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HomeMy WebLinkAbout12086RESOLUTION NO. 12086 A RESOLUTION AWARDING A LEASE AND MANAGEMENT AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND ON IN 2, INC., A COLORADO CORPORATION FOR CERTAIN PREMISES AT WALKING STICK GOLF COURSE AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE SAME WHEREAS, no eligible proposals for the operation of the Restaurant and Lounge at Walking Stick Golf Course were received; and WHEREAS, in order to serve the public interest, the City needs the services of On In 2, Inc. to occupy, manage, operate and maintain the Restaurant and Lounge at Walking Stick Golf Course, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Lease and Management Agreement attached to this Resolution, approved as to form by the City Attorney, is hereby approved. The President of City Council is hereby directed to execute the Lease and Management Agreement on behalf of the City, and the City Clerk is directed to attest same. SECTION 2. This Resolution shall become effective immediately upon final passage and approval. INTRODUCED: February 14, 2011 BY: Leroy Garcia Background Paper for Proposed RESOLUTION AGENDA ITEM # M-9 DATE: February 14, 2011 DEPARTMENT: PARKS AND RECREATION, CREIGHTON WRIGHT, DIRECTOR TITLE A RESOLUTION AWARDING A LEASE AND MANAGEMENT AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND ON IN 2, INC., A COLORADO CORPORATION FOR CERTAIN PREMISES AT WALKING STICK GOLF COURSE AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE SAME ISSUE Should City Council award a contract for the management and operation of the Walking Stick Golf Course restaurant and lounge to On In 2, Inc. of Pueblo, Colorado? RECOMMENDATION Approval of this Resolution. BACKGROUND The contractor responsible for the operation and management of the Walking Stick Golf Course Restaurant and Lounge terminated his contract effective January 1, 2011. His reasoning for terminating the contract was due to the amount of time it actually took to operate a restaurant, especially a destination restaurant such as Walking Stick. Lack of marketing resources, inconsistent cash-flow, and the success of the restaurant tied to the golfers and the weather were some of the issues as to why this restaurant has been such a challenge. In December 2010, an RFP was advertised for a new contractor to take over the operation and management of the restaurant and lounge, but unfortunately the only two bidders that submitted quotes were both disqualified. In an effort to keep the restaurant and lounge in operation for the 2011 season, Walking Stick Golf Pro, Dave Lewis submitted a proposal to operate and manage the restaurant and lounge similar to the way he currently manages the golf course. Mr. Lewis has experience operating a golf course restaurant at Desert Hawk Golf Course. The Walking Stick Golf Course Enterprise would be responsible for the restaurant with On In 2, Inc. operating it similar to the way the golf course is operated. On In 2, Inc. would collect all revenue and pay all operating and payroll expenses. Operating and payroll expenses would then be reimbursed to On In 2, Inc. by the Walking Stick Enterprise on a monthly basis. FINANCIAL IMPACT On In 2, Inc. will pay into the Walking Stick Enterprise as rent due under this lease, 75% of the net proceeds of all food and beverage operations received during the preceding month. An operating and capital budget of $327,000 will be required to resume operation of the restaurant under this model. This budget is based on sales history provided by former contractor of $292,000. An additional $35,000 will be needed to replace equipment and furnishing that were owned by former contractor and have since been removed from the premises. It is recommended that the Walking Stick Enterprise own all Capital equipment from this point forward. The Walking Stick Enterprise is expecting a positive cash flow at the end of year one of between $40,000 and $50,000 between renovations and equipment purchases. A LEASE AND MANAGEMENT AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND ON IN 2, INC., A COLORADO CORPORATION FOR CERTAIN PREMISES AT WALKINGSTICK GOLF COURSE. THIS AGREEMENT is entered into this 14th day of February, 2011, by and between Pueblo, a Municipal Corporation ( "City ") and On In 2, a Colorado Corporation ( "On In 2 ") RECITALS A. The City needs the services of On In 2 to occupy, manage, operate and maintain a restaurant, including liquor licensed premises. B On In 2 has experience operating restaurants, including liquor licensed premises. In consideration of the foregoing recitals, and the terms and conditions set forth herein, the Parties agree as follows TERMS AND CONDITIONS SECTION 1 DEFINITIONS. As used herein, the following words and phrases shall have the following meanings. (a) "Leased Premises" means and includes (1) The "Restaurant and Lounge," consisting of the restaurant, lounge, public restrooms and front entranceway located on the first floor of the Walkingstick Municipal Golf Course clubhouse, consisting of approximately 2,532 square feet of floor area, and the walk -in refrigerated room located in the basement of the clubhouse, all as shown on Exhibit A, and (2) The "Optional Premises," consisting of the starter buildings located on the golf course, the gazebo located outside but adjacent to the clubhouse, and the golf course itself. (b) "Director" means the City's Director of Parks and Recreation or any person that the Director of Parks and Recreation may authorize to act in his stead. (c) "Gross Revenue" means the total revenue, whether in cash, check, debit card or credit card transaction, for food and beverage sales and service at the Leased Premises, exclusive of tips, received in any month or portion of a month. The term does not include any revenue paid to the City under Sponsorship Contracts for the privilege of conducting a Sponsorship Event, but does include food and beverage sales made during Sponsorship Events. 