HomeMy WebLinkAboutContract 32504-R2A2 CITY 11WI AW
COWRACT NO. 3J 5TD+QA 2
SECOND RENEWAL AND SECOND AMENDMENT
TO CITY SECRETARY CONTRACT NO.32504,
A LEASE AGREEMENT WITH LINVILLE AND SMITH ENTERPRISES,INC.
This Second Renewal and Second Amendment to City Secretary Contract Number 32504, as
amended, ("Second Renewal and Second Amendment") is made and entered into by and between The
City of Fort Worth ("City" or "Lessor"), a home-rule municipal corporation, acting by and through its
duly authorized Assistant City Manager, and Linville and Smith Enterprises, Inc. ("Lessee"), a Texas
Corporation with its principal offices located in Tarrant County, Texas, acting by and through its duly
authorized representative.
WHEREAS, on October 19, 2005, the City and Lessee entered a lease agreement for the use of a
portion of North Z. Boaz Community Park (formerly known as Z. Boaz Golf Course) to operate a
miniature golf course (currently, but not necessarily in the future, under the name "Putt Putt"), batting
cages, and various other related facilities,the same being City Secretary Contract("CSC")Number 32504
(M&C C-22922);
WHEREAS, on August 6, 2008, City and Lessee amended CSC No. 32504 to expand the use of
the premises to include a go-kart track and the operation and maintenance of recreational battery-powered
electric go-karts, the same being CSC No. 37415 (CSC Nos. 32504 and 37415 are collectively referred to
herein as the"Lease");
WHEREAS, the primary term of the Lease expired on December 31, 2009 and included three,
five-year renewal options;
WHEREAS, Lessee exercised the first renewal option to extend the Lease from January 1, 2010
through December 31, 2014;
WHEREAS, parties desire to continue this relationship by exercising the second, five-year
renewal option;
WHEREAS, the parties also wish to amend the Guaranteed Rental amount for the second and
third renewal terms; and
NOW, THEREFORE, in consideration of the mutual covenants herein expressed, the City and
Lessee agree to renew,extend, and amend the Lease as follows:
I.
RENEWAL
1. The City and Lessee hereby agree to renew and extend the Lease for five years, effective
beginning on January 1, 2015 and ending on December 31, 2019.
m II.
r' AMENDMENT
m
L
m I. Section 6 of the Lease is hereby amended in its entirety to read as follows:
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U, OFFICIAL RECORD
� Second Renewal and Second Amendment CITY SECRETARY I of 3
FT.WORTH,TX
"6.
RENTAL
A. The rental for the Premises shall be the following, as applicable:
a. During, the Primary Term - $3,250.00 per month as Guaranteed
Rental, plus ten percent (10%) of any of Lessee's gross fiscal annual
income earned by Lessee at the Premises in excess of$612,000 (the ten
percent (10%) additional rent being hereinafter referred to as the
"Additional Rent").
b. During the Option l Term — Guaranteed Rental amount of
$3,750.00 per month, plus the Additional Rent, if any.
C. Duringthe he Option 2 Term
i. January I, 2015 — April 30, 2015: Guaranteed Rental
amount of $3,750.00 per month, plus the Additional
Rent, if any.
ii. May 1, 2015 — December 31, 2019: Guaranteed Rental
of$2,500.00 per month, plus the Additional Rent, if any.
d. During the Option 3 Term —Guaranteed Rental of$4,000.00 per
month, plus the Additional Rent, if any.
B. The term "Guaranteed Rental" shall be defined to mean the monthly
rental payments due under the term of this Lease as set forth above in this
Section 6.A., excluding the Additional Rent.
C . The term 'Lessee's gross fiscal annual income" (which shall be
prorated for partial fiscal years but calculated effective as of the last day of
each fiscal year of Lessee) shall be defined to mean all cash and credit sales
and rentals, paid or accrued to Lessee, excluding sales, use tax and property
taxes and bad debt write-offs and excluding all amortizations and expenses
paid, incurred or accrued by Lessee for capital improvements and capital
expenditures at or for the Premises.
a. Lessee agrees to keep and maintain accurate books and
records in compliance with generally accepted accounting principles
sufficient to allow accurate computation of Lessee's gross fiscal
annual income. Lessee agrees to provide Lessor with summaries and
excerpts of Lessee's books and records in support of the calculation
of Lessee's gross fiscal annual income and Additional Rent, if any,
payable to Lessor as Lessor may reasonably request.
