Loading...
HomeMy WebLinkAboutAmerican Golf Corporation - ACG - Formerly Golf of Southern California - 1992-07-06CS Dept. ID CS 13-012 Page 1 of 2 Meeting Date: 7/1/2013 40Pnod -0 CITY OF HUNTINGTON REACH REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 7/1/2013 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Janeen Laudenback, Interim Director of Community Services SUBJECT: Approve and authorize execution of an amendment to the lease agreement with American Golf Corporation and the City for operation of Meadowlark Golf Course and to allow for demolition of the former grounds keeper residence on the premises Statement of Issue: There .is a need to amend the lease agreement for the operation of Meadowlark Golf Course to allow for demolition of the former grounds keeper residence on the premises. Financial Impact: If approved amendment to the lease will eliminate a monthly rent of $2,890 for the house. Golf course management will re -direct the equivalent amount towards capital improvements at the course. Recommended Action: A) Approve and authorize the Mayor and City Clerk to execute "Addendum to Lease Agreement' with American Golf Corporation to eliminate the monthly rent for the former groundskeeper residence and to allow for demolition of the house; and, B) Approve re -directing an amount equivalent to the rent payments to complete certain capital improvements at the course as presented. Alternative Action(s): Do not approve amending the lease and direct staff accordingly. Analysis: In 1974, the City purchased Meadowlark Golf Course from private owners. The City purchased the land and all its improvements including the clubhouse, banquet and bar facilities, cart storage area, and a maintenance yard. At the time of purchase, Southern California Golf (SCG) operated the course under contract with the previous owners. The City continued the relationship with SCG to continue operating the course. A single story house located within the golf course boundaries also became the property of the City. The house had served as a residence for one of the former property owners and was later converted to a groundskeeper residence for employees of SCG. In 1984, SCG changed its name to American Golf Corporation (AGC). AGC continued to manage the day to day operations of the course until 2008, when City Council approved a sub -lease for management of the course to CNL Income EAGL (CNL). CNL has since hired FORE Golf to provide the day-to-day management of the course, which is allowed under the terms of the sub- lease. xB -11 s- Item 7. - I Dept. ID CS 13-012 Page 2 of 2 Meeting Date: 711/2013 The residence has been vacant since 2008, when operation of the course was transferred from AGC to CNL. At the time it was vacated, staff inspected the interior and exterior conditions of the house. While the structure was in relatively good condition, substantial repairs and updates would be needed in order to make it habitable or suitable for public use. CNL and staff explored options to re -use the house, however, no viable options were determined. Current zoning on the property does not allow the house to be used once again as a private residence or a groundskeeper unit. Trying to create a public facility for golf course activities also proved prohibitive due the house being situated within the interior of the course. Access from the main parking lot, clubhouse, and exterior streets, requires traversing the playing areas of the course. Creating a use that would lead non -golfers through the course would create potential liability to both the City and course operators and cause a disruption of play for golfers. Additionally, there is no Americans with Disabilities Act (ADA) access or available space to provide public parking at the house. Staff has also received numerous complaints from residents living adjacent to the course with concerns of blight and the potential for undesirable activity occurring on the property when the course is closed to the public. Their preference is for the house to be removed. Based on the location and the development challenges for re -use of the house, staff and course operators agreed to pursue approval to demolish the house and convert the area to benefit the course. Because the use of the house and rent compensation to the City is included in the master lease for the course, an amendment to the lease approved by Council is required. The current rent for the house is $2,890 per month. This amount increases 7% annually through the life of the current agreement. Staff has worked with representatives from CNL and FORE Golf on terms to demolish the house, which includes a plan to re -direct funds equivalent to the rent payments toward capital improvements at the course. As indicated in Section 3 of the proposed addendum, course operators will be responsible for acquiring the necessary permits and demolishing the house at their sole cost and expense. Also, as outlined in Sections 4, 5, and 6 of the addendum, course operators will be required to complete capital improvements at the course at an amount equivalent to the rent payments the City would receive for the house. Initial improvements include renovations to the clubhouse and parking lot. This list of improvements is included as "Attachment A" to the addendum. Remaining capital improvements will be completed through the remaining terms of the lease as identified in Section 5 and 6. As indicated in Section 7, the City will agree to remove the rent obligation from the master lease. Since there are no viable options for re -use of the house and the potential for increased revenue generated by improvements to the course, staff is recommending approval of a lease amendment in order to demolish the house and complete the capital improvements as presented. The proposed addendum is between the City and AGC, since they are listed as the main lease holders of the course. Representatives of AGC have reviewed and agreed to the terms of the addendum as presented. Environmental Status: Demolition of the house will be subject to the appropriate environmental review as determined by the permit process. Strategic Plan Goal: Improve the City's infrastructure Attachment(s): 1. Addendum to Lease Agreement between the City of Huntington Beach and American Golf Corporation. 2. Course Boundary and House Location Map Item 7. - 2 H B -116- ATTACHMENT #1 ADDENDUM TO LEASE AGREEMENT THIS ADDENDUM TO LEASE AGREEMENT (this "Addendum") is made and entered into this /-31— day of S Zt , 2013 (the "Effective Date") by and between THE CITY OF HUNTINGTON IfEACH, a municipal corporation ("Lessor"), and AMERICAN GOLF CORPORATION, a California corporation ("Lessee"). Lessor and Lessee are at times collectively referred to herein as the "Parties" and individually as a "PartX." RECITALS: A. Lessee leases from Lessor that certain golf course property known as Meadowlark Golf Course and located in Huntington Beach, California (the "Premises") pursuant to that certain Lease Agreement dated July 6, 1992 (the "Ground Lease"). B. Lessor and Lessee have agreed that certain renovations and capital improvements shall be made to the Premises in exchange for a reduction in the amount of minimum rent payable under the Ground Lease, all on the terms and conditions set forth herein. C. Lessee has subleased the Premises to CLP Meadowlark Golf, LLC, a Delaware limited liability company (f/k/a CNL Income EAGL Meadowlark, LLC) ("Sublessee"), pursuant to that certain Sublease Agreement dated April 17, 2008 (the "Sublease"), which Sublease was approved by Lessor pursuant to that certain Consent to Sublease dated April 17, 2008 by and between Lessor, Lessee, Sublessee, and Evergreen Alliance Golf Limited, LP. D. Lessor and Lessee acknowledge and agree that Sublessee will perform all of the obligations of Lessee under the Ground Lease for the duration of the Sublease, including but not limited to the renovations and capital improvements set forth in this Addendum. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee agree as follows: 1. Recitals. Lessor and Lessee acknowledge and agree that the recitals set forth above are true and correct and hereby constitute a part of this Addendum. 2. Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Ground Lease. 3. Demolition of Residential Rental Property. Following the Effective Date, but on or before the date which is one (1) year following the Effective. Date (the "Site Renovation Period"), Lessee shall, at Lessee's sole cost and expense, demolish and remove the residential building, the garage, and the perimeter fencing located on a portion of the real property (the "Residential Property") described in the Residential Rental Agreement attached to the Ground Lease as Exhibit "B" thereto (the "Demolition"). Lessor acknowledges and agrees that this Addendum satisfies any and all provisions in the Ground Lease requiring Lessee to obtain Lessor's prior consent for the Demolition or otherwise requiring Lessee to submit plans, schematics, requests for approval, or any similar documents or requests to Lessor concerning the 1 13-3625/90248 Demolition; however, Lessee shall obtain all required government permits and entitlements at Lessee's sole cost and expense. 4. Site Renovations. During the Site Renovation Period, Lessee shall complete the site renovations listed in Exhibit "A" attached hereto and by this reference incorporated herein (the "Renovations") pursuant to the requirements and other conditions set forth in Exhibit "A." Lessor acknowledges and agrees that Exhibit "A" satisfies the requirement for Lessor's prior approval under Section 15 of the Ground Lease; however, Lessee shall obtain all required government permits and entitlements at Lessee's sole cost and expense. 5. Initial Capital Improvements. During each of the following periods during the Term, Lessee shall make certain capital improvements to the Premises at Lessee's sole cost and expense (the "Initial Capital Improvements"): (a) September 1, 2013 through August 31, 2014; (b) September 1, 2014 through August 31, 2015; (c) September 1, 2015 through August 31, 2016; and (d) September 1, 2016 through December 31, 2017 (each, an "Improvement Year"). Initial Capital Improvements shall include, but are not necessarily limited to, the construction, renovation, or alteration of buildings, landscaping, signage, drainage infrastructure, water utility infrastructure, and general golf course improvements. At the beginning of each Improvement Year during the Second Improvement Period, Lessor and Lessee shall use reasonably prompt and good -faith efforts to agree on the Initial Capital Improvements to be made by Lessee during such Improvement Year, which agreement shall satisfy the requirement for Lessor's prior approval under Section 15 of the Ground Lease. Lessee shall expend at least thirty thousand six hundred dollars ($30,600.00) during each Improvement Year on Initial Capital Improvements unless and until Lessee has expended a total sum of two hundred four thousand dollars and zero cents ($204,000.00) on Initial Capital Improvements, at which point Lessee shall have no further obligation to make Initial Capital Improvements. 6. Secondary Capital Improvements. If Lessee extends the Term for an additional period of ten (10) years (the "Renewal Period") beyond the original twenty-five (25) year term pursuant to Section 4 of the Ground Lease, Lessee shall make, during each of the ten (10) twelve (12) month years of the Renewal Period (each, a "Renewal Period Year"), certain capital improvements to the Premises at Lessee's sole cost and expense (the "Secondary Capital Improvements"). Secondary Capital Improvements shall include, but not necessarily be limited to, the construction, renovation, or alteration of buildings, landscaping, signage, drainage infrastructure, water utility infrastructure, and general golf course improvements. Lessee shall expend at least forty thousand five hundred thirty dollars ($40,530.00) during each Renewal Period Year on Secondary Capital Improvements during the Renewal Period unless and until Lessee has expended a total sum of eight hundred ten thousand six hundred four dollars and zero cents ($810,604.00) (the "Expenditure Cap") on Secondary Capital Improvements, at which point Lessee shall have no further obligation to make Secondary Capital Improvements. Lessee must expend an amount equal to the Expenditure Cap on Secondary Capital Improvements during the Renewal Period unless the Ground Lease is terminated prior to the end of the ten (10) year term of the Renewal Period, in which case Lessee shall have no further obligation to make or pay for Secondary Capital Improvements other than those incurred prior to such termination. 7. Rent Reduction and Residential Property. The Parties acknowledge and agree that the Residential Rental Agreement and the attachment thereto (collectively, the "Residential 2 13-3625/90248 Lease Documents") attached to the Ground Lease as Exhibit `B" thereto are, as of the Effective Date, incorporated into the Ground Lease solely for the purpose of identifying the Residential Property. Accordingly, the Parties shall have no obligations, responsibilities, liabilities, or other duties under the Residential Lease Documents from and after the Effective Date, including but not limited to the payment of any rent associated with the Residential Property pursuant to Section 8 of the Ground Lease or any other operative provision thereof from and after the Effective Date, including during the Renewal Period (if the renewal_ option is exercised by Lessee). 8. Application of Ground Lease Provisions. Section 17 of the Ground Lease shall apply to all matters contemplated by this Addendum. Section 7.5 of the Ground Lease shall not apply to the Demolition, Initial Capital Improvements, Secondary Capital Improvements, or any other construction, renovations, improvements, alterations, or other activities contemplated by this Addendum. 9. Integration and Conflicts. The Parties acknowledge and agree that this Addendum shall be integrated into the Ground Lease as a part thereof. In the event of any conflict or inconsistency between the provisions of the Ground Lease and the terms of this Addendum, the terms of this Addendum shall control. 10. Binding Effect. This Addendum shall be binding upon, and inure to the benefit of, the Parties and their respective successors and assigns. 11. Paragraph Headings. The titles of the various sections of this Addendum are for reference and index purposes only, and none of them shall be taken into consideration or given any effect whatsoever in determining the meaning or scope of the section or paragraph to which they apply. 12. Reserved. 13. Joint Preparation. The Parties have been represented by counsel in the negotiation of the terms of this Addendum and have jointly prepared this Addendum. 14. Modifications. This Addendum may not be amended or modified unless such amendment or modification is in writing and signed by both Parties. 15. Successors and Assigns. The terms, covenants, and conditions contained in this Addendum shall bind and inure to the benefit of the Parties and their successors and assigns. 16. Counterparts. This Addendum may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same Agreement. 17. Severability. If any terms, covenants, or obligations of this Addendum shall be held to be invalid, illegal, or unenforceable in any respect, this Addendum shall be construed without such provision. 3 13-3625/90248 18. Governing Law. This Addendum shall be construed in accordance with and governed by the laws of the state in which the Premises are located. 19. Further Assurances; Cooperation. Each of the Parties shall execute and deliver or cause to be delivered to the other Party all such further certificates, instruments, and documents and take such other action as may be reasonably required to effectively carry out fully the intentions of the parties and accomplish the matters contemplated in this Addendum. IN WITNESS WHEREO>F', :Lessor and Lessee have each caused this Agreement to be executed and delivered in its name by a duly authorized officer as of the Effective Date. "LESSEE" AMERICAN GOLF CORPORATION, a California corporation an Name: "LESSOR" 7,1 INITIATED AND APPROVED: ` ' ? By.Z� Name: �� Director of Community Services Title:,Si�1 REVIEW APPROVED: ///Mpanager OUNTERPA RT APPROVED AS TO FORM: Ci Attorney >,Yl /7613 4 13-3625/90248 18. Governinu Law. This Addendum shall be construed in accordance with and governed by the laws of the state in which the Premises are located. 19. Further Assurances; Cooperation. Each of the Parties shall execute and deliver or cause to be delivered to the other Party all such further certificates, instruments, and documents and take such other action as may be reasonably required to effectively carry out fully the intentions of the parties and accomplish the matters contemplated in this Addendum. IN WITNESS WHEREOF, :Lessor and Lessee have each caused this Agreement to be executed and delivered in its name by a duly authorized officer as of the Effective Date. "LESSEE" "]LESSOR" AMERICAN GOLF CORPORATION, a CITY OF HUNTINGTON BEACH, a California corporation By: Name: Title: By: t Name: Title: k4 municipal corporation Mayor City Clerk INITIA D AND APPROVED: ,,irector of Community Services REVIEWED AND APPROVED: City Manager COUNTERPART PROVED AS TO FORM: Cit 'Attorney 4 13-3625/90248 EXHIBIT "A" SITE RENOVATION PLAN See Attached. 13-3625/90248 EXHIBIT A SITE RENOVATION PLAN Lessee shall complete site renovation as outlined below within one year of the lease amendment approval. All listed improvements are subject to review and approval of the Director of Community Services or his/her designee. Improvements 1. FIRST FLOOR RENOVATIONS a. Men's & Women's Restrooms • New flooring, granite counter tops, new sinks/fixtures b. Main Lobby Improvements • New carpeting and paint, removal of fountain c. Dining area • New exterior doors and hardware 2. SECOND FLOOR RENOVATIONS a. Banquet Room • Exterior Door repair and modifications • New paint • New windows with low-E glass and window coverings • New lighting • New retractable wall • New furniture b. Ladies Dressing Room • Minor modifications to create a "Bride's Room" 3. PARKING LOT a. Slurry seal and new striping Note: Course Management anticipates a 5% to 10% increase in business due to improved facilities. 1 HB -125- Item 7. - 11 cc J N to r� City ®f Hu tin ®n Beach 2000 Main Street * Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov Office of the City Clerk Joan L. Flynn, City Clerk July 3, 2013 American Golf Corporation 16782 Graham St. Huntington Beach, CA 92649-3754 Attn: Brian Woods Dear Mr. Woods: Enclosed for your records is a duly executed duplicate original of the "Addendum to Lease Agreement" for operation of Meadowlark Golf Course. Sincerely, n L. Flynn, CIVIC City Clerk JF:pe Enclosure Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand a > REQUEL FOR CITY C UNCL ACTION Date July 6, 1992 Submitted to: Honorable Mayor and City Council Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Ron Hagan, Director, Community Services *�� Subject: PROPOSED NEW AGREEMENT WITH AMERICAN GOLF CORPORATION FOR OPERATION OF MEADOWLARK GOLF COUR APPROVED Ey CITY COUNCIL Consistent with Council Policy? [ ] Yes [ ] New Policy or Exceptio Statement of Issue, Recommendation, Analysis, Funding Source, Alternative twmv S.T.A_TBM,EN_T.