HomeMy WebLinkAbout4655 Contract Number: 4655
Vendor: SCOTT ALEXANDER'S GOLF SHOP INC
Subject: Driving Range/Pro Shop/Golf Cart Pad
Department: Parks
File Class: LEG 16-3
Begin Date: O1/Ol/2007
End Date: 12/31/2010
Review Date: 09/O1/2010
Vault Date:
�Comments: Amendment 12/09
' AMENDMENT TO
LEASE AGREEMENT
WHEREAS, on September 13, 2007, the City of Bremerton, a municipal corporation of the State of
Washington, "Landlord" and Scott Alexander's Golf Shop, Inc., a Washington corporation, "Tenant"
� entered into a Lease Agreement; and
WHEREAS, the term of the Lease Agreement commenced on September 1, 2007 and shall ternunate on
December 31, 2009; and
WHEREAS, the parties desire to amend the Agreement to extend the term through December 31, 2010;
,
NOW THEREFORE, for mutual consideration, Landlord and Tenant agree as follows:
Section 5 of the Lease Agreement is hereby amended to extend the ternunation date to
December 31, 2010.
All other terms of the Lease Agreement not specifically amended herein shall remain in full force and
effect.
LANDLORD: TENANT:
CITY OF BREMERTON SCOTT ALEXANDER'S GOLF SHOP, INC.
-�' )�-�,�- c���—
, Mayor By: SCOTT ALEXANDER
Its:
DATE: 7 /O DATE:
By: DARYL MAT E
Its:
DATE: /� �
ATTE :
i
Carol Etgen, ity Clerk
APPROVED AS TO FORM:
R GER LUBOVICH, City Attorney
R:\Legal\Legal�Files\Current Active Files\Gold M se Agreement Amendment (2009).doc
Amendment to Lease Agreement
Contract Number:
Vendor:
Subject:
Department:
File Class:
Begin Date:
End Date:
Review Date:
Vault Date:
Comments:
4655
SCOTT ALEXANDER'S GOLF SHOP INC
Driving Range/Pro Shop/Golf Cart Pad
Parks
LEG 16-3
01/01/2007
12/31/2009
09/01/2009
LEASE AGREEMENT
1. Date and Parties. THIS LEASE AGREEMENT (the "Lease"), is entered into on
the date fully executed by and between the CITY OF BREMERTON, a municipal corporation,
hereinafter referred to as "Landlord", and SCOTT ALEXANDER'S GOLF SHOP, INC., a
Washington Corporation, hereinafter referred to as "Tenant".
2. General Recitals.
A. The Landlord owns and operates a golf complex known as the Gold
Mountain Golf Club ("Golf Club"). Gold Mountain originally had one IS-hole golf course and a
clubhouse. For purpose of this Lease, this 18-hole course shall be known as "Cascade Course"
and this clubhouse as the "Old Clubhouse". The Driving Range (the "Driving Range") is located
on the Old Course.
B. In 1996 the Landlord decided to expand the Gold Mountain Golf Club by
adding a new IS-hole golf course known as the Olympic Course. Additionally, the Landlord
built a new clubhouse (the "Clubhouse") in 2001 at a total cost of $3.5 million. The Landlord
financed $3.1 million of the total cost of constructing the Clubhouse by selling bonds (the
"Bonds"), the interest on which is not included in gross income for federal income tax purposes.
C. The Tenant has served the Landlord as its golf professional for many
years. It is the desire of the Tenant and Landlord to continue this relationship. The Tenant and
the Landlord are simultaneously, with the execution of this Lease, also entering into an
agreement for golf management and services entitled "Golf Management Agreement" and an
agreement for food and beverage service entitled "Food and Beverage Agreement" so that the
Tenant will serve as the Golf Course Professional, and provide management services and food
and beverage services for the Golf Club.