D. Lessee shall deliver to Lessor the payment of Guaranteed Rental no
later than ten (10) calendar days after the beginning of each calendar
month during the term of this Lease. Lessee shall also deliver to Lessor no
later than sixty (60) days after the expiration of each fiscal year of Lessee
during the Primary Term and any Option Term a financial statement
Second Renewal and Second Amendment 2 of 3
reflecting the calculation of Lessee's gross fiscal annual income for the
previous fiscal year (with appropriate prorations, if applicable), together with
payment of any Additional Rent payable for the previous year if any such
Additional Rent is required to be paid to Lessor by Lessee hereunder. Lessor
agrees that Lessee shall have the right and authority to offset against future
Guaranteed Rental payments any overpayments of rent as required hereunder
that Lessee has at any time paid to Lessor for the period beginning on the
effective date of this Lease."
III.
MISCELLANEOUS
1. All terms of this Second Renewal and Second Amendment that are capitalized but not
defined shall have the meanings assigned to them in the Lease.
2. All terms and conditions of the Lease that are not expressly amended pursuant to the
Second Renewal and Second Amendment shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Second Renewal and Second
Amendment in multiples, this `"day of2015.
LESSOR: LESSEE:
THE CITY OF FORT WORTH LINVILLE AND SMITH ENTERPRISES,
INC.
By: By:
/T Susan Alanis Rodger 4vine
Assistant City Manager Vice President
APPROVED AS TO FORM AND LEGALITY:
Y
Tyler Fr' allach
Assistant City Attorney Q(� ��o�
A vfE . 00
� o
Mary J. Kayser %1O000000 °
City Secretary rexAs
Authorization:
M&C Numbers: C-20864 (July 19,20 08); C-27271 (April 21,2015)
OFFICIAL RECORD
Second Renewal and Second Amendment CITY SECRETARY 3 of 3
FT.WORTH}TX
M&C Review Pagel of 3
Official site of the City of Fort Worth, Texas
CITY COUNCIL AGENDA F�"
COUNCIL ACTION: Approved on 4/21/2015
DATE: 4/21/2015 REFERENCE NO.:**C-27271 LOG NAME: 80PUTT-PUTT LEASE
AMENDMENT
CODE: C TYPE: CONSENT PUBLIC IVO
HEARING:
SUBJECT: Authorize Amendment to City Secretary Contract No. 32504, as Amended, a Lease
Agreement with Linville and Smith Enterprises, Inc. a/k/a Putt-Putt Golf, for Use of a
Portion of North Z. Boaz Community Park to Revise the Monthly Fixed (or Guaranteed)
Rental Amount (COUNCIL DISTRICT 3)
RECOMMENDATION:
It is recommended that the City Council authorize an amendment to City Secretary Contract No. 32504,
as previously amended, a Lease Agreement with Linville and Smith Enterprises, Inc. a/k/a Putt-Putt Golf,
for use of a portion of North Z. Boaz Community Park to revise the monthly fixed (or guaranteed) rental
payments as set forth below:
a. January 1, 2015 through April 30, 2015- Amend the monthly fixed (or guaranteed) rental
payment from $4,250.00 to $3,750.00;
b. May 1, 2015 through December 31, 2019 -Amend the monthly fixed (or guaranteed) rental
payment from $4,250.00 to $2,500.00; and
c. January 1, 2020 through December 31, 2024 -Amend the monthly fixed (or guaranteed) rental
payment from $4,750.00 to $4,000.00.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to authorize revisions to the monthly
fixed (or guaranteed) rental payments for the remaining term of the Putt-Putt Golf Lease at North Z.
Boaz Community Park. Since January 1, 1990, Linville and Smith Enterprises, Inc. (Linville), has leased
and operated the Putt-Putt course on a portion of North Z. Boaz Community Park (Park). Putt-Putt
provides public recreational benefits of miniature golf, batting cages and various related facilities.