___Q ''_.....1S.S_U.E A new agreement with American Golf Corporation has been prepared for Council approval to replace the existing agreement for the city -owned Meadowlark Golf_ Course. R.E G—MME.N.D.A.T LO.N. Approve the new agreement with American Golf' Corporation for the improvement, operation and maintenance of Meadowlark Golf Course, and authorize the Mayor to execute same. ANALY_S-I.S In 1974, the City of Huntington Beach entered into a 34-year lease agreement with American Golf Corporation (formerly Golf of Southern California), which expires January 1, 2008, for the operation of the Meadowlark Municipal Golf Course. For the past year, city staff have been negotiating with American Golf Corporation to develop a new -- agreement that would replace the existing agreement and provide for major capital improvements to the golf course and give the city greater control over the operational standards of the course. Meadowlark Golf Course is currently designed to accommodate approxi- mately 60,000 rounds of golf per year. For the past three years, it has been averaging over 126,000 rounds annually. Consequently, the tee -boxes, which are small, are constantly torn up from overplay and. need to be enlarged. Only 31 mats exist on the public driving range and the city receives constant complaints about how difficult it is to get on the driving range. The clubhouse, restaurant and banquet facilities were built in the 1940s and have been piecemealed over the years. They have deteriorated to the point where they are not only an eyesore, but also have numerous structural problems, including dryrot, leaking roofs, and wall deterioration. There is also a need to build a new maintenance facility and secured cart storage area to maintain Plo 5/85 REQUEST FOR COUNCIL ACTION July_ b1 1992 Page two equipment and golf carts in good condition. The most needed improve- ment is to completely replace the irrigation system which would in- clude fixing and expanding the lakes currently on the course, fixing low spots, connecting to reclaimed water system, and putting the entire system on a computerized watering program that would provide for maximum drainage and improved playability of the course. Staff has had numerous public meetings with golfers, the Meadowlark Men's Club, the Meadowlark Women's Club, Chamber of Commerce, Con- ference and Visitors Bureau, hotel/motel operators and the Community Services Commission. All concurred with the need for these improve- ments at Meadowlark. American Golf Corporation is willing to spend a minimum of $3.2 million to accomplish the above improvements. In exchange for this capital investment, which the city will own, Ameri- can Golf is requesting to add an additional eight years to its exist- ing agreement and to receive a ten-year option to extend the new agreement if the city determines that American Golf has performed all of the terms and conditions outlined in the agreement both monetarily and operationally. To determine this performance, the new agreement contains a maintenance standard exhibit and a monthly evaluation form. American Golf must maintain a "B or better" rating throughout the initial term of the new lease in order to qualify for the option. If Council approves the new agreement, the current agreement will terminate in_thre_emonths (approximately October 1, 1992) and the new agreement would require American Golf to have the above described improvements completed within two years of this date. The first year would see all of the course improvement items completed, such as, tee - boxes, irrigation, lakes, fencing, new turf, cart paths, etc. During the second year, American Golf would build a brand new clubhouse/pro shop/restaurant/banquet facility, a driving range, a new parking lot, and entryway into the golf course. The financial arrangements with American Golf would provide them with a rent break in the initial years of the contract with substantially higher percentage rent payments beginning in later years. A projected city revenue for 20 years under the new agreement is contained in Attachment 1. A city revenue difference for seventeen years (the time remaining on the existing lease) is presented in Attachment 2. As shown, the city will lose approximately $285,000 in the Meadowlark Golf Course Fund in the first two years of the new agreement due to lower percentage rent and a reduced number of rounds during the construction period. In year three, the city will. begin receiving greater revenue than it currently does under the existing agreement. The $285,000 will be recouped by year eight or nine. During the following years, the city will receive a substantial increase in revenue over the existing agreement so that in the same time period, i.e., seventeen years, the city will receive $3.8 million more than it REQUEST FOR COUNCIL ACTION __ J__uly 6 , 1992 Page three would have under the existing agreement, plus it will own the $3.2 million worth of improvements that American Golf will have made to the course. In addition, the city will have control over the operational standards of the golf course. A summary of terms and conditions is contained in Attachment 3. An issues and comments analysis is contained in Attachment 4. The new agreement contains the specific terms and conditions and the forms to be used to determine performance. The new agreement also allows American Golf Corporation to be self -insured for its insurance deductible up to a maximum of $250,000. Meadowlark will be added to American Golf's master insurance policy which covers the 200 golf courses it operates nationwide. Meadowlark Golf Course is the third most Orange County. While there is a demand Meadowlark and for additional golf courses area, staff feels that the city's primary long term development and operation of its agreement with American Golf will provide course that will be expertly maintained. FUNDT.N.G_3.0-UR.GE The Meadowlark Golf Course Fund AL-TERNAT_1VE ACTION played golf facility in for both improvements to in the Huntington Beach concern should be in the existing course. The new for a premium municipal Deny the new agreement with American Golf and continue under its existing agreement. A-T.TACUMN_T._ Attachments 1. Projected City Revenue for 20 Years 2. City Revenue Difference for 17 Years 3. Summary of Terms and Conditions 4. Issues and Comments Analysis Agreement with Exhibits A - D RH:cs ATTACHMENT 1 MEADOWLARK GOLF COURSE Projected City Revenue for 20 Years YEAR PROJECTED REVENUE UNDER NEW AGREE. 1 175,000 2 230,000 3 386,000 4 402,000 5 418,000 6 433,000 7 456,000 8 474,000 9 495,000 10 516,000 11 932,000 12 965,000 13 1,000,000 14 1,012,000 15 1,046,000 16 1,061,000 17 1,102, 000 18 1,087,000 19 1,543,000 20 1,567,000 TOTAL 15,300,000 ATTACHMENT ATTACHMENT 2 MEADOWLARK GOLF COURSE City Revenue Difference for 17 Years (Time Remaining on Existing Lease) Year Income under Current Agreement (3% Annual Inflation) Projected Income Under New Agreement Difference in City Income 1 1 340,000 175,000 -165,000 2 350,000 230,000 -120,000 3 360,500 386,000 25,500 4 370,000 402,000 32,000 5 381,000 418,000 37,000 6 392,500 433,000 40,500 7 403,500 456,000 52,500 8 415,000 474,000 59,000 9 427,500 495,000 67,500 10 440,000 516,000 76,000 11 453,000 932,000 479,000 12 466,500 965,000 498,500 13 470,500 1,000,000 529,500 14 484,500 1,012,000 527,500 15 498,000 1,046,000 548,000 16 513,000 1,061,000 548,000 17 518,000 1,102,000 584,000 TOTAL 7,283,500 11,103,000 3,819,500J, ATTACHMENT IMPROVEMENTS LEASE TERM % RENT TO THE CITY INSPECTIONS ATTACHMENT 3 MEADOWLARK GOLF COURSE $3.2 MILLION DOLLAR MASTER PLAN AGREEMENT SUMMARY OF TERMS AND CONDITIONS ATTACHMENT 3 NEW IRRIGATION $ 950,000 LAKE LINING $ 45,000 FENCING $ 20,000 TEE WORK $ 100,000 CARTPATHS $ 139,M DRIVING RANGE $ 450,000 MAINT. BUILD. $ 200,000 CLUBHOUSE $1�2Mn COFFEE SHOP BANQUET ROOM PRO SHOP CARTSTORAGE 85 NEW CARTS 25 YEARS 10 YEAR PERFORMANCE BASED OPTION CANCELS CURRENT 34 YEAR LEASE, WITH 17 YEARS REMAINING. 4 % GROSS SALES PRO SHOP 10% GROSS SALES FOOD & LIQUOR 25 % BANQUET ROOM RENTALS YR. 1-2, 5 % GOLF OPERATIONS YR. 3-10, 9% GOLF OPERATIONS YR. 11-18, 18 % GOLF OPERATIONS YR. 19-25, 25 % GOLF OPERATIONS OPTION YR. 25 % GOLF OPERATIONS MONTHLY BY THE CITY MUST MAINTAIN A "B" OR BETTER RATING DETERMINED BY THE CITY ATTACHMENT 4 ISS_ _o AND COMMENTS REGARDING THE PROk .,ED MASTERPLAN IMPROVEMENTS AND NEW LEASE AGREEMENT WITH AMERICAN GOLF ISSUE 1. THE NEW AGREEMENT WILL DECREASE THE AMOUNT OF MONEY GOING INTO THE MEADOWLARK GOLF COURSE FUND FOR THE NEXT TWO (2) YEARS. HOW WILL THIS IMPACT THE CITY? 2. THE NEW AGREEMENT IS FOR 25 YEARS WITH A 10 YEAR OPTION. WHO DECIDES IF AMERICAN 'GOLF GETS THE 10 YEAR OPTION? 3. WHY DOES AMERICAN GOLF WANT TO DO THIS PROJECT? 4. ARE THESE GOOD ECONOMIC TIMES TO DO THIS PROJECT OR SHOULD WE WAIT UNTIL THE ECONOMY PICKS UP? 5. HOW WILL MEADOWLARK BE DIFFERENT AFTER THE IMPROVEMENTS AND, IF MEADOWLARK HAS HIGH PLAY NOW, WHY CHANGE IT? COMMENT THERE WILL BE NO NEGATIVE IMPACT. THE CITY CURRENTLY HAS $1.6 MILLION IN THE GOLF COURSE FUND BALANCE. ONLY $150,000 PER YEAR IS NEEDED TO MEET THE DEBT SERVICE FOR THE 1975 BONDS USED TO PURCHASE MEADOWLARK. THE NEW AGREEMENT SETS A MINIMUM INCOME OF $175,000 PER YEAR. BY THE TIME THE CITY PAYS OFF THE BONDS, THE CITY WILL RECOUP THE LOST REVENUE OF THE FIRST TWO YEARS AND THE SAME, OR EVEN A LARGER AMOUNT, OF REVENUE WILL BE AVAILABLE FOR THE GENERAL FUND. THE EXISTING AGREEMENT HAS 17 MORE YEARS, SO THE NEW AGREEMENT IS FOR 8 MORE YEARS + THE 10 YEAR OPTION. THE CITY IS GETTING $3.2 MILLION IN IMPROVEMENTS THAT WILL BE PAID FOR BY AMERICAN GOLF AND OWNED BY THE CITY. THE 10 YEAR OPTION IS ONLY GRANTED IF THE CITY DETERMINES THATAMERICAN GOLF HAS PERFORMED TO THE CITY'S SATISFACTION. MEADOWLARK WAS ONE OF THE FIRST MUNICIPAL COURSES CONTRACTED FOR BY AMERICAN GOLF. THE FACILITIES ARE OLD AND IN NEED OF MAJOR RENOVATION AND IMPROVEMENTS. AMERICAN GOLF FEELS, LIKE THE CITY, THAT IT'S TIME FOR A NEW MASTERPLAN THAT WILL MAKE MEADOWLARK A PREMIUM PUBLIC COURSE FOR THEM TO BE PARTNERS WITH THE CITY FOR YEARS TO COME. NOW IS A GREAT TIME TO GET MORE IMPROVEMENTS FOR THE MONEY. THE PROJECT REQUIRES NO FUNDS FROM THE CITY AND IT WILL GENERATE $3.2 MILLION INTO THE LOCAL CONSTRUCTION ECONOMY, THE SIZE OF THE TEE BOXES WILL BE ENLARGED TO ACCOMMODATE THE HIGH PLAY. NEW IRRIGATION AND DRAINAGE WILL GET RID OF LOW SPOTS AND STANDING WATER WHICH WILL ELIMINATE COURSE DAMAGE AND GIVE THE ABILITY TO MAINTAIN BOTH A FAIRWAY CUT AND A ROUGH CUT. THE DRIVING RANGE WILL DOUBLE IN SIZE, THUS MAKING ROOM FOR THE DEMAND AND OFFERING OF MORE LESSONS. THE NEW CLUBHOUSE, COFFEE SHOP, AND BANQUET ROOM WILL LOOK GREAT AND BETTER SERVE GOLFERS AND NON -GOLFERS ALIKE. THE NEW CARTPATHS, CARTS, AND MAINTENANCE BUILDING WILL ENABLE THE COURSE TO BE MAINTAINED AT A PREMIUM LEVEL. ATTACHMENT 4 eV, CERTIF'C XE OF INS . CE ISSUE DATE (MM/DD/YY) iYYddll �6__ _ __.......7/15/91......_......___.. PRODUCER THIS CERTIFICATE IS ISSUED AS A -MATTER OF INFORMATION ONLY AND I CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICAI Jardine Insurance Brokers Los Angeles Inc [ DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY TH 11835 W. Olympic Blvd., 5th F1. [ POLICIES BELOW. I T.nc Anaal eG _ California 90064 ^^RAM A LIICC+ A r7r7^n %16IP%_ nnvro A i±r ;Tel: (213) "444-3333 .,.,.... r........ ,......._...,. ... ._..,.—_ COMPANY i LETTER National Union Insurance CO. I COMPANY B INSURED LETTER National Union Insurance CO. !American Golf Corporation, Etal COMPANY C 1633 - 26th Street LETTER Federal Insurance Co. !Santa Monica, California 90404-4024 1 American Home Insurance Co. I COMPANY p • LETTER 2• National Union Insurance CO. i 3. Birmingham Fire Insurance Co. COMPANY E LETTER COVERAGES.-� .. . .• ': ` -'� �._- - THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO TYPE OF INSURANCE POLICY NUMBER LTR POLICY EFFECTIVE POLICY EXPIRATION LIMITS DATE (MM/DD/YY) DATE (MM/DD/YY) GENERAL LIABILITY GENERAL AGGREGATE $ 1,800,000 j A X COMMERCIAL GENERAL LIABILITY PRODUCTS-COMP/OP AGG. $ 1,800,000 I CLAIMS MADE X OCCUR. RMGL 3257950 7/15/91 7/15/92 PERSONAL & ADV. INJURY $ 1,800,000 OWNER'S & CONTRACTOR'S PROT, ($200, 000 S.I.R.) EACH OCCURRENCE $ 1 , 800, 000 APPOVED AS TO �' ORM: FIRE DAMAGE (Any one fire) $j0 000 GAIL HU TO MED. EXPENSE (Any one person) $ 5,000 AUTOMOBILE LIABILITY By: D��Y,y Att ey COMBINED SINGLE $ 1,000,000 B X ANY AUTO LIMIT X ALL OWNED AUTOS RMCA 1427881 - AOS 'Y� BODILY INJURY $ X SCHEDULED AUTOS RMCA TX1427882 -Texas 7/15/91 7�15�92 Per person) X HIRED AUTOS BODILY INJURY $ X NON -OWNED AUTOS (Per accident) GARAGE LIABILITY PROPERTY DAMAGE $ X GKLL-$300,000 Limit EXCESS LIABILITY EACH OCCURRENCE $ i I I C UMBRELLA FORM (92) 7966-24-44 7/15/91 7/15/92 AGGREGATE $ 10,000,00 X .OTHER THAN UMBRELLA FORM STATUTORY LIMITS WORKER'S COMPENSATION D 1. RMWC 1232582 -Texas 7/15/91 7/15/92 EACH ACCIDENT $ 1,000,000 AND 2. RMWC 1232583 - AOS DISEASE —POLICY LIMIT $ 1 , 000 , 000 EMPLOYERS' LIABILITY 3. RMWC 1232584 - Ariz., Ore., Mary., Idaho, VA DISEASE —EACH EMPLOYEE $ 1,000,000 OTHER DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS It is hereby understood and agreed that the Certificate Holder is included as Additional Insur( as respects Meadowlark Golf Course. CERTIFICATE HOLDER ;; . ? CANCELLATION;; SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THI City of Huntington Beach EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL-MQ9A`Io�.QR -Ti 30 2000 Main Street MAIL DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO TH Huntington Beach, CA 92648 "- LEFT,-D;4T-FAk-;RE TO MAR- 'E-6++A+rL---NE) eBLie€rT40N-el Attn: Risk Management Division 6A446Txsl=- PHA EN k'E-,c AUTHORIZED ACORD 25=S (7/90) ' =TIVE ©ACORD COFAORAT,lO F,/ LEASE AGREEMENT AMERICAN GOLF CORPORATION AND CITY OF HUNTINGTON BEACH TABLE OF CONTENTS PAGE 1. DESCRIPTION OF PREMISES .............................1 2. CONSTRUCTION AND USE OF LEASED PREMISES.............2 3. QUIET ENJOYMENT.....................................2 4. TERM................................................2 5. TERMINATION.........................................3 6. LEASE YEAR DEFINED..................................3 7. IMPROVEMENTS TO THE GOLF COURSE.....................4 8. RENT...............................................10 9. GROSS REVENUE......................................12 10. REPORTING AND PAYMENT OF PERCENTAGE RENT ........... 14 11. MAINTENANCE AND EXAMINATION OF RECORDS.............14 12. SERVICES TO BE PROVIDED BY LESSEE..................15 13. TAXES..............................................19 14. UTILITIES..........................................20 15. CAPITAL IMPROVEMENTS...............................20 16. MAINTENANCE AND REPAIRS ............................21 17. LESSOR'S COOPERATION...............................21 18. INDEMNIFICATION, DEFENSE, HOLD HARMLESS ............ 22 19. WORKERS' COMPENSATION INSURANCE....................24 20. INSURANCE..........................................24 i TABLE OF CONTENTS PAGE 21. DAMAGE AND RESTORATION..............................27 22. EMINENT DOMAIN......................................27 23. FRUSTRATION OF PURPOSE..............................28 24. ASSIGNMENT..........................................29 25. BREACH AND REMEDIES.................................30 26. NOTICES AND ADDRESSES...............................33 27. GOVERNING LAW.......................................34 28. CAPTIONS............................................34 29. DEFAULT WAIVER......................................34 30. INTEGRATION.........................................35 31. PUBLIC ACCOMMODATION................................35 32. TIME IS OF THE ESSENCE..............................35 33. MINERAL RIGHTS......................................35 ii LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND AMERICAN GOLF CORPORATION FOR THE PROPERTY KNOWN AS THE MEADOWLARK GOLF COURSE THIS LEASE AGREEMENT is made and entered into this &A day of juju 1992, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "LESSOR", and AMERICAN GOLF CORPORATION, a California corpora- tion, hereinafter referred to as "LESSEE". WHEREAS, LESSOR owns certain real property (hereinafter referred to as "Premises"), in the City of Huntington Beach, and LESSEE desires to lease said PREMISES for the use and purposes set forth below, and LESSOR and LESSEE had previously entered into that certain lease for the same Premises effective as of January 1, 1975 (Previous Lease), and the parties now wish to terminate such Previous Lease and replace it with this new Lease, NOW, THEREFORE, the parties covenant and agree as follows: 1. DESCRIPTION OF PREMISS LESSOR hereby leases to LESSEE that certain real property located in the City of Huntington Beach, County of Orange, State of California, and more particularly described in the attached Exhibit "A" and incorporated herein by this reference, commonly known as Meadowlark Golf Course for all purposes, along with all easements, covenants, water well rights and other appurtenant rights associated therewith (collectively, the "Real Property") together with the improvements constructed on or to be constructed on the Real Property (the "Improvements") and the property described in Residential Rental Agreement, Exhibit "B" attached hereto and incorporated herein by this reference. The Real Property and the Improvements are hereinafter collectively referred to as the "Leased Premises". 2. CONSTRUCTION AND USE OF LEASE] PREMISES LESSEE agrees it will use the Leased Premises exclu- sively for the operation of a public golf course and other activ- ities customarily associated with or incidental to the operation of a public golf course, including without limitation, sale or rental of golf -related merchandise at a golf professional's shop, furnishing of,lessons by a golf professional, operation of a driving range,, and sales of food and both alcoholic and non- alcoholic beverages. LESSEE shall not use the Leased Premises for any unlaw- ful purpose and shall comply with all laws, rules and regula- tions, zoning and licensing regulations applicable to the Leased Premises or the businesses conducted on the Leased Premises. 3. QUIET .N OYMEN'T' Subject only to the terms of this Lease, so long as LESSEE complies with each and all of its obligations under this Lease, LESSOR shall secure to LESSEE the quiet and peaceful enjoyment of the Leased Premises and the sole and exclusive possession of the Leased Premises without objection or inter- ference from LESSOR or any party claiming under LESSOR. 4. TERM The PREVIOUS LEASE between the parties is hereby D; terminated as of the commencement date of the new Term herein set forth below. The term of this Lease ("Term") shall be for twenty-five (25) years, beginning on the first day of the calendar month six (6) months following the date of approval by City Council. Provided that LESSEE is not in default pursuant to Section 25.1 of this Lease, LESSEE shall have the option to re- quest to extend the Term of the Lease for an additional period of ten (10) years, and LESSEE shall provide written notice to LESSOR of LESSEE's request for such extension at least eighteen (18) months prior to the expiration of the initial term of the Lease. LESSOR shall determine if LESSEE is in default pursuant to Section 25.1 and, if not, grant the extension within ninety (90) days of receipt of such request. If Lease is extended, all terms and conditions of this Lease shall continue to be applicable, unless it is mutually agreed to change any term or condition. 