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HomeMy WebLinkAboutC-2177!. 117 " Execution Original AMENDMENT TO LEASE AGREEMENT (ARCADIA PAR 3 GOLF COURSE) 1. Identification and Parties. This Amendment to Lease Agreement ( "Amendment ") is made and entered into as of June 30, 2008 ( "Amendment Effective Date ") by and between the CITY OF ARCADIA, a municipal corporation ( "City") and AMERICAN GOLF CORPORATION, a California corporation ( "Lessee "). 2. Recitals. 2.1 The City owns that certain golf course, clubhouse, pro shop and other facilities located at 620 East Live Oak Avenue, Arcadia, California, commonly referred to as "Arcadia Par 3 Golf Course" (the "Golf Course" or the "leased premises "). 2.2 The City and Lessee are parties to that certain Lease Agreement dated as of June 16, 1998 pursuant to which the City leases the Golf Course to Lessee (the "Lease Agreement"). Capitalized terms used in this Amendment and not otherwise defined herein shall have the same definitions as set forth in the Lease Agreement, 2.3 Pursuant to the Lease Agreement, the term of the Lease ( "Lease Term ") expires on June 30, 2008 and the City desires to extend the Lease Term in order for the City to negotiate and enter into a new lease or management agreement with Lessee or with another lessee or operator. 2.4 In order to accommodate the City, Lessee has agreed to extend the Lease Term as set forth herein and the parties have agreed to amend the Lease Agreement as set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Amendment and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree to amend the Lease Agreement as follows effective as of the Amendment Effective Date: 3. Extension of Lease Term. Section 8 of the Lease Agreement is amended by the addition of the following two (2) sentences at the end thereof: "The term of the Lease ( "Lease Term ") shall be extended by three (3) :months and accordingly shall expire at 5:00 pm (PST) on September 30, 2008 (the "Extended Expiration Date ")." The period of the Lease Term commencing on the Amendment:lEffective Date and expiring on the Extended Expiration Date shall be referred to herein as the "Extended Term." 4. Rent. Attachment D to the Lease is modified such that the rental payments during the Extended Term shall be based only on the Percentage Rent calculation. In addition, the Percentage Rent shall be subject to an offset as set forth below to partially compensate Lessee for the additional insurance costs to be incurred by Lessee during the Extended Term. Accordingly, -1- 03674- 0000411635903.8 0. 0 Section 9 of the Lease is amended by the addition of the following Paragraph (D) at the end thereof: "(D) During the Extended Term: (i) the Minimum Rent (as described in Attachment D) shall be deleted from Attachment D for the calculation of rental payments hereunder; and (ii) the Percentage Rent to be paid by Lessee during the Extended Term shall be offset by the amount of Seven Thousand Five Hundred Dollars ($7,500) in the aggregate for the Extended. Term to partially compensate Lessee for the additional insurance costs incurred by Lessee during the Extended Term." 5. Surrender of Property. Section 20 of the Lease Agreement is amended by the addition of the following sentences at the end thereof: "The Golf Course and all improvements thereto shall be returned to the City on the Extended Expiration Date in their "as -is" and "where -is" condition. No representations, warranties or statements have been made by Lessee regarding: (i) the condition or fitness of the Golf Course or the improvements thereto; nor (ii) compliance of the Golf Course with any codes or regulations. The City and Lessee conducted joint inspections of the Golf Course on June 24, 2008 and June 30, 2008 and have agreed that Lessee shall be permitted to remove upon the Extended Expiration Date the personal property inventory designated on Exhibit 1 attached hereto without any payment or reimbursement obligation to the City. Notwithstanding any term or provision to the contrary in this Lease, as amended, Lessee shall return the Golf Course and all improvements to the City in substantially the same condition (subject to reasonable wear and tear) as they were found as of the joint inspection conducted on June 30, 2008, except that upon the Extended Expiration Date, Lessee shall be permitted to remove from the Golf Course the personal property inventory described on Exhibit 1 attached hereto." 6. Capital Improvements. The City acknowledges and agrees that Lessee has fully satisfied its obligations to complete any and all capital improvements or upgrades to the Golf Course, including without limitation, the capital improvements referenced on Attachment B to the Lease Agreement. Lessee has no obligation to construct, complete, replace, repair or pay for any capital improvements or upgrades to the Golf Course unless such improvements or upgrades are required as a result of Lessee's negligence or intentional misconduct. 7. Repairs and Maintenance, The City acknowledges and agrees that Lessee has fully satisfied its obligations to maintain and repair the Golf Course as required under the Lease Agreement, including without limitation, the obligations under Section 6 to the Lease Agreement and the obligations to meet the minimum maintenance standards referenced on Attachment C to the Lease Agreement. Lessee shall be required to meet the obligations under Section 6 of the Lease Agreement and the minimum maintenance standards as set forth in Attachment C to the Lease Agreement; provided that Lessee shall not be required to make any major repairs of or provide major replacements to the Golf Course unless such repairs or replacements are required as a result of Lessee's negligence or intentional misconduct. 8. Insurance, Lessee shall maintain the same insurance it currently maintains under the Lease Agreement. 03674- 00004/1635903.9 .2- 9. Estoppel. As of the Amendment Effective Date, the City acknowledges and agrees that the Lessee is in compliance with the terms and conditions of the Lease Agreement. The City is not aware of any defaults or breaches under the Lease Agreement nor any conditions or facts that through the passage of time will or could result in a default or breach under the Lease Agreement. 10. Counterparts. The City and Lessee may execute this Amendment in counterparts, each of which will be deemed an original part and all of which together will constitute a single agreement. 11. No Other Changes. Except as expressly amended by this Amendment, the Lease Agreement remains unchanged and shall continue in full force and effect. IN WITNESS WHEREOF, the Parties have entered into this Amendment effective as of the Amendment Effective Dale. ATTEST: By: City Clerk APPROVED AS TO FORM: By: CITY OF ARCADIA, a Municipal Corporation 0 City Manager AMERICAN GOLF CORPORATION a California corporation 1 By: Name: Position: Corporate Secretary 03674 - 00004/1635903.8 -3- 9. Estoaael. As of the Amendment Effective Date, the City acknowledges and agrees that the Lessee is in compliance with the terms and conditions of the Lease Agreement. The City is not aware of any defaults or breaches under the Lease Agreement nor any conditions or facts that through the passage of time will or could result in a default or breach under the Lease Agreement. 10. Counterparts. The City and Lessee may, execute this Amendment in counterparts, each of which will be deemed an original part and all of which together will constitute a single agreement. 11. No Other Changes. Except as expressly amended by this Amendment, the Lease Agreement remains unchanged and shall continue in full force and effect. IN WITNESS WHEREOF, the Parties have entered into this Amendment effective as of the Amendment Effective Date. ATTEST: By: Aft LJ Ci y rk APPROVED AS TO FORM: By: 4 /,o C ITY AT1b2N (:y 03674-00004/1635903.8 CITY OF ARCADIA, a Mu�icip rporation By: City anage AMERICAN GOLF CORPORATION a California corporation By, _ Name: _ Position: -3- 0 0 Exhibit 1 [see attachedl 0367400004/1635903.8 .4_ §� 0ƒ k n � C E Va � � k w t 1 / b 0 E. . \ Q) $ 7 E f E § } ) \ \ \ � � . E o X77 2 77��n 0 I f /k \$ \kk /)0\ E a & ` (D 4) O o °' / K r- cc) � «` <�c 0w �) ke ƒ\ CL 7�.L 3734))7. V \ D \ . ( k )A ° d f \ • ` § 2 )k ! & e2 ° k \ ..