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HomeMy WebLinkAbout10360RESOLUTION NO. 10360 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND J.M.A. NACHOS, INC. AND AN ACCEPTANCE OF ASSIGNMENT AND LEASE MODIFICATION BETWEEN THE CITY OF PUEBLO AND ZAREMBA ENTERPRISES, INC. RELATING TO THE WALKINGSTICK GOLF COURSE RESTAURANT AND LOUNGE, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Agreement dated April 11, 2005 between the City of Pueblo and J.M.A. Nachos, Inc. ( "Agreement') and the Acceptance of Assignment And Lease Modification ( "Lease Modification ") dated April 11, 2005 between the City of Pueblo and Zaremba Enterprises, Inc. relating to the Walkingstick Golf Course Restaurant and Lounge, copies of which are attached hereto, having been approved as to form by the City Attorney, are hereby approved. The President of the City Council is authorized to execute and deliver the Agreement and Lease Modification in the name of the City and the City Clerk is directed to affix the seal of the City thereto. SECTION 2 This Resolution shall become effective upon final passage and approval. INTRODUCED April 11, 2005 BY Jeff Chostner Councilperson APPROVED: PRES1DENT 9F CITY C IL ATTESTED BY: CITY CLERK P i Background Paper for Proposed RESOLUTION AGENDA ITEM # , j DATE: April 11, 2005 DEPARTMENT: CITY MANAGER'S OFFICE, TOM MARTINEZ, CONTRACT ADMINISTRATOR PARKS & RECREATION, RICH ZAJAC, DIRECTOR TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND J.M.A. NACHOS, INC., AND AN ACCEPTANCE OF ASSIGNMENT AND LEASE MODIFICATION BETWEEN THE CITY OF PUEBLO AND ZAREMBA ENTERPRISES, INC. RELATING TO THE WALKINGSTICK GOLF COURSE RESTAURANT AND LOUNGE, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME 1 * *1L Should City Council approve a Resolution that extends the Elmwood Golf Course Restaurant and Lounge Management Agreement with J.M.A. Nachos, Inc., for an additional five years and also authorize the assignment and modification of the Walking Stick Golf Course Restaurant and Lounge Management Agreement from J.M.A. Nachos Inc. to Zaremba Enterprises, Inc. RECOMMENDATION Approval of the Resolution. BACKGROUND Mr. Martin Ayala, President of J.M.A. Nachos, Inc., formerly M.C.A. Nachos, Inc., currently has the management agreements for the operation of the golf course restaurant and lounge facilities at Elmwood and Walking Stick. The terms of the separate agreements are from January 1, 2001 to December 31, 2005. Both agreements may be extended by the City Council for one additional five - year term. Mr. Ayala has requested that the management agreement for the Elmwood Golf Course Restaurant and Lounge be extended for the additional five -year term from January 1, 2006 to December 31, 2010 at the same rental terms. J.M.A. Nachos, Inc. will pay the City the greater of a minimum annual guarantee of $27,000 ($2,250 /month) or 10% of gross sales up to $30,000 monthly plus 3% of gross sales in excess of $30,000 monthly. Mr. Ayala has also requested that the current management agreement for the Walking Stick Golf Course Restaurant and Lounge be modified and assigned to Zaremba Enterprises, Inc., who had previously operated the facility from 1992 to 2000. J.M.A. Nachos, Inc. also requested that their rental payments be reduced from the current $2,250 per month maximum to $750 per month for the period from October 1, 2004 through May 1, 2005. The original rental terms were the same as for the Elmwood facility. Zaremba Enterprises, Inc. will invest $35,000 of capital improvements into the facility by July 1, 2005 and this capital expenditure will be considered as rent paid for the period from May 1, 2005 to June 30, 2006. Zaremba Enterprises, Inc. will then pay the City a flat rate of $2,000 per month rental for the balance of the term of the agreement starting on July 1, 2006 through December 31, 2010. The City will be responsible for any improvements required by the inspections performed by the City /County Health and Regional Building Departments prior to Zaremba Enterprises, Inc. taking