5. TERMI AEI. TIQN This Agreement is subject to termination by LESSOR under Sections 25.1, 25.2 and 29 hereof. 6. LEASE YEAR DEFINED A "Lease Year" is that period of twelve (12) consecu- tive calendar months beginning with the first month of the Lease as defined in Section 4 and each anniversary thereof during the Term. The Lease Year may be changed by written agreement of the parties. If this Lease is terminated prior to the end of a Lease Year, minimum rent for such partial year shall be prorated based on the number of days in such partial year. Each Lease Year will 3 constitute a separate accounting period for the purpose of computing "Percentage Rent" (as hereinafter defined), and gross revenue for any Lease Year shall not be carried forward or backward into any other Lease Year. 7. a PRQVEME.-TS. TO TIiEGOLF COiJ$SE 7.1 LESSOR's Obligations. The obligations identified in this subsection 7.1 shall be referred hereafter as "LESSOR's Obligations." LESSOR shall provide to LESSEE possession of the Leased Premises and LESSOR shall perform, secure and/or provide each and all of the following: a) Approval of all plans and specifications sub- mitted to LESSOR from LESSEE that meet city code requirements; fees by LESSEE; b) All necessary building permits upon payment of c) At the point of current connection, all required utilities, including without limitation, if available, gas, electricity, water, sewer, storm drain and fire hydrants. 7.2 Lf3-a .E_'zs Obligat -Qjaa a) Required Improvements. The obligations identified in this subsection 7.2 (a) shall be referred to as "LESSEE's Required Improvements." LESSEE shall construct the following improvements within the first two years of the Lease Term at an approximate minimum investment including design, engineering, consulting, permits and licenses, supervision and management, fixtures, equipment, and all direct and indirect construction costs of Three Million Two Hundred Thousand ($3,200,000) Dollars: 4 Golf Course I. Design and implementation of new and/or re- placement of waterwise irrigation system that will hookup to reclaimed water system. LESSEE shall meet all federal, state and local requirements for hook- up to such system no later than six (6) months from LESSOR notification of availability of such water. II. Lake lining and drainage improvements III. Fencing IV. Tee work V. Cart paths Driving Range I. 61 stalls w/mats II. Two tiers III. New lighting IV. New netting V. Synthetic target mounds VI. Deeper hitting area Maintenance Building I. Meet all Cal -OSHA requirements II. Fenced for security III. Proper chemical storage Clubhouse I. New building/coffee shop/lounge II. Banquet room III. Golf shop IV. Cart storage for 85 carts b) LESSEE shall obtain all necessary environ- mental studies, mitigations, and permits, such as an environ- mental impact report or negative declaration; c) Mutually approved changes to or substitutions for LESSEE's Required Improvements shall be in writing and signed by both parties; d) LESSEE shall make all improvements required by this Lease in compliance with the right-of-way for Graham Street. LESSOR may, at its option, choose to improve Graham Street at any time during the term of this Lease. If LESSOR so chooses to improve Graham Street, LESSOR shall be responsible for all costs of such improvements. 5 e) Additional Improvements. Subject to written approval of LESSOR, LESSEE may elect to construct certain addi- tional facilities which are compatible with the LESSEE's Required Improvements and which provide additional city approved services for the Leased Premises. f) The period for construction of the improve- ments described in this section 7.2 shall be extended by the period of any delay caused by inclement weather or other acts of God, shortage of materials or supplies, labor strike or walkout, delay in obtaining permits, licenses, or approvals from govern- mental agencies, or any other force majeure event not within the control of LESSEE. Upon the occurrence of any of these events, LESSEE shall provide written notice to LESSOR of the occurrence of such event and the length of the delay caused by such event. 7.3 Construc.tsj on Plans and Approval a) Schematic Plans. LESSEE will submit schematic plans for improvements of the golf course to LESSOR not later than sixty (60) days following execution of this Lease for LESSOR's approval. LESSOR's response to the schematic plans, including any recommendations for change, is to be submitted to LESSEE not later than thirty (30) days following LESSOR's receipt of the schematic plans. b) Development Plan and Final Construction Plans. Within one hundred twenty (120) days following approval of LESSEE's schematic plans, LESSEE shall submit to LESSOR a devel- opment plan, final construction plans, and specifications for C0 LESSOR's approval, subject to city review which may include Com- munity Services Commission, Planning Commission, or City Council. LESSOR shall make every effort to expedite the approval process. c) "As Built" Plans. within sixty (60) days following completion of LESSEE's Required Improvements, LESSEE shall furnish LESSOR a complete set of reproducibles and three sets of prints of mylar "as built" plans. 7.4 Construction. Promptly following LESSOR's approv- al of the development plan and final construction plans and issu- ance of necessary permits, LESSEE shall commence LESSEE's Re- quired Improvements and construction of any Optional Improvements in accordance with the Approved Plans. LESSEE shall substantial- ly comply with the Approved Plans unless a change order or alter- ation is otherwise approved in advance by LESSOR. LESSOR shall have the right to inspect all construction for the purpose of confirming that LESSEE is adhering to the Approved Plans, pro- vided that LESSOR's failure to so discover or object to construc- tion that does not adhere to the Approved Plans shall not be con- strued to constitute a waiver by LESSOR of the requirement that such construction be in accordance with the Approved Plans. LESSEE shall also construct or cause to be constructed upon the Leased Premises all lines, structures and facilities required in order to provide the Leased Premises with all necessary utility services and drainage. a) Mechanics Liens or Stop -Notices. LESSEE shall at all times indemnify and hold LESSOR harmless from all claims VA for labor and materials in connection with the construction, repair, alteration or installation of structures, improvements, equipment or facilities upon the Leased Premises by LESSEE and from cost of defending against such claims, including reasonable attorney fees. In the event a lien or stop -notice is imposed upon Leased Premises as a result of such construction, repair, alteration or installation, LESSEE shall, within thirty (30) days after notice of the filing of such lien or stop -notice, either: i) Record a valid release of lien; or ii) Procure and record a bond in accordance with Section 3143 of the California Civil Code, which frees the Leased Premises from the claim of the lien or stop -notice and from any action brought to foreclose the lien. 7.5 LESSEE's Assurance of Coi[mpletion. Prior to LESSEE signing a construction contract and commencement of construction, LESSEE shall furnish LESSOR suitable evidence of money available, approved as to form by the City Attorney, in an amount of not less than Three Million Two Hundred Thousand ($3,200,000) Dollars in order to complete LESSEE's Required Improvements in the form of one of the following: a) A performance bond containing the provisions of a labor and material bond supplied by LESSEE's contractor or contractors, provided said bonds are issued jointly to LESSEE and LESSOR as obligees; or b) An irrevocable letter of credit, in an amount not less than Three Million Two Hundred Thousand ($3,200,000) Dollars; or c) A certified letter from a qualified bank certifying that it is holding funds in an amount of not less than Three Million Two Hundred ($3,200,000) Dollars which will be released to LESSEE solely for the construction of LESSEE's Required Improvements. d) Cash deposited in an escrow acceptable to LESSOR, with interest to accrue to LESSEE, but with instructions to the escrow agent to the effect that until construction is completed, funds deposited in escrow may not be released or pledged without LESSOR's written approval; or any combination of the above. e) All bonds and letters of credit must be issued by a company qualified to do business in the State of California. 7.6 Ownership of Improvements a) All buildings, improvements and facilities, other than personal property, placed upon the Leased Premises by LESSEE, shall become LESSOR's property upon the termination of the Lease Agreement. b) The parties acknowledge and agree that LESSEE owns (or leases from third parties other than LESSOR) all personal property located on the Leased Premises or used in connection with the operation, maintenance, or improvement of the Leased Premises and that LESSOR has no present or future right or interest in such personal property. Within 30 days after the E expiration of this Lease, LESSEE shall remove all such personal property from the Leased Premises. c) Upon completion of the improvements and annually thereafter, LESSOR and LESSEE will jointly prepare a complete inventory of all items located upon the Leased Premises (form attached), and shall distinguish each item as to whether it shall be considered real or personal property for purposes of this Lease. This list and any additions will be used as a guideline in determining ownership upon termination of the Lease. 8. RENT In addition to the rent specified in Exhibit "B", LESSEE shall pay an annual rent in an amount that will be the greater of either (i) the minimum rental payment as set forth below, or (ii) a rent based upon percentages of gross revenue as set forth below. 8.1 Minimum Rent. LESSEE will pay to LESSOR an annual minimum rent thirty (30) days in arrears in equal monthly installments on the following schedule: Years 1-2 $175,000.00 ($14,583.33 per month) Years 3-10 $300,000.00 ($25,000.00 per month) Years 11-18 $500,000.00 ($41,666.67 per month) Years 19-25 75% of the average of actual percentage rent during Years 11-18 Option Period 75% of the average of actual percentage rent during Years 19-25 8.2 ercentaae Rent. In any Lease Year in which the amount of Percentage Rent set forth below exceeds the Minimum Rent specified in subsection 8.1, LESSEE shall pay to LESSOR Percentage Rent based upon the following formula: 10 Years 1-2 Five percent (5%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. Years 3-10 Nine percent (9%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. Years 11-18 Eighteen percent (18%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent ( 25 %) of non-food, banquet room rentals. Years 19-25 Twenty-five percent (25%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%)of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. Option Period Twenty-five percent (25%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent ( 4 %) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. 8.3 Late Payment Charae. If any payment of rent or any other sum due is not received on or postmarked as of the due date, a late charge of ten percent (10%) of the payment due will 11 be added to the payment obligation and the total sum shall be immediately due and payable to LESSOR. An additional charge of ten percent (100) of said payment, excluding late charges, shall accrue for each additional month that said payment remains unpaid; provided, however, that in the event that LESSEE contests the obligation to pay a sum allegedly due and it is ultimately determined that the sum is not owed, LESSEE shall not be required to pay late charges pursuant to this subsection. 9. BOSS REVENUE_ For purposes of calculating Percentage Rent, gross revenue shall mean all money received by LESSEE as a result of the sale of merchandise or the provision of services on the Leased Premises, but shall not include: customers; (a) Cash refunds or credits allowed on returns by (b) Sales taxes, excise taxes, and similar taxes now or later imposed upon the sale of goods, merchandise or services and paid by LESSEE to the appropriate taxing authority, whether added to or included in the sales price; (c) Fees charged for golf lessons and instructions; (d) The actual uncollectible amount of any check or draft received by LESSEE as payment for goods or services and returned to LESSEE from a customer's bank as being uncollectible (commonly "non -sufficient funds" checks), but only after LESSEE has made a reasonable effort to collect on the check; (e) The actual uncollectible amount of any charge or 12 account (commonly "bad debts") incurred by LESSEE for the sale of merchandise or services; provided, however, that the charge or account was extended to the customer by LESSEE, and that reason- able efforts to collect said charge or account have been made; (f) The actual uncollectible amount of any sale of merchandise or services for which LESSEE accepted a credit card; provided, however, that LESSEE has made reasonable efforts to collect the debt after being notified by the issuing bank of the invalidity or uncollectibility of the charge; (g) Interest or other charges paid by customers for extension of credit; (h) Sales made by any concessionaire or licensee of LESSOR, it being the intention of this Lease that only LESSEE's share of the receipts of such concessionaires or licensees, if and to the extent actually received by LESSEE, are to be included in the calculation of LESSEE's gross revenue; (i) Sales or trade-ins of machinery, vehicles, trade fixtures or personal property used in connection with LESSEE's operation of the Leased Premises; (j) The value of any merchandise, supplies or equip- ment exchanged or transferred from or to other locations of bus- iness of LESSEE where such exchange or transfer is not made for the purpose of avoiding a sale which would otherwise be made from or at the Leased Premises; (k) Receipts in the form of refunds from or the value of merchandise, supplies or equipment returned to shippers, 13 suppliers or manufacturers; (1) The amount of any cash or quantity discounts received from sellers, suppliers or manufacturers; (m) The amount of any gratuities paid or given by customers to or for employees of LESSEE; (n) Receipts from the sales of uniforms or clothing required to be worn by employees; (o) Amounts attributed to meals served or provided to employees of LESSEE; (p) Receipts from the sale of waste or scrap materials resulting from LESSEE's operations; and (q) Amounts attributable to play by members of the American Golf Club exercising their membership right to play not more than two (2) rounds per year without separate payment of greens fees not to exceed 300 total rounds per year. ;_'• New.0I •. _4 .N we] •_Do c _: _DIN Within thirty (30) days following the end of each Lease Month, LESSEE will submit to LESSOR a statement signed by LESSEE or a person authorized by LESSEE showing, in reasonable detail acceptable to LESSOR, the amount and types of gross revenue for the year to date, and a remittance, if appropriate, of the amount by which the Percentage Rent for such year to date exceeds the Minimum Rent. 4� \4�_ �-��_ ,:u tom_ •� • C_ •;l LESSEE agrees to maintain its financial records per- taining to the operation of the Leased Premises for a period of 14 four (4) years after the conclusion of any Lease Year and further agrees that such financial records shall be open and available to LESSOR or LESSOR's representative for an examination at all reasonable times during business hours. LESSOR shall give LESSEE notice of such examination at least forty-eight (48) hours before LESSOR intends to conduct such examination. LESSOR shall be entitled at any time within four (4) years after the conclusion of a Lease Year to question the sufficiency of any rent payments or the accuracy of the report furnished by LESSEE. At the end of each Lease Year, LESSEE shall submit an annual statement of gross receipts pursuant to Section 9, certi- fied as correct by LESSEE. LESSOR may, at its option, require an outside audit of LESSEE's financial reporting. LESSOR shall pay for such outside audit unless such audit shows that LESSEE under- reported applicable income by an amount of five percent (5%) or greater. If such under -reporting is determined by outside audit, LESSEE shall immediately reimburse LESSOR with the determined amount of under -payment, plus the cost of the outside audit that determined such under -payment. 12. SERVICES TO BE PROVIDED BY LESSEE Pursuant to this Lease, LESSEE shall provide the serv- ices and operate Meadowlark Golf Course facilities as follows: 12.1 Management. LESSEE agrees to operate and manage the golf course facilities and services offered in a high quality manner and shall maintain the Leased Premises in accordance with the minimum maintenance standards as listed in the attached 157 Exhibit C and incorporated herein by this reference. LESSEE agrees it shall provide an overall standard of service at least equal to a "B" or better rating as described in the monthly course evaluation report (Exhibit D), with no single category maintained below a "C". In the event the evaluation report indicates that the premises do not meet the minimum rating requirements set forth in Section 12.1 above, the Director shall so indicate by a detailed, itemized list of all items that need to be corrected, improved, or repaired on the "Evaluation Form". The Evaluation Form shall serve as the LESSOR'S written notice pursuant to Section 25.1 b). Director and LESSEE shall meet and discuss the monthly Evaluation Form, and shall, in good faith, attempt to agree upon the steps LESSEE shall take to correct, improve, or repair the items in- cluded on the Evaluation Form and the time schedule for doing so. Except as provided below, LESSEE shall have sixty (60) days after receipt of the monthly Evaluation Form to correct, improve, or repair each of the items on the Form, provided that if any item cannot be corrected, improved, or repaired in such period, LESSEE shall have such additional time as reasonably necessary to com- plete such correction, improvement, or repair so long as LESSEE is diligently proceeding with such correction, improvement, or repair ("Correction Period"). In the event LESSEE disagrees with anything on the monthly Evaluation Form or LESSOR and LESSEE disagree as to whether an item has been properly corrected, improved, or repaired, then the parties agree that the matter in 16 disagreement shall be submitted for resolution to the Greens Section of the United States Golf Association, or any other person or entity agreed to by the parties, and the parties shall abide by the recommendation of such person or entity. The Correction Period shall be stayed during the period of time that an item is being disputed by either party and is being considered by the Greens Section of the United States Golf Association or such other person or entity agreed to by the parties. The parties acknowledge and understand that the purpose of the monthly evaluation reports is to determine whether LESSEE is in compliance with Section 12.1 of this Lease and to identify those areas, if any, which LESSEE needs to correct, improve, or repair in order to be in compliance with Section 12.1. The par- ties further acknowledge and understand that the Director's de- termination whether the quality standards set forth in Exhibit D have been satisfied and, if not, the number of points that should be deducted for failing to meet these standards is subjective in nature, and LESSOR hereby agrees that Director shall act reason- ably and in good faith in making such determinations. 