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HomeMy WebLinkAbout11929RESOLUTION NO. 11929 A RESOLUTION APPROVING AMENDMENT NO. 2 BETWEEN THE CITY OF PUEBLO AND J.M.A. NACHOS, INC. RELATING TO THE CITY PARK MUNICIPAL GOLF COURSE RESTAURANT AND LOUNGE MANAGEMENT AGREEMENT, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. Amendment No. 2 dated July 12, 2010 between the City of Pueblo, a Municipal Corporation and J.M.A. Nachos, Inc. (“Amendment No. 2”) relating to the City Park Municipal Golf Course Restaurant and Lounge Management Agreement, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver Amendment No. 2 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 approval and passage. INTRODUCED: July 12, 2010 BY: Judy Weaver /COUNCILPERSON Background Paper for Proposed RESOLUTION DATE: AGENDA ITEM # M-2 July 12, 2010 DEPARTMENT: Law Department Thomas J. Florczak, City Attorney Parks & Recreation Department Creighton Wright, Director TITLE A RESOLUTION APPROVING AMENDMENT NO. 2 BETWEEN THE CITY OF PUEBLO AND J.M.A. NACHOS, INC. RELATING TO THE CITY PARK MUNICIPAL GOLF COURSE RESTAURANT AND LOUNGE MANAGEMENT AGREEMENT, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council grant a lease extension to the current operator of the City Park Restaurant and Lounge for an additional term of 5 years or until a new clubhouse has been constructed and is available for use? RECOMMENDATION This extension has been proposed by Councilman Aguilera. BACKGROUND City Council entered into a five-year management agreement dated November 13, 2000 with M.C.A. Nachos, Inc. to operate the City Park (Elmwood) Golf Course Restaurant and Lounge. That agreement authorized a possible 5-year extension. Under a subsequent agreement dated April 11, 2005, the City consented to assignment of the management agreement to J.M.A. Nachos, Inc. and agreed to the five-year extension until December 31, 2010. The Parks and Recreation Department and the Golf Course Advisory Committee are studying the possible replacement of the City Park (Elmwood) Golf Course clubhouse, including the restaurant and lounge. Consequently, it is probably inadvisable to solicit proposals for a new operator since the continued long term use of the existing clubhouse is questionable. FINANCIAL IMPACT Under the 5-year extension, the operator will continue to pay to the City monthly rent equal to the greater of (a) $2,250, or (b) 10% of gross monthly sales up to $30,000 plus 3% of gross sales in excess of $30,000. • Rev. 7 -2 -10 AMENDMENT NO. 2 TO CITY PARK MUNICIPAL GOLF COURSE RESTAURANT AND LOUNGE MANAGEMENT AGREEMENT THIS AMENDMENT NO. 2 to City Park Municipal Golf Course Restaurant and Lounge Management Agreement ( "Amendment No. 2 ") is made and entered into as of the 12th day of July, 2010, between the City of Pueblo, a Municipal Corporation ( "City ") and J.M.A. Nachos, Inc., a Colorado corporation ( "Manager "). WHEREAS, City and M.C.A. Nachos, Inc., a Colorado corporation, entered into a Management Agreement dated November 13, 2000 ( "Management Agreement ") for the management, operation, maintenance and promotion of the restaurant and lounge (the "Restaurant and Lounge ") located at City Park Municipal Golf Course, 3900 Thatcher Avenue, Pueblo, Colorado, also known as Elmwood Golf Course; and WHEREAS, by an Agreement dated April 11, 2005 between Manager and City ( "Amendment No. 1"), the City and Manager agreed to an extension of the Management Agreement to and until December 31, 2010 upon the same terms and conditions except for a temporary reduction in rent, and the City consented to an assignment of the Management Agreement for the Restaurant and Lounge to Manager as successor to M.C.A. Nachos, Inc.; and WHEREAS, the City and its Golf Course Advisory Committee intend to study and evaluate the possible replacement of the City Park Golf Course clubhouse, including the Restaurant and Lounge; and WHEREAS, due to the possible uncertainty concerning replacement of the Restaurant and Lounge, it is inadvisable to issue a request for proposals for long -term operation of the Restaurant and Lounge after expiration of the Management Agreement on December 31, 2010; and WHEREAS, City believes a short-term extension of the Management Agreement is appropriate until plans for the clubhouse replacement are developed and implemented. NOW, THEREFORE, in consideration of the foregoing and mutual terms and conditions set forth herein, the parties agree as followed: 1. The term of the Management Agreement for the Restaurant and Lounge is hereby extended to and until December 31, 2015, or the date when a new City Park Golf Course clubhouse has been constructed and a certificate of occupancy issued, whichever shall first occur, upon the same terms and conditions as set forth in the Management Agreement, except as set forth herein. 2. The term of the Management Agreement shall not be extended for any additional periods. The provisions set forth in Section 2 of the Management Agreement providing for an additional term of five (5) years are hereby deleted. • 3. Within thirty (30) days of the date of this Amendment No. 2, Manager shall develop and submit to the City's Director of Parks and Recreation ( "Director ") a proposed Operations Plan to specifically address the following matters: (a) customer service and staffing, (b) food service for tournaments, (c) keeping restaurant open during all golf course hours, (d) cleanliness of restrooms, (e) timely payment of rent /commissions, and (f) improved beverage cart service. Director will review the proposed Operations Plan and either approve same or advise Manager in writing of deficiencies in the Operations Plan. Within 10 days of Director's written response, Manager shall revise the Operations Plan to address such deficiencies and resubmit same to Director for review. Once approved by Director, Manager shall implement the Operations Plan. 4. Except as expressly modified herein by this Amendment No. 2, the Management Agreement (as previously modified) shall remain in full force and effect. Except as expressly modified, any obligation remaining to be performed by Manager under the Management Agreement are not waived or exercised in any manner, but shall be fully performed in accordance with the terms of the Management Agreement as it existed prior to this Amendment No. 2. IN WITNESS WHEREOF, Manager and City have executed this Amendment No. 2 as of the date first written above. CITY OF PUEBLO, ATTEST: a Municipal Corporation By ., City Jerk President of the City Council APPROVED AS TO FORM: J.M.A. ■ A 'r S, . City Attorn y By — Na e: /1 4de`A9 6 / Title: President 2