D. As an inducement for Tenant to enter into the Golf Management
Agreement and the Food and Beverage Agreement, and to assure that the customers receive all
of the services that are customary for a golf course, the Landlord has agreed to lease the Driving
Range and a portion of the Clubhouse to the Tenant. The portion of the Clubhouse to be leased
to the Tenant is for a Golf Pro Shop.
E. The Driving Range is located adjacent to the Cascade Course, neither of
which includes improvements that were bond-financed.
F. The Golf Pro Shop, the location of which is within the Clubhouse, is
pictorially illustrated in Exhibit A attached hereto and by reference incorporated herein. The pro
rata cost of construction for the Clubhouse that is attributable to the Golf Pro Shop is less than
the Landlord's contribution to the cost of construction derived from sources other than Bond
proceeds, which contribution was approved in the Declaration of Official Intent of the Landlord
adopted pursuant to federal tax law prior to the issuance of the Bonds and allocated by Landlord
to area of the Clubhouse in which the Golf Pro Shop is located.
Page 1 of8
Gold Mountain Lease
G. Tenant has a golf cart rental business and desires to lease land ("Cart
Pad") from the Landlord at Gold Mountain Golf Club for said business. The area to be leased
consists of an area of land for a total area of approximately 15,000 square feet identified in
Exhibit B attached hereto and by reference incorporated herein.
H. The purpose of this Lease is to provide for the Tenant to operate the Pro
Shop and Driving Range as well as to operate its private golf cart rental business while serving
as the Landlord's Golf Professional under the terms of the Professional Service Agreement
referenced above.
3. Premises. The premises subject to this Lease are the Driving Range located at
the Gold Mountain Golf Club, the Golf Pro Shop located in the Gold Mountain Clubhouse and
the Cart Pad (collectively, the "Premises"). The Premises are located on the real property legally
described as Section 36, Township 24 N, Range 1 West, WM in Kitsap County, Washington.
4. Use of Premises.
A. The Golf Pro Shop may be used for all activities normally related to the
retail activities of a golf course including, but not limited to, retail sales of golf related
merchandise, equipment rental, and golf related professional services. The Driving Range may
be used for all activities normally related to operating a Driving Range, including, but not limited
to, providing lessons and rental of balls and equipment.
B. The Tenant shall maintain an adequate stock of golf related merchandise
to serve the playing public.
C. The Tenant has the exclusive right to rent practice balls on the Driving
Range. The Tenant shall provide and maintain ball dispensing machines, ball retrieval and
washing equipment. The Tenant shall be responsible for retrieving the balls. The Landlord shall
be responsible for grass related maintenance of the Driving Range.
D. The Tenant shall have the exclusive right to salvage golf balls from all
water hazards at Gold Mountain.
E. The Tenant shall have the right to use the Cart Pad for the storage,
maintenance and operation of his private golf cart rental business.
F. Tenant shall not use the Premises or any part thereof for any illegal
purpose. Tenant shall not engage in any activity with respect to or on the Premises other than the
express uses and purposed stipulated therein, without obtaining prior written consent from the
Landlord, which consent can be withheld for any reason. Tenant agrees to conform to municipal,
county, and state codes, statutes, ordinances, and regulations concerning the use and occupation
of the Premises.
G. The Landlord and Tenant do not intend to allow the Premises to be used in
such a manner as to cause the interest on the Bonds to be included in gross income for purposes
of federal income taxation. If it is determined that any use contemplated under the terms of this
Lease, the Golf Management Agreement or the Food and Beverage Agreement referenced herein
Page 2 of8
Gold Mountain Lease
would cause the bonds to be private activity bonds, then the parties agree, that without penalty to
either party, the terms of this Lease, the Golf Management Agreement and/or the Food and
Beverage Agreement will be modified accordingly so as to preserve the exclusion of the interest
on the Bonds from federal income taxation.
5. Term. The term of this Lease shall be thirty (30) months commencing on
September 1, 2007 (the "Commencement Date") and shall terminate on December 31, 2009,
unless otherwise earlier terminated in accordance with Paragraph 13.