12.2 Hours of Operation. Subject to LESSOR's approval, LESSEE will establish hours of operation for the golf course facilities that shall meet the public demand for said facilities. 12.3 LESSE_E.'s . LESSEE will ensure that its employees shall at all times conduct themselves in a creditable manner. LESSEE will maintain a staff adequate to operate and 17 administer all facilities located on the Leased Premises in meeting standards set forth in the attached Exhibit C. 12.4 Dress and Conduct-StandarAs.. LESSEE shall set dress and conduct standards, with LESSOR's approval, and shall be permitted to deny permission to play to anyone who fails to con- form to standards. LESSEE shall have the right to refuse admis- sion to persons who are drunk, disorderly, under the influence of drugs, or who conduct themselves in a manner that may result in injury or harm to themselves, other persons or property on the premises. 12.5 Merchandise and Equipment. LESSOR retains the right to require LESSEE to refrain from sale or use of items that are of substandard quality as determined by LESSOR in the exer- cise of LESSOR's reasonable judgment. 12.6 Tournaments. LESSOR shall have the right two (2) times during each calendar year to schedule a tournament or tour- naments. LESSEE and LESSOR will agree in advance, once a year, on the dates for such tournaments. Tournament participants will be given special rates as mutually agreed for golf tournament fees. 12.7 Charity Tournament. One of the two times per year, LESSOR will have the right to organize and conduct a tournament at no charge for greens fees or equipment rentals which shall be for the purpose of raising money for City of Huntington Beach charities that will be mutually agreed to by LESSOR and LESSEE. In 12.8 RaLt_e__Sihe.di 1e_a. Prior to March 1 of each year, LESSEE shall provide to LESSOR a schedule of rates for green fees, golf cart rental, and driving range use for the ensuing year. LESSEE hereby agrees that the rates for green fees, golf cart rental, and driving range will be based on rates charged for similar golf courses in Los Angeles and Orange Counties. If there is a dispute regarding fees and rates, both parties agree to meet and confer in good faith to resolve any dispute. 13 . T XFa 13.1 Read _ Property or Possessory —Interest_ Taxea. It is not the intent of the parties that this Lease create a posses- sory interest subject to taxation; provided, however, that if this Lease should create a possessory interest in LESSEE which is subject to taxation, LESSEE agrees to pay such taxes prior to delinquency, which is not a waiver of the right to protest. LESSEE will have the right to contest the validity or amount of possessory interest taxes by means of appropriate proceedings diligently pursued at LESSEE's sole expense. LESSEE agrees that, upon final determination of liability, it will promptly pay the amount of taxes found owing, along with any interest, penalties or cost that may result from LESSEE's contest. Director will cooperate with LESSEE in any such contest of the validity or amount of such taxes, provided that LESSOR is not required to incur any cost or expense as a result of such cooperation. 13.2 Other Taxes. LESSEE shall pay before they become delinquent, all real property taxes, or possessory interest taxes 19 and assessments levied or assessed against the Premises by any governmental agency, including any special assessments imposed on or against the Premises for the construction or improvement of public works, in, on, or about the premises. 14. UTILITIES. LESSEE will pay, before delinquency, all charges for utilities, including electricity, gas, heating, cooling, tele- phone and water, used by LESSEE on the Leased Premises. LESSEE shall pay all charges for groundwater produced from water wells used and operated by LESSEE. Said charges shall include fees, assessments and other charges assessed or imposed on the City of Huntington Beach by the Orange County Water District, Metropoli- tan Water District or any other agency for groundwater extracted by the LESSEE. All charges shall be paid to the city before de- linquency by LESSEE as invoiced. It shall be the responsibility of LESSEE to contact LESSOR's Water Operations Manager at least annually to discuss any charges that may be forthcoming. 15. CAPITAL IMPRONEMENTS Unless made on an emergency basis to prevent injury to person or property, LESSEE will submit plans for any alteration or addition with a value of more than Ten Thousand ($10,000) Dollars, to LESSOR for LESSOR's prior approval, such approval not to be unreasonably withheld or delayed. LESSEE shall not have the right to create or permit the creation of any lien attaching to LESSOR's interest in the Leased Premises as a result of any construction of capital improvements. Pill Starting in the first year, LESSEE will begin a major renovation and modernization program as set forth in Section 7.2. Work shall be paid for and performed by LESSEE. As indicated in Section 8.2, the percentage rent has been decreased in years 1 through 10 to compensate LESSEE for the capital improvements. If LESSEE's Required Improvements are not constructed pursuant to Section 7.2, then LESSOR shall have the option either to cancel the Lease or to unilaterally change the percentage rent for Lease Years 1-10 to the percentages which apply for Lease Years 11-18. 16. MAINTENANCE AND REPAIRS LESSEE acknowledges it is acquiring the Leased Premises in their current "as is" condition. 16.1 LESSEE's Qbligations. LESSEE assumes sole re- sponsibility for maintenance and repair of the Leased Premises and LESSEE will maintain the Leased Premises in good order and in sanitary and safe condition at LESSEE's sole expense. LESSEE agrees it will maintain the Leased Premises in conformance with maintenance standards set in Exhibit C, subject to monthly performance evaluations as set forth in Exhibit D. 17. LESSOR'S COOPERATION LESSOR recognizes and acknowledges that LESSEE will need the assistance and cooperation of Director in order to properly perform and fulfill LESSEE's covenants and obligations under this Lease. Therefore, LESSOR agrees Director will assist in securing for LESSEE, as needed, all permits or licenses that are within the jurisdiction and authority of LESSOR's various 21 departments, agencies officers, boards or councils, and that are required in order for LESSEE to fulfill its obligations under this Lease. LESSOR agrees Director will designate a specific staff person having appropriate experience and authority whose responsibility it is to work with LESSEE in assisting LESSEE to obtain the full cooperation and assistance of Director, subject to the terms of this Lease and all applicable laws. 17.1 Initi d_ewt_P ease. During the improve- ment phases, Director's agent shall organize meetings with all appropriate agencies for the purpose of acquiring design and construction information; facilitate the submitting and securing of the necessary planning approvals, grading permits, and build- ing permits; and shall aid in developing alternative solutions to issues raised in the planning and plan check phases. 18. ICI LESSEE agrees to indemnify and save harmless LESSOR, its officers and employees against any and all claims by or on behalf of any person or persons, firm or firms, corporation or corporations, arising from the conduct or management of LESSEE or from any work or thing whatsoever done in or about the Leased Premises or any buildings and improvements thereon during the term of the Lease, and will further indemnify and save LESSOR harmless against any and all claims arising during the term of the Lease from any conditions of the buildings on the Leased Premises or from any activity on the Leased Premises which affects any street, curb or sidewalk adjoining the Leased Prem- 22 ises or any vaults, passageways or spaces therein or appurtenant thereto, or arising from any breach or default on the part of LESSEE in the performance of any covenant or agreement on the part of LESSEE to be performed, pursuant to the terms of this Lease, or arising from any act of negligence of LESSEE, or any of its agents, contractors, servants, employees or licensees, or arising from any accident, injury or damage whatsoever caused to any person, firm or corporation occurring during the term of this Lease, in or about the Leased Premises or any buildings and improvements thereon, or upon or under the sidewalks and the land adjacent thereto and related to any activity on the Leased Premises, and from and against all costs, counsel fees, expenses and liabilities incurred in or on account of any such claim or action or proceeding brought thereon; and in case any action or proceeding be brought against LESSOR by reason of any such claim, LESSEE, upon notice from LESSOR, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to LESSOR. LESSEE will conduct all defense at its sole cost and expense. Any costs of defense or attorney's fees incurred by LESSOR in enforcing this obligation will be reimbursed to LESSOR by LESSEE or may be awarded to LESSOR by a court of competent jurisdiction as costs pursuant to California ode-..._-Q.f_.-Ci—VdI P-mc-edux-e Sec. 1021. LESSEE' s obligations under this Section 18 shall not apply to any claims, liabilities, costs and expenses resulting from the sole negligence or willful misconduct of LESSOR or LESSOR'S employees or agents. 23 19. WORKERS' _..COMPENSATION ._.INSURANCE Pursuant to California LahQ. '.__,.CQ-de.. Sec. 1861, LESSEE acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for Workers' Compensation; LESSEE covenants that it will comply with such provisions prior to commencing performance of the work hereunder. LESSEE shall maintain such Workers' Compensation Insurance in an amount of not less than Five Hundred Thousand ($500,000) Dollars bodily injury by accident, each accident, Five Hundred Thousand ($500,000) Dollars bodily injury by disease, each employee, and One Million ($1,000,000) Dollars bodily injury by disease, policy limit, at all times incident hereto, in forms and underwritten by insurance companies satisfactory to LESSOR; and LESSEE shall, prior to the commencement of this Agreement, furnish to LESSOR, on a form approved by the City Attorney, a certificate evidencing such insurance; said certificate shall include a provision that the insurer shall notify LESSOR at least thirty (30) days prior to any cancellation or modification of said insurance policy; and LESSEE shall notify LESSOR at least thirty (30) days prior to any cancellation or modification of such policy. Said insurance shall not derogate from the provi- sion for indemnification of LESSOR by LESSEE under Section 18 of this agreement. 20. 1 N-SURAN_CE. In addition to LESSEE's covenant to indemnify LESSOR, 24 LESSEE shall obtain and furnish to LESSOR, the following certifi- cates of insurance for the following policies: 20 .1 Ge._e_r.a.1_Li ab_ 1_ity Insuran,_ e. A policy of general liability insurance, including coverage for bodily injury, prop- erty damage, products/completed operations, and blanket contrac- tual liability. Said insurance shall also include automotive bodily injury and property damage liability insurance. All insurance shall be underwritten by insurance companies in forms satisfactory to LESSOR for all operations, subcontract work, contractual obligations, product or completed operations and all owned vehicles and non -owned vehicles. Said insurance shall name the LESSOR, its officers, agents and employees and all public agencies as determined by the LESSOR as Additional Insureds. LESSEE shall subscribe for and maintain said insurance policies in full force and effect during the life of this. Agreement, in an amount of not less than One Million ($1,000,000) Dollars combined single limit coverage. If coverage is provided under a form which includes a designated general aggregate limit, such limit shall be no less than twice the per occurrence limit. In the event of aggregate coverage, LESSEE shall immediately notify LESSOR of any known depletion of limits. LESSEE shall require its insurer to waive its subrogation rights against LESSOR and agrees to provide certificates evidencing the same. 20.2_i.x�._.�nu,x���. LESSEE shall maintain in force during the term of this Agreement, a standard broad form fire insurance policy for full replacement of the structure itself, in 25 which the LESSOR is named as loss payee. The face amount of said policy shall be equal to the full replacement value of the structure itself. LESSOR may, upon thirty (30) days written notice to LESSEE, require said fire insurance coverage to be increased by an amount determined by LESSOR. Prior to the commencement of this Agreement, LESSEE shall furnish to LESSOR certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages; said certificates shall provide the name and policy number of each carrier and policy, and shall state that the policy is currently in force and will not be cancelled without thirty (30) days written notice to LESSOR. LESSEE shall maintain the foregoing insurance coverages in force during the entire term of this Agreement unless waived in writing by the LESSOR's Risk Manager. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of LESSOR by LESSEE under Section 18 of this Agreement. LESSOR or its representatives shall at all times have the right to inspect the original or a copy of all said policies of insurance. LESSEE shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. The parties acknowledge and agree that any insurance maintained by LESSEE pursuant to this Lease may contain deductible provisions and self-insurance or self -assumption provisions up to $250,000 per occurrence or such greater amount as the parties may approve in writing. 26 21. DAMA..�.E._ D_._R_E_STORATION. If the buildings or other improvements on the Leased Premises, should be partially damaged or totally destroyed by fire, storm, earthquake, or other casualty not caused by negli- gence of LESSOR, LESSEE will repair, reconstruct or replace the buildings, improvements or personal property to a condition as nearly similar as possible. In performing such repairs, recon- struction, or replacement, LESSEE shall not be obligated to expend more than the amount of insurance proceeds received by LESSEE. If the parties should decide among themselves that reconstruction or replacement is not warranted, this Lease shall terminate without further obligation on the part of either party, and all insurance proceeds for personal property shall be kept by LESSEE. All fixed assets proceeds shall be kept by LESSOR. 21.1 Fe.nta.1.__..Aba em _._ n�. _ m._ .�. _e.n. .n. If LESSEE is unable to use all or a significant portion of the Leased Premises during repair, reconstruction or replacement as provided for in this section, LESSEE's rental obligations under Section 8.1 during the period of repair, reconstruction, or replacement shall only be percentage rent (and not the greater of minimum rent or percentage rent). The term of this Lease shall also be extended for a period equivalent to then length of time needed for LESSEE to restore the Leased Premises for LESSEE's use pursuant to Section 2 of this Lease. 2 2. EM.I.N_EXT_._D2m&1_N If at any time during the term of this Lease, title to 27 all or substantially all of the Leased Premises shall be taken by condemnation or by right of eminent domain, this Lease shall terminate on the date of such taking and all rental payments already made shall be apportioned as of the date of the taking. For purposes of this section, substantially all of the Leased Premises shall be deemed to have been taken if that portion of the Leased Premises not taken cannot be economically utilized by LESSEE for those purposes permitted under Section 2 of this Lease. In the event that title to less than all or substan- tially all of the Leased Premises is taken by condemnation or by right of eminent domain, this Lease shall not terminate, but the minimum rent due during the remainder of the Lease Term shall be reduced as of the date of such partial taking in proportion to the extent LESSEE's operation of the Leased Premises pursuant to Section 2 of this Lease is affected by the partial taking. If there is a taking by condemnation or right of eminent domain, the award shall belong to and be paid to LESSOR, except that LESSEE shall receive from the award a sum attribu- table to the value of LESSEE's leasehold estate, including without limitation any improvements constructed by LESSEE. At any time during the term of this Lease, if the governing body of any political subdivision having competent jurisdiction over the Leased Premises should enact any valid zoning ordinance, law or regulation which prohibits the use of the whole or a substantial part of the Leased Premises for the purposes as provided in Section 2 of this Lease, or if an event of force majeure occurs, including without limitation, declared or undeclared war, sabotage, riot or other acts of civil diso- bedience, acts of government, labor disputes, shortages of fuel, accidents, fires, explosions, floods, earthquakes, or other acts of God, which substantially prevents LESSEE's fulfillment of its obligations as provided for in Section 2 of this Lease, it is agreed that LESSEE may elect, within one hundred twenty (120) days after the effective date of such ordinance, law, regulation or the occurrence of the event of force majeure, to cancel this Lease and surrender possession of the Leased Premises. Any such cancellation and surrender will act to release and discharge LESSEE from any further obligation under this Lease. 2 4. �3_LGNMEuj Except as otherwise provided below, LESSEE shall not assign this Lease or sublet all or part of the Leased Premises without the prior written consent of LESSOR and such consent shall not be unreasonably withheld. LESSEE shall notify LESSOR of any proposed assignment or subletting at least sixty (60) days prior to the proposed effective date of such assignment or sub- letting. In the event that any such assignment or subletting is approved by LESSOR, the assignee or sublessee shall agree in writing to be bound by all of the covenants of this Lease required of LESSEE. 29 24.1 g�$�fus.. In the event that prior to the stated expiration date of the Lease Term, LESSEE should elect to assign all of its interest in this Lease pursuant to the provisions of Section 24 above, LESSEE shall submit the proposed terms and conditions of any such assignment in writing to LESSOR and LESSOR shall then have the right, to be exercised by means of a written notice delivered to LESSEE no later than sixty (60) days following LESSOR's receipt of LESSEE's initial notice, to terminate this Lease and operate the Leased Premises itself, or to assign LESSEE's interest in the Lease to another third -party lessee of LESSOR's choosing. Should LESSOR exercise this right of first refusal, such exercise shall serve to release LESSEE from all further liability under this Lease other than for events which may have occurred during the term of LESSEE's operation of the Leased Premises. 