$ °��� e£�% ` o Sa «$ / \)) § \ .00 £[ /$k\ /� © fn 1 / ) a CL �� f [o E \ §)ff£& m- \) te§E2m2))n2 §!� ƒj \) /)]Ikk` k� \jIalo ���k Ik E)§Jd� /ice / }k `E City of Arcadia Office of the City Clerk Jim Barrows City Clerk 240 West Huntington Drive Post Office Box 60021 Arcadia, CA 91066 -6021 (626) 574 -5455 (626) 447 -7524 Fax 9 July 15, 2008 Scott S. Thompson Greenberg Glusker 1900 Avenue of the Stars, 21" Floor Los Angeles, CA 90067 E Re: Arcadia Par 2 Golf Course Amendment to Lease Agreement Dear Mr. Thompson: Thank you for the original signature pages to the Amendment to the Lease Agreement signed by AGC. Enclosed you will find for your files a fully executed original Amendment to Lease Agreement. Thank you. Sincerely, Lisa Mu Chief Der Records Manager Enclosure c: Don Penman, City Manager (letter only) Stephen Deitsch, City Attorney (letter only) Pat Malloy, Assistant City Manager /PWS Director 0 Scott S. Thompson D: 310.785.6860 F: 310.201.2368 SThompson @GreenbergGlusker.com File Number: 03674 -00004 July 9, 2008 VIA FEDERAL EXPRESS Lisa Mussenden Chief Deputy City Clerk/ Records Manager 240 W. Huntington Drive Arcadia, CA 91007 Re: Arcadia Par 3 Golf Course Dear Lisa: REEN RG,'GLUSKER e Counsel You Keep- Enclosed are three (3) original signature pages of the Amendment to Lease Agreement signed by AGC. Please call me if you have any questions. Very truly yours, �C.0 tl%OPOOI� Scott S. Thompson SST /ed Enclosures cc: Christine Chong Paul Ballam Greenberg Glusker Fields Claman & Machtinger LLP 1900 Avenue of the Stars, 21st Floor, Los Angeles, California 90067 T. 310.553.3610 1 F: 310.553.0687 GreenbergGlusker.com 03674-00004/1647118 1 ARCADIA PAR 3 GOLF COURSE This second Lease; Agreement is by and between the City of Arcadia, a municipal corporation, (hereafter referred to as City) and American Golf Corporation (hereafter referred to as Lessee.) In consideration of the mutual promises, covenants, set forth herein, both parties agree as follows: SECTION 1 - PROPERTY LEASED The City leases to Lessee for its management and operation the real property known as the Arcadia Par 3 Golf Course located at 620 East Live Oak Avenue, Arcadia, which is fully described in Attachment A, incorporated as part of this Lease Agreement. The name of the golf course shall not be changed unless authorized in writing by the City. SECTION 2 - USE Lessee agrees that the site is designed to provide the general public with golf and golf - related recreational facilities and Lessee shall not in any way mitigate against or substantially alter this use as set forth in this Agreement. Lessee agrees to promote the site and its facilities and to operate the course so that it meets the golfing needs of the general public to the satisfaction of the City. Lessee further agrees to provide instructional services in golfing technique and practice and to coordinate and promote the activities of golf clubs (organizations) and tournaments. Lessee shall also provide all starter and driving range services and shall monitor the play of the course to assure that proper golf etiquette is practiced by course participants. Lessee shall have the privilege of using the site and facility solely for the purpose set forth in the agreement. It is understood and agreed that the Arcadia Par 3 Golf Course is one of the public recreational facilities owned by the City of Arcadia, and its conduct and operation are for service to and for the benefit of the general public. 1 SECTION 3 - FACILITIES ` (A) Lessee agrees that at its own expense, it-will maintain and :operate he facilities listed below in accordance with the terms and conditions of this Agreement. Minimum site facilities shall include: 1. An eighteen hole par 3 golf course illuminated for night play 2. A practice putting green illuminated for night play 3. A driving range illuminated for night play 4. A clubhouse and pro shop for the sale and rental of golfing related equipment and supplies 5. A coffee shop serving sandwiches and refreshments 6. All parking facilities 7. Course and range irrigation system 8. Restrooms and drinking fountains on course B) Subject to Section 13 of this Lease Agreement, Lessee also agrees that it will complete all improvements and renovations to the satisfaction of the City as detailed in Attachment B of this Agreement per the Schedule in.Attachment 'B" incorporated as part of this Agreement. SECTION 4 - HOURS OF OPERATION All said facilities shall be operated and opened, weather permitting, for business at least 12 hours per day, 360 days per year during business hours that will be established at the discretion of the Lessee. In no event shall said facilities be opened for business during the hours of 10:00 p.m. to 6:00 a.m. without the written approval of the City Manager. Lessee shall operate business on a daily schedule which enables the largest number of participants to enjoy the facility. SECTION 5 - FACILITY FEES Lessee shall have the right to set and charge fees for the use of the facility. Lessee shall have the right to adjust said fees at its discretion subject to City action and approval pursuant to the following process: The City is to be provided with a written request listing any amended fees at least ten (10) days prior to their implementation. Said notice shall not be required for any charges related to the sale of goods, food or beverage which can be set at the discretion of the 2 Lessee. All fees and charges shall be consistent with other similar type facilities. The City reserves the right to disallow the establishment of any service fees which are substantially inconsistent with those of other similar type facilities. In the event the City believes the Lessee's service fees are substantially inconsistent with those of other similar type facilities, the City shall forward a letter to Lessee describing the City's objections to a new fee or fee adjustment. The Lessee shall respond in writing to the City within thirty (30) calendar days explaining in detail it's rationale for the proposed new fee adjustment. City staff and the Lessee shall discuss the Lessee's reply. If within an additional forty -five (45) days from submittal of the Lessee's request, City staff still disagrees with the Lessee's request, the matter shall be submitted by City staff to the City Council for final determination. Failure by Lessee to comply with this procedure or the final determination by the City Council shall be cause for termination pursuant to Section 12. No fees shall be charged for parking without prior written approval of the City. Lessee shall maintain a preferential reduced golf fee structure for senior citizens over the age of 58 years. SECTION 6 - SITE MAINTENANCE The Lessee shall have the exclusive duty to maintain the golf course and all site facilities in accordance with the highest industry standards. Maintenance shall include, but shall not be limited to, regular mowing, edging, vericutting, aerifying, fertilizing, irrigating and all necessary landscape procedures which are required to keep the golf course and driving range and practice green in as excellent playing condition as possible. Regular maintenance shall also include, but shall not be limited to, the requirement to change cups, top dress playing areas, repair divots, raise sand traps, renovate turf, provide weed and insect control, maintain watering systems including pumps and controls and to conduct re- sodding and re- seeding when necessary. The pruning of trees, shrubs and plants and the clipping of grass around all poles, fences and walkways located within the site shall also be part of the regular maintenance for the site. Lessee shall be responsible for maintaining the clubhouse, pro shop, coffee shop, public course restrooms, parking lot area and all storage areas. Maintenance of these facilities shall include regular exterior and interior painting and repair so that all facilities K, F are kept in good condition at all times. In addition, all interior furnishings shall be kept clean and in good repair. Storage areas shall be kept clean and orderly and shall be screened from public view when not in use. Kitchen and dining facilities shall be maintained in accordance with all applicable health and safety requirements. No