HomeMy WebLinkAboutC-4187 • • C.-Lil'&l
1160
ARCADIA PAR 3 GOLF COURSE
MANAGEMENT AGREEMENT
This Golf Course Facility Management Agreement (as may be amended, the
"Agreement") is made as of the 30th day of November, 2018, between Touchstone Golf, LLC, a
Delaware limited liability company ("TOUCHSTONE"), and the City of Arcadia, California , a
charter city organized under the Constitution and laws of the State of California ("CITY").
RECITALS
A. City holds title to an 18 hole par 3 golf course facility illuminated for night play
and an 18 hole Foot Golf facility("Golf Courses") and other amenities known as the Arcadia Par
3 Golf Course including, but not limited to, a putting green, driving range, clubhouse, food and
beverage operations, and all improvements and business operations thereof or in connection
therewith(collectively, "Golf Course Facility").
B. City is in need of a professional manager of the complete operation of the Golf
Course Facility, including, but not limited to, administration of all receipts and disbursements,
operation and maintenance of the golf course, clubhouse, related facilities and equipment golf
course, marketing, sales and membership development.
C. City desires that Touchstone provide the management and other services which
are necessary for the operations of the Golf Course Facility in a professional manner with
budgets and operations structured to accomplish City's fmancial needs.
D. Touchstone has agreed to provide such services on the terms and conditions
herein.
NOW THEREFORE, in consideration of the foregoing Recitals, the mutual covenants
and agreements contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the City and Touchstone agree as follows:
I. RETENTION OF TOUCHSTONE
A. Term: Subject to such earlier termination as set forth in Article VII, this
Agreement shall commence on December 1, 2018 and terminate on November 30, 2023 (the
"Initial Term"). This Agreement may extend for an additional term of five (5) years (the
"Renewal Term") provided Touchstone is in compliance with the Agreement upon termination
of the Initial Term. The Initial Term and Renewal Term are collectively the "Term." Upon
execution of this Agreement, Touchstone shall deliver an initial operating budget, business plan
and facility improvement plan by January 15, 2019.
B. City hereby appoints Touchstone, and Touchstone hereby accepts such
appointment to manage the Golf Course Facility during the Term upon the terms and subject to
the conditions hereinafter set forth.
24347.00600131583085.5
• •
C. Touchstone accepts the relationship of trust and confidence established between
Touchstone and City by the terms of this Agreement. Touchstone shall report to the City
concerning the management and operation of the Golf Course Facility. Touchstone covenants
with City to furnish its best skill and judgment in performing its obligations hereunder, and shall
at all times provide such consulting and managerial services in a manner which maintains the
good name and business reputation of City and the Golf Course Facility. Touchstone shall
perform its duties and obligations under this Agreement in an efficient, expeditious, prudent and
economical manner, consistent with the best interests of City, in accordance with the standards
followed by Touchstone in its role as course manager of similarly situated golf facilities operated
by Touchstone, in accordance with Touchstone's quality standards, and in such manner so as to
maximize all gross revenues and minimize all Golf Course Facility expenses, both as set forth in
this Agreement and otherwise in connection with operation and maintenance of the Golf Course
Facility.
D. Touchstone is entering into this Agreement as an independent contractor to
provide the services set forth in this Agreement. Touchstone acknowledges that it is acquiring
no rights whatsoever in the Golf Course Facility, or any portion thereof (including the Golf
Courses and any trade names, trademarks, logos, emblems and similar identifying materials of
either the City or the Golf Course Facility) or the equipment and supplies, except a nonexclusive
and revocable license, during the Term, to enter upon the Golf Course Facility and use the
equipment and supplies if, and to the extent reasonably necessary, to carry out its obligations
pursuant to this Agreement. In acknowledging that Touchstone is acquiring no rights whatsoever
in the Golf Course Facility (including any trade names, trademarks, logos, emblems and similar
identifying materials) or the equipment and supplies, Touchstone further agrees that it will not
assert, in any legal action or otherwise, any right or interest in the Golf Couse Facility, or any
portion thereof. In no event shall Touchstone alter or improve any portion of the Golf Course
Facility except as directed by the City or as expressly permitted under this Agreement.
II. POWERS AND RESPONSIBILITIES OF TOUCHSTONE
A. Touchstone shall operate the Golf Course Facility in a good, workmanlike and
professional manner by performing and assuming the following duties and obligations:
1. Overview. In performing the services set forth hereinbelow, Touchstone
shall oversee and implement every aspect of the day-to-day management of the Golf
Course Facility and, in connection therewith, will:
(a) Comply with all laws, regulations and governmental and other land
use requirements, approvals and agreements affecting the Golf Course Facility,
any tee time reservation policy established by the City, and any applicable
regulatory agreements, declarations of covenants, conditions and restrictions,
agreements with the community, and similar documents. Notwithstanding the
foregoing, City shall provide Touchstone with a copy of any and all applicable
documents related to regulatory agreements, community agreements and/or
recorded covenants applicable to the operation of the Golf Course Facility.
2
24347.00600\31583085.5
• !
(b) Touchstone will provide a comprehensive analysis of all aspects of
the existing goals in place for maintenance, operations and marketing of the Golf
Course Facility. Touchstone will work closely with City in defming the ongoing
goals and visions for the Golf Course Facility and will provide a new Annual Plan
(as defmed in Article II(A)(4)(b) herein) based upon these conclusions.
(c) Touchstone will maintain a copy of Touchstone's quality standards
at the Golf Course Facility at all times.
(d) Touchstone will provide consistent guidance and vision to the Golf
Course Facility and take proactive steps to successfully operate the Golf Course
Facility and adhere to annual operating expectations.
(e) Touchstone will develop, support and implement a culture of
excellence within the Golf Course Facility based upon pride, respect, quality of
service, and creating an exceptional experience for all patrons of the Golf Course
Facility, including residents, guests, and others.
2. Operations
(a) Arranging for the purchase of such supplies and equipment as is
reasonably necessary in order to operate the Golf Course Facility.
(b) Maintaining the golf course and all of its facilities in a condition
consistent with quality levels described in Exhibit "D" attached hereto and
defmed in the calendar year budget, business plan, and facility improvement plan.
(c) Coordinating with City to cause the Golf Course Facility to operate
in compliance with applicable laws and regulations.
(d) Diligently pursue the collection of all sums due and owing to City
from all purchasers of goods and/or services relating to the Golf Course Facility.
(e) Maintain in full force and effect, as a Golf Course Facility
expense, all permits, licenses, franchises, authorizations, approvals, consents and
variances, whether regulatory, governmental, quasi-governmental or otherwise,
designated by City or necessary or appropriate for the Golf Course Facility. All
such permits, licenses, franchises, authorizations, approvals, consents and
variances shall be the sole and exclusive property of the City.
(0 Immediately advise City of any discovery by Touchstone of any
hazardous waste in, on or about the Golf Course Facility and, promptly following
such discovery, jointly determine with City the actions which should be taken to
ensure that the presence of such hazardous waste in, on or about the Golf Course
Facility will not constitute a violation of any laws, and upon approval by City of
any action recommended by Touchstone promptly take, or cause to be taken, such
actions.
3
24347.00600\31583085.5
•
(g) Comply with all federal, state and local laws and regulations
pertaining to the storage, use and disposal of "hazardous or toxic wastes,
substances, or materials" as defined by applicable law.
(h) Immediately advise the City of any discovery by Touchstone of
any condition or event which may have a material adverse effect upon the Golf
Course Facility or its operations.
(i) Comply with all safety regulations of federal, state and local
governmental agencies, including without limitation any requirements imposed by
California Labor Code Section 1720 et. seq. and 6300 et. seq. and regulations
promulgated with respect thereto, and applicable federal occupational, health, and
safety laws and regulations. Touchstone shall take all reasonable actions to
protect the safety of all Golf Course Facility employees and customers. The Golf
Course Facility shall contain appropriate security systems, including video
monitoring of cash operations, security alarm systems, motion detection sensors
for after hours control, and locks for the maintenance yard and perimeter gates.