25. E.RE.A C.R_AND—REMF DTEES The following conditions will constitute a breach of this Lease and a default thereunder: 25.1 ��ns3iti o_n_s_Qf._I2�f.u.1 a) If LESSEE fails to pay rent, any assessed late fees, or fulfill any other monetary obligation of LESSEE to LESSOR, and LESSEE fails to cure such monetary default within ten (10) days after written notice from LESSOR to LESSEE of such monetary default. b) If either party fails to perform any of its other non -monetary obligations under this Lease when due or 30 called for, and the party in default fails to cure such non - monetary default within sixty (60) days after written notice from the non -defaulting party of such non -monetary default; provided, however, that if the nature of the non -monetary default is the result of a force majeure occurrence or is otherwise of a nature such that it cannot be fully cured within that sixty (60) day period, the party in default shall have such additional time as is reasonably necessary to cure the default so long as the party in default is proceeding diligently to complete the necessary cure after service of notice by the non -defaulting party. c) If LESSEE shall be adjudged bankrupt, or a receiver be appointed for LESSEE's property, or if LESSEE's interest in this Lease shall pass by operation of law to any person other than LESSEE and such adjudication, appointment or order is not vacated, dismissed, or set aside within one hundred twenty (120) days from its entry. 25.2 ��.�m s .i� _...Q. ....L.E.SS.O.R. Without waiving any remedies, LESSOR may, in the event of a default by LESSEE, at LESSOR's option: a) Continue this Lease in effect without term- inating LESSEE's right to possession, even if LESSEE has breached this Lease and abandoned the Leased Premises, and enforce all of LESSOR's rights and remedies under this Lease, including the right to recover, by suit or otherwise, all sums and installments required to be paid in accordance with the provisions of this Lease, or other monetary performance as it becomes due hereunder, 31 or to enforce, by suit or otherwise any other term or provision hereof on the part of LESSEE required to be performed; provided, however, that LESSOR may, at any time thereafter, elect to term- inate this Lease for such previous uncured breach by notifying LESSEE, in writing, that LESSEE's right to possession of the Leased Premises has been terminated; or b) Immediately terminate LESSEE's right to possession of the Leased Premises and repossess the same by summary proceedings or appropriate action, and LESSOR shall thereupon be entitled to receive from LESSEE the following: i) The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; ii) The worth, at the time of the award of the amount by which the unpaid rent that would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of rent that. LESSEE proves could have been reasonably avoided; and iii) The worth, at the time of the award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of the loss of rent that LESSEE proves could have been reasonably avoided; and iv) "The worth at the time of the award", as used in Sections 25.2(b)(i) and 25.2(b)(ii) is to be computed by allowing interest at the rate of ten percent (10%) per annum. "The worth, at the time of the award", as referred to in Section M 25.2(b)(iii), is to be computed by discounting the amount at the discount rate of ten percent (10%) per annum. 25.3 IntPrP a Atorneys'�_. If either party at any time by reason of the other party's default pays any sum or does any act that requires the payment of any sum, the sum paid by the non -defaulting party shall be immediately due and owing by the defaulting party to non -defaulting party at the time the sum is paid and, if repaid at a later date, shall bear interest at the rate of ten percent (10%) per annum from the date the sum is paid by the non -defaulting party until the non - defaulting party is reimbursed by the defaulting party. 26. NOTICES AND ADDRESSE All notices, demands, requests or replies required or permitted by this Lease shall be in writing and may be delivered by any one of the following methods: (1) by personal delivery; (2) by deposit with the United States Postal Service, certified or registered mail, return receipt requested prepaid to the addresses stated below; (3) by prepaid messenger; or (4) by deposit with an overnight express delivery. Notice deposited with the United States Postal Service in the manner described above shall be deemed effective three (3) business days after deposit with the Postal Service. Notice by telegram or overnight express delivery service shall be deemed effective one (1) business day after transmission to the telegraph company or after deposit with the express delivery service. Notice by personal delivery shall be deemed effective at the time of such delivery. 33 For purposes of notice, demand, request, reply or payment, the address of LESSOR shall be: Community Services Department Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 The address of the LESSEE shall be: American Golf Corporation 1633 Twenty -Sixth Street Santa Monica, CA 90404-4024 Attention: Legal Department Each party shall have the right to designate a differ- ent address within the United States of America by the giving of notice in conformity with this section. 27. GQVERR.JN_G_ GW This Lease and the rights and liabilities of the parties to the Lease shall be governed by the laws of the State of California. If any provision of this Lease is invalidated by judicial decision or statutory enactment, the invalidity of any such provision will not affect the validity of any other pro- vision of the Lease. 28.-.,8PTIDM Captions in this Lease are included for convenience only and are not to be taken into consideration in any construction or interpretation of this Lease or any of its provisions. 29. DEFA.U.LT__. WAIVE. LESSOR's failure to act on any default on the part of LESSEE shall not be construed as a waiver thereof, nor shall any 34 custom or practice that may exist between the parties in the course of administering this Agreement be construed to waive any provision thereof. 3 0. IRATN This Lease represents the entire agreement between the parties regarding Meadowlark Golf Course, and supersedes and replaces that certain Lease dated October 21, 1974 between LESSOR and LESSEE. All exhibits attached to this Lease are hereby made a part of and incorporated into this Lease. No previous agree- ment or understanding, verbal or written, of the parties or any of their agents shall be binding or enforceable. 31. PU.B.LI ... C.C_0MnQ AT.I.QN. LESSEE agrees not to discriminate against any person or class of persons by reason of race, color, creed or national origin in the use of the Leased Premises. LESSEE shall make its accommodations and services available to the public on fair and reasonable terms without unjust discrimination on the basis of race, creed, color or national origin. 3 2. T..1� l _ __.. _THE_. E.SS EyU. Time is of the essence of this Lease Agreement. 33. I.N.E$.AI_....R.TQI3.U_ Sub -surface mineral rights to the demised premises, in - eluding a right to construct and maintain one or more drilling sites, have been reserved to LESSOR'S predecessors in title. LESSEE agrees to permit reasonable ingress and egress to said drilling sites by the holders of said rights. 35 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized officers on the date above written. LESSOR: CITY OF HUNTINGTON BEACH, a munici al corporation Mayor ATTEST: t REVIEWED AND APPROVED: 36 LESSEE: AMERICAN GOLF CORPORATION, a California C orp ration r By: Gc-c Crai-- `Price - Its: Execut' '_V' e President By: t" -- w d R. Sause Its: Chief Finance Officer APPROVED AS TO F M: City AtCoriney INITIATED AND -.APPROVED: A/Z Co unit ervices Director EXHIBIT A Parcel 1: The southwest quarter of the southeast quarter and the - south two-thirds of the west half of the northwest quarter of the southeast quarter of Section 21, Township 5 south, Range 11 west, in the Rancho La Bolsa Chica, City of. Huntington Beach, County of Orange, State of California, as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Parcel 2: The east half of the northwest quarter of the southeast quarter and the west half of the northeast quarter of the southeast quarter of Section 21, Township 5 south, Range 11 West, in the Rancho La Bolea Chica, City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Except the north 447.36 feet of the east 427.00 feet of said west half. Parcel 3: The northwest quarter of the southeast quarter of the south- east quarter.of Section 21, Township 5 south, Range 11 west, in the Rancho La Bolsa Chica, City of Huntington Beach, County of Orange, State of California as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Parcel 4: That portion of Block 4 of Tract No. 86 in the City of Huntington Beach, County of Orange, State of California as per Map recorded in Book 10 Pages 35 and 36 of Miscellaneous Maps, in the office of the County Recorder of said County, described as follows: Beginning at a point on the north and south quarter section line of Section 21 Township 5 south, Range 11 west, south 00 46' 30" east 660.74 feet from the center of said section, said point being the southeast corner of the land described in the deed to Cyril B. Bell et ux, recorded November 23, 1946 in Book 1504 Page 195 of Official Records; thence south 89° 36, 00" west 580.80. - feet along the southerly line of said land and the westerly prolongation thereof; thence south 00 46' 30", east 300.00 feet; thence north 89° 36' 00" east 580.80 feet to said north and south quarter section line; thence north 0° 46' 30" west 300.00 feet to the point of beginning. Parcel 6: That portion of Block 4 of Tract No. 86 in the City of Huntington Beach,.County of Orange, State of California, as per map recorded in Book 10 Pages 35 and 36 of Miscellaneous Maps, in the office.of the County Recorder of said County described as follows: Beginning at the southwest corner of the land described as Parcel 1 in the deed to Edmund J. Newbegin et ux, recorded October 3,.1947 in Book 1561 Page 91 of Official Records; thence north 00 46' 30" west 300.00 feet; thence south 89° 36' 00" west 82.10 feet to the west line of said block; thence south 00.46" 30" east 300.00 feet along said west line to the northwest corner of the land described in the deed to Gloria Ampolilla et al, recorded July 30, 1959 in Hook 4818 Page 497 of Official Records; thence north 89* 36' 00 east 82.10 feet to the point of beginning. 2. AMERICAN GOLF CORPORATION' U. } ,Regional Office: �F""TCAL RENTAL AGREEArt_.'NT 19400 East Mountain View Drive Yorba Linda, California 92686 (Month To Month Tenancy) VKUFtKI f Jut- Q b 1988 THIS Ifs INTENDED TO BE A LEGALLY BINDINd AGREEMENT v ItEAO IT CAat:iFUl TtfANAGENIENT CALIFORNIA AUOC1ATION OF REALTORIS STANDARD FORM Huntington Beach , Collfornla June* .10 tpg$_ The City of Huntington RParh,'a m;inirinral_corTarata,An - Landlord, and American Golf Cornoratioon , Tenant, agree as foilovvt: 1. Landlord rents to Tenant and Tenant hires from Landlord those promises described as: 16782 Graham St. nA ()1)41i.a (SirLCr1 P Famj I RPS7_rlpnrta) noduar with Rt►e f�ptg�glltg turn lure, end appliances, If any, and fixtures: all pertinent to the structure_ including, out buiings � garages 4iasrt "be Mown on Exhibit A vttachedtoo and attach the exhibit if the Ust /a extensive.) 2. The term shell commence on April 1, , tg 88 , and shall continue from month to rMth. This rental agreement may be terminoted at any time by either party by giving written notice 30 days In advance. Tenant sprees to pay; 350.00 rent per month payable in advance on the first day of each month and $ representing prorated rent from date of posaession, 3. The rent shall be paid at City Hall, City of Huntington Beach, 2000 Main, P.O. BOx 190, HB, CA 92648 tr at any address designated by the Landlord in writing. 4. $ as security has been deposited. Landlord may_,use therefrom such amounts as are reasonably necestery to remedy Tenant's defaults In the payment of rent, to repair damages caused by Tenant,'and to clean the premises it necessary upon termination of tenancy. II used toward rent or damages during the term of tenancy, Tenant agrees to reinstate sold total security deposit upon five days written notice delivered to Tenant in person or by malllrtg. Security deposit ot'.belwica thorsof, If any, together +,rich an Itemized accounting, shall be mailed to Tenant at last known address within 14 days of surrender of ptemises: ' 5. Tenant West to pay for all utilities and services based upon occupancy of the premjees and tho following charges: Any and all taxes, if any except None whkh shall be paid for by Landlord, 6. Tenant het examined the.prernisei and, all furniture, furnishings and appliances It any, am] fixtures contained therein, and accepts the sam as befngcleat, in good order, condition, and repair, with the following exceptions: Any and all cost` of repairs to be charges to tenant. 7. The premises are rented for use as a residence by the fog dwing named,persons: 'Jody Picconia_nd family, or nominee as aDn�G-" O Droded by the Citv.A�►•r.Wt)A 9-- 7-•41 No animal, bird, or pot except ,.ti7 ' shalt be kept on or about the premises without Landlord's prior written content. 0. Tenant ahali not disturb, annoy. endanger or Interfere with other Tenants of the building or neighbort, nor use tho,premimt for any urA"-,*;g purposrra. nor violate any jaw or ordinance, nor commit waste or nuisance upon or about the premises. _ 9. Tenant &great to comply with all reasonable rules or regulations posted on the premises or deliveredto Tenant by Landlord. 10. Torrent shall keep the premises and furniture, furnishings and appliances, i1 any, end fixtures. which are rented for h!s exclusl-es !ate in good order and condition and pay for any repairs to the property caused by -Tenant's negligence or misuse or that of Tenant's Invitets, Larxilord shall otherwise maintain the property. Tenant's personal property Is not insured by Landlord. 11. Tenant thall not paint, wallpaper, not make alterations to the property without Landlord's pt for written consent. 12, Upon not less than 24 hours advance notice, Tenant shall make the demised premises avefiable during nrxmal business hours to Landlord n8 his authorized agent or representative, for the purpose of entering (a) to snake necessary weed repairs, decorations, alterations or Improvements or to supply necessary or agreed services, and (b) to show the premises to prospective or actual purchasers, mortgagees, tenants, workmen or contractors. In an emergency, Landlord, his agent or authorized representative may enter the prtmises at any time without securing prior permisslon from Tenant for the purpose of tusking corrections or repairs to alleviate such emergency. 13. Tenant shall not let or sublet ,all or any part of the promises nor assign this agreement or any Interest in it without the prior written consent of Landlord. 14, if Tenant aba ndon$ or vacates the promises, Landlord may at his option terminate this agreement, and regain possession In the mannet ®r*rJbsd by law. 15. If any legal action or proceeding be brought by olther party to enforce any part of this agreement, the prevailing party shall recover lit addition to oil otter relief, reasonable attorney's feet and costs. M. Time Is of the essenca. The waiver by Landlord or Tenant of any breach shall not be ef-insttued to be a continuing waiver of any subsecitsent breach. 17. Notice upon Tenant shall be served as provided by law. Notice upon Landlord may be served upon Manager of the demised premises Dan M. Brennan, Real Property Manager It City Hall (Address as above) Said Manager Is authorlr:d to accept service on behalf of Latxiloid 18. Within 10 days alter written notice, Tenant agrees to execute and deliver a certificate as submitted by Landlord acknowledging the, this agreement is unmodified arid in full force and effect or in full force And effect as modified &ncf sating the modifications. Failure to cornpl� shall be deemed Tenant's acknowledgement that the certificate as submitted by Landlord Is true rnA correct and may, be rsli,d upon br g;% lander or purchaser. 19. In the event rent is not paid with in five (5) days after•du;2 date', Tenant agrees co pay a late charge of $..:... Tenant agrees further to pay $...... for each dishonored bank check. 20. The undersigned Tenant acknowledges having read the foregoing; prior to execution and receipt; of a copy hereof. 2I (SEE NOTE ON REVERSE) PLEASE SIGN AND RETURN City,of Huntington Beach, a municipal corporation AMIERICAN GOLF CORPORATION by Dan 1�. Brennan, Real Property Manager — By. Ken Davidson Tenant ' . .Gndbrd ..:� . .. Tenon t • I 0 W110511INTATION 14 MAOD All TO 1110 LrOAL V4I,10ITY Or ANY PHOVi61014 OR 1110 ADF(JUACY OF ANY PnOV181UN t'ANY SPECIFIC- TRANSACTION. A• REAL ESTATE BROKER IS THE PERSON QUALIFIED '10 ADVISE ON REAL ESTATE, IF nU DESIRE LEGAL ADVICE CONSULT YOUR ATTORNEY. ATTACHMENT: 21. The future rental schedule will be as Follows - 1st year - April 1st 1988 through March 31st 1989 will be $350.00/per mo. 2nd year — April. 1st 1989 through March 31st 1990 will be $500.00/per mo. 3rd year — April 1st 1990 through March 31st 1991 will be $650.00/per mo. 4th year — April 1st 1991 through March 31st 1992 will be $800.00/per mo. Each year thereafter starting April 1st 1992 the rents will be increased in the amount of 7% of the previous years monthly rental amount, example 5th year amount of $856.00/per mo. etc. These yearly increases of 7% will continue until the term of the present lease the City has with American Golf Corporation or their Successors. LANDL Q:,. TENANT -�� By: Ken Davidson LANDLORD If 9 TENANT EXHIBIT "C" MAINTENANCE STANDARDS Meadowlark Golf Course City of Huntington Beach I. Maintain Greens A. Prepare Greens for Da; 1_y. Use. On a daily basis, change cup location and repair ball marks, divots and other damage. B. Mow Greens. Mow to maintain a grass height of not less than 1/8 inch and not more than 1/4 inch. Vertical mow at least twice monthly from February to November. C. Aerify Greens. Aerify greens at least twice per year with the plugs removed the same day. D. Topdress Greens. After vertical mowing and aerifying, a good quality, medium grade nursery sand with particle size of approximately 2.0 mm shall be brushed into the surface of the green. E. Herbicide and Pest control. As turf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to the greens. F. overseed Greens. Overseed greens as weather condi- tions dictate. After overseeding a preventive program of fungicide application shall be followed. Prior to overseeding, greens to be aerified and vertically mowed. II. Maintain Tees A. Set Up Tees. On a daily basis, move and/or replace tee markers, tee benches and ball washers for proper teeing and wearing of turf. Keep ball washers filled to proper level with water plus an appropriate cleaning agent. Tee towels to be changed weekly. B. Regair Tee Areas. Overseed and topdress or resod worn and damaged tee areas with the same type of turf grass. C. Mow Tee Areas. Mow tee areas to maintain a grass height of 1/2 inch or less. Vertical mow as necessary for thatch removal. D. Aeri_fy Tees. Two (2) times per year, aerify the tee areas and topdress with good quality, medium grade nursery sand. E. PertilizP Tee Areas. Apply eight (8) to twelve (12) pounds of actual nitrogen for every thousand (1,000) square feet of turf per year in a manner to provide uniform growth. Four (4) pounds of nitrogen shall be supplied through the application of a N-P-K formulation of approximately a 4-1-2 ratio. F. Herbicide and Pest control_. As turf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to tees. G. nvPrsapd and Topdregs Tee Areas. Monthly, the turf areas are to be overseeded and topdressed. Apply a preventive fungicidal treatment prior to overseeding. 