1 (d) "Net Proceeds" means Gross Revenue received in any month or portion of a month less Permitted Expenses incurred and paid by On In 2 during the same period. (e) "Permitted Expenses" includes the following expenses food, water, laundry services, alcohol beverages, beverages, wages, salaries, insurance required under this Agreement, utilities that On In 2 is required to pay under this Agreement, licenses, attorney's fees and other expenses reasonably related to the acquisition of licenses, sales and use taxes, maintenance, advertising and promotion, cleaning, and any other expense reasonably related to the food and beverage operations at the Leased Premises contemplated under this Agreement. The term does not include any of the following• improvements, capital costs, such as equipment, plates, dishes, glasses, and the like, late fees under this Agreement, or any wages, salary, or other compensation to any of the officers or directors of On In 2, Inc (f) "Sponsorship Contract" means any contractual arrangement in which a third party business pays for the right to conduct events, promotions, parties, celebrity appearances, social functions, tournaments, contests, product demonstrations, product promotions, or other events at the Leased Premises or the third party is permitted to place advertising signs, banner, and other materials at the Leased Premises. (g) "Sponsorship Events" means events, promotions, parties, celebrity appearances, social functions, tournaments, contests, product demonstrations, product promotions, and other events at the Leased Premises or the placement of advertising signs, banners, announcements and similar materials at the Leased Premises under a Sponsorship Contract. SECTION 2. EXHIBITS TO AGREEMENT Exhibit A. Restaurant and Lounge Floor Plan. Exhibit B List of City's Property Exhibit C PERA Questionnaire. SECTION 3. GRANT OF EXCLUSIVE RIGHT TO OCCUPY AND OPERATE LEASED PREMISES. (a) City grants to On In 2 the exclusive right to occupy, use, operate the food and beverage operations at the Leased Premises, subject to (1) the City's right to enter the Restaurant and Lounge without notice to On in 2 to conduct Sponsorship Events, to inspect the premises, and to perform maintenance, provided that On in 2 shall have sole control over the mode and manner in which alcohol beverages are sold, served, and consumed at the Restaurant and Lounge; (2) the right of the City and its guests to enter the Optional Premises without notice to On In 2 to conduct Sponsorship Events inspect the premises, perform maintenance, play 2 golf, control golf operations, conduct irrigation, conduct greenskeeping, and to carry out any other activities reasonably related to golf, provided that On In 2 shall have sole control over the mode and manner in which alcohol beverages are sold, served, and consumed on the Leased Premises, and (3) All other terms of this Agreement SECTION 4. RENT, LATE FEES, INTEREST (a) On In 2 shall pay to City as rent due under this Lease seventy -five percent (75 %) of the net proceeds of all food and beverage operations received at the Leased Premises during the preceding month, or portion of a month, which shall be due without notice, offset or deduction, on the first day of the first full month under this Agreement, and shall be payable at the place designated in this Lease for Notice to City This rent shall be paid into the City's Golf Course Enterprise. (b) On In 2 shall pay to City a late fee in the amount of Thirty -Five Dollars ($35) for any rent payment paid more than ten (10) days after the first day of the month. On In 2 shall pay to City a late fee in the amount of Sixty -Five Dollars ($65) for any rent payment paid more than fifteen (15) days after the first day of the month. (c) All rent, fees, and other sums due under this Lease shall bear interest at the rate of eight percent (8 %) per annum from the date the sum first becomes due, compounded monthly (d) In the event that On In 2 suffers negative net proceeds in any month or portion of a month, such that Permitted Expenses exceed Gross Revenue during any month or portion of a month, City shall pay to On In 2 the difference between Permitted Expenses and Gross Revenue within ten days after On In 2 submits to City an accounting showing the same. The City's payment of this sum shall be drawn from the City's Golf Enterprise. (e) In the event that On In 2 suffers negative net proceeds in any month or portion of a month, such that Permitted Expenses exceed Gross Revenue during any month or portion of a month, On In 2 shall provide a report