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CITY COUNCIL STAFF REPORT
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DATE: June 20, 2012 CONSENT CALENDAR
SUBJECT: EXTENSION OF THE MANAGEMENT AGREEMENT WITH CGPM
MANAGERS, LLC AND THE CITY OF PALM SPRINGS FOR THE
MANAGEMENT AND OPERATION OF THE CITY-OWNED LEGENDS
AND RESORT GOLF COURSES FOR A PERIOD OF FIVE YEARS,
BEGINNING JULY 1, 2012 THROUGH JUNE 30, 2017
FROM: David H. Ready, City Manager
BY: Thomas J. Wilson, Assistant City Manager
SUMMARY
On October 29, 2008, the City Council approved an Agreement with CGPM Managers,
LLC, for the management and operation of the city-owned Legends and Resort Golf
Courses. On June 16, 2010, the Mayor and Council extended the Agreement, with all
of its provisions remaining in full force and effect, to June 30, 2012.
To date, CGPM Managers, LLC has successfully managed and operated the two golf
courses, and have more than successfully fulled all of the terms of the Agreement.
For the last two years the play on the golf courses has almost been 100,000 rounds per
year, producing income which has been able to fund operations and extensive
improvements to the golf courses and clubhouse facilities. CGPM Managers, LLC has
provided stable leadership and is proposing no increase in its fee of$225,000 per year
for the new five-year period.
Finally, the Agreement provides that either the City or CGPM Managers, LLC has the
right to terminate the agreement upon sixty days notice without cause.
RECOMMENDATION:
Approve an Amendment to extend the Agreement with CGPM Managers, LLC for five
years beginning July 1, 2012, for the operation of City owned golf courses, at the
original fee of $225,000 per year and with no other changes to the terms of the
Management Agreement.
ITEM NO. D _ _
City Council Staff Report
June 20, 2012—Page 2
Extension of the Management Agreement with CGPM Managers, LLC
FISCAL IMPACT:
No new fiscal impact. The management fee remains $225,000 per year.
David H. Ready Thomas J. ilson
City Manager Assistant City Manger
Dougl s C. Holland
City Attomey
Attachments: Amendment No. 2 - Management Agreement
02
AMENDMENT NO. 2
MANAGEMENT AGREEMENT
THIS AMENDMENT NO. 2 TO MANAGEMENT AGREEMENT ("Amendment") is
made and entered into this 20th day of June, 2012 by and between the City of
Palm springs, a California charter city ("City") and CGPM Managers, LLC
("Manager")
RECITALS
A. City and Manager entered into a Management Agreement for the
purpose of managing the Legends and Resort Golf Courses on October 29,
2008.
B. The term of the Management Agreement provides that
Management Agreement currently expires on June 30, 2012.
C. It is the desire of the Parties that the Management Agreement be
extended for a period of five years until June 30, 2017.
AGREEMENT
1. The foregoing Recitals are true and correct.
2. Section 2.3 of the Management Agreement is amended to read, in
its entirety, as follows:
2.3. Term.
The term of this Agreement shall begin on October 29, 2008 and
shall expire at the close of business on June 30, 2017 and shall
automatically renew on a monthly basis thereafter unless or until either the
City or the Manager provides the other Party with at least thirty (30) days
written notice of its intent to not renew the Agreement. 'Notwithstanding
the foregoing or any other provision of this Agreement, either the City or
Manager shall have the right to terminate this Agreement early without
cause upon 60 days written notice delivered to the other party.
3. Except as expressly provided above, all other terms and conditions
of the original Management Agreement shall remain unchanged and in full force
and effect.
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City of Palm Springs
"CITY"
By:
Date David H. Ready, City Manager
APPROVED AS TO FORM: ATTEST:
By: By:
Douglas C. Holland James Thompson
City Attomey City Clerk
CGPM MANAGERS, LLC
"Manager"
By:
Date
Name:
Title:
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