HomeMy WebLinkAboutL018-09 - Other - Public Golf Management, Inc. - Addendum #2 - Riverbend Clubhouse - 02/05/2003 CITY CLERK
CITY OF KENT
220 4" Avenue South
KENT Kent, WA 98032
WASHINGTON
Fax 253-856-6725
PHONE: 253-856-5725
Lease Agreement Cover Sheet
Instructions
This document is to be used in lieu of the Contract Cover Sheet
SECTION 1 - CONTRACT PROCESSING AND TENANT SET-UP:
All lease agreements must be signed by the Mayor or his/her designee and approved
by the City Council. Lease amendments, extensions, renewals, and assignments may
or may not require Council approval (contact the Law Department), but they must be
signed by the Mayor.
The City Clerk's Office will perform the following tasks associated with all lease
agreements and amendments:
• Assign a sequential lease agreement number based on starting with 001 and
preceded with "L", e.g. L001.
• Scan the Lease Agreement Cover Sheet, Lease Agreement (or Amendment) and,
if any, related supporting documentation into the document imaging system.
• Provide notification via e-mail to the Contact Person (Question 2), Law and
Customer Services.
The Lease Agreement Cover Sheet is to be completed for each existing and active and
all subsequent lease agreements, lease amendments and assignments of lease. There
is recognition that certain existing and active agreements and amendments may not
incorporate new policies, e.g. commencement of the lease on the 1s' of the month or
year. Those agreements and amendments will be addressed through subsequent
agreements and/or amendments, if any.
Contract Number: L018-09-4
1. Responsible Department/Division: Parks/Admin
2. Contact Person and Title: Jeff Watling
Telephone Extension: 5007
3. Tenant (Customer) Name: Access Golf Management, LLC (assignment from
Public Golf Management, Inc)
4. Tenant (Customer) Number: 54272
Lease Agreement Cover Sheet-Page 1 of 5
5. General Ledger Account Number: 48006855.56250
6, King County Tax Parcel Number: 232204-9010 (partial)
7. Address of Parcel: 2019 West Meeker Street, Kent
8. Type of Lease: Addendum Two - Commercial Building Rental
9. Council Authorization Date: None
10. Mayor Signature Date: February 5, 2003
SECTION 2 - LEASE DURATION AND IMPORTANT DATES:
All lease agreements and amendments must reflect the lease start date, lease
termination date and the duration of the lease. The lease agreement may also
authorize the tenant to request an extension of the lease term, i.e. either 'month to
month" or for a defined period of time. The tenant must provide advanced written
notice of the intent to exercise this lease option.
A date certain lease start date must be established in the lease agreement and must
be the first of the month. Commencement of certain leases may be predicated on
certain actions by the tenant, e.g. installation of cellular tower equipment. In such
instances, a reasonable fixed future date must be established in the lease agreement.
11. Lease Start Date: March 1, 2000
12. Tenant Lease Option Renewal Notification Due Date: 180 days prior to
expiration of term
13. Lease Termination Date: February 28, 2006
14. Lease Duration: March 1, 2000 through February 28, 2006. One additional six
year option period
SECTION 3 - RENT DETERMINATION AND DUE DATE:
Lease agreement must include provisions establishing the stated rent and, if over one
year in length, modification of stated rent. Typically, rental increases are based on
changes in the Consumer Price Index. Example of possible contract language:
Effective as of each anniversary of the Commencement date (the
"Adjustment Date") by an amount equal to the greater of four (4) percent
or the percentage increase rn the CPI two (2) months prior to the
Adjustment Date and the CPI for the month 12 months prior to the
Adjustment Date. "CPI" means the Consumer Price Index - All Urban
Consumers, (Seattle-Tacoma-Bremerton, WA), All Items, base period
1982-84=100, Not Seasonally Adjusted, Issued by the U.S. Bureau of Labor
Statistics. If the CPI is converted to a different standard reference base, or
otherwise revised, the adjustment set forth rn this paragraph shall be made
with the use of the conversion formula published by the U.S. Bureau of
Labor Statistics.
Lease Agreement Cover Sheet-Page 2 of 5
15. Rent: Greater of $12.00 per square foot of leased space ($5,000.00) or 5% of
gross revenue/month (plus leasehold excise tax)
16. Rent Due Date: loth of the following month, e.g. January rent due February 10
17. Calculation of Rental Increase(s): N/A - Rent calculated based on stated
percentage of gross revenue subject to a $5,000 per month minimum (plus
leasehold excise tax)
SECTION 4 - LEASEHOLD EXCISE TAX:
Leasehold excise tax applies to the possession and use of publicly owned real property
by a private sector individual, business or other organization. This tax is calculated
based on 12.84 percent of the contract rent amount. See also Department of
Revenue Leasehold Excise Tax Frequently Asked Questions and Answers
(http://dor.wa.g_ov/docs/Pubs/IndustSpecific/Leasehold.pdf). Contact the Customer
Services Financial Analyst (LIDs/Receivables) or the Audit Manager regarding
questions in this area.
