HomeMy WebLinkAboutOrdinance 2763 N.C.S. 01/25/2021 Ordinance No. 2763 N.C.S. Page 1
EFFECTIVE DATE
OF ORDINANCE
February 24, 2021
ORDINANCE NO. 2763 N.C.S.
Introduced by: Brian Barnacle Seconded by: Dennis Pocekay
AN ORDINANCE OF THE COUNCIL OF THE CITY OF PETALUMA APPROVING A
FIFTH AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY AND
ROOSTER RUN GOLF CLUB, LLC.
WHEREAS, the City of Petaluma (City) and Empire Golf, Inc., a California corporation (Empire),
entered into a Lease Agreement dated January 7, 1991 (the Lease, concerning the construction and
operation of a golf course on approximately 126 acres located on or near the Petaluma Municipal Airport,
Sonoma-County, California (Leased Premises); and
WHEREAS, in 1994, Empire assigned its interest in the Lease to Cottonwood Golf Club, Inc.
(Cottonwood) and City approved said, assignment; and
WHEREAS, City and Cottonwood amended the lease pursuant to the terms of that Certain
Amendment to Lease Agreement dated December 8 1994 (First Amendment); and
WHEREAS, City and Cottonwood amended the Lease pursuant to the terms of that certain Second
Amendment to Lease Agreement dated June 5, 1 996 (Second Amendment), pursuant to which the Leased
Premises were redesigned to cover the real property described in the Second Amendment; and
WHEREAS, prior to September 1997, Cottonwood assigned its interest in the Lease to Rooster Run
Golf Club, a California Limited Partnership (Rooster Run LP), pursuant to the Terms of the Lease, the
First Amendment and the Second Amendment; and
WHEREAS, Rooster Run LP mortgaged its interest in the Lease to Exchange Bank pursuant to that
certain Deed of Trust and Assignment of Rents dated September 17, 1997, and recorded October 10, 1997,
as Document No. 97- 92917, Sonoma County Records (the Mortgage); and
WHEREAS, with the express agreement of Exchange Bank, City and Rooster Run LP amended the
Lease pursuant to that Lender's Agreement and Third Amendment to Lease Agreement dated as December
19, 1997 (the Third Amendment); and
WHEREAS, on or about April 24, 1998, Rooster Run LP assigned its interest in the Lease to Rooster
Run Golf Club, LLC (Rooster Run LLC) pursuant to the terms of the Lease, the First Amendment, the
Second Amendment, and the Third Amendment; and
WHEREAS, on or about December 19, 2011, Rooster Run LLC and the City entered into a Fourth
Amendment to the Lease Agreement to reduce the rent in response to the economic recession and to
expressly provide that under no circumstances would the City be obligated to subordinate its fee ownership
or any other City interest in the Leased Premises to any current or future debt of the lessee or and
successors or assigns of the lessee; and
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WHEREAS, the closure of the golf course and clubhouse due to the coronavirus pandemic has
impacted Rooster Run LLC’s finances; and
WHEREAS, reductions in revenues resulting from a general decline in the golf industry have
impacted Rooster Run LLC’s finances and ability to sustain operations; and
WHEREAS, anticipated future reductions in revenue resulting from a coronavirus induced recession
may significantly impact Rooster Run LLC’s ability to remain open; and
WHEREAS, Rooster Run LLC has requested, and the City has agreed, to modify certain provisions
of the Lease related to percentage of gross revenues from the Leased Premises payable as rent to the City,
as stated in the Fifth Amendment to Lease Agreement; and
WHEREAS, City and Rooster Run LLC wish to amend further the terms of the Lease, the First
Amendment, the Second Amendment, the Third Amendment, and the Fourth Amendment in the manner
set forth in the Fifth Amendment to the Lease which is attached to and made a part of this ordinance as
Exhibit A.
NOW THEREFORE BE IT ORDAINED by the City Council of the City of Petaluma as follows:
Section 1. The Fifth Amendment to the Lease Agreement between the City and Rooster Run Golf
Club, LLC attached hereto as Exhibit A, is hereby approved.