2 III. Maintain Fairways A. Repair f Areas. Overseed worn and damaged turf areas with the same type of turf grass. 0 B. Mow Turf Areas. Mow as necessary to maintain a grass height of 1/2 inch to 3/4 inch in fairway and 3/4 inch to 1 1/2 inches in roughs. Contour mow as to master plan of fairways and roughs at the golf courses. Vertical mow as necessary to prevent mat or thatch buildup. a year. C. A ri y Turf Areas. Aerify turf areas three (3) times D. Fertilize Turf Areas. Apply six (6) pounds of actual nitrogen for every thousand (1,000) square feet of turf per year in a manner to provide uniform growth of turf. Two (2) pounds of nitrogen shall be supplied through the application of a fertilizer with N-P-K formulation of approximately a 4-1-2 ratio. Aerification shall precede fertilization each time. E. Herbicide and Pest Control. As turf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to the fairways. IV. Maintain Sod Nurseries A. Maintain Sod Areas. Maintain and mow sod of the same type of grass and soil condition as used for the tees and greens. B. Replace Sod. After removal of sod, replace the proper soil and reseed the area. 3 e V . Edge All sidewalks, curbs, parkways, walkways, driveways, parking lots and cart paths are to be edged at least once per week. Valve boxes, meter boxes, backflow preventers and other structures are to be edged or trimmed regularly. VI. Maintain Lakes and Ponds A. Remove Weeds. Periodically remove weeds from water areas. B. `heck and Maintain Water Level. Periodically check water level and fill or drain the water areas as necessary. C. Control Algae. Establish a regular program to control the growth of algae. VII. Maintain Sand ap- A. Edge Sand Traps. As necessary, edge sand traps to maintain a neat lip. B. Rake and Clean Traps. Rake traps daily, eliminate weeds and fill traps with fresh sand as necessary to maintain at least a four (4) inch depth in bottom and on slopes, replace rakes as necessary. Sand to be of a dust -free type. VIII. jrrii,g to and Maintain irrigation Systems A. Evaluate Roil and Environmental Conditions. As neces- sary, determine soil texture, porosity, water holding capacity, drainage, compaction, precipitation rate, runoff, infiltration rate, percolation rate, evapotranspiration, seasonal temperatures, prevailing wind conditions, time of day or night, type of grass plant and root structure. 4 B. Trrj�gate_ Course. Irrigate all turf areas, trees and planting areas to maintain adequate moisture for healthy growth. Every effort should be made to employ water conservation practices without compromising the level of maintenance. 1. Inspect Operating Condition. On a daily basis, inspect and test irrigation systems including controllers, heads, valves and lines. 2. Correct or Repair Irrigation System. On a daily basis, adjust sprinklerheads and controllers, unplug clogged heads, remove obstacles and flush lines to insure proper operating conditions. IX. Maintain Trees, Shrubs and around Cover A. Prune G. Trim and prune trees to maintain safe vehicular and pedestrian clearance and visibility, to prevent or eliminate hazardous situations and to maintain playable standards. B. Repair Damaged es. Major and minor damage to trees shall be remedied as directed by Project Manager. Damage occurring from either spray drift or lateral leaching shall be corrected and the soil conditioned to ensure its ability to support plant life. C. Plant New T s. Any new trees or replacement trees shall be planted in accordance with the policy of one for one. Replacement trees shall be acceptable trees for the situation and, if possible, a minimum of a 24" box. 5 D. Stake Trees. All newly planted trees shall be staked as necessary for protection. The stakes used to secure the tree shall be checked frequently and either retied to prevent girdling or removed along with the stakes when no longer required. E. Pest Control. Control insects, disease and other pests as necessary to maintain healthy and attractive trees, shrubs and ground cover. F. Clean Up Debris. Pick up and remove all trash and debris such as paper, drinking cans, bottles, fallen limbs and leaves. G. Remove weeds. Periodically remove weeds and grass from shrubs and ground cover areas and edge planting areas. H. Prune shrubs. Prune shrubs to protect from wind and insect damage and to maintain appropriate appearance. I. Removal of Dead Plants. All dead, diseased, damaged and unsightly branches, vines, plants, spent flowers and blooms or other growth shall be removed and replaced with the same type of plant or plant material, if possible, or with similar plants approved by the city. X. Maintain Rest Rooms A. Clean Rest Rooms. on a daily basis, clean, disinfect, deodorize and free of deposits the floors, floor drains, wash basins, piping, toilets, toilet seats, walls and partitions around the toilets, urinals, mirrors, and supplies dispensers. N. On a weekly basis, clean, disinfect, deodorize and free of deposits the walls and ceiling. B. Replenish Supplies. On a daily basis, replenish the rest room supplies including all paper supplies and cleaning materials. C. Empty Trash. Empty, clean and disinfect trash recep- tacles prior to opening the golf course each day. D. Remove Graffiti. Repaint to matching surface or scrub off graffiti on all interior and exterior surfaces on a daily basis. E. Check Lighting. Check daily to ensure that all inter - for and exterior lighting fixtures and lights are in good con- dition and operable. Replace light bulbs or tubes as necessary. F. Maintain Structures. As necessary, maintain and repair walls, ceilings, roofs, floors, doors and partitions of structures. G. Repair Leaks and clogs. On a daily basis, repair all leaking fixtures, stopped -up or damaged basins, toilets and urinals and all clogged drains. u. ►•$ RTM A. Maintain Cart Paths. Maintain cart paths in a smooth, clear, clean and safe condition and repair damaged concrete, asphalt or ruts. B. Maintain Drainage Lines. Inspect, clean and deweed all surface flow lines, barranca channels, catch basins and other drainage structures. 7 C. Clean Up Debris. Remove all litter and debris from golf course and especially around walls and fences. Empty trash receptacles daily, repair and replace as necessary. D. Maintain Water Fountains. Maintain and clean all ex- terior water fountains and repair all leaks and clog daily. E. clean Parking Lot. Remove all debris and litter from parking lot and sweep parking lot not less than three (3) times per week. Repaint and replace signs in parking lot. F. Maintain Pence and Fence Lines. Periodically inspect and repair the fence and fence lines within and around the golf course including, but not limited to, those fences designed to control the flight of golf balls. XII. Maintain Golf Carts A. Clean and Check Operation'of Carts. After the golf carts are returned from use, remove all trash and litter, and wash the carts to remove dirt, mud and grass. Check operating condition of the carts. B. Recharge Batteries. Recharge batteries to electri- cally power golf carts through two, 18-hole rounds of golf. C. Cart Maintenance. Repair and adjust golf carts to maintain in good operating condition. EXHIBIT "D" CITY OF HUNTINGTON BEACH MEADOWLARK GOLF COURSE EVALUATION REPORT AMERICAN GOLF CORPORATION MONTH YEAR TODAY'S DATE INSPECTED BY SUMMARY SHEET MAINTENANCE INSPECTION OPERATIONAL INSPECTION POINTS POINTS AREA AVAILABLE EARNED AREA AVAILABLE EARNED GOLF SHOP 125 GREENS 120 CARTS 80 TEES 80 CLUBHOUSE 170 FAIRWAYS & ROUGHS 80 FOOD & BEVERAGE 200 IRRIGATION SYSTEM 50 RESTROOMS 100 DRIVING RANGE 120 LAKES 45 SUB -TOTAL 675 TREES & SHRUBS 40 CART PATHS 70 TOTAL POINTS EARNED ENTRANCE & PWING LOT 80 MAINT. EMPLOYEES 25 PERCENTAGE % MAINT. SHOP & EQUIP. 60 FENCES 50 RATING SUB -TOTAL 820 The percentage is determined by dividing the total points earned by the total points available 1495. COMMENTS PERCENTAGE RATING 98 - 100 A 95 - 97 A- 90 - 94 B+ 85 - 89 B RECEIVED BY AMERICAN GOLF DATE 80 - 84 B- 77 - 79 C + 74 - 76 C 70 - 73 C- 0-69 D GREENS TEES QUALITY STANDARD: Smooth, uniform turf, firm but not hard, well defined, consistent, and of suitable speed. Cups placed in accordance with USGA recommendations. Flag sticks are of good quality, standing straight, and are uniform on all greens. 1. QUALITY AND PLAYABILITY 100% Turf cover, smooth and uniform POINTS texture. Greens hold approach shots. Cups are cut cleanly and in proper location. Generly free of AVAILABLE EARNED weeds, insects, or rodents. 60 2. APPEARANCE Turf uniform in color POINTS and in mowing direction. Collars and aprons cut to AVAILABLE EARNED maintenance standard. 40 3. SAND TRAPS Sand surface is uniform POINTS and smoothly raked and is of adequate depth AVAILABLE EARNED for play. Sand is silica, washed plaster, or nursery 20 grade sand. Traps are edged, genearlly free of weeds, rocks, or debris in traps. Rakes are adequate in number and in good condition. Traps are uniform throughout the course. TOTAL POINTS AVAILABLE 120 TOTAL POINTS EARNED COMMENTS: QUALITY STANDARD: Tees are completely turfed, smooth, level, and firm. Tees drain well with no mud buildup. Tee amenities including, trash cans, signs, tee markers, ball washers, towels, and benches are in good condition and repair. Tees are consistent throughout the course. 1. TEE QUALITY 100% Turf cover with POINTS smooth level surface. Genearlly free of weeds, AVAILABLE EARNED disease, or rodents. Uniform mowing, adequate top 50 dressing and seeding program is evident. 2. PERIMETER AREAS AROUND TEES Area between cartpath and POINTS tees is uniformly mowed and smoothly turfed. AVAILABLE EARNED Generally free of identifiable traffic 30 pattern into tees, and mud or hard dirt areas. Ballwashers are clean and filled with water. Towels are in good condition, benches are in good condition, and signs are clear and in good condition. All surrounding landscape is in good condition and adequately planted. TOTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED COMMENTS: FAIRWAYS AND ROUGh. DRIVING RANGE QUALITY STANDARD: Fairways are smooth with a uniform turf cover. Turf is firm, but not hard. Well defined, and properly supports the ball for play. Rough properly mowed to specification height which is distinct in height from fairways. 1. QUALITY AND PLAYABILITY 100% turf cover, smooth and POINTS uniform texture. Fairway turf properly supports AVAILABLE EARNED the ball for play. Genearlly free of diseases, weeds, or rodents. 50 2. APPEARANCE Fairways have been mown POINTS consistently throughout the course. Turf is uniform AVAILABLE EARNED in height and color with the appearance of being manicured. Fairways easily distinguishable from roughs. 30 TOTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED 10101Mlu140II& i IRRIGATION SYSTEMS QUALITY STANDARD: Even, adequate, uniform irrigation coverage throughout the entire facility. Sprinkler heads and valve boxes level with grade and trimmed for clearance. No broken heads, valves, or lines are in evidence. 1. IRRIGATION SYSTEM Course shows good irrigation, POINTS neither too wet or too dry. Low spots are filled. AVAILABLE EARNED Irrigation does not throw on drinking fountains. 50 TOTAL POINTS AVAILABLE 50 TOTAL POINTS EARNED 1. LANDING AREA Surface is smooth and uniform. Artificial greens clearly identified. 2. TEE LINE - TURF AREA Turf area is smooth and uniform. There is evidence of ongoing top dressing and overseeding. 3. TEE LINE - MATS All mats are in good, usable condition. Holes, rips, or tears are repaired. Concrete pad is clean and edged, no cracks, lightly abrasive. 4. PERIMETER AREAS Genearlly clean around driving area. Benches are clean and in good repair. Buckets with water are placed in strategic positions. Fences are in good repair. Lighting is adequate and all bulbs are working. Flags for distances are clearly marked. Directions for use signs are clearly visible and in good condition. 5. RANGE BALLS Range balls are in good condition. Not smooth or cracked. Balls are clean and in plentiful supply. TOTAL POINTS AVAILABLE TOTAL POINTS EARNED COMMENTS: COMMENTS: POINTS AVAILABLE EARNED 10 POINTS AVAILABLE EARNED 20 POINTS AVAILABLE EARNED 20 POINTS AVAILABLE EARNED 50 POINTS AVAILABLE EARNED 20 120 LAKE AREAS QUALITY STANDARD: Lakes are clean, free of weeds and other growth. Shorelines are well defined and attractive. Lakes are free of litter and debris. Lakes are suitable for wildlife habitat. 1. APPEARANCE Water is genearlly clean POINTS of weeds or other growth, foul order, or floating AVAILABLE EARNED litter or debris. Banks are trimmed. 15 2. PERIMETER AREA Ground around lakes and streams POINTS is mown, trimmed, and has a smooth and clean surface. AVAILABLE EARNED Genearlly free of debris. 20 3. SUPPORT EQUIPMENT Pumps and aerators are POINTS operating smoothly and properly. All lake equipment AVAILABLE EARNED is in good condition and properly maintained. 10 TOTAL POINTS AVAILABLE 45 TOTAL POINTS EARNED COMMENTS: TREES AND SHRUBS QUALITY STANDARD: Trees and scrubs are maintained in a safe, healthy, structurally sound and aesthetically pleasing condition. 1. PRUNING Trees and scrubs are pruned POINTS to maintain cart, mower, and pedestrian traffic clearance AVAILABLE EARNED for a minimum of 7 feet. All automobile, service, and delivery traffic areas pruned to a minimum of 14 feet. 40 Tree basis are neat clean and clear of stumps or down limbs. TOTAL POINTS AVAILABLE 40 TOTAL POINTS EARNED COMMENTS: CART PATHS QUALITY STANDARD: Smooth surface no raised concrete or asphalt surfaces. Curbs properly edged. Paths free of weeds and debris. 1. QUALITY Condition is smooth POINTS with cracks, holes, or breaks repaired. AVAILABLE EARNED 30 2. TRAFFIC CONTROL Ropes, stakes, and other POINTS traffic control devices are clean, in good condition AVAILABLE EARNED and repaired as necessary. 20 3. PERIMETER AREAS Routes used by golf carts POINTS are well maintained and genearlly free of pot holes AVAILABLE EARNED and present a clean appearance. 20 TOTAL POINTS AVAILABLE TOTAL POINTS EARNED COMMENTS: 70 ENTRANCE AREA AND PARKING LOTS QUALITY STANDARD: Entry area is attractively landscaped and well maintained. Parking lot has good traffic flow and directional signs Surface is clean and smooth, genearlly free of pot holes, cracks or excessive wear. Stripping is bright and clearly evident. Entrance signs are clearly visible and in good condition. 1. ENTRANCE AREA AND SIGNS Entrance area is attractively POINTS landscaped. All planter areas have healthy plant material AVAILABLE EARNED and are free from weeds and debris. 40 Directional signs are in good operational condition and are informative and attractive. 3. PARKING LOTS Parking lot surface is clean and POINTS smooth genearlly free of pot holes, or signs of excessive wear. AVAILABLE EARNED Stripping is bright and clear. 40 TOTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED COMMENTS: MAINTENANCE EMPLOYGr-S FENCES QUALITY STANDARD: Golf course superintendent has proper education background and license. Maintenance crews are sufficient in number and wear appropriate clothing and shoes. 1. QUALIFICATIONS Golf course superintendent POINTS is class A qualified. All required licenses for AVAILABLE EARNED chemical handling are obtained. 10 2. QUANTITY The number of maintenance POINTS crew is sufficient to maintain the course per AVAILABLE EARNED the specifications. 10 3. DRESS AND CONDUCT All maintenance crew POINTS wear appropriate clothing and shoes. All crew AVAILABLE EARNED are courteous and trained in their area of responsibility. 5 TOTAL POINTS AVAILABLE 25 TOTAL POINTS EARNED COMMENTS: MAINTENANCE SHOP AND EQUIPMENT QUALITY STANDARD: Shop area is clean and orderly with no obvious safety hazards. Chemical storage is well organized and done according to local and state law. Equipment is in good repair, building is in good repair. 1. BUILDING AREA Maintenance building POINTS area is clean and neat. Walls are painted, storage AVAILABLE EARNED areas are secured, building is properly maintained. 40 2. EQUIPMENT Equipment is in good repair POINTS clean and properly maintained. Equipment meets all AVAILABLE EARNED OSHA requirements. 20 TOTAL POINTS AVAILABLE 60 TOTAL POINTS EARNED _ COMMENTS: QUALITY STANDARD: Perimeter and protective fences are free of holes, splits and are stretched to original design. Support posts are in place, straight and properly anchored. Fence lines are maintained clean and clear of weeds or other growth. 1. FENCE CONDITION All fences and screens POINTS are genearlly free of holes, tears, and splits. AVAILABLE EARNED Support posts are in place and tied tightly to all fence material. 50 TOTAL POINTS AVAILABLE 50 TOTAL POINTS EARNED COMMENTS: GOLF SHOP QUALITY STANDARD: Golf shop is clean and in good repair. Staff is courteous, all signs clearly marked, ample merchandise, floor and window coverings clean and looking new. Storage areas well maintained. Bulletins boards well organized. 1. OPERATIONS Staff is courteous POINTS and responsive to public. Staff is dressed in AVAILABLE EARNED appropriate attire with a clean and neat appearance. All required signs are prominently displayed and contain correct information. Starter operations are in compliance with specifications. Merchandise displays are amply supplied with prices clearly marked. Exterior and interior walls, windows, and ceilings are well maintained and in good repair. 125 TOTAL POINTS AVAILABLE 125 TOTAL POINTS EARNED COMMENTS: CARTS C•1011- .[911RU QUALITY STANDARD: Carts are sufficient in number to meet customer demand. Seats are in good repair. Floor mats are clean. Carts work properly. Cart storage area is clean and orderly. Carts are clear of trash and graffiti. 1. APPEARANCE Carts are clean and in POINTS good repair. Graffiti is removed. AVAILABLE EARNED Mats are clean. Bag holders, roofs, and tires all in good condition. 40 Carts are provided in sufficient POINTS quantity to meet public demand. Check in, check out easily AVAILABLE EARNED done by customers. 20 3. STORAGE AREA Storage area used for cart POINTS storage only. Area is clean and neat. AVAILABLE EARNED Carts are being maintained at a level that insures good service. Area meets all OSHA requirements. 20 QUALITY STANDARD: Clubhouse is well maintained, obviously in excellent condition. Exterior and interior surfaces well maintained, all signs are in good condition. Walkways are clean and edged. All equipment well maintained. All window and floor coverings in good condition. Office areas well organized and clean. 1. QUALITY AND APPEARANCE All areas of clubhouse POINTS operations are in good condition and properly maintained. AVAILABLE EARNED All surfaces are painted, wall and window coverings clean and new looking. All equipment well maintained. Employee areas clean and organized. All operations are done according to health dept. requirements and city codes. 