HomeMy WebLinkAboutIRI Sun Willows Golf Course Lease Agreement & Amendments Golf Course Lease Agreement
This Agreement (the "Agreement" or "Lease") is entered into, this 27th day of
December, 2000,between the CITY OF PASCO,a municipal corporation of the State of
Washington, herein called the "Cif"and IRI SUN WILLOWS ASSOCIATES LLC, a
Delaware limited liability company, herein called"Lessee".
Whereas, the City desires to have a responsible, qualified and competent entity
operate and maintain the Sun Willows Golf Course, hereinafter called "Golf Course",
located in the City of Pasco, Washington; and
Whereas, Lessee desires to obtain the right, license and privilege to provide such
operation and maintenance services;
Now, Therefore,the City and Lessee agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the terms defined in
this Article I shall have the following meanings:
(a) "Additional Capital Improvements"shall mean improvements to the golf
course for which the Additional Capital Improvement Amount is expended.
(b) "Additional Capital Improvement Amount" shall mea# an amount
equal to the sum of (i) $100,000, plus (ii) the differe ce between
$1oo,000.00 and sums actually expended for Required Capital
Improvements.
(c) "Additional Concession Fee"shall have the meaning set forth in Section
2.2 d i hereof.
(d) 'Additional Payment"shall have the meaning set forth in Section
2.2 i hereof.
(e) "Annual Concession Fee"shall have the meaning set forth in Section
2.2(c)(D hereof.
(f) "Annual Lease Payment" shall have the meaning set forth in Section
2.2 a i hereof.
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(g) "Bonds"shall mean a performance bond,or other bonds,or combination of
bonds and insurance, acceptable to the City Manager, in the amount of One
Hundred Thousand Dollars ($loo,000.00).
(h) "Buildings" shall mean and include the Clubhouse/Restaurant, the Pro-
Shop and other above ground enclosed structures and any and all alterations,
replacements or modifications thereto during the Term of this Lease.
(i) "Business Dav" shall mean a day that is not a Saturday, a Sunday, a legal
holiday or a day on which banks are required or permitted by law or other
governmental action to close in the City of Pasco, Washington.
(j) "Capital Improvement Budget" shall mean an annual budget for the
applicable Lease Year covering the installation of Capital Improvements to
the Golf Course,which shall include an estimate of any capital replacements,
substitutions,and/or additions to the Golf Course or any component thereof
to be accomplished during such Lease Year.
(k) "Capital Improvements"shall mean any improvements,replacements or
modifications to the Buildings or Other Improvements which are of a capital
nature and which do not constitute routine repair and maintenance
operations and which are made for the purpose of creating a long term
beneficial impact on the quality and success of the Golf Course.
(1) "Capital Replacement Amount"shall have the meaning set forth in
Section 4.2(b) hereof.
(m) "Capital Reserve Account"shall have the meaning set forth in Section
4-2(a) hereof.
(n) "City Construction Election"shall mean the election by the City to either
(i)proceed with the construction of the Renovation Improvements on its own
behalf or (ii) require Lessee to proceed with the construction of the
Renovation Improvements.
(o) Representativg"shall mean the City Manager or his designee.
(p) "Ot
Ys Environmental Covenant" shall have the meaning set forth in
Section 1q.2.(0. hereof.
(q) "Clubhouse Construction Cost Amount"shall mean the aggregate costs
incurred by the City or Lessee in connection with the construction of the
Renovation Improvements.
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(r) "Clubhouse Renovation Date"shall mean the date upon which:
(i) the renovation of the Clubhouse/Restaurant has been substantially
completed so that the Food and Beverage Operations can be
commenced without unreasonable interference from contractors or
subcontractors who are in the process of completing the balance of
construction of the of the Renovation Improvements,
(ii) the equipment necessary for the operation of the Food and Beverage
Operations has been installed and is fully operational, and
(iii) All Permits have been issued and/or obtained by Lessee to permit
Lessee to operate the Food and Beverage Operations in accordance
with applicable law or are available upon proper application by Lessee.
(s) "Clubhouse/Restaurant" shall mean the existing building containing
clubhouse and restaurant/food service facilities.
(t) "Comparable Facilities"shall mean Columbia Point Golf Course,Canyon
Lakes Golf Course, and Horn Rapids Golf Course.
(u) "Commencement Date" shall mean January 1, 2001.
(v) "Contract Documentation" shall mean all contracts and other
documentation with third parries regarding the development and
construction of the Renovation Improvements.
(w) "Course Manager" who shall mean a frill time, on-site, competent golf
course manager who shall be a PGA"Class A'golf professional or certified by
the Country Club Manager's Association and with at least three (3) years
experience in the operation of golf courses comparable to the Golf Course,
whose operations include the operation of a pro shop.
(x) "Default Rate" shall mean a rate of interest equal to one and one-half
percent(1.5%) per month.
(y) "Environmental ActivitX"shall mean:
(i) any past, present or future storage, holding, presence, existence,
release, threatened release, emission, discharge, generation,
processing,use,abatement,disposition,handling or transportation of
any Hazardous Substance in violation of any applicable
Environmental Laws from, under, into or on the Golf Course, or
otherwise relating to the Golf Course or the ownership,use,operation
or occupancy thereof, or any threat of such activity, or
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(ii) the migration of any Hazardous Substance to or from other property,
or
(iii) the loss or injury resulting from any underground or aboveground
storage tanks located on or at the Golf Course,whether filled,empty,
or partially filled with any substance, as defined in any applicable
Environmental Laws, including any Hazardous Substance and the
release thereof into the air, atmosphere, ground, water supply or
sewer systems from the Golf Course.
(z) "Environmental Laws" shall mean
(i) all applicable federal laws and regulations
(A) relating to(t)pollution of the environment(including without
limitation, ambient air, surface water, ground water, land
surface or subsurface strata), or (2) emissions, discharges,
releases or threatened releases of Hazardous Substances or
(B) otherwise relating to the manufacture,processing,distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Substances,
(ii) any and all state and local laws similar to,in whole or in part,federal
toxic waste laws, which from time to time are in effect in the
jurisdiction in which the Golf Course are located, and the regulations
adopted pursuant thereto,
(iii) any laws or regulations governing "wetlands", and
(iv) any common law theory based on nuisance or strict liability.
(aa) "Environmental Liabilities" shall mean any and all actual or potential
obligations to pay the amount of any judgment or settlement, the cost of
complying with any settlement,judgment or order for injunctive or other
equitable relief,the cost of compliance or corrective action in response to any
notice, demand or request from any department, agency or other body or
component of any government authority that exercises any form of
jurisdiction or duthority under any Environmental Laws,the amount of any
civil penalty or criminal fine,and any court costs and reasonable amounts for
attorney's fees,fees for witnesses and experts,and costs of investigation and
preparation for defense of any claim or any judicial action,suit or proceeding
(whether civil or criminal), any administrative proceeding (whether formal
or informal), any investigation by a governmental authority or entity
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(including a grand.jury),and any arbitration,mediation or other non judicial
process for dispute resolution, regardless of whether such proceeding is
threatened,pending or completed,that may be or have been asserted against
or imposed upon the City, Lessee, the Golf Course or any property used
therein and arising out of
(i) failure to comply at any time with all Environmental Laws applicable
to the Golf Course;
(ii) presence of any Environmental Activity on,in,under,at or in any way
affecting the Golf Course;
(iii) identification of Lessee or the City as a potentially responsible party
under any Environmental Laws;
(iv) presence at any time of any underground or aboveground storage
tanks,whether filled,empty,or partially filled with any substance,as
defined in any applicable Environmental Laws on, in,at or under the
Golf Course;or
(v) any and all claims for injury or damage to persons or property arising
out of exposure to Hazardous Substances originating or located at or
migrating from the Golf Course to adjacent properties, or resulting
from operation thereof.
(bb) "Equipment Replacement Account"shall have the meaning set forth in
Section a..i(a) hereof.
(cc) "Existing Facilities"shall mean the following facilities situated on the Real
Property:
(i) Pro Shop
(ii) Driving Range
(iii) Clubhouse/Restaurant
(iv) Maintenance Building and Yard
(v) Course Restroom
(vi) Parking Lot
(dd) "Expiration Date"shall mean December 31, 2010.
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(ee) "Fees"shall have the meaning set forth in Section 7.i. hereof.
() "Food& Beverage Concession Fee"shall have the meaning set forth in
Section 2.2(e)(i)hereof.
(gg) "Food and Beverage Operations" shall mean the restaurant and food
and beverage services offered from time to time at the Golf Course.
(hh) "Food and Bever.age Revenues" shall mean all gross income, revenues
and consideration of whatever form or nature, received by or paid to Lessee,
its agents or employees, from any and all sources attributable to the
operation,leasing,licensing or occupancy of the Golf Course,determined on
a cash basis, from:
(i) food and beverage sales (including alcohol sales) at the Golf Course
and at bars and restaurants now or hereafter situated on the Golf
Course,and
(ii) proceeds of business interruption or similar insurance payable in
connection with any loss of revenues described in this
Subparagraph (hh).
In no event shall "Food and Beverage Revenues" include any income,
revenue or other consideration arising from Golf Course Play Revenues,Golf
Course Ancillary Revenues and Merchandise Sales.
00 "Golf Course"shall mean and include the Real Property and the Facilities,
including the Buildings and Other Improvements.
Qj) "Golf Course Ancillary Revenue"shall mean all gross income,revenues
and consideration,of whatever form or nature,received by or paid to Lessee,
its agents or employees, from any and all sources attributable to the
operation, leasing,licensing and occupancy of the Golf Course, determined
on a cash basis, for:
(i) golf cart rentals,
(H) driving range revenues,
(iii) trail fees,
(iv) parking fees,
(v) rentals, rents and receipts from licenses, concessions, vending
machines and similar items,
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(vi) other fees,charges or payments not determined as rental,but payable
for or in connection with the rental of office,retail,storage,parking or
other space in the Golf Course, and
(vii) proceeds of business interruption or similar insurance payable in
connection with the loss of revenue described in this Subparagraph
UP.
The term "Golf Course Ancillary Revenues" shall include all other
sources of revenue or income of Lessee or its agents or employees with
respect to the use,operation and activities associated with the Golf Course to
the extent not clearly included within the definitions of Golf Course Play
Revenues, Merchandise Sales, or Food and Beverage Revenues, as
appropriate,using common sense application to specific sources of revenue
not specifically identified above.
(kk) "Golf Course Play Revenues"shall mean all gross income,revenues and
consideration, of whatever form or nature, received by or paid to Lessee, its
agents or employees,from any and all sources attributable to the operation,
leasing, licensing and occupancy of the Golf Course, determined on a cash
basis,for:
(i) green fees,
(ii) tournaments,
(iii) group outings,
(iv) season passes,
(v) similar charges for the right to play golf on or otherwise use the Golf
Course, and
(vi) proceeds of business interruption or similar insurance payable in
connection with any loss of revenues described in this
Subparagraph (kk).
In no event shall "Golf Course Play Revenues" include any income,
revenue or other consideration arising from Golf Course Ancillary Revenues,
Merchandise Sales and Food and Beverage Revenues.
(11) "Hazardous Substance" shall mean any substance, material or waste
which is regulated or governed by any Environmental Law, and includes,
without being limited to,
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(i) any substance,material or waste defined,used or listed as"hazardous
waste", "extremely hazardous waste", "restricted hazardous waste",
"hazardous substance", "hazardous material", "toxic substance" or
other similar or related term as defined, used or listed in any
Environmental Laws,
(ii) any asbestos or any substance containing asbestos,
(iii) any petroleum products stored in bulk or polychlorinated biphenyl,
(iv) any additional substances or materials which are now or hereafter
hazardous or toxic substances under any Environmental Laws relating
to the Golf Course, and
(v) as of any date of determination,any additional substances or materials
which are from and after the Effective Date incorporated in or added
to the definition of "hazardous substance" for purposes of any
Environmental Law.
(mm)"Irrigation Renovation Date" shall mean a date which is no later than
June 30, 2003.
(nn) "Irrigation Renovation Plan"shall mean a plan for the Irrigation System
Improvements.
(oo) "Irrigation System" shall mean the irrigation system located on the Golf
Course, including the on-site pump station (which on-site pump station
includes three pumps) and the off-site pump station (which off-site pump
station includes one pump)located near 4oth Avenue and Argent.
(pp) "Irrigation System Improvements"shall mean the improvements to the
Irrigation System contemplated by the Irrigation Renovation Plan.
(qq) "Late Charge"shall have the meaning set forth in Section 2.4-. hereof.
(rr) "Lease Year" shall mean, other than the initial Lease Year, any 12-month
period from January 1 to December 31 during the Lease Term;provided that
the initial Lease Year shall be the period beginning on the Commencement
Date and ending December 31,2001.To the extent any computation or other
provision hereof provides for an action to be taken on a Lease Year basis, an
appropriate proration or other adjustment shall be made, if the context
requires, in respect of the initial and final Lease Years to reflect that such
periods are less than full calendar year periods.
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(ss) "Lessee Default"shall have the meaning set forth in Section 17.2(a).
hereof.
(tt) "Lessee Representative" shall mean Mr. Jeffrey M. Silverstein or Mr.
Dave Flickwir, Mrs. Debbie Pedersen or another individual designated by
Lessee in writing to the City.
(uu) "Lessee's Environmental Covenant"shall have the meaning set forth in
Section 19.1. hereof.
(w) "Maintenance Equipment"shall have the meaning set forth in Section
im.i, hereof.
(ww) "Maintenance Standards"shall mean the maintenance standards set forth
on &hibit"E"attached hereto and by this reference incorporated herewith.
(xx) "Merchandise Sales" shall mean all gross income, revenues and
consideration, of whatever form or nature, received by or paid to Lessee,its
agents or employees,from any and all sources attributable to the operation,
leasing, licensing and occupancy of the Golf Course, determined on a cash
basis,from:
(i) retail and wholesale sales of merchandise and products (including,
without limitation, receipts from the pro shop now or hereafter
located at the Golf Course), and
(ii) proceeds of business interruption or similar insurance payable
in connection with any loss of revenues described in this
Subparagraph(xx).
In no event shall "Merchandise Sales" include any income, revenue or
other consideration arising from Golf Course Play Revenues, Golf Course
Ancillary Revenues and Food and Beverage Revenues.
(yy) "Permits" shall mean all certificates, permits, licenses, approvals and
franchises relating to the Renovation Improvements or any part thereof,
including,but not limited to,building permits and certificates of occupancy.
(zz) "Monthly Report"shall have the meaning set forth in Section 5.2.hereof.
(aaa) "Project Cost(s)" shall mean all costs of construction of the Renovation
Improvements including the following:
(i) the cost of all labor, materials, utilities, equipment (acquired or
rented) and similar items incorporated into or consumed in the
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construction and development of the Renovation Improvements, including
fees of contractors or materialmen;
(ii) expenses paid to outside architects, surveyors, consultants and
engineers in connection with the planning and construction of the
Renovation Improvements, and any utility work;
(iii) to the extent not included in fee and expense statements from
architects and engineers, costs of reproducing plans and
specifications;
(iv) all rents, office supplies, utilities and related expenses;
(v) all costs of Permits for the Renovation Improvements;
(vi) costs incurred in connection with the Temporary Facilities,including
the temporary construction of sewer and water lines;
(vii) a fair and reasonable charge for cost of capital based upon a
reasonable rate of interest,such rate to be set forth in the Renovation
Budget;
(viii) all reasonable third party expenses,incurred in connection with the
construction of the Renovation Improvements including:
(A)reasonable travel expenses of employees of Lessee or the City
incurred in the discharge of duties connected with the
construction of the Renovation Improvements and included in
the Renovation Budget;
(B)supplies of whatever nature contemplated by the Renovation
Budget;
(C)cost of water, power, and fuel directly related to construction;
(D)cost of telephone and telecopy service,data processing services,
telegrams,postage,blueprints,photographs,field office supplies,
stationery, and similar items;
(E)cost of surveys;
(F) sales, or other similar taxes based upon labor performed and
materials furnished;
(G)fees for Permits;
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(H) surety bond premiums;
(I) premiums on insurance directly related to construction;
(J) cost of discharging liens; and
(K)reasonable attorneys' fees and expenses growing out of the
performance of the construction of the Renovation
Improvements; and
(ix) such other fees and expenses as may be contemplated by the
Renovation Budget.
(bbb)"Pro-Shop"shall mean the existing building containing pro-shop facilities.
(ccc) "Optional Capital Improvements" shall mean the improvements to the
Golf Course or additions to the equipment used and maintained at the Golf
Course to be made by Lessee at its sole cost and expense identified in Exhibit
"G"attached hereto.
(ddd)"Optional Capital Improvement Amount" shall mean the amount
expended by Lessee in respect to the Optional Capital Improvements.
(eee) "Other Improvements" shall mean any and all improvements to the Real
Property other than the Buildings which may from time to time exist during
the Term of this Lease, including the Irrigation System, parking lots, septic
tanks and similar improvements.
(M) "Real Prol erty" shall mean the real property depicted on the sketch
attached as Exhibit"A"hereto and incorporated herein by this reference,on
property legally described on Exhibit"B"hereto and incorporated herein by
reference.
(ggg) "R cor "shall have the meaning set forth in Section 5.2. hereof.
(hhh)"loegulation(s)"shall mean any and all laws,ordinances,rules,regulations,
statutes, building and fire codes, zoning ordinances, restrictions, orders or
decrees,health and environmental laws and regulations and other matters of
all governmental authorities having jurisdiction over the Renovation
Improvements or the Golf Course.
(iii) "Renewal Option" shall mean a one-time right to renew the Term of this
Lease for an additional five (5)years in accordance with the provisions forth
in the Renewal Term Rider attached hereto and made a part hereof for all
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purposes.
(jjj) "Renovation Budget"shall mean a budget to cover the Project Costs for the
construction of the Renovation Improvements.
(kkk)"Renovation Election Date"shall mean February 1, 2ooi.
(111) "Renovation Improvements"shall mean the improvements contemplated
by the Renovation Plan.
(mmm) ",Kenovation Improvement Outside Completion Date"shall
mean,in the event that the City is responsible for the consturction of
the Renovation Improvements, December 31, 2ooi,to the extent of
a renovation as opposed to a replacement of the
Clubhouse/Restaurant, or April 1, 2oo2, to the extent of the
replacement of the Clubhouse/Restaurant and the Pro-Shop.
(nnn)"Renovation Plan"shall mean a plan for the renovation or replacement of
the Clubhouse/Restaurant which shall include:
(i) preliminary plans regarding the scope of the renovation or
replacement,
(ii) any interior or exterior modifications or improvements to the
Clubhouse/Restaurant to the extent of a renovation as opposed to
replacement,
(iii) a list of proposed furniture,fixtures and equipment, and
(iv) drawings as to location of improvements to the extent alteration of
existing structural components or drawings of the replacement
improvements.
(000)"Rent"shall mean the aggregate of the Annual Lease Payment,the Additional
Payment,the Annual Concession Fee, the Additional Concession Fee and the
Food & Beverage Concession Fee, together with any and all other sums due
and payable hereunder.
(ppp)"Rental Credit"shall have the meaning set forth in Section 2.2(n hereof.
(qqq)"Required Capital Improvements"shall mean those improvements to the
Golf Course to be constructed at Lessee's sole cost and expense identified in
Exhibit"F"attached hereto not later than the dates specified in Exhibit"F"
and to the reasonable satisfaction of the City.
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(rrr) "Required Capital Improvement Amount" shall be an amount to be
expended by Lessee in respect to the Required Capital Improvements which
shall be not more than the sum of$100,000.00.
(sss) "Revenues" shall mean the aggregate of Golf Course Play Revenues, Golf
Course Ancillary Revenues, Merchandise Sales and Food and Beverage
Revenues.
(ttt) "Superintendent"shall mean a full time,on-site golf course superintendent,
certified by the Golf Course Superintendents Association of America who has
at least three(3)years experience in maintenance of golf courses comparable
to the Golf Course, in the supervision of grounds maintenance activities.
(uuu)"Security Interests" shall have the meaning set forth in Section 20.14
hereof.
(vv) "Temporary Facilities"shall mean temporary facilities,improvements and
equipment to be used for the purpose of conducting limited Food and Beverage
Operations,until the Clubhouse Renovation Date.
(www) "Term"shall mean a period of ten (10)years.