offensive or refuse matter, nor any substance constituting an unnecessary, unreasonable or unlawful fire or health hazard shall be permitted to remain on the site and Lessee shall prevent any such matter or material from being or from accumulating upon said premises. Lessee shall furnish trash receptacles for use by the public and shall empty and clean such daily. At a minimum Lessee's regular maintenance schedule shall conform with the schedule set forth in Attachment C, incorporated as part of this Agreement. Lessee shall maintain the course and all related facilities so as not to cause or maintain a public nuisance and in accordance with all applicable City Code provisions including property maintenance requirements. SECTION 7 - MERCHANDISE Lessee shall provide and maintain an inventory in the pro shop and the coffee shop of quality golf equipment and food and beverage products. All merchandise, food and alcoholic beverages sold on the site shall conform to all federal, state and municipal laws, ordinances and regulations in every respect. SECTION 8 - LEASE TERM The term of this Lease shall be for ten (10) years commencing July 1, 1998, and ending June 30, 2008. During the period beginning 24 months and ending 21 months prior to the scheduled expiration of this Lease, Lessee may request a five (5) year extension to this Lease. As part of the request, Lessee must submit an improvement plan which details any proposed capital improvements, service enhancements, proposed fees for the course and driving range, proposed rental payments to the City and any additional material that may be requested by the City. a] Upon receipt of, Lessee's request and improvement plan; the City Council, at its sole discretion, may grant, deny or amend an extension to the Lease and may establish conditions upon whichi" any extension would be granted. SECTION 9 - RENT (A) For the uses granted herein, Lessee agrees to pay City and City agrees to accept annual rental payments equal to the amounts indicated in Attachment D incorporated as part of this Agreement. (B) Said rental payments shall be paid at (90) ninety day intervals, with the first payment due (90) ninety days after the effective date of this Lease Agreement. All rental payments shall be paid in lawful money of the United States by check or draft to the order of the City of Arcadia, mailed or delivered to the Administrative Services Department, City of Arcadia, City Hall, 240 West Huntington Drive, Arcadia, CA 91007. (C) Each quarterly payment submitted by Lessee shall be accompanied with a financial statement indicating the gross sales by category during that quarter. Categories shall include golf course, driving range, cart rental, equipment rental, merchandise, food and beverage sales for each month of the proceeding quarter. SECTION 10 - RECORDS AND INSPECTIONS (A) Lessee shall be required to maintain a method of accounting, to the satisfaction of the City, which correctly and accurately reflects the gross. receipts and disbursements of the Lessee in connection with the site operations. The method of accounting, including bank accounts, shall be separated from the accounting system used for any other business operated by Lessee. Such method shall include the keeping of the following documents: is 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. 5 F iv. Any other reasonable reporting records that the City deems. necessary, for.; proper reporting of receipts. (B) `. Within ninety (90) days after the close of the Lease's fiscal year, Lessee shall provide, at no cost to the City, a certified statement with an opinion prepared by a Certified Public Accountant detailing all gross revenue as defined in Attachment E, incorporated as part of this Agreement,, derived from green fees, driving range services, food sales, beverage sales, sale of merchandise, cart rentals and miscellaneous rentals and all other concessions and services. The statement shall include computations which show all rent due to the City and Lessee shall include a payment for any rents due at the time that the statement is submitted to the City. (C) At the direction of the City' Lessee shall provide City with a Certified Financial Audit with an opinion prepared by a Certified Public Accountant selected by the Lessee covering all financial aspects of the course operation. The City shall have the right to require that the audit be prepared by auditors selected by the City. The City will assume all costs related to the preparation of an audit by a City- selected auditor except that the Lessee will assume the cost if the City audit reveals a discrepancy of 3% or greater in revenue or expense figures previously reported to the City or if the City determines that the audit is necessary to determine the validity of service or fee changes proposed by the Lessee which are not in conformance with this Lease. (D) All documents, books and accounting records shall be open for inspection and reinspection at any reasonable time during the term of this Lease and for twelve months thereafter. In addition, the City or its auditors or representatives, may from time to time at its discretion, conduct an audit and reaudit of the documents, books and accounting records and the business conducted by Lessee and /or observe the site operations of the Lessee as needed to determine that the accuracy of the Lessee's records and operations can be confirmed. a (E) The City shall have the exclusive right to inspect the facilities at any time during Lessee's normal business, hours to determine maintenance and operational compliance and to observe site operations SECTION 11 NOTICE TO COMPLY In the event that the Lessee fails to comply with any terms or conditions of this Lease including, but not limited to, provisions related to operational standards, maintenance standards, rental payments, records submitted or capital improvement programs, the City Manager shall provide the Lessee with a written notice of the deficiencies causing the non- compliance and Lessee shall have 30 days to comply with, the notice unless otherwise extended or amended in writing by the City Manager or unless compliance cannot be properly achieved within thirty (30) days in which case Lessee shall have such additional time as necessary, as determined by City, in writing, in order to achieve compliance so long as Lessee is proceeding in good faith with efforts to achieve compliance. Failure to comply within the thirty (30) days, or any amended period, shall be grounds for default and eventual termination of this Lease. SECTION 12 - DEFAULT AND TERMINATION (A) Following the provisions set forth in Section 11, in the event Lessee fails in the performance of any terms, conditions or provisions of this Lease, including all operational and maintenance requirements, or fails to conform to the rules and regulations or any of the directions or instructions that may be reasonably and properly made by City or fails, neglects or refuses to pay the full rent amount within thirty (30) days after the same shall become due, or becomes unable through corporate incapacity or files a petition under the United States Bankruptcy code or the subject of a petition for involuntary bankruptcy filed against it, or defaults in the performance of any of the other terms, conditions or provisions herein required, or makes any misrepresentations to the City, City shall have following options without further notice or authorization to Lessee: i. City may give Lessee a written notice of default. If the Lessee fails to cure said default within twenty (20) days, City may assume the operations of the facility and City may perform such work as it deems necessary to cure said default and VA • 0 shall charge Lessee for the full cost of all labor and materials expended plus 30% of said costs for administrative overhead and may exclude Lessee from the premises. ii. City may seek to recover at law any and all claims which may be due to it. iii. City may retain any of Lessee's money in its possession and any of Lessee's property on the premises and may seek to apply this to any and all claims due to City. iv. In the event of bankruptcy, the lease shall terminate automatically with no action by Lessor; may not be assigned to a third party; and will be