HomeMy WebLinkAboutReso 1975-7639i
Form~No. 34'2
Rev. 3/7~
RESOLUTION NO, 7639
RESOLUTION OF THE CITY COUNCIL OF ThE CITY Or' CHULA
VISTA, APPROVING AGREEMENT BETWEEN THE CITY OF CHULA
VISTA AND DONALD J. DANIELSON, T. DAVID EYRES, JOSEPH M.
BURKHART, GENE R. SIEBEN FOR THE OPERATION OF THE BAR AND
RESTAURANT AT THE CHULA VISTA MUNICIPAL GOLF COURSE
AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT
The City Council of the City of Chula Vista does hereby
resolve as follows:
NOW, THEREFORE, BE I`T RESOLVED that that certain agreement
between THE CITY OF C~3ULA VISTA, a municipal corporation, and
DONALD J. DANIELSON, T. DAVID EYRES, JOSEPH M. BURKHART, GENE R.
SIEBEN, for the operation of the bar and restaurant at the Chula
Vista Municipal Golf Course
dated the 11th day of February 19~~, a copy of
which is attached hereto and incorporated herein, the same as though
fully set forth herein be, and the same is hereby approved,
BE I:T F`URTE~ER RESOLVED that the Mayor of the City of Chula
Vista be, and he is hereby authorized and directed to execute said
agreement for and on behalf of the City of Chula Vista.
Presented by Approved as to form by
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George D. Lindberg, City At orney George D. Lindberg, City Attorney
ADOPTED AND APPROVED by the CITY COUNCIL of the CITY OF CEULA
VISTA, CALIFORNIA, this 11th day of February , 19 75 , by
the followinc, vote, to-wit: °°
AYES: Councilmen Egdahl, Scott, Hobel, Hamilton~Hyde
NAYES: Councilmen None
ABSENT: Cauncx.lmen None
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Ci~CV Jerk
STATE OF CALIFORNIA)
COUNTY OF SAN DIEnO) ss.
CITY OF CFIULA 'VISTA]
rlayor of th ~{
I, _, City Clerk of the City
of Chula Vista, California, DO IiEREBY CERTIFY that the above is a cull,
true and correct coc~y of. Resolution No._ and that the same has
not been amended or repealed. DATED
e Cit of Chula Vista
City Clerl~
LEASE AGREEP'IENT k'OR THE OPERATION OF THE RESTAURATIT
AND BAR PREMISES AT TFE CHULA VISTA MUNICIPAL GOLF
COURSE
THIS AGREEMENT, made and entered into this 11th day of
February , 1975, by and between THE CITY OF CHULA VISTA, a
municipal corporation, hereinafter called "Lessor", and DONALD J.
DAr1IELSON, T. DAVID EYRES, JOSEPH M. BURKHART, GEPdE RICHARD SIEBEN,
a partnership, hereinafter called "Lessee";
W T T N E S S E T H
WHEREAS, the City of Chula Vista has heretofore entered
into a lease agreement for the management and operation of the bar
and restaurant facilities located at the Chula Vista municipal Golf
Course known as "The Glenn" with Dick E. Agee on the 9th day of March,
1971, as amended on the 27th day of June, 1972, and
WHEREAS, said Lessee, Dick E. Agee, now wishes to assign
said lease agreement in accordance with Paragraph 23 thereof, and
WHEREAS, pursuant to said provisions, the City has given
written consent to said assignment and now wishes to reform and
amend said lease agreement by establishing a new lease with the
partnership as delineated hereinabove subject to certain modifica-
tions of terms and conditions as contained herein, and
WHEREAS, said partnership Lessee agrees hereby to make
certain specified improvements within six (6) months of their assump-
tion of control of the premises.