18. Is this lease subject to leasehold excise taxes?
® YES (go to Question 19)
❑ NO, reason:
19. Are leasehold excise taxes for this tenant centrally assessed, i.e. directly
collected from the tenant by the Washington State Department of
Revenue?
❑ YES (attach written verification received directly from DOR or indirectly
through the tenant, e.g. DOR notification letter)
® NO (go to Question 20)
20. Does Lease Rent include Leasehold Excise Tax?
(Leasehold taxes must be broken out on the invoice and coded: Business
unit.32500.0303)
❑ YES Calculate the leasehold excise tax (Stated Rent divided by 1.1284)
® NO Calculate the leasehold excise tax (Stated Rent times .1284)
SECTION 5 - APPLICABLITY OF UTLITIES:
The Lease agreement must include provisions establishing responsibility for payment
of utilities, including but not limited to electricity, natural gas, water, sewer, storm
drainage, and garbage collection and disposal services.
In certain instances, the utility service may not be applicable, e.g. septic system, or
may not be provided by the City, e.g. Highline Water District service area. In all
instances, City utilities will be billed through the Customer Services utility billing
system. Other utilities paid by the City on behalf of the tenant, e.g. electricity or
Lease Agreement Cover Sheet-Page 3 of 5
natural gas, will be invoiced to the tenant through the central accounts receivable
system (JD Edwards).
Electricity or natural gas charges may be established based on actual consumption,
e.g. usage of a meter or by a reasonable amount established through appropriate
financial analysis. Separate meters for measurement should not be established on
City-owned or leased properties. The dollar amount of electric and natural gas
charges must be included in the lease agreement (amendment) and should be subject
to future modification based on appropriate methodologies, e.g. change in rate, etc.
Contact Finance Customer Services for questions in this area, as well as ensuring that
City accounts are transferred into the name of the tenant.
21. Applicability of Utilities — Check all that utilities that are affected and
indicate provider (e.g. City of Kent), Account Number or basis of
exclusion.
❑ Does Not Apply
® Water: 805-12167.01 (75% paid to City)
® Sewer: 805-12167.01 (75% paid to City)
® Drainage: 805-12167.01 (75% paid to City)
❑ Garbage: Waste Management (Facility not subject to these charges)
® Electricity/Natural Gas: Puget Sound Energy (75% paid to City)
Ensure that Finance Customer Services is properly notified to ensure City utility
account, if any, is recorded into the name of the tenant if so established in the
Agreement. Ensure all other applicable charges are properly invoiced to the tenant.
SECTION 6 — MONETARY PENALTIES AND LATE INTEREST CHARGES:
Lease agreement should contain provisions establishing penalties and must contain
provisions establishing late interest charges. Late interest (also referred to as
"finance charges") should be consistent with Chapter 3.10 of the Kent City Code, i.e.
currently 1% of the amount of the unpaid balance or $2.00, whichever is greater, if
not paid within 30 days from the due date.
22. Monetary Penalties: 5% of the payment due and unpaid if not received by the
City within 10 days of the due date (loth of the month)
23. Late Interest: 1% on the amount outstanding if not paid by the 1st day of the
month following the due date for payment (approximately 20 days late)
SECTION 7 — OTHER LEASE CONSIDERATIONS:
1. Tenant is required to provide a signed written statement detailing monthly gross
and net receipts signed by the tenant by the loth of the following month, e.g. January
rent due February 10 (Section 4).
2. Section 4 requires payment of leasehold excise tax on the 15th of the month
following the end of each quarter (RCW 82.29A.050 requires payment at the same
time as collection of the related rent, i.e. monthly basis for this lease).
Lease Agreement Cover Sheet—Page 4 of 5
3. Tenant is required to pay the City for telecommunication service provided to the
Fire Creek Grill (Section 10).
4. Addendum One deleted Exhibit B Riverbend Retail Merchandise from the Lease
Agreement and authorized usage of City personnel for janitorial services in lieu of
usage of a private contractor.
5. First Assignment of Lease assigned lease from Public Golf Management, Inc to
Access Golf Management, LLC
6. Addendum Two waives certain rent following the close of the sale of the resturant
from Public Golf Management, Inc to Access Golf Management, LLC and decreases the
Riverbend City employee and Tenant employee discount for food and beverages
(excluding alcohol) from 40% to 25%.
Lease Agreement Cover Sheet-Page 5 of 5
ADDENDUM TWO TO LEASE AGREEMENT
THIS ADDENDUM TWO between THE CITY OF KENT, a Washington
municipal corporation, ("City") and ACCESS GOLF MANAGEMENT LLC, a
Washington limited liability company, ("Lessee") amends that certain Lease Agreement
entered into on or about March 27, 2000, and Addendum One to the Lease Agreement
entered into on or about January 29, 2002, (together referred to as the "Lease")
WITNESSETH:
WHEREAS, Lessee agreed to lease certain property owned by the City located at
the City of Kent Rrverbend Golf Complex ("Premises"), and
WHEREAS, City and Lessee express their mutual intent and desire to amend the
Lease,
NOW THEREFORE, in consideration of the mutual intent, desire and promises of
the parties hereto and other good and valuable consideration, City and Lessee agree as
follows
1 Sections 4 A 3.a, b and e of the Lease, entitled "Lease Consideration and
Payment," are hereby amended to read as follows
SECTION 4. LEASE CONSIDERATION AND PAYMENT.