subject to all costs incurred by Lessor upon early termination. B) Except for a default caused by the filing of a bankruptcy petition, after providing Lessee with a written notice of a default pursuant to Subsection (i) above, City may terminate the Lease upon forty -five (45) days written notice following expiration of the twenty (20) day time to cure. (C) The acceptance of all or part of a rental payment by City for any period after a default, shall not be deemed a waiver of any of these options, nor a waiver of the default or any subsequent default of the same or any other term, covenant and condition. Any waiver by City of a default on the part of the Lessee shall not be construed as, or constitute a waiver of, any subsequent default of the same or any other term, covenant or condition. (D) City's choice of any option above shall in no way waive its right to select any other option to cure a default or terminate the Lease. SECTION 13 - FORCE MAJEURE Should either of the parties to this Lease be delayed in or prevented, in whole or in part, from performing any of the obligations or conditions hereunder by reason of an act of God, an act of public enemy, epidemic, fire, flood, military hostilities or other causes clearly beyond the control of the parties, then either party shall be excused from such performance to the extent caused by said acts and the rights and obligations of parties hereto shall not be otherwise affected by such failure. J LL SECTION 14 - NON - TRANSFERABLE Lessee shall not sublet, assign, license, transfer or allot any portion of the site or any aspect of the facility operations or usage or any rights or privileges contained herein to any other person or for any other use except as those specified herein without the prior written consent of City. The granting of such consent shall not render unnecessary any subsequent consent. SECTION 15 -INDEMNIFICATIONS (A) Hold Harmless Agreement. Lessee shall indemnify and hold harmless the City, its officers, boards, commissions, agents and employees, against and from any and all claims, demands, causes of actions, actions, suits, proceeding, damages, costs or liabilities (including costs or liabilities of the City with respect to its employees), including but not limited to damages for injury or death or damage to person or property including any reasonable attorney fees, arising out of or pertaining to the performance and activities of the Lessee pursuant to this Lease. (B) Defense of Litigation. Lessee shall at the sole risk and expense of Lessee, upon demands of the City, made by and through the City Attorney, appear in and defend any and all suits, actions, or other legal proceedings, whether judicial, quasijudicial, administrative, legislative, or otherwise, brought or instituted by third persons or duly constituted authorities against or affecting the City, its officers, boards, commissions, agents, or employees, and arising out of or pertaining to the exercise or the enjoyment of this Lease, or the granting of this Lease to Lessee. , (C) Lessee shall pay and satisfy and shall cause to be paid and satisfied any judgment, decree, order, direction, or demand rendered, made or issued against Lessee, the City, its officers, boards, commissions, agents, or employees in any of these premises. Such indemnity shall exist and continue without reference to or limitation by the amount of any, bond, policy of insurance, deposit, undertaking or other assurance required hereunder or otherwise; provided that, neither Lessee nor City shall make or enter into any compromise or settlement of any claim, demand, cause of action, action, suit, or other proceeding, without first obtaining the written consent of the other which consent shall not be unreasonably withheld. 0 SECTION 16 - INSURANCE REQUIRED • (A) Lessee shall, as a condition precedent to execution of this Lease by City, furnish to the . City and file with the City Clerk and City Attorney, and at all times during the existence of this franchise, maintain in full force and effect, at its own cost and expense, a . general comprehensive liability insurance policy, including but not limited to coverage for premises operations, explosion and collapse hazard, underground hazard, contractual insurance„ property damage, independent contractors and personal injury and automobile liability in comprehensive form, in protection of the City, its officers, boards, commissions, agents and employees, by a company approved by the City Manager and in a form satisfactory to the City Attorney, protecting the City and all persons against liability for loss or damage for personal injury, death and property damage, occasioned by the operations of Grantee under this Agreement, with minimum liability limits of two million dollars ($2,000,000) for personal injury or death of any one person and five million dollars ($5,000,000) for personal injury or death of two or more persons in any one occurrence, and one million dollars ($1,000,000) for damage to property resulting from any one occurrence. (B) The City shall be named as an additional insured in all said insurance policies. Such insurance shall contain a provision that a written notice of cancellation or reduction in coverage of said policy shall be delivered to the City Clerk thirty (30) days in advance of the effective date thereof. w Said insurance policy shall contain the following endorsements: 1) The naming of an additional insured as herein provided shall not affect any recovery to which such additional insured would be entitled under this policy if not named as such additional insured; and 2) The provisions of the policy will not be changed, suspended, canceled or otherwise terminated as to the interest of the additional insured named herein without first giving such additional insured thirty (30) days written notice. (C) Fire Insurance. Throughout the term of this Lease Agreement, Lessee shall insure all structures erected or installed on the site under a policy of extended fire insurance iU coverage in an amount equal to the replacement value of said structures. Lessee and City shall be named as the insured under the said policies of fire insurance and any ' payment resulting from damage or destruction to said property shall be paid into an escrow account and shall be used by Lessee solely and exclusively for the repair, reconstruction or replacement of said buildings or facilities. In the event that Lessee fails to undertake such repairs, construction or replacement within one hundred twenty (120) days, or such additional time as may be approved by the City, following the damage or destruction to said buildings or facilities, the entire proceeds of the fire insurance policy shall be paid to City. In the event that Lessee shall fail or neglect to take out or to maintain said fire insurance, City may, but nothing herein contained shall be deemed to create any obligation or liability on its part to do so, secure fire insurance for such period as Lessee shall fail or neglects to do so, and shall have the right to collect the cost of the insurance policy from Lessee. Fire insurance shall be obtained from an insurance company authorized to do business in the State of California with a rating by Best & Company of Los Angeles as B +, XII or above, and issued by its office or authorizing an agent in the County of Los Angeles. Lessee shall file with the City Clerk a policy or example certificate, subject to the approval of the City Attorney, indicating that the required insurance is in full force and effect. (D) Worker's Compensation. Concurrently with the execution of this franchise, Lessee, shall furnish to the City and file with the City Clerk a certificate of Workers' Compensation Insurance and at all times during the term of this Lease, maintain in full force and effect, at its own cost and expense a policy of Workers' Compensation Insurance. SECTION 17 - SECURITY FUND Within thirty (30) days after the execution of this Lease, the Lessee shall deposit with the City Treasurer the sum of $10,000 in cash or an irrevocable letter of credit approved by the City Treasurer and City Attorney for the term of the Lease (10 years) plus 12 months (total: 11 years) to guarantee the payment of any compensation, uncompleted improvements