over the operation of the facility on May 1, 2005. Zaremba Enterprises, Inc. will be responsible for the costs of all permits and licenses related to the operation of the restaurant and lounge. Financial Impact: Elmwood Golf Course Restaurant/Lounne: J.M.A. Nachos, Inc. will continue to pay the City the greater of a minimum annual guarantee of $27,000 per year ($2,250 per month minimum) or 10% of the gross sales up to $30,000 monthly plus 3% of gross sales in excess of $30,000 monthly. Walking Stick Golf Course Restaurant/Lounge: J.M.A. Nachos, Inc. monthly rent will be reduced from the previous $2,250 per month minimum to $750 per month for the period of October 1, 2004 to May 1, 2005 at which time Zaremba Enterprises, Inc. will take over operation of the facility. Zaremba Enterprises, Inc. will invest $35,000 for capital improvements to the facility by July 1, 2005 and this capital expenditure will be considered as rent paid for the period from May 1, 2006 to June 30, 2006. Zaremba Enterprises, Inc. would then pay the City a flat rate of $2,000 per month ($24,000 a year) for the balance of the agreement commencing on July 1, 2006 through December 31, 2010. AGREEMENT THIS AGREEMENT entered into as of April 11, 2005 between the City of Pueblo, a municipal corporation ( "City ") and J.M.A. Nachos, Inc., a Colorado corporation ( "Manager "), WITNESSETH: WHEREAS, M.C.A. Nachos, Inc. and City entered into the City Park Municipal Golf Course Restaurant And Lounge Management Agreement dated November 13, 2000 ( "City Park Restaurant Agreement ") and the Walkingstick Municipal Golf Course Restaurant And Lounge Management Agreement dated November 13, 2000 ( "Walkingstick Restaurant Agreement "), and WHEREAS, Manager is the successor in interest of M.C.A. Nachos, Inc. in and to all of M.C.A. Nachos, Inc. right, title and interest in the City Park Restaurant Agreement and Walkingstick Restaurant Agreement, and WHEREAS, Manager desires to assign the Walkingstick Restaurant Agreement and continue the City Park Restaurant Agreement, and WHEREAS, City is willing to consent to the assignment of the Walkingstick Restaurant Agreement and continue the City Park Restaurant Agreement upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the foregoing and mutual promises herein contained, City and Manager agree as follows: 1. The term of the City Park Restaurant Agreement is extended for an additional five (5) years from January 1, 2006 to December 31, 2010 upon the same terms and conditions. 2. Manager assigns and transfers all its right, title and interest in and to the Walkingstick Restaurant Agreement and liquor licenses and restaurant licenses for the Leased Facilities to Zaremba Enterprises, Inc. effective May 1, 2005 and City consents to such assignment and transfer. Manager shall be released and discharged from all obligations under the Walkingstick Restaurant Agreement occurring after May 1, 2005. Manager's monthly rent under the Walkingstick Restaurant Agreement for the period from October 1, 2004 to May 1, 2005 is reduced to $750.00 per month. 3. Manager shall vacate and surrender possession of the Leased Facilities under the Walkingstick Restaurant Agreement to Zaremba Enterprises, Inc. on May 1, 2005 and shall cooperate with Zaremba Enterprises, Inc. in the transfer of the management of said Leased Facilities including the execution and delivery of all documents required to transfer the liquor license and restaurant license for the Leased Facilities to Zaremba Enterprises, Inc. At the time of transfer of the Leased Facilities, the Leased Facilities and all City's fixtures, equipment and machinery shall be in good working order and condition. 4. This Agreement shall be binding upon and inure to the benefit of City and Manager and their respective successors and assigns. 