The current Lease Agreement went into effect in October of 2005 (City Secretary Contract No. 32504,
M&C C-20864)with a primary term through December 31, 2009 and three optional five-year renewals
(Lease Agreement). The primary and option periods and rental amounts for the Lease Agreement are
as follows:
Primary Term: October 19, 2005 - December 31, 2009: $3,250.00 monthly
Renewal Option #1: January 1, 2010- December 31, 2014: $3,750.00
monthly
Renewal Option #2: January 1, 2015- December 31, 2019: $4,250.00 monthly
Renewal Option #3: January 1, 2020 - December 31, 2024: $4,750.00 monthly
In addition to the above-stated fixed monthly (or guaranteed) rental payments for each term, Linville
agreed to pay additional rent in the amount of 10 percent of the Linville's gross fiscal annual income
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earned over$612,000.00.
The parties exercised the first renewal option and, prior to the expiration thereof, the parties entered into
good faith discussions to exercise the second renewal option at a reduced fixed monthly rental rate. In
an effort to come to a mutually agreeable resolution while still allowing Linville the ability to continue its
operations, the Director of the Parks and Community Services Department agreed to permit Linville to
continue operating its business on the leased premises at the first renewal option rental rate of
$3,750.00.
Through negotiations between the two parties, the proposed amendment is now recommended. The
amendment is intended to accurately reflect current market conditions, provide a stable lease for
continued operation of this revenue generating facility and will continue a mutually beneficial
arrangement between the City and the Linville that provides additional recreational activities and
opportunities to the general public. The recommended revisions are as follows:
Amended Renewal Option No. 2:
January 1, 2015-April 30, 2015: $3,750.00 monthly
May 1, 2015 - December 31, 2019: $2,500.00 monthly
Amended Renewal Option No. 3:
January 1, 2020 - December 31, 2024: $4,000.00 monthly
This amendment does not change the additional requirement of Linville to pay the City additional rent in
the amount of 10 percent of Linville's gross fiscal annual income earned over $612,000.00.
Prior to March 26, 2013, all revenues from the Lease Agreement were applied to the Golf Enterprise
Fund. However, on March 26, 2013, the City Council authorized all annual revenue from the Lease
Agreement to be credited to the Capital Projects Reserve Fund for improvements to the Park (M&C C-
26168).
The Park, including this leased facility, is located in COUNCIL DISTRICT 3.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that the Parks and Community Services
Department is responsible for the collection of funds due the City under this Lease Agreement and that
this amendment will reduce funding for improvements to North Z. Boaz Community Park by $145,000.00
over the next 10 years.
The impact of the Lease Agreement amendment is depicted in the table below:
Lease Current Term Amended Term Impact
Period Amount Term Amount
Renewal 1/1/2015- $255,000.00 $155,000.00*
Option #2 12/31/2019 ($100,000.00)
Renewal 1/1/2020- $285,000.00 $240,000.00
Option #3 12/31/2024 ($45,000.00)
Agreement $540,000.00 $395,000.00
Total ($145,000.00
*Renewal Option 2 includes the bifurcated rental structure set forth in the Discussion section.
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TO Fund/Account/Centers FROM Fund/Account/Centers
C291 442001 803490221880 $0.00
Submitted for City Manager's Office by Susan Alanis (8180)
Originating Department Head: Richard Zavala (5704)
Additional Information Contact: David Creek (5744)
ATTACHMENTS
http://apps.cfwnet.org/council_packet/mc review.asp?ID=20958... 5/13/2015
M&C Review Pagel of 2
Official site of the City of Fort Worth, Texas
CITY COUNCIL AGENDA F° "
COUNCIL ACTION: Approved on 7/15/2008
DATE: 7/15/2008 REFERENCE NO.: **C-22922 LOG NAME: 80PUTTPUTT
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: Amend Lease Agreement with Linville and Smith Enterprises, Inc., also Known as Putt Putt
Golf, to add Rental of Battery-Powered Electric Go-Karts as an Allowed Use of the Leased
Portion of Z-Boaz Park Golf Course
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to amend the existing lease
agreement with Linville and Smith Enterprise, Inc., also known as Putt Putt Golf, to add rental of
battery-powered electric go-karts to the list of allowed uses for the leased portion of Z-Boaz Park Golf
Course.
