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HomeMy WebLinkAboutOrdinance 1835 N.C.S. 01/07/1991EFFECTIVE ®ATE I OVORDINANCE ORDINANCE NO. 1835 N.C.S. Introduced by Seconded by Larry Tencer Michael Davis AN ORDINANCE AUTHORIZING A LEASE OF REAL PROPERTY LOCATED WITHIN THE CITY OF PETALUMA BE IT ORDAINED BY THE Council of the City of Petaluma as follows: Section 1. Certain real property located in the City of Petaluma, County of Sonoma, State of California is hereby authorized to be leased under the terms and conditions set forth in the Lease by and between the City of Petaluma and Empire Golf, Inc. which Lease is attached hereto as Exhibit "A" and incorporated herein by reference and the City Manager is hereby authorized to sign said Lease which is for the use of a public golf course. Section 2. The City Clerk be, and she is hereby directed to publish this ordinance for the period and in the manner as required by the City Charter. Ord 1835 N.C.S. INTRODUCED AND ORDERED published/posted this 17th day of December , 1990. ADOPTED this 7th day of January , 1991, by the following vote: AYES: Davis, Woolsey, Vice Mayor Cavanagh, Mayor Hilligoss NOES: 0 ABSENT: Sobel ABSTAIN: Read, Nelson M ATTEST: y Clerk City, golf.doc Ord. 1835 N.C.S PProwe� b� &rc inane Ig35. tiC.S• L E A 'S E A G' R E E M E N T This Leaise Agreement (",Lease") is entered into this 7,-Zh day of 'JQ 19, by and between the CITY OF PETALUMA, a 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 germs 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 re-al'p.roperty (collectively the "Leased Premises"). 2. CONS'TRUCTI'ON AND USE OF` LEASED PREMISES Lessee agrees it will u,se the Leased Premises for the construction and operation oaf a public golf course and .other activities customarily associatedwith or incidental -to the operation of a public golf course, including without lim'itat.ion, sale or rental o`f golf -related merchandise at a golf .professional's shop, furnis.hing.of lessons by a golf professional, operation of a driving range, an'd 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 A r 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 o.f 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 Le_ssor'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 I he .option to Lessor not later than one hundred eighty (1.80) 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 andipercentage re twill be subject to proration. 6. CONSTRUCTLON OF .THE GOLF COURSE 6.1 Lessor's Required Obligations The obligations identified in this subsection 6.1 shall be referred hereafter as "Lesso`i's Required Obligations." 3 Lessor shall provide to Lessee the real property identified in Secti.on 1 and Exhibit "A" of this Lerse. In order to satisfy Lesso-r'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. (B) 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 o.f 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 neces ay map recordation, conditional use permits, easements or zoning approvals. (G) Indemnif.ication from any toxic waste liability existing as of the commencement of the Lease. (H)' At the point of ultimate connection, all nec?essary and required utilities. including without limitation, but only if avail -able., 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, Le'sso.r 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 di charge program in any respect to change its location in such a manner a,s 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 Obli.aations 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 L.ez'see 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 an;d 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 IS hole golf course facility. 6 (,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 pede: trian (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 Agre,,ement for Les,sor's approval, which is not to be unreasonably withheld. Lessor's response to the submitted plans, including any'r'ecommendatons for change, is to be submitted to Lessee not laterr than thirty (30) days following. Lessor's receipt of th:e 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. Lesse.e shall 8 at.all times indemnify, dofend,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 Premise-s.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 buildi',ngs, 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 be due no latex than fifteen (1.5). 