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HomeMy WebLinkAboutL018-09 - Amendment - #1 - Public Golf Management, Inc. - Riverbend Clubhouse - 01/29/2002 FIRST AMENDMENT TO GOLF MANAGEMENT AND SERVICES AGREEMENT THIS FIRST AMENDMENT TO GOLF MANAGEMENT AND SERVICES AGREEMENT is made this day of Ja"as v 1 , 2002, by and between the CITY OF KENT, a Washington municipal corporation("City), and PUBLIC GOLF MANAGEMENT,INC , a a), Sh'n corporation("Contractor") WITNESSETH: WHEREAS, City and Contractor entered into that certain Golf Management and Services Agreement, dated March 27, 2000, ("Agreement") wherein the Contractor agreed to provide professional golf management and other services pursuant to the Agreement at the City of Kent Riverbend Golf Complex ("Golf Complex"), and WHEREAS, City and Contractor express their mutual intent and desire to amend the Agreement in order to modify the services provided and to adjust the amount of compensation the City shall pay to Contractor for the services provided by the Contractor, NOW THEREFORE,in consideration of the mutual intent, desire and promises of the parties hereto and other good and valuable consideration, City and Contractor agree as follows 1 Section 3(A)(1) of the Golf Management and Services Agreement, entitled"General Services," is hereby amended to read as follows SECTION 3. NATURE OF GOLF SERVICES PROVIDED. A. General Services. 1 The Contractor's responsibilities include promoting and managing the use of the par-3 course, the collection of fees, staffing the par-3 course, including starter services and marshals, operating the driving range (including ball picking) and num-putt, providing a limited selection and amount of promotional merchandise and apparel related to contractor's food and business, unless otherwise agreed, providing food and beverage service at the par-3, driving range, and mim-putt, providing golf instruction, providing janitorial services for the interior of the par-3 clubhouse and par-3 restrooms and areas of Contractor's responsibility at the driving range and mum-putt, except that the City may provide these services in whole or in part upon mutual agreement of the parties and the compensation for these services shall be modified accordingly 2 Section 3(B)(1) and 3(B)(2) of the Golf Management and Services Agreement, entitled "Specific Services," is hereby amended to read as follows FIRST AMENDMENT TO GOLF (January 29, 2002) MANAGEMENT AND SERVICES AGREEMENT- 1 SECTION 3. NATURE OF GOLF SERVICES PROVIDED. B. Specific Services. In providing the general services described above, Contractor shall provide not less than the following specific services 1 Par-3 a Contractor shall provide an adequate number of starters, agreed upon by both parties, deemed necessary for the par-3 course to facilitate a good golf operation Contractor shall be responsible for all starting of golf play and for control of the first tee at all tunes b All par-3 gross revenue must be recorded, collected and deposited in the City par-3 cash register which will dispense a dated receipt to be given to each customer c All counter staff at the par-3 course shall be experienced, trained, and knowledgeable of golf rules, etiquette, and play d Contractor shall provide an adequate number, as agreed upon by both parties, of golf clubs, bags, and pull-carts for rent to users at the par-3 course City will reimburse Contractor fifty percent (50%) of the cost of this equipment e Contractor shall have the right to sell a limited selection of merchandise at the par-3 course consisting of ball, tees, gloves,ball markers, and divot repair tools 2 Driving Range and Mina-Putt a The Contractor shall operate the driving range and mmi-putt Adequate staffing shall be available at all times to ensure an efficient, safe and customer focused operation Contractor is required to provide marshalling of the mini-putt and supervision of the driving range tee line. All counter staff shall be experienced,trained, and knowledgeable of golf rules, etiquette, and play FIRST AMENDMENT TO GOLF (January 29, 2002) MANAGEMENT AND SERVICES AGREEMENT-2 b The Contractor will ensure that the driving range golf balls are picked up daily, weather