6. Golf Manaeement and Food and Beveraee Aereements. The Landlord and
Tenant, contemporaneously with the execution of this Lease, have entered into the Golf
Management Agreement and the Food and Beverage Agreement, in which the Tenant agrees to
perform the services of the Golf Professional for the Golf Club and to operate the restaurant
located within the Gold Mountain Clubhouse. A breach of the Golf Management Agreement or
the Food and Beverage Agreement shall be deemed a breach of this Lease. The faithful
performance of the terms of said agreements are part of the consideration for entering into this
Lease.
7. Rent. Tenant shall be obligated to pay the following rent for the Premises:
A. Fixed Fee. Base rent of thirty-three thousand dollars ($33,000) per year
payable $4,750 on January 1, $11,750 on April 1, $11,750 on July 1, and $4,750 on October 1 of
each year during the term of this lease.
B. Percentaee Fee. In addition, the Tenant shall pay as additional rent, six
percent (6%) of the gross revenue from the Golf Club golf cart rental and eight percent (8%) of
the gross revenues from driving range fees. These amounts shall be paid quarterly for the
preceding quarter, payable on April 15, July 15, October 15 and January 15. Tenant shall
provide a quarterly accounting to the Landlord of all "gross revenues" at the same time it makes
the quarterly payment. The Landlord reserves the right to inspect the financial statements and
records of the Tenant at any reasonable time and may require accounting to be performed in
accordance with Landlord audit standards.
C. Cart Pad. In addition to the Fixed Fee and the Percentage Fee, Tenant
shall pay $3,444 per year for the Cart Pad in quarterly payments of $861.00 on January 1, April
1, July 1, and October 1 of each year during the term of this lease.
D. Receiptine and Depositine. All revenue collected from transactions
generated from the driving range and Pro Shop must be processed through the City's Point of
Sale System and deposited as provided in Section 10 of the Golf Management Agreement.
E. Credit Card Costs and Fees. Contractor shall be responsible for all
credit card costs and related fees incurred for Contractor's business pursuant to this Lease.
8. Taxes. The Tenant shall be responsible for the timely payment of all taxes
associated with the businesses operated under the terms of this Lease. In addition, the Tenant
shall pay all leasehold taxes imposed upon the Landlord and/or the Tenant as a result of this
Lease.
Page 3 of8
Gold Mountain Lease
9. Utilities. The Landlord agrees to provide and pay all charges for electricity,
water, sewer, gas/propane, garbage, telephone, and for all other public utilities used in the
Premises. The Landlord shall not be responsible for failure of provision of these services unless
said failure is due to nonpayment for services. Each party shall pay internet and web page costs
and expenses related to their duties and responsibilities under this Agreement, unless otherwise
agreed.
10. Sublet. Tenant shall not assign this Lease or sublet the whole or any portion of
the Premises without first obtaining Landlord's written consent. Landlord may withhold its
consent for any reason. Provided, however, the Tenant may transfer the Lease to a wholly
owned corporation or limited liability company for tax purposes or third party liability purposes.
However, the Tenant shall remain personally liable to Landlord for the faithful performance of
all Lease terms. If consent is once given by Landlord to the assignment of the Lease, or any
interest therein, Landlord shall not be barred from afterward refusing to consent to any further
assignment.
11. Repairs and Maintenance. The Premises have been inspected and are accepted
by Tenant in their present condition, and Tenant will at all times keep the Premises neat, clean
and in a sanitary condition. Landlord shall maintain at its sole expense the building, including
but not limited to, the roof, foundations, exterior walls, structural members, gutters, downspouts,
concealed and underground plumbing and utilities of the Premises in good condition and repair,
except that Tenant shall be responsible for repair of any damage resulting from the negligence of
Tenant, Landlord shall not be required to redecorate the Premises at any time. Tenant shall be
responsible to maintain at its sole expense all the furniture, fixtures and equipment and provide
general maintenance as set forth in the Golf Management Agreement and the Food and Beverage
Agreement. Tenant agrees that at the expiration of this Lease, Tenant will quit and surrender the
Premises in a neat and clean condition, and will deliver all keys belonging to the Premises to
Landlord. The Contractor shall maintain the counterlkiosk area at the Driving Range. City shall
provide landscaping services for the Driving Range field.