Section 2. The City Manager is hereby authorized and directed to execute the Fifth Amendment to
the Lease Agreement, Exhibit A, on behalf of the City.
Section 3. All prior actions of the City Council amending the Lease Agreement are hereby ratified.
Section 4. If any section, subsection, sentence, clause, phrase or word of this ordinance is for any
reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction or
preempted by state legislation, such decision or legislation shall not affect the validity of the remaining
portions of this ordinance. The City Council of the City of Petaluma hereby declares that it would have
passed and adopted this ordinance and each and all provisions thereof irrespective of the fact that any one
or more of said provisions be declared unconstitutional, unlawful or otherwise invalid.
Section 5. This ordinance shall become effective thirty (30) days after the date of its adoption by the
Petaluma City Council.
Section 6. The City Clerk is hereby directed to publish or post this ordinance or a synopsis for the
period and in the manner provided by the City Charter and other applicable law.
INTRODUCED and ordered posted/published this 4th day of January 2021.
ADOPTED this 25th day of January 2021 by the following vote:
Ayes: Mayor Barrett, Vice Mayor Barnacle, Fischer, Healy, King, McDonnell, Pocekay
Noes: None
Abstain: None
Absent: None
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Ordinance No. 2763 N.C.S. Page 3
Teresa Barrett, Mayor
ATTEST: APPROVED AS TO FORM:
Kendall Rose, CMC, City Clerk Eric Danly, City Attorney
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EXHIBIT A
FIFTH AMENDMENT TO LEASE AGREEMENT
THIS FIFTH AMENDMENT TO LEASE AGREEMENT (the “Fifth Amendment”),
is made and entered into as of the _____ day of ________________, 2021 (the “Effective
Date”), by and between THE CITY OF PETALUMA, a public body, corporate and politic of the
State of California (“Lessor”), and ROOSTER RUN GOLF CLUB, LLC, a California limited
liability company (“Lessee”).
RECITALS:
This Fifth Amendment is made with reference to the following facts:
A.Lessor and a certain third party not party hereto, namely Empire Golf,
Inc., a California corporation (“Empire”), have entered into that certain Lease Agreement dated
January 7, 1991 (the “Lease”), concerning the construction and operation of a golf course on
approximately 126 acres located on or near the Petaluma Municipal Airport, Sonoma County,
California.
B.In 1994, Empire assigned its interest in the Lease to Cottonwood Golf
Club, Inc. (“Cottonwood”) and Lessor has approved said assignment.
C.Lessor and Cottonwood have amended the Lease pursuant to the terms
of that certain Amendment to Lease Agreement dated December 8, 1994, (the “First
Amendment”).
D.Lessor and Cottonwood have again amended the Lease pursuant to the
terms of that certain Second Amendment to Lease Agreement dated June 5, 1996, (the
“Second Amendment”) pursuant to which the Leased Premises were redemised to cover the
real property described in the Second Amendment. As used herein, the term “Leased
Premises” shall refer to the Leased Premises defined in the Second Amendment.
E.Prior to September 1997, Cottonwood has assigned its interest in the
Lease to Rooster Run Golf Club, a California Limited Partnership (“Rooster Run LP”), pursuant
to the terms of the Lease, the First Amendment and the Second Amendment.
F.Rooster Run LP has mortgaged its interest in the Lease to “Exchange
Bank” (herein so called) pursuant to that certain Deed of Trust and Assignment of Rents dated
September 17, 1997, and recorded October 10, 1997, as Document No. 97-92917, Sonoma
County Records (the “Mortgage”).
G.Lessor, Rooster Run LP and Exchange Bank have amended the Lease
pursuant to that Lender’s Agreement and Third Amendment to Lease Agreement dated as of
December 19, 1997 (the “Third Amendment”).
H.On or about April 24, 1998, Rooster Run LP assigned its interest in the
Lease to Lessee pursuant to the terms of the Lease, the First Amendment, the Second
Amendment and the Third Amendment.