required 11 by this'Agreement, penalties or fees which are set forth in this Agreement. The City Manager shall have the unconditional rights to withdraw sums for any due rent, uncompleted improvements required by this Agreement, penalties, or fees due thirty (30) days after a notice of default and any extension as reasonably determined by the City Manager. No interest shall be paid to the Lessee on said sum of ten thousand dollars ($10,000). Such utilization of the Security Fund by the City shall not be in lieu of other remedies available to City and shall not be deemed a waiver of any other rights and remedies of the City, or an exoneration of Lessee. Lessee shall provide a cash deposit, or a new or extended letter of credit as a Security deposit in the event the City grants a five -year option as set forth in Section 8 above, said term to be for a period of six years from the commencement of the option period. SECTION 18 - DESTRUCTION OF PREMISES In the event that the facilities located or installed on the site during the term of this Lease are partially or totally destroyed for any cause, there shall be an abatement or reduction of rent to the extent the destruction interferes with the use of the premises, but in no case shall rent be totally abated for a period in excess of six months from the date of the destruction. Lessee waives the provisions of Civil Code Section 1932(2) and 1933(4) with respect to any destruction of the premises. SECTION 19 - IMPROVEMENTS Lessee 'agrees that no improvements now existing or later constructed on said property shall be removed or permitted to be removed by Lessee at any time when Lessee is in default of any provision of this Lease nor removed contrary to any provision of this Lease. In the event that this Lease is terminated by the City for any reason resulting from any default of any provision herein, including the failure to pay rent and to maintain all facilities as required herein, all improvements located on said premises at the time of such termination shall, at the election of the City, be and become the sole property of the City. SECTION 20 - SURRENDER OF PROPERTY At the termination or expiration of this Lease, Lessee agrees to return the premises including any improvements to the City in the same condition less ordinary wear or tear, as received. Any alterations or improvements authorized by the City on the site shall become the sole property of the City at the termination or expiration of this Lease Agreement. 12 SECTION 21 - CONDEMNATION Lessee takes and leases said properties subject to all encumbrances, easements, rights and right -of -way of record and upon the condition and understanding that in the event of condemnation by any legal entity having the power to do so, Lessee shall not be deemed to have any interest in the land nor to be entitled to any portion of an award made as a result of the condemnation, except as set forth below regarding improvements. Lessee shall not claim to have any interest in said property under or by virtue of this Lease or otherwise other than the interest as to the value of any improvements thereon erected by Lessee. Such claim of interest regarding improvements shall be made only if Lessee is not in default of any substantive provisions contained herein. For the purpose of this section the value of any improvements erected by Lessee shall be equal to their value at the time the eminent domain proceedings are filed by the condemnor, depreciated in proportion to the ratio between the remaining life of the Lease and the entire Lease period. If the entire leased property is taken by condemnation, either party shall have the election to terminate this Lease. The termination date shall be the date of taking. Each party waives the provisions of Code of Civil Procedure Section 1265.130 (which accords either party the right to petition the Superior Court to terminate this Lease in the event of a partial taking of the premises). SECTION 22 - TAXES Lessee shall be responsible for the payment of any taxes that may be assessed against the leased premises or fixtures, improvement and equipment thereon, or imposed upon the sale of products or prepared foods and beverages. SECTION 23 - UTILITIES AND PERMITS Lessee shall be responsible to pay for all utilities used on the property and in connection with the operations of the site. Lessee shall also be required to pay for any permits or licenses, at standard City rates, required by the City as part of its operation. SECTION 24 - LIMITATIONS (A) Any permission required by this Lease Agreement shall be secured in writing by the Lessee from the City and any errors or omissions therein shall not relieve the Lessee from its obligation to faithfully perform the conditions herein. 13 9 (B) Lessee hereby acknowledges that it has inspected the leased site and facilities and that it accepts said site and facilities in their present condition and that it agrees not to call upon the City to make any repairs or improvements to the site. Any alterations or improvements authorized by the City on the property shall become the sole property of the City at the termination or expiration of this Agreement. SECTION 25 - WATER RIGHTS (A) Upon all the property herein described, Lessee shall use only water produced and furnished by City. Lessee shall pay the full cost of all water installations required to service property. Lessee shall pay City for all water service charges and all water used by Lessee as shown by meters installed on the property at the standard rates established by the City. The City shall, at all times throughout the duration of this Lease, and at all renewals or extensions thereof, have the right to use water from fire hydrants located on the property for the protection of the property in the immediate vicinity of such hydrants. When water from said hydrants is used by Lessee with the permission of City, the City shall provide a fire hydrant meter to measure the amount of water used and debit Lessee's account with an amount equivalent to water used. In the event of an emergency or water shortage, the City shall have the right to curtail the use of water to the site in the same manner and to the same extent which other water users are curtailed. No water furnished by City shall be sold by Lessee to others. Lessee shall not cause or permit the waste of any water furnished by the City. (B) The City expressly reserves the right, at its sole discretion, to drill or construct or cause to be drilled or constructed upon any of the property leased hereunder, a water well with related and necessary pump equipment and water transmission mains for the use by its City owned water system at any site location that will not substantially interfere with Lessee's facilities located thereon. SECTION 26 - ATTORNEY'S FEES (A) If either party commences any action against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to have and recover from the losing party reasonable attorney's fees and cost of suit. 14 (B) In case any suit shall be brought for an unlawful retainer of said premises, or for the recovery of any rent due under the provisions of this Lease, or because of any breach by Lessee of any condition or term herein contained, Lessee shall pay to City a reasonable attorney's fees which shall be affixed by the court. SECTION 27 - NOTICE Any notices to be given hereunder shall be in writing and deemed to be duly given if and when deposited in the U. S. mail properly stamped and sent by certified mail to the party for whom it was intended at the address of such party as herein specified or at such other address of such party as herein specified or at such other address as the party may designate by proper notice from time to time. Kevin Roberts, President American Golf Corporation 2951 28th Street Santa Monica, CA 90405 William R. Kelly, City Manager City of Arcadia 240 W. Huntington Drive Arcadia, CA 91006 SECTION 28 - NO SUBLETTING OR ASSIGNMENT Lessee shall not voluntarily assign or encumber its interest in this Lease or in the premises, or sublease all or part of the premises, or allow any other person or entity to occupy or use all or any part of the premises, without first obtaining the City's written consent. Any assignment, encumbrance, or sublease without the City's consent shall be voidable, and at City's election, shall constitute a default. No consent to any assignment, encumbrance, or sublease shall constitute a further waiver of the provisions of this paragraph. 