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Home My WebLink AboutContract 26716CITY SECREiARY � �, .�� CONTh�ACT NO. —_ AMENDMENT TO CITY SECRETARY CONTRACT NO. 22169 LEASE AGREEMENT BETWEEN CITY OF FORT WORTH AND CAS1N0 BEACH GOLF, INC. WHEREAS, on the 11 day of May, 1987, the City of Fort Worth and Casino Beach Golf, Inc. entered into a lease agreement whereby Casino Beach Golf, Inc. leased from the City of Fort Worth approximately 52.287 acres of public land around Lalce Worth to operate a golf course, golf retail shop and related facilities. Said lease was recorded in the office of the County Clerlc, Tarrant County, Texas, Volume 11482, Page 1418; and WHEREAS, on October 10, 1996, the lease recorded in the office of the County Clerk, Tarrant County, Texas, Volume 11482, Page 1418 was amended by City Secretary Contract No. 22169 modifying the terms of the lease agreement, incorporating the agreement, as modified, into the new lease agreement, and superseding the recorded lease agreement; and WHEREAS, it is the intention of the City of Fort Worth to partner with Casino Beach Golf, Inc. in the continued operation of the golf course and related facilities; and WHEREAS, the parties to City of Fort Worth City Secretary Contract No. 22169, desire to modify the terms of their lease agreement and incorporate their agreement, as modified, into the lease agreement under City Secretary Contract No. 22169; NOW, THEREFORE, KNOW ALL BY THESE PRESENTS: That, for and in consideration of the mutual agreements in the Lease, the City of Fort Worth, hereinafter referred to as "Lessar", acting by and through its duly autharized assistant city manager, Libby Watson and Casino Beach Golf, Inc., hereinafter referred to as "Lessee", acting by and tluough Steve Champion, do hereby agree as follows: 1. Paragraph 2, RENTAL, of City of Fort Worth City Secretary Contract No. 22169 �.. _..�.-rr....�...�3 � �:�;�i��0�.�0�'�� C��QD 1 ! �� U ilr C;'�I�W4W11�U � ` � ;� �;t�,r�+�� !�� J U� o t.. ._..,� , �..,t, is hereby is amended to read in its entirety as follows: A. AMOUNT Lessee shall pay annual rent to the City of Fort Worth the amount of ten percent (10%) of gross annual receipts or $13,200.00 whichever is greater. "Gross Receipts" shall be defined as all money received annually by Lessee as a result of the sale of goods or the provision of services on the demised premises or in conjunction with the use of the demised premises, exclusive of the payment of City and State sales taxes. Monthly payments shall be $1,100.00 each month, representing one-twelfth, (1/12th) of the total annual amount. All monthly payments shall be made in advance, on or before the tenth (lOt�') day of each calendar month at such location or locations which may be specified in writing by Lessor. Monthly payment amounts become past due on the eleventh (1 lth) day of each calendar month. All past due amounts owed by Lessee shall be subject to a late charge of ten percent (10%), plus an additional late charge after thirty (30) days to be computed at a rate of one percent (1%) per month; provided, however, that this provision for late charges shall not be construed as a waiver of the right of Lessor to terminate this Lease at its option as authorized in Section 18. B. RECORDS Lessee shall keep fiill, coinplete and proper boolcs, records and accounts of the gross receipts, both for cash and credit, of each separate department, concession, division, and subsidiary activity at any time operated on or in conjunction with the Lease and shall report same monthly to the Lessor. Said books, records and accounts, including any sales tax repoi-ts that Lessee may be required to fiirnish to any government or governmental agency, shall at all reasonable times be available for inspection by the City and its authorized representatives and agents. Lessee agrees to maintain its financial records pertaining to the operation of the Lease for a period of two (2) years after the conclusion of any lease year. ''�iU�� °�� '��GQ� ��' ��'r� l�" �i� 2 �. .