to City within fifteen (15) days after the end of the month or portion of a month in which the negative net proceeds occurred, detailing the reason for the negative net proceeds. Within 45 days after the end of the month or portion of a month in which the negative net proceeds occurred, On In 2 shall submit to the Director a Corrective Action Plan detailing how On In 2 intends to alter its operations over the next 30 days to avoid further negative net proceeds. If during the next full month following submission of the Corrective Action Plan, On In 2 does not show a reduction in negative net proceeds over the month or portion of a month in which the negative net proceeds occurred, the City shall have the right to terminate this Agreement upon ten (10) days notice to On In 2 SECTION 5. UTILITIES. On In 2 shall pay, before delinquent, all charges for cable television only 3 SECTION 6. SECURITY DEPOSIT (a) On In 2 shall deposit with City the sum of $Two Thousand Dollars ($2,000) to ensure performance of its obligations under this Lease. In the event that On In 2 fails, neglects or refuses to pay any rent, fee, or other sum due under this Lease, or fails to perform any obligation under this Lease, then City may, in its sole and absolute discretion, draw from this security deposit to remedy On In 2's default. Nothing contained in this Lease shall require City to remedy On In 2's default in this manner, and City may instead, in its sole and absolute discretion, refuse to remedy On In 2's default by drawing on the security deposit, and instead pursue the remedies for default provided in this Lease or by law (b) In the event that City draws from this security deposit to remedy On In 2's default, City shall notify On In 2 in writing and require On In 2 to replenish the deposit to its original level. Failure of On In 2 to comply with this section shall constitute a material breach of this Lease (c) Within sixty (60) days after this Lease expires or terminates City shall refund to On In 2 the security deposit, less any portion of the security deposit that City has applied to remedy any of On In 2's defaults under this Lease, including but not limited to unpaid rent, other sums due under this Lease, and any damages or cleaning that may be required, whether discovered during the term of this Lease or afterward. SECTION 7 CITY TO PROVIDE CERTAIN CAPITAL. (a) City shall provide the equipment and supplies presently located on the Leased Premises, including stoves, ovens, plates, dishes, furniture, bars, and the like, for On In 2's use on the Leased Premises, but all such equipment and supplies shall remain Property of the City and shall be returned to the City at the termination of this Agreement. (b) The City shall reimburse On In 2 for additional capital expenses incurred by On In 2 for equipment and furniture to be used by On In 2 at the Leased Premises, provided that: (1) The capital expenses are incurred only for restaurant related equipment and furniture delivered to and used solely at the Leased Premises, (2) The cumulative total reimbursable capital expenses under this subsection does not exceed Thirty Five Thousand Dollars ($35,000), (3) On In 2 provides detailed invoices to the City for each expense showing the price and a description of the restaurant equipment or furniture, (4) The capital expense is incurred by no later than June 1, 2011, (5) The equipment or furniture becomes the sole property of the City; and 4 (6) The equipment or furniture is brought on to the Leased Premises and placed on Exhibit B signed by both parties SECTION 8. SPONSORSHIP CONTRACTS (a) The City reserves the exclusive right to enter into Sponsorship Contracts and conduct Sponsorship Events held on or in any part of the Leased Premises at any time that the City determines in its sole and absolute discretion. (b) On In 2 shall not enter into any Sponsorship Contract nor conduct any Sponsorship Event, but shall fully cooperate in conducting any Sponsorship Event that the City may determine, in its sole and absolute discretion, should be held on the Leased Premises, by keeping any required portion of the Leased Premises open for such event and by providing food and beverage service during such event, including the service of alcohol beverages, provided that the sale, service and consumption of alcohol beverages shall only be permitted during such hours as are allowed under the Colorado Liquor Code and Regulations. (c) Any payment, fee, or other compensation that the City receives under a Sponsorship Contract shall be solely the City's property and shall not be treated as any part of Gross Revenue under this Agreement. (d) In the event that any term of this Section, or any term of this Agreement pertaining to Sponsorship Contracts or Sponsorship Events conflicts with, or is construed to conflict with, any provision of any other contract, lease, or agreement between the City or any of its enterprises and On In 2, Inc , including but not limited to the Walkingstick Golf Course Management Agreement dated December 1, 2008, the provisions of this Agreement shall control. SECTION 9 ON IN 2'S ADDITIONAL OBLIGATIONS. On In 2 shall perform and comply with the following obligations, restrictions, and limitations (a) Operate, staff, manage, clean, keep clean and