permitting, to ensure availability for the golfing public and must be easily accessible to the golfing public. Contractor shall provide the vehicle and equipment necessary to pick up the golf balls at the driving range Contractor shall rent from the City the city-owned vehicle used to pick up the golf balls. Beginning January 1, 2002, Contractor shall pay$250 49 per month for fourteen (14) months, as rent for this vehicle, and upon final payment, the City shall convey ownership interest in the same to Contractor In addition to these payments, previous payments made by Contractor to City for rent of this vehicle shall be considered part of the consideration paid for the purchase of the same All rent payments for this vehicle will be deducted by the City from the fixed fee paid to Contractor set forth in Section 8(A) Contractor shall be responsible for all fuel and maintenance for this vehicle c The City will provide maintenance of the driving range ball machine d. All driving range and mum-putt gross revenue must be recorded, collected and deposited in the City driving range/mim-putt cash register which will dispense a dated receipt to be given to each customer Money received from the City owned range token machine, if used as determined by the City, shall be accounted for in a method acceptable to the City e Contractor shall provide an adequate number, as agreed upon by the parties, of golf balls and putters for users of the mnn-putt facility f Contractor shall, at its discretion,provide an adequate number of golf clubs for rent to users of the driving range g City shall provide a minimum of 18,000 driving range balls at all times and will replace them on a regular basis to ensure that good quality golf balls are available to users of the driving range FIRST AMENDMENT TO GOLF (January 29, 2002) MANAGEMENT AND SERVICES AGREEMENT-3 h City shall provide mats for the driving range tee line i City shall repair the ball picker at the driving range as needed, dunng normal golf maintenance operating hours, unless Contractor elects to repair the same, however,repair costs will be charged to Contractor on a time and material basis for said repairs 3 Section 8(A) and 8(B) of the Golf Management and Services Agreement, entitled "Compensation,"is hereby amended to read as follows. SECTION 8. COMPENSATION. Contractor shall be paid compensation to include a fixed fee and a percentage fee as follows A. Fixed Fee to Contractor. As full compensation of work performed, services rendered, and all labor, materials, supplies, equipment and incidentals necessary to perform the work and services, in the management of the par-3 golf course, driving range and mim-putt course pursuant to this Agreement; the City shall pay to the Contractor an annual fixed fee (the "Fixed Fee"). The Annual Fixed Fee shall be $205,000 00, TWO HUNDRED FIVE THOUSAND AND N0/100 DOLLARS (consisting of $45,000 00 driving range, $45,000 00 par-3, $25,000 00 mim-putt, $75,000 00 lessons*; and$15,000 00 for food and beverage*)which shall be paid in equal monthly installments(pro-rata as appropriate)payable on the last day of the month preceding the month for which services are provided * The fixed fee for lessons and food and beverage will be paid as set forth in Exhibit"C " B. Percentage Fee to Contractor. As full compensation for work performed; services rendered; and all labor, materials, supplies, equipment and incidentals necessary to perform the work and services, and for the management of golf services, food and beverage services, lessons, and driving range picking pursuant to this Agreement Payment to Contractor for revenue other than the fixed fee and food and beverage sales will be made twice a month Revenue for the 1't to the 15th will be paid on the last day of the month and revenue for the 16`h to the end of the month will be paid on the 16th of the following month. Payments to Contractor for food and beverage sales will be paid four (4) times per month per the following schedule Sales Dates Payment Date 1st to 7' 21st 81h to 141h Last day of the month 15th to 215t 7th 22"a to end of month 15`h FIRST AMENDMENT TO GOLF (January 29, 2002) MANAGEMENT AND SERVICES AGREEMENT-4 If the payment date falls on