(xxx) "Unamortized Capital Amount" shall mean the sum of the following:
0) The unamortized cost of the Required Capital Improvements, plus
(ii) The unamortized cost of the Additional Capital Improvements,plus
(111) The unamortized cost of that portion of the Optional Capital
Improvements which Lessee is unable to remove from the Golf
Course as of the early termination date of the Lease or which were
designed exclusively for use at and which shall remain at the Golf
Course.
The unamortized cost of the foregoing items shall be determined by using
straight line depreciation over the lesser of (A) the useful life of the Capital
Improvement in question,or(B)the Term hereof,assuming that the Renewal
Option has been exercised.
1.2 Inclusive Nature of Revenue DefinitiQns.The parties intend that all gross
income,revenues and consideration from the Golf Course not expressly excluded as
set forth in Section 1.3.below shall be included as Golf Course Play Revenues,Golf
Course Ancillary Revenues, Merchandise Sales, or Food and Beverage Revenues, as
appropriate, using common sense application to specific sources of revenue.
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1.3 Specific Exclusions to the Revenue Definitions. Golf Course Play
Revenues,Golf Course Ancillary Revenues,Merchandise Sales and Food and Beverage
Revenues shall exclude the following items:
(i) Federal, state or municipal taxes collected from the consumer
(regardless of whether the amount thereof is stated to the consumer
as a separate charge) and paid over periodically by Lessee to a
governmental agency accompanied by a tax return or statement as
required by law(provided that any leasehold excise tax shall not be
so excluded);
(ii) Charges attributable to goods which have been returned to Lessee or
deposits which are subject to refund, until such deposits have been
forfeited to Lessee;
(iii) Proceeds from the sale of assets which have been clearly identified
as being owned by Lessee (including the sale of Lessee's leasehold
estate hereunder, if such sale is otherwise permitted by the City);
(iv) Proceeds from insurance or insurable losses related to the Golf
Course, provided that all such proceeds shall be used to repair or
restore corresponding losses or destruction of the Golf Course,
including improvements,unless the City consents in writing to other
use of the proceeds;
(v) Additional sums or funds provided by Lessee or its partners on an
equity or loan basis; and
(vi) Customary and reasonable fees,salaries,bonuses and tips earned by
golf instructors, employees and agents as payment of, or services
rendered for, golf instruction, golf lessons and waiter and waitress
services at the Golf Course.
ARTICLE II
TERM; RENT; RENTAL CREDIT;
EXCISE TAXES; LATE CHARGE; BONDS
2.1 Term.
(a) Initial Term. For and in consideration of the Rent and faithful
performance by Lessee of the terms and conditions and the mutual covenants
hereof, the City hereby grants to Lessee the exclusive right to operate and
maintain the Golf Course for the Term commencing on the Commencement
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Date and ending on the Expiration Date.
(b) Delivery of Possession. If Lessor,for any reason whatsoever, cannot deliver
possession of the Golf Course to Lessee on the Commencement Date, Lessor
shall not be subject to any liability nor shall the validity of the Lease be
affected; provided, the Term of this Lease shall commence on the date
possession is actually tendered to Lessee;provided,further,that the Expiration
Date of the initial Term shall in all events occur on December 31, 2010.
(c) Remedies for Failure to Deliver Possession. In the event that
possession of the Golf Course is not delivered by the City to Lessee on or before
March 31, 2001, Lessee shall, at its option, have the right to terminate this
Lease by the delivery of written notice to the City of its election to terminate,
in which event neither party hereto shall have any further obligation
hereunder, one to the other. The foregoing option to terminate may be
exercised at any time commencing on April 1, 2001, and prior to the date the
City delivers possession of the Golf Course to Lessee.
(d) Option to Renew.Lessee is hereby granted the Renewal Option, subject to
the provisions forth in the Renewal Term Rider attached hereto and made a
part hereof for all purposes.
(e) Term. The word"Term"whenever used herein refers to the initial Term of
this Lease and any valid extension or renewal thereof.
2.2 Rent; Payment: Rental Credit. Lessee agrees to pay the City for the right,
license and privilege of leasing,operating and maintaining the Golf Course,food and
beverage concession, and other concessions,the following payments:
(a) Golf Course Annual Lease Payment.
0) Lessee agrees to pay an annual lease payment (the"Annual Lease
Payment") for each Lease Year in the amount of $150,000, pro-
rated for a partial Lease Year.
(ii) Lessee shall pay the Annual Lease Payment in equal monthly
installments of $12,500 on or before the 5' day of each calendar
month during the term of this lease, commencing on the 5`h day of
the first full month following the Commencement Date.
(b) Golf Course Additional Payment.
(i) In addition to the Annual Lease Payment,Lessee agrees to pay,on an
annual basis,the amount,if any,by which 17.5%of Golf Course Play
Revenues exceeds an amount equal to the Annual Lease Payment
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(the "Additional Payment").
(ii) Any Additional Payment shall be due and payable on January 31 of
each Lease Year of the Term of this Agreement, commencing on
January 31, 2002, for the Golf Course Play Revenues generated in
the prior Lease Year.
(c) Golf Course Concession Fee.
(i) Lessee agrees to pay, for the right to offer golf related merchandise
for sale,lessons and other golf related services,an annual concession
fee for each Lease Year in the amount of $75,000 (the "Annual
Concession Fee"), pro-rated for a partial Lease Year.
(ii) Lessee shall pay the Annual Concession Fee in equal monthly
installments of $6,250 on or before the 5' day of each calendar
month during the Term of this Lease, commencing on the 5'day of
the first full month following the Commencement Date.
(d) Golf Course Additional Concession Fee.
(i) In addition to the Annual Concession Fee, Lessee agrees to pay, on
an annual basis,the amount,if any,by which(a)20%of Golf Course
Ancillary Revenues, plus 6% of Merchandise Sales, exceeds (b) the
Annual Concession Fee(the"Additional Concession Fee").
(ii) Any Additional Concession Fee shall be due and payable on January
31 of each Lease Year of the Term of this Agreement,commencing on
January 31, 2002, for Golf Course Ancillary Revenues and
Merchandise Sales generated in the prior Lease Year.
(iii) Example: If during the Lease Year in question Golf Course
Ancillary Revenues are $415,0oo and Merchandise Sales are
$150,000, the Additional Concession Fee payable under this
Section 2.2(d)shall be $17,000, calculated as follows:
20%of Golf Course Ancillary Revenues $83,000
6%of Merchandise Sales 9,000
Subtotal $92,000
Less Golf Course Concession Fee ($7-5,000)
Additional Concession Fee $17,000
(e) Food&Beverage Concession Fee.
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(i) Lessee agrees to pay for the right to operate the Food and Beverage
Operations an annual food and beverage concession fee(the"Food
& Bevera a Concession Fee") in the amount of.
(A)6% of the Food and Beverage Revenues, commencing on the
Commencement Date,plus
(B)$10,00o per Lease Year, commencing with the Lease Year in
which the Clubhouse Renovation Date occurs, pro-rated for a
partial Lease Year.
(ii) The portion of the Food&Beverage Concession Fee attributable to
6%of the Food and Beverage Revenues for the prior calendar month
shall be due and payable on or before the 25" day of each calendar
month during the Term of the Lease,commencing on the 25th of the
second full month following the Commencement Date.
(iii) The remaining portion of the Food & Beverage Concession Fee
($10,000.0o per annum) shall be payable in equal monthly
installments of$833.00,payable on the 5th of each calendar month,
commencing on the 5' day of the first full month following the
Clubhouse Renovation Date.
(f) Rental Credit. In the event that the City elects to require Lessee to
construct the Renovation Improvements in accordance with the provisions of
Section 9.3.below,Lessee shall be entitled to a credit(the"Rental Credit")
against sums due in respect to the Annual Lease Payment, the Additional
Payment,the Annual Concession Fee,the Additional Concession Fee and the
Food and Beverage Concession Fee, until such time as the amount of the
Clubhouse Construction Cost Amount has been reduced to zero through any
combination of the Rental Credits contemplated by this Subparagraph (f),
the application of the Additional Capital Improvement Amount and/or the
application of funds from the Capital Reserve Account.
(g) Place of Payment. All required payments due and payable under this
Section 2.2. shall be directed to City Treasurer, 525 N. 3r'Avenue, Pasco,
Washington, 99301, or to such other place as the City may from time to time
designate.
(h) Partial Month Rental. To the extent that,during the Term,Rent is payable
for a partial month, the monthly.Annual Lease Payment,Annual Concession
Fee and Food&Beverage Fee shall be pro-rated based upon the actual number
of days in the month in question.
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2.3 Leasehold Excise Taxes.
(a) The City shall be responsible for and shall remit to the State of Washington
leasehold excise tax payable on the "taxable rent" due under this Lease in
accordance with Chapter 82.29A RCW with respect to:
(i) the Annual Concession Fee,
(ii) the Additional Concession Fee, and
(iii) payments made by Lessee with respect to (A) the Required Capital
Improvements, (B) the Additional Capital Improvements, and (C)
the Capital Replacement Amount.
(b) Lessee shall be responsible for and shall remit to the City (and the City shall
thereafter remit to the State of Washington) leasehold excise tax payable on
the "taxable rent" due under this Lease in accordance with Chapter 82.29A
RCW with respect to:
(i) the Annual Lease Payment,
(ii) the Additional Payment, and
(iii) the Food&Beverage Concession Fee.
2.4 Late Charge: Interest.
(a) Lessee hereby acknowledges that late payments of any sums due hereunder
will cause the City to incur costs not otherwise contemplated by this Lease.
Accordingly,if any payment due from Lessee is not received by the City within
five (5) Business Days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay the City a late charge (the
"Late Charge") equal to five percent(5%) of the overdue amount.
(b) The parties agree that the Late Charge represents a fair and reasonable
estimate of the costs the City will incur by reason of late payment by Lessee.
(c) Acceptance of the Late Charge by the City shall in no event constitute a waiver
of Lessee's default with respect to such overdue amount,nor prevent the City
from exercising any of the other rights and remedies granted hereunder.
(d) In addition to the Late Charge provided for in this Section 2.4,interest shall
accrue on Rent,or any other sums due hereunder,at the Default Rate from and
after the 6"Business Day following the date due until paid.
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2.5 Performance Bonds.
(a) Performance Bonds. On or before the Commencement Date,Lessee shall
deliver to the City Manager the Bonds in a form and executed by a surety
acceptable to the City.The Bonds shall secure the faithful performance of the
terms and conditions of this Agreement by the Lessee.
(b) Renewal of the Bonds. To the extent that the Bonds have a term shorter
than the Term of the Lease,Lessee shall from time to time renew or replace the
applicable Bond on or before thirty (3o) days prior to the expiry date of the
Bond in question.
(c) Reduction in Amount or Cancellation of the Bonds. The City Manager
may elect to reduce the amount of or cancel the requirement for the Bond(s)
during the course of this Agreement.
(d) Presentation of the Bonds for Payments. Subject to the provisions of
Section 17.3. hereof, if a Lessee Default shall occur with respect to any
covenant or condition of this Lease, including but not limited to the payment
of Rent or any other payment due under this Lease, the City may present the
Bonds for payment and apply all or any part thereof to the payment of any sum
in default or any other sum which the City may be required or may in its
reasonable discretion deem necessary to spend or incur by reason of a Lessee
Default. In such event, Lessee shall, within five (5) Business Days of written
demand therefor by the City, deposit with the City the amount so applied.
(e) Return of the Bonds. If Lessee shall have fully complied with all of the
covenants and conditions of this Lease, but not otherwise, the Bonds or
amount of the Bond proceeds (with interest) then held by the City shall be
returned or repaid to Lessee within thirty (3o) days after the expiration or
sooner termination of this Lease.
(f) Remedies. Subject to the provisions of Section 17.3. hereof, in the event
of the occurrence of a Lessee Default under this Lease,the City's right to retain
the Bond proceeds shall be deemed to be in addition to any and all other rights
and remedies at law or in equity available to the City.
(g) Protection of Proceeds of the Bonds,, To the extent that the City has
presented the Bonds for payment and has not expended all of the proceeds
thereof in respect to the payment of sums required to cure a Lessee Default
hereunder, the City shall be required to keep the unexpended balance of the
proceeds of the Bonds separate from its general funds and Lessee shall be
entitled to interest thereon at the rate the City receives from time to time from
the investment of the City's funds on a short term basis.
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ARTICLE III
UTILITIES;IRRIGATION WATER FEES
3.1 Utilities.
(a) Basic Utilities. Lessee agrees to pay for all utilities required for the
operation of the Golf Course as contemplated by this Agreement,including gas,
water, electricity, and telephone services and for trash collection.
(b) Lack of Liability for Failure to Deliver Utilities. The City shall not
be liable to Lessee in damages or otherwise:
0) if any utility shall become unavailable from any entity(including the
City) supplying or distributing such utility, or
(ii) for any interruption in any utility service (including, without
limitation,any heating,air-conditioning or sprinkler)caused by the
making of any necessary repairs or improvements or by any cause
beyond the City's reasonable control.
(c) Interrupti!Qn of Utilities; Unavailability of Utilities; Lessee's Right
to Terminate.
0) If any utility service used at the Golf Course shall be interrupted,for
which the City is responsible,the City shall use reasonable efforts to
restore such utility service as soon as reasonably possible.
(ii) In the event that (a) one or more of the utility services become
partially or totally permanently unavailable and (b) Lessee
determines, in good faith, that the unavailability of such utility
services to the Golf Course will cause a material adverse economic
impact on the operations of the Golf Course,in the ordinary course,
then in such event,Lessee shall have the right to terminate this Lease
upon ten(xo)days prior written notice,in which event neither party
hereto shall have any further obligations hereunder,one to the other,
other than Lessee's obligation to pay Rent on a current basis through
the date of termination.
3.2 Irrigation Water Fees.
(a) Annual Irrigation Water Fee; City's Responsibility. The City shall pay
the annual irrigation water fee assessed by the Franklin County Irrigation
District ("FCID") up to a maximum amount of Twelve Thousand Dollars
($12,000.00) in any Lease Year.
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(b) Lessee's Payment Responsibility. The Lessee shall be responsible to pay
any irrigation water fees imposed by FCID in excess of Twelve Thousand
Dollars ($12,000.00)in any Lease Year.
(c) Adjustment to City's Payment Responsibility. Following the initial five
(5) years of the Term of this Agreement the maximum amount of the City's
payment to FCID shall be adjusted by an amount equal to the percentage
increase in the Consumer Price Index(all items,US City Average,as published
by the Department of Labor Bureau of Labor Statistics)last published before
January 1,20o6 in relation to the Consumer Price Index last published before
January 1, 2001.
ARTICLE IV
REPLACEMENT AND RESERVE ACCOUNTS;
ANNUAL CAPITAL IMPROVEMENT BUDGET
4.1 Egpipment Replacement Account.
(a) Equipment Replacement Account. Beginning on the Commencement
Date,the City shall establish and maintain an equipment replacement account
(the"Equipment Replacement Account"),into which Lessee shall make
the payments identified in Exhibit"D"to be used solely for the purposes set
forth below.The Equipment Replacement Account shall be initially funded by
the City with the sum of $116,000.00. The payments to be made by Lessee
under this Subparagraph(a)are in addition to the payment of Rent and the
performance of the other obligations set forth herein.
(b) Book Entry Account. The Equipment Replacement Account may be a
book entry account on the City's records and commingled with other City
funds,but shall be exclusively available to fund the cost of replacement of the
Maintenance Equipment.
(c) Purpose of Equipmment Replacement Account. The purpose of the
Equipment Replacement Account is to establish a reserve to fund the costs of
replacing the Maintenance Equipment, as needed,and as further provided in
Section 134. below. Lessee and the City agree in good faith to adjust the
required deposits into the Equipment Replacement Account to reflect the
anticipated replacement cost of the Maintenance Equipment.
(d) Expiration of Tgrm. At the expiration or earlier termination of this
Lease, any funds remaining in the Equipment Replacement Account shall be
retained by the City.
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4.2 Capital Reserve Account.
(a) !anital Reserve Account. Commencing January 1,2003,the City shall
establish and maintain a capital reserve account (the "Capital Reserve
Account")to be used solely for the purposes set forth in this Section 4.2.
(b) Capital Replacement Amount. Commencing on January 1, 2003,
Lessee shall pay to the City and the City shall deposit into the Capital Reserve
Account on an annual basis(ie for each Lease Year) an amount(the "Capital
Replacement Amount") equal to the greater of:
(i) four percent (4%) of Golf Course Play Revenues, or
(ii) the surn of$20,000.00.
(c) Timing of Funding. Lessee shall fund the sums contemplated by
Subparagraph(b)(i) on a monthly basis.To the extent that the amounts so
funded into the Capital Reserve Account for any Lease Year do not equal the
sum of$2%000.00(pro-rated for a partial Lease Year),Lessee shall fund such
deficit into the Capital Reserve Account on or before January 31 of the
following Lease Year. The sums to be deposited by Lessee into the Capital
Reserve Account shall be in addition to the payment of Rent and the
performance of the other obligations set forth herein.
(d) Commencement of Lessee's Obligations. Lessee's obligation to fund the
full Capital Replacement Amount shall not begin until the Clubhouse
Renovation Date.Prior to the Clubhouse Renovation Date(a)Lessee shall only
be obligated to fund fifty percent (5o%)of the Capital Replacement Amount,
and (b) the minimum funding amount contemplated by Subparagraph
(b)(ii)shall be the sum of$10,000.00.
(e) Book Entry Account. The Capital Reserve Account may be a book entry
account on the City's records and commingled with other City funds,but shall
be exclusively available to fund the amounts contemplated by Subparagraph
(f)below.
(f) Use of Funds. Funds in the Capital Reserve Account shall be used and
applied as follows:
(i) From and after January 1, 2003, two percent (2%) of Golf Course
Play Revenues (being one hundred percent (loo%) of the Capital
Reserve Amount until the Clubhouse Renovation Date) shall be
applied to the cost of Capital Improvements to the Golf Course, as
required by the then applicable Capital Improvement Budget or as
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otherwise mutually determined by Lessee and the City. From and
after the Clubhouse Renovation Date,the application of the Capital
Reserve Amount may include (A) the renovation or replacement of
the Irrigation System, or (B) the reduction of the Clubhouse
Construction Cost Amount.
(ii) Lessee and the City agree to cooperate in good faith to identify and
agree upon Capital Improvements to the Golf Course, with the
intention of allocating the applicable portion of the Capital Reserve
Account to Capital Improvements that will have a long term
beneficial impact on the quality and success of the Golf Course.
(iii) From and after the Clubhouse Renovation Date,fifty percent(go%)
of the Capital Reserve Account(two percent(2%)of Golf Course Play
Revenues) shall be utilized, as directed by the City, in the payment
of:
(A)costs associated with the renovation and/or replacement of the
Irrigation System, or
(B)costs associated with the renovation of the
Clubhouse/Restaurant in reduction of the Clubhouse
Construction Cost Amount.
(iv) From and after the date the Clubhouse Construction Cost Amount
has been reimbursed in its entirety, and the costs of the Irrigation
System have been reimbursed in their entirety,one hundred percent
(loo%)of the Capital Reserve Amount shall be applied to the cost of
Capital Improvements.
(g) Payments by Lessee. The City may require funds deposited in respect to
the Capital Reserve Amount to be applied directly by Lessee(in lieu of placing
funds into the Capital Reserve Account)to accomplish all or a portion of:
(i) the renovation or replacement of the Irrigation System, or
(ii) the installation of Capital Improvements, or
(iii) the reimbursement of the Clubhouse Construction Cost Amount.
(h) Lessee's Expenditures. Additionally, to the extent that Lessee expends
sums in respect to Capital Improvements, as contemplated by the Capital
Improvement Budget or otherwise approved by the City,it shall either receive
a credit against amounts required to be funded in respect to the Capital
Replacement Amount or it shall be entitled to reimbursement from the Capital
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Reserve Account.
(i) Expiration of Term. At the expiration or earlier termination of this
Lease, any funds remaining in the Capital Reserve Account shall be retained
by the City.
4.3 Annual Capital Improvement Budget.
(a) Submission of Budget. No later than forty-five (45) days prior to the
commencement of each Lease Year, commencing with the Lease Year
beginning January 1,2002,Lessee shall submit to the City a proposed Capital
Improvement Budget for the Golf Course for such Lease Year.
(b) QWs Approval of Budget. Within thirty(3o) days after the proposed
Capital Improvement Budget is so submitted to the City, the City shall
endeavor to approve such proposed Capital Improvement Budget or notify
Lessee of any proposed revisions therein that the City deems reasonably
necessary.
