50 'same; in writing, which writing shall be deemed incorporated herein.
51 The term "Lease Year" as used herein shall be a period of twelve (12)
52 successive calendar months, except that if the Lease Term commences
53 on a day other than the first day of a calendar month, then the initial
54 fractional month together with the succeeding twelve (12) calendar
55 months shall. constitute "the first'Lease Year.
56
5.7 The Lessor, at its option, by and through the City Council, shall have
5.8 the right to terminate the Lease if Items (a), (b), (c) and (d)' above are
59 not completed witlun three (3) years from the date `of the'
60 this Lease; provided, `however, that Lessor, by and through the City
61 Council, shall also have- the right to terminate the Lease if Lessee is in
62 default. The time limits in this paragraph shall not be extended: for
63 force maj "eure reasons. -
64
65 3. RENT Lessee shall pay Lessor as annual rent ( "Rent ") for the Premises a
66
percentage of Gross Revenues, as defined below, as follows:
67
During the Period:
Percentage of Gross Revenues:
68
First Lease Year through the
2% or $1,000.00
69
Fifth. Lease Year
whichever is greater
70
Sixth Lease Year through the
6 % or $10,000.00
71
Tenth Lease Year
whichever is greater
72
Eleventh Lease. Year through the
1.0% or $20,,00,0.00
73
Twenty- fifth Lease Year
whichever is greater
74
75
a Renego:tration If' during the
term of this .agreement the financial
76
operation of said sports: complex shall be in jeopardy,, both :Lessee and
77
Lessor` may; but are not; :obligated to. ; consider renegotiating rent as
78
paid to Lessor.
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2
RESOLUTION AMENDING: LEASE AGREEMENT WITH REDWOOD EMPIRE
SPORTSPLEX, LLC (RE SA)
WHEREAS, the Petaluma City Council approved a'lease (Ordinance 2124 N.C.S.) with
Redwood Empire Sportsplex, LLC for use of City property specifically for recreational purposes
on December 17, 2001; and
WHEREAS, in order to obtain financing from the Small Business Administration
(SBA), the terms would require that the ownership or lease double the number of years of the
financial period; and
WHEREAS, the lessee is 'requesting an additional five (5) years be added to the terms of
the agreement.
NOW, THEREFORE, BE IT RESOLVED 'that the City Council does hereby authorize
the City Manager to sign said amendment.to the lease.agreemernt.