a weekend or holiday, the payment shall be due on the first working day following the weekend or holiday, except for payment for food and beverage service which the City will pay the day before a weekend or holiday During the first year of operation, the Contractor and City agree to review and adjust payment schedules necessary to maintain adequate cash flow for food, beverage, and merchandise All payments are calculated on gross revenue, net of sales tax, as follows 1 For the par-3 course a 10% of gross revenue, net sales tax, up to and including $300,000 00 per year b 25% of gross revenue, net sales tax, over $300,000 00 per year. 2 For the driving range a 15% of gross revenue, net sales tax, up to and including $300,000 00 per year b 30% of gross revenue, net sales tax, over $300,000 00 per year 3 For mini-putt: a 10% of gross revenue, net sales tax, up to and including, $80,000.00 per year b 35%of gross revenue,net sales tax, over$80,000 00 per year 4 For lessons a 15% of gross revenue, net sales tax, up to and including $100,000 00 per year b 90% of gross revenue, net sales tax, over $100,000 00 per year 5. For food and beverage a. 80% of gross revenue, net sales tax 6 For merchandise a 95% of gross revenue, net sales tax FIRST AMENDMENT TO GOLF (January 29, 2002) MANAGEMENT AND SERVICES AGREEMENT-5 Pursuant to IRS Revenue Procedure 97-13, the Percentage Fee paid to the Contractor for any fiscal year beginning January 1 and ending December 31,net of sales tax shall not exceed the Fixed Fee for that fiscal year In the event it appears that the percentage fee will exceed the fixed fee,the City shall adjust the fee schedule to comply with this provision and, in doing so, shall attempt to maintain the actual percentage of compensation realized (based on fixed fee and percentage of revenue from the compensation formula compared to total revenue) that is realized from the compensation formula ortgmally established above During the first year of operation, the percentage fee and fixed fee shall be adjusted on a monthly basis as necessary to comply with the fixed/percentage fee requirements of these Revenue Procedures The gross revenue figures set forth in this Section are based on a calendar year and for the year 2000,beginning January 1 as if this Agreement was in effect on such date 4 Contractor hereby certifies to City that the Agreement is in full force and effect,that there exists no uncured defaults on the part of the Contractor under the Agreement and City hereby certifies to Contractor that the Agreement is in full force and effect, that there exists no uncured defaults on the part of the City under the Agreement 5 Except as specifically amended herein, the remaining provisions of the entire Agreement shall remain in full force and effect 6 The effective date of this First Amendment is January 1, 2002. IN WITNESS WHEREOF,the parties hereto have executed this First Amendment to Golf Management and Services Agreement as of the date first above written EXECUTED this (i_( day of J44UA4=/ 2002 Contractor: City: PUBLIC GOLF MANAGEMENT, INC. CITY OF KENT a W M,tt'+J v "1 corporation a Washington municipal corporation By I"" &1— Name c1A� �� Print Name, T A C A i2K Its PtlL�S�� ' Its Me--QL PRo TF VA FIRST AMENDMENT TO GOLF (January 29, 2002) MANAGEMENT AND SERVICES AGREEMENT-6 EXHIBIT C City of Kent Driving Range, Mini-putt, Par 3 Facilities Agreement with Public Golf Management, Inc. Payment of Fixed Fee Month Green Range Mini-Putt Lesson FIB Total Fees Fees Fees* January 3,750 3,750 2,083 5,000 5,000 19,583 February3,750 3,750 2,083 . 6,000 5,000 20,583 March 3,750 3,750 2,084 7,000 5,000 21,584 -April 3,750 3,750 2,083 8,000 17,583 -May 3,150 3,750 2,083 9,000 18,583 June 3,750 3,750 2,084 8,000 17,584 -July 3,750 3,750 2,083 8,000 17,583 -August 3,750 3,750 2,083 8,000 17,583 -September 3,750 3,750 2,084 1 6,000 15,584 October 3,750 3,750 2,083 1 4,000 13,583 November 3,750 3,750 2,0831 3,000 12,583 December 3,750 3,750 2,0841 3,000 12,584 Total 45,000 45,000 25,000 75,000 15,000 205,000 *Proration of fixed fee based on history of lesson fee collections. Fixed fees are subject to yearly adjustment in order to comply with Internal Revenue Procedure 97-13.