15 SECTION 29 - DEPARTMENT RESPONSIBILITIES The City of Arcadia Maintenance Services Department (MSD) Director shall be responsible under the City Manager for supervising the maintenance of the facility pursuant to this Lease; the Administrative Services Department (ASD) Director shall be responsible under the City Manager for supervising the payment of rent pursuant to this Lease; the Recreation Department Director shall be responsible under the City Manager to monitor the quality of the golfing program offered to the community pursuant to this Lease. Lessee shall cooperate with the above named City officials in their respective area of responsibility. SECTION 30 - EFFECTIVE DATE The effective date of this Lease, for all purposes hereof, shall be July 1, 1998. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day of _T""g , 1998 by their respective officers duly authorized in their behalf. ATTEST: By: %� A � J-- z s - s� une Alford, City. rk APPROVED AS TO -FORM: By: k Mic ael H. Miller, City Attorney y 16 CITY OF ARCADIA, a Municipal Corporation By: w 4 William R. Kelly, City Manager AMERICAN GOLF CORPORATION, a a a C r io By: Kevin Roberts, President By' Secretary ATTACHMENT A LEGAL DESCRIPTION EXISTING PAR 3 GOLF COURSE That certain real property in the City of Arcadia, County of Los Angeles, State of California, described as follows, to wit: A portion of Lot B, Tract 7465, per map recorded in Book' 84, page 98, of Maps; and a portion of Lots 12, 16 and 17 of the Western Two- thirds Rancho San Francisquito, per map recorded in Book 42, pages 93 and 94 of Miscellaneous Records in the office of the Recorder of said County, described as follows: Beginning at a point of intersection of the westerly boundary of the City of Arcadia as same existed on October 1, 1957, with the southerly line of said Lot B, thence North 56 45' 03° East along said southerly line to the westerly line of Santa Anita Wash as shown on Los Angeles County Flood Control District Map No. 36 -RW 11.1; thence South 10 30' 11" East 723.23 feet; thence southwest along a curve concave to the northwest and having a radius of 594.12 feet, 504.99 feet; thence South 38 11' 50" ; West 448.74 feet; thence South 45 05' 57° West 273.59 feet; thence South 47 49' 15" ; West 266.84 feet; thence South 60 09' 48" West 237.72 feet; thence North 74 52' 45" West 301.27 feet more or less to a point of intersection with the previously mentioned westerly boundary of the City of Arcadia; thence northerly and easterly along the various courses and distances of the said boundary to the point of beginning. 17 0 0 LEGAL DESCRIPTION OF EXISTING OVERFLOW PARKING AREA JUST NORTH OF PAR 3 GOLF COURSE EAST OF ACCESS ROAD That certain real property in the City of Arcadia, County of Los Angeles, State of California, described as follows, to wit: That portion of Lot B, Tract 7465, per map recorded in Book 84, page 98, of Maps, in the office of the Recorder of said County, lying westerly of the Santa Anita Wash, as shown on Los Angeles County Flood Control District Map No. 36-RW 11. 1, excepting therefrom the northerly 1177.96 feet and the westerly 25 feet of said Lot B. LEGAL DESCRIPTION EXISTING 25' ACCESS ROAD FROM LIVE OAK AVENUE TO PAR 3 GOLF COURSE That certain real property in the City of Arcadia, County of Los Angeles, State of California, described as follows, to wit: The Westerly 25 feet of Lot B, Tract 7465, per map recorded in Book 84, page 98, of Maps in the office of the Recorder of Los Angeles County. W 0 • ATTACHMENT B CAPITAL IMPROVEMENTS The Lessee shall complete the following capital improvements, as more fully described in his proposal dated May 8, 1997 (included herein by reference and made a part of this Agreement), by December 31, 1998: DRIVING RANGE Grading/soil prep landing area Artificial turf Sand Drainage Repair netting Add lighting along. perimeter Install new concrete tee line CLUBHOUSE Carpet Interior Paint Lighting in shop HVAC Artwork/accessories EXTERIOR SITE WORK Replace chain link with iron fencing Planters /landscaping Add 4 outdoor tables with chairs Entrance sign (picture in 5/8/97 proposal - subject to City pre- approval of location, design, colors of sign) Patch and slurry seal parking lot Repair /rehabilitate on- course restroom facilities FP 0 0 In addition to these items, the following improvements shall be completed as scheduled during the term of this Agreement: • Install a reduced pressure backflow preventer at or near the water Jul. 1998 meter (there can be piping between the backflow preventer and the water meter) • Fence repairs: a) Netting protecting private property along 17th hole needs to be Jul. 1998 removed Jul. 1998 b) Netting at 18th tee needs to be removed Jul. 1998 c) Chain link at several tees needs to be restretched and wired to Jul. 1998 the ground Jul. 1998 • Finish stump grinding all the trees that were removed during the Jul. 1998 December, 1997, January, 1998 tree trimming and removal program, and any other trees that were removed and not replaced during the last contract period and replace with 24" box trees. Type of trees to be specified by the Maintenance Services Director or his designee. • Copies of vapor and leak testing permits /inspections for above Jul. 1998 ground fuel tanks • Finish painting of parking lot light poles Jul. 1998 • Plant additional trees along left side of fairway, #18 Jul. 1998 • Bottom portion of light poles need to be painted Jul. 1998 • Tee benches need to be replaced (Golf Solutions) Jul. 1998 • Install a roll -away fence on the east side of the building between the Aug. 1998 maintenance yard wall and the fence next to the bike path • Paint storage area wood siding to match exterior of building Aug. 1998 • Replace exposed romex on office area Aug. 1998 • Replace commode in bathrooms with low volume type Aug. 1998 • Install grease trap for kitchen Aug. 1998 • Replace irrigation system (controllers, sprinklers, and valves) Aug. 1998 install electrical to controllers. Repair any leaks in the line during this time • Install a French drain on the northwest side of the green at hole #14 Nov. 1998 • Construct new concrete patio area Dec. 1998 • Design and construct an entryway generally consistent with the Dec. 1998 attached concept plan, subject to City pre - approval of design, materials, plantings, colors. • Repair /rehabilitate on- course restroom facilities Dec. 1999 • Repaint exterior of clubhouse Sep. 2005 • Replace carpet in clubhouse Nov. 2005 20 0 0 Z } Z W 0 _Y c a> a� L W U U co L CL m IL i m U O U O a m c m W Of m n m ca Q Ez m mmEa3 3 m cmmmama o j Wes„ Y•�J: '� Y..r t�oac c.° 0`3�a C s4z �r'4 =.; m m c a> a� L W U U co L CL m IL i m U O U O a m c m Of m n m ca Q Ez m mmEa3 3 m cmmmama 9 •L m vvm,E c t�oac c.° 0`3�a C Op Y S c X =.; m m 5 C L E m m m O m ='.V 9 pa _om o c Ssc i .. .' m a a c m C! O X � 'p 0 arc—. m arc— T m p c U m m c g c 0 a m m °m C m C m m oh c o m m m c 01 a.°.¢ E m ¢ o ma ►c�oci a� L ...__. H Z [V n v Le mi 1 21 T m 6.6•, c 0 0 c O U d cn d U c U LL c D 0 m m d Y U m C 0 D d U ' c n mini U ® m U C O m m 7 m 0 U LM o f{� Mimi ca c of m LU m Y ~ O 00 rn LM L m 0 Q v �x In �I. � D .. cor E A m c 0 0 c O U d cn d U c U LL c D 0 m m d Y U m C 0 D d T v C T E m m c m 0 O O N SO U ' E - O'm U. O m 2 m. n ca C UJ of m m Y ~ O 00 rn •,. L m 0 Q v �x In m D .. E T v C T E m m c m 0 O O N SO v 0 0 "v x N d d a n L O Q L Q U ' 4 O'm U. O a � 0 IZ' ca C UJ of m m Y 22 v rn L m ^co Q v �x In m D .. E m co m c L L m `D o 0 v m o O w. m ox ~ N v 0 0 "v x N d d a n L O Q L Q U ' 4 O'm U. O a � 0 IZ' ca C UJ m Y 22 0. L ^co Q �x In .. D .. U ' O'm U. O 0 m ca Q m Y 22 u'S a ♦ nOP05=D ENTRANCE SIGN 0 (Final design subject to Cit hrc- �,prmal i 9' X IT Pole I-Iounted. Tnx}ure Goo-, eo. ,-er really Ugh-, ed Sheet t-letd Gon wi-n >lexigloss rotes and Vinyi Grophics. 