HomeMy WebLinkAbout6/27/2007 - STAFF REPORTS - 2.H. dQ�pALM Sp4
iy
c
col l F O'RaNP
Cit-y Council Staff Report
DATE: JUNE 27, 2007 CONSENT CALENDAR
SUBJECT: AMENDMENT NUMBER FOUR (4) TO AGREEMENT NUMBER 3469 TO
ARNOLD PALMER MANAGEMENT LLC, FOR GOLF COURSE
MANAGEMENT SERVICES AT TAHQUITZ CREEK GOLF RESORT,
FROM: David H. Ready, City Manager
BY: Assistant City Manager—Administrative Services
SUMMARY
The current management agreement with Arnold Palmer Golf Management for the
operations and management of the Tahquitz Creek Golf Resort is scheduled to expire
on June 30, 2007. Arnold Palmer Golf Management is presently in the process of
assigning their interests, in both their lease on the Legends Course and the
management agreement they have with the City, to another party. This process, which
will likely take several months to complete, must ultimately be approved by the City
Council. The proposed amendment extends the term of the existing agreement for a
period of six (6) months, from July 1, 2007 through December 31, 2007 to facilitate the
proposed assignment of the lease and management agreement. All other terms and
conditions of the existing agreement remain in full force and effect.
RECOMMENDATION:
1. Adopt Minute Order No. approving Amendment Number Four (4) to
Agreement 3469 with Arnold Palmer Management, LLC, extending the term of
their Management Agreement for a period of six (6) months from July 1, 2007
through December 31, 2007.
STAFF ANALYSIS:
On January 2, 1995, the City entered into agreement with Arnold Palmer Golf
Management (Palmer) for the management and operation of the City's golf resort. The
agreement was scheduled to expire on June 30, 2006. Prior to the expiration of this
agreement, the City Council approved an amendment extending the term of the
agreement through June 30, 2007. This extension was granted to Olympus Real Estate
Partners, the majority owner of Palmer, in order to facilitate the sale of their interests in
both the management agreement and lease that they hold on the Legends Course.
ITEM NO.12.`
City Council Staff Report
June 27, 2007 -- Page 2
Fourth Amendment to Management Agreement with Arnold Palmer Management
Unfortunately, Palmer was unable to successfully complete the sale of their interests
and was forced to terminate the deal.
The City recently received correspondence from Palmer indicating that they entered into
a purchase and sale agreement with another company, Touchstone Golf LLC, and have
asked the City to consider an assignment of the lease and management agreements.
Staff is in the process of reviewing this information provided by Palmer and will be
submitting a report to the City Council in the near future.
Since the existing management agreement with Palmer will expire before the City can
complete its due-diligence on the assignment request and make a recommendation to
the City Council, staff believes that it would be in the City's best interest to extend the
term of the management agreement for an additional six (6) months. By extending the
agreement at this time, the City will ensure that its golf course will continue to be
properly managed until the assignment request can be resolved and a successor-in-
interest to the lease and management agreement be selected.
FISCAL IMPACT-
There is no direct financial impact as a result of the proposed action as it is strictly an
extension of time being requested.
"Listratziv
sistant City Manager David H. Ready, It r ger
ices
Attachments-
I- Minute Order
2. Fourth Amendment to Management Agreement
MINUTE ORDER NO.
APPROVING AMENDMENT NUMBER FOUR (4) TO
AGREEMENT 3469 WITH ARNOLD PALMER
MANAGEMENT, LLC EXTENDING THE TERM OF THE
MANAGEMENT AGREEMENT FOR A PERIOD OF SIX (6)
MONTHS FROM JULY 1, 2007 THROUGH DECEMBER 31,
2007,
I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that this
Minute Order, approving Amendment Number Four (4) to Agreement 3469 with Arnold
Palmer Management, LLC, extending the term of their Management Agreement for a
period of six (6) months, from July 1, 2007 through December 31, 2007 was adopted by
the City Council of the City of Palm Springs, California, in a meeting thereof held on the
27th day of June, 2007.
James Thompson, City Clerk
cL�11�1��
AMENDMENT NO. 4 TO AGREEMENT NO. 3469
FOR GOLF COURSE MANAGEMENT SERVICES AT
TAHQUITZ CREEK GOLF COURSE
This Fourth Amendment to the Golf Course Management Agreement (the "Fourth
Amendment") is made and entered into on the day of June, 2007, by the City
of Palm Springs ("City"), a California charter city, and Arnold Palmer Golf
Management LLC ("Manager"), a Delaware limited liability company.
Recitals
A. On or about January 2, 1995, the City and the Manager entered into
that certain Golf Course Management Agreement ("Agreement") for the provision
by Manager to City of certain services for the management and operation of the
real property and related amenities for use as a municipal golf facility.
B. On November 17, 1999, the City and Manager entered into the "First
Amendment to the Agreement for Golf Course Management Services" ("First
Amendment"), which modified the term of the Agreement.
C. On April 25, 2002, the City and Manager entered into the "Second
Amendment to the Agreement for Golf Course Management Services" ("Second
Amendment"), which revised certain reporting requirements, clarified procedures
for the improvement of land and the use of the Capital Improvement Fund and
modified certain defined terms.
D. On June 21, 2006, the City and Manager entered into the "Third
Amendment to the Agreement for Golf Course Management Services" ("Third
Amendment"), which extended the term of the Agreement for an additional period
of time.
E. The current amendment with Manager expires on June 30, 2007.
F. The City and Manager have been unable to reach agreement on a
new contractual arrangement prior to the expiration of the current amendment.
G. It is the desire of the Parties to continue the existing Agreement for
an additional six (6) months to provide additional time to reach a new agreement or
alternate management arrangement.
Agreement
1. Section 2.3 of the Agreement is amended to read:
001 04
"2.3 Term. The term of this Agreement shall be extended to the
close of business on December 31, 2007 ".
2. Except as specifically provided in this Amendment No. 4, all other
terms and conditions of the Agreement, as amended by previously approved
amendments, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed and entered into this
Third Amendment as of the date stated above.
"City"
CITY OF PALM SPRINGS,
a California charter city
ATTEST:
City Clerk City Manager
APPROVED AS TO FORM:
City Attorney
"Manager"
ARNOLD PALMER GOLF
MANAGEMENT LLC
a Delaware limited liability company
Title:
Title:
2