A The Lessee shall provide to the City the following consideration-
3 Pay to the City the following
a Years 1-6
(1) 5% of net taxable revenue required to be
reported for sales tax purposes to the state of
Washington Department of Revenue for all
operations of Lessee, or $12 00 dollars per
square feet of leased space as set forth in
Exhibit"A", whichever is greater
(n) Lessee shall not be obligated to pay the
amount referenced in subsection 4 A 3 a for
the 90 days following the close of the sale of
the Fire Creek Grill from Public Golf
Management, Inc to Access Golf
Management LLC
ADDENDUM TWO TO LEASE AGREEMENT- 1 (Febntary 4 2003)
(between City of Kent and Access Golf Management LLC)
ORIGINAL
(in) Lessee shall not be obligated to pay the
amount referenced in subsection 4 A 3 a for
the months of January and February 2004,
provided however, that if net sales for all
operations of Lessee are 2 2 million dollars
or greater at the end of 2004, Lessee shall
pay to the City by January 31, 2005, 50% of
the amount that would have been due in
January and February 2004, under
subparagraph 4 A3 a
b Years 7-12• 5% of net taxable revenue required to be
reported for sales tax purposes to the state of Washington Department of
Revenue for all operations of Lessee, or twelve dollars ($12 00) per square
feet of leased space, whichever is greater
e Pursuant to Charter 82.29A RCW, Lessee shall pay
quarterly to the City, on the 15 day of the month following the end of
each quarter, the amount of state leasehold tax owing
2 Section 5 of the Lease, entitled "City Obligations," is hereby amended to
read as follows
SECTION 5. CITY OBLIGATIONS.
The City shall have the following obligations under this Lease.
H City shall provide information in an appropriate manner to golf
coarse users and tournament sponsors explaining that no food or beverage
obtained off-site shall be allowed on the Premises without prior approval of
Lessee
3 Section 6(I) of the Lease, entitled "Lessee's Operational Obligations," is
hereby amended to read as follows.
SECTION 6. LESSEE'S OPERATIONAL OBLIGATIONS.
Lessee shall perform the following tasks
I Provide a twenty-five percent (25%) discount for food and
beverage (excluding alcohol) to City employees and Lessee's employees who
work at the Riverbend Golf Complex Said discount shall only apply during an
employee's work shift
ADDENDUM TWO TO LEASE AGREEMENT-2 (February 4,2003)
(between City ofKent and Access Golf,Management LLC)
4 Except as amended by this Addendum Two, all provisions of the Lease
shall remain in full force and effect except as specifically modified by this Addendum
Two
IN WITNESS WHEREOF, the parties hereto have executed this Addendum
Two to Lease Agreement, which shall take effect on the last date signed below
CITY: LESSEE:
CITY OF KENT ACCESS GOLF MANAGEMENT,
LLC
13Yi ' `�` �.�/A-) By
Print Name G�. AiA OleYt Print Name
Itsi)2 h/Gu TG—m Its:
Date c:Q - eT o. 3 Date
STATE OF WASHINGTON )
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COUNTY OF KING )
I hereby czyyN atot hee� da 2003, I know or have
satisfactory eviden� Iliae a is the person who appeare before me, and said person
acknowledged that he/she signed this instrument, on oath stated that he/she is authorized to
execute the instrument on behalf of the City of Kent as its Mayo?Vn s11h execution to be
the free and voluntary act of such party for the uses and purposes mentioned in the foregoing
instrument
-Notary Seal Must Appear Within This Bos-
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and ea Jpt written
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��o NOTARY P LIC, in and for the State of Washington
+r p ,� residing
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"w.,„,. My appointm nt expires
ADDENDUM TWO TO LEASE AGREEMENT-3 (February 4,2003)
(between City ofKenl and Access Golf,Management, LLC)
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as amended by thss Addendum Two' all provisions of the Lew �
4 tally modsfied by this the
shall remain m full fora and effect except as Specifically
TWO executed this Addettdam
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Two to Leese ASreomont+which shall take effect on the lot date signed
LESSEE: MANAGEMENT,
CITY-. ACCESS Cr y
CITY ult KEN I LLC ,
By
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Date .,
STATE OF WAnl T )
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STATE OF WASHINGTON )
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COUNTY OF KING )
I hereby certify that on the day of 2003, I know or have
satisfactory evidence that is the person who appeared before
me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she
is authorized to execute the instrument on behalf of Access Golf Management, LLC as its
and such execution to be the free and voluntary act of
such party for the uses and purposes mentioned in the foregoing instrument
-Notary Seal Must Appear Within This Box
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and year first above written
NOTARY PUBLIC, to and for the State of Washington
residing at
My appointment expires
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ADDENDUM TWO TO LEASE AGREEMENT-4 (February 4,2003)
(between City ofKent andAecess Golj,Management, LLC)