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HomeMy WebLinkAboutReso 1972-6501RESOLUTION N0. 6501 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE THIRD AMENDMENT TO THAT CERTAIN AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND DICK E. AGEE FOR THE OPERATION OF THE RESTAURANT AND BAR PREMISES 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: WHEREAS, that certain agreement between the City of Chula Vista and Dick E. Agee dated March 9, 1971 has heretofore been amended on May 25, 1971 and October 12, 1971, and WHEREAS, it is now desired to proceed with a third amend- ment to said agreement constituting a substantially changed agreement. NOW, THEREFORE, BE IT RESOLVED that that certain amendment to the agreement between the City of Chula Vista and Dick E. Agee, dated the 27th day of June 1972, a copy of which is attached hereto and incorporated herein by reference as though fully set forth herein be, and the same is hereby approved. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista be, and he is hereby authorized and directed to execute the same on behalf of the City of Chula Vista. BE IT FURTHER RESOLVED that the City Clerk of the City of Chula Vista be, and she is hereby authorized and directed to forward a certified copy of this resolution and agreement to Dick E. Agee. Presented by Approved as to form by Jahn Thomson, City Manager George Lindberg, City Attor ey h V k w *- t' ADOPTED AND AppROVED BY '1'HE CITY COUNCIL OF THE CITY OF CHULA V.1,STA, CAL.IFOF~TA, this 27th day o f June ~ 19 ~ ~ by the fallowing coo t.e , to-wit : __._. AYES: Cauvte-c~Lme,~ Scott, Hobel, Hamilton, Hyde, E dahl NAPES: Counc~.~2men None ABSENT: Couf2C~.~me,n None AT`1'EST STATE OF CALIFORNIA COUNTY OF SAN DIEGO j ~~o CITY OF CHULA VISTA ? ~, 3~NNI ~ Mo ~L1 ~ASZ, C~,~y C.~enFz o s -the C~.~y o~ ~ Ch.u2a U~..d.ta, Ca.~,i$ohntia, DU I~ER~BS~ CCRTI~y ~ha~ the above arid. ~onego~.ng ti~ a ~u.2.~, ~nue and connect cgry a(~ and ~l.a~ ,the ~camE hay n;~~ been amended on ne~ea.~edo ~~T~~: cx.t y c en "'~_, ,_ AMENDED LEASE AGREEMENT FOR THE OPERATION OF THE RESTAURANT AND BAR PREMISES AT THE CHULA VISTA MUNICIPAL GOLF COURSE THIS AMENDED AGREEMENT, made and entered into this 27th day of June , 1972, by and between THE CITY OF CHULA VISTA, a municipal corporation, hereinafter called "Lessor", and DICK E. AGES, an individual, hereinafter called "Lessee"; W I T N E S S E T H 1. LEASE PREMISES. For and in consideration of the rent hereinafter specified and the covenants and agreements hereinafter set forth, 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 preparation and sale of food, refreshments and all lawful beverages as approved by the City Manager of the City of Chula Vista. Said premises shall include all of the clubhouse located at the Chula Vista Municipal 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 existing facilities. Said premises are more particularly described as follows: A portion of the Chula Vista Municipal Golf Course club- house 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 any additional portions of said premises within said Chula Vista Municipal Golf Course as designated by the City Manager and mutually agreeable to Lessee. 2. ADDITIONAL 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 places and times as are approved and designated by the City Manager. 3. MANAGEMENT COMMITMENT. Lessee agrees to use the premises 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 termina- tion 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. 5. PRICES AND PROPOSED TYPE OF OPERATION. All prices charged ~ on sales by the Lessee shall be reasonable and consistent with current prices in the community as well as with prices charged for similar food and beverage items at golf courses throughout the County. All 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 facilities in other parts of the County. It is understood and agreed that no adjustment of prices shall be made on standard sales without the approval of the City Manager but that arrange- ; ments can be made for special occasions when prices will vary from standard rates as approved by the Manager with the concurrence of the Manager. w -1- -~~ ?/ ~,_::~ 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 may 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 herein- after provided. Lessee may also make use of vending machines for dispensing coffee, soft drinks or food items, which vending machines and the location 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. 6. MASTER PLAN TO BE PREPARED BY LESSOR. City agrees to provide a master development plan for the entire Golf Course complex, including Rohr Park, as soon as possible after the execution of this lease agreement. The premises leased pursuant to this agreement will be incorporated in and compatible with said master development plan. It is understood and agreed that Lessee will be consulted in con- junction with the development of said plan. 7. IMPROVEMENTS TO BE MADE 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 further understood and agreed that Lessee may from time to time make alteration, modifications or improvements 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 pro- vided 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 an audited 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 reviewed on an individual proposal basis with conditions of approval to be developed at that time. 8. IMPROVEMENTS TO BE MADE BY LESSOR. It is understood that City shall assume total responsibility for the improvement and maintenance of the parking lot and shall commence improvements in accordance with the master plan to be developed by the City as provided herein. The construction design shall be modular in nature. It is understood and agreed that the time and scope of the parking lot improvements shall be subject to prior approval of the City Council. 9. AMORTIZATION OF IMPROVEMENTS. All of said improvements to the premises as provided in Section 7 of this agreement shall J become fixtures and a part of the realty. Lessee agrees that the Y cost of said improvements shall be amortized over a twenty (20) year period, commencing at that time of completion of said improvement, using a straight-line depreciation method for purposes of fixing _} the City's obligations under the terms of this lease. 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 improve- ments, 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 arrangements of Lessee in the acquisition and installation of said improvements. 