23 ATTACHMENT C MINIMUM MAINTENANCE STANDARDS 1. Greens, Practice Putting Greens & Nurseries A. Mowing - At least five days per week at a height of 3/16" - 5/16" during the growing season. B. Change cup locations on all greens and practice putting greens daily during the active season and at least three times weekly in the off - season. Cup location will be moved at least twenty 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 times per year during the growing season, i.e., March, June and September, or more frequently if needed. E. Topdress all greens, practice putting greens and nurseries: a. After any aedfication performed with 1/2" or larger tines; b. And 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. Note: Where Bermuda grass greens are maintained,, they shall be over seeded annually, in September of each year, using a blend of perennial rye, Poe Tdvilas and /or fine fescues - at a rate of not less than 20 lbs. per 1,000 square feet or 30 lbs. if straight perennial ryegrass. The putting surface shall be prepared for over seeding in August by aedfying not sooner than 30 days before over seeding, verticutting weekly starting three to four weeks in July prior. Over seeding shall be topdressed 1/8" with material similar to green construction material or sand /compost mixture. A complete fertilizer shall be applied immediately prior to seeding. Green shall be irrigated sufficient to remain moist but not soaked until all germinated seed has rooted. During germination period, cup shall be changed daily. First mowing shall be at 5/16" reducing to normal cutting heights gradually. A preventive program of fungicide applications shall be maintained starting two days after over seeding. 24 0 0 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 such as Balan, Dacthal, etc., shall be used if necessary in the appropriate amounts and appropriate times to prevent intrusion into the greens of weeds difficult to eradicate such as poa anus, goosegrass, crabgrass, etc. K. Weed Control - All greens, practice greens and nurseries shall be maintained free of undesirable grasses and weeds. L. Insecticides - All greens, practice greens and nurseries shall be treated as necessary to prevent or halt insect damage. 2. Tees - All Natural Turf Areas Used for Tee Surface Including Driving Range A. Mowing - All tees shall be mowed at a height of 3/8" - 5 /8" three times per week. In season, and not less than two 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. Seeding - All tee areas shall be over seeded at a rate of not less than 10 lbs. /1,000 square feet by October 15 each year. Seed used shall be a suitable species or blend. D. Set -up - Tee markers and all tee equipment shall be moved daily for proper teeing and control of turf wear. E. 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. F. Vertical Mowing - All tees shall be vertically mowed as necessary to control mat or thatch buildup or uneven growth. G. Aerification - All tees shall be aerified at least every two months from March through October. H. Fertilization - All tees shall be fertilized with nitrogen, phosphorous, potash, and other elements as needed to maintain color, growth, health and turgidity 25 of the turf, without allowing excessive or excessively succulent growth. I. If astro turf is installed at all tees, the Lessee shall provide recommended maintenance standards to the City for review and approval by the start of this Lease. 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 shalt be mowed three times per week at a height of 1/2" - 7/8" during the growing season and as needed for the balance of the year. B. Aerification - All fairways shall be aerified a minimum of three times per year, in the spring and in the summer, i.e., March, June, September. Aerification holes shall not exceed a spacing of eight inches on center or be of a diameter of less than 112. 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 preemergent 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 sq. ft. acre. G. Any improvements to the turf areas shall be completed within thirty (30) days of written notification from the director or his designee to the Maintenance Superintendent at the golf course. 4. Roughs All turfed areas of play except greens, tees, fairways and natural growth areas. A. Aerification a) Fairway -to- tree -line play areas shall be performed at least two 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). 26 b) 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 Plav 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. 6. Trees - All Trees Within the Property Lines of the Golf Course All trees shall be maintained according to I.S.A. (International Society of Agriculture) specifications, or the following specifications, whichever is greater: A. Stakes - Trees shall be staked as necessary until of sufficient size to stand unassisted. Stakes shall be installed and maintained. Stakes shall be removed as soon as possible. B. Pruning - All trees shall be properly pruned for protection from wind and pests as well as for appearance and safety at least once every four (4) years, or 1/4 annually. Trees or limbs that are deemed hazardous shall be removed immediately. C. Irrigation - All trees shall be irrigated to provide adequate moisture for normal growth. D. Mowing - Large area mowers shall not be used within one foot of the trunk of any tree. E. Removal and Replacement - All dead trees, for whatever cause, or diseased shall be removed within twenty working days from written notification from the Maintenance Services Director. Replacement shall be with a tree of appropriate type and size within ten (10) working days of the removal. F. Unsightly sucker growths (i.e., water sprouts) shall be removed as necessary from all tree bases and trunks. 27 7. Inioation A. The Contractor 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. Contractor 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. D. All system malfunctions, damage, and obstructions shall be repaired immediately within 72 hours following written notification from Maintenance Contracts Officer. E. In addition to required testing, all irrigation systems shall be tested and inspected as necessary when damage is suspected, observed or reported. Daily testing may be required if necessary. F. In areas where wind creates a problem of spraying onto private property, the controller must be set to operate during the period of lowest wind velocity. G. A solid probe or tensiometer shall be used to determine the soil moisture content in various areas when necessary. H. The Lessee shall observe and note all deficiencies occurring from the original design and review these findings with the Inspector, so necessary improvements can be made. I. Lessee shall repair all leaking or defective valves within 72 hours following written notification from the Maintenance Contracts Officer of such a deficiency (problematic with obsolete parts). J. Lessee shall repair /replace sprinklers that are causing excessive run -off or puddling within 24 hours following written notification from the Maintenance Contracts Officer of such a deficiency. K. In the event of a reduction of the volume of water supplied to a golf course during peak demand periods, the priority of water distribution by Lessee shall be as follows: 1. Greens 2. Tees W., 9 3. Fairways 4. Other turf and landscaped areas. L. Irrigation part requirements: Plastic pipe shall be polyvinyl chloride (PVC), Type 1. - Plastic pipe fittings and connections shall be PVC Schedule 40, except nipples, which shall be Schedule 80 All sprinkler heads shall be approved by the Director of Maintenance Services before installation. M. Notification of work to be performed. Lessee shall provide written notification to the Maintenance Services Director at least ten (10) days prior to any major improvements to the course. Trimming, planting, or removal of trees. Fertilization, aeration, overseeding, or verticutting of turf. 8. Fences - All Fences and Walls Block Chain Link or Barbed Wire etc. on or Within Boundaries of the Property A. Repair all broken or damaged fencing as necessary within twenty (20) calendar days of written notification. B. Repair or replace as necessary all fences, gates, and locking devices needed for the protection of the golf course or equipment within seven (7) calendar days of written notification. 