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 (lith) 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 r 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'statem'ent. Accurate receipt printing registers shall be installed and kept by Lessee on the premises, which ,shall show and record each and every sale transactedt. Rentals and fees shall be recorded when made or performed.. d) Inspection of Records: Audit. The Lessor shall be entitled a't'an.y 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 requiredto 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 ti"mes,.shall have the right to inspect a'-nd 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 atIthe 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 r 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 ex -change or transfer is not made for the purpose of avoiding a sale which would otherwise b-e made from or at the Leased Premises; (9°) Receipts in the form of refunds from or the value of merchandise, s-upplies 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) Rece.ipts 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 (6.2 years old and older) and Juniors ( 18 years old and under) shall receive a minimum of an additional 10% 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 r balls, lessons, rentals, food. and beverage., and golf shop merchandise shall be at sol.e'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 services. 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 o.p'erate 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 Proteszi.onal 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 employee's ;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 jud'gement,�refuse admission and/or service to persons who are drunk, d'isorderly, 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 Premi,ses. Lessee shall also have the right to suspend privileges as he deems necessary. 10.5 Tournaments Lessor shall have the right two times 17 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. (H) 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 is o the parties hereto. T.h>eL sc2iedu1ng 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 th,e! course during p.uc,h events. 10.8, Lessor's Right,of Inspection. Lessor, acting. through its director of Parks and Recre-ation ("Director"), shall have the right to enter upon and ins;pe.;c't the Leased Premises at any time during normal business hours. 11. TAMS Lessee will pay all taxes., license fees or other governmental charges.a"ssessed 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. L-eased. Premise s . 12. UTILITIES Lessee will pay before delinquency all charges for utilities, including electricity. gas, heat'ing., cooling, telephone and water, used`by.Lessee on the :.Leased Premises. 13. CAP`I-TA`L 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 (3%) of the gross green fee revenues annually commencing in year thirty- one (31). This-wilI be deposited in an account annually approved 19 by Lessor, all interest to go to account. Lessee with Lessor's approval will make improveme,n,ts to golf course facility annually or on a basis as agreed by.partie's. This three percent (3s) of the gross green fee revenue shall be paid pursuant to subsection 7:2, and is an addition to percentages set forth in 7.2. 13:2 Optional Term 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 th,e 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 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 assistanc..e 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:appro.priate 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 f'or the purpose of acquiring. design and construction information; submit and secure the nec"ess:ary planning approvals, mass grading permits building construction permits; and shall aid in developing a;lte_rnati've solutions to issues raised in the planning and plan .che;ck phases. 16. INSURANCE The following types of in.s.urance coverage relating to -the Leased -Premises and Lessee's opera°t`i,ons of the Leased Premises shall be maintained at all times throughout the Lease Term: 16.1 LiabiliayInsurance 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 J 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 Lesse'e 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 buildi_ng.s 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 operateas 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 an'd 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 Le,ssor 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 fare or other casualty. Les'see wi11 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 recoh struction or replacement is not 23 warranted, this Lease shall terminate without further obligation on the part of either party. 18.1'Re`ntal 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. EMINEN.T DOMAIN In the event that title to any portion of the leased premises is taken by condemnation orby 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 PURPO&E At any time during the term afthis 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,.ri,ot 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 maj'eure,_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. ASSIG'NMENT E'x.ce.pt,as otherwise provided below. Lessee shall not assign this Lease of 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 assignm'e'nt 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 sub"letting Vis ap.p_roved by Lessor, the assignee or suble,ssee 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 th•e event that prior to the "stated expiration date of the Lease te;rm," 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.writ:ing, 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 role,ased from any and all further liability under this lease other than -for events which may have ot.curre'd during the term of Lessee's- operation of the leased premises. 