The alarm system at the Golf Course Facility shall be tied into an offsite
monitoring station. Touchstone shall keep for seven (7) days computer back-up
tapes for all accounts payable and accounts receivable information. All records at
the Golf Course Facility shall be kept in fireproof files.
(j) Overseeing all other matters reasonably necessary for the efficient
performance of the operations in connection with the Golf Course Facility.
(k) Implementation of Touchstone Golf's national accounts
relationships, purchase supplies and equipment, as needed, to operate the Golf
Course Facility.
3. Human Resources
(a) Arranging for the employment of competent management that are
trained in the necessary facets of Golf Course Facility management, with
sufficient experience in the Golf Course Facility industry to oversee management
of the Golf Course Facility.
(b) Arranging for the employment of a competent staff and deploying
such staff and other resources to ensure proper care of the buildings, grounds and
Golf Course Facility.
(c) Managing all hiring, training and termination of all Golf Course
Facility management and personnel, including administering all labor relations.
The general manager shall be subject to the approval of City. All personnel of the
Golf Course Facility shall be employees of Touchstone or its affiliate.
(d) Touchstone shall be responsible for any employment related
liability, fine, penalty or award (including the cost of defense and attorney fees)
with respect to claims, demands, arbitration or litigation brought by an employee
4
24347.00600\31583085.5
• •
or employees of Touchstone at the Golf Course Facility resulting from violations
by (a) Touchstone's corporate office, (b) an executive or officer, and/or (c) Golf
Course Facility supervisory staff, of federal, state or local laws, ordinances or
regulations governing the employment or working conditions of the employees at
the Golf Court Facility. Touchstone shall not be entitled to any reimbursement
by City for such damages unless such damages were (a) the result of a policy or
procedure which was required in writing by the City, or (b) the result of working
conditions at the Golf Course Facility which were identified in writing as non-
compliant by Touchstone and City failed to provide the requisite funding to
remedy such conditions after written notice to City.
4. Accounting, Budgeting and Recordkeeping
(a) Generally. Oversee the accounting process including planning and
budgeting; daily and monthly sales reporting; producing monthly financial
statements; processing all expenses for payment; reviewing monthly cash flow
statements;bank account reconciliations; and payroll processing.
(b) On or before May 1 of each operational year commencing July and
ending June ("Operational Year"), Touchstone and City shall have prepared and
received City's approval of an annual operating and capital budget for the
subsequent calendar year(s)(the "Annual Plan"). Until such time that the annual
operating budget is complete and approved by City, Touchstone shall use its best
reasonable efforts to operate the Golf Course Facility under the existing budget
framework provided to Touchstone by City or in a manner consistent with the
current market position of the Golf Course Facility.
(c) Touchstone shall maintain books, accounts and records of the
operations of the Golf Course Facility and all transactions related to the Golf
Course Facility accurate in all material respects with periodic reporting to the City
as may be available utilizing current accounting systems maintained by the Golf
Course Facility or its affiliates. The method of accounting maintained by
Touchstone shall be to the satisfaction of the City, including a bank account that
is separated from any other Touchstone's operation. Such method shall include,
but is not limited to, the keeping of the following documents:
i. regular books of accounting such as general ledgers;
ii. journals including any supporting and underlying
documents such as vouchers, checks, tickets, bank statements, etc.;
iii. cash register tapes (daily tapes may be separate but shall be
retained so that from day to day the sales can be identified), golf starter
sheets and golf cart rental forms; and
iv. any other reasonable reporting records that the City deems
necessary for proper reporting of receipts.
5
24347.00600\31583085.5
•
(d) Touchstone shall provide monthly, quarterly, and annual fmancial
statements including a balance sheet, statement of operations and other fmancial
data reasonably requested by City no later than twenty-five (25) days following
the end of each month, forty (45) days after the quarter ending, and ninety (90)
days following the end of the calendar year. City may ask for financial reports
that may be available utilizing current accounting systems maintained by
Touchstone with forty eight (48) hours advance notice. Touchstone is not
responsible for the preparation of any state or federal income tax returns of the
City for the Golf Course Facility.
(e) City shall have the right, upon request, to examine all books and
records and to, at City's expense, request an audit.
5. Marketing
(a) Oversee the planning and implementation of all marketing
programs, including developing and executing a business plan (including, if
applicable to the Golf Course Facility, a lodging/golf package plan,
tournament/catering event sales plan, e-marketing, promoting the food and
beverage operation, implementing pricing and revenue management techniques,
and placing appropriate media/advertising;
(b) Implementation of the Touchstone Golf Foundation to enhance
guest service and community outreach as described in Exhibit "C" attached
hereto.
B. Subject to any provisions to the contrary herein, Touchstone may subcontract the
whole or any part of the performance of its obligations and duties herein described to any
wholly-owned subsidiary of Touchstone, or to any other person, firm or corporation approved by
City. The subcontracting of the whole or any part of its obligations and duties as aforesaid shall
not relieve Touchstone from liability for the performance of such obligations and duties before or
after such contracting.
C. Unless otherwise directed by City all contracts and agreements which relate
specifically to the Golf Course Facility shall be entered into by and in the name of City. No
contract or agreement shall be entered into without City approval unless in accordance with the
budget and terminable on thirty (30) days notice. Touchstone shall provide City copies of all
such contracts and agreements which are binding upon or obligate City within ten (10) business
days of their execution.
D. Touchstone shall pay promptly all operating expenses of the Golf Course Facility
unless the amounts thereof are in dispute. In addition, Touchstone will calculate any moneys or
fees due Touchstone in accordance with this Agreement. Touchstone is authorized to pay its fees
and expenses owing under this Agreement from the bank account utilized to pay operating
expenses for the Golf Course Facility. No director or officer of Touchstone shall have any
interest in any concession at the Golf Course Facility nor in any contract for the Golf Course
Facility without approval by the City or his designee. City shall designate bank account(s)
6
24347.00600131583085.5
• •
necessary to fulfill the payment of expenses and shall authorize Touchstone and Golf Course
Facility employees, as necessary, to make deposits and authorize disbursements from such
accounts which authorization shall be presumed for individuals named on bank resolutions
and/or signature cards. City shall approve the individuals authorized to make such disbursements
in writing upon submission of a request for designees by Touchstone.
E. Subsequent to Touchstone receiving written notification of the termination or
expiration this Agreement, or during the year prior to such expiration or termination, Touchstone
agrees and covenants to cooperate fully with City or City's designated successor manager
(subject to compliance with the restrictions set forth herein) in the smooth and businesslike
transfer of the operations of the Golf Course Facility. In connection therewith, Touchstone
agrees to provide all requested documents and information in its possession relating to the Golf
Course Facility (other than Touchstone's proprietary information) including, but not limited to,
the assignment of accounts, contracts, policies, licenses, permits and improvements in
connection with the Golf Course Facility to City or City's designees, and Touchstone agrees and
covenants to execute all documents required or convenient to accomplish any such transfer in a
timely, effective and efficient manner. In addition, Touchstone shall provide reasonable training,
assistance and direction to the new management company or operator, and shall in good faith,
endeavor to facilitate a smooth, seamless and efficient transition of management responsibility..
Unless otherwise agreed in writing by the parties hereto, Touchstone shall remove its personnel
and personal property from the Golf Course Facility upon such expiration or termination and
surrender to City all cash and other assets of the Golf Course Facility. Touchstone's failure to
comply with this Article II(E) shall be a material default under Article VII of this Agreement.
The duties of Touchstone set forth in this Section are expressly conditioned upon City's full
payment of the Administrative Fee, any Cash Flow Split and any fee due upon termination as set
forth in this Agreement.