DISCUSSION:
Since January 1, 1990, Linville and Smith Enterprises, Inc., has leased a portion of Z-Boaz Park Golf
Course for operation of a miniature golf course, batting cages, arcade games and related
activities. The purpose of this amendment is to revise the lease to add rentals of battery-powered
electric go-karts as an allowed use of the premises. The proposed amendment would expressly
prohibit operation of internal combustion go-karts powered by gasoline or other combustible
material. The amendment would also require Linville and Smith Enterprises, Inc., to install and
maintain a six-feet tall screening fence along the outward-facing portion of the go-kart track
perimeter.
Staff recommends authorizing this amendment to provide the public with additional recreation benefit
and anticipates the additional revenues generated by the operation of the go-kart facilities will result
in additional income to the Golf Enterprise Fund.
Z-Boaz Park Golf Course and this Leased Facility are located in COUNCIL DISTRICT 3.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Parks and Community Services Department is responsible for
the collection of funds due the City under this lease agreement.
TO Fund/Account/Centers FROM Fund/Account/Centers
PE39 466162 0804005 $0.00
Submitted for City Manager's Office by: Charles Daniels (392-6183)
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Originating Department Head: Richard Zavala (871-5704)
Additional Information Contact: Nancy Bunton (871-5717)
ATTACHMENTS
20050530162035236 0001 .pdf
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M&C Review Pagel of 2
Official site of the City of Fort Worth, Texas
CITY COUNCIL AGENDA FoRw
COUNCIL ACTION: Approved on 7/19/2005
DATE: 7/19/2005 REFERENCE NO.: C-20864 LOG NAME: 80PUTTPUTT80
CODE: C TYPE: NON- PUBLIC NO
CONSENT HEARING:
SUBJECT: Authorize the City Manager to Amend and Renew the Lease Agreement with Linville and
Smith Enterprises, Inc., (AKA Putt Putt Golf) for Use of a Portion of Z-Boaz Golf Course as
a Miniature Golf and Batting Practice Facility
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the amendment and renewal of the existing lease agreement with Linville and Smith
Enterprises, Inc. for use of a portion of Z-Boaz Golf Course for operation of a miniature golf and
batting practice facility;
2. Authorize the term to be for five years with three five-year renewal options;
3. Authorize the monthly fixed rent payment to be $3,250 ($39,000 annual) plus 10% of the gross
fiscal income in excess of$612,000, with an optional monthly fixed rent increase in year six to $3,750
($45,000 annual); year 11 to $4,250 ($51,000 annual) and year 16 to $4,750 ($57,000 annual); and
4. Authorize the annual revenue to be credited to the Golf Enterprise Fund.
DISCUSSION:
Since January 1, 1990 Linville and Smith Enterprises, Inc. has leased and operated Putt Putt
Miniature Golf on a portion of Z-Boaz Golf Course. The purpose of this amendment and renewal is to
revise the lease to accurately reflect current market conditions and provide a stable lease for
continued operation of this revenue generating facility. Putt Putt Miniature Golf provides the public
recreation benefit of miniature golf and batting practice cages at this facility.
The lease has continued on a month-to-month basis while the City and Linville and Smith
Enterprises, Inc. staff negotiated the renewal terms of this lease. The Parks and Community
Services Fort Worth Golf staff will be responsible for collecting the revenue and ensuring it is credited
to the Golf Enterprise Fund.
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Z-Boaz Golf Course and this Leased Facility are located in Council District 3.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Parks and Community Services Department is responsible for
the collection of funds due the City under this lease agreement.
TO Fund/Account/Centers FROM Fund/Account/Centers
PE39 466162 0804005 $39,000.00
Submitted for City Manager's Office by: Libby Watson (6183)
Originating Department Head: Randle Harwood (Acting) (5704)
Additional Information Contact: Randle Harwood (Acting) (5704)
ATTACHMENTS
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=4233&... 5/13/2015