22. ,BREACH AND REMEDIES The' f.oilowng conditions will constitute a breach of this Lea"se and a default thereunder:, 22.1 Canditidns of Default (a) If Lessee fails to pay rent or fulfill any other monetary:ob 'i,gation 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_Le•as:e when due or calle.,d for, and the party in default fails to cure such non -monetary default within sixty (6.0) 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'forc;e 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 reas.onably 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 t`o' any person other than Lessee and such adjudication, appointment or or -der is not va-cated. 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 D:ecem'ber•31, 1994, Lessor shall have the option to. terminate the Lease. 2.2 ., 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 th•e 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 A1,1 notices.,, demands requests or replies provided for or A ermitted 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 •Unite•d States Postal Service as certified or registered mail. return receipt requested. postage prepaid to the addresses stated below;.(3) by prepaid te-l.egram; or (4) by deposit with an overnight express delivery service. Notice deposited with the United States Postal Service in the manner described above s:ha'1.1 be deemed effective three ( 3 ) busine-ss days after deposit with the Postal Service. Notice by telegram or overnight express delivery service shall be deemed effective one (1) business day after-trans,mis.sion to t-he telegraph company or after deposit with the express delivery service. Notice by personal delivery shall be deemed effective at the time of personal delivery. Eo.r 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 947952 With a copy to: 29 Director .pf. Pa=rks and Recreation City of Petaluma CIO City Hall- 11°English Street Petaluma, CA 94952 The.addres.s of the Lessee shall be: Em,pir.e Golf Inc. Attn: Rod Metzler, President 7 Fourth.Stree_t, 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 govern-ed by the laws of the State of California.. If any provision of this Lease is invalidated by judicial decision or statutory enact*me.nt;, 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 f,or convenience only and are not to be taken into consideration in any const"ruct ion o`.r interpretation of this Lease or -any o:f its pr-ovisi,ons. EXEZUT.ED in multiple original counterparts, which constitute the same single Lease instrument, on the,date stated above. Execution signatures on the following page. 31 EMPI GOLF' INC. (Les.zee.) CITY OF PETALUMA (Lessor) Ro Metzler _=% City 'anag.er President ATT ST: Its City Clerk .APPROVED AS .TO FORM: u4A - V City Attorney Finance Offs er/Auditor sk Man .ge!r 1 32 O Exhibit "A" 0 • 0 Leased land in highlighted areas. (approximations) 1 2 EXHIBIT "B LESSEE'S LAND CONTRIBUTION Being a portion of Lot 250,. at, said lot IS nUMberea and designated upon Rowe's Map of. the Petaluma Rancho in the office of the County Recorder of Sonoma County on September, 7, 1866 In Sook ,8 of Maps, page 15, Sonoma County Records, said portion being more particularly described as follows to -Wits. Beg inn;i ng at point on the Southeasterly I tne, of Washington Street, said point being on the division line between Lots 243 and 250; thence from said point of' Deg i nning along the So_ uth `seer l y 1 i ne of Washington Street North 350 East 201,9.60 feet, more -Or- less, to the most Westerly corner of Lot- 10 as shown and . desi gna ted UPan Map o f Fast Side, a portion of Lot 250, Petaluma Ranchzap., February 9, 1912 in Book 27 of Maps, page 1,6, Sonoma .county thence along the Southwesterly line of said tubdiv1sion t" 39• East 2.140.38 feet, more or less, to the intersection thereof with the Southeasterly line of Lot 250 of said Petaluma Ranchoi' the - Southerly along said Southeasterly dine to the common co.; of Lots 242,.243, 250.and 251; thence North 54 33" test, along the dlvlsaon line we Lots 243 and 250, 21 .4 feet to the point of be94.nnIr19, Excep ing therefrom thal portion as 'descri ..in a Final Order of Condemnation to.the: City of 'Petaluma June 11 1986 under Document No. 8604L91201 Of Official Records of Sonoma County, and being more particularly described. as fell : .: PARCEL wB" A portions of the lands convey_ ed to Cramer by Deed recorded in Book 2485 of Official Records, page ZM, SMnna"County Records, in Allotment 250, Rowe'':: Map- of Petaluma Rancho, in Book 8 of flaps, 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 5outheasterl;y+ line of MAshing,ton,Street. 60 feet wide, ' from which corner a found Let inch iron pipe, untagged, bears South 54. 