F. Liquor License:
1. All Net Profits from the sale of alcoholic beverages at the Golf Course
Facility will be retained by Touchstone. Touchstone shall provide the City with a
quarterly accounting of the Net Profits from the sale of alcoholic beverages and on an
annual basis, the Administrative Fee will be reduced in an amount that is equal to the
final amount of Net Profits retained by Touchstone. As used herein, the term "Net
Profits" shall mean the gross receipts attributable to the sale of alcoholic beverages at the
Golf Course Facilities less (i) compensation payable to employees directly involved in
the sale of alcoholic beverages, (ii) payments under equipment leases for the food and
beverage operations, (iii) costs incurred to purchase alcoholic beverages for service or
sale, (iv) any applicable state and federal taxes that are attributable to the sale of alcoholic
beverages, but specifically excluding Touchstone's income taxes in respect of Net Profits
retained by Touchstone pursuant hereto; and (v) any other direct cost related to the sale of
alcohol, including but not limited to permit renewal fees, legal expenses and similar
costs.
2. Touchstone shall hold the liquor license for the Golf Course Facility (the
"Liquor License"). Upon expiration or termination of this Agreement, Touchstone agrees
that it will, upon City's request, execute and deliver to City escrow instructions, forms
7
24347.00600\31583085.5 _
• •
ABC-211A and ABC-227, and any other documents or forms required by the California
Department of Alcoholic Beverage Control to transfer the Liquor License to City's
designee. The consideration for the transfer of the Liquor License pursuant to this
Section 8 shall equal the consideration paid for the Liquor License at the commencement
of this Agreement. Upon transfer of the Liquor License to City's designee, Touchstone
shall keep and retain the consideration equal to the amount paid directly by Touchstone
for the Liquor License.
G. Touchstone shall not make, or suffer to be made, any alterations of the Golf
Course Facility or any part thereof if the cost of such alteration in the aggregate would be in
excess of$2,500 unless already included within the then approved budget (either operating or
capital) for the Golf Course Facility without the prior written consent of City. Touchstone shall
use its best efforts to keep the Golf Course Facility premises and City's property in which such
premises are situated free from any liens arising out of any work performed or material furnished
to the property, subject only to the right to diligently contest such liens.
H. Touchstone shall not discriminate against any employee or applicant for
employment because of race, color, creed, sex, age, national origin or non-disqualifying
handicap. Touchstone shall not discriminate because of race, religion, color, ancestry, sex,
national origin or non-disqualifying handicap against any person by refusing to furnish such
person any service or privilege offered to or enjoyed by the general public, nor shall Touchstone
or its employees publicize the Golf Course Facility in any manner that would directly or
inferentially reflect on the acceptability of the patronage of any person because of race, religion,
color, ancestry, sex, national origin or non-disqualifying handicap, nor shall the Golf Course
Facility be so used.
I. Upon seven (7) days' prior written notice to Touchstone, which notice shall set
forth the date and time that the City desires to inspect the books and records, the City or its
authorized agents, auditors, or representatives shall have the right during normal business hours
to review, inspect, audit, and copy the books, records, deposit receipts, canceled checks, and
other accounting and financial information maintained by Touchstone in connection with the
operation of the Golf Course Facility. All such books and records shall be made available to the
City at the Golf Course Facility, unless the City and Touchstone agree upon another location.
The City, at its own expense, shall have the right to retain an independent accounting firm to
audit the books and records of the Golf Course Facility on an annual basis. The inspection right
of City under this Article II(H) shall remain in effect for a period of one (1) year following the
termination or expiration of this Agreement.
J. When an action or recommendation by Touchstone requires the approval or
written consent of the City pursuant to this Agreement, Touchstone will submit the request in
writing to the Public Works Services Director for the City or such other person as is delegated
authority for the day to day operational management of the Golf Course from time to time by the
City. To the extent that a matter is within the authority of the Public Works Services Director,
then the City will use reasonable efforts to respond to the request within ten (10) days unless
Touchstone indicates in the request that emergency action is required. For matters that are
within the authority of the City Manager, the City will use reasonable efforts to respond to the
request within thirty (30) days of the request. All requests that deviate from the terms of this
8
24347.00600\31583085.5
•
Agreement will be subject to review by the City Manager. If a request requires the approval of
the City Council, such as approval of the Annual Plan or a material amendment to this
Agreement, then the Public Works Services Director and/or the City Manager will work
cooperatively with Touchstone to set such matter on the agenda for the City Council meeting
following the date upon which all staff level approvals and recommendations have been
completed. This section is intended to provide guidelines for approval of Touchstone requests
and in no event will the City be in breach of this Agreement or be deemed to have approved or
consented to a request if the foregoing time frames are not met.
III. RESTRICTED ACTIVITIES OF TOUCHSTONE
A. Without the prior written consent of the City, which consent may be granted or
withheld in the City's sole discretion, Touchstone shall not do, or cause or permit to be done, any
of the following throughout the Term:
1. Borrow or lend money in the name of the Golf Course Facility or the City.
2. Except for the operating contracts which are approved by the City or the
Annual Plan, enter into any agreement relating, directly or indirectly, to the Golf Course
Facility.
3. Assign, transfer, pledge, compromise or release any of the claims of or
debts due the City, except upon payment in full, or, arbitrate or consent to the arbitration
or settlement of any claim of or against the City or any other dispute or controversy
involving the City.
4. Make, execute or deliver in the name of the City, or with respect to any of
the assets of the City or the Golf Course Facility, any assignment for the benefit of
creditors or any bond, confession of judgment, chattel mortgage, security instrument,
deed, guarantee, indemnity bond or surety bond.
5. In the name of or on behalf of the City, endorse any note, or become a
surety, guarantor, or accommodation party to any obligation.
6. Violate any legal requirement or applicable rule, regulation or order of any
local board of fire underwriters or similar body.
7. Commence or maintain in the name of or on behalf of the City any action
or proceeding, whether judicial, administrative or otherwise.
8. Make any deletion, addition, modification, improvement or other
alteration to the Golf Course Facility other than as expressly authorized hereunder or as
contemplated in the applicable Annual Plan.
9. Expend any funds, except as expressly contemplated in the then current
Annual Plan or this Agreement, or as otherwise agreed upon by the City.
9
24347.00600\31583085.5
• •
10. Make any amendments or alterations to, or fail to comply with, any
reservation policy approved by the City.
11. Use any trade names, trademarks, logos, emblems or similar identifying
matters of the City or the Golf Course Facility except in connection with the operation
and promotion of the Golf Course Facility, provided, however, that City agrees that the
Golf Course Facility may be listed as a property under management by Touchstone on its
website.
12. Hire anyone as a Golf Course Facility employee at compensation in excess
of that agreed to by the City in the then-current Annual Plan, unless approved in advance
by the City prior to the hiring of such individual.
IV. MANAGEMENT COMPENSATION
The following payments and consideration shall be made to Touchstone for the services
to be provided by Touchstone under this Agreement:
A. The Administrative Management Fee of four thousand dollars ($4,000) per month
(the "Administrative Fee"), with the first payment of the Administrative Fee payable within
fifteen (15) days of the execution of this Agreement and thereafter payable monthly in arrears
during the Term.
B. In addition to the Administrative Fee, after 2.5% of the Golf Course Facility's
total revenue is reserved for the capital expenditures fund, Touchstone shall receive 15% of the
positive Earnings Before Interest, Taxes and Depreciation ("EBITDA") and the City shall retain
the balance as the effective lease payment ("Gross Revenue Sharing"). Payments shall be made
quarterly within forty-five (45) days after the end of the quarterly calendar period (or portion
thereof) based on the EBITDA results for such quarter. Annually, a reconciling calculation of
EBITDA for each party's Gross Revenue Share shall be made, as necessary, to comply with the
prescribed terms of 15% to Touchstone as described above. A sample calculation is provided in
Exhibit "B". City shall have the right to contest such calculation, but shall be required to resolve
such calculation within thirty (30) days of notice of such contest and if not resolved, make the
payment based on Touchstone's calculation with reservation of the right to contest.