sanitary, maintain, and promote the Restaurant and Lounge and Optional Premises, providing food and beverage service in all areas of the Licensed Premises, including but not limited to alcohol beverages. On In 2 shall perform these duties with reasonable care according to the highest standards in the industry (b) Hire, supervise, train and schedule all employees and subcontractors needed and required for the efficient operation, maintenance, management and promotion of the Restaurant and Lounge and for sale and service of alcohol beverages on the Optional Premises. It is expressly understood and agreed that all employees hired by On In 2 shall be the employees of On In 2 and no contractual obligations or relationship of employer - employee shall exist between the City and such employees. On In 2 shall provide all workers' compensation insurance for its employees in accordance with the provisions of the laws of the State of Colorado and furnish Director with satisfactory proof that such insurance is in effect. 5 (c) Maintain the security and inventory of, and maintain in good condition and repair, all City equipment, fixtures and machinery used by On In 2 or placed under On In 2's custody and control by City An initial inventory of such machinery, fixtures, and equipment shall be prepared for the Leased Premises and shall be signed by the Director and On In 2 and attached hereto as Exhibit B Director and On In 2 shall annually update such inventory Repairs, replacements and disposal of any items on the inventory shall be approved by the Director annually or such earlier time as requested by On In 2 (d) Keep and maintain separate, accurate, and complete accounts and records of all activities and transactions conducted by On In 2 in the Restaurant and Lounge and Optional Premises in accordance with generally accepted accounting principles, which accounts and records shall be available for inspection, copy and audit by City during normal business hours. On In 2 shall retain all such accounts and records for a minimum period of three (3) years after termination of this Agreement. These records and accounts shall be entirely separate from any other business operations that On In 2 may conduct at any other premises. (e) Comply strictly with all applicable federal, state and City laws, rules and regulations. (f) Keep the Restaurant and Lounge and Optional Premises open for business and provide service and catering of food and beverages, including but not limited to alcohol beverages, throughout all parts of the Leased Premises on such days and at such times as the Leased Premises are open to the public and on such further days and times as the Director may require in his sole and absolute discretion, after reasonable consultation with On In 2 for catering, special events, or Sponsorship Events. (g) Furnish prompt, courteous and efficient food and beverage service at the Restaurant and Lounge and Optional Premises, including alcohol beverages, and catering of food and beverages, including alcohol beverages, throughout all parts of the Restaurant and Lounge and Optional Premises at regular events, special events, and Sponsorship Events according to a menu that the Director shall approve, in his sole and absolute discretion, after reasonable consultation with On In 2 All such products and services shall conform with the requirements of federal, state, and city laws and regulations. (h) Purchase, stock, carry, furnish, provide and replace as needed, at On In 2's sole cost and risk, sufficient and adequate food, foodstuffs, beverages, alcohol beverages, equipment, furnishings and furniture in the Restaurant and Lounge and Optional Premises, in a quality and quantity determined to be adequate by Director in his sole and absolute discretion after reasonable consultation with On In 2, including but not limited to foodstuffs and beverages for breakfast, lunch, dinner, snacks, banquets, and catering, and tables, chairs, glasses, dishes and utensils for the Restaurant and Lounge and Facilities. (i) Provide all food and beverage service and catering in a polite and inoffensive manner, ensuring polite conduct and demeanor on the part of On In 2's representatives, agents, employees, and subcontractors. 6 (j) Meet with Director in person at least quarterly to review the menu, prices charged, days and times when food and beverage service must be provided at the Restaurant and Lounge and Optional Premises, days and times when catering must be provided throughout the leased Premises, stocks of foodstuffs, beverages, equipment, furnishings and furniture in the Restaurant and Lounge and Facilities, upcoming special events, decor, menus, brochures, and sales materials, quality of food and beverages provided, and Sales Records. (k) Pay at On In 2's sole cost, before same become delinquent, all sales, use and property taxes on On In 2's property and business conducted on the Leased Facilities. On In 2 shall collect and remit to City all sales taxes on the sale of food, beverages and merchandise. (1) Operate and manage the Restaurant and Lounge and Facilities as public facilities for the use and benefit of the public on a fair, equal and nondiscriminatory basis without preferential treatment to any individual, group or entity On In 2 shall comply fully with