��.. �yhi+� I'�U U 9 U 5(/Ua C. AUDITS Not later than thirty (30) days following the end of the lease year, Lessee shall provide a statement of gross receipts for the previous lease year and a copy of Lessee's state sales tax report for the same time period. The city may audit, or require to be audited, all of Lessee's boolcs, records and accounts pertaining to its operations at the Leased Premises. The cost of such audit shall be paid by Lessee if the outcome shows an error in the amount due the City of five percent (5%) or more. Otherwise, the cost of such audit shall be borne by the City. 2. City of Fort Worth City Secretary Contract No. 22169 is hereby amended by adding a new paragraph, Paragraph 3A CAPITAL IMPROVEMENTS, to read and shall be as follows: A. To date, Lessee has completed $213,700 of the $1,068,900 required under E�ibit "B" of City Secretary Contract Number 22169. Lessee and Lessor agree that only two out of the seven capital projects required to be completed by the end of 1998 are substantially complete. B. Lessee shall submit a detailed arrd verified schedule of any capital costs, exclusive of any financing costs, incurred after the execution of this Amendment. This shall include all reasonable planning, design, and construction costs for the approved improvement. C. When the total amount of the capital costs has been verified and determined by Lessee and Lessor, Lessee shall be eligible for reimbursement of the capital costs as stated in Paragraph D below and computed as follows: from and after the first day of the subsequent year in which the improvements are competed, the improvements will be depreciated at the rate of 10% per year in straight line depreciation. Improvements that are not fitlly depreciated by the end of the primary term will not be eligible for reimbursement. r�T-=°�-�^`"�`�-�`�,�_�� ,:;�C�Gs�� G��G�� Ir�l��r �l�'�' �}C��i 3 � r�� ., . � a �� C�'l�C!��.��a �..�_—..._�— a -�.�.a.___ D. Lessor will reimburse Lessee for the iinprovements less accumulated depreciation if Lessor cancels this Lease provided that Lessee remains in good standing for all conditions and is not in default of any term of the Lease. Lessor shall not reimburse an amount �reater than the amount of the improvement net of all accumulated depreciation. All improvements shall be fiilly depreciated at the end of the first renewal term. Therefore, Lessor shall have no obligation to reimburse Lessee for any improvements thereafter. E. If Lessee exercises its option to terminate the lease, whether in the primary term or in any renewal term, Lessor shall not be liable for reimbursement of any improvements. Further, any improvements not removed by Lessee within ninety (90) days after termination of the lease becomes the property of the Lessor to use in the sole discretion of the Lessor. 3. EXHIBIT B, CAPITAL IMPROVEMENTS LAKE WORTH LEASE CASINO BEACH GOLF, of City of Fort Worth City Secretary Contract No. 22169 is hereby deleted in its entirety. � Paragraph 25, TERMINATION, of City of Fort Worth City Secretary Contract No. 22169 is hereby amended to read in its entirety as follows: Either party may terminate this lease at any time by giving the other party sixty (60) days written notice. All terms of Paragraph 3A CAPITAL IMPROVEMENTS shall apply to the termination of this Lease. Lessor may not terminate this lease solely for the purpose of gaining control of Lessee's business enterprise. 5. ��a�� '�C��QD l✓'oU U C�)L5��U5l�lVnIRS u 4 �', .ti"� `:'�� o All other terms, conditions and covenants of City of Fort Worth City Secretary No. 22169 not expressly amended herein shall remain in full force and effect. ,/ u;� � Executed this the !� day of ,,�.t r , 2001. CITY OF��?ORT WORTH CASINO BEACH GOLF, INC. By: �� `�� B Libby atson t hampion Assistant City Manager Owner AT�` T: � /, jl � `" .�� ' �\�'�, �' �f,'� �� ; �y - Gloria�Pearson, City Secretary _ _?:�, f�C.; i APPROVED AS TO FORM AND LEGALITY: David tt, City Attorney Y� �- � �`�c.,Q,��,�- �'�— Assista ity Attorney � C� - /�'�`�.�� eontract Ruthorization �- `3-c� / Date �� ,;��d� �IU�� G��C�GQD ; �, � ��r N}�;� �� f��G�� ; (,�`�a.��L�:�V�'I, �C�a __ R ��._ City of Fort Worth, Texas �i�A�ar A11d Counc�l C,a�nn�tun�cA�ian DATE 4/3/01 SUBJECT REFERENCE NUMBER LOG NAME C-18535 :�: � � PAG E 1 of 2 AUTHORIZATION TO EXECUTE A CONTRACT AMENDMENT WITH CASINO BEACH GOLF. INC. RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute an amendment to the contract with Casino Beach Golf, Inc. to eliminate additional capital improvements as outlined in the original contract, and to maintain rental payments at the December 2000 level. DISCUSSION: In 1987, the City entered into a lease agreement with Circle Tee Driving Range, Inc. (Circle Tee) to use a portion of Love Circle Park, adjacent to Lake Worth residential lots, as a golf practice facility. In February 1994, Casino Beach