C. Touchstone shall be reimbursed for reasonable out-of-pocket expenses related to
travel by Touchstone personnel only as provided for in the applicable budget or pursuant to a
travel reimbursement policy which has been approved by City. Such expenses shall be paid from
the bank account utilized to pay operating expenses subject to the expense documentation
requriements included in the travel policy. City reserves the right to require documenation of all
expenses rather than per diems.
V. RESPONSIBILITY FOR EXPENSES
A. Touchstone's performance and activities pursuant to this Agreement shall be for
and on behalf of City. City shall pay for all costs and expenses of maintaining, operating and
supervising the operation of the Golf Course Facility, provided, however, Touchstone's actions
10
24347.00600`31583085.5
•
and expenses incurred are in accordance with relevant contracts and consistent with the approved
budget or within permitted variances provided in this Agreement. Such expenses include, but are
not limited to the following:
1. Salaries, fringe benefits, workers compensation insurance and expenses of
employees;
2. Costs and expenses of any advertising or business promotion;
3. Costs of goods sold, including inventory and supplies necessary to
conduct the business of the Golf Course Facility;
4. Capital expenditures, repairs and maintenance, equipment and supplies;
5. Premiums for insurance maintained;
6. Regulatory compliance and permits, it being specifically agreed that (i)
legal fees incurred in connection with regulatory compliance for such liquor licenses, and
food services are approved, and (ii) reasonable and necessary legal fees of attorney's
retained by City or otherwise approved by City in advance, directly related to the
operation and protection of the Golf Course Facility and City's and Touchstone's liability
are approved;
7. Cost and expenses of utilities;
8. Actual out-of-pocket general and administrative and accounting costs
incurred in connection with goods or services provided by thrid parties, including forms
and checks;
9. If included within the budget, consulting fees for certain expertise (e.g.
agronomy) needed to address specific needs of the Golf Course Facility or if not included
in the budget, if approved by City and
10. Administrative Fees and reimbursable expenses of Touchstone as set forth
herein.
B. City is responsible for providing sufficient funds to cover the operating expenses
for the Golf Course Facility. Touchstone, acting as authorized independent contractor for City,
will deposit all revenues of the Golf Course Facility into an operating account or accounts for the
Golf Course Facility and Touchstone will have authority to draw upon the funds in the account to
cover operating expenses. In the event that funds in an account are not sufficient to cover
operating expenses, Touchstone shall advise City of the shortfall or potential shortfall and City
shall deposit additional funds into the appropriate account in a timely manner in order to ensure
that sufficient funds are available to meet the operational requirements, including the
Administrative Fee, of the Golf Course Facility. Touchstone will have no obligation to
contribute funds to the accounts of the Golf Course Facility.
11
24347.00600\31583085.5
• •
C. Touchstone may cause the Golf Course Facility to incur any expense (i) that is
included in the approved annual operating budget; (ii) that is needed to remedy any emergency
situation that, in Touchstone's professional judgment, is potentially hazardous, unsafe or
damaging to the Golf Course Facility or to persons reasonably expected to be present at the Golf
Course Facility (e.g., employees, patrons, authorized visitors) ("Emergency Expenditure"), as
more particularly set forth hereinabove; or (iii) as otherwise expressly approved by City.
Touchstone shall not incur any expense that is not consistent with the annual operating budget
without the prior written consent of the City, except for Emergency Expenditures (as elsewhere
provided in this Agreement) or as otherwise provided in this Agreement. Touchstone shall not
enter into any contract, even if otherwise authorized hereunder, which binds or purports to bind
City or the Golf Course Facility without the prior written approval of City if the term of such
contract exceeds the Contract Period unless such contract is terminable on thirty (30) days'
notice. Excepting only Emergency Expenditures or expenditures included in the approved
budget, Touchstone shall not incur any single expense, even if otherwise authorized hereunder,
which is chargeable to City or to the Golf Course Facility if the amount equals or exceeds five
thousand dollars ($5,000).
D. The annual operating budget may contain a "contingency" line item in an amount
not to exceed three percent (3%) of the total annual operating budget. Touchstone may
reallocate portions of the contingency to other items in the annual operating budget. Touchstone
may also reallocate among line items, provided the total expenses to be incurred do not increase.
No other reallocations of line items may be made by Touchstone without the prior written
consent of City. Unbudgeted minor expenditures unforeseen at the time of preparation of the
annual operating budget, and reasonably deemed necessary by Touchstone, may be made without
City's authorization except that unbudgeted expenditures in excess of $500.00 without City's
written approval in advance. In the event such request is submitted and City does not respond
within five (5) business days of receipt of the request, City shall be deemed to have consented to
such unbudgeted expenditures.
E. To the extent employees remain employed by an affiliate of City, the Golf Course
Facility will also be responsible for reimbursing such affiliate for all costs of such employees,
including but not limited to salaries, wages, benefits, taxes, insurance and payroll processing
costs, as applicable.
VI. INSURANCE
A. Insurance to be maintained by Touchstone for the Golf Course Facility. Without
limiting the indemnity provisions of the Agreement, Touchstone shall procure and maintain in
full force and effect during the term of the Agreement, the policies of insurance that are
described on Exhibit E. City reserves the right to modify these requirements, including limits,
based on the nature of the risk, prior experience, insurer, coverage, or other special
circumstances. If the existing policies do not meet the insurance requirements set forth herein,
Touchstone agrees to amend, supplement or endorse the policies to do so.
B. Insurance to be maintained by City for the Golf Course Facility. City will carry
reasonable amounts of liability, property and contents insurance insuring all Golf Course Facility
assets and operations including improvements now or hereafter located on the Golf Course
12
24347.00600\31583085.5
•
Facility real estate, against loss or damage by fire and other casualty, including theft, vandalism
and malicious mischief, and such other risks common to Golf Course Facility properties. City
will also provide other insurance coverage as it deems necessary for the operation of the Golf
Course Facility including, but not limited to, automobile liability and liquor liability
insurance/DRAM shop insurance. The City will have the right to satisfy its insurance
requirements through its existing program of self insurance or any self-insured retention program
or risk pool.
VII. TERMINATION
A. The Term of this Agreement shall be for the Initial Term plus Renewal Terms, if
applicable.
B. This Agreement may sooner be terminated:
1. At any time by mutual agreement between Touchstone and City.
2. In the event of a sale of the Golf Course Facility.
3. Except as to matters subject to Subsection 5 below as to which there is no
cure period, upon the failure of the defaulting party to cure a material breach of this
Agreement after the non-defaulting party has given not less than fifteen (15) days written
notice of the default in writing to the defaulting party("Cure Period") Provided, however,
the Cure Period shall be extended for such period as may be reasonably necessary for the
defaulting party to cure the failure in the event the material breach is of a type that
requires longer than fifteen (15) days to cure and the defaulting party has taken steps
before the end of the Cure Period to remedy the breach in a proper and diligent manner
and the defaulting party is diligently pursuing to default such cure. Any notice given
pursuant to this subsection shall specify the full particulars of the default alleged.
4. In the event of gross negligence or willful misconduct in the operation of
the Golf Course Facility by Touchstone, upon'written notice from City.
5. Immediately upon written notice from Touchstone to City in the event
City fails to make any required deposit to pay expenses of the Golf Course Facility
(including the Administrative Fee) as required by this Agreement.
5. In the event Touchstone engages in conduct which adversely impacts the
reputation of the Golf Course Facility after written notice from City specifying in detail
the conduct of Touchstone in that regard, and an opportunity to cure.
6. Touchstone files a petition of any type in bankruptcy, is declared
bankrupt, becomes insolvent,makes an assignment for the benefit of creditors, or goes
into liquidation or receivership.
C. In the event of termination of this Agreement, except pursuant to Subsections
B(3) or B(4) herein, City will not hire, for a period of one (1) year following such termination,
any general manager or golf course superintendent placed at the Golf Course Facility by
13
24347.00600\31583085.5
• •
Touchstone, without the express written consent of Touchstone which may be granted or
withheld in Touchstone's sole and absolute discretion.