PdOW, THEREFORE, IT IS P~4UTUALLY UNDEP,STOOD AP3D AGREED by
and between the parties hereto as follows:
1. LEASE PREMISES. For and in consideration of the rent
hereinafter specified and the covenants and agreements hereinafter
set fortYi, Lessor agrees to lease to Lessee those certain premises
with the appurtenances set forth herein, to be used exclusively for
the operation and maintenance of a bar and restaurant, including a
coffee shop and banquet facilities, and such activities as are
commonly or usually conducted in said premises and for the prepara-
tion and sale of food, refreshments and all lawful beverages as
approved by the City Manager of the City of Chula Vista. Said pre-
mises shall include all of the clubhouse located at the Chula Vista
runicipal Golf Course mutually agreeable to Lessee, except for that
portion of the premises presently used for the operation of a pro
shop and electric golf cart storage room, and the property immediately
adjacent to said existing buildings and for the expansion of the ex-
isting facilities. Said premises are more particularly described as
follows:
A portion of the Chula Vista Municipal Golf Course
clubhouse in the Sweetwater Valley consisting of
approximately 5,882 square feet of space as is now
designated and used as a restaurant and bar facility,
together with ary additional portions of said pre-
mises within said Chula Vista Municipal Golf Course
as designated by the City Manager and mutually agree-
able to Lessee.
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~~t,: 2. ADDITIOPdAL PRIVILEGES. In addition to the use of said
premises, Lessee may be permitted to establish concessions on said
golf course for the purpose of the sale of refreshments and beverages
at such place and times as are approved and designated by the City
Manager.
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3. MANAGEMENT COMMITMENT. Lessee agrees to use the pre-
mises for the purpose for which they are demised and to diligently
conduct the business so as to produce a reasonable and substantial
gross income, and failure to so conduct said business shall be grounds
for termination of this lease.
4. USE AND HOURS. Lessee agrees to use said premises, and
agrees to keep open said restaurant and bar in accordance with the
hours of operation permitted under the State law, or as mutually
agreed to by the parties hereto. It is understood and agreed that
said hours of operation shall be subject to the approval of the City
Manager. It is further understood that that portion of the premises
devoted to a coffee shop operation serving primarily golfers utili-
zing the Chula Vista Municipal Golf Course shall be open and offering
full services at 6:00 a.m., seven (7) days a week.
5. PROPOSED TYPE OF OPERATION AND PRICES. It is understood
and agreed that Lessee shall be required to maintain a short order bar
and restaurant operation specifically catering to the needs and desires
of the golfers using the Chula Vista Municipal Golf Course recreational
facility.
In addition, Lessee shall establish a restaurant open to and
catering to the public in the balance of the leased premises. Lessee
shall institute such changes and modifications of the premises in
order to accommodate these divergent restaurant and bar operations.
Any such modifications are subject to the approval of the City Manager
as hereinafter provided.
Lessee may also make use of vending machines for dispensing
coffee, soft drinks or food items, which vending machines and the loca-
tion, placement and design thereof shall be subject to prior approval
of the City Manager, provided said vending machines shall not be full
substitute for services to the golfers.
In the facilities serving primarily the needs of the golfers,
all prices charged on sales by the Lessee shall be reasonable and con-
sistent with current prices in the community as well as with prices
charged for similar food and beverage items at golf courses through-
out the County. Said prices are subject to review and approval of
the City Manager who shall take into account the type of food or
beverage being sold and the charges being made for comparable items
in this community as well as at golf course bar and restaurant facili-
ties in other parts of the County. It is understood and agreed that
no adjustment of prices on food or beverages for the golfers shall be
made on standard sales without the approval of the City Manager but
that arrangements can be made for special occasions when prices will
vary from standard rates as approved by the Manager with the con-
currence of the Manager.
6. IMPROVEMENTS TO BE T~iADE BY LESSEE. Lessee agrees to
accept the premises in their existing condition, including the fur-
nishings as listed herein. Lessee further agrees to develop a plan
for the construction of improvements in addition to the existing
facilities. It is understood and agreed that said improvements are
intended to provide for expanded services and allow for the operation
of a coffee shop, Class "A" restaurant and bar, and banquet facilities.
