HomeMy WebLinkAbout4/4/2001 - STAFF REPORTS (5) DATE: April 4, 2001
TO: City Council
FROM: Director, Department of Facilities
PALM SPRINGS TENNIS CENTER
RECOMMENDATION:
That City Council approve a Settlement Agreement & General Release of All
Claims, on file in the Office of the City Clerk, between Collas Enterprises, Inc. and
the City of Palm Springs for differences arising out of the Lease of The Palm
Springs Tennis Center.
SUMMARY:
Collas Enterprises, Inc. (CEI) entered into a Lease on February 16, 2000 with the
City of Palm Springs for operation of The Palm Springs Tennis Center(PSTC). On
March 1, 2001, CEI representatives advised the City that they intended to vacate
the property and proposed that a settlement agreement be created whereby
certain improvements made to the property by CEI would remain at PSTC in
exchange for the City releasing CEI of past due payments due the City and future
obligations associated with the Lease of PSTC. This agreement was endorsed in
concept by the Parks and Recreation Commission at its March 21, 2001 regularly-
scheduled meeting.
BACKGROUND:
In 1999, the City of Palm Springs developed a Request for Proposal (RFP) for
operation of PSTC. CEI was chosen to be the operator at the conclusion of this
process and entered into a Lease with the City on February 16, 2000.
At the time the agreement was initiated, the City was in the process of doing
certain upgrades to the property to bring the building and other appurtenant
structures associated with PSTC into an acceptable condition for use by CEI.
These improvements were not completed until September 2000 due to the
necessity to participate in the public bidding process for resurfacing the tennis
courts. CEI assumed daily operation of the facility on October 1, 2000.
Thereafter, City staff received correspondence dated January 7, 2001 from CEI,
requesting that certain amendments be made to the Lease to reduce operational
costs for CEI's operation of the property. This request was reviewed by the Parks
and Recreation Commission on January 17. City staff, upon review of the
commission's recommendation, attempted to negotiate with CEI to reach resolution
to the terms of its request. Upon meeting with CEI on February 21, CEI informed
the City that it intended to vacate the property as of March 1 due to financial
hardship and a lack of resources to continue operating PSTC and proposed a
settlement agreement at that time.
PALM SPRINGS TENNIS CENTER
DATE: April 4, 2001
PAGE: Two
Staff negotiated with CEI and drafted the proposed Settlement Agreement &
General Release of All Claims between the City and CEI and believes it would be
in the City's best interest to approve this agreement, rather than seek other
remedies, to avoid cost, disruption, inconvenience, and the uncertainty of litigation
to enforce the terms of the Lease and any other disputes that may exist between
the parties.
OTT MIKESELL, Director
Department of Facilities
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APPROVEDEy-�"
City Manager
ATTACHMENT:
1. Minute Order
REVIEWED BY DK OF FINANCE
�'r
MINUTE ORDER NO.
APPROVING A SETTLEMENT AGREEMENT & GENERAL
RELEASE OF ALL CLAIMS, ON FILE IN THE OFFICE OF THE
CITY CLERK, BETWEEN COLLAS ENTERPRISES, INC. AND
THE CITY OF PALM SPRINGS FOR DIFFERENCES ARISING
OUT OF THE LEASE OF THE PALM SPRINGS TENNIS CENTER,
I HEREBY CERTIFY that this Minute Order, approving a Settlement Agreement &General
Release of All Claims, on file in the Office of the City Clerk, between Collas Enterprises, Inc.
and the City of Palm Springs for differences arising out of the Lease of The Palm Springs
Tennis Center, was adopted by the City Council of the City of Palm Springs, California, in
a meeting thereof held on the 4" day of April, 2001.
BY: PATRICIA A. SANDERS
City Clerk
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MINUTE ORDER NO.
DIRECTING THE CITY ATTORNEY TO COMMENCE
PROCEEDINGS DECLARING COLLAS ENTERPRISES, INC. IN
DEFAULT OF LEASE, AGREEMENT NO. 4200, DATED
FEBRUARY 16, 2000.
I HEREBY CERTIFY that this Minute Order, directing the City Attorney to commence
proceedings declaring Collas Enterprises, Inc. in default of Lease, Agreement No. 4200,
dated February 16, 2000, was adopted by the City Council of the City of Palm Springs,
California, in a meeting thereof held on the 71h day of February, 2001.
BY: PATRICIA A. SANDERS
City Clerk
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