(c) Failure to Approve. In the event the City fails to approve the proposed
Capital Improvement Budget or make proposed revisions to the proposed
Capital Improvement Budget within thirty(3o)days after it is submitted to the
City by Lessee, such proposed Capital Improvement Budget shall be deemed
to be disapproved; provided, however,that the City shall respond in a timely
manner to insure that a final Capital Improvement Budget may be prepared
prior to the commencement of each Lease Year.
(d) Final Approval oil:Capital Improvement Budget. If the City
approves the proposed Capital Improvement Budget,or Lessee does not make
reasonable objections to such proposed revisions within ten (xo) days after
receipt of any proposed revisions to the proposed Capital Improvement
Budget, then such proposed Capital Improvement Budget and proposed
revisions shall be deemed thereafter to constitute the "Capital
Improvement Budget" for the Lease Year in question for all purposes
hereof.
(e) Budget Approval Process; Cooperation. In the event Lessee timely
makes any reasonable objection to any proposed revisions to the proposed
Capital Improvement Budget, the City and Lessee shall cooperate with each
other to resolve any questions with respect to such proposed revisions to the
proposed Capital Improvement Budget and shall use their best efforts to agree
upon an approved Capital Improvement Budget for the Golf Course for the
Lease Year in question prior to the beginning of the Lease Year to which such
Capital Improvement Budget relates.
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(f) Operation Pending Approval of Budget. In the event the City fail to
agree upon an Capital Improvement Budget for any Lease Year prior to the
commencement thereof,Lessee shall continue to manage,maintain,supervise,
direct, and operate the Golf Course in accordance with the Capital
Improvement Budget for the previous Lease Year until a new Capital
Improvement Budget is approved.
(g) Resolution of Disputes. To the extent that Lessee and the City are
ultimately unable to agree upon a proposed Capital Improvement Budget after
using good faith efforts to do so, either the City or Lessee shall be entitled to
submit the disputed matters to the submitted to Dispute Resolution
Procedures contemplated by Sect�iZ.4. hereof. In submitting proposed
expenditures and in approving or disapproving of proposed expenditures,the
parties shall use reasonable efforts to make decisions based upon the purpose
of maintaining and keeping the Golf Course in good working order and
attractive and functional to meet the reasonable needs and desires of the
public.
(h) Bud2et.Amendment. Lessee shall have the right from time to time during
each Lease Year to submit revised budgets and amendments to the Capital
Improvement Budget to the City for approval. 'Me City shall endeavor
promptly to reject or to approve the same or make such revisions thereto as the
City may deem reasonably necessary and proper.Once approved or so revised,
such revised budgets and amendments shall be incorporated and become part
of the Capital Improvement Budget for the remaining portion of the Lease Year
in question.
(i) Decisions of City Representative. All decisions to be made by the City
with respect to the Capital Improvement Budget shall be made by the City
Representative,
ARTICLE V
ACCOUNTING, REPORTS RECORDS
5.1 Accounting Method. Lessee shall maintain a cash method of accounting in
accordance with sound accounting principles which accurately reflects the Revenues
of Lessee in connection with the operation of the Golf Course.
5.2 Maintenance of Records:Monthly Reports. Lessee shall maintain accurate
and complete records (the "Records") showing the all receipts from all sources of
Revenue from the operation of the Golf Course and shall deliver to the City an
itemized report (the "Monthly Report") of all Revenues monthly, subject to the
following:
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(a) The record keeping for the operation of the Golf Course shall be maintained
separately from the records used for any other business operated by the Lessee.
(b) The Monthly Report shall include abreakdown of the number of rounds of golf
played,by category and month, and shall separately itemize Golf Course Play
Revenues, Golf Course Ancillary Revenues, Merchandise Sales and Food and
Beverage Revenues.
(c) The Monthly Report shall be submitted on or before the 2oth day of each month
for the preceding month in a form reasonably acceptable to the City,
commencing on the loth day of the second full month following the
Commencement Date.The Monthly Report shall be accompanied by a copy of
the Lessee's monthly or quarterly B & O Tax Report filed with the State of
Washington Department of Revenue.
5.3 Records.
(a) Inspection of Records. The City or its authorized auditors and
representatives shall have access to and the right to audit and reproduce any
of the Records related to the generation of Revenues to the extent the City
deems necessary to insure the City is receiving all moneys to which the City is
entitled under this Agreement or for other purposes relating to this Agreement.
(b) Preservation of Records. Lessee shall maintain and preserve all the
Records for at least three (3) years after termination of this Agreement. If
Lessee fails to make the Records available within the city limits of the City or
at a mutually agreed upon place,Lessee shall promptly reimburse the City for
all reasonable costs incurred in conducting the inspection at another location,
including but not limited to expenses for personnel,salaries,private auditors,
travel, lodging , meals and overhead.
ARTICLE VI
DESCRIPTION OF GOLF COURSE AND FACILITIES;
CONDITION OF THE GOLF COURSE; OWNERSHIP; NAME
6.1 Description of the Golf Course. The City agrees to provide Lessee with the
the Golf Course in the manner and for the purposes as herein provided.Lessee hereby
acknowledges that the term "Golf Course"shall not include the cart storage sheds
which are owned and managed by the City.
6.2 Acceptance ofthe Condition of the Golf Course. Except as expressly set
forth herein in respect to the Clubhouse/Restaurant and the Irrigation System,Lessee
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agrees to accept the Golf Course,including the Buildings and the Other Improvements
in an "as is" condition, without representation or warranty of any kind or nature
whatsoever.
6.3 Ownership of the Golf Course, Equipment and Improvements.
(a) During and after the Term of this Agreement, the City shall retain ownership
of the Golf Course and all Buildings and Other Improvements.
(b) For purposes of federal and state tax law,the City and Lessee agree that Lessee
shall be considered as"owner"of all equipment and improvements purchased,
improved and maintained by Lessee during the Term of this Agreement,to the
extent paid for by Lessee.
6.4 Name of Golf Course. Lessee agrees that the Golf Course shall bear the name of
"Sun Willows Golf Course."
ARTICLE VII
FEES
7.1 Standard For Fees. Fees charged to the public and referred to in this Article
VII shall be the"base i$-hole regular weekday and weekend rates and trail fees"(the
"Fees"herein). Any discounts or promotions offered by Lessee in respect to the Fees
may be offered in Lessee's reasonable discretion.
7.2 Initial Fee Structure. All Fees which Lessee charges to the public for the first
thirty-six (36) months of the Term of this Lease have been initially established, in
concert with the City, based upon the fee structure currently in place at the
Comparable Facilities. Fees for the first 36 months of the Term of this Lease will be
as set forth in Exhibit "C" attached hereto, and may only be amended with the
consent of the City Representative.
7.3 Adjustment to Fees.
(a) Adjustment to Fees. At the beginning of the 37th month of the Term
hereof,and on January i of each subsequent Lease Year,Lessee shall establish
rates for Fees for such Lease Year based upon the structure contemplated by
this Article VII., subject to the prior approval of the City Representative,
which approval will not be unreasonably withheld,so long as the rate structure
complies with the provisions set forth herein,which rates so established in the
manner set forth herein shall remain constant throughout such Lease Year.
Subject to the limitations set forth in Subparagraph (b) below, at the
beginning of the 37th month of the Term hereof, Lessee may increase any Fee
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which it charges the public as provided in this Lease at such times as Lessee
deems appropriate.
(b) Limitations on Increases in Fees. Any increase i n the Fees
contemplated by Subparagraph (a)above shall not result in the Fees being
in excess of eighty-five percent(85%) of the average regular rates then being
charged at the Comparable Facilities, unless the consent of the City
Representative is obtained,which shall not be unreasonably withheld. When
adjustment to the Fees are established, they may be rounded upward to the
nearest one-half dollar.
(c) Special Programs. Lessee shall not discontinue programs such as
Senior Discounts,Senior Passes,Junior Discounts,Season Passes and similar
programs benefitting the public which have been historically maintained at the
Golf Course without the prior consent of the City,which consent shall not be
unreasonably withheld so long as such programs have been discontinued at
one (1) or more of the Comparable Facilities or the maintenance of such
programs is no longer economically viable for the operation of the Golf Course.
To the extent that Lessee desires to increase the fees or charges relating to such
programs, such increases shall be determined and governed in the same
manner as applicable to the Fees under Subparagraphs (a)and(b)above.
7.4 Charges For Cart Rental. Golf cart rental fees shall be charged based upon
market rental charges and other factors such as the cost thereof and a reasonable
return of and on investments in golf carts or the leasing thereof.
ARTICLE VIII
OLD COURSE; RELEASE OF PORTIONS OF THE REAL PROPERTY;
SALE OF THE GOLF COURSE; RESIDENTIAL SUFFER ZONES;
RESIDENTIAL DEVELOPMENT
8.1 Old Course. Lessee shall maintain that portion of real property adjacent to the
Golf Course commonly referred to as"the old course"and as further illustrated in
Exhibit "A" in accordance with the Maintenance Standards set forth herein and
shall be entitled to use "the old course"at no additional charge.
8.2 Sale of Portions of the Real Property,
(a) Stele of the Old Corse. The City reserves the right to sell or otherwise
transfer all or any part of "the old course"and any other portions of area
described on Exhibit"A"not currently developed as a golf course at anytime
for any use,without otherwise affecting the other provisions of this Agreement,
so long as the sale of such adjacent land does not negatively impact the
operation of the Golf Course in any material manner.
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(b) CiWs Right of Early Termination. In recognition of the potential
opportunities for the City to sell or otherwise transfer all or substantially all of
the Real Property involved in this Lease, Lessee agrees that the City reserves
the expressed right to terminate this Agreement effective December 31 of any
Lease Year provided that:
(i) The City gives written notice of such termination at least ninety(go)
calendar days prior to such termination date,
(ii) The City has entered into a bona fide binding agreement for the sale
or other transfer of all or substantially all of the Golf Course in a
transaction that makes continued operation of the Golf Course as
contemplated by this Lease impractical; and
(iii) The City pays to Lessee the Unamortized Capital Amount.
8.3 Residential Buffer Zones. Lessee acknowledges that portions of the Golf
Course are adjacent to residential development.Provided the City installs,at the City's
sole cost and expense, all required irrigation facilities, Lessee agrees to plant grass
and to maintain to"rough"standards,buffer zones between the adjacent residential
developments and the Golf Course.
8.4 Modification t4 Accommodate Residential Development. Lessee agrees to
cooperate in good faith and permit modifications to the Lease and the Golf Course to
the extent determined reasonably necessary by the City to facilitate development of
the remaining undeveloped residential subdivision adjacent to the Golf Course and
commonly known as the Villa of Sun Willows. Such modifications may include the
relocation of tee boxes, a reconfiguration of portions of the Golf Course, or similar
matters to accommodate such residential development. All costs and expenses of any
such modification shall be at the sole cost and expense of the City and/or the
residential developer. Following such modifications,the Lease shall apply to the Golf
Course, as so modified.
ARTICLE IX
CAPITAL IMPROVEMENTS
9.1 Lessee's Required C4pijal Imvrovements. Lessee agrees to make the
Required Capital Improvements to the Golf Course at its sole cost and expense not
later than the dates specified in Exhibit"F"and to the reasonable satisfaction of the
City. Lessee shall not be required to expend sums in excess of the Required Capital
Improvement Amount in respect to the Required Capital Improvements.
9.2 Lessee's Optional Improvements. Lessee may, in Lessee's sole discretion,
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make the Optional Capital Improvements at its sole cost at such cost and within such
time parameters as Lessee may reasonably determine.
9.3 The Clubhouse/Restaurant- Renovation or Replacement.
(a) Clubhouse/Restaurant. The City and Lessee recognize that the
Clubhouse/Restaurant is in need of renovation and modification and that the
condition of the Clubhouse/Restaurant does not satisfy Lessee's requirements
for the operation of the Food&Beverage Operation.
(b) City's Election to Renovate or Replace.
0) On or before the Renovation Election Date, the City shall made an
election in writing and deliver same to Lessee as to whether or not it
desires to renovate or replace the Clubhouse/Restaurant.
(iii) In the event the City elects to replace the Clubhouse/Restaurant,the
construction of new facilities shall include the demolition of the
existing Pro-Shop and the inclusion of facilities for a pro-shop in the
building which is constructed in place of the Clubhouse/Restaurant.
(iii) The election by the City to replace the Clubhouse/Restaurant and
the Pro-Shop shall be deemed to be an election by the City to also be
responsible for the construction thereof and the payment and
funding of construction costs (from sources including the Capital
Improvement Amount and the Capital Replacement Account).
(iv) In no event shall Lessee be required to make any improvements to
the Pro-Shop as part of the Required Capital Improvements prior to
the City Construction Election and then only in the event the City
elects to have the Clubhouse/Restaurant renovated and not replaced.
(c) Preparation of the Renovation Plans and Renovation Budget.
G) As soon after the Renovation Election Date as may be reasonable
practical the City and Lessee shall do the following:
(A)Develop the Renovation Plan for the Renovation Improvements;
and
(B)Prepare and develop the Renovation Budget.
(ii) The City and Lessee shall use all reasonable efforts to complete the
Renovation Plan and the Renovation Budget on or before February
28, 2001.
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(d) The Renovation Improvements shall include the furnishing of such equipment
as may be reasonably necessary to operate the Food and Beverage Operations
to meet the reasonable requirements for the operation of the Golf Course and
serving the public in the ordinary course of business in a manner jointly
contemplated by Lessee and the City,taking into consideration the nature of
the Golf Course, its quality and the public nature of its operations.
(e) City Construction Election. Within fifteen (15) days following
completion of the Renovation Plan and the Renovation Budget,the City shall
make the City Construction Election. The City shall deliver to Lessee written
evidence if its election within the fifteen(15)day period.To the extent that the
City has elected to have the Restaurant/Clubhouse and Pro-Shop replaced,the
City Construction Election shall be deemed to be an election by the City to be
responsible for the construction of the new facilities and the payment of the
cost thereof.
(f) Development and Construction of the Renovation Improvements.
(X) In the event that the City elects to be responsible for the construction
of and the payment of the cost of the Renovation Improvements:
(A)The City shall proceed with all reasonable diligence to
commence and complete construction of the Renovation Work
as quickly as reasonable possible, subject to compliance with
applicable Regulations;
(S)Construction of the Renovation Improvements,to the extent that
the Clubhouse/Restaurant is to be renovated and not replaced,
shall in all events commence no later than forty-five (45) days
following the date the City makes the City Construction Election
or such additional period of time which may be reasonably
necessary for the City to complete the public bidding process;
(C)To the extent that the Clubhouse/Restaurant and Pro-Shop are
to be replaced,construction shall commence within ninety(go)
days following the date of the City Construction Election is
made; and
(D)The City shall cause the Renovation Improvements to be
completed, at its sole cost and expense, no later than the
Renovation Improvement Outside Completion Date.
(id) In the event that the City makes the City Construction Election,
electing to construct the Renovation Improvements itself,and in the
event the Clubhouse Renovation Date has not occurred on or before
the Renovation Improvement Outside Completion Date, subject to
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delays beyond the City's reasonable control:
(A)Lessee shall have-the right to terminate this Agreement at any
time thereafter until the Clubhouse Renovation Date actually
occurs upon delivery of written notice to the City of its election
to terminate this Lease.
(B)The effective date of such termination shall be sixty (6o) days
following the date such notice is delivered to the City,unless the
Clubhouse Renovation Date occurs prior to the expiration of
such sixty(6o) day period.
(C)In the event of such termination,the City shall pay to Lessee the
Unamortized Capital Amount.
(g) Lessee's Responsibilities With Regard to the Renovation
Improvements.
(i) In the event the City elects to require Lessee to construct the
Renovation Improvements, Lessee shall supervise, manage, and
direct all activities necessary to develop,construct,install,and equip
the Renovation Improvements pursuant to the Contract
Documentation and the terms set forth herein. Lessee shall have the
discretion and authority to perform,on behalf of the City, such acts
deemed necessary or desirable for the construction and development
of the Renovation Improvements consistent with this Agreement,the
Renovation Budget, the Regulations, the Contract Documentation
and the restrictions, approval requirements, conditions and terms
recited herein.
(ii) In the event that Lessee is responsible for the construction of the
Renovation Improvements,the following provisions shall apply:
(A)Permits. Lessee shall secure all requisite Permits required by
applicable governmental authorities to construct the Renovation
Improvements.
(B)Standard of Care. In regard to the construction of the
Renovation Improvements,Lessee shall act in good faith and in
a manner that Lessee reasonably believes to be in the best
interest of the City, and shall conduct the development,
construction, equipping and installation of Renovation
Improvements using the standard of care of a prudent
development manager.
(C)Construction Contracts. Lessee shall prepare,or cause to be
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prepared, recommendations concerning potential contractors
who shall be qualified to perform all or any portion of the work
for the Renovation Improvements, including the estimated
economic costs of each proposal. Based on a review of the
alternative proposals,bids and estimates and the City's approval
of the specific proposals to be pursued, Lessee shall work with
the prospective contractors to secure the services necessary for
development of the Renovation Improvements. Lessee and the
City shall approve the Contract Documentation to be executed
between Lessee and the Contractors. All contracting shall be in
compliance with applicable Regulations.
(D)Costs-of Construction. Lessee shall use its best efforts to
cause the Renovation Improvements to be completed within the
parameters of the Renovation Budget. The City recognizes that
the Renovation Budget will be a reasonable estimate of the
necessary costs to complete the construction of the Renovation
Improvements and that there will be no guaranteed cost
coverage for such construction.Any cost increases in the Project
Costs outside of the original scope of the work shall be incurred
only be pursuant to change orders approved by Lessee and the
City. Lessee shall (a) fund the Clubhouse Construction Cost
Amount and(b)shall be reimbursed for the aggregate Clubhouse
Construction Cost Amount by way of Rental Credits as
contemplated herein and at the City's election,from application
of the Additional Capital Improvement Amount and the Capital
Reserve Account.
(h) Interim Food and Severjlge Operations; Temporary Fa- lities.
(i) As soon as the City furnishes the Clubhouse/Restaurant with
sufficient equipment and furnishings to operate Food and Beverage
Operations and Lessee is able to secure necessary licenses with which
to operate the Food and Beverage Operations, Lessee shall use
reasonable efforts to use the existing facilities to provide a minimum
level of food and beverage service until the Clubhouse Renovation
Date.
(ii) From and after April 30, 20oi, during the construction of the
Renovation Improvements, so long as the Food and Beverage
Operations cannot be reasonably conducted in the existing facilities,
taking into consideration construction interference, noise and
disruption, Lessee shall have the right to rent and/or install the
Temporary Facilities for the purpose of conducting limited Food and
Beverage Operations until the Clubhouse Renovation Date.
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9.4 Irrigation ft stem.
(a) Preparation of the Irrigation Renovation Plan.The City and Lessee
recognize that the Irrigation System is in need of renovation, modification or
replacement. The City and Lessee shall, as soon as reasonably practical
following the Commencement Date, but no later than December 31, 2001,
conduct and complete a study,by themselves or using third party consultants,
which study shall make recommendations as to the improvements,
replacements,modifications or repairs required to bring the Irrigation System
in good working order and to provide reasonably adequate irrigation for the
Golf Course. Based upon the studies and reports the City and Lessee shall
prepare and approve the Irrigation Renovation Plan for the construction of the
Irrigation System Improvements.
(b) City's Responsibility for Completion of the Irrigation S stem
Improvements. The City shall use reasonable efforts to cause the Irrigation
System Improvements to be completed, at its sole cost and expense, no later
than the Irrigation Renovation Date.
(c) Maintenance of Irrigation System. To the extent that the Irrigation
System Improvements are not completed by the Irrigation Renovation Date,
the City shall be solely responsible for all maintenance and repair costs for the
wells and pumps constituting portions of the Irrigation System and fifty
percent (50%) of the maintenance and repair costs of the balance of the
Irrigation System throughout the Golf Course, until the date the Irrigation
System Improvements are completed.
(d) Rental Abatement. During the period in which the Irrigation System
Improvements are being constructed,to the extent that all or a portion of the
Golf Course must be shut down on a temporary basis to permit the completion
of the renovation,the Rent payable hereunder shall be abated on an equitable
basis taking into consideration the length of time of the shut down and
whether or not play is shut down in its entirety or interrupted or impaired in
a material manner. To the extent that a dispute arises as to the amount of
reasonable Rent abatement, such dispute shall be resolved by the Dispute
Resolution Procedures set forth in Section ma. hereof.