170 TOTAL POINTS AVAILABLE 170 TOTAL POINTS EARNED COMMENTS: FOOD AND BEVERAGE TOTAL POINTS AVAILABLE 80 QUALITY STANDARD: All restaurant and snack bar operations are of the highest quality. Bar operations are well maintained. All kitchen areas meet or exceed health department requirements. Food TOTAL POINTS EARNED service operations are well organized. Staffing is adequate to minimize customer wait. Menu variety is adequate to please customers and presented in an attractive manner. COMMENTS: 1. OPERATIONS Food is well prepared and served attractively. Both snack bar and restaurant service operate adequate hours as posted. Adequate staff to maintain excellent service is provided. Bar area is attractive, serving of alcoholic beverages meet all code requirements. Kitchen area meets all health department and local code requirements. POINTS AVAILABLE EARNED 200 TOTAL POINTS AVAILABLE 200 TOTAL POINTS EARNED COMMENTS: RESTROOMS CORRECTION LIST QUALITY STANDARD: Restrooms are continually cleaned and well maintained. all fixtures properly work. Interior and exterior are properly clean and painted. Restrooms are attractive to the public. 1. WOMEN'S RESTROOM Entry mats or carpet POINTS clean, entry door fingermark free, the AVAILABLE and painted wall clean toilets clean: bowls, rims, tank tops, and bodies, clean toilet seats, tops and under sides, mirrors clean and streak free, soap dispenser clean and full, paper towel dispenser clean and full, toilet paper dispenser clean and full, counter top clean, ashtrays emptied and washed, sink and faucet fixtures clean and scoured, light fixtures clean, functional and bug free, room air freshener clean and functional, trash receptacle: clean and liner, reasonably empty, napkin receptacles clean with liner, interior recently swept and washed, exterior of building clean, cobweb free, grass trimmed. 50 2. MEN'S RESTROOM Entry mats or carpet POINTS clean, entry door fingermark free, tile AVAILABLE and painted wall clean toilets clean: bowls, rims, tank tops, and bodies, clean toilet seats, tops and under sides, mirrors clean and streak free, soap dispenser clean and full, paper towel dispenser clean and full, toilet paper dispenser clean and full, counter top clean, ashtrays emptied and washed, sink anI faucet fixtures clean and scoured, light fixtures clean, functional and bug free, room air freshener clean and functional, trash receptacle: clean and liner, reasonably empty, interior recently swept and washed, exterior of building clean, cobweb free, grass trimmed. 50 TOTAL POINTS AVAILABLE 100 EARNED EARNED ITEM AGREED UPON ACTION AND TIMELINE DIRECTOR AMERICAN GOLF TOTAL POINTS EARNED DATE: COMMENTS: -ro REAL & PERSONAL PROPERTY LIST MEADOWLARK GOLF COURSE Year CITY AMER/GOLF 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK July 6, 1992 American Golf Corporation 1633 - 26th Street Santa Monica, CA 90404 - 4024 Attn: Kevin Roberts CALIFORNIA 92648 The City Council of the City of Huntington Beach at the regular meeting held I-4onday, July 6, 1992 approved a lease agreement between the City of Huntington Beach and American Golf Corporation for the improvement, operation and maintenance of Meadowlark Golf Course. Enclosed is an executed copy of the agreement for your records. Connie Brockway City Clerk CB:bt Enc. CC: Tom Frost 5000 E. Ananeim Blvd. Long Beach, CA 90804 ( Telephone: 714-536-5227 ) (� �x A of REQUEb f FOR CITY COUNCIL ACTION Cx,, � to -?/a 5/91 4AyV,11C to #-/1/91 Date March 18, 1991 Submitted to: Honorable Mayor and City Council Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Ron Hagan, Director, Community Services/ Subject: REPORT ON MEADOWLARK GOLF COURSE APED BY CITY COUr1Cx:= _...._. �. 19-2z Consistent with Council Policy? (] Yes [ ] New Policy or Except orr CIT CL Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:. C7 STATE.MF NT OF..-.SSUR The Community Services Director has met with American Golf Corporation representatives and Meadowlark Men's Club members with regard to the development of a master plan for improvements to the Meadowlark Golf Course. 1111*00.011�: •� Receive report on Meadowlark Golf Course as requested from the Community Services Director. ANALX.S.� (See attached report). F Lt N.D-1 NTG—S—OD ECYL None required. ALTERNAT-LVE—ACT T ON None required. ATTA.UMENT March 8, 1991 memo to City Council/City Administrator from Ron Hagan, Director, Community Services RH:cs PIO 5/85 CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH To City Council and From Ron Hagan City Administrator Director Community Services Subject Council Requested Report on Date March 8, 1991 Meadowlark Golf Course (91-25) Per Council's request, staff has prepared the following inform- ation regarding the operation of the city -owned Meadowlark Golf Course by American Golf Corporation. I. History In 1975, the city contracted with American Golf for the operation of the Meadowlark Golf Course. At that time, American Golf was required to make certain improvements to the facility. Those improvements included: 1) Clubhouse, including pro shop, restaurant, bar, rest rooms, office area, cart storage, etc. $200,000 2) Irrigation system 3) Driving range 4) Cart paths and parking lot 5) Refurbishing greens, traps, landscaping, fencing and golf course maintenance equipment 6) Miscellaneous 175,000 25,000 20,000 50,000 .3_0�_.0 Q 2 Total $500,000 These improvements were to be completed within thirty-six months from the signing of the original lease agreement. Apparently, there were some trade-offs for these improvements that dealt with course construction, irrigation, etc., and the $500,000 was spent on items other than called out in the agreement. All of this information regarding trade-offs of improvements required in the agreement, staff has gathered from verbal comments. There was no documentation or inspection of the improvements back in 1975 through 1978. In addition, in 1979, American Golf subleased the restaurant and bar operations to a firm known as Meadowlark Enterprises. Meadowlark Enterprises continued to operate the bar and restaurant from this date until March 1, 1991. American Golf has purchased the sublease agreement back from Meadowlark Enterprises and now intends to operate the restaurant and bar facilities directly. Page two During the term of the agreement, American Golf has made numerous improvements to the golf course, including the recon- figuration of holes, reconstruction of greens, improvements to tee -boxes, addition of lakes, and has started improvements to cart paths. Meadowlark Golf Course does over 100,000 rounds of golf per year, making it one of the busiest municipal golf courses in Southern California. Dad Miller Golf Course in Anaheim is the busiest facility with 115,000 rounds per year. Keeping a course playable and in good condition with such use is not an easy task. The current agreement with American Golf provides no language for the city to monitor and require any level of condition or playability. This is purely a function of marketing left up to American Golf. In addition, there is no language requiring American Golf to gain city approval for fee increases. American Golf has unilateral authority to set all fees at Meadowlark Golf Course. There is a need for numerous improvements to Meadowlark and staff has initiated discussions with American Golf to develop a master -plan for same. II. Golf Course Revenue The city derives revenue from American Golf Corporation's operation of Meadowlark Golf Course as follows: Green fees 12.5% of gross Driving range 12.5% of gross Cart rentals 12.5% of gross Pro shop 8% of gross, as of 3/90 Restaurant 8 % of gross, as of 3/90 Bar 8 % of gross, as of 3/90 The 1990 revenue from these sources is shown in the attached chart. Actual revenue for 1990 to the city was $305,599.24. In 1989, it was $286,929.82. The city last audited American Golf in 1982. At that time, the difference between reported figures and audited figures was less than '-z of 1 percent. American Golf is required to submit monthly certified statements of income to the city which are reviewed by Adminis- trative Services. As one can see by the chart, June and July are the biggest revenue producing months, with December and January, the least. American Golf's gross revenue for 1990 was $2,625,945. Of that amount, $2,351,000 was expended for such items as operating expenses, taxes, insurance, equipment replacement, lease payments, capital improvements, and overhead. This left American Golf with an estimated 1990 net profit of $295,000. Page three III. Master Plan Improvements Proposed improvements to Meadowlark Golf Course would include demolition of existing pro shop, restaurant, banquet facility and cart storage facility and development of a new club- house facility that would include a pro shop, restaurant, banquet facility, and cart storage area. The parking lot and entryways would be redesigned and improved. The driving range would be expanded and a teaching and practice area developed. The irriga- tion system would be upgraded substantially along with fencing and some reconfiguration of those holes on which the city currently receives complaints about errant golf balls going into residential yards. The current agreement does call for American Golf to gain city approval for any of the abovementioned improvements. Con- sequently, it will be working with the city to develop a master plan review process so that the best design and functional use of the space for both golders and maintenance operations can be achieved. Pursuant to the master plan improvements, American Golf has indicated its willingness to amend its existing lease with the city and negotiate several items. The lease needs to be brought up to date in terms of insurance requirements and indemnity clauses, review of fees and percentage rental rates, and should contain language regarding long term capital improve- ments and condition of the golf course. Both the master plan and the lease amendments will be worked on concurrently. IV. Meadowlark Men's Club On March 5, representatives of American Golf and the Director of Community Services met with the Meadowlark Men's Club to discuss the master plan, green fees, and the discontinuance of guaranteed tee times. As Council is aware, over the past fifteen to twenty years, patrons have been given weekly guaranteed tee times. This practice resulted in almost 800 individuals having a guaranteed tee time. This meant that the general public could not have access to the course from 7:00 to 11:00 a.m., seven days a week unless someone gave up their guaranteed tee time. Guaranteeing start times was a common practice in the early days of golf course operations in order to secure business. How- ever, with the shortage of golf courses and the boom in golf popularity, both the city and American Golf had come under heavy criticism regarding inaccessibility of a public golf course by the public. Consequently, guaranteed tee times were eliminated effective March 1, 1991. The Meadowlark Men's Club, whose mem- bership totals a little over 200, was a part of the guaranteed tee times. In an effort to provide the club with special bene- fits because of its participation in supporting the Meadowlark Golf Course, the Men's Club Board of directors, American Golf, Page four and staff worked out an arrangement whereby the club would be given two hours every Saturday, from 7:00 to 9:00 a.m., for its activities. A complete explanation of this process is contained in the attached letter from the President of the Meadowlark Men's Club. Although individual club members were still unhappy about losing their guaranteed tee times during the week, the majority was happy with the Saturday block of time for Men's Club activi- ties. Staff will monitor this usage and, if there is a need for an additional hour on Sunday so that members who cannot play on Saturdays have an opportunity to participate in Men's Club activities, quite possibly an hour can be made available on Sunday mornings. Some Men's Club members theorize that income will decrease because of the loss of guaranteed tee times. However, it is both staff's and American Golf's opinion that play will actually con- tinue to increase because of the popularity of the sport and the lack of available golf courses. Meadowlark is a public course and should have public access. Staff did check the benefits of men's clubs on surrounding public courses, including seven courses operated by American Golf. The benefits given to the Meadowlark Men's Club meet or exceed all of the other courses' benefits. For example, the Men's Club at Prado Dam is given fifteen starting times every Saturday morning with no annual tournament dates guaranteed. The policy of no guaranteed tee times for men's club benefits is consistent with the other muni- cipal golf courses that American Golf operates. Of the over 200 members present at the meeting, it appeared their biggest concern was not just Meadowlark but the fact that Huntington Beach has only one public course. They strongly urged staff to consider a second public golf course in Huntington Beach. V. Summary Staff will be working with American Golf, the Meadowlark Men's Club and other concerned golfers with regard to the development of a master plan for improvements to the Meadowlark Golf Course. Community Services will be negotiating with American Golf on amendments to the agreement to bring it up to date and provide more city control over golf course operations. Staff will keep the City Administrator and Council informed. RH:cs Attachments 1990 REVENUE STATEMENT FOR MEADOWLARK GOLF COURSE REVENUE FROM AMER.ICAN GOLF CORP. OPERATIONS REVENUE ITEM JAN FEB MAR APRIL MAY 3UNE JULY AUG SEPT OCT NOV DEC GROSS REVENUE CITY REVENUE GREEN FEES 87574 82629 111147 131411 132985 140151 146754 132015 119345 102659 104190 91541 1382404 172800 DRIVING RANGE 28365 26453 35630 40383 41819 46197 49761 44861 41505 24043 23250 23337 305733 38216 CART RENTALS 28365 26453 35630 40383 41819 46197 49761 44861 41505 35068 33679 28WO 452035 56504 PRO SHOP 15630 16913 16211 17287 16644 19421 17390 17250 15637 13268 13446 14478 193502 15161 RESTAURANT 13283 12324 16343 16774 18246 18743 19645 19072 17400 13946 13674 0 179457 14100 BAR 9772 10493 12479 11387 11312 10257 10999 10943 9333 8052 7701 0 U 2732 8815 TOTAL GROSS REVENUE 175841 169805 217965 245939 246722 263202 273527 253533 228753 197043 195942 157667 2625945 305599 TOTAL CITY REVENUE 19352 19040 25218 28697 28761 30721 32029 29564 26687 23043 22925 19056 March 4, 1991 Ron Hagen Community Relations City of Huntington Beach Tom Frost American Golf Corporation ° Gentlemen: Per our conversation of February 21st, the directors of Meadowlark Men's Golf Club have met to discuss the means of allocating starting times reserved for the Men's Club. The system to be used has two parts: 1. At all future Men's Club membership meetings, beginning March 5, those members present will be eligible for a drawing to fill a two hour block of times reserved for the Men's Club from 7:00 to 9:00 AM. These times will be for the Saturday twelve days from the day of the drawing. 2. Beginning March 12, and on each Tuesday following, except for those Tuesdays that are membership meeting days, phone reservations will be accented for the Saturday twelve days following. The hours of this phone service will be from 7:00 to 8:00 PM. No reservations will be accepted before 7:00 PM, and none after 8:00 PM. Other provisions discussed and agreed to include: * Any spots in the 7:00 to 9:00 AM block not filled in the ascribed manner will be returned to Meadowlark Golf Course by Wednesday evening. * All green fees for reserved players will be collected and paid 7 days in advance. • Times during Meadowlark Men's Golf Club out-of-town tournaments will be returned to Meadowlark Golf Course. * SCGA Team Play matches will be taken from the 7:00 to 9:00 AM block. * Meadowlark Men's Golf Club tournaments will be played from 7:00 AM utilizing that reserved block. * All players in the reserved block of times will be Meadowlark Men's Golf Club members. The Board of Directors hope that this system is acceptable to the city of Huntington Beach, American Golf Corporation and Meadowlark Golf Course. Sincerely, ,, Eno Angulo President MMGC cc Jack Henry CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH To City Council and From Ron Hagan City Administrator Director Community Services Subject Council Requested Report on Date March 8, 1991 Meadowlark Golf Course (91-25) Per Council's request, staff has prepared the following inform- ation regarding the operation of the city -owned Meadowlark Golf Course by American Golf Corporation. I. History In 1975, the city contracted with American Golf for the operation of the Meadowlark Golf -Course. At that time, American Golf was required to make certain improvements to the facility. Those improvements included: 1) Clubhouse, including pro shop, restaurant, bar, rest rooms, office area, cart storage, etc. $200,000 2) Irrigation system 3) Driving range 4) Cart paths and parking lot 5) Refurbishing greens, traps, landscaping, fencing and golf course maintenance equipment 6) Miscellaneous 175,000 25,000 20,000 50,000 30,000 Total $500,000 These improvements were to be completed within thirty-six months from the signing of the original lease agreement. Apparently, there were some trade-offs for these improvements that dealt with course construction, irrigation, etc., and the $500,000 was spent on items other than called out in the agreement. All of this information regarding trade-offs of improvements required in the agreement, staff has gathered from verbal comments. There was no documentation or inspection of the improvements back in 1975 through 1978. In addition, in 1979, American Golf subleased the restaurant and bar operations to a firm known as Meadowlark Enterprises. Meadowlark Enterprises continued to operate the bar and restaurant from this date until March 1, 1991. American Golf has purchased the sublease agreement back from Meadowlark Enterprises and now intends to operate the restaurant and bar facilities directly. Page two During the term of the agreement, American Golf has made numerous improvements to the golf course, including the recon- figuration of holes, reconstruction of greens, improvements to tee -boxes, addition of lakes, and has started improvements to cart paths. Meadowlark Golf Course does over 100,000 rounds of golf per year, making it one of the busiest municipal golf courses in Southern California. Dad Miller Golf Course in Anaheim is the busiest facility with 115,000 rounds per year. Keeping a course playable and in good condition with such use is not an easy task. The current agreement with American Golf provides no language for the city to monitor and require any level of condition or playability. This is purely a function of marketing left up to American Golf. In addition, there is no language requiring American Golf to gain city approval for fee increases. American Golf has unilateral authority to set all fees at Meadowlark Golf Course. There is a need for numerous improvements to Meadowlark and staff has initiated discussions with American Golf to develop a master -plan for same. II. Golf Course Revenue The city derives revenue from American Golf Corporation's operation of Meadowlark Golf Course as