12. Default. In case of violation of this Lease by Tenant, the Landlord shall notify
Tenant in writing of such violation. The Tenant shall cure any default that imposes an
immediate threat to the public health, safety or welfare within 24 hours. Any default in the
payment of monies due under any provision of this Lease shall be cured within 10 days. All
other violations shall be cured within thirty (30) days following the delivery of said notice. In
the event of the failure of the Tenant to remedy any default or violation of the covenants,
agreements, or conditions herein contained within the period of time specified in the notice, this
Lease and all rights of Tenant hereunder shall be terminated and the Landlord shall have the right
to enter upon the Premises and re-take possession thereof. Continued violations for same or
similar reasons may be grounds for immediate termination if a subsequent violation occurs after
the Landlord gives notice that it intends to terminate upon the further occurrence of similar
violations.
13. Termination. This Lease shall terminate on December 31,2009. This Lease can
be earlier terminated for good cause. Good cause shall mean any of the following; 1) failure to
timely cure a default after notice as provided in paragraph 12 above, 2) termination or expiration
of the Golf Management Agreement or the Food and Beverage Agreement, 3) lack of sufficient
Page 4 of8
Gold Mountain Lease
insurance proceeds to rebuild or repair the facility after damage or destruction; 4) insolvency of
the Tenant, or the appointment of a receiver to administer its financial affairs, or 5) any reason
specified elsewhere in this Lease, or the attachments hereto, that is designated as grounds for
termination. Upon the termination of the Lease, the Tenant shall vacate the Premises, and the
Landlord may immediately reenter and take possession of the Premises without the necessity of a
court order to do so.
14. Accidents and Indemnitv. Tenant agrees to defend, indemnify and hold
Landlord harmless from all loss, damage, liability or expense resulting from any injury to any
person or any loss of or damage to any property caused by or resulting from any act or omission
of Tenant or any officer, agent, employee, guest, invitee or visitor of Tenant in or about the
Premises, but the foregoing provision shall not be construed to make Tenant responsible for
injuries to third parties caused by the sole negligence of Landlord or any officer, agent,
employee, guest, invitee or visitor of Landlord. Landlord shall not be liable for any loss or
damage to person or property sustained by Tenant, or other persons, which may be caused by
theft or by any act of neglect of any tenant or occupant of the building, or of any other person, or
by any other cause, unless Landlord is judicially found solely negligent for such damage or
injury. Tenant further agrees to procure, at no expense to the Landlord, industrial insurance for
all employees of Tenant.
15. Liens. Tenant shall keep the Premises and the Golf Club free from any liens
arising out of any work performed, materials furnished or obligations incurred by Tenant.
16. Access. Tenant will allow Landlord or Landlord's agent free access at all
reasonable times to the Premises for the purpose of inspection, or of making repairs, additions or
alterations to the Premises or any property owned by or under the control of Landlord, but this
right shall not be construed as an agreement on the part of Landlord to make any repairs other
than those repairs for which Landlord is responsible pursuant to the terms hereof. Landlord shall
have the right to show the interior of the Premises to interested parties for thirty (30) days prior
to the expiration of this Lease. By mutual agreement of the Director of Parks and Recreation, or
his or her designee, (hereinafter "Director") and Tenant, portions of the Clubhouse may be
provided on a non-interference basis with no room charges assessed when conducting Landlord's
business. Room set-up is the responsibility of the Landlord.