9.5 Additional Capital Improvement Amount. The City may, on or after
January 1, 20o2, require Lessee to, and Lessee agrees to, contribute the Additional
Capital Improvement Amount,which shall be used towards the costs of:
(i) payment of the costs of the renovation of the Clubhouse/Restaurant,
and/or
(ii) reimbursement of the Clubhouse Construction Cost Amount,and/or
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(iii) payment of the costs of the Irrigation System Improvements.
The City shall direct in writing to Lessee the manner in which-the Additional Capital
Improvement Amount is to be applied and paid.
ARTICLE X
GOLF COURSE USES; HOURS OF OPERATION;
CERTAIN RESTRICTIONS
1oa Golf Course Uses.
(a) Primary Use. Lessee shall maintain the Golf Course as a public 18 hole
golf course. The general public shall not be wholly or permanently excluded
from any portion of the Golf Course,except during non-business hours or for
scheduled tournaments.
(b) Reasonable Restrictions on Use. Lessee may develop reasonable
restrictions for the use of the Golf Course provided they are consistent with the
rights of the general public and are designed to allow Lessee to use the Golf
Course for the purposes specified herein.
(c) Limited.Right to Deny Permission to Use the Golf Course.
(i) Lessee shall be permitted to deny entry or permission to play to
anyone who refuses to conform to those reasonable rules and
regulations from time to time established by Lessee.
(ii) Lessee shall have the right to refuse admission and/or service to
persons who are drunk, disorderly, under the influence of drugs, or
who conduct themselves in a manner that could result in injury or
harm to persons or property on the Golf Course.
10.2 Hours of Operation.
(a) Days of Operation. The Golf Course and related facilities(including the
restaurant/food service facility) shall be open every day except Christmas.
(b) Closure for Weather. Lessee may close the Golf Course and related
facilities on any day weather does not reasonably permit play.
(c) Hours of Operation. Hours of operation shall be generally dawn to dusk,
subject to adjustment based upon the mutual approval of the City and Lessee.
If Lessee and the City cannot agree on adjustment to such hours,same shall be
set in accordance with the hours of operation followed by the Comparable
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Facilities.
(d) Hours of Food and Beverage Operation. Lessee shall have the right to
shut down Food and Beverage Operations at any time the Golf Course is closed
for play.
i0.3 Certain Restrictions on Use of Clubhouse. No other usage of the portions
of the Clubhouse/Restaurant designated for restaurant use shall be allowed unless
prior written consent is obtained from the City Representative,which shall be granted
or not granted at the absolute discretion of the City.
10.4 Restrictions on Operations of the Restaurant. Lessee may not sublet or
license the operation of the restaurant and Food and Beverage Operations without
prior written approval from the City Representative. Lessee shall not grant to any
third party the right to sell food and/or beverages at the Golf Course.
ARTICLE XI
REPRESENTATIVES;
COURSE MANAGER AND COURSE SUPERINTENDENT;
EMPLOYEE UNIFORMS. IDENTIFICATION AND QUALIFICATION.
mi Representatives of The Qty and Lessee.
(a) City Representative. The City Representative shall be the person
generally responsible for administering and monitoring this Agreement on
behalf of the City.
(b) L&gsee Representative.The Lessee Representative shall be the person
generally responsible for administering and monitoring this Agreement on
behalf of Lessee in respect to all material issues and decisions dealing with the
Golf Course or this Agreement.
11.2 Course Managemgnt Throughout the Term of this Lease, Lessee
shall provide competent management of the Golf Course to the reasonable satisfaction
of the City. For the purposes of this paragraph,"competent management"shall mean
demonstrated ability in the management and operation of a golf course, restaurant,
clubhouse, greens keeping and related activities in a manner consistent to those
standards adhered to at the Comparable Facilities.
11.3 Golf Course Manager. Lessee, at its cost, shall obtain the services of a full time,
on-site, competent Course Manager. The Course Manager shall be reasonably
available during normal working hours to meet with the City Representative. After
normal working hours,the Course Manager shall be reasonably available to appear
at the Golf Course if deemed necessary by the City Representative. The Course
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Manager shall not have the authority to act for Lessee on any matters relating to the
performance of services under this Agreement, other than day to day operational
matters. The Course Manager shall be the principal contact person with the City
Representative in respect to day to day operational issues.The personal and business
telephone number of the Course Manager shall be provided to the City Representative
at all times.
11.4 Golf Course Superintendent. Lessee, at its cost,shall also obtain the services of
a full time, on-site golf course Superintendent.
11.5 Replacement of Course Manager or Superintendent. The Course Manager
and the Superintendent, if terminated by Lessee, shall be replaced as soon as
reasonably practical following termination. Each person replacing the Course
Manager or the Superintendent shall satisfy the criteria for such Person set forth in
the definition of "Course Manager" and "Superintendent." Lessee agrees to
consult with the City in regard to the hiring of such replacement personal, however
Lessee shall have make the ultimate hiring decision,so long as the foregoing criteria
are satisfied.
11.6 Employee Uniforms,Identification and Qualifi_ cation. Lessee agrees to
the following in regard to its employees:
(i) Each of Lessee's employees on the Golf Course shall carry
appropriate identification. The identification system shall be
furnished at the Lessee's expense and shall include appropriate
attire, name badges and/or name plates.
(ii) Where required by law, the employees performing services under
this Agreement, shall possess the appropriate and currently valid
licenses or certificates.
(iii) Lessee's employees shall perform services in a courteous and
business-like fashion.
(iv) Lessee shall maintain an adequate and proper staff and shall
discharge any employee whose conduct or activity shall, in the
reasonable exercise of discretion,be deemed to be detrimental to the
interests of the public patronizing the Golf Course.
ARTICLE XII
SCOPE QF SERVICES AND OPERATION AND MAINTENANCE
12.1 Comparable Golf Course Operations. Lessee agrees to operate and maintain
the Golf Course and related facilities in accordance with the standards of maintenance
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and service provided for herein. The condition of the Golf Course and the operations,
maintenance and services provided by Lessee shall be consistent with prudent golf
course maintenance and management practices and at a minimum shall be
comparable to the standards followed at the Comparable Facilities.
12.2 Personnel; Services and Equipment. Lessee agrees to furnish the
personnel, material, supplies, equipment, tools, services, supervision and
administration necessary to:
(i) Operate the Golf Course and related facilities including but not
limited to collecting all fees(including fees for golf play and golf cart
usage), scheduling tournaments, arranging reservations, sending
golfers to the tee,starting golfers in proper intervals and renting golf
carts;
(ii) Provide maintenance services including but not limited to mowing,
edging, trimming, over seeding, fertilizing, aerating, sodding,
changing cups, servicing tees, top dressing, raising divets, raking
traps, spraying, spot irrigating, syringing and renovating turf and
other plantings,as well as providing weed,disease and pest control,
tree maintenance, maintenance of hazards (sand traps and lakes)
and the monitoring and maintaining of irrigation systems, in
conformance with the Maintenance Standards; and
(iii) Provide,subject to the provisions of Articles XIII and XIV below,
maintenance of Golf Course facilities such as restrooms,
maintenance yard, tool sheds, golf cart maintenance area and
maintenance of equipment.
(iv) Operate the Restaurant/Food and Beverage Operations in
conformance with applicable city ordinances and state and federal
laws;
(v) Display and maintain a professional shop inventory comparable to
the Comparable Facilities, which shall include golfing equipment,
supplies, shoes and apparel which shall be offered for sale to the
public and, in particular, to patrons of the Golf Course at prices
reasonable and comparable to prices being paid for equipment,
supplies, and apparel at the Comparable Facilities;
(vi) Furnish such personnel as may be required to marshal the play of
golfers without substantial delay; and
(vii) Set dress and conduct standards consistent with those imposed at
the Comparable Facilities.
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ARTICLE XIII
GOLF COURSE MAINTENANCE EQUIPMENT.
13.1 Maintenance Equipment. The property leased by Lessee hereunder in respect
to the Golf Course includes the golf course maintenance equipment (the
"Maintenance Equipment")listed in Exhibit"D"attached hereto. Subject to the
provisions set forth below regarding replacement of the Maintenance Equipment,
Lessee shall keep the Maintenance Equipment in good condition and repair,ordinary
wear and tear excepted.
13.2 Replacement of Maintenance Equipment. Lessee agrees to replace the
Maintenance Equipment generally in accordance with the replacement schedule set
forth in Exhibit "D", and may use the funds held or deposited in the Equipment
Replacement Account to do so,including the initial $116,000.00 funded by the City.
13.3 Early Replacement. In the event an item of Maintenance Equipment must be
replaced earlier than as scheduled pursuant to Exhibit"D",Lessee shall replace such
piece of Maintenance Equipment early,but shall have the right to be reimbursed for
the cost thereof from the Equipment Replacement Account as funds become available.
13.4 F iration of Term. At the expiration of the Term or earlier termination of the
Lease, the City shall be entitled to retain all Maintenance Equipment (including all
replacement Maintenance Equipment acquired pursuant hereto), in their then
existing condition, together with any funds then held on deposit in the Equipment
Replacement Account.
ARTICLE XIV
MAINTENANCE AND REPAIR OF BUILDINGS
AND OTHER IMPROVEMENTS
14.1 Acceptance of the BML1d ngs and Other Improvements. Except with
respect to the Clubhouse/Restaurant,the Irrigation System and the Restaurant/Food
and Beverage Operations,Lessee has examined the Golf Course and accepts the Golf
Course (including the Buildings and the Other Improvements) in its present
condition.
14.2 Maintenance of the Buildings.
(a) ssee',j R=gnsibilities. Lessee shall be responsible for the general
maintenance of the condition of the Buildings and for all repairs of the roof,
structure and heating and cooling systems of the Buildings costing less than
$1,000 per repair.
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(b) Guy's Responsibilities. The City shall be responsible for repairs of the roof,
structure,and heating and cooling systems of the Buildings costing$1,000.00
or more per repair,and are not the result of any actions,omissions,negligence
or lack of reasonable maintenance on part of the Lessee, or its employees.
14.3 Maintenance of the Other Improvements,including the Irrigation System.
(a) Maintenance of the Other Improvements. Lessee shall be
responsible for the general maintenance of the condition of the Other
Improvements, including the Irrigation System and for all repairs necessary
in connection therewith.All monitoring and maintenance obligations required
hereunder in respect to the Other Improvements shall be conducted in
conformance with the Maintenance Standards.
(b) Maintenance of the Irrigation System.
(i) Lessee shall repair and maintain in good condition, ordinary wear
and tear excepted,the Irrigation System, including pump stations,
and Lessee shall promptly document any revision or major repair of
the Irrigation System, including but not limited to pumps, values,
lines and heads, with as-built drawings and such documents shall be
timely filed with the City Representative.
(ii) Notwithstanding the foregoing,any repair or group of repairs to the
Irrigation System which costs or cost in excess of$500.00 per item
or$3,000.00 in the aggregate per Lease Year shall be considered as
a Capital Improvement and shall be funded from the Capital Reserve
Account.
(iii) To the extent that improvements to the Irrigation System
contemplated herein are not completed by Irrigation Renovation
Date, the City shall be responsible for a share of the maintenance
costs of the Irrigation System until the date the improvements in
question are completed in accordance with the provisions of Section
4.4(c)above.
(c) Maintenance of the Parking Lobs. Lessee shall keep the parking lots
swept and free of debris.The City shall be responsible for the construction of
and payment of the cost of any improvements to the parking lot of a capital
nature.
(d) Maintenance Building and Yard. The Maintenance Building and Yard
shall be delivered to Lessee by the City in a neat and orderly fashion and Lessee
shall maintain or keep such areas during the Term in a neat and orderly
fashion.
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(e) Roadways. Restrooms and Cart Paths.
(i) The maintenance roadways at khe Golf Course shall be delivered to
Lessee by the City graded and graveled as appropriate and Lessee
shall maintain or keep such roadways during the Term graded and
graveled as needed.
(ii) Restrooms on the Golf Course shall be cleaned daily and stocked
with paper products as necessary.
(iii) Cart paths shall be edged at least once during each Lease Year.Holes
existing in or occurring in the cart paths will be repaired within a
reasonable period of time following discovery.
14.4 Use of Ca$ital Reserve Accounts. Upon mutual approval of Lessee and the
City, portions of the Capital Reserve Account established pursuant to Section 4.2.
may be used for unexpected or material repairs to the Buildings and Other
Improvements at the Golf Course.
14.5 Alteration or Modification to the Buildings or Other Improvements.
Except as expressly authorized hereunder in respect to the Renovation Improvements,
Lessee shall not demolish, remove, alter, modify, replace or add to the Buildings or
Other Improvements on the Golf Course during the Term of this Lease Agreement
other than in connection with the removal of obsolete equipment or improvements
unless Lessee secures the prior written approval of the City,which approval may be
granted or withheld in the City's sole discretion. To obtain approval of any proposed
demolition,remodel,modification or alternation, Lessee shall submit detailed plans
and specifications of the proposed action to the City, together with a statement of
Lessee's reasons therefor. Any such approved demolition, removal, alteration,
modification, replacement or addition shall be commenced and completed in
accordance with all of the provisions of this Lease.
ARTICLE XV
LESSEE'S COVENANTS
15.1 Subcontracting. Lessee agrees to be responsible for the standards of performance
of any subcontractor engaged by it. Lessee agrees to assure that the work or services
performed by any such subcontractor shall satisfy the terms of this Agreement.
Lessee agrees that no subcontractor shall relieve Lessee of any obligation under this
Agreement. All subcontracts shall first be approved by the City. The City agrees not
to unreasonably withhold approval of any subcontract.
15.2 Security. Lessee agrees to provide reasonable security for and to safeguard all
City property under the care of and used by Lessee and to provide for the reasonable
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safety of the patrons while on the Golf Course.
15.3 Easements. Lessee shall recognize all existing easements on the Golf Course and
shall not obstruct their use. Lessee shall join in and consent to any amendments to
such existing easements (or new easements) as reasonably requested by the City.
15.4 Cross CountryMeet. Lessee agrees to honor the commitment of the City
to the Washington Interscholastic Activities Association to host the state cross country
championships at the Golf Course in 2001 and 2002.
15.5 Liens. Lessee shall keep the Golf Course free from any liens arising out of
any work performed, materials furnished or obligations incurred by Lessee and hold
the City harmless therefrom including all costs and attorney's fees.
15.6 Golf Instruction and Junior Golf Program. Lessee shall promote golf
instruction and a.junior Golf Program by providing, at a reduced charge,to the City
or participants therein group lessons,range balls,general golf instruction,actual play
and junior tournaments. Such programs shall be taught by Lessee's golf professionals
and publicity for same shall be coordinated through the City's Parks and Recreation
Department. Golf shall be taught only by qualified instructors.
15.7 Disorderly Persons. Lessee agrees to use reasonable efforts to promptly remove
from the Golf Course any unreasonably loud,boisterous or disorderly persons.
15.8 Illegal Activities. Lessee shall not knowingly permit any illegal activities to be
conducted upon the Golf Course.
15.9 Golf Clubs/Organizations. Lessee acknowledges that there is a benefit to the
operating of the Golf Course to have responsible golfing organizations. Without
granting any special privileges to any person or group, Lessee may encourage,create
and accommodate organizations,including withoutlimitation,senior citizens and any
general nondiscriminatory golf club organizations.
15.10 Patron Forms. Lessee agrees to supply and have readily available at all
times appropriate forms for patrons of the Golf Course to present their
comments, criticisms, commendations or complaints regarding Lessee's
operation and maintenance of the Golf Course. On a regular basis,Lessee shall
provide the City Representatives with copies of such forms returned to Lessee
by patrons.
15.11 Compliancy with Law-Non-Discrimination. Lessee shall conform to
and abide by all City and County ordinances, and all State and Federal laws
and regulations,insofar as the same are applicable and where permits and/or
licenses are required for the Golf Course operation, the same must be first
obtained from the regulatory agency having jurisdiction thereof. Lessee agrees
to keep the Golf Course equipped with all safety equipment reasonably
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required and otherwise required by law. Lessee shall comply with all laws
concerning alcoholic beverages, including licensing requirements. In such
regard,Lessee shall have the right to sell alcoholic beverages for consumption
during all hours of course operation,including the sale of alcoholic beverages
on the Golf Course from beverage carts and related facilities and from or in
club house facilities.
15.12 Responsibility for Taxes. Lessee shall be responsible for all fees,taxes
and charges which may be levied upon Lessee in relation to its performance of
services under this Agreement. This Section 15.12. does not apply to the
payment of leasehold excise tax, for which payment responsibility is
specifically provided for elsewhere in this Agreement. The City agrees that it
will not design or adopt any new tax specifically targeted to golf course
operations during the Term of this Agreement.
ARTICLE XVI
INSURANCE; DAMAGE BY FIRE, OTHER CASUALTY;
EMINENT DOMAIN.
16.1 Insurance.
(a) Lessee's Responsibilities. Lessee shall procure and maintain for the
duration of the Agreement,insurance against claims for injuries to persons or
damage to property which may arise from or in connection with the Lessee's
operation and use of the Golf Course.
(b) Minimum Scope of Insurance. Lessee shall obtain insurance of the types
described below:
0) Commercial General Liability. Commercial general liability
insurance shall be written on Insurance Services Office (ISO)
occurrence form CG o0 01 and shall cover premises and contractual
liability. The City shall be named as an insured on Lessee's
Commercial General Liability insurance policy using ISO Additional
Insured-Lessees or Lessors of Premises Form CG 20 11 or a
substitute endorsement providing equivalent coverage.
(ii) Liquor Liability Insurance. In the event Lessee offers alcoholic
beverages in or around the Golf Course, "Dram Shop" and/or
"Innkeeper's Liability"insurance against claims or liabilities arising
directly or indirectly to persons or property on account of the sale or
dispensing of beer, wine or other alcoholic beverages, with a
combined single limit coverage of $1,000,00o bodily injury and
property damage liability, or in greater amounts if required by law,
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in form and substance reasonably acceptable to the City,and naming
the City and its employees,officers and agents as additional insureds.
(iii) Property Insurance. Property insurance on Lessee's property
shall be written on an all risk basis.
(c) Minimum Amounts of Insurance. Lessee shall maintain the following
insurance limits:
(i) Commercial General Liability insurance shall be written with limits
no less than $i,000,000 each occurrence, $2,000,000 general
aggregate.
(ii) Property insurance shall be written covering the full value of Lessee's
property and improvements with no coinsurance provisions, loo
replacement value with no coinsurance penalty.
(d) Other Insurance Provisions. The insurance policies are to contain,or be
endorsed to contain,the following provisions for Commercial General Liability
insurance:
(i) The Lessee's insurance coverage shall be primary insurance with
respect the City. Any Insurance, self-insurance, or insurance pool
coverage maintained by the City shall be excess of the Lessee's
insurance and shall not contribute with it.
(ii) The Lessee's insurance shall be endorsed to state that coverage shall
not be cancelled by either party, except after thirty (30) days prior
written notice by certified mail, return receipt requested, has been
given to the City.
(e) Acceptability of Insurers. Insurance is to be placed with insurers with a
current A.M. Best rating of not less than A/VII.
(f) Verification of Coverage. Lessee shall furnish the City with original
certificates and a copy of the amendatory endorsements, including but not
necessarily limited to the additional insured endorsement, evidencing the
insurance requirements of the Lessee.
(g) Waiver of Subrogation. Lessee and the City hereby release and discharge
each other from all claims,losses and liabilities arising from or caused by any
hazard covered by property insurance required to be carried by this Lease or
actually carried by such parry. Each party shall obtain any special
endorsements,if required by its insurer,whereby the insurer waives its rights
of subrogation against the other party. This provision is intended to waive
fully,and for the benefit of the parties hereto,any rights and/or claims which
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might give rise to a right of subrogation in favor of any insurance carrier.
(h) The CiWs PronejU Insurance. The City shall purchase and maintain
during the term of the Lease all-risk property insurance covering the Buildings
for their full replacement value without any coinsurance provisions. Such
insurance may be included as part of a blanket insurance program maintained
by the City.