Said plans shall be subject to the approval of the City Council and
any undertaking for the implementation of the plans shall not be
commenced without said approval. Any proposals for the expansion
of the facility and installation of improvements as contemplated
herein shall be submitted with complete design plans and funding
commitments in hand. It is further understood and agreed that
Lessee may from time to time make alteration, modifications or im-
provements of the existing facility, which may be necessary for the
continued operation of the facility. Any such improvements shall be
subject to prior approval by the City Manager and shall be amortized
as provided herein. It is understood and agreed that said additions
and improvements shall first be approved by City and the total cost
of said improvements, based upon actual construction costs, shall be
submitted to~City with a financial statement. It is understood and
agreed that any capital improvements of the restaurant and bar
facility shall be subject to said specific design plans and any
capital improvements or total package of improvements shall be re-
vievaed on an individual proposal basis with conditions of approval
to be developed at that time. Lessee spec if ically agrees to prepare
plans for and develop a permanent sound-proofing partition between
the coffee shop utilized by the golfers and the public restaurant
and bar. Lessee further agrees to prepare plans for either the
creation of additional rest room facilities so that the golfers will
have separate rest room and locker facilities from those used by
the general public in the restaurant operation or plans which will
achieve such a goal with existing facilities to the fullest extent
possible.
7. MASTER PLAN AND IMPROVEMENTS TO BE MADE BY LESSOR.
City may develop a master development plan for the entire Golf Course
complex including Rohr Park. Lessee shall be consulted in the develop-
ment of any such master plan as said plan may affect the operation of
the leased premises. City and Lessee shall consult from time to time
concerning any necessary improvement of the existing parking facili-
ties which are used jointly by golfers and patrons of the leased
premises and any improvements mutually deemed to be desirable shall
be accomplished through an equitable division of the costs thereof.
In the event that a master plan developed by the City or an addi-
tional program of development by the City should include a bar and
restaurant operation on any City-owned lands contiguous to the Muni-
cipal Golf Course, Lessee shall have the right of first refusal for
such an operation.
8. AMORTIZATION OF IR~PROVEMENTS. All of said improvements
to the premises as provided in Section of this agreement shall
become fixtures and a part of the realty. Lessee agrees that the
cost of said improvements shall be amortized over a period of time
as agreed upon by City dependent upon the nature of the improve-
ments commencing at the time of completion of said improvements
utilizing a straight-line depreciation method for purposes of fixing
the City's obligation under the terms of this lease. Those improve-
ments heretofore installed by Lessee's predecessor in interest, which
Lessee agrees to assume financial obligation for from Dick E. Agee,
shall be amortized commencing at the time of their installation by
Dick E. Agee to April 10, 1992.
Provided further that said amortization period shall be
used for the purpose exclusively for determining the City's and
Lessee's obligation for payment of rent and transfer of the premises
to the City and shall in no way prevent Lessee from requesting an
adjustment of said amortization period to a shorter period of time
for specific improvements, e.g., the air conditioning system which
will depreciate over a shorter period of time. Said shorter periods
of amortization shall be approved by the City Manager acting for and
on behalf of the City in order to facilitate necessary financial
arrangerlents of Lessee in the acquisition and installation of said
improvements.
9. TERM OF LEASE. The term of this lease shall be for a
period of twenty 20 years commencing on March 4, 1975 and
running to and until March 3, 1995.
This lease may be terminated at any time by either party
upon one hundred and eighty (180) days written notice, provided
that termination by Lessor shall be based upon a failure to sub-
stantially perform in accordance with the terms and conditions of
this lease. Lessor shall give Lessee written notice of said non-
performance, directing the Lessee to perform in accordance with
the terms and conditions of this lease within ninety (90) days.
Should Lessee fail to so substantially perform within said ninety
(90) day period, City may terminate said lease ninety (90) days
thereafter. Termination by Lessee as provided herein must be by
written notice given to the City. Lessor shall also tender to
Lessee the proportional part of any rent paid in advance by Lessee.