17. Fire Insurance. Hazards.
A. No use shall be made or permitted to be made of the Premises, nor acts
done, which will increase the existing rate of insurance upon the Clubhouse or cause the
cancellation of any insurance policy covering the Clubhouse, or any part thereof, nor shall
Tenant sell or permit to be kept, used or sold, in or about the Premises, any article which may be
prohibited by the standard form of fire insurance policies. Tenant shall, at its sole cost and
expense, comply with any and all requirements, pertaining to the Premises and resulting from
Tenant's business activities, of any insurance organization or company necessary for the
maintenance of reasonable fire and public liability insurance covering the Premises, Clubhouse
and appurtenances. In the event that Tenant fails or refuses to comply with any and all such
requirements then Landlord may, at its option, assess the Tenant any increases in such fire and
public liability insurance premiums caused as a result thereof and the Tenant shall pay the same
Page 5 of8
Gold Mountain Lease
upon demand as additional rent or Landlord may declare the Tenant to be in default under the
terms of this Lease.
B. Landlord hereby releases Tenant of and from every and all right, claim
and demand the Landlord may hereafter have against Tenant or Tenant's successors or assigns
arising out of or in connection with any property loss or losses occasioned by fire and such items
as are included under the normal extended coverage clause of fire insurance policies and to the
extent of the policy limits, and does hereby waive all rights of subrogation in favor of insurance
carriers against the Tenant arising out of any lawsuit occasioned by fire and such items as are
included under the normal extended coverage clause of fire insurance policies and sustained by
Landlord in or around the Premises. Tenant hereby releases Landlord from any and every right,
claim and demand that Tenant may hereinafter have against Landlord or Landlord's successors
or assigns arising out of or in connection with any lawsuit occasioned by fire and such items as
are included under the normal extended coverage clause of fire insurance policies, and does
hereby waive all rights of subrogation in favor of insurance carriers against Landlord arising out
of any loss occasioned by fire and such items as are included under the normal extended
coverage clause of fire insurance policies and sustained by Tenant to the trade fixtures,
equipment and merchandise on the Premises. The waiver provided for in this paragraph shall be
applicable and effective only in the event such waivers are attainable from the insurance carriers
concerned.
18. Liabilitv Insurance. Tenant, at its own expense, shall provide and keep in force
with companies acceptable to Landlord, comprehensive public liability, including products
liability insurance for the benefit of Landlord and Tenant jointly against liability for bodily injury
and property damage in the amount of not less than one million dollars ($1,000,000.00). Tenant
shall furnish Landlord with a certificate of such policy, including an additional insured
endorsement acceptable to Landlord's Risk Manager, within ten (10) days of the commencement
date of this Lease and thereafter shall satisfy Landlord that such policy is in full force and effect.
Such policy shall name Landlord as an additional insured and shall be primary and
noncontributing with any insurance carried by Landlord. The policy shall further provide that it
shall not be canceled or altered without twenty (20) days prior written notice to Landlord.
19. Dama2e or Destruction. In the event the Premises, other than the Clubhouse are
damaged to such an extent as to render the same unusable in whole or in substantial part, or are
destroyed, Tenant shall give Landlord or Landlord's agent immediate written notice thereof, and
it shall be optional with Landlord to repair or rebuild the same. Landlord shall have not more
than ninety (90) days after date of such notification to notify Tenant in writing of Landlord's
intention to repair or rebuild the Premises, or the part so damaged and, if Landlord elects to
repair or rebuild Premises, Landlord shall prosecute the work of such repairing or rebuilding
without unnecessary delay, and during such period the rent of the Premises shall be abated in the
same ratio that that portion of the Premises rendered for the time being unfit for occupancy shall
bear to the whole of the Premises. If Landlord shall fail to give the notice aforesaid, Tenant shall
have the right to declare this Lease terminated by written notice served upon Landlord or
Landlord's agent. In the event that there is not sufficient insurance to pay for the repair or
rebuilding of any damaged structure, then the Landlord, in its sole discretion, may terminate this
Lease. Provided, however, prior to terminating the Lease for this reason, the Landlord shall
discuss with the Tenant other ways to provide for the funding shortfall, but such will not prohibit
the Landlord from terminating the lease.