VIII. INDEMNITY
A. Touchstone's Indemnity. Touchstone agrees to indemnify and hold harmless City
and its officials, officers, employees, agents and volunteers from and against any and all claims,
demands, actions, lawsuits, proceedings, damages liabilities, judgments, penalties, fines,
attorneys' fees, costs, and expenses (collectively, "Claims") to the extent that such Claims arise
from or are the result of;
1. any act or omission constituting active or passive negligence (including
acts or omissions that do not meet industry standards), gross negligence, fraud or willful
misconduct by an Executive Employee, employment claims arising out of the improper
acts or omissions of Touchstone, or the failure of Touchstone to properly supervise the
Golf Course Facility employees or properly administer employment practices in
accordance with the Golf Course Facility employment manual approved by City;
2. any action taken by Touchstone or a Touchstone employee relating to the
Golf Course Facility (i) that is expressly prohibited by this Agreement, or (ii) that is not
within the scope of Touchstone's duties under this Agreement, or (iii) that is not within
Touchstone's delegated authority under this Agreement; or
3. Touchstone's material breach of any covenant or obligation contained in
this Agreement. For purposes of this Section, the term "material" shall mean any breach
resulting in liability in excess of$5,000.00.
Touchstone's indemnity obligations under this Article VIII(A) shall not apply to any acts
taken (or omissions not taken) either at the written direction of City or with the approval of
the City, provided, however, that the approval of the Annual Plan, or any other general
operating policy or procedure by City shall not be interpreted as "direction" or "approval" of
a specific act or omission unless such act or omission is clearly and unambiguously
contemplated thereby. The act or omission of a Golf Course Facility employee who is not a
manager shall constitute an act or omission of Touchstone under this Article VIII(A) only if
Touchstone's management staff acted with negligence or gross negligence in employing,
training, supervising and/or continuing the employment of such employee.
B. City's Indemnity. City agrees to indemnify and hold harmless Touchstone, its
officers, directors, employees, members and managers from and against any and all claims,
demands, actions, lawsuits, proceedings, liabilities, injuries, losses, damages, costs and expenses
(including attorneys' fees) arising from or related to Touchstone undertaking its duties under
this Agreement, except to the extent such damages are be caused by Touchstone's gross
negligence, willful misconduct or material breach of this Agreement.
IX. REPRESENTATIONS AND WARRANTIES
14
24347.00600\31583085.5
•
A. City represents and warrants to Touchstone as follows:
1. City is a duly organized and validly existing charter city under the laws of
the state of California and is duly qualified to do business and is in good standing in the
state of California, with full power and authority to enter into and execute this Agreement
and to consummate the transactions contemplated hereby. City has received all requisite
approvals necessary for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and this Agreement constitutes
the legal, valid and binding obligation of City, enforceable against City in accordance
with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting debtors' and creditors' rights
generally and general equitable provisions.
2. Except as disclosed in writing to Touchstone prior to the execution hereof
or disclosed on Exhibit "A", to the best of City's knowledge, City has not received
written notice from any governmental authority that the existing use, maintenance and
operation of the Golf Course Facility or any portion thereof violates any law or ordinance
which has not been cured and to the best of City's knowledge, the Golf Course Facility is
currently in compliance with applicable laws and ordinances, including, without
limitation, applicable liquor license rules and regulations. City has not received any
written notice from any mortgagee, insurance company, fire marshal or building
inspector requiring or requesting the performance of any work or alterations to the
Improvements which has not been performed.
3. City has filed all federal, state, county, municipal and city income and
other tax returns and reports required to have been filed by City with respect to the Golf
Course Facility, and has paid all taxes which have become due pursuant to such returns or
pursuant to any assessments received by City or is contesting such taxes in accordance
with the requirements of applicable law.
4. There are no actions, suits, or proceedings pending or, to the best of City's
knowledge, threatened in any court or before or by any governmental authority against or
affecting City or the Golf Course Facility, except as disclosed in Exhibit "A" attached
hereto and made a part hereof.
5. There is no pending eminent domain or condemnation proceedings against
the Golf Course Facility or any part thereof and to the best of City's knowledge, no such
proceedings are presently threatened or contemplated by any authority with the power of
eminent domain.
6. The City is not aware of any contracts or other obligations outstanding for
the sale, exchange or transfer of the Golf Course Facility or any portion thereof.
B. Touchstone represents and warrants to City as follows:
1. Touchstone is a limited liability company duly organized, validly existing,
and in good standing under the laws of the state of Delaware; that it has all necessary
power and authority to enter into and execute this Agreement and to consummate the
15
24347.00600\.315 83085.5
• •
transactions contemplated herein.; and that the execution and delivery hereof and the
performance by Touchstone of Touchstone's obligations hereunder will not violate or
constitute a default under the terms and provisions of any agreement, law or court order
to which Touchstone is a party or by which Touchstone is bound.
2. Touchstone has received all requisite partner or corporate approvals
necessary for the execution and delivery of this Agreement and the consummation of the
transactions contemplated herein and this Agreement constitutes the legal, valid and
binding obligation of Touchstone, enforceable against Touchstone in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting debtors' and creditors' rights
generally and general equitable provisions.
3. The person(s) executing this Agreement on behalf of Touchstone have full
power and authority to bind Touchstone to the terms hereof.
4. Notwithstanding the foregoing, Touchstone does not give any general or
specific guarantee as to the profitability of the Golf Course Facility, the attendance
thereat or the revenues therefrom.
X. CONFIDENTIALITY
A. Each party at all times hereafter shall attempt to preserve the secrecy and
confidentiality of all the other party's confidential information (as defined hereafter) as it relates
to the operation of other party's golf facilities, shall not attempt to use or in any way appropriate
the same for its own use or benefit and shall not knowingly disclose or knowingly permit to be
disclosed to any person (other than employees of City and Touchstone) confidential information
without the prior written consent of the applicable party, except as required by law. Nothing
contained in this Agreement shall obligate either party to transfer to the other party any
confidential information at any time, including,' upon termination of this Agreement.
"Confidential information" means all information and data related to Touchstone, used by
Touchstone in connection with Touchstone's obligations hereunder and related to other Golf
Course Facilities of Touchstone, which information and data relates to Touchstone trade secrets,
ideas, know-how, improvements, inventions, technologies or internal business facts (including
financial and operating information), except such information or data which is, (i) through no
improper action or inaction by the City or any subsidiary, affiliate, agent, consultant, or
employee, generally available to the public; (ii) was in possession or known by City prior to
receipt from Touchstone; or(iii) was rightfully disclosed to City by a third party or who City has
no reason to believe acquired the same in other than good faith and not under any obligation to
Touchstone with respect thereof. Touchstone further acknowledges that the City's obligations
hereunder are subject to the public disclosure requirements of the Public Records Act and the
Brown Act.
B. Touchstone is permitted to identify its relationship with the Golf Course Facility
in its advertising and marketing literature and website, including a photograph of the Golf
Course Facility acceptable to City, with a generic reference stating that the Golf Course Facility,
is a client (or upon expiration of the Term, was a client) of Touchstone.