~3 ~~~~y
10. RENT AND AUDIT RIGHTS. Said rent shall be the sum of
THREE HUTJDRED DOLLARS 3 per month to be adjusted annually on
the anniversary date of this lease to reflect the cost of living in-
crease as reflected by the United States Department of Commerce Con-
sumer Price Index of Commodity Prices, or a sum equal to four percent
(40) of the gross proceeds of all sales made on or from the leased
premises or other facilities located at the Chula .Vista Municipal
Golf Course under the control of the Lessee during such month, whichever
amount is greater. At such time as expansion of the facility as con-
templated in Section 6 of this lease agreement is undertaken, it is
understood and agreed that any principal and interest payments for
improvements made by Lessee, as approved by City, shall be deducted
from the maximum four percent (40) of gross rental proceeds, however,
the minimum $300.00, as it may be adjusted from time to time to re-
flect the cost of living increases, shall remain as a floor on the
rental.
Gross proceeds, as used in this lease, shall include all
income resulting from the occupancy of the premises from whatever
source derived, including manufacturer's or importer's excise tax,
but shall not include federal, state or municipal taxes collected
from the consumer and paid over periodically by Lessee to a govern-
mental agency. Gross proceeds, as used in this lease, shall exclude
the cost of employees' meals and tips as a portion of the income
derived from the operation of the business. Lessee shall submit a
monthly statement, together with the monthly rental payment. Lessor
shall have the right to audit Lessee's records at any time. When-
ever the rent hereunder is dependent on percentage calculations
of gross income accruing to Lessee or materials of any kind removed
from the leased premises during all of the interval concerned,
Lessee shall keep, or cause to be kept, true, accurate and complete
records and double entry books from which the City can at all times
determine the nature and amounts of income subject to rental per-
centage from the operation of the leased premises. Such records
shall show all transactions relative to the conduct of the operation,
and such transactions shall be supported by documents of original
entry such as sales slips, cash register tapes, purchase invoices
and tickets issued. It is further understood that Lessee shall pay
any lawful and legal taxes that may be levied by any taxing agency.
11. CITY OWNERSHIP OF IMPROVEMEPdTS. At the conclusion of
any amortization period established for improvements and additions
installed by Lessee, which have become fixtures and a part of the
realty, all of said improvements and additions shall become the
property of the City of Chula Vista.
In the event that the City should exercise the right of
termination as provided by this lease or if, by operation of law,
said leasehold shall be terminated prior to the conclusion of the
amortization period for those fixtures and capital improvements
which Lessee as acquired through the assignment of this lease, City
shall purchase the improvements or additions from Lessee in an amount
not to exceed eighty percent (80%) of the then unamortized value of
the original capital investment of the assignor of the Lessee. Should
said lease be so terminated during a calendar year, the unamortized
value shall be pro-rated for said year.
In the event that the City should exercise the right of
termination of the lease or if, by operation of law, said leasehold
shall be terminated, any improvements or additions undertaken by
Lessee, as approved by the City, shall be purchased from Lessee by
the City for the unamortized value of said improvements on a straight-
line depreciation for the period of years as agreed upon between the
City Manager and Lessee at the time of approval of any capital im-
provement project is requested.
In the event
accordance with the pry
tion to purchase shall
based upon the formula
however, that the City
the necessity for said
that Lessee should terminate the leasehold in
visions contained herein, the City's obliga-
be determined by negotiation substantially
set forth in this paragraph recognizing,
has not precipitated the action leading to
purchase of fixtures and capital improvements.
'~_ ~~~~~
The City may enter into a new lease for said premises
which lease may provide that the new Lessee shall assume the obli-
gation of said unamortized portion of the capital investment in
the amount set forth above, or City may arrange a method of finan-
cing, whether through bonding or lease-purchase or some other method
approved by the City, to refinance the unamortized balance of the
original capital investment. It is understood and agreed that
said options in no way obligate future revenues of the City of Chula
Vista.
12. MAIZ~3TENANCE OF PREMISES. Lessee shall care for and
maintain the interior of the leased premises and shall provide for
the ordinary and routine cleaning of windows both interior and ex-
terior. City shall be fully responsible for all exterior mainte-
nance of the premises and shall provide for and maintain landscaping
in the area immediately surrounding the clubhouse premises in accor-
dance with plans approved by the Landscape Architect of the City.