state and federal anti - discrimination laws, rules and regulations and specifically agrees that no person shall be denied or refused services or other full or equal use of the Restaurant and Lounge and Facilities, nor denied employment opportunities by On In 2 as a result of race, creed, color, sex, age, national origin, ancestry or disability unrelated to ability or job performance (m) Obtain at On In 2's cost and expense all licenses required for the operation of the Restaurant and Lounge and Optional Premises, including but not limited to food service licenses, liquor licenses, and sales and use tax licenses. Upon termination of this Agreement, all such licenses shall remain with the Leased Premises and On In 2 shall fully cooperate in the transfer and approval of such licenses to City or its designee. For such purposes, On In 2 hereby irrevocably appoints City its agent and attorney in fact to execute all approvals and instruments required for such transfers (n) Comply with the rules and regulations adopted by the Director relating to the use and operation of the Leased Premises, and all roads, sidewalks, parking lots, and golf cart pathways used in connection with the Leased Premises (o) Meet and comply with the nondiscrimination and equal employment requirements of section 1 -8 -4 of the Pueblo Municipal Code which are incorporated herein by reference. (p) On In 2 shall not use or allow the Leased Premises to be used for any improper, unlawful, immoral or objectionable purpose and shall not cause, maintain or permit any disorderly conduct, nuisance or waste in, on or about the Leased Premises. On In 2 shall not conduct any activity or sell anything at or on the Leased Premises except as specifically authorized in this Agreement. On In 2 shall conduct all sales and service of alcohol beverages in compliance with the Colorado Liquor Code and Regulations and according to the highest standards in the industry, exercising special care to ensure that persons under the age of 21 do not purchase, receive or consume alcohol beverages on the Leased Premises, that alcohol beverages are not removed from the Leased Premises, and that visibly intoxicated persons are not served alcohol beverages. Before allowing any employee to sell or serve alcohol beverages 7 on the Licensed Premises, On In 2 shall ensure that all employees selling and serving alcohol beverages receive training in the requirements of the Colorado Liquor Code and Regulations, or demonstrate that they have already completed such training within the last three years. (q) On In 2 shall not make any improvements of a permanent nature to the Leased Premises or install any fixture or sign thereon, or make any additions, changes, remodeling or alterations to the same without the prior written approval of the Director and after obtaining all permits required therefor All such approved improvements, fixtures, signs, additions, changes, remodeling or alternations shall remain the property of the City (r) Surrender and deliver to the City at the expiration or termination of this Agreement the Restaurant and Lounge and Optional Premises and all City fixtures, machinery, supplies and equipment in good order and condition, reasonable wear and tear excepted. SECTION 10. TERM AND TERMINATION (a) The initial term of this Agreement is from February 14, 2011 to December 31, 2011, unless earlier terminated as herein provided. This Agreement may be renewed for two separate successive and consecutive one -year periods by mutual agreement of the parties in writing. (b) If either party is in default hereunder, the non - defaulting party may give written notice describing the default to the defaulting party If the defaulting party does not correct such default within twenty (20) days after receipt of said notice, or if the default cannot be corrected within said 20 -day period and the defaulting party fails to commence action to correct the default within said 20 -day period and thereafter diligently pursues corrective action, the non - defaulting party may upon an additional five (5) days' notice given to the defaulting party terminate this Agreement. (c) Notwithstanding the foregoing, either party may terminate this Agreement without cause by giving ninety days advance written notice to the other, specifying the date of termination. (d) Notwithstanding the foregoing, City may terminate this Agreement upon 10 days notice to On In 2 for failure to reduce negative net proceeds, as provided in Section 4(0. (e) Termination of this Agreement shall not terminate or otherwise affect the Walkingstick Golf Course Management Agreement between the parties dated December 1, 2008 In the event that any term of this Section, conflicts with, or is construed to conflict with, any provision of any other contract, lease, or agreement between the City or any of its enterprises and On In 2, Inc , including but not limited to the Walkingstick Golf Course Management Agreement dated December 1, 2008, especially Section 2 (b) thereof, the provisions of this Agreement shall control. 