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I. Lessor, Lessee and Exchange Bank have amended the Lease pursuant
to that certain Fourth Amendment to Lease Agreement dated November 1, 2011, pursuant to
which the rent schedule was modified (the “Fourth Amendment”).
J. Lessee is the current occupant of the Leased Premises and is operating
the golf course on the terms and conditions set forth in the Lease, the First Amendment, the
Second Amendment, the Third Amendment and the Fourth Amendment subject to the
Mortgage.
K. Lessee was forced to close the golf course for a period of time in 2020
due to the Covid-19 pandemic. During the time of closure, Lessee maintained the golf course at
Lessee’s own expense despite receiving no revenues during this time period.
L. Lessor and Lessee wish to amend further the terms of the Lease, the
First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment
in the manner set forth in this Fifth Amendment.
ACCORDINGLY, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Lessor and Lessee hereby agree to amend the Lease, the
First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment
as follows:
1. Status of Lease. Lessor and Lessee agree and acknowledge that the
Lease, the First Amendment, the Second Amendment, the Third Amendment and the Fourth
Amendment are in full force and effect and, except for this Fifth Amendment, have not been
otherwise modified or amended.
2. Rent. Lessor and Lessee agree that notwithstanding anything stated in
the Lease, the First Amendment, the Second Amendment, the Third Amendment and/or the
Fourth Amendment to the contrary, Lessee shall pay rent for the period of March 1, 2020
through June 30, 2022 as follows:
(i) From March 1, 2020 to September 30, 2020, Lessee shall
pay zero (0) rent.
(ii) From October 1, 2020 through June 30, 2022, Lessee
shall pay monthly rent in the amount of two and one-half
percent (2 1/2%) of green fees, cart rentals and range
income.
(iii) Commencing June 1, 2022, Lessee shall pay rent in
accordance with the Lease as amended by the First
Amendment, the Second Amendment, the Third
Amendment and the Fourth Amendment subject to the
terms of Paragraph 3, below.
3. Continued Negotiations For Modified Rent Structure. Lessor and Lessee
hereby agree to meet and confer in good faith on a routine basis to negotiate a revised rental
structure for the Lease taking into account all relevant factors with the goal of entering into a
new lease with a new rent structure prior to December 1, 2021. The relevant factors include,
without limitation, the burden on Tenant of required capital improvements to the golf course and
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the buildings, use in connection thereof and assuring Lessee a reasonable return on such
capital expenditures and the amenities and benefits that golf courses and maintained open
space provide for community which amenities and benefits will be lost to the community if
Lessee is unable to meet its debt service obligation and/or operate the golf course at a
reasonable profit.
4. Prohibition of Use of Glyphosate. Lessee agrees to immediately
discontinue all use of weed control products containing the chemical “glyphosate” throughout
the grounds under management by Lessee. This prohibition includes products commonly sold
under the brand name “RoundUp”, as well as any other products containing glyphosate.
5. Capitalized Terms. All capitalized terms and phrases used in this Fifth
Amendment shall be given the same meaning ascribed to that term or phrase in the Lease and
First Amendment, the Second Amendment, Third Amendment and the Fourth Amendment,
except as otherwise provided in this Fifth Amendment.
6. Conflicts. In the event of any conflict between the terms of the Lease,
and the First Amendment, the Second Amendment, the Third Amendment and the Fourth
Amendment on one hand and the terms of this Fifth Amendment on the other hand, the terms of
this Fifth Amendment shall govern and prevail.
7. Counterparts. This Fifth Amendment may be executed in identical
counterparts and each counterpart together shall constitute a single integrated document.
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IN WITNESS WHEREOF, the parties hereto have set their hand, effective as of
the Effective Date.
LESSOR: CITY OF PETALUMA
By:
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
Finance Director
Risk Manager
LESSEE: ROOSTER RUN GOLF CLUB, LLC,
a California limited liability company
By: ROOSTER RUN GENERAL PARTNERS,
a California general partnership,
Manager
By:
RICHARD A. COOMBS,
General Partner
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