(i) Worker's Compensation. Lessee agrees that all persons furnishing services
to the City pursuant to this Agreement are, for purposes of workmen's
compensation liability, employees solely of Lessee and not employees of the
City. Lessee shall bear the sole responsibility and liability for furnishing
workmen's compensation benefits to any person for injuries arising form or
connected with services performed on behalf of Lessee pursuant to this
Agreement. Lessee agrees to provide and maintain workman's compensation
insurance in amounts required by state law.
(j) The QA5fs Right to Obtain. In the event the insurance required under this
Section 16.1.is not maintained,or if a default by Lessee occurs,the City shall
have the right (but not the obligation) to place and maintain the Insurance
required to be placed and maintained by Lessee hereunder. Lessee agrees,on
demand,to pay to the City the amounts expended therefor with interest at the
Default Rate from the time the City incurs said costs of insurance.In the event
Lessee fails to place and maintain the insurance required under Section
16j(W i),the City shall have the right(but not the obligation)to require the
immediate cessation of the sale of alcoholic beverages at the Golf Course.
16.2 Damage by Fire, other Casualty.
(a) Material Casualty. In the event of casualty to a material part of the
Golf Course,where:
(i) Lessee shall reasonably determine that the Golf Course in its entirety
cannot be effectively used or operated by Lessee(whether on account
of physical, economic, aesthetic or other reasons), or
(ii) the Buildings and Other Improvements cannot be appropriately
repaired with available insurance proceeds within one hundred
eighty(18o)days of such casualty to a substantial similar economic
function,
Lessee shall have the right to terminate this Lease in which event Lessee shall
forward a written notice to the City of such determination not more than sixty
(6o) days after the date of such damage.
(b) Insufficiency of Insurance Proceeds. To the extent of an occurrence
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of a casualty and to the extent that Lessee does not elect to terminate this
Lease as contemplated by Subparagraph (a) above, in the event that
proceeds of insurance are not sufficient to repair or restore the damage
resulting from the casualty in question, the City shall have the right to
terminate this Lease unless Lessee commits to pay the costs of repair or
restoration in excess of available insurance proceeds.
(c) Lessee's or the Gig's Right to Terminate.The term of this Lease shall
expire upon such date as Lessee shall specify in such notice contemplated by
Subparagraph (a)(H) above but not earlier than thirty (3o) days after the
date of such notice.Likewise,the term of this Lease shall expire upon such date
as the City shall specify in such notice contemplated by Subparagraph (b)
above but not earlier than thirty(3o)days after the date of such notice,unless
Lessee commits in writing to pay the costs of repair or renovation within
fifteen (15) days following the City's written notice.
(d) Abatement in Rent. If this Lease is not terminated as aforesaid, it shall
continue in full force and effect and the Rent shall be equitably reduced during
such reconstruction, unless the casualty was due to the negligence or
intentional misconduct of Lessee, in which event Rent shall not be abated.
(e) Limitation of Qtv's Liability. If this Lease is terminated as aforesaid, no
damages, compensation or claim shall be payable by the City for
inconvenience, loss of business or annoyance arising from any damage or
destruction to any portion of the Golf Course.
M Lessee's Acknowledgment. Lessee hereby acknowledges that the City
will not carry insurance of any kind on any improvements paid for by Lessee
or on Lessee's furniture,furnishings,fixtures,equipment or appurtenances of
Lessee under this Lease and the City shall not be obligated to repair any
damage thereto or replace the same.
(g) Lessee's Waiver. As a material inducement to the City entering into this
Lease,with respect to any destruction(including any destruction necessary in
order to make repairs required by declaration of any authorized public
authority) which the City makes or is obligated to make, Lessee hereby
irrevocably waives the provisions of any law, code, or ordinance permitting
Lessee to make repairs at the City's expense or to terminate this Lease in the
event of damage or destruction to Lessee's property.
(h) Availability of Insurance Proceeds. In the event of the occurrence
of a casualty and in the event neither the City or Lessee exercises its rights to
terminate this Lease as contemplated above, all insurance proceeds
maintained hereunder shall be made available for the purpose of paying the
costs of such repair or renovation,with any remaining proceeds to be paid to
the City.
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16.3 Eminent Domain.
(a) Taking of All of the Golf Course. If all of the Golf Course is taken by
eminent domain, this Lease shall automatically terminate as of the date title
vests in the condemning authority.
(b) Material Taking. In the event of a taking of a material part,but less than all,
of the Golf Course, where either the City or Lessee shall determine that the
remaining portions of the Golf Course cannot be economically and effectively
used by Lessee (whether on account of physical,economic,aesthetic or other
reasons) or where the City or Lessee determines the Golf Course should be
restored in such a way as to materially alter its use or functionality,either party
shall forward a written notice to the other party of such determination not
more than sixty(6o) days after the date of taking.
(c) Termination of the Lease. The Term of this Lease shall expire upon
such date as the City or Lessee shall specify in such notice but not earlier than
sixty(6o) days after the date of such notice.
(d) Partial Taking. In case of taking of a part of the Golf Course,or a portion
thereof not reasonably or substantially interfering with the continued use of
the Golf Course for its intended purposes,then this Lease shall continue in full
force and effect and the Rent shall be unchanged.
(e) Allocation of Damages.Except as expressly set forth herein, the City
reserves all rights to damages to the Golf Course for any partial,constructive,
or entire taking by eminent domain,and Lessee hereby assigns to the City any
right Lessee may have to such damages or award, and Lessee shall make no
claim against the City or the condemning authority for damages for
termination of the leasehold interest or interference with Lessee's business.
(f) Legsee's Right to Damages. Lessee shall have the right to recover from
a portion of the City's award an amount equal to the Unamortized Capital
Amount. Lessee shall also have the right,however,to claim and recover from
the condemning authority compensation for any loss to which Lessee may be
put for Lessee's moving expenses,business interruption or taking of Lessee's
personal property (not including Lessee's leasehold interest) provided that
such damages may be claimed only if they are awarded separately in the
eminent domain proceedings and not out of or as part of the damages
recoverable by the City.
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.ARTICLE XVII
INDEMNIFICATION/ HOLD HARMLESS; DEFAULT;
DISPU'T'E RESOLUTION
17.1 Indemnification.
(a) Lessee's Indemnity. Lessee hereby agrees that it will protect, indemnify,
hold harmless and defend the City from and against all liabilities,obligations,
claims, damages, penalties, causes of action, costs and expenses (including,
without limitation, reasonable attorney's fees and expenses), to the extent
permitted by law,by reason of:
(i) any accident, injury to or death of persons or loss of or damage to
property occurring on or about the golf course or the real property,
during the Term or while the Golf Course is in the possession or
control of Lessee;
(ii) any failure on the part of Lessee to pay,perform or comply with any
of the terms of this Lease; or
(iii) all liabilities arising from events between the commencement date
of this lease through the termination date hereof and which result in
a failure to comply with Lessee's Environmental Covenants.
(b) Lessee's Waiver of Certain Rights. Solely for the purpose of effectuating
Lessee's indemnification obligations under this Lease, and not for the benefit
of any third parties(including but not limited to employees of Lessee), Lessee
specifically and expressly waives any immunity that may be granted it under
applicable federal, state or local worker compensation acts, disability benefit
acts or other employee benefit acts. Furthermore, the indemnification
obligations under this Lease shall not be limited in any way by any limitation
on the amount or type of damages,compensation or benefits payable to or for
any third party under worker compensation acts, disability benefit acts or
other employee benefit acts. The parties acknowledge that the foregoing
provisions of this section have been specifically and mutually negotiated
between the parties.
(c) Exclusions From Lessee's Indemnity. Lessee shall be relieved from
the indemnity obligations set forth above to the extent that such liabilities,
obligations, claims, damages, penalties, causes or action, costs and expenses
or those imposed upon or incurred by or asserted against the City are the direct
result of(a)the City's negligence or willful misconduct or(b)the City's breach
of its obligations under this Lease.
(d) . City's Indemnity. The City hereby agrees that it will protect, indemnify,
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hold harmless and defend Lessee from and against all liabilities, obligations,
claims,damages,penalties,causes of action,costs and expenses imposed upon
or incurred by or asserted against any Lessee indemnified party as a result of:
0) all liabilities arising from the City's failure to perform the City's
Environmental Covenants.
(ii) the negligence or willful misconduct of the City; or
(iii) any failure on the part of the City to perform or comply with any of
the terms of this Lease.
(e) Exclusions From The QWs Indemnity. The City shall be relieved from
the indemnity obligations set forth above to the extent that such liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
or imposed upon or incurred by or asserted against a lessee indemnified party
are the direct result (a) Lessee's negligence or willful misconduct or (b)
Lessee's breach of its obligations under this Lease.
(f) Pa, ent of Sums Due. Any amounts that become payable by an
indemnifying party under this Section 17,1. shall be paid within thirty(30)
days after liability therefor on the part of the indemnifying party is determined
by litigation or otherwise, and if not timely paid, shall bear interest (to the
extent permitted by law) at the Default Rate from the date of such
determination to the date of payment. Any such amounts shall be reduced by
insurance proceeds received and any other recovery(net of costs)obtained by
the indemnified party.
(g) Defenses of Claims. An indemnifying party, upon request, shall, at its
sole expense, resist and defend any proceeding, claim or action, or cause the
same to be resisted and defended by counsel designated by the indemnified
party and approved by the indemnifying party; provided, however,that such
approval shall not be required in the case of defense by counsel designated by
any insurance company undertaking such defense pursuant to any applicable
policy of insurance.
(h) Parts'cipation in Defense of Claims. Each indemnified party shall have the
right to employ separate counsel in any such proceeding, claim or action and
to participate in the defense thereof,but the fees and expenses of such counsel
will be at the sole expense of such indemnified party unless a conflict of
interest prevents representation of such indemnified party by the counsel
selected by the indemnifying party and such separate counsel has been
approved by the indemnifying party.
(i) Settlement of Claims. The indemnifying party shall not be liable for any
settlement of any such proceeding,claim or action made without their consent,
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but if settled with the consent of the indemnifying parry, or if there be a final,
non-appealable judgment for an adversary parry in any such proceeding,claim
or action, the indemnifying party shall indemnify and hold harmless the
indemnified party from and against any liabilities incurred by such
indemnified party by reason of such settlement or judgment.
(j) Survival. Lessee's and the City's obligations under the provisions of this
Section V.i shall survive any termination of this Lease.
17.2 Default.
(a) Default By Lessee. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Lessee(a
"Lessee Default"):
(i) the abandonment of the Golf Course by Lessee or the vacating of the
Golf Course for more than thirty(30)consecutive days,other than as
a result of the damage or destruction of the Golf Course as a result of
fire or other casualty;
(ii) the failure by Lessee to make any payment of Rent or any other
payment required to be made by Lessee hereunder,and such failure
continues for more than ten (1o) days after written notice from the
City;
(iii) the failure by Lessee to observe or perform any of the other
covenants,conditions or provisions of the Lease,where such failure
shall continue for a period of thirty (3o) days after written notice
from the City; provided, however, if more than thirty(3o) days are
reasonably required for its cure then Lessee shall not be deemed to
be in default if Lessee commences such cure within said thirty(30)
day period and thereafter diligently prosecutes such cure to
completion;
(iv) the making by Lessee of any general assignment or general
arrangement for the benefit of creditors;
(v) the filing by or against Lessee of a petition to have Lessee adjudged
bankrupt or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed
against Lessee,the same is dismissed within sixty(6o) days);
(vi) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Golf Course or of
Lessee's interest in the Lease, where possession is not restored to
Lessee within thirty(30) days;
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(vii) Lessee is adjudged insolvent by any court or competent jurisdiction;
(viii) the attachment,execution or other judicial seizure of substantially all
of Lessee's assets located at the Golf Course or of Lessee's interest in
this Lease, where such seizure is not discharged within thirty (go)
days; or
(ix) the assignment or other transfer of all or any interest of Lessee in
this Lease,or the subletting of all or any portion of the Golf Course,
in either case which is in violation of Section 20.2. below.
(b) Affect of Notice and Cure Periods. All notice and cure periods set forth
above are in lieu of and not in addition to any notice required pursuant to
applicable unlawful detainer/eviction statutes.
(c) The C!Ws Remedies Upon Ussee Default. All rights and remedies
of the City herein enumerated shall be cumulative,and none shall exclude any
other right or remedy allowed by law or in equity,and all of the following may
be exercised with or without legal process as then may be provided or
permitted by the laws of the State of Washington:
(i) Upon any default under this Lease, the City may reenter the Golf
Course and remove or put out Lessee or any other persons found
therein. No such reentry shall be construed as an election on the
City's part to terminate this Lease unless a written notice of such
intention is given to Lessee.
(ii) The City may elect to re-let the Golf Course or any part thereof upon
such terms and conditions, including rent,term and remodeling or
renovation,as the City in its sole discretion may deem advisable. To
the fullest extent permitted by law,the proceeds of any reletting shall
be applied: first, to pay the City all costs and expenses of such
reletting(including without limitation,costs and expenses incurred
in retaking or repossessing the Golf Course, removing persons or
property therefrom,securing new Lessees,and,if the City maintains
and operates the Golf Course,the costs thereof); second,to pay any
indebtedness of Lessee to the City other than rent;third,to the rent
due and unpaid hereunder; and fourth, the residue, if any, shall be
held by the City and applied in payment of other or future obligations
of Lessee to the City as the same may become due and payable,and
Lessee shall not be entitled to receive any portion of such revenue.
(iii) The City may also elect to terminate the Lease and all rights of Lessee
by giving notice to Lessee of such election. If the City elects to
terminate the Lease,the City shall have the right to reenter the Golf
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Course and remove all persons,and to take possession of and remove
all equipment and fixtures of Lessee in the Golf Course. Lessee
hereby waives all damages that may be caused by the City's
reentering and taking possession of the Golf Course or removing or
storing the properly thereof,and Lessee shall save the City harmless
therefrom,and no such reentry shall be considered a forcible entry.
If the City so elects to terminate the Lease,the City may also recover
from Lessee:
(iv) The worth at the time of the award of the unpaid rent which had
been earned at the time of termination;
(v) The worth at the time of the award of the amount by which the
unpaid rent which would have been earned after termination until
the time of the award exceeds the amount of rental loss that the
Lessee proves could have been reasonably avoided;
(vi) The worth at the time of the award of the amount by which the
unpaid rent for the balance of the term after the time of the award
exceeds the amount of rental loss that the Lessee proves could be
reasonably avoided;
(vii) Any other amount necessary to compensate the City for all the
detriment proximately caused by the Lessee's failure to perform its
obligations under the Lease or which in the ordinary course of things
would be likely to result therefrom; and
(viii) At the City's election,such other amounts in addition to or in lieu of
the foregoing that may be permitted from time to time by applicable
law.
(ix) The "worth at the time of the award" of the amounts referred to in
paragraphs (1) and (2) above is computed by allowing interest at
twelve percent (12%). The "worth at the time of the award" of the
amount referred to in paragraph (3) above is computed by
discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of the award plus one percent
(1%).
(d) Indemnification Provisions Unaffected. Nothing in this Section 17.2.
shall be deemed to affect the City's right to indemnification for liability or
liabilities arising prior to termination of this Lease for personal injury or
property damage under the indemnification provisions or other provisions of
this Lease.
(e) Mitigation of Damages.Notwithstanding anything contained herein to the
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contrary,the City shall use reasonable efforts to mitigate its damages incurred
as a result of Lessee's default hereunder, as and to the extent required by
applicable Washington law.
17.8 Lessee's Right To Terminate. At anytime during the Term, commencing with the
sixth(6th)Lease Year,whether or not a Lessee Default has occurred,Lessee shall have
the right to terminate this Lease upon the satisfaction of the following conditions:
(i) Delivery of written notice to such effect to the City at least eight(8)
months prior to the proposed termination date, which shall take
place on the last day of the Lease Year in which the election is made;
(ii) All Rent then due through the date of termination is paid in full;and
(iii) Lessee has complied in all material respects to its obligations in
respect to the maintenance of the Golf Course in accordance with the
Maintenance Standards; and
(iv) Lessee has fully completed the Required Capital Improvement s and
fully funded the Additional Capital Improvement Amount.
In such event (A) the Bonds or the proceeds thereof then held by the City shall be
returned to Lessee, (B) the City shall have no obligation to fund the Unamortized
Capital Amount to Lessee, and (C) the parties thereafter shall have no further
obligation one to the other except for those obligations which expressly survive the
termination of this Lease.
17.4 Dispute Resolution Procedure.
(a) Disputes-Subject to Dispute Resolution Procedures. The purpose of
this Section 17.4.. is to provide a mechanism whereby the parties hereto can
resolve a bona fide dispute with respect to the following matters:
(i) the determination of the Fair Market Rental for any Renewal Term
as set forth in the Renewal Term Rider attached hereto;
(ii) the finalization of and approval of any Capital Improvement Budget;
(iii) the determination of whether or not Lessee is performing or in
compliance with the Maintenance Standards;
(iv) A determination of a reasonable amount of Rent abatement as
contemplated by the provisions of Section 16,2.(d.).
(v) A determination of Golf Course Play Revenues,Golf Course Ancillary
Revenues, Merchandise Sales and Food and Beverage Revenues;
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(vi) the determination of the Clubhouse Renovation Date, and matters
relating to the construction of the Renovation Improvements;
(vii) the determination of the adequacy of the repairs to the Irrigation
System; and
(viii) similar issues regarding the manner of operating and maintaining
the Golf Course and the Other Improvements.
Notwithstanding the foregoing, the Dispute Resolution Procedure shall not
apply to claims of a material default by a party under this Lease whereby the
party alleging the default asserts in good faith that,as a result of such default,
this Lease has terminated or the party desires to so terminate this Lease, in
accordance with the provisions hereof.
(b) Dioute Resolution Procedure.
(i) If the provisions of this Section x7,4. are instituted by a party
hereto,the City and Lessee shall immediately attempt to agree upon
an independent appraiser, accountant, golf course operator or
another person qualifiedto resolve the dispute in question,who shall
have at least ten (1o) years of real estate appraisal experience,
accounting experience or other experience in or for the management
and operation of golf courses similar to the Golf Course to make the
determination in question (such Person is hereinafter called a
"Decision Maker").
(ii) If the City and Lessee cannot agree upon a Decision Maker within ten
(1o) days after the initiation of this procedure,then:
(A)The party initiating this procedure (the "First Party") shall
notify the other party(the"Second Parr')and in such notice
shall designate the first Decision Maker. If the first Decision
Maker is acceptable to the Second Party,the Second Party shall
immediately so notify the First Party and the first Decision
Maker shall proceed to make the determination within fifteen
(15) days thereafter.
(B)If the first Decision Maker is not acceptable to the Second Party,
then within twenty (ao) days after receipt of the First Party's
notice,the Second Party shall designate, in a written notice,the
second Decision Maker. If the Second Party fails to timely
approve the first Decision maker or designate the second
Decision Maker,then the first Decision Maker shall proceed to
make the determination within fifteen (15) days thereafter.
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(C)If a second Decision Maker is designated, the first and second
Decision Makers shall meet within ten (1o) days after the
designation of the second Decision Maker,and proceed to make
the determination within fifteen(15) days thereafter.
(D)If the first and second Decision Makers are unable to reach a
decision within such fifteen (15) day period, they shall jointly
appoint a third Decision Maker who shall make an independent
evaluation of the analysis and the determinations made by the
first and second Decision Makers and who shall, within an
additional fifteen (15) day period, elect the analysis and
determination of the first two Decision Makers which, in the
opinion of such third Decision Maker, most closely adopts the
proper analysis.
(c) Final Decision. A decision of the Decision Maker or Decision Makers shall
be binding and conclusive on the parties hereto.
(d) Refusal to Act. If any Decision Maker shall fail,refuse,or become unable to
act, a new Decision Maker shall be appointed in his place following the same
method as was originally followed with respect to the Decision Maker to be
replaced.
(e) Decision Maker Fees. The City and Lessee shall pay the fees and expenses
of the Decision Maker appointed by them, and if only one Decision Maker is
used,or if a third Decision Maker is required,the fees and expenses of the sole
Decision Maker or the third Decision Maker, as applicable, and all other
Decision Making expenses shall be borne equally by the Party. All hearings
and proceedings held and all investigations and actions taken by the Decision
Makers shall take place in the City of Pasco,Washington.
(f) Independgnce. Any Decision Maker designated to serve in accordance
with the provisions of this Section i7..a.(f)shall be independent of the City,
Lessee or any of their respective affiliates.
ARTICLE XVIII
SURRENDER UPON LEASE TERMINATION.