Page 6 of8
Gold Mountain Lease
In the event the Clubhouse is damaged (even though the Premises shall not be damaged thereby)
to such an extent that in the reasonable opinion of Landlord it shall not be practicable to repair or
rebuild, or its destroyed, then it shall be optional with Landlord to terminate this Lease by written
notice served on Tenant within thirty (30) days after such damage or destruction.
20. Notices. All notices under this Lease shall be in writing and delivered in person
or sent by registered or certified mail to Landlord in care of the Director, 345 6th Street, Suite
600, Bremerton, Washington 98337, and to Tenant at P.O. Box 197, Bremerton, Washington
98312, effective as of postmark time and date, or to such other place as may hereafter be
designated by either party in writing.
21. Alterations. Tenant shall not make any alterations, additions or improvements in
the Premises without first obtaining the consent of Landlord in writing, which consent can be
withheld at Landlord's sole discretion. All alterations, additions and improvements, shall be at
the sole cost and expense of Tenant, and shall remain in and be surrendered with the Premises as
a part thereof at the termination of this Lease. If Tenant shall perform work with the consent of
Landlord, as provided above, Tenant agrees to comply with all laws, ordinances, rules and
regulations of the City of Bremerton and any other authorized public authority. Tenant further
agrees that workmanship will be of a reasonable commercial quality, in color schemes in
accordance with current building standards and free of mechanics liens. Tenant further agrees to
save Landlord free and harmless from damage, loss or expense arising out of such work.
22. Costs and Attornev Fees. If, by reason of any default or breach on the part of
either party in the performance of any of the provisions of this Lease, a legal action is instituted,
the losing party agrees to pay all reasonable costs and attorney fees in connection therewith. It is
agreed that the venue of any legal action brought under the terms of shall be in Kitsap County.
23. Amendments. This Lease may be amended at any time only by written
agreement signed by the parties.
24. Insolvency. In the event that the Tenant shall become insolvent or go into
bankruptcy, this Lease may be canceled at the option of the Landlord without notice, and the
Landlord may take immediate possession of the Premises and the whole thereof and the same
shall not become an asset in bankruptcy.
25. Nondiscrimination. Tenant shall not discriminate in employment or services to
the public on the basis of sex, race, color, creed, national origin, age, marital status, physical,
mental or sensory handicap except an employment action based 0 a bona fide occupational
qualification.
26. Waiver. Failure to insist upon strict compliance with any terms, covenants or
conditions of this agreement shall not be deemed a waiver of such, nor shall any waiver or
relinquishment of such right or power at any time be taken to be a waiver of any other breach.
27. Bindin~ Effect. This Lease shall be binding upon the heirs, successors, assigns
and all other parties legally empowered with signatory rights of any or all of the parties hereto.
Page 7 of8
Gold Mountain Lease
28. Invalidity of Provisions. Should any term, provision, condition or other portion
of this lease be held to be inoperative, invalid or void, the same shall not affect any other term,
provision, condition or other portion of this Lease and the remainder of this Lease shall be
effective as if such term, provision, condition or portion had not been contained herein.
29. Previous A2:reements Superseded. The terms and conditions of this Lease
supersede the terms, obligations and conditions of any existing or prior agreement between the
parties regarding the subject matter of this Lease. This lease replaces in its entirety any prior
agreements including prior leases and any amendments and extensions thereto.
30. Entire A2:reement. This Lease, including the exhibits and statutes referenced
herein contain the entire agreement between the Parties and are the embodiment of all written or
oral representations between the parties hereto.
DATE:
9-/3-01
ATTEST:
('.AtA~d"",~r,- ,~
P AULA JOHNSTON, Cit Clerk
TENANT:
~~~
By: S~OTT ALEXANDER
Its: ytt6s,Os"Jr
DATE: q [11-(01
DATE: I ~ 1
R:\Legal\Legal\FileS'iCurrent Active Files\Gold Mountain\Lease Agreement - FINAL.doc
Page 8 of8
Gold Mountain Lease
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