Golf, Inc. (CBGI) purchased the business assets from Circle Tee. The transferred lease agreement expired on May 10, 1996, but continued on a month-by-month basis until the current re-negotiated lease became effective on January 1, 1997 (M&C L-11820). Under the new agreement, the leased park area expanded from 33 to 52 acres, as a result of a re- survey of the total land that would remain (including portions of adjacent residential lots) after the Highway 199 right-of-way is eventually expanded. The initial term of this lease (City Secretary Contract No. 22169) was set at 12 years (with 2 five-year renewal options) so that at 10% depreciation per year all capital improvements could be fully depreciated by the expiration of the initial lease term. CBGI agreed to spend $795,900 in the first two years and another $273,000 in the third year on specified and City approved capital improvements for a total of $1,068,900. However, the capital improvement schedule was set back six months because the corporation was unable to secure a construction loan until the City agreed to subordinate its interest to that of the bank's. The modification for the City to subordinate its interests was approved on June 10, 1997 by M&C L-11983. This contract, originally managed through the Engineering Department's Real Property Management Division, was transferred to the Parks and Community Services Department in June 1998. The department requested an audit be conducted, and this was completed in February 1999. The audit determined that through January 1999, CBGI had completed only 26.9% of the dollar value, or $213,700 of capital improvements planned for the first two lease years. Seven capital projects were required to be completed by the end of 1998, but only two are substantially complete. The driving range was lighted and partially irrigated, and the batting cages became operational in October 1997. No additional improvements have been accomplished to date (summary attached). Throughout 2000, City staff negotiated with CBGI to determine the best solution to alleviate the default issue related to capital improvements. CBGI was, in addition, waiting to hear from the Texas Department of Transportation (TxDOT) to determine if they would reimburse CBGI for any improvements that were located within the highway right-of-way. To date, TxDOT has made no provision to reimburse CBGI, as these improvements were outside the lease boundary. CBGI now believes that the additional improvements outlined in the contract cannot be completed or depreciated in the time remaining in the contract. In addition, CBGI does not believe it can pay the escalating rental payments anticipated with the corresponding capital improvements. C'iiy of'Fo�i �'o�th, 7'exas �il�A�or A11d Caun�i( Ca�rtn�un;cA�ian DATE REFERENCE NUMBER LOG NAME PAGE 4/3/01 C-18535 80BEACH 2 of 2 SUBJECT AUTHORIZATION TO EXECUTE A CONTRACT AMENDMENT WITH CASINO BEACH GOLF, INC. It is staff's opinion that CBGI provides a valuable recreation service for the residents in the Casino Beach and surrounding Lake Worth area, and defaulting the contractor would be a disservice to the community. The contractor is current on all rental payments, and all other aspects of the contract. Overall, CBGI has been a good tenant/operator, and the City has received no complaints regarding their operations. This amendment will delete any additional capital improvements required by CBGI, and maintain rental payments at the December 2000 level of $13,200 annually, or 10% of gross annual receipts, whichever is greater. This amendment would prevent CBGI from defaulting the contract and allow them to continue operating the facility in its present condition. At their regularly scheduled meeting on March 20, 2001, the Parks and Community Services Advisory Board endorsed a recommendation to approve the attached amendment. Love Circle Park is located in COUNCIL DISTRICT 7. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that the Parks and Community Services Department is responsible for the collection and deposit of all revenues due the City under this contract. LW:k Submitted for City Manager's Office by: Libby Watson Originating Department Head: Richard Zavala Additional Information Contact: Richard Zavala FUND ACCOUNT (to) GG01 481306 6183 5704 (from) 5704 CENTER 0801000 AMOUNT I CITY SECRETARY C��oV�� VV�iV�� r �� 3 2001 �� r=�'�..�, K;a,�•��^r_n:.^r}°f�� ;;r,;. G;i't);' Cs; I�'v:CF'�i`;_ii t°t,'Ga..,�.,