16
24347.00600\31583085.5
• •
XI. DAMAGE OR DESTRUCTION; EMINENT DOMAIN; FORCE MAJEURE
A. Damage or Destruction. Should the Golf Course Facility be destroyed or
substantially damaged by fire, flood, acts of God, or other casualty, the City, by written notice to
Touchstone given within sixty (60) days following the occurrence of such event, shall have the
right to terminate this Agreement on the basis that the City does not choose to rebuild or restore
the Golf Course Facility, and in such event neither party shall have any further obligation to the
other party under this Agreement, except with respect to liabilities accruing, or based upon
events occurring, prior to the effective date of such termination. For the purpose of this Article
XI(A), the Golf Course Facility shall be deemed to have been substantially damaged if the
estimated length of time required to restore the Golf Course Facility substantially to its condition
and character just prior to the occurrence of such casualty shall be in excess of six (6) months, as
indicated by an architect's certificate or other evidence reasonably satisfactory to Touchstone. If
this Agreement is not terminated in the event of damage to the Golf Course Facility either
because (i) the damage does not amount to substantial damage as described above, or (ii)
notwithstanding destruction of or substantial damage to the Golf Course Facility, the City elects
to restore the Golf Course Facility, then the City shall proceed, at the City's own expense, with
all due diligence to commence and complete restoration of the Golf Course Facility to its
condition and character just prior to the occurrence of such casualty. If as a result of any damage
or destruction to the Golf Course Facility as provided in this Article XI(A), the responsibilities of
Touchstone under this Agreement are substantially changed, then the parties shall meet and
discuss in good faith appropriate modifications to this Agreement including the Administrative
Fees.
B. Eminent Domain. If all of the Golf Course Facility (or such a substantial portion
of the Golf Course Facility so to make it unfeasible, in the reasonable opinion of the City, to
restore and continue to operate the remaining portion of the Golf Course Facility for the purposes
contemplated in this Agreement) shall be taken through the exercise (or by agreement in lieu of
the exercise) of the power of eminent domain, then upon the date that the City shall be required
to surrender possession of the Golf Course Facility or of that substantial portion of the Golf
Course Facility, this Agreement shall terminate and neither party shall have any further
obligation to the other party under this Agreement except with respect to liabilities accruing, or
based upon events occurring, prior to the effective date of such termination. If such taking of a
portion of the Golf Course Facility shall not make it unfeasible, in the reasonable opinion of the
City, to restore and continue to operate the remaining portion of the Golf Course Facility for the
purposes contemplated in this Agreement, then this Agreement shall not terminate, and the City
shall proceed, at the City's own expense, with all due diligence to alter or modify the Golf
Course Facility so as to render it a complete architectural unit which can be operated as a golf
resort of substantially the same type and character as before. If as a result of any alteration or
modification of the Golf Course Facility as provided in this Article XI(B), the responsibilities of
Touchstone under this Agreement are substantially changed, then the parties shall meet and
discuss in good faith appropriate modifications to this Agreement including the Administrative
Fees.
C. Force Majeure Events
17
24347.00600\31583085.5
• S
1. For the purposes of this Article XII, "force majeure" shall mean an act of
God, strike, lockout or other industrial disturbance, act of a public enemy, war blockade,
public riot, lightning, fire, storm, earthquake, flood, explosion, governmental restraint,
breakage or accidents to equipment and any other cause, whether of the kind specifically
enumerated above or otherwise, which shall not reasonably be within the control of the
party claiming suspension. Force Majeure does not include any financial incapacity.
2. If Touchstone or City is unable, wholly or in part, by reason of force
majeure (as herein defined) to carry out an obligation under this Agreement, such
obligation shall be suspended so far as it is affected by such force majeure during the
continuance thereof. The party unable to perform shall give the other party prompt notice
of such force majeure with reasonably full particulars thereof and, insofar as is known,
the probable extent to which it will be unable to perform or be delayed in performing
such obligation. The party unable to perform shall use all possible diligence to remove
such force majeure as quickly as possible.
3. The requirement that any "force majeure" shall be removed with all
possible diligence shall not require the settlement by the party unable to perform due to
strikes, lockouts or other labor disputes or the meeting of any claims of or demands by
any supplier or government entity contrary to the wishes of Touchstone or City or which
may be harmful to City or to Touchstone.
XII. MISCELLANEOUS
A. Waiver. No delay or failure on the part of any party in exercising airy right
hereunder shall impair any such right or any remedy of the party so delaying or failing, nor shall
it be construed to be a waiver of any continuing breach or default hereunder or any acquiescence
therein or of any similar breach or default thereafter occurring, nor shall any waiver of any single
breach or default hereunder be deemed a waiver of any other breach or default theretofore or
thereafter occurring.
B. Amendment. This Agreement can be changed, waived, released or discharged
only by written amendment executed by the parties hereto.
C. Severability. If it is held by a court of competent jurisdiction that any part of this
Agreement is void, voidable, illegal or unenforceable, or this Agreement would be void,
voidable, illegal or unenforceable unless any part of this Agreement were severed from this
Agreement, that part shall be severable from and shall not affect the continued operation of the
rest of this Agreement. The provisions of this Article XII(C) shall not apply if the part of the
Agreement affected is a substantive part in which event the parties shall in good faith renegotiate
the provisions of the part so affected.
D. Assignment. This Agreement shall inure to the benefit of and be binding on all
parties hereto and their respective successors and assigns.
1. Limitation on Touchstone. Touchstone shall not sell, convey, assign, transfer,
hypothecate, pledge, or otherwise dispose of(or agree to do any of the foregoing) all or
any part of its interest, if any, in this Agreement, or any contractual rights or obligations
18
24347.00600\31583085 5
• i
related hereto (except for Touchstone's rights to receive payments hereunder), without
the prior written consent of the City; provided, however, Touchstone may assign this
Agreement to an entity that is similarly engaged in the golf management business and
that employs the principal members of the current Touchstone management team.
2. Limitation on City. The City may assign or transfer this Agreement to a
governmental agency related to the City. The City may also assign and transfer its rights
under this Agreement to a purchaser or new owner of the Golf Course Facility that
assumes the obligation of City hereunder. Otherwise, the City may not assign or transfer
its rights hereunder.
E. Counterparts. This Agreement may be executed in any number of counterparts,
each of which, when so executed, shall be deemed to be an original and such counterparts shall
together constitute an agreement.
F. Notices. Any notice, document or other item to be given delivered, furnished or
received under this Agreement shall be deemed given, delivered, furnished or received when
given in writing and personally delivered to an officer of the applicable party, sent by e-mail,
receipt of which is confirmed, or upon delivery by a reputable national overnight courier service
to the addresses set forth hereunder or such other address as the party has notified the other party
is their current delivery address:
IF TO TOUCHSTONE: Mr. Stephen T. Harker
President and CEO
Touchstone Golf, LLC
1052 Overlook
Berkeley, California 94708
email: sharker@touchstonegolf.com
and, Mr. Douglas J. Harker
Executive Vice President
Touchstone Golf, LLC
11612 Bee Cave Road, Suite 150
Austin, Texas 78738
email: dharker@touchstonegolf.com
IF TO CITY: Dominic Lazzaretto
City Manager
City of Arcadia
240 W. Huntington Drive
PO Box 60021
Arcadia, CA 91066-6021
Copy to: Public Works Services Department
City of Arcadia
11800 Goldring Road
PO Box 60021
19
24347.00600131583085.5
•
Arcadia, CA 91066-6021
G. Independent Contractor Relationship. The relationship between City and
TOUCHSTONE is that of independent contractors, and except as herein expressly provided,
neither party is granted any right or authority to assume or create any obligation or responsibility,
express or implied, on behalf of or in the name of the other or to bind the other in any manner or
thing whatsoever.
H. Entire Agreement. This Agreement constitutes the entire agreement between the
parties as to the management of the Golf Course Facility, and all prior or contemporaneous, oral
or written agreements or instruments are merged herein.
I. Remedies. The remedies provided herein for breach of this Agreement are not
exclusive; and, in event of breach, the parties hereto have all the remedies provided by law.
J. No Third Party Rights. This Agreement is not intended and does not create any
rights or interest in persons not a party hereto.
K. Approval. In those circumstances provided herein in which approval by a party is
required, such approval shall not be unreasonably withheld, conditioned or delayed.
L. Attorneys' Fees. If any party fails to perform any of its obligations under this
Agreement or if any dispute arises between the parties concerning the meaning or interpretation
of any provision of this Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred by any other party
on account of such default and/or in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorney's fees and disbursements. Any such
attorney's fees and other expenses incurred by any party in enforcing a judgment in its favor
under this Agreement shall be recoverable separately from and in addition to any other amount
included in such judgment, and such attorney's fee obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any such judgment
M. Governing Law. This Agreement is subject to the law of the State of California
and the parties submit to the jurisdiction of the state and federal courts of the County of Los
Angeles.