5. Manager represents and warrants that it is the successor in interest of M.C.A. Nachos, Inc. in and to all of M.C.A. Nachos, Inc. right, title and interest in the City Park Restaurant Agreement and Walkingstick Restaurant Agreement and has the authority to execute and deliver this Agreement. Executed in Pueblo, Colorado the day and year first above written. J.M.A. NACHOS, INC. _ CITY OF PUEBLO By 'G z / ' G By 'AL resid nt resident o the ity Council [SEAL] Attest cretary [SEAL] Attest: City C IPA ACCEPTANCE OF ASSIGNMENT AND LEASE MODIFICATION THIS ACCEPTANCE OF ASSIGNMENT AND LEASE MODIFICATION ( "Lease Modification ") is entered into as of April 11, 2005 between City of Pueblo, a municipal corporation ( "City") and Zaremba Enterprises, Inc., a Colorado corporation ( "Manager "). WHEREAS, J.M.A. Nachos, Inc. as the successor in interest to M.C.A. Nachos, Inc. assigned and transferred all its right, title and interest in and to the Walkingstick Municipal Golf Course Restaurant and Lounge Management Agreement dated November 13, 2000 ( "Walkingstick Restaurant Agreement ") to Manager effective May 1, 2005, and WHEREAS, Manager and City are desirous of modifying the Walkingstick Restaurant Agreement. NOW, THEREFORE, in consideration of the foregoing and mutual promises herein contained City and Manager agree as follows: 1. Manager accepts the assignment ofthe Walkingstick Restaurant Agreement effective May 1, 2005 and agrees to be bound thereby and to perform all covenants and provisions on the part of the Manager to be performed under the Walkingstick Restaurant Agreement as modified and amended by the provisions of this Lease Modification. 2. The Walkingstick Restaurant Agreement is hereby modified and amended as follows: (a) The term of the Walkingstick Restaurant Agreement is extended for an additional five (5) years from January 1, 2006 to December 31, 2010. (b) Manager shall make capital expenditures approved by City's Director of Parks and Recreation with respect to the Leased Facilities in the amount of $35,000.00 on or before July 1, 2005. Such capital expenditures shall constitute rent paid for the period from May 1, 2005 to June 30, 2006. (c) Commencing with the month of July 2006 and each month thereafter, Manager shall pay monthly rent in the amount of $2,000.00 per month for the use of the Leased Facilities in lieu of the rent provided for in the first sentence of Paragraph 5 of the Walkingstick Restaurant Agreement. In addition, Manager shall not be required to file with the City's Department of Finance monthly statements showing gross sales as required by the provisions of said Paragraph 5. (d) All repairs and modifications to the Leased Facility required by the Pueblo City-County Health Department and /or the Regional Building Department for the transfer of restaurant permit and liquor license to Manager in order for Manager to operate the restaurant and licensed premises shall be performed at City's expense. Manager shall be responsible for all cost of such permits and licenses. 3. The Walkingstick Restaurant Agreement as modified and amended by the provisions of this Lease Modification shall remain in full force and effect, binding upon and inuring to the benefit of City and Manager and their respective successors and approved assigns. Executed at Pueblo, Colorado as of the day and year first above written. ZAREMBA ENTERPRISES BY 'z1= Presidenti/` [SEAL] [SEAL] Attest: �� Attest: Sec �etary City Nrk i GUARANTY In consideration of the City of Pueblo approving and executing the foregoing Acceptance of Assignment And Lease Modification, the undersigned, Michael Zaremba, does hereby personally guarantee the performance of the Acceptance of Assignment and Lease Modification and the Walkingstick Municipal Golf Course Restaurant and Lounge Agreement dated November 30, 2003 (collectively the "Agreements ") by Zaremba Enterprises, Inc. In the event of default by Zaremba Enterprises, Inc. under any provision of said Agreements and written notice thereof is given to Michael Zaremba, Michael Zaremba will timely cure such default and perform all the covenants and provisions of the Agreements to be performed by Zaremba Enterprises, Inc. thereunder. Signed as of April 11, 2005. Michael Zarembai' RZ