18.1 Surrender of Golf Course. At the expiration of the Term of this Lease, or at the
earlier termination of this Lease, Lessee shall surrender the Golf Course in good
condition, reasonable wear and tear excepted.
18.2 Removal of Fixtures. Lessee may place any personal property or equipment in the
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Golf Course for use in connection with the business of Lessee, and the title of-said
personal property or equipment shall remain in Lessee regardless of whether or not
such property or equipment is attached to or made a part of the building or real
property covered by this Lease. Upon the expiration or sooner termination of this
Lease, Lessee shall have the right to remove any such property whether or not the
same is attached to the real property covered hereby, provided that upon any such
removal,the Golf Course hereby leased shall be replaced in as good condition as the
same now are, reasonable wear and tear excepted. Provided, further, except as
expressly set forth in Section 17.3. hereof in respect to Lessee's right to terminate
this Lease,that Lessee shall not have the right to remove any such personal property
or equipment if Lessee is in default in the payment of rentals due under this Lease or
if Lessee is in default if any of the terms and conditions of this Lease.
18.3 Rights of Lessee Upon Termination by the City. In the event that the City
exercises its right to terminate this Lease pursuant to Sections 8.2(b) or Lessee
exercises its right to terminate this Lease pursuant to Section 1g.2(b)the City shall
pay to Lessee the Unamortized Capital Amount.
.ARTICLE XIX
ENVIRONMENTAL MATTERS.
19a Lessee's Enyironm�ntal Covenants Regarding Operations- of the Golf
Course. Lessee hereby covenants and agrees with the City that it shall use
reasonable efforts not to do or permit,except for the use of fertilizer, pesticides and
gasoline products in the ordinary course of business in connection with the operation
of the Golf Course, to be used in commercial quantities similar to those quantities
usually used,released,kept or disposed of in the Comparable Facilities,and which are
used, released, kept or disposed of in compliance with applicable Environmental
Laws,any Environmental Activity to take place in,on or under the Golf Course,or to
be incorporated in the Golf Course.Additionally,Lessee hereby agrees to hold the City
harmless from and against any Environmental Liabilities arising from the acts of
Lessee during the Term of this Lease (the foregoing covenants herein called
"Lessee's Environmental Covenant").
19.2 The vir nme ve Re ar I rs P 'or
Operations.
(a) Cry's Obligations and Covenants. The City shall be responsible for any
and all liabilities arising from Environmental Activity at the Golf Course prior
to the Commencement Date,including but not limited to existing underground
or aboveground storage tanks, asbestos or other Hazardous Wastes.
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(b) Lessee's Right to Terminate.
(i) In the event that Hazardous Wastes existing on or at the Golf Course
as of the Commencement Date are found and in the event that as a
result of requirements to comply with Environmental Laws the City
is legally required to remove or remediate such Hazardous Wastes,
the City, at its election, may or may not, remove or remeidate such
Hazardous Wastes.
(ii) In the event, the City does not elect to remove or remediate such
Hazardous Waste, and such removal or remediation is be required
to permit Lessee to operate the Golf Course in the ordinary course
without undue interference or risk, economic or otherwise, Lessee
may terminate this Lease.
(iii) Notwithstanding anything contained herein to the contrary, the
City's right to elect not to remove or remediate Hazardous
Substances shall not apply to its obligations with respect to
underground storage tanks and any removal or remediation
obligation with respect thereto, if the City's failure to do so would
prevent Lessee from operation the Golf Course in the ordinary course
without undo interference or risk, economic or otherwise. In such
event such removal or remediation shall be conducted by the City at
its sole cost and expense within a reasonable period of time following
the determination that such removal or remediation is necessary or
required.
(c) City's Environmental Covenants. The City hereby agrees to hold Lessee
harmless from and against any Environmental Liabilities(a)existing in respect
to the Golf Course as of the Commencement Date,or(b) arising from the acts
of the City or its agents prior to or after the Commencement Date, or (c) the
existence of Hazardous Wastes at the Golf Course as of the Commencement
Date, or (c) the performance of the City's covenants set forth in
Subparagraph (b)(iii) above (the foregoing covenants herein called the
"QWs Environmental Covenants").
ARTICLE XX
MISCELLANEOUS
20.1 Independent Contractor Status. ThisAgreernent is not intended,and should
not be construed,to create a relationship of agent,servant, employee,joint venture,
or association,as between the City and Lessee. Lessee shall at all times be considered
an independent contractor under this Agreement.
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2o.2 Transfer.
(a) No Assignment, Subletting, Licensing or other Transfer.
(i) Neither this Lease nor any interest therein may be assigned,
mortgaged,transferred,hypothecated or encumbered by Lessee,nor
shall all or any part of the Golf Course be sublet or licensed(each of
which, a "Transfer"), without the City's prior consent, which may
be withheld in its sole discretion.
(ii) If Lessee is a corporation,partnership,limited liability company,or
any other entity, any transfer of a controlling ownership interest in
such entity or any transfer of this Lease by merger,consolidation or
liquidation shall be deemed a Transfer requiring the City's consent.
(iii) Transfers include,without limitation,one or more sales or transfers,
by operation of law or otherwise, or creation of new stock,by which
an aggregate of more than fifty percent (50%) of Lessee's stock, or
partnership or membership interests, as applicable, shall be vested
in a parry or parties who are non-stockholders or non-partners or
non-members, as applicable, as of the date hereof.
(b) Transfer by the City. If the City shall assign its interest under this Lease or
transfer its interest in the Golf Course, the City shall be relieved of any
obligation accruing hereunder after such assignment or transfer, and such
transferee shall thereafter be deemed to be the City hereunder.
20.3 Notice of Delaya. When either Lessee or the City has knowledge that any actual or
potential situation is delaying or threatens to delay the timely performance of this
Agreement, that party shall, within five (5) days, give notice thereof, including all
relevant information with respect thereto to the other party.
204 Severability. The invalidity in whole or in part of any provision of this Agreement
shall not void or affect the validity of any other provision.
20.5 Waiver. No waiver of a breach of any provision of this Agreement by either
Lessee or the City shall constitute a waiver of any other breach of the same provision
or any other provision of this Agreement. Failure of either the City or Lessee to
enforce at any time, or from time to time, any provision of this Agreement, shall not
be construed as a waiver of such provision or breach. The remedies herein reserved
shall be cumulative and additional to any other remedies in law or in equity.
20.6Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing and(a) hand delivered, including
delivery by courier service, (b) sent by facsimile, or(c) sent by certified mail, return
receipt requested, postage prepaid, addressed as shown below, or to such other
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address as the parry concerned may substitute by written notice to the other. If the
notice is sent by facsimile, it must be properly addressed, reflecting the facsimile
phone number of the addressee(s), and must be transmitted by a facsimile which
produces a dated message completed confirmation.Facsimile notices shall be deemed
received on the date of confirmed transmission if during normal business hours in
Pasco, Washington, otherwise on the next Business Day. All notices hand delivered
shall be deemed received on the date of delivery.All notices forwarded by mail shall
be deemed received on a date three (3) days (excluding Sundays and legal holidays
when the U.S.mail is not delivered)immediately following date of deposit in the U.S.
mail;provided,however,the return receipt indicating the date upon which all notices
were received shall be prima facie evidence that such notices were received on the
date on the return receipt. The addresses and addressees may be changed by giving
notice of such change in the manner provided herein for giving notice. Unless and
until such written notice is received, the last address and addressee given shall be
deemed to continue in effect for all purposes.Any notice to Lessee may be delivered
personally or by mail addressed to Mr.Dave Flickwir,c/o IRI Golf Management,L.P.,
16236 San Dieguito Road, Ste. 4-13, Rancho Santa Fe, CA 92067, Telephone: 858-
756-6333,Facsimile:858-756-6334,E-mail:golfsuds(&aol.com.Any notice to the City
may be delivered personally or by mail addressed to City Manager,City of Pasco,525
N. 3rd, P.O. Box 293,Pasco,Washington 99301,or such other place as the City may
designate in writing.
20.7&M nses of Enforcement. Lessee and the City agree to pay all reasonable
costs, attorney's fees (including the reasonable value of the services rendered by the
City Attorney) and expenses, including investigation fees, expert witness fees,to the
prevailing party in any dispute involving the terms and conditions or interpretation
or breach of this Agreement.
20.8 Successors and Assigns.. This Agreement shall be binding upon and inure to
the benefit of the heirs,executors,administrators,successors and assigns of the City
and, if permitted by the City hereunder, the successors and assigns of Lessee.
20.9 Time of Essence. Time is of the essence in regard to the performance of any of the
terms or conditions of this Agreement.
20.10 Governing Laws. This Agreement shall be construed, and the rights and
duties of the City and Lessee shall be determined, in accordance with and
governed by the laws of the State of Washington. Venue shall be in the
Franklin County Superior Court.
20.11 Entire Agreement. This Agreement constitutes the entire agreement
between the City and Lessee. It supersedes all prior communications,
agreements, contracts and promises, either oral or written, by the City and
Lessee. No modification of the terms of this Agreement shall be effective
unless agreed to in writing and signed by both the City and Lessee.
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20.12 Quiet Possession. The City covenants that, subject to the limitations,
covenants and conditions expressly set forth in this Lease, and, so long as
Lessee is not in default hereunder beyond applicable cure periods,Lessee may
quietly have,hold, and enjoy the Golf Course during the period commencing
on the Commencement Date hereof and ending upon the expiration or earlier
termination of this Lease, without hindrance or interruption by the City,
subject to the City's right to enter upon the Golf Course as provided herein.
20.13 The Ci . s Entrv.
(a) The City and any of its agents shall at any time upon reasonable notice to
Lessee have the right to go upon and inspect the Golf Course and
improvements erected or constructed, or in the course of being erected or
constructed,repaired, added to, rebuilt or restored thereon.
(b) The City shall have the right to serve or to post and to keep posted on the Golf
Course, or on any part thereof, any notice permitted by law or by this Lease,
any other notice or notices that may at any time be required or permitted by
law or by this Lease.
(c) The City shall not be liable in any manner for any inconvenience,disturbance,
loss of business, or other damages arising out of the City's entry on the Golf
Course as provided in this clause except for such damage that is caused directly
by, or through the negligence of, the City, their employees, agents, or
representatives.
20.14 Subordination. This Lease shall be subordinate to (a) any deed of trust,
mortgage or other security instrument now or in the future encumbering the
City's interest in the Golf Course, or any part thereof, (b) all obligations
secured thereby, and (c) all renewals, modifications, consolidations,
replacements and extensions thereof (collectively, "Security Interests"),
provided that the City first obtains the agreement of the holder of such Security
Interest that Lessee's rights under this Lease will not be abrogated by any
foreclosure or other remedy exercised by such holder against the City as long
as Lessee complies with all of its obligations under this Lease. Lessee's
obligation to subordinate this Lease to any future Security Interest is
conditioned on the agreement of the holder of such Security Interest that
Lessee's rights under this Lease will not be abrogated by any foreclosure or
other remedy exercised by such holder against the City as long as Lessee
complies with all of its obligations under this Lease.
20.15 Estoppel Certificates. Lessee shall, from time to time, upon written
request of the City,execute,acknowledge and deliver to the City or its designee
a written statement certifying that:
(a) this Lease is in full force and effect and has not been assigned or amended in
Page-6o-
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any way (or specifying the date and terms of agreement so affecting this
Lease);
(b) this Lease represents the entire agreement between the parties as to this
leasing;that all obligations under this Lease to be performed by the City have
been satisfied;
(c) on this date there are no existing claims, defenses or offsets which the Lessee
has against the enforcement of this Lease by the City;
(d) no Rent has been paid more than one month in advance; and that no security
has been deposited with the City(or, if so,the amount thereon; and
(e) such other items as the City shall reasonably request.
It is intended that any such statement delivered pursuant to this Section 20. i.may
be relied upon by a prospective purchaser of the City's interest or holder of any
mortgage upon the City's interest in the Golf Course. If Lessee shall fail to respond
within ten (xo) days of receipt by Lessee of a written request by the City as herein
provided, Lessee shall be deemed to have given such certificate as above provided
without modification and shall be deemed to have admitted the accuracy of any
information supplied by the City to a prospective purchaser or mortgagee and to have
certified that this Lease is in full force and effect,that there are no uncured defaults
in the City's performance,that the security deposit is as stated in the Lease,and that
not more than one month's rent has been paid in advance.
M Amg_ndmentto Lease;Material.Agreements. Any amendment to this
Lease shall be made in writing and only with the approval of Lessee, and
Lessee's Representative, and the City, and the City Representative. Any
decision or consent or approval of any material matter dealing with this Lease
or the Golf Course or its operations shall be made only by Lessee's
Representative and the City Representative and neither the Course Manager
or the Superintendent shall have the right or power to bind Lessee in any
material manner.
Page-61-
Dated this _day o£ X-ff- er, z� J
CITY OF PASCO:
ICHAEL L. ARRISON
Mayor
ATTEST: APPROVED AS TO FORM:
CATHERINE D. SEAMAN LELAND B. KERR
Deputy City Clerk City Attorney
STATE OF WASHINGTON )
ss.
County of Franklin )
I certify th,a�, I know or have satisfactory evidence that
is the person who appeared before me,and said person
acknowledged that sai " erson signed this instrument,on oath stated that said person was
authorized to execute the instrument and acknowledged it as the
of the City of Pasco, a Washington municipal
corporation,to be the free and voluntary act of such municipal corporation for the uses and
purposes mentioned in the instrument.
GIVEN under my hand and official seal this day of irk;2see:
NOTARY PUBLIC in afid f r the oN� L zUti
State of Washington,..r�s ing ���SS1
at:
My Commission Expires: �3Z3_0 NOTARy�
�AVBLIGk 2
Page-62-
LESSEE:
IRI SUNWILLOWS ACCOCIATES LLC,
a Delaware limited liability company
By: IRI GOLF MANAGEMENT, L.P.,
a Delaware limited liability company,
Its Manager
By: GolfMark Corporation,
a Delaware corporation,
Its General Partner
By:
Name: V Je rey M. Silverstein
Title: President
STATE OF I i J : )
ss. ,
County o ,� _ )
certif� that I know or have satisfactory evidence that
c � rs- is the person who appeared before me,and said person
acknowle ged that said person signed this instrument,on oath stated that said person was
authorized to execute the instrument and acknowledged it as the President of Golfmark
Corporation,a Delaware corporation,General Partner of IRI GOLF MANAGEMENT, L.P.,
a Delaware limited partnership, Manager of IRI SUNWILLOWS ASSOCIATES, LLC, a
Delaware limited liability company, to be the free and voluntary act of such corporation,
limited partnership and limited liability company for the uses and purposes mentioned in
the instrument.
GIVEN under my han official seal this day of December, 2000.
X P�U►�� Ci
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of residin g # 178
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Notary Public-CO idomiq
SanDl
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My Commission Expires: 4{-Z S-o Z- _. ' ,,rycsan 0,
C:\LJBdocs\SILVERSTEIN\SUN WILLOWS GOLF COURSE\LEASE AGREEMENT\LJB DRAFTS\LJB LEASE
AGREEMENT.12.22.00mpd
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SCHEDULE OF EXHIBITS:
Renewal Term Rider
Exhibit A - Sketch of Golf Course and Old Course
Exhibit B - Legal Description of Golf Course and Old Course
Exhibit C - Rate Schedule for First 36 Months
Exhibit D - List of Equipment/Replacement Schedule
Exhibit E - Golf Course Maintenance Standards
Exhibit F - Course Improvements
Page-64-
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Renewal Term Rider
Provided Lessee is not then in material default,and provided that neither this Lease
nor any interest in the Golf Course has been assigned, sublet, licensed, or otherwise
transferred by Lessee other than in accordance with the provisions of this Lease, Lessee
shall have the right to renew and extend this Lease(the"Renewal Option")with respect
to the Golf Course for the Renewal Term upon and subject to the following terms and
conditions:
1.1 Lessee may renew the initial Term of this Lease for one (1) Renewal Term of five (5)
years. Subject to the provisions of this Renewal Term Rider, the Renewal Term,
herein so called, shall commence immediately upon the expiration of the original
Term by Lessee's giving written notice thereof to City no later than twelve (12)
months' prior to the expiration of the original Term. If Lessee does not renew this
Lease for the Renewal Term,then Lessee shall have no further renewal rights.
1.2 The exercise by Lessee of any Renewal Option must be made, if at all, by written
notice executed by Lessee and delivered to City on or before the date set forth in
Paragraph 1.2 above. Once Lessee shall exercise the Renewal Option, Lessee may
not thereafter revoke such exercise. Lessee shall not have the right to exercise the
Renewal Option at a time a Lessee Default has occurred and remains uncured.
Lessee's failure to exercise timely the Renewal Option for any reason whatsoever shall
conclusively be deemed a waiver of such Renewal Option.
1.3 Lessee shall take the Golf Course"as is"for the Renewal Term and City shall have no
obligation to make any improvements or alterations to the Golf Course.
1.4 Rent for the Renewal Term shall be the greater of the Rent in effect for the year prior
to the commencement of the Renewal Term,or the Fair Market Renewal Rate.If City
and Lessee have not agreed upon the Fair Market Renewal Rate at least four (4)
months prior to the commencement of the Renewal Term,such Fair Market Rate shall
be determined as provided in Section 17.4. of the Lease.
1.5 In determining the Fair Market Renewal Rate,the parties (and Decision Makers,as
applicable) shall take into account all revenue sources then existing with respect to
the use and operation of the Golf Course, and a market rate return to the City with
respect thereto. The parties may elect to follow the allocation of the rent to different
sources of revenues as provided in this Lease, or use other another formula to
establish the Fair Market Renewal Rent hereunder.
Page-1-
EXHIBIT A
SKETCH OF GOLF COURSE AND OLD COURSE
`
LEASE NO.
CLUB UDVSE
GOLF I FA E AREA 250542 - AIRSPACE EASEMENT
258248 - PUD EASEMENT
261892 - PUD EASEMENT CITY OF PASCO
2?0 9 200 400 am
'
EXHIBIT B
LEGAL DESCRIPTION OF GOLF COURSE AND OLD COURSE
EXHIBIT B
LEGAL DE O LPTION OF GOLF COURSE AND OLD fkRSE
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EXHIBIT B (2)
LEGAL DESC ION OF GOLF COURSE AND OLD CO
TH PTN N2 19-9-30 DAF : BEG AT SW COR LOT 8 , BLK 3 AMENDED PLAT OF
SUN WILLOWS; TH NlOD42 ' E ALG SELY BDRY OF SD ELK 3 , 69 . 681 ; TH N71D
291E TO SELY COR LOT 1 , BLK 3 OF SD PLAT, 4421 ; TH N10D331W ALG ELY
LN OF SD LOT 1 , 102 . 451 ; TH N24D26 ' E TO PT ON SW COR LOT 22 , BLK 1
SD PLAT, 158 . 18 ' ; TH S85E ALG SELY LN OF SD LOT 22 , 123 . 93 ' ; TH S
75D171E, 278 . 861 ; TH N55D10 ' E, 227 .291 ; TH N40D271B, 240 . 181 ; TH S
79D27 ' E, 175 ' ; TH S12D14 ' E, 304 . 18 ' ; TH S02D301E, 169 . 15 ' ; TH S28D
18 ' E, 458 . 231 ; TH S56Dll ' E, 119 . 66 ' ; TH N72D56 ' E, 64 . 371 ; TH N47D331
E, 99 . 75 ' ; TH S72D141E, 81 . 341 ; TH S23D45 'W, 344 . 631 ; TH S87D21 ' W,
142 . 521 ; TH N76D14. 'W, 227 . 34 ' ; TH N70D231W, 283 :154 ' ; TH S72D19 'W,
147 . 37 ' ; TH N82D36 'W, 385 . 651 ; TH S79D39 'W, 476 . 031 ; TH N55D37 ' W,
488 . 791 ; TH N33D16 'W, 67 . 961 ; TH N39D47 ' E, 26 . 251 TO PT TH IS NW COR
LOT 1, BLK 2 OF SD PLAT; TH S50D12 ' E ALG WLY LN SD LOT 1 , BLK 2 , 651
TO PT TH IS SW COR SD LOT 1; TH N39D471E ALG SELY LN SD LOT 1 ,
137 .22 ' ; TH N67D34 ' E, 301 TO PT ON CUR TO RT, RAD PT BEARS N67
W1207 . 54 ' OF NE4 19-9-30 LY N OF NLY R/W OF HWY & NW4 19-9-30 EXC
PTN LY WITHIN RS#498653 , EXC SUN WILLOWS DIV 2 THRU 6 AND
EXC PTN DEEDED IN DOC #396531 (RED LION)
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EXHIBIT C
RATE SCHEDULE FOR FIRST 36 MONTHS
• EXHIBIT C 0
RATE SCHEDULE FOR FIRST 36 MONTHS
Proposed Golf Fees
I.R.I. Proposal (11113)
Season
March • October 2001 Rates 2002 Rates 2003 Rates
18 Hole Rate Includes tax Includes tax includes tax
Weekday $18.00 $20.00 $22.00
Friday $22.00 $23.50 $25.00
Weekend $24.00 $26,00 $28.00
Freq. Weekday $14.00 $16.00 $18.00
Freq. Friday $18.00 $19.50 $21.00
Freq. Weekend $20.00 $22.00 $24.00
Jan, Feb, Nov, Dec
Freq. Weekday $12.00 $14.00 $16.00
Freq. Friday $16.00 $17.50 $19.00
Freq. Weekend $18.00 $20.00 $22.00
Senior Weekday $15.00 $17.00 $19.00
Senior Weekend $15.00 $17.00 $19.00
Junior Weekday $13.00 $15.001 $17.00
Junior Weekend $13.00 $15.00 $17.00
Hotel Weekday $16.00 $18.00 $20.00
Hotel Friday $22.00 $23.501 $25.00
Hotel Weekend $24.00 $26.00 $28.00
9 Hale Rate
Weekday $13.00 $15.00 $17.00
Friday $17.00 $18.50 $20.00
Weekend $19.00 $21.00 $23.00
Senior Weekday $11.00 $11.00 $11.00
Junior Weekday $8.00 $8.00 $8.00
Event Rounds
Weekday $18.00 $20.00 $22.00
Weekend $24.00 $26,00 $28.00
Twillght
Weekday $13.00 $15.00 $17.00
Friday $17.00 $18,50 $20.00
Weekend $19.00 $21.00 $23.00
Super Twilight
Weekday $12.00 $13.00 $14.00
Friday $12,00 $13.00 $14.00
Weekend $12.00 $13.00 $14.00
League
Frequent $10.00 $11.00 $12.00
Non Frequent $12.00 $13.00 $14.00
Season;Passes (All proposed pricing of season passes does not Include sales tax,and will be added on at the time of sale.)