8 (f) In the event that the Walkingstick Golf Course Management Agreement between the parties dated December 1, 2008 is terminated by either party according to the terms of that agreement, this Agreement shall terminate on the same date SECTION 11 INSURANCE, INDEMNITY, AND RELEASE. (a) On In 2 shall, within ten (10) days after this Agreement is executed by both parties, and on the anniversary of such execution each year, obtain the following insurance coverages and provide to the City Certificates of Insurance showing that On In 2 has obtained the same. On In 2 shall maintain all such insurance coverages at all times during the term of this Agreement: (1) Workers' Compensation Insurance complying with statutory requirements in Colorado and in any other state or states where the work is performed. The Workers' Compensation Insurance policy shall contain an endorsement waiving subrogation against the City (2) Commercial General Liability ( "CGL ") Insurance issued to and covering the liability of On In 2, and naming the City of Pueblo and its officers and employees as additional insureds with respect to all work performed by On In 2 and its subcontractors and subcontractors under this Agreement, to be written on a Commercial General Liability policy form CG 00 01, with coverage limits of not less than Six Hundred Thousand and No /100 Dollars ($600,000 00) per person and occurrence for personal injury, including but not limited to death and bodily injury, and Six Hundred Thousand and No /100 Dollars ($600,000 00) per occurrence for property damage This CGL policy shall also provide coverage for contractual liability assumed by On In 2 under the provisions of this Agreement. (3) Comprehensive Automobile Liability Insurance effective dunng the period of the Agreement, covering the liability of On In 2, and naming the City of Pueblo and its officers and employees as additional insureds with limits of liability for injury to one person in any single occurrence of not less that $500,000 and for any injury to two or more persons in any single occurrence of not less than $500,000 This insurance shall include umnsured/undennsured motonst coverage and shall protect On In 2 from any and all claims ansing from liability for the use of motor vehicles and golf carts both on and off the Leased Premises and whether the motor vehicle or golf cart is owned, hired or used by On In 2 or its employees. (4) The coverage and limits enumerated in this insurance provision represent only the minimum insurance required by the Board, and the Contractor should rely on its expertise to obtain any additional insurance coverage needed for the Board and the Contractor in its performance hereunder this Agreement. (b) Every insurance policy and certificate of insurance specified in subsection (a) of this Section shall contain a provision requiring that Insuror shall notify the City in writing, in the manner provided in this Agreement, in the event that any such policy or coverage is modified, revoked, terminated, rescinded, or lapses 9 (c) On In 2 forever releases and waives any and all claims, known and unknown, presently existing or arising in the future, and any suit or action in law or equity against City and its officers, employees, agents and independent contractors ( "Released Parties ") in any court or tribunal, based on tort, statute, violation of civil rights, or any other legal theory, for any physical injury, psychological injury, death, or property damage or loss that On In 2 may suffer, related to or caused by the Released Parties which are in any way related to the Leased Premises, or any vehicle, object, thing, or activity in any building or facility owned, operated or controlled by the Released Parties. (d) On In 2 shall not file, pursue or prosecute any suit, action or proceeding, in law or in equity, in any court or tribunal, against the Released Parties, based on tort, statute, violation of civil rights, or any other legal theory, for any physical injury, psychological injury, death, or property damage or loss that On In 2 may suffer related to or caused by the Released Parties which are in any way related to the Leased Premises or any vehicle, object, thing, or activity in any building or facility owned, operated or controlled by the Released Parties. (e) On In 2 shall indemnify, defend and hold harmless the Released Parties against any liability for any damages, attorneys fees, and restitution that may be imposed by any court or tribunal in any suit, action or proceeding in law or equity filed by any person or entity based on tort, statute, violation of civil rights, or any other legal theory, for any physical injury, psychological injury, death, or property damage or loss that On In 2 may suffer, related to or caused by the Released Parties which are in any way related to the Leased Premises under this Agreement, or any vehicle, object, thing, or activity in any building or facility owned, operated or controlled by the Released Parties. SECTION 12. SUBCONTRACTS. (a) The parties acknowledge that On In 2 is the only party with whom City has a lease or contract under this Agreement. To the extent On In 2 performs any services under this Agreement through subcontractors, On In 2 shall contractually bind each of its subcontractors by subcontract to all of the terms of this Agreement which are for the benefit of City, and City shall be a third party beneficiary of those subcontracts (b) On In 2 shall indemnify and defend City from all claims and demands for payment for services