N. Headings and Construction. The singular includes the plural and words importing
one gender include the other gender. The headings in this Agreement are for convenience only
and shall not affect its interpretation.
SIGNATURE PAGE FOLLOWS
20
24347.00600\31583085.5
• •
IN WITNESS WHEREOF, the parties, have signed this agreement on the date first
hereinbefore written.
TOUCHSTONE GOLF,LLC,a Delaware limited
liability company �
By: -/
Name: Ste en T. Harker
Title: Chief Executive Officer
CITY OF ARCADIA,CALIFORNIA
a
Name: DominicLazz tto
Title: December 12, 1!)18 _._ _
Approved as to form:
Best Best&Krieger LLP
21
24347 0060013 1 5 83085 5
• •
GOLF COURSE FACILITY MANAGEMENT AGREEMENT
LIST OF EXHIBITS
Exhibit A Known Litigation and Other Matters
Exhibit B Sample Incentive Management Fee Calculation
Exhibit C Recreational Use
Exhibit D Minimum Maintenance Standards
Exhibit E Insurance Requirements
22
24347.00600\31583085.5
•
EXHIBIT A
KNOWN LITIGATION AND OTHER MATTERS
NONE
Exhibit A
24347 00600\31583085.5
EXHIBIT B
SAMPLE CASH FLOW SPLIT CALCULATION
Cash Flow Split Example
Arcadia Par 3 Golf Course
The following analysis utilizes 2017 fiscal results which may or may
not reflect future oeprating results and is for calculation example purposes only.
Annual Quarterly
Revenue 1,072,860
Course EBITDA 77,737 19,434
Add Back: Historical Rent 173,646 43,412
Less: TG Administrative Fee 48,000 12,000
Adjusted EBITDA 203,383 50,846
Less: 2.5% of Revenue for Cap Ex 26,822 26,743
Available EBITDA for Split 176,562 24,103
Touchstone Share of Split (15%) 26,484 6,621
Balance to City 150,077 37,519
Exhibit B
24347.00600\31583085.5
• •
Exhibit C
Recreational Use
Touchstone shall collaborate with the Recreation and Community Services Department to
provide a variety of quality golf related, affordable recreational programs to the City of Arcadia
residents. These recreational opportunities should be used to enhance and increase recreational
golf participation in the community year round. Programs and activities shall be offered through
the City, while both advertising and marketing will be a shared responsibility by the City and
Touchstone provided that City and Touchstone shall each have reasonable approval rights over
the advertising and marketing materials. Staffmg and a Golf Professional for programs and
activities shall be provided by Touchstone. Such programs and activities shall include:
• A minimum of four(4) golf tournaments per year the community
• A minimum of four (4), beginner level Golf classes/clinics per year offered in the City's
Recreational Classes Brochure.
• A minimum of four(4), intermediate level Golf classes/clinics per year offered in the
City's Recreational Classes Brochure.
• Provide a summer golf camp program for children.
• A minimum of two (2) special events per year that would be geared toward the family
and run in conjunction with the Recreation and Community Services Department. (ex.
Family golf events, promote health/wellness, life long sport, picnics, contests, etc.).
• Exclusive use of the driving range, the Friday evening prior to Easter Holiday, from the
approximate hours of 530-930pm for the annual Teen Flashlight Egg Hunt event.
• Use of Recreation Room a minimum of 20 hours per week, to provide recreational
classes.
• Work with Director of Recreation and Community Services to increase level of service to
the community by marketing the golf course, programs, classes, tournaments and
activities to the general public.
• Work with the City's Director of Recreation and Community Services to promote the
course on the City's website. Create link from City website to
www.arcadia.americangolf.com. Highlight special events and classes on City website
and through City publications.
• Provide a discounted rate for Arcadia High School Golf Team.
Rates shall be set for the foregoing activities such that the proceeds shall be sufficient to cover
Lessee's and City's costs of administering and implementing the programs and activities.
Exhibit C
24347.00600\31583085.5
•
Exhibit D
Minimum Maintenance Standards
1. Greens, Practice Putting Greens, and Nurseries
A. Mowing — At least five days per week at a height of cut of .100 during the growing
season.
B. Change cup locations on all greens and practice putting greens daily during the active
season and at least three (3) times weekly in the off-season. Cup location will be
moved at least twenty(20) feet from the previous placement.
C. Repair ball marks, divots, or any other damaged turf on all greens and practice greens
daily.
D. Aerify all greens practice putting greens and nurseries at least three (3) times per year
during the growing season, i.e., March, June, and September, or more frequently if
needed.
E. Top-dress all greens, practice putting greens and nurseries:
• After any aerification performed with 1/2" or larger tines;
• Additionally, as needed to maintain a smooth putting surface. Topdressing
will be sand or a mix similar to that used to construct the greens.
F. Light vertical mowing of all greens, practice putting greens and nurseries shall be
performed as appropriate to smooth and true the putting surfaces.
G. Spiking of all greens and practice greens shall be performed as needed between
aerifications to maintain water infiltration.
H. Fertilization — All greens, practice greens, and nurseries shall be fertilized with
nitrogen, phosphorous, potash, and other elements as needed to maintain color,
growth, health and turgidity of the turf, without allowing excessive or excessively
succulent growth.
I. Fungicide — All greens, practice greens and nurseries shall have appropriate fungicide
applications to prevent and/or control fungal disease activity.
J. Pre-emergent herbicides shall be used if necessary in the appropriate amounts and
appropriate times to prevent intrusion into the greens of weeks difficult to eradicate
such as poa anua, goosegrass, crabgrass, etc.
K. Weed Control — All greens, practice greens and nurseries shall be maintained free of
undesirable grasses and weeds.
Exhibit D
24347.00600\31583085.5
L. Insecticides — All greens, practice greens and nurseries shall be treated as necessary to
prevent or halt insect damage.
2. Tees—Tee surface including driving range and FootGolf areas.
A. Mowing — All tees, including FootGolf, shall be mowed at a height of cut .350 on
driving range three (3) times per week. In season, and not less than two (2) times per
week in winter.
B. Topdressing — All worn areas on tees shall be topdressed at least weekly to fill divots
and level tee surface. Topdressing material shall contain seed of annual or perennial
rye grasses, or other species as appropriate.
C. Mats—Tee mats at driving range shall be rotated weekly for proper teeing. Mats shall
be replaced as necessary and/or by request from Public Works Services Director, or
designee.
D. Weed Control—Tees shall be kept weed free to an extent of at least 90% of the area by
the proper and timely application of post-emergent herbicides.
3. Fairways — All areas of play except greens, tees and natural growth areas (All other
areas are mowed at fairway height).
A. Mowing — All fairways shall be mowed two (2) times per week at a height of cut .5
during the growing season and as needed for the balance of the year.
B. Aerification—All fairways shall be aerified a minimum of three (3) times per year, in
the spring and in the summer, i.e., March, June, September. Aerification holes shall
not exceed a spacing of eight (8) inches on center or be of a diameter of less than 1/2.
C. Fertilization — All fairways shall be fertilized with nitrogen, phosphorous, potash, or
other elements as needed to maintain color, growth, health and turgidity of the turf,
without allowing excessive or excessively succulent growth.
D. Vertical Mowing — All fairways will be vertically mowed as necessary to control mat
or thatch buildup.
E. Weed Control — Fairways shall be kept weed free to an extent of at least 90% of the
area by the proper and timely application of pre-emergent and/or post-emergent
herbicides.
F. Overseed all fairways in the Fall with a perennial rye or a fine fescue at a rate not less
than 275 lbs. per 1,000 square foot acre.