7 Day $995.00 $1,020.00 $1,045.00
Spouse or dependent add on $250.00 $250,00 $250.00
5 Day $795.00 $620.00, $845.00
Spouse of dependent add on $200.00 $200.00 $200.00
4 Day Senior Citizen (M-Th) $525.00 $550.00 $575.00
Spouse or dependent add on $150.00 $150.00 $150.00
4 Day Junior M-Th, & After 4 pm F, S, S $295.00 $320,00 $345.00
Trail Fees (off site storage cart) $250.00 $250.00 $250.00
Trail Fees on site storage cart $150.00 $150.001 $150.00
0
EXHIBIT D
LIST OF EQUIPMENT/REPLACEMENT SCHEDULE
City of Pasco
525 N 3rd Ave
Pasco,WA 99301
EQUIPMENT RENTAL
Goff Course-Vehicle Fleet
MONTHLY Leasehold Excise Tax ACCUMULATED
REPLACEMENT ALLOCATION REPLACEMENT ANTICIPATED ANTICIPATED
PAYMENT ACTUAL LEASEHOLD NET BALANCE REPLACEMENT REPLACEMENT
VEH.# YEAR/ MAKE VEHICLE Apr-Dec00 PAID-IN TAX SHARE PAID-IN (31 Au '00) DATE COST
4503 91 Lely 800 Spreader 0.00 0.00 0-00 0.00 5,110.67 March-2001 3,790.00
4511 94 John Deere 5300 Tractor 0.00 0.00 0.00 0.00 19,690.41 June-2004 13,843.00
4517 97 Toro Workman 3200 w/27 325.00 325.00 (36.98) 288.02 10,370.77 March-2002 17,025.00
4518 197 TriDeck Rotary Mower 1 265.00 265.00 (30.15) 234.85 10,748.88 March-2002 12,920.00
4519 198 Greensmaster 430-00 430.00 48.93) 381-07 11,744.96 March-2003 20,700.00
p 4520 198 Greensmaster 420-00 420.00 (47.79) 372.21 11,930.10 March-2003 20,700.00
N 4521 98 Ransom 660.00 660.00 (75.10) 584.90 18,768.65 March-2003 40,520.00
4522 98 Toro Fa i rway 395.00 11 395.00 (44.95) 350.05 17,533.72 March-2003 30,825.00
4523 Toro Sand Pro 5000 200.00 200.00 (22.76) 177.24 2,602.19 April-2004 10,520.00
4524 Carryall Turf 11 140.00 140.00 (15.93) 124.07 1,837.51 April-2004 7,380-00
4525 Cushman 31HP Truckster 300.00 300.00 (34.14) 265.86 3,927.67 March-2004 15,590-00
Ca CJ, 4526 1999 Spra er 70.00 70.00 (7.97) 62.03 1,029.15 April-2004 3,750.00
: 4527 GA30 Ryan Aerator 190.00 190.00 (21.62) 168.38 993.50 March-2008 16,085.00
H PL4
H
Total 3,395.00 3,395.00 (386.32) 3,008.68 116,288.18
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EXHIBIT E
MAINTENANCE STANDARDS
12/03/2000 12:24 FAX 8587566334 I R I GOLF GROUP tj002
EXHIBIT E
G LF CUU 1E SE MAR TENANCE SPECIFICAnQNS
"Maintenance Standards"shall mean the maintenance standards for the Golf
Course designed to insure maintenance of the grounds in an attractive and playable
condition,which standards are set forth below,or such other similar standards that may
be from time to time required by the USGA to insure a similar standard of maintenance;
provided that such similar standards are(i) approved by the City,which approval shall
not be unreasonably withheld, and(ii) are commensurate with the Comparable
Facilities.
I. SUPERVISION OF MAINTENANCE
(a) The golf course superintendent shall be responsible for supervising the
maintenance of the course. He will be a Golf Course Superintendents of America
Affiliated Golf Course superintendent employed full-time at the course who will develop
the maintenance program and be responsible for its implementation. At least one full-time
crew member shall have a current pesticide applicator's license as required by State law.
(b) Other than during inclement weather, a full maintenance crew,consisting of
a minimum of seven(7)worker in season and a minimum of three(3)workers off season
shall be on duty at the course, 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.
2. WEATHER IlVIPACT ON MAINTENANCE
When horticultural tasks are specified to be performed in a scheduled basis(as daily, every
other day, etc.),the crew will not be expected to perform the task on the specified
schedule if the performance of the task is precluded by weather conditions. The tasks
shall be.performed on the next available day which the weather conditions will not
interfere with the reasonable performance of the task.
3. GREENS MAINTENANCE
(a) Mowingthe Greens
0) The greens shall be mowed at least five days per week(Saturday
and Sunday required). Greens shall be cut at a length of 5/32"but may be
adjusted, depending on the time of year and the amount of play. A stemp meter
reading of not less than seven feet is desired.
Page-I-
11/03/2000 12:26 FAX 8587566334 1 K 1 GULF GRUUF WjUUa
w •
(ii) Grass clippings shall be properly disposed and at a minimum of 20
feet from all greens.
(iii) Basket devices for catching grass clippings shall be used on mowers
each time a green is cut, except for the first mowing after the green has been top-
dressed.
(iv) The mowing patterns shall be alternated each time a green is
mowed.
(v) "Graining" or "thatch" in the greens shall be controlled as necessary
by use of combs, brushes, or "verticut" attachments on greens mowers.
(b) WAjgring on(rr, eens
(i) The crew shall water the greens as necessary to keep the grass in
optimal growing condition.
(ii) Irrigation should produce greens that are wet evenly over the total
green. Wet and dry spots are to be minimized by controller settings and by hand-
watering as necessary.
(c) Top-Dressing of Qreens
The crew shall top-dress each green af3er aeration in the summer,winter, spring
and fall;using sand similar to that used for construction. Sand shall be applied at
the rate of approximately one(1)yard of materials per green in each top-dressing
process.
(d) Aeration of Greens
The crew shall aerate each green four(4)times each year,using a recognized
greens aerator manufactured for the purpose.
(e) Vertical N, owin-&-of Greens
(i) The greens shall be vertically mowed as necessary to control
"graining" or "thatching."
(ii) The greens shall be vertically mowed on a 45-degree angle of
difference each time they are vertically mowed to assure the most benefit from this
process.
Page -2-
11/03/1000 12:Z7 r'AA 00U/:) b4d4 A ,. I "Vill, V.%Vu, _
(fj Fertilizing Greens
(i) All greens 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 succulent growth.
(ii) The goal of the greens fertilization program is to provide the best
possible putting surface,not to produce the maximum amount of growth.
(iii) Greens shall not be closed for fertilization, unless required by State
law.
(g) Pes Control Qn Greens
(i) Pest control management of the greens is considered to be a
constant ongoing responsibility of the superintendent.
(ii) The greens shall be checked daily for fungus activity, insect
infestations, or any other pest problem which will adversely affect the quality of
the putting surface. The appropriate controls for these pests shall be applied as
soon as necessary after their detection,
(iii) Develop an Integrated Pest Management Plan for Pest Control
practices
(h) Weed Control on Greens
All greens shall be maintained free of undesirable grasses and weeds. Preernergent
herbicides shall be used as necessary to prevent intrusion into the greens of weeds
difficult to eradicate such as goose grass, crabgrass, etc_
(i) impair of Greens
Any damage done to the greens from any source which affects the putting surface
shall be repaired immediately by the crew. All such areas shall be sodded or
plugged from similar base material and same species of grass.
{j) Other Greens Requirements
(i) The crew shall repair ball marks on all greens on a daily basis.
(ii) The crew shall change the pin placement on the greens every day
utilizing a systematic rotation.
Page-3-
11/03/2000 12:29 FAX 8587566334 1 x 1 wLr uxuur C,
4. MAINTENANCE OF TEES AND DAAPRONS
(a) Mowing of Tees and Aprons
(i) The crew shall mow all tee areas and aprons around the greens not
less frequently than three times per week. Tees and aprons shall be cut at a
maxinwin height of 5/8 inch, but may be adjusted for different types of grasses.
(ii) The crew shall not use snowing implements intended for mowing
fairways for the mowing of tees or aprons.
(b) Watering of Tees and Aprons
Tees and aprons are to be watered as necessary to keep the grass in optimal
growing condition. Hand watering shall be used by the crew where necessary to
augment the irrigation system.
(c) Aeration and To -p„Dressingrgf Tees and Aprons
(i) The tees shall be aerated two (2)times per year or more as needed.
They shall be top-dressed two (2)times'per year using 1/4 yard of sand per square
foot per application-
(H) The aprons shall be aerated two(2)times per year. Plugs shall be
chopped and returned to the apron surface.
(iii) A recognized greens aerator, manufactured for the purpose, shall be
used for each area.
(d) Vertical Mowing of Tees and Aprons
Tees and aprons shall be vertically mowed as.necessary to prevent thatching. They
shall be snowed at different angles each time to assure the most benefit from the
process.
(e) Fertilizing of Tees and Aprons
All tees and aprons 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 succulent growth.
Page -4-
11/03/ZUUU 1L:31 NAA 6001300JJ4 i n i %Jv).A' VAN"—
(� Pest Control of Tees and Aprons
The tees and aprons shall be checked daily for fungus activity and insect
infestations or any other pest, gopher, or burrowing animal infestations which
would interfere with the playing surface or the health of the turf grasses. The
appropriate controls for these pests shall be put into force as soon as necessary
after their discovery,utilizing Integrated Pest Management procedures.
(g) Weed Control on Tees and Aprons
Tees and aprons shall be kept weed-free to an extent of at least 90 percent of the
area by the proper and timely application of preemetgent and/or postemergent
herbicides.
(h) Qverseeding of Tees and AprEM
(i) The tees shall be overseeded in the Fall with erennial Rye at the rate
of ten(10)pounds per 1,000 square feet. This process may be combined with the
aeration/top-dressing process if the superintendent so desires.
(ii) All divots on tees are to be filled with seed/sand mixture weekly or
as needed, using a seed mixture if Tifway 419 is used on the tee,boxes.
(i) Setup
Tee markers and all tee equipment shall be moved daily for proper play and control
of turf wear.
S. MA_.INTENANCE OF FAIRWAYM2R_1 VING RANGE
(a) Mowing of fairways/Driving Ran$&
(i) The fairways shall be mowed at a height of 5/8 inch. The mowing
heights may be adjusted as needed to provide a difference in height between
fairways and the rough.
(ii) The driving range shall be mowed one(1)time per week at a height
of V or as needed.
(iii) Excess grass clippings shall be removed mechanically to prevent
damage to existing grass.
(iv) During periods of rainy weather which interfere with the normal
Page-5-
11/03/2000 12:31 FAX 8587566334 i K 1 kJuLV wwur
fairway mowing schedule, the crew shall be expected to use additional mowing
resources to catch up on mowing requirements so as to prevent overlying long
grass.
(b) meterin _g of F ays/Driving Rang
Fairways and the driving range are to be watered as necessary to keep the grass in
optimal playing condition.
(c) Aeration of Fairwa g2dyjg R
The fairways and driving range shall be aerated a minimum of two (2)tithes per
year or as needed, using an aerator with 5/8" diameter spoon and a minimum
penetration depth of three(3)inches.
(d) Vertical Mov ng_of airways wing Roge
Vertical mowing of fairways and the driving range is not required except in
extraordinary circumstances for disease control or to reduce thatch of stoniferous
weed grasses.
(e) Fertilization of Fairways/Driving&nS
(i) All fairways/driving range 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 succulent growth.
(ii) Fairways and the driving range are to be fertilized four{4)times per
year.
M Pest Control on Fairways/Driving Range
(i) The fairways and the driving range shall be checked daily for any
pest infestation, gophers, and other burrowing animals which will affect the playing
surface of the ongoing health of the turf grass.
(ii) Any pest problem recognized as such shall be dealt with as soon as
possible.
6. 1^WARD MAINTENANCE
(a) Sand Maintenance
Page -6-
11/03/2000 12:34 FAX 8587566334 1 x t GULN' GKUUr LW Vvo
(i) All sand traps shall be edged as necessary to maintain an
appropriate lip, raked daily, and filled with USGA trap sand of proper color as
needed to maintain a minimum 3" depth on slopes and 5" in the bottom.
(ii) The sand shall be raked five(5)times per week,Monday,
Wednesday,Friday, Saturday and Sunday in each sand trap.
(iii) The sand traps shall be kept weed-free,
7. TREES, SMM5 AND QJJMRLANDSCAPING .
(a) The superintendent will be responsible for the maintenance of all the
landscaping at the course.
(b) All landscaped planter areas shall be kept weed-free.
(c) All trees and shrubs shall be pruned as necessary to provide ease of play on
the course and to provide ease of play on the course and to provide aesthetic value
throughout. the crew shall replace trees damaged by wind, etc., and provide staking as
necessary.
(d) Any pruning on larger trees that necessitates the use of the ladders and/or
mechanical raising and lowering devices to carry a person about in order to prune,thin out
dead wood or debris or unwanted growth is the responsibility of the crew.
(e) The crew shall irrigate all tree shrubs and other landscape plants as
necessary to maintain them in the optimum condition for growth.
(f) All dead trees,for whatever cause, shall be removed as soon as reasonably
possible. Replacement trees shall be planted as soon as reasonably possible with a tree of
appropriate type and size,
(g) The landscaped slope separating the golf course from the adjacent housing
shall be cultivated,weeded and pruned on a regular basis.
(h) The crew is to keep grass adjacent to trees mowed at the same frequency
and to the same height as is applicable to the location of each tree(e.g.,whether fairway
or rough). Large area mowers shall not be used within one(1)foot of the trunk of any
tree.
(i) Ali newly planted trees, existing,specimen trees and other landscaping shall
be fertilized a minimum of one(1)time each year to maintain color, growth and vigor_
Page-7-
11/03/2000 12:37 FAX 8587566334 1 R 1 GULk GKUUY WJUUU
S. ROUGHS
(a) ow`
All roughs shall be mowed weekly during the growing season, and as necessary
during the balance of the year,at heights between 3/4" and 1 1/2". Rough height
shall not exceed 2" without the direct approval of the regional superintendent, and
rough mowing shall not be suspended for any tournament without such approval.
Vegetation within and along drainage ditch slopes shall be mowed or weedeatered
as required to maintain a suitable appearance.
(b) Aeration
(i) Fairway-to-tree-line play areas shall be aerated at least two (2)
times per year.
(ii) Within wooded play areas,aeration shall be performed as necessary
to establish and/or maintain turf.
(c) Fertilization
Roughs shall be fertilized as necessary to maintain turf.
(d) Wg,d Control
Shall be performed as necessary to prevent seed formation and to allow proper
play,
9. WETLANDS
All areas that are designated wetlands shall be maintained in their natural condition.
Exotic weed species such as tamarisk, pampas grass, grant reed, and castor bean shall be
removed.
10. NON-.HORTICULTURAL MAINTENANCE RELATED T4 PLAY QN THE
CollSE
(a) Lessee shall be responsible for the maintenance of all tee markers, cups,
flags, ball washers, trap rakes, yardage signs, and benches on the course. Maintenance
shall include repairing,painting,-replacing, furnishing towels, and otherwise beeping these
amenities in a good condition that is conducive to player enjoyment of and respect for the
course.
Page -$-
11/03/2000 12:35 N"AL aba-iSOn.s.sq
. 0 0
(b) The cups on each green and the tee markers on each tee shall be relocated
every day or as dictated by weather,
(c) The ball washers located around the course shall be services Monday,
Wednesday,Friday, Saturday, and Sunday. The towels for the ball washers shall be
changed on the same schedule with clean towels furnished as needed.
(d) The superintendent shall have the responsibility to mark temporary hazards,
out-of-bounds areas, and other course conditions as they occur or are required by
tournament play. Definition of tournament requirements will be furnished by the starter
staff in the Pro Shop at the clubhouse of the course.
(e) The crew shall pick up litter throughout the course on a daily basis. Litter
receptacles are to be fiwished by the Lessee and maintained by the lessee.
(f) Vertebrate pest control shall be routinely performed throughout the
property on an ongoing basis in such a manner that vertebrate pest populations are steadily
reduced and eventually eliminated.
(g) A soil analysis shall be performed yearly by an approved professional
laboratory,
(h) 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 only be
undertaken with the direct approval of the City Manager or his designated representative.
1.1. GENES PENANCE STATEMENT
These specifications indicate minimurti practices necessary for the proper maintenance of
any golf course. In no way do they limit the responsibility of the golf course
superintendent for the professional care and maintenance of the property.
Page -9-
EXHIBIT F
COURSE CAPITAL IMPROVEMENTS
m Reguired Capital Improvements. Lessee shall, subject to the terms of this
Exhibit "F" perform the following Required Capital Improvements at its sole
expense, such work to be completed on or before June 1, 2001:
(a) Rebuild and level tees (estimated cost $25,000).
(b) Replace sand bunkers (estimated cost $15,000).
(c) Remove silt from lakes(estimated cost $lo,000).
(d) Repair existing cart paths (estimated cost $lo,000).
(e) Repair and improve drainage (estimated cost $lo,000).
(f) Trim trees (estimated cost $7,500).
(g) Refurbish existing restrooms and cart storage areas (estimated cost $5,000).
Lessee and the City, acting in good faith, shall prioritize the construction of the
improvements listed above and to the extent that Lessee has expended the Maximum
Amount, as defined below, it shall be relieved of further obligation to complete the
balance of the such improvements.
1.2 Above and JTndergrgund Storage Tanks. Lessee shall install new above-ground
fuel tanks,in priority of the items listed in Paragraph 1.2 above,in accordance with
all applicable codes on or before June 1, 2001. The existing underground tanks shall
thereafter be abandoned and not used for Golf Course operations. A decision whether
to remove the underground fuel tanks or to abandon such tanks in place shall be made
by the City. Any costs to remove the existing underground tanks or abandon such
tanks in place shall be the responsibility of the City.