Lessee agrees to transfer said lease premises in good repair, and
shall be fully responsible for said interior maintenance so as to
maintain them in the same order and condition in which received,
except for any structural portions thereof, any ordinary wear and
tear, and any act, occurrence or happening including those within
and insured against by the extended coverage fire insurance policy
which shall be procured and maintained by Lessee in accordance
with the provisions of this lease. Lessee shall, at all times,
keep the premises in a clean, sanitary and orderly condition, and
all personnel employed in the service to the public shall be clean
and properly dressed in clean clothing suitable for such purposes.
It is understood and agreed, with reference to maintenance as well
as overall management of the operation, Lessee shall have full and
complete control and shall at no time request the assistance of City
in fulfilling any of these obligations. Further, Lessee agrees to
employ a professional cleaning service for the specific purpose of
maintaining the rest rooms in a clean and sanitary condition at all
times and Lessee will frequently check to insure that such condi-
tions are maintained and take such additional steps are may be
required upon such examination to remedy any unclean or unsanitary
conditions.
13. FURNITURE. Lessee
responsibility for all furniture,
area. Any furniture or equipment
at the termination of this lease,
damage resulting from the removal
shall acknowledge receipt of and
located in the lounge and dining
furnished by Lessee may be removed
provided that Lessee repairs any
of such equipment.
14. ALTERATIONS OR MODIFICATIONS SUBSEQUENT TO ORIGINAL
CAPITAL INVESTMENT. In the event that any alterations or mo ifica-
tions of the premises are undertaken by the Lessee, including major
repairs or remodeling, said alterations, modifications or repairs
must be first approved by the City and shall be undertaken at the
sole cost of Lessee, provided, however, that City and Lessee may
mutually agree to share in some manner the cost of major remodeling
underta}:en subsequent to the original capital investment for im-
provements.
15. SIGNS. Lessee shall have the right to select the
name for the business operation and any change thereof which may
be desirable during the course of this lease. Lessee shall be
authorized to place appropriate signs upon the exterior of the
clubhouse and in other locations as may be desired; provided,
however, that any such signs must first be approved by the Director
of Planning of the City of Chula Vista.
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16. UTILITIES. Except for such installations and utili-
ties as Lessor herein expressly agrees to pay, Lessee shall order,
obtain and pay for all utilities, and the service and installation
charges in connection therewith.
17. HOLD HARMLESS. Lessee shall, during the term of
this lease or any extension thereof, hold harmless and indemnify the
City, its officers and employees from and against all claims, demands,
loss damage and liability arising out of or connected with the use of
the leased premises by Lessee.
18. LIABILITY INSURANCE. During the term of this lease
or any extension thereo Lessee shall obtain an insurance policy
from a responsible and solvent corporation authorized to issue such
policy under the laws of the State of California, which policy shall
insure the parties to this lease against loss or liability imposed
by law for injury to or death of any person or damage to property
arising from or growing out of the use of the leased premises pur-
suant to this lease, to the minimum amount as follows:
FIFTY THOUSAND DOLLARS ($50, 000.00) property damage;
TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000.00)
for death or injury to any one person in any one acci-
dent; FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) for
death or injury to two or more persons in any one
accident.
Such policy shall include "products" liability coverage.
19. FIRE IISURANCE. City shall maintain fire insurance
sufficient to cover the cost of replacement of the original structure
as transferred to Lessee, and Lessee agrees to provide fire insurance
sufficient to cover the cost of the replacement of the improvements
and additions constructed as a part of the original capital invest-
ment for improvements or such improvements as may thereafter be
constructed in accordance with the provisions of this lease. In
the event of the destruction by fire or the elements or other cause,
Lessee agrees to proceed with the reconstruction of the premises
within one hundred and eighty (180) days; provided, however, that
if it is mutually agreed by City and Lessee that the premises should
not be reconstruct d, this lease shall terminate. If said premises
cannot be repaired or reconstructed within one hundred and eighty (180)
days with reasonable diligence as provided in Section 23 herein, this
lease shall also terminate. In the event that this lease is termi-
nated pursuant to the provisions of this section of Section 23 hereof,
Lessee shall be fully responsible for the payment of any unamortized
balance of his original capital investment.