9. Clubhouse and Structures - All Structures within the Boundaries of the Golf Course A. Course Restrooms - All course restrooms shall be maintained daily in a manner so as to provide clean and sanitary facilities for the public as well as employees of the course. Soap, towels, toilet paper, etc. shall be provided in adequate quantity at all times. Portable facilities shall be maintained similarly. B. All buildings and structures shall be maintained in good repair at all times. Surrounding areas shall be maintained free of weeds, brush, disorganized junk or broken -down equipment, trash piles, etc. Interior areas shall be clean and neatly organized, safe and sanitary, for customers and employees. Painting, rodent and insect control, and landscaping shall be performed as necessary. "Housekeeping" duties shall be assigned to all maintenance crew members and shall be performed daily. C. The golf course superintendent is responsible for all facilities and structures maintenance not within the clubhouse area proper, whether performed by his own staff or some other. 29 u a) clean cobwebs and dust from the exterior of building; four times a year or as necessary, June, September, December, March b) clean carpet and hard surface floors; four times a year, June, September, December, March c) clean and disinfect restaurant eating areas daily per department of health standards d) clean and disinfect bathrooms daily e) clean grease traps monthly per department of heath standards 0 spray interior and exterior of building for insects monthly g) wash all windows inside and out, four times a year or a necessary, June, September, December, March h) bi- monthly visual inspection of premises 10. Edging All sidewalks, patios and concrete cart paths must be kept edged. Edging around valve boxes, meter boxes, backflow preventers, etc. shall be done as needed (minimum monthly) to insure that there is no obstruction of play or maintenance from growth around these items. 11. Sand Traps All sand traps shall be edged as necessary to maintain an appropriate lip, raked daily and filled with fresh sand as needed to maintain a minimum 4 -inch depth on slopes and in the bottom. Replacement sand will be of a dust -free type, suitable for trap use. 12. Color Areas The various planting areas throughout the course shall be cultivated, weeded, and pruned on a regular basis, with at least three replanting programs for annuals scheduled each year, i.e., March, June, October. 13. Construction and Remodelina Any change in the physical characteristics of any area of the golf course, such as addition or removal of sand traps, addition or removal of any hazards (water, trees, or native vegetation), movement of soil exceeding 20 cubic yards in any single area, or the modification of any portion of the golf course or the buildings, shall not be undertaken without the direct approval of the Maintenance Services Director. 30 14. Crews American Golf shall have sufficient staff assigned to the golf course daily to meet the requirements and provisions contained in these specifications. These employees shall be supervised by an on -duty superintendent. Regular hours will be established and maintained. The superintendent's hours shall normally be the same as those of his crew. 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. 17. Soil and Water Analysis will be performed annually in September by an approved professional laboratory. The results of these tests shall be used to guide the type and amount of fertilization, aerification, or other maintenance standards required to provide healthy plant growth. 18. Lightina Any repairs or replacement of lighting system to ensure proper night lighting shall be completed within twenty (20) calendars days of written notification. 31 0 ATTACHMENT D RENTAL PAYMENT SCHEDULE The rental payments from AGC to the City "shall be the greater of either: Percentage Fifteen (15) percent of all green fees, cart fees, and range fee revenues, and for each and every dollar thereafter, and Eight (8) percent on all other revenue (excluding green fees, cart fees and range fees); n Minimum Rent Beginning at $120,000 in Year One and increasing by $5,000 annually thereafter to $150,000; thereafter minimum rent would be 75% of the average rent paid over the last three (3) years, but not less than $150,000. Terms herein used shall be as defined in Attachment E (Gross Revenue - defined). Projected rents shall be as shown on Attachment F (Summary). 32 ATTACHMENT E GROSS REVENUE - DEFINED For purposes of calculating percentage rent, gross revenue shall mean all money received by Lessee as a result of the sales and rental of all goods and services on the leased premises, but shall not include. (1) Cash refunds or credits allowed on returns by customer; (2) Sales taxes, excise taxes, gross receipts taxes and other similar taxes nor or later imposed upon the sale of food, beverages, merchandise or services and paid by Lessee or the appropriate taxing authority, whether added to or included in the selling price; (3) Fees charged for golf lessons and instruction; (4) The actual uncollectible amount of any check or bank draft 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; (5) The actual uncollectible amount of any charge or credit account (commonly `bad debts ") incurred 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 been made; (6) The actual uncollectible amount of any sale of merchandise or services for which Lessee accepted a credit card; provided, however, that Lessee has made reasonable efforts to collect the debt after being notified by the issuing bank of the invalidity or uncollectibility or the charge; (7) Interest or other charges paid by customers for extension of credit; (8) Sales made by any concessionaire or licensee of Lessor, it being the intention of this Lease that only Lessee's share of the receipts of such concessionaires or licensees, if any, are to be included in the calculation of Lessee's gross revenue, subject to approval by the City of Arcadia of all concession or license agreements prior written; (9) Sales or trade -ins of machinery, vehicles, trade fixtures or personal property used in connection with Lessees operation of the leased premises; (10) Unless otherwise disallowed by City, the value of any merchandise, supplies or equipment exchanged or transferred from or to other locations of business of Lessee where such exchange or transfer is not made for the purpose of avoiding a sale which would otherwise be made from or at the leased premises; 33 (11) Receipts in the form of refunds from or the value of merchandise, supplies or equipment returned to shippers, suppliers or manufacturers; (12) The amount of any cash or quantity discounts received from sellers, suppliers or manufacturers; (13) The amount of any gratuities paid or given by customers to or for employees of Lessee; (14) Receipts from the sales of uniforms or clothing required to be worn by employees; (15) Amounts attributed to meals served or provided to employees of Lessee; (16) Receipts from the sale of waste or scrap materials resulting from Lessee's operations; (17) Amounts attributable to play by members of the American Golf Club exercising their membership right to play a limited number of rounds without separate payment of greens fees; and provided that the City can, at its option, require this activity to be included as gross revenue if in the opinion of the City, this activity is causing a reduction in green fees. (18) The amount of any cash received from operation of an advance reservation system; provided that the Lessee receives prior approval from City to operate a cash advance reservation system. 34 00 m (h O } C� 6 i E E c d oU t a � mi E � U F C a U� 9 v d � f�l U v c E C U d � c v C7 .y 2ppi 25 20o5 2i 2pp5 2N5 2p5 04D �3 {�{pp NNI�9 V 99550 0 wwwwwwa4;A4,4 N1: �l Of OOi -mw wwwwwwwwww n�i�°�uwi ioen�� wwHwwwW9HH wwwwwwwwww O�I��NNm�m O� f�NtN�1N w w w w w w w w w w Ori,� O�NtN+1 fV § § § § § § §g yyyyy wwwww mOI� N VVii ywwwww o ci (,if ui Wrmai wwwwwwwwwin R-MMM 0 ATTACHMENT F O r C c E r � O w U y c y c s o c r w w � 25 _E w = w v d C E w N N N G c c o 4) .N N > U C N C > w U N O O O 4) O = O N Vl C y f0 a) 0) N T w N cl) C O C_ m > C .L 'O w w E o m U > C m a N r tm O w w O o N m >Ln O O) _ cb O cb o O C0 o w T O 7 � N �p 4) E °p = ct 4) L C_ LO 2r EA w C N w > O O O Z U 0 r C E 7 U OI _ E 3 E c 2