1.3 Delay in Commenegment of Improvements. in the event that the City makes
the City Construction Election pursuant to which it elects to construct the Renovation
Improvements, Lessee's obligation to start commencement of the necessary
construction or installation of the improvements or equipment contemplated by
Paragraph i.i. or 1.2 above shall be delayed until ten (lo) days following the date
the City's bidding procedures have been complied with and completed,a construction
contract has been awarded and executed by the City and the City has issued a Notice
to Proceed to its Contractor.
1.4 Cad on Expenditures. Notwithstanding the foregoing, Lessee shall not be
required to incur more than$loo,000(the"Maximum Amount")in direct,actual,
Page-1-
�► s
verifiable costs to complete the improvements under Paragraphs 1.1 and 1.2. If
Lessee incurs less than $1oo,000 in direct, actual, verifiable costs to complete such
improvements, any remaining amount shall be added to and constitute a portion of
the Additional Capital Improvement Amount.
1.5 Plans. The foregoing work(the"InWrovements") shall be subject to City's prior
approval,not to be unreasonably withheld,and shall be subject to the other terms and
conditions of this Exhibit "F". All architectural, engineering and other design fees
shall be paid by Lessee. Lessee shall use its architect, engineers and other design
professionals,all of wham shall comply with any applicable licensing or governmental
requirements in the state in which the Golf Course are situated.
1.6 Contractors. All contractors and subcontractors participating in construction of the
Improvements shall be reputable and shall meet all licensing and insurance
requirements of the state in which the Golf Course are situated, and be reasonably
satisfactory to City. Lessee's choice of subcontractors shall not materially affect any
guaranties or warranties relating to the improvements on the Golf Course.
1.7 Construction Work and Costs. Lessee shall complete all Improvements at
Lessee's sole risk, cost and expense. The construction shall be performed in a good
and workmanlike manner and in compliance with all applicable rules,laws,codes and
regulations, including all applicable safety procedures established by City.
1.8 Construction Insurance. During construction, Lessee or its Contractor shall
procure and maintain in effect the following insurance coverages with an insurance
company or companies authorized to do business in the State where the Golf Course
are located in amounts and with coverages reasonably acceptable to City, including
without limitation builders risk coverage. Lessee shall furnish the City with
certificates of insurance evidencing such coverage prior to the commencement of the
construction work.All insurance shall be carried in companies reasonably acceptable
to the City. The carrying of any of the insurance required hereunder shall not be
interpreted as relieving the insuring party of any responsibility to the other party,and
the other party does not waive any rights that it may have against the other party
and/or its representatives for any expense and damage to persons and property
(tangible and intangible) from any cause whatsoever with respect to the insuring
party's work.
1.9 As-Builts. Upon completion of the Improvements,Lessee's Contractor shall submit
to City(i)copies of all as-built Construction Documents and specifications indicating
reconfiguration of Lessee's Golf Course, including changes to the mechanical,
electrical, architectural, plumbing, cabling, sprinkler and fire alarm, as applicable;
and (ii) original permit with inspector(s) final acceptance (if any permit was
required).
mo Legal Title. Legal title to all Improvements shall immediately vest in City upon
substantial completion thereof.
Page-2-
No City Liability. The City shall not be liable for any injury,loss or damage to any
person (including death) or property on or about the Golf Course during the
performance of the work, unless caused by the City, its employees or agents, and
Lessee shall indemnify and hold the City harmless against and from any such liability,
and any costs or charges(including,without limitation,reasonable attorney's fees and
court costs)which the City may incur on account of any such injury,loss or damage.
Lessee's Contractor shall carry commercial general liability insurance which shall
include coverage of the foregoing contractual liability. City's collection rights to any
amounts due shall be deemed the same as for additional rent under the Lease.
Page -3-
EXHIBIT G
OPTIONAL CAPITAL IMPROVEMENTS
EXHIBIT "C"
OPTIONAL DTROVEE TS
Capital Expenditures - Clubhouse Start-up
POS System 28,000
Office Supplies 500
Rental Sets 1,775
Merchandise Bags 100
Fixtures 3,000
Time Clock 500
Television 500
Office Furniture 1,000
PA System 1,100
Telephone System 1,800
Vacuum Cleaner 250
Security System 1,200
Range Picker 1,800
Ball Washer 2,400
Range-other 550
Cart Tools 500
Air Compressor 525
Power Washer 500
46,000
Contingency 4,000
Total $50,000
Proposed Golf Course Maintenan e, E uipmen_t,p-nd Staffing plans
Sun Willows Course Supplies and Equipment
Numher aL Itgms item QQst
2 Edgers $ 1,112.00
2 Weed eaters 1,000.00
5 Square shovels 150.00
5 Scoop shovels 210.00
5 Maintenance rakes 280.00
5 Steel rakes 160.00
4 Leaf rakes 160.00
2 Pumps 11500.00
1 Chain saw 400.00
36 Flags 428.00
27 Flag poles 490.00
18 Ballwashers 4,284.00
108 Tee markers 2,500,00
80 Bunker rakes 940,00
12 Divot containers 575.00
2 Spreaders 600.00
1 Drop spreader 200.00
�—' 200 Stakes 1,300.00
4,800 Rope 150.00
2 Cup cutters 140,00
2 Blowers 705.00
3 Whipping poles 140.00
100 Signs 1,825.00
1 Parts cleaner 650.00(per rental)
1 Tee towels 90.00
1 Wheel blower 1,131.00
2 Fuel tanks 10,000.00
Shop tools 4,000.00
Aerator, Fairway 4,000,00
Topdresser 6,000.00
Overseeders 4,800.00
Sod Cutter- 5,000.00
Verticutters 2,800.00
Rollers 51000.04
2-way radios 1,400,00
1 Tool chest 250.00
1 Drag brushes 465.00
Wood benches 174.00(each)
Sweepers 10,000.00
Aerway Trailer 8,QOO.00
$ 83,009.00
W
Amendment No. 1
Golf Course Lease Agreement
This Amendment is entered into this 3 day of 2005 between the
CITY OF PASCO, a municipal corporation of the State of Washington, herein called the "City"
and IRI SUN WILLOWS ASSOCIATES LLC, A Delaware limited liability company, here in
called"Lessee".
Whereas, the City and Lessee entered into that certain Golf Course Agreement dated
December 27, 2000; and
Whereas, the City and Lessee desire to amend said Agreement as set forth herein below;
Now, 'Therefore, the City and Lessee agree as follows:
Section 1
Section 4.2 Capital Reserve Account, sub paragraph b is hereby amended to read as follows:
(b) Capital Replacement Amount. Commencing on January 1, 2003, Lessee shall pay to
the City and the City shall deposit to the Capital Reserve Account on an annual basis (ie
for each Lease Year) an amount (the "Capital Replacement Amount") equal to the
greater of:
(i) four percent (4 %) of Golf Course Play Revenues, or
(ii) the sum of$20,000.00.
Commencing on July 1, 2005, Lessee's payment requirement shall increase to six and
one half percent (6.5%)of Golf Course Play Revenues.
Section 2
Section 15.12 Responsibility for Taxes, is hereby amended to read as follows:
15.12 Responsibility for Taxes. Lessee shall be responsible for all fees, taxes and charges
which may be levied upon Lessee in relation to its performance of services under this
Agreement. This Section 15.12, does not apply to the payment of leasehold excise tax,
for which payment responsibility is specifically provided for elsewhere in this
Agreement. The City agrees that it will not design or adopt any new tax specifically
targeted to golf course operations during the Term of this Agreement. The City agrees
that effective July 1, 2005, except for spectator admissions, the golf course and driving
range shall not be subject to the City Admission Tax as imposed by Section 3.02.020 of
the Pasco Municipal Code.
Section 3
That all other provisions of said Lease Agreement shall remain as originally written.
r
CITY F PASCO
ICHAEL L. GXIKSON Date
Mayor
ATTEST: APPROVED AS TO FORM:
SANDY . NWORTHY LELAND B. KERR
Deputy City Clerk City Attorney
LESSEE:
IRI SUNWILLOWS ASSOCIATES LLC,
a Delaware limited liability company
By: IRI GOLF MANAGEMENT, L.P.,
a Delaware limited liability company,
Its Manager
By: Golf/Mark Corporation,
a Delaware corporation,
Its General Partner
By. 1 11
Name: Je ffrey M. Silverstein Date
Title: President
Amendment No. 2
Golf Course Lease Agreement
This Amendment is entered into this ze,7N day of -JA Vi:,-AA tj 2006 between the CITY OF
PASCO, a municipal corporation of the State of Washington, herein called the "Lj!y" and IRI SUN
WILLOWS ASSOCIATES LLC, a Delaware limited liability company, here in called"Lessee".
Whereas, the City and Lessee entered into that certain Golf Course Agreement dated December
27, 2000; and
Whereas, the City and Lessee desire to amend said Agreement as set forth herein below;
Now,Therefore,the City and.Lessee agree as follows:
Section 1
Section 2.2 Rent; Payment; Rental Credit, sub paragraph(a), is hereby amended to read as follows:
(a) Golf Course Annual Lease Payment.
(i) Lessee agrees to pay an annual lease payment (the "Annual Lease Payment") for
each Lease Year in the amount of$150,000,prorated for a partial Lease Year.
(ii) Lessee shall pay the Annual Lease Payment in equal monthly installments of
$12,500 on or before the 5th day of each calendar month during the term of this
Lease, commencing on the 5th day of the first full month following the
Commencement Date.
Provided, however, commencing on January 1, 2006, Lessee shall pay monthly
installments according to the following schedule:
January $0
February $6,250.00
March $12,500.00
April $21,875.00
May $21,875.00
June-December $12,500.00
Section 2
Section 2.2 Rent; Payment; Rental Credit; sub paragraph (c), is hereby amended to read as follows:
(c) Golf Concession Fee.
(i) Lessee agrees to pay, for the right to offer golf-related merchandise for sale,
lessons and other golf related services, an annual concession fee for each Lease
0 0
Year in the amount of$75,000 (the "Annual Concession Fee"),pro-rated for a
partial Lease Year.
(ii) Lessee shall pay the Annual Concession Fee in equal monthly installments of
$6,250 on or before the 5th day of each calendar month during the Term of this
Lease, commencing on the 5th day of the first full month following the
Commencement Date.
Provided, however, commencing on January 1,2006, Lessee shall pay monthly
installments according to the following schedule:
January $0
February $3,125.00
March $6,250.00
April $10,937.50
May $10,937.5.0
June—December $6,250.00
Section 3
Section 2.2 Rent; Payment; Rental Credit; sub paragraph(e), is hereby amended to read as follows:
(e) Food & Beverage Concession Fee.
(i) Lessee agrees to pay for the right to operate the Food and Beverage Operations an
annual food and beverage concession fee (the "Food & Beverage Concession
Fee") in the amount of:
(A) 6% of the Food and Beverage Revenues, commencing on the
Commencement Date, plus
(B) $10,000 per Lease Year, commencing with the Lease Year in which the
Clubhouse Renovation Date occurs, pro-rated for a partial Lease Year.
(ii) The portion of the Food & Beverage Concession Fee attributable to 6% of the
Food and Beverage Revenues for the prior calendar month shall be due and
payable on or before the 25th day of each calendar month during the Term of the
Lease, commencing on the 25th day of the second month following the
Commencement Date.
(iii) The remaining portion of the Food& Beverage Concession Fee ($10,000 per
annum) shall be payable in equal monthly installments of$833.00,payable on the
5th of each calendar month, commencing on the 51h day of the first full month
following the Clubhouse Renovation Date.
Provided, however, commencing on January 1, 2006, Lessee shall pay monthly
installments according-to the following schedule:
January $0
February $416.70
March $833.33
April $1458.33
May $1,458.33
June—December $833.33
Section 4
Section 4.2 Capital Reserve Account, sub paragraph b is hereby amended to read as follows:
(b) Capital Replacement Amount, Commencing on January 1, 2003, Lessee shall pay to
the City and the City shall deposit to the Capital Reserve Account on an annual basis (ie
for each Lease Year) an amount (the "Capital Replacement Amount") equal to the
greater of-
(i) four percent(4%) of Golf Course Play Revenues, or
(ii) the sum of$20,000.00.
Commencing on July 1, 2005, Lessee's payment requirement shall increase to six and
one half percent(6.5%) of Golf Course Play Revenues.
Commencing on January 1, 2006, Lessee's payment requirement shall increase to six and
one half percent (6.5%) of Golf Course Play Revenues plus two and one half percent
(2.5 1/o) of driving range revenues.
Section 5
That all other provisions of said Lease Agreement shall remain as originally written.
CITY OF PASCO
&4-rlp - - --16� c - /I- ZcmG
JOYJ O ON Date
May
ATTEST: APPROVED AS TO FORM:
Sa f 7,
•
SANDY L. E WORTHY L B. KERR
Deputy City Clerk ity Attorney
LESSEE:
IRI SUN WILLOWS ASSOCIATES LLC,
a Delaware limited liability company
By: IRI GOLF MANAGEMENT, L.P.,
. � 0 i
a Delaware limited liability company,
Its Manager
By: GoIVMark Corporation,
a Delaware corporation,
Its General Partner
By: �
Namej Jeffrey M. Silverstein Date
Title: President
Amendment No. 3
Golf Course Lease Agreement
This Amendment is entered into this_�` N day of May, 2007 between the CITY OF PASCO,
a municipal corporation of the State of Washington, herein called the "City" and IRI SUN WILLOWS
ASSOCIATES LLC, a Delaware limited liability company, herein called "Lessee".
Whereas, the City and Lessee entered into that certain Golf Course Agreement dated.December
27, 2000; and
Whereas, the City and Lessee desire to amend said Agreement as set forth herein below;
Now,Therefore,the City and Lessee agree as follows (deletions by interlineation, additions by
underline):
Section 1
Section 1.1 Definitions, sub paragraph(t), is hereby amended to read as follows:
1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires,the terms defined in this Article I shall have the
following meanings:
(t) "Comparable Facilities" shall mean Columbia Point Golf Course;and Canyon
Lakes Golf Course , .
Section 2
Section 2.2 Rent; Payment; Rental Credit; sub paragraph(b), is hereby amended to read as follows:
2.2 Rent; Payment; Rental Credit. Lessee agrees to pay the City for the right, license and
privilege of leasing and operating and maintaining the Golf Course, food and beverage
concession, and other concessions, the following payments:
(b) Golf Course Additional Payment.
(i) In addition to the Annual Lease Payment, Lessee agrees to pay on an annual
basis, the amount, if any, by which 17.5% of Golf Course Play Revenues exceeds an
amount equal to the annual Lease Payment (the "Additional Payment"). Effective
January ls`, 2009,the Additional Payment will be 17.5% of Golf Course Play
Revenues generated in excess of the amount of Golf Course Play Revenues for the
2008 calendar year.
Section 3
Section 4.2, Capital Reserve Account, sub paragraph(b), is hereby amended to read as follows:
0 0
4.2 Capital Reserve Account.
(b) Capital Replacement Amount. Commencing on January 1, 2003, Lessee shall pay to
the City and the City shall deposit to the Capital Reserve Account on an annual basis (i.e.
for each Lease Year) an amount(the "Capital Replacement Amount") equal to the
greater of:
(i) four percent (4%) of Golf Course Play Revenues, or
(ii) the sum of$20,000.00.
Commencing on July 1, 2005, Lessee's payment requirement shall increase to six and
one half percent(6.5%) of Golf Course Play Revenues.
Commencing on January 1, 2006, Lessee's payment requirement shall increase to six and
one half percent(6.5%) of Golf Course Play Revenues plus two and one half percent
(2.5%) of driving range revenues.
Commencing on January 1, 2009, Lessee's payment requirement shall increase to seven
and one half percent (7.5%) of Golf Course Play Revenues plus two and one half percent
(2.5%) of driving range.revenues.
Section 4
Section 7.3 Adjustment to Fees, sub paragraphs (b) and (c) are hereby amended to read as follows:
(b) Limitations on Increases in Fees. Any increase in the Fees contemplated by
Subparagraph (a) above shall not result in the Fees being in excess of eight-five percent
(85%) of the average regular rates then being charged at the Comparable Facilities, unless
the consent of the City Representative is obtained, which shall not be unreasonably
withheld. When adjustment to the Fees are established, they may be rounded upward to
the nearest one-half dollar. Effective for the 2009 calendar year, any increase in the Fees
shall not result in the Fees being in excess of the average of the regular rates then being
charged at the Comparable Facilities.
(c) Special Programs. Lessee shall not discontinue programs such as Senior Discounts,
Senior Passes, Junior Discounts, Season Passes, (including a 15% discount on season
passes for Pasco residents), and similar programs benefiting the public which have been
historically maintained at the Golf Course without the prior consent of the City, which
consent shall not be unreasonably withheld so long as such programs have been
discontinued at one (1) or more of the Comparable Facilities or the maintenance of such
programs is no longer economically viable for the operation of the Golf Course. To the
extent that Lessee desires to increase the fees or charges relating to such programs, such
increases shall be determined and governed in the same manner as applicable to the Fees
under Subparagraphs (a) and (b) above.
Section 5
Renewal Term Rider is hereby amended to read as follows:
Provided Lessee is not then in material default, and provided that neither this Lease nor any
interest in the Golf Course has been assigned, sublet, licensed, or otherwise transferred by Lessee other
than in accordance with the provisions of this Lease, Lessee shall have the right to renew and extend this
Lease (the "Renewal Option"),together with all existing terms and co_nditions,with respect to the Golf
Course for the Renewal Term upon and subject to the following terms and conditions:
1.1 La) Lessee may renew the initial Term of this Lease for one (1) Renewal Term of five (5)
years. Subject to the provisions of this Renewal Term Rider, the Renewal Term, herein
so called, shall commence immediately upon the expiration of the original Term by ,
Lessee's giving written notice thereof to City no later than twelve (12) months' prior to
the expiration of the original Term. If Lessee does not renew this Lease for the Renewal
Term, then Lessee shall have no further renewal rights.
(b) Lessee desires to install a pavilion, the estimated cost of which is in excess of$50,000, to
accommodate large group events,tournaments, etc. In the event that Lessee completes
such improvements, in compliance with all ap lip cable permits and plans approved by the
City, by March 31, 2008, Lessee shall have the right to exercise the Renewal Option,
subject to the Rent provisions(Section 2.2)in effect beginning with the 2009 calendar
year, for the term of the renewal, in lieu of the provisions for Rent as determined in
paragraphs 1.4 and 1.5, below, by giving written notice as in paragraph 1.1(a), above.
1.2 The exercise by Lessee of any Renewal Option must be made, if at all, by written notice
executed by Lessee and delivered to City on or before the date set forth in Paragraph 1.2
above. Once Lessee shall exercise the Renewal Option, Lessee may not thereafter revoke
such exercise. Lessee shall not have the right to exercise the Renewal Option at a time a
Lessee Default has occurred and remains uncured. Lessee's failure to exercise timely the
Renewal Option for any reason whatsoever shall conclusively be deemed a waiver of
such Renewal Option.
1.3 Lessee shall take the Golf Course "as is" for the Renewal Term and City shall have no
obligation to make any improvements or alterations to the Golf Course.
1,4 Rent for the Renewal Term shall be the greater of the Rent in effect for the year prior to
the commencement of the Renewal Term, or the Fair Market Renewal Rate. If City and
Lessee have not agreed upon the Fair Market Renewal Rate at least four (4) months prior
to the commencement of the Renewal Term, such Fair Market Rate shall be determined
as provided in Section 17.4, of the Lease.
4
1.5 In determining the Fair Market Renewal Rate, the parties (and Decision Makers, as
applicable) shall take into account all revenue sources then existing with respect to the
use and operation of the Golf Course, and a market rate return to the City with respect
thereto. The parties may elect to follow the allocation of the rent to different sources of
revenues as provided in this Lease, or use der another formula to establish the Fair
Market Renewal Rent hereunder.
Section 6
That all other provisions of said Lease Agreement shall remain as originally written.
CITY OF PASCO
(fov-ct S 6
JO E SON Date
M r
ATTEST: APPROVED AS TO FORM:
,
SANDY KENWORTHY LELAND B. KERR
Deputy City Clerk City Attorney
LESSEE:
IRI SUN WILLOWS ASSOCIATES LLC,
a Delaware limited liability company
By: IRI GOLF MANAGEMENT, L.P.,
a Delaware limited liability company,
Its Manager
By: Golf/Mark Corporation,
a Delaware corporation,
Its General fartner
By: S It`�IZoa�'1
Name: Jeffrey M. Silverstein Date
Title: resident