10. TERM OF LEASE. The term of this lease shall be a period of twenty (20) years commencing on April 10, 1972 and running to and until April 10, 1992, provided however that in addition to the termination agree- ments set forth hereinafter the City may, upon ten (10) days notice, at the sole discretion of the City Council, terminate this lease on or after June 30, 1974. 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 substantially 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. Termi- nation 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. 11. RENT. Said rent shall be the sum of THREE HUNDRED DOLLARS ($300.00) per month 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 contem- plated in Section 7 of this lease agreement is undertaken, it is understood and agreed that adjustment of this rent schedule shall be undertaken mutually beneficial to the parties. 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. 12. CITY OWNERSHIP OF IMPROVEMENTS. At the conclusion of y any amortization period established for improvements and additions installed by Lessee, which have become fixtures and a part of the r realty, all of said improvements and additions shall become the property of the City of Chula Vista. In the event that either i -s- ~loSO/ party shall exercise the right of termination of this lease or if, by operation of law, said leasehold shall be terminated or the lease terminated by the terms herein prior to the conclusion of the amor- tization periods as established between City and Lessee, City shall either: (a) 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 Lessee. Should said lease be so terminated during a calendar year, the unamortized value shall be pro-rated for said year; or (b) City may enter into a new lease for said premises which lease shall provide that the new Lessee will assume the obligation of the unamortized portion of the capital investment in the amount set forth above; or (c) City may arrange a method of financing, 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. 13. MAINTENANCE 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 exterior. City shall be fully responsible for all exterior main- tenance 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. 14. FURNITURE. Lessee shall acknowledge receipt of and responsibility for all furniture, located in the lounge and dining area. Lessee shall remove all of said furniture from the premises to a safe and reasonable storage location within thirty (30) days after Lessee assumes possession. All storage and moving costs shall be paid by Lessee. Any furniture or equipment furnished by Lessee may be removed at the termination of this lease, provided that Lessee repairs any damage resulting from the removal of such equipment. 15. ALTERATIONS OR MODIFICATIONS SUBSEQUENT TO ORIGINAL CAPITAL INVESTMENT. In the event that any alterations or modifications 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 undertaken subsequent to the original capital investment for improvements. 16. SIGNS. Lessee shall have for the business operation and any change during the course of this lease. Lessee J -4- the right to select the name thereof which may be desirable shall be authorized to place ~~sa~ 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. 17. UTILITIES. Except for such installations and utilities 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. 18. 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. 19. LIABILITY INSURANCE. During the term of this lease or any extension thereof, 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 pursuant 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 accident; 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. 20. FIRE INSURANCE. 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 investment 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 reconstructed, this lease shall terminate. If said premises cannot be repaired or recon- structed within one hundred and eighty (180) days with reasonable dili- gence as provided in Section 24 herein, this lease shall also terminate. In the event that this lease is terminated pursuant to the provisions of this section of Section 24 hereof, Lessee shall be fully responsible for the payment of any unamortized balance of his original capital investment. 21. WORKMEN'S COMPENSATION. Lessee shall maintain a policy of Workmen's Compensation Insurance to cover Lessee's employees and shall provide Social Security coverage for such employees. 22. INSURANCE CERTIFICATES FILED 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. ,. 23. ASSIGNMENT. 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 12 of this agreement may be '" assigned to a lender. 24. TERMINATION BY DAMAGE OR DESTRUCTION. If, during the term of the lease hereby granted, the leased premises shall be destroyed 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 terminate 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 terminate. 25. INVOLUNTARY ASSIGNMENT. 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 . 26. MECHANIC'S LIEN BOND. Lessee will save the City free and harmless, indemnify it against all claims for labor and materials in connection with improvements, repair or alterations to leased premises, and the cost of defending against such claims, including reasonable 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 estimated cost of the improvement, alteration or repair as determined by the City Manager of the City of Chula Vista. The bond shall be acknowledged 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. 27. RENEGOTIATION OF LEASE. If at any time during the term of this lease, Lessee presents proposals for major capital improvements 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 under- stood and agreed that the nature of the capital improvements and contemplat- ed by this lease are limited to the expansion, modification and improve- . ment of the restaurant-bar facility itself and that any proposed expansion of the operation beyond said facility may necessitate the w -,.~ r -6- ~~ ~U/ • ~. 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. - LESSOR: THE CITY OF CHULA VISTA LESSEE: DICK E. AGEE, an individual ayor of the City o Chula Vista Dick E.,Age ` ATTEST ~.~.z c.G'i i~/ -L City Clerk ~ Approved as to form by Approved as to form by ~ ~, j' '' George D indberg, City Attorn A torney for Les`~ee -~~ 7 a Y f 7 ~~Sz~/