provided by subcontractors of On In 2 SECTION 13. STATE- IMPOSED MANDATES PROHIBITING ILLEGAL ALIENS FROM PERFORMING WORK (a) At or prior to the time this Agreement is executed, On In 2 shall submit to the Purchasing Agent of City its certification that it does not knowingly employ or contract with an illegal alien who will perform work under this Agreement and that the On In 2 will participate in either the "E- Verify Program" created in Public Law 208, 104 Congress, as amended and expanded in Public Law 156, 108 Congress, as amended, that is administered by the United States Department of Homeland Security or the "Department Program" established pursuant to 10 §8- 17.5- 102(5)(c) C.R.S that is administered by the Colorado Department of Labor and Employment in order to confirm the employment eligibility of all employees who are newly hired for employment to perform work under this Agreement. (b) On In 2 shall not: (1) Knowingly employ or contract with an illegal alien to perform work under this Agreement; (2) Enter into an Agreement with a subcontractor that fails to certify to On In 2 that the subcontractor shall not knowingly employ or contract with an illegal alien to perform work under this Agreement. (c) The following state - imposed requirements apply to this Agreement: (1) On In 2 shall confirm the employment eligibility of all employees who are newly hired for employment to perform work under this Agreement through participation in either the E- Verify Program or Department Program. (2) On In 2 is prohibited from using either the E- Verify Program or Department Program procedures to undertake pre - employment screening of job applicants while this Agreement is being performed. (3) If On In 2 obtains actual knowledge that a subcontrator performing work under this Agreement knowingly employs or contracts with an illegal alien, On In 2 shall A. Notify the subcontractor and the City's Purchasing Agent within three (3) days that On In 2 has actual knowledge that the subcontractor is employing or contracting with an illegal alien, and B Terminate the subcontract with the subcontractor if within three (3) days of receiving the notice required pursuant to subparagraph (c)(III)A. above the subcontractor does not stop employing or contracting with the illegal alien, except that On In 2 shall not terminate the Agreement with the subcontractor if, during such three (3) days, the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an illegal alien. (4) On In 2 is required to comply with any reasonable request by the Colorado Department of Labor and Employment (hereinafter referred to as "CDLE ") made in the course of an investigation that CDLE is undertaking pursuant to its authority under §8 -17 5- 102(5), C.R.S (d) Violation of this Section by On In 2 shall constitute a breach of Agreement and grounds for termination. In the event of such termination, On In 2 shall be liable for City's 11 actual and consequential damages. (e) As used in this Section, the terms "subcontractor" and "subcontractor" shall mean any subcontractor or subcontractor of On In 2 rendering services within the scope of this Agreement. SECTION 14 NOTICES. (a) Any notice required or permitted by this Agreement shall be in wnting and shall be deemed to have been sufficiently given for all purposes if sent by certified mail or registered mail, postage and fees prepaid, addressed to the party to whom such notice is to be given at the following address or at such other address as may be subsequently furnished in writing to the other party If to City City Manager City of Pueblo 200 South Main Street Pueblo, CO 81003 With an additional copy to City Attorney City of Pueblo 503 N Main St. Suite 203 Pueblo, CO 81003 If to On In 2 Dave Lewis On In 2, Inc 4301 Walking Stick Boulevard Pueblo, CO 81001 (b) Such notices shall be deemed to have been given when deposited in the regular United States mail. SECTION 15. PERA LIABILITY On In 2 shall reimburse the City for the full amount of any employer contribution required to be paid by the City of Pueblo to the Public Employees' Retirement Association ( "PERA ") for salary or other compensation paid to a PERA retiree performing contracted services for the City under this Agreement. On In 2 shall fill out the questionnaire attached as Exhibit C and submit the completed form to City as part of the signed Agreement. 12 SECTION 16. MISCELLANEOUS. (a) Additional Documents. The Parties agree to execute any additional documents or take any additional action that may be necessary to carry out this Agreement. (b) Force Majeure. Any delays in or failure of performance by any party of its obligations under this Agreement shall be excused if such delays or failure are a result of acts of God, fires, floods, storms, lightning strikes, labor strikes, labor disputes, accidents, regulations or orders of civil or military authorities, shortages of labor or materials, or other causes, similar or dissimilar, which are beyond the control of such party (c) Binding Effect. This Agreement shall inure to the benefit of, and be binding upon, the Parties, their respective legal representatives, successors, and assigns, provided, however, that nothing in this paragraph shall be construed to permit the assignment of this Agreement except as otherwise expressly authorized herein. (d) Section Captions. The captions of the paragraphs are set forth only for the convenience and reference of the Parties and are not intended in any way to define, limit or describe the scope or intent of this Agreement. (e) Integrations, Severability, Amendment, and Counterparts. This Agreement represents the entire agreement between the Parties and supersedes all prior discussions and written agreements or understandings. This Agreement may be amended only by an instrument in writing signed by the Parties. If any provision of this Agreement is held invalid or unenforceable, no other provision shall be affected by such holding, and all of the remaining provisions of this Agreement shall continue in full force and effect. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one and the same agreement. (f) No Third Party Beneficiaries, No Waiver of Immunities. Nothing in this Agreement is intended, nor should it be construed, to create any rights, claims, or benefits or assume any liability for or on behalf of any third party, or to waive any immunities or limitations conferred under federal or state law, including but not limited to the Colorado Governmental Immunity Act, § 24 -10 -101 et seq , C.R.S (g) Waiver of Breach. A waiver by any party to this Agreement of the breach of any term or provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either party (h) Authority of Signers. Each person signing this Agreement on behalf of a party represents and warrants that he or she has the requisite power and authority to enter into, execute, and deliver this Agreement on behalf of such party and that this Agreement is a valid and legally binding obligation of such party enforceable against it in accordance with its terms. 13 (i) Attorney's Fees and Costs of Collections. In the event that it becomes necessary for the City to bring any action or proceeding to collect unpaid utilities, damages, janitorial fees, costs, or other sums due under this Agreement, to enforce any provision of this Agreement, to recover damages for Club's breach of this Agreement, or to seek specific performance of this Agreement, the City shall be entitled to collect its reasonable attorneys fees, costs of suit, and costs of collection as part of the judgment in such action or proceeding. (j) Relationship Nothing in this Agreement is intended to, or shall be deemed to constitute, a partnership or joint venture between the Parties, or to create any agency or partner relationship between the Parties. Neither Party shall hold itself out as a partner, joint venture, agent, or representative of the other under this Agreement. (k) Assignment. This Agreement shall not be assigned by On In 2 without the prior written consent of the City, which consent may be granted, denied, or conditioned in City's sole and absolute discretion. (1) Governing Law and Venue. This Agreement shall be governed by the laws of the State of Colorado Venue for any action arising under this Agreement or for the enforcement of this Agreement shall be in a state court with jurisdiction located in Pueblo County, Colorado (m) Certain Provisions Survive Expiration of Term and Termination. The provisions of this Agreement pertaining to indemnification, releases, covenants not to sue, providing draft and completed work product to the City, and liability, shall survive both the expiration of the term of this Agreement and termination of this Agreement, and such terms shall continue in effect for a period of five years following the termination of this Agreement and for such further time as it may take to completely and finally negotiate, settle, or litigate any claim or suit concerning the same. (n) No Multi - Fiscal Year Obligation on City This Agreement is expressly made subject to the limitations of the Colorado Constitution. Nothing herein shall constitute, nor deemed to constitute, the creation of a debt or multi -year fiscal obligation or an obligation of future appropriations by the City Council of Pueblo, contrary to Article X, § 20 Colorado Constitution or any other constitutional, statutory or charter debt limitation. Notwithstanding any other provision of this Agreement, with respect to any financial obligation of the City which may arise under this Agreement in any fiscal year after 2011, in the event the budget or other means of appropriations for any such year fails to provide funds in sufficient amounts to discharge such obligation, such failure shall not constitute a default or breach of this Agreement, including any sub - agreement, attachment, schedule, or exhibit thereto, by the City (o) Prior Agreements Between the Parties. In the event that any term of this Agreement conflicts with, or is construed to conflict with, any provision of any other contract, lease, or agreement between the City or any of its enterprises and On In 2, Inc , including but not limited to the Walkingstick Golf Course Management Agreement dated December 1, 2008, especially Section 2.(b) thereof, the provisions of this Agreement shall control. 14 CITY OF PUEBLO, ON IN 2, INC. A COLORADO A MUNICIPAL CORPORATION CORPORATION d By /! /�� Presi en oft e Cit Council : , • 4a! !li ent Attest: '� Attest: -S "L k-VD City Clerk Secretary APPROVED AS TO FORM. 771110 " City Attorney 15