follows: Green fees 12.5% of gross Driving range 12.5% of gross Cart rentals 12.5% of gross Pro shop 8% of gross, as of 3/90 Restaurant 8% of gross, as of 3/90 Bar 8% of gross, as of 3/90 The 1990 revenue from these sources is shown in the attached chart. Actual revenue for 1990 to the city was $305,599.24. In 1989, it was $286,929.82. The city last audited American Golf in 198?,,. At that time, the difference between reported figures and audited figures was less than '-z of 1, percent. American Golf is required to submit monthly certified statements of income to the city which are reviewed by Adminis- trative Services. As one can see by the chart, June and July are the biggest revenue producing months, with December and January, the least. American Golf's gross revenue for 1990 was $2,625,945. Of that amount, $2,351,000 was expended for such items as operating expenses, taxes, insurance, equipment replacement, lease payments, capital improvements, and overhead. This left American Golf with an estimated 1990 net profit of $295,000. Page three III. Master Plan Improvements Proposed improvements to Meadowlark Golf Course would include demolition of existing pro shop, restaurant, banquet facility and cart storage facility and development of a new club- house facility that would include a pro shop, restaurant, banquet facility, and cart storage area. The parking lot and entryways would be redesigned and improved. The driving range would be expanded and a teaching and practice area developed. The irriga- tion system would be upgraded substantially along with fencing and some reconfiguration of those holes on which the city currently receives complaints about errant golf balls going into residential yards. The current agreement does call for American Golf to gain city approval for any of the abovementioned improvements. Con- sequently, it will be working with the city to develop a master plan review process so that the best design and functional use of the space for both golders and maintenance operations can be achieved. Pursuant to the master plan improvements, American Golf has indicated its willingness to amend its existing lease with the city and negotiate several items. The lease needs to be brought up to date in terms of insurance requirements and indemnity clauses, review of fees and percentage rental rates, and should contain language regarding long term capital improve- ments and condition of the golf course. Both the master plan and the lease amendments will be worked on concurrently. IV. Meadowlark Men's Club On March 5, representatives of American Golf and the Director of Community Services met with the Meadowlark Men's Club to discuss the master plan, green fees, and the discontinuance of guaranteed tee times. As Council is aware, over the past fifteen to twenty years, patrons have been given weekly guaranteed tee times. This practice resulted in almost 800 individuals having a guaranteed tee time. This meant that the general public could not have access to the course from 7:00 to 11:00 a.m., seven days a week unless someone gave up their guaranteed tee time. Guaranteeing start times was a common practice in the early days of golf course operations in order to secure business. How- ever, with the shortage of golf courses and the boom in golf popularity, both the city and American Golf had come under heavy criticism regarding inaccessibility of a public golf course by the public. Consequently, guaranteed tee times were eliminated effective March 1, 1991. The Meadowlark Men's Club, whose mem- bership totals a little over 200, was a part of the guaranteed tee times. In an effort to provide the club with special bene- fits because of its participation in supporting the Meadowlark Golf Course, the Men's Club Board of directors, American Golf, Page four and staff worked out an arrangement whereby the club would be given two hours every Saturday, from 7:00 to 9:00 a.m., for.its activities. A complete explanation of this process is contained in the attached letter from the President of the Meadowlark:Men's Club. Although individual club members were still unhappy about losing their guaranteed tee times during the week, the majority was happy with the Saturday block of time for Men's Club activi- ties. Staff will monitor this usage and, if there is a need for an additional hour on Sunday so that members, who cannot play on Saturdays have an opportunity to participate in Men's Club activities, quite possibly an hour can be made available on Sunday mornings. Some Men's Club members theorize that income will decrease because of the loss of guaranteed tee times.- However, it is both staff's and American Golf's opinion that play will actually con- tinue to increase because of the popularity of the sport and the lack of available golf courses.. Meadowlark is a public course and should have public access. Staff did check the benefits of men's clubs on surrounding public courses, including seven; courses operated by American Golf. The benefits given to the Meadowlark Men's Club meet or exceed all of the.other courses' benefits. For example, the Men's Club at Prado Dam ,is given fifteen starting times every Saturday morning with no annual tournament dates guaranteed. The policy of 'no.guaranteed tee times for men's club benefits is consistent with the other muni-. cipal golf courses that American Golf operates. of the over 200 members present at'the:_meeting,'it appeared their biggest concern was not Just Meadowlark:but,the factIthat Huntington Beach has only one public course..,They,,strongly._,urged staff to consider a second. public golf- 'course in,r-Huntington'`'... Beach. V. Summary Staff will be working with American Golf, the'.Meadowlark Men's Club and other concerned golfers with,regard.to the development of a master plan for improvements to the Meadowlark Golf Course. Community Services will be negotiating with American Golf on amendments to the agreement to bring it up to date and provide more city control over .golf course operations. Staff will keep the City Administrator and Council informed. RH:cs Attachments 1990 REVENUE STATEMENT FAR MEADOWLARK GOLF COURSE REVENUE FROM AMERICAN tiALF CORP. AFERATTiiNS REVENUE ITEM ]AN FED MAR APRIL MAY ,TUNE 1ULY AUC, SEPT OCT NOV DEC GPOSS REVENUE CITY REVENUE C;REEiT FEES ?574 8 b2'3 z11147 131411 1329e5 14f1151 146754 i'i!15 119345 102659 104190 91541 1'824i!4 i712800 r� i�( F ..r DRIVING RANGE - _�: r L?:"J qqc7 i(:,a!5 7c'-f :,tt ._.;1 ( 4)716t q r 411'li .1 4E'19 �,� / 4 761 { 1�3� 44 J( _Lt c 41 I5 (! n L4 4+� 27250 LLLJ. 237737 LJ _1 7!!c777 J.Jt ;4` F 1 inRT RENTALS _ , „-c tc_,j "c,q c' "7 1 8 9r 3 4rbt c 4' 7c0- 7769 5fc• J- Rf! SHOP15{,"!i b'?1:' 161i 1 172; 7 i6h44 1`�421 17 39!i t7y`,ij 1`h-7- 1326 , 1?44r 144'v `,; L 151�-I G'ES:TaiIPA,1 T 1:2e 12 ,24 ir.14' i6774 15246 1_:74 r l9b45 i'a1 17460 113946 11674 C? i7'?4`I, 14100 E'uR, 11� .# 04 7�-= 121;: 7 i1. 7 i { -� '12 11LC_ 1 r !1'-��j,{ 1'.: t: .1 i+L1 "`}C� ',,! 1 { , 11127_2 1 --------- R VE I!�fAL !i�,l_?�Z .,Ex�Ni�E TOTAL 'REVENUE 7c:�. 1iJQ�11 {,; .+� iic _ 'i�..i '�+7 j c �li':f..� ri 7,� 4.�i.�: L7 i.� �4!�iLL .i if�)L 277.5.27 tl1 .ic7c77 ..t.,.i.�_ -, �2rn c7 ::Li�t.)� .f 7 1'?/'4_: 195 1:J�4i c7: 1.,�hF,( i __ � t�iJ4ii=i 7i rc.; ra :;!.JJ. s v C� !!L-E� iE 'FIT nl '_I I- j�_.�� 1! L !' i„j! #-`{.` "�'i! L.'..AC. i'i h'i° L! •i 7h Lei i 1t7% 1 -) 21��' ifs r�'- 4 �661.1 �jl)4 �i.'�c� 1 �?5E y _ - March 4, 1991 Ron Hagen Community Relations City of Huntington Beach Tom Frost t American Golf Corporation Gentlemen: Per our conversation of February 21st, the directors of Meadowlark Men's Golf Club have met to discuss the means of allocating starting times reserved for the Men's Club. The system to be used has two parts: 1. At all future Men's Club membership meetings, beginning March 5.i those members present will be eligible for a drawing to fill a two hour block of times reserved for the Men's Club from 7:00 to 9:00 AM. These times will be for the Saturday twelve days from the day of the drawing. 2. Beginning March 12, and on each Tuesday folloing, except for those Tuesdays that are membership meeting days, phone reservations will be accented for the Saturday twelve days following. The hours of this phone service will be from 7:00 to 8:00 PM. No reservations will be accepted before 7:00 PM, and none after 8:00 PM. Other provisions discussed and agreed to include: * Any spots in the 7:00 to 9:00 AM block not filled in the ascribed manner will be returned to Meadowlark Golf Course by Wednesday evening. * All green fees for reserved players will be collected and paid 7 days in advance. * Times during ;Meadowlark Men's Golf Club out-of-town tournaments will be returned to Meadowlark Golf Course. * SCGA Team Play matches will be taken from the 7:00 to 9:00 AM block. * Meadowlark Men's Golf Club tournaments will be played from 7:00 AM utilizing that reserved block. * All players in the reserved block of times will be Meadowlark Men's Golf Club members. The Board of Directors hope that this system is acceptable to the city of Huntington Beach, American Golf Corporation and Meadowlark Golf Course. Sincerely, i Eno Angulo President MMGC cc Jack Henry ----------------- 44 a' _!!UCR . Jardine Emett & Chandler Los Angeles'lInc. Insurance Brokers 11835 West Olympic Boulevard, Fift}l� Floor Los Angeles, California 90064 Telephone: (213) 444-3333 Telex: 69 1260 - Facsimile: 444-3444 INSURED American Golf Corporation, Etal. 1633 26th Street Santa MDnica, CA 90404-4024 fLdir4yr5Y='x.E.%+ 'i*Y�' & C'( ,,•�„�V_ "a 8 / 1-/ 88 -- - - '.HIS" ZRTIFiCA7 ;S ISSUE tiS 'dAT -:� — ii=C�R4At`-"�CN ONLY AND N(O RIGHTS UPON THE CERTii-!CA sTE *CLJErR. ':-ilS C-ERTIF!CATE DOES NOT.MEND. =,"TEND OR ALTER TEE CC'YE?.:GE 3r=C sncD :OY TM= POLNO:ES SELOVV. —n -- {--�+—q--- --- - -- 00MP `r,P 1;itiY 17l/1'L' 14WJGL'Ily111 ^ �1fJV HOW 1NSgRANCE 00WAdY OF ILLMD I ;CMPANY - HOME INSURANCE ODWANY OF IDDIANA 0IPANY D _E 7 ER COMPANY � THIS IS TO CERTIFY THAT POLICIES OF !NSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED A80VE POR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITii RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN is SUBJECT-1 0 ALL THE TERMS, EXCLUSIONS, .AND CCNDI- TIONS OF SUCH POLICIES. i CC ! ! �DLICY==�cr-';"t �CUL', ::PI 4TiOPI I TYPE OF INSURANCE POLICY `:UMBER ALL L;MITS IN THOUSANDS LT= I CAc, M!DDi r,. I �..._ `.'M1DuWI 1 — j GENERAL LIABILITY 4 900, 1�Or1 COMMERCIAL GE:E?AL LIAEI.!T , i _L_. j ;:o._ ...s._ - i �j 4,900) A I !;LA;ins., __ i 'occ_ �'_vc=i I, 1643580 7-15-58 j 7-15-89 1$4,900, 1 n n; ER'$ LC'JTP 3 C i'$RS ?T $ " c i ,. _ ' _ , `��--1 50, -DUSS OF A $100,000 SIR ��!.^=_ �, 5 i i AUTOMOBILE LIABILITY ANY AUTO ? S 5,0002 i ALL OWNED AUTOS A I X SCHEDULED AUTOSBA 4086813 7-15-88 7-15-89 1 i X ! HIRED AUTOS X NON -OWNED AUTOS kRAGE LIABILITY Mp CAMAG LIABILITY EACH AGSPEGA.= u�EEXCESS APPROVED AS TO FO�M: 1—i S vGAIL�JiG1Cit,� Attorney { OTHER THAN UMBRELLA FORM B. k — M., T AT:JTCRI WORKERS' COMPENSATION I I ! i � EACH dCCDEM�; I ANQ ( I EMPLOYERS' LIABILITY ,C'SE;SE _„Dr. !) OTHER B PROPERTY - TEXAS ONLY SPX 9206481 ( 7-15-88 7-15-89 $15,000,000 Loss Limit on C� PROPERTY - A.O.S. SPX 9206480 1 7-15-88 i 7-15-89 all real & personal property subject to a $10,000 Deductible ! _ — DESCRIPTION OF OPERATIONS iLCCAT;CNS!VEHICLES/RESTRICTIONS/SFEC;AL iTE"As Amending Uertiricate aaEeQ / / 14/ 0b It is hereby understood and agreed that the Certificate Holder is included as Additional Insured as respects Meadowlark Golf Course. The City of Huntington Beach 2000 Main St. Huntington Beach, CA 92648 SHOULD ANY OF THE ABOVE DESCRIBED -POLICIES BE CANCELLED BEFORE THE EX PIRATION DATE T`iE 1ECF. THE ISSUING COMPANY 'WILL Xxx"XXXXX -BAIL 30DAYS 'WRITTEN NOTICE TO THE CERTIFICATE HOLDER NANIE0 TO THE LEFT AX10Mi�XXXMXX� X � i r r+iiT :�'r.!�.==' F._- ATTIC: Risk Management Division PRODUCER J Jardine Emett & Chandler Los Angeles Inc. Insurance Brokers 11835 West Olympic Boulevard, Fifth Floor Las Angeles, California 90064 Telephone: (213) 444-3333 Telex: 69 1260 - Facsimile: 444-3444 INSURED African Golf Corporation, Etal. 1633 26th Street Santa Monica, CA 90404-4024 9�.1w TE _ ISSUE SA } THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. i COMPANIES AFFORDING COVERAGE Y COMPANY LETTER A HIE MRANCE C OWANY COMPANY Ei LETTER HW INSURANCE 00WANY OF ILL D1S COMPANY LETTER NATIONAL WMN FIRE INSURANCE COMPANY COMPANY LETTER COMPANY crrrn En•:. �L. THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE a0,'THE PDLICY.PE vD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESge.T7011"ICH TPNS CERTIFICATE MAY TO iE XCLUSIONS, AND CONDI- BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT URMSr TIONS OF SUCH POLICIES. D j i Tq TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) �}`3 ' ALL LIMITS IN THOUSANDS GENERAL LIABILITY GE .ERaL AGGREGATE $ 1 DDO COMMERCIAL GENERAL LIABILITY X7 PRODUCTS CDMPiOPS AGGREGATE $ j 000 P`RSONAL 3 ADVERTISING INJURY $ 1 A CLAIMS MADE ®OCCURRENCE GL 1694013 7-15-87 p 7-15-Q88 X EACH OCCURRENCE $ 1 000 OV,NER S & CONTRACTORS PROTECTIVE S,z FIRE I MAT - 1-1AB X =:RE DAMAGE (ANY ONE FIRE) $ 50- P ' MEDICAL EXPENSE ZANY ONE PERSON) $ AUTOMOBILE LIABILITY ANY AUTO CSL $ 1 000 X X ALL OWNED AUTOS BODILY INJURY _'W A X SCHEDULED AUTOS BA 4075498 7-1-87 7-15-88 (PER PERSON) $ .. HIRED AUTOS BODILY INJURY ''.R`,`-.4':R . •-.a=•-y X NON -OWNED AUTOS (PER ACCIOENTI $ PROPERTY GARAGE LIABILITY DAMAGE EXCESS LIABILITY EACH AGGREGATE ,_" OCCURRENCE C X BE 3052541 7-1-87 7-15-88 'z ' 4" $ $ OTHER THAN UMBRELLA FORM i `"5 000, 5,0009 STATUTORY WORKERS' COMPENSATION $ (EACH ACCIDENT) " AND $ (DISEASE -POLICY LNAi T i EMPLOYERS' LIABILITY $ (DISEASE -EACH c}.tPLGYEEI OTHER B PROPERTY - TEXAS ONLY SPX 9207104 7-15-87 7-15-88 $10,000,000 Loss Limit on A PROPERTY - ALL OTHER SPX 9207103 7-15-87 7-15-88 all real & personal property STATES $25 000 deductible. DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS IT IS UNDERSTOOD & AGREED THAT CITY OF HUNTINGTON BEACH IS INCLUDED AS ADDITIONAL INSURED AS RESPECTS MEADOWLARK GOLF COURSE. City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Insurance & Benefits Office SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX- PIRATION DATE THEREOF, THE ISSUING COMPANY WILL X90w) Xy1[XX MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER nyW0(XX;t9X AUTHORIZED REPRESENTATIVE P z PRODUCER Jardine Emett & Chandler Los Angeles Inc. Insurance Brokers 11835 West Olympic Boulevard, Fifth Floor Los Angeles, California 90064 Telephone: (213) 444-3333 Telex: 69 1260 - Facsimile: 444-3444 INSURED American Golf Corporation, Etal. 1633 26th Street Santa Monica, CA 90404-40214 4u11 133, -1987 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER, THIS CERTIFICATE DOES NOT AMEND. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE - i" ` r COMPANYLETTER A ^, RIME TNaMANCE (UNIPANY r COMPANY 13 LETTER HOME INSURANCE COMPANY OF D•tTNOIS COMPANY LETTER NATIONAL UMN FIRE DISURANCE COWANY COMPANY LETTER COMPANY LETTER THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE*QR; fHE,PQLICYP R 0D INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RES E-C. 1O,,WUiiCH �T S'CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO Al E URM, %- ,XCLUSIONS, AND CONDI- TIONS OF SUCH POLICIES. ire olol - CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MMIDD YY) POLICY Ex ON DATE (MMiDO YiDO/yY) ALL LIMITS IN THOUSANDS GENERAL LIABILITY GENERAL AGGREGATE $ 1 000 •O00 P?.ODUCTS C06+PMPS AGGREGATE $ j COMMERCIAL GENERAL LIABILITY A CLAIMS MADE ®OCCURRENCE GL 1694013 7-15-87 7-15-& PERSONAL & ADvERTIStNG !NJURY ' OWNER'S & CONTRACTORS PROTECTIVE X EACH OCCURRENCE $1 000 X FIR 123AT+ LIA PRE CAMAGE !ANY ONE FIRE) $ 50 MEDICAL EXPENSE (ANY ONE PERSON) $ >� AUTOMOBILE LIABILITYCSL ANY AUTO $ 1 000 X ALL OWNED AUTOS Y n. k„.t.�.,.,. X BODILY A SCHEDULED AUTOS BA 4075498 7 1-87 7-15 INJURY PER PERSON! $ _. „T - X BODILY X HIRED AUTOS NON -OWNED AUTOS (INPJURY,av:_ ACCIDENT) $ . X GARAGE LIABILITY PROPERTY DAMAGE EXCESS LIABILITYlZ"IL v� EACHNCE OCCURRE OCCURRENCE �ccRecn-e C X BE 3052541 7-1-87 7-15-88 $ $ OTHER THAN UMBRELLA FORM �,�:.° 5,000, 5,000, STATUTORY P WORKERS' COMPENSATION $ (EACH ACC,OENTI AND $ )DISEASE -POLICY I"+11T: s EMPLOYERS' LIABILITY $ (DISEASE EACH E%IPLOYEE1' OTHER :.B PROPERTY - TEXAS ONLY SPX 9207104 7-15-87 7-15-88 $10,000,000 Loss Limit on A PROPERTY - ALL GM SPX 9207103 7-15-87 7-15-M all veal & personal property STATES $25 000 deductible. DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS IT IS UNDERSTOOD & AGREED THAT CITY OF HUNTINGTON BEACH IS INCLUDED AS ADDITIONAL INSURED AS RESPECTS MEADOWLARK GOLF COURSE. City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Insurance & Benefits Office SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX PIRATION DATE THEREOF, THE ISSUING COMPANY WILL )9I)WAXXWX MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER N0Xl X$;(W AUTHORIZED REPRESENTATIVE P t UE DATE (MM/DD/YY) 7-28-86 PR(7DUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFIAMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, TT &CHANDLER IDS ANGELES, INC. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. EME�11835 West Olympic, Boulevard, 5th Floor C OONPIA ES 'AF OQDD00 COVERAGE Los Angeles, California .90064 Telephone Number:, (213) 444-3333 COMPANY Telex Nunber: 69-1260: LETTER Q HOME INSURANCE COMPANY INSURED American Golf Corporation, Etal. 641 North Sepulveda Boulevard Los Angeles, California 90049 LETTERNY NATIONAL UNION FIRE IlVSURANCE COMPANY COMPANY LETTER @ 1 i COMPANY [] `i Q i Q`,i+� " �oxney LETTERNS COMPANY d?" LETTER A 11, W. THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDI- TIONS OF SUCH POLICIES. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MWDDNY) POLICY EXPIRATION DATE (MM/DDNY) LIABILITY LIMITS IN THOUSANDS EACH OCCURRENCE AGGREGATE GENERAL LIABILITY COMPREHENSIVE FORM BODILY INJURY $ $ X X PROPERTY DAMAGE $ $ PREMISES/OPERATIONS UNDERGROUND EXPLOSION & COLLAPSE HAZARD PRODUCTS/COMPLETED OPERATIONS BOPP 168638 7-1-86 7-1-87 X A CONTRACTUAL COMBINED $ 13000, $ 13000) X X INDEPENDENT CONTRACTORS X BROAD FORM PROPERTY DAMAGE PERSONAL INJURY PERSONAL INJURY $ 1,000, X A AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS (PRIV. PASS.) ALL OWNED AUTOS OTHER THAN PRIV. PASS. BA 4039339 7-1-86 7-1-87 BODILY INJURv (PER PERSON) �✓�$;�.' wp-��a-, X$ X BODILY''~' INJURY PER ACCIDENT) $ X X X HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY PROPERTY DAMAGE BI & PDq�i COMBINED $ $ 1,000, r - n EXCESS LIABILITY B X UMBRELLA FORM BE1320636 6-1-86 7-1-87 COMBINED $ 5,000, $ 5,000, OTHER THAN UMBRELLA FORM STATUTORY WORKERS' COMPENSATION �_"` "AD $ (EACH ACCIDENT) AND EMPLOYERS' LIABILITY b;.=„x (DISEASE -POLICY LIMIT) $ (DISEASE -EACH EMPLOYEE) OTHER $4,000,000 loss limit an all PROPERTY BOPP 168638 7-1-86 7-1-87 real & personal property. "All Risk" $10,000 deductible DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLES/SPECIAL ITEMS Certificate Holder is included as additional insured/loss payee as respects Meadowlark Golf Course, 16732 Graham S't., Huntington Beach, CA 92649 COL4Qt rr , Vt " D D The City of Huntington Beach P.O. BOX 180 Huntington Beach, CA (CYN,rGINUUA10rol N SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX. PIRATION DATE THEREOF, THE ISSUING .COMPANY WILL X T&-X)%X MAIL 30, D&YS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT. L2244_XX.X 'X"XX} �XX$�X�XQ XXX X XXDX+$Xa ^ � �NNPXf1 +XTX+X