20. WORY.MEN'S COMPENSATION. Lessee shall maintain a
policy of Workmen s Compensation Insurance to cover Lessee's em-
ployees and shall provide Social Security coverage for such employees.
21. INSURANCE CERTIFICATES FILES WITH FINANCE OFFICER.
Lessee shall file the above named policies or certificates thereof
with the Finance Officer of the City of Chula Vista. The Finance
Officer may, at any time, require Lessee to replace any such policy
or certificate with another policy or certificate.
22. AS5IGN1"lENT. Lessee shall not assign or transfer this
lease or any part thereof without the written consent of the City
first had and obtained; provided, however, that subject to the
approval of City, the rights set forth in Paragraph 11 of this
agreement may be assigned to a lender, provided, further, that
Lessee may incorporate and transfer assets to said corporation.
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23. TERMINATION BY DAMAGE OR DESTRUCTION. If, during-the '
term of the lease hereby grante , the leased premises shall be de-
stroyed by fire or the elements or any other cause, and if same shall
be so damaged that they cannot be repaired with reasonable diligence
within one hundred and eighty (.180) days, then said lease shall termi-
nate at the option of either party and become null and void from the
date of such damage or destruction, and in the event of the exercise
of such option by either party, Lessee shall immediately surrender
the premises to City and this lease agreement shall thereupon termi-
nate.
24. INVOLUNTARY ASSIGNMEPdT. This lease cannot be assigned
involuntarily or by any process of law, and in case Lessee is adjudged
to be bankrupt or insolvent or Lessee makes a general assignment for
the benefit of creditors or fails to release any levy or attachment
or execution upon Lessee's property within ten (10) days after such
levy is made, then it shall be optional with the Lessor to consider
any of the same a breach of this lease and to cancel and terminate
this lease, but nothing herein contained shall be construed to compel
Lessor to do so.
25. MECHANIC'S LIEN BOND. Lessee will save the City free
and harmless, indemni y it against all claims for labor and materials
in connection with improvements, repair or alterations to leased pre-
mises, and the cost of defending against such claims, including rea-
sonable attorney's fees. In the event that improvements, repairs or
alterations are constructed on the leased premises by other than the
City, the Lessee shall file with the City a bond, conditioned for
the payment in full of all claims of all persons performing labor
upon or furnishing materials to be used, in the amount of the esti-
mated cost of the improvement, alteration or repair as determined by
the City Manager of the City of Chula Vista. The bond shall be ac-
knowledged by the Lessee as principal and by a corporation licensed
by the Insurance Commissioner of the State of California to transact
the business of a fidelity and surety insurance company as surety.
In the event that a lien is recorded under Chapter II of Title 4 of
Part 3 of the California Code of Civil Procedure against the leased
premises and the lien-holder attempts to perfect such lien by a
lawsuit and the Lessee has failed to comply with the requirements
of this paragraph, this lease shall automatically terminate five (5)
days after the service of summons in such lawsuit upon the City;
provided, however, that the City Manager shall have the right to
continue this lease in full force and effect by notifying the Lessee
in writing of his election to do so.
26. RENEGOTIATION OF LEASE. If at any time during the
term of this lease, Lessee presents proposals for major capital im-
provements which are approved by the City Council, the terms and
conditions of this lease shall be amended accordingly to reflect new
programs of operation and amortization of said improvements. It is
further understood and agreed that the nature of the capital improve-
ments and contemplated by this lease are limited to the expansion,
modification and improvement of the restaurant-bar facility itself
and that any proposed expansion of the operation beyond said facility
may necessitate the establishment of a competitive bidding system in
which Lessee may submit proposals which will be considered by the
City Council.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed the day and year first hereinabove set forth.
LESSEE:
Donald- J. Dani~'I''~n
Approved a s tfcl, f m by
City Attorney _7_
T. David Eyres //
~~'~ ~ ~
o eph Burkhart
i . ~ ( / ~... . !~- ~ .`a. .
Gene Richard Sieben ~~;;rr
G~, 7~3y
LESSOR: THE CITY OF CHULA VISTA
CITY l;`~,i`;i OFFICE