33- East, O�.2+3 feet, themesl'ong id. line of Allotments 243 and 250 South S4® 33" East, 2141.59 feet to a set iron pipe at the most Southerly corner of said lands, from which corner a found i/2 inch iro n pipe, tantaggedo vas North.. ' 34'1 East 5.25 feet; thence along the 'Southeasterly line of said landsNorth 35� 25' 3411 �East :857'. 45 feet to a tet iron pipe, thence North 34® 33' Jest 2142.75 feet toa set iron pipe ort Said South _ `titeriy fine of Washington Street;, thence along said line 'South 35® 20" .55"° West 857.45 feet to the point: of beginning. PARCEL "E- i `° r A portion- of the lands conveyed to Cramer by, Dead recorded in Book 2485 of Official. Retards, page 285, panty Records, in Allotment 25.0, Rowe's Map of Petaluma Rancho, recorded in Book a Of Maps, page 15, and'more particularly described as foilowss -Beg i' nn f rog 4-It a het. i Imn : p i.p! on tnO t . l,i.- Of wash i rng toot Street, ..60 feet wi.d Oilstant al®ng sAidl. line. North 340 =20, 55" East 857.43 feet m* its inters dtion. with' E-I AtI UDOnts 243 and 250 as shown on said saps theva � ., 33 209 �« pi P 1Pe8 e' East Z143.43 ' East; 500.00 feet to a' mot. tro feet t0 a set iT'tiTl pipe^ on the S th s df , id lands; thence. aiong' s�i,d ooundary SQg 35 34°' t �0 00 feet, to a set iron . p ipe. thence North 54- 33' West 2142075 fe&t to thepoint of beginning. 1 EXH.IBIT C 2 TECHRICAL 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 mod.f,ie'd 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 "a*s 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 aeri,ficatio:n and verti;cutting 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: est°ab1ished 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. n e e d e.d. at °a -height of 1/ 2" .o r less. 2 C. Aerify at leAzt 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. Ae,rify all FAIRWAY as needed and as required 21 by soil conditions. 22 d. Aer.ify all IRRIGATED. ROUGHS as needed and as 23 requ°fired by soil conditions. 24 e. Overseed and topdress (or resod) worn or bare 25 are,as 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:\P:CCONT REVI,S: 12/28/90 •� 1 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 b. Aerify at least two times per year. c. .Oversee.d and top.drezz (or re -sod) worn or bare spot's in turf as they occur. d. Treat turf in a preventative manner to control weeds, diseases,' insects and other pests to insure a year round healthy turf that is conducive to the established turf. e. Apply fertilizer as determined by soil test results. 5. Establish and maintain, at all times a sod nursery (one each) for greens, tees and fairways. a. Greens. 1) Establish nur;se.ry green with soil structure and grass species as existing on course. 2) Maintain according to greens maintenance specifications. 3) Following removal of sod replace soil and re -seed. b. Tees and Fairways. 1) E.stablish tee and fairway nursery with soil structure and grass blend as existing on the course. 2) Maintain according to tee and fairway maintenance specifications or as approved by County. 3) Following removal of sod replace and re- seed or stolonize. 6. Maintain all golf course accessory equipment in clean, safe, functioning conditions at all times, replacing equipment and/or materials as necessary, including but not limited to the following: a. Signs. b. Tee benches C:\PCCONT REVIS: 12/28/9:0 13 14 15 16 17 18 19 20 21 22 23 24 25 2 6' 27 2s c . Tee markers d. Ba11 wash;er,, including towels and soap e. Out-of-bounds markers f. Distance markers g. Greens, flags, and cups (annually) h. Green flag poles i. Practice'gr,een markers and cups (annually) j. Trash receptacles k. Shoe spike brushes 1.- Sand trap rakes, ac'ces,s and maintenance 7. Maintain 'access and maintenance roadways and their slopes free of brush,;.weeds and debris at all times. 8. Remove all litter daily from golf course grounds and driving range. Remo"ve all trash and: deb' is resulting from golf course maintenance as it occurs. Clean, repair and replace trash receptacles as necessary to maintain, clean, safe, and sanitary conditions at all times. 9. Maintain the entire, irrigation system, including pump 'station, gate valve assem_blies., main 'lines, electric valves, lateral lines, sprinkler heads, controllers,, water supply, lines in good -repair, functioning as designed by manufacturer and conforming to all related codes and regulations. at all times. 10.. Irrigate. all tu,rf and landscape planting as necessary to maintain healthy growth at all times. 11. Maintain all shrub, ground cover planting and lawn areas An a manne-r to promote proper healthy growth and. an aesthe:ti.cally.,pleasing appearance and weed free condition at all times. 29 12. Maintain all trees in safe, healthy and 30 aes'thetically 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: \P.:GCONT REVIS: 12/28/90 1 14. Take whatever preventative steps are necessary to 2 protect all slope areas from:6r,,osion, 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 o,f 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: 1.2/28/90