Exhibit D
24347.00600\31583085.5
4. Roughs — All turfed areas of play except greens, tees, fairways and natural growth
areas.
A. Aerification - Fairway-to-tree-line play areas shall be performed at least two (2) times
per year, i.e., February and September (if maintained as a rough— if mowed the same
manner as fairways, aerification shall be performed in March, June and September.
Within wooded play areas—as necessary to establish and/or maintain turf.
B. Fertilization—Roughs shall be fertilized as necessary to maintain turf
C. Weed Control—Shall be performed as necessary to control seed formation, or to allow
proper play.
5. Planters — All areas planted with ornamental plants, not intended for golf play and
having a definable border.
A. Clean-up — Daily, all planters shall be maintained free of trash and debris such as
paper, drinking cans, bottles, fallen limbs and leaves, etc.
B. Weed Control — As needed, all planters shall be maintained free of weeds or grass
whether by mechanical or chemical means.
C. Trimming — Monthly, the plant material (trees, shrubbery and ground covering) in
planters shall be trimmed for protection from wind, insect damage, and for appearance.
D. Unsightly sucker growths (i.e., water sprouts) shall be removed as necessary from all
tree bases and trunks.
7. Irrigation
A. The Firm shall monitor the requirements of the plant material, soil conditions, seasonal
temperature variation, wind conditions, and rainfall and make appropriate changes in
duration of watering cycles. All landscaped areas shall be irrigated as required to
maintain adequate growth and appearance.
B. Firm shall provide personnel fully trained in all phases of the irrigation systems
operation, maintenance, adjustments and repair; in all types of components to include
electrical and battery operated control clocks, valves and sprinkler heads.
C. All systems shall be adjusted in order to provide adequate coverage of all landscape
areas; prevent runoff and/or erosion; prevent water roadways, hard surface areas and
private property. Puddling of water for more than one hour is unacceptable.
I. All leaking or defective valves shall be repaired/replace within 24 hours following
knowledge of such a deficiency.
Exhibit D
24347.00600\31583085.5
• •
L. Irrigation part requirements:
a. Plastic pipe shall be polyvinyl chloride (PVC), Type 1
b. Plastic Pipe fittings and connections shall be PVC Schedule 40, except
nipples, which shall be Schedule 80
15. Trash and Refuse
Shall be collected daily and removed from the property as necessary to ensure minimal problems
from refuse odors, insects, etc. Approved trash receptacles shall be conveniently stationed on
tees and other appropriate areas and emptied daily.
16. Vertebrate Pest Control
Shall be routinely performed throughout the property on an on-going basis, in such a manner that
vertebrate pest populations are steadily reduced and eventually eliminated.
Exhibit D
24347.00600\31583085.5
• •
Exhibit E
INSURANCE REQUIREMENTS
See Attached
Exhibit E
24347.00600\31583085.5
Touchstone Golf LLC
Insurance Summary 2018-2019
Coverage Blanket Limits
PROPERTY
Policy Period: 4/1/18-19 Carrier: Liberty Mutual Insurance Company
Real Property $86,275,327
Personal Property $19,844,355
Equipment/Carts $5,983,871
Business Income $13,628,966
Extensions of Coverage Limits off Liability
Contractor's Equipment Included
Equipment Breakdown Included
Accounts Receivable $300,000
Debris Removal $250,000
Extended Period of Restoration 120 Days
Fine Arts $100,000
Personal Property of Others $250,000
Ordinance or Law $1,000,000
Errors and Omissions $1,000,000
Terrorism Excluded
Blanket Yes
BI included in Blanket Limit Yes
Replacement Cost Yes
Coinsurance
Building Nil
Personal Property Nil
Contractor's Equipment Nil
Business Interruption Nil
Deductibles:
Building $25,000
Personal Property $25,000
Business Interruption $0
Equipment $10,000
Wind Associated with Named Storm
First Tier Wind Counties and Parishes 5% subject to $250,000 Minimum
Second Tier Wind Counties and Parishes 2% subject to$100,000 Minimum
Hawaiian Islands 5% subject to$250,000 Minimum
GENERAL LIABILITY
Policy Period: 4/1/18-19 Carrier: Liberty Mutual Insurance Company
Bodily Injury and Property Damage Liability CSL $1,000,000
General Aggregate $2,000,000
Products and Completed Operations Aggregate $2,000,000
Personal and Advertising Injury $1,000,000
Fire Damage/Tenants Legal Liability $1,000,000
Medical Expenses $10,000
Employee Benefits Liability $1,000,000
Employee Benefits Liability Aggregate $2,000,000
Employee Benefits Retro Date 4/1/2015
Pollution Limited - Pesticide, Herbicide or Fertilizer
1'N Touchstone Golf LLC
Insurance Summary 2018-2019
Canoes or Rowboats Exception Yes
Al-Users of Golfmobiles — Yes
Al -Club Members Yes
Exposures:
Rounds of Golf $1,211,969
LIQUOR LIABILITY
Policy Period: 4/1/18-19 Carrier: Liberty Mutual Insurance Company
Liquor Liability $1,000,000
Liquor Liability Aggregate $2,000,000
Exposures:
Liquor(Sales) $4,825,331
BUSINESS AUTOMOBILE
Policy Period: 4/1/18-19 Carrier: Liberty Mutual Insurance Company
Liability CSL $1,000,000
Liability Auto Symbol(s) 1
Uninsured Motorists $1,000,000
Uninsured Motorists Auto Symbol(s) 2
Auto Medical Payments $5,000
Auto Medical Payments Auto Symbol(s) 5
Comprehensive Deductible $1,000
Collision Deductible $1,000
WORKERS COMPENSATION
Policy Period: 1/1/18-19 Carrier: Federal Insurance Company
Each Accident $1,000,000
Disease-Policy Limit $1,000,000
Disease-Each Employee $1,000,000
UMBRELLA LIABILITY
Policy Period: 4/1/18-19 Carrier: Liberty Mutual Insurance Company
Each Occurrence $5,000,000
Annual Aggregate $5,000,000 _ v
Products/Completed Operations $5,000,000
Retained Limit $10,000
Underlying:
General Liability Yes
Auto Liability Yes
Liquor Liability Yes
Employers Liability Yes
MANAGEMENT LIABILITY (Claims Made)
Policy Period: 4/15/18 to 4/1/19 Carrier: Axis Insurance Company
Directors&Officers Liability $1,000,000
Employment Practices Liability $1,000,000
3rd Party Employment Practices Liability $1,000,000
Fiduciary Liability $1,000,000
Workplace Violence Expense $150,000 except$50,000 Death Benefit
Aggregate Limit of Insurance $3,000,000
Touchstone Golf LLC
Insurance Summary 2018-2019
Retentions
Directors & Officers Liability $75,000
Employment Practices Liability $150,000 except$250,000 California
3rd Party Employment Practices Liability $150,000 except$250,000 California
Fiduciary Liability $0
CRIME-AXIS Insurance Company
Policy Period: 4/15/18 to 4/1/19 Carrier: Axis Insurance Company
Limit Deductible
Fidelity
Employee Theft $1,000,000 $100,000
ERISA Fidelity $1,000,000 $0
Client Property $1,000,000 $100,000
Forgery or Alteration $1,000,000 $100,000
Premises Coverage $1,000,000 $100,000
Transit Coverage $1,000,000 $100,000
Computer Crime
Computer Fraud $1,000,000 $100,000
Restoration Expense $100,000 $0
Funds Transfer Fraud $1,000,000 $100,000
Credit, Debit or Charge Card Fraud $1,000,000 $100,000
Money Orders and Counterfeit Money $1,000,000 $100,000
Investigative or Claim Expense $100,000 $0
Social Engineering Fraud $50,000 $25,000
Errors & Omissions Liability (claims Made)
Policy Period: 4/1/18 to 4/1/19 Carrier: Darwin Select Insurance Company
Errors and Omissions Liability $1,000,000 $1,000
Punitive Damage $1,000,000 $1,000