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HomeMy WebLinkAbout12684RESOLUTION NO. 12684 A RESOLUTION APPROVING AMENDMENT NO. 4 BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, 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. 4 dated May 28, 2013 between the City of Pueblo, a Municipal Corporation, and J.M.A. Nacho’s, Inc. (“Amendment No. 4”) relating 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. 4 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 approval and passage. INTRODUCED: May 28, 2013 BY: Ami Nawrocki Background Paper for Proposed RESOLUTION DATE: May 28, 2013 AGENDA ITEM # Q-3 DEPARTMENT: PARKS AND RECREATION DEPARTMENT STEVEN MEIER, INTERIM DIRECTOR TITLE A RESOLUTION APPROVING AMENDMENT NO. 4 BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND J.M.A. NACHOS, INC., RELATING TO THE CITY PARK MUNICIPAL GOLF COURSE RESTAURANT AND LOUNGE MANAGEMENT AGREEMENT, AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE THE SAME ISSUE Should City Council grant a contract term extension for the management and operation of the City Park Municipal (“Elmwood”) Golf Course Restaurant and Lounge to J.M.A. Nacho’s, Inc. of Pueblo, Colorado? RECOMMENDATION Approve the Resolution. BACKGROUND The Contractor responsible for the operation and management of the Elmwood Golf Course Restaurant and Lounge made a presentation to the Golf Course Advisory Committee requesting a five-year extension of the current agreement that expires December 31, 2015. The reasoning for the contract extension request was that the restaurant has several health code issues that needed to be addressed and the contractor was willing to finance the improvements vs. requesting the City to pay to bring the facility up to health code. The Contractor stated they were willing to make additional upgrades to the facility to improve the dining experience for its customers at a cost of $45,150. In return for the $45,150 investment, the Contractor has requested a five-year extension of their current agreement to terminate December 31, 2020. The Golf Course Advisory Committee voted unanimously to support the request stating the restaurant has been meeting the needs of the golfers and public. The committee felt the restaurant provides a quality product and that the $45,150 worth of improvements would make the dining experience more pleasurable for its customers. In an effort to keep the restaurant and lounge operating with as little distraction as possible, J.M.A. Nacho’s, Inc. will make the majority of the changes after the current golf season winds down with a deadline of December 15, 2013. J.M.A. Nacho’s, Inc. would be responsible for multiple improvements to the restaurant including replacing the floor of the bar to bring it up to health code, adding new carpet, replacing all refrigeration units, building a new wet bar, adding six new televisions for a sports bar effect, painting, and adding new sinks, drains, countertops and cabinets. J.M.A. Nacho’s, Inc. will verify all expenses via receipts. FINANCIAL IMPACT J.M.A. Nacho’s will continue to pay its existing rental fees as required. As set forth in the Management Agreement and Amendment No. 4, improvements shall remain the property of the City. AMENDMENT NO. 4 TO CITY PARK MUNICIPAL GOLF COURSE RESTAURANT AND LOUNGE MANAGEMENT AGREEMENT THIS AMENDMENT NO. 4 to City Park Municipal Golf Course Restaurant and Lounge Management Agreement ( "Amendment No. 4 ") is made and entered into as of the 28 day of May, 2013 between the City of Pueblo, a Municipal Corporation ( "City ") and J.M.A. Nacho's, Inc., a Colorado corporation ( "Manager "). WHEREAS, City and M.C.A. Nacho's, 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, by an Agreement dated July 12, 2010 between Manager and City ( "Amendment No. 2 "), the City and Manager agreed to an extension of the Management Agreement to and until December 31, 2015 upon the same terms and conditions as set forth in the Management Agreement, except for the deletion of Section 2 of the Management Agreement which provides for additional extensions of a term of five (5) years, and other certain modifications reflected in Amendment No. 2; and WHEREAS, by an Agreement dated August 24, 2011 between Manager and City ( "Amendment No. 3 "), the Management Agreement was modified in respect to the due date for rent payments as reflected in Amendment No. 3; and WHEREAS, the City and Manager wish to enter into this Amendment No. 4 to extend the term of the Management Agreement to and until December 31, 2020 and to require Manager to make capital improvements to the Leased Facilities. NOW, THEREFORE, in consideration of the foregoing and mutual terms and conditions set forth herein, the parties agree as follows: 1. The term of the Management Agreement is hereby extended to and until December 31, 2020, upon the same terms and conditions as set forth in the Management Agreement and subsequent Amendments, except as set forth herein. 2. Manager shall make capital improvements to the Leased Facilities in the amount and manner specified in the attached Explanation of Capital Improvements for Amendment No. 4 to City Park Municipal Golf Course Restaurant and Lounge Management Agreement on or before December 15, 2013. All such improvements shall remain the property of the City. 3. Except as expressly modified herein by this Amendment No. 4, 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. 4. IN WITNESS WHEREOF, Manager and City have executed this Amendment No. 4 as of the date first written above. CITY OF PUEBLO, ATTEST: a M o . .ion City erk rest. ent of City Council APPROVED AS TO FORM: J.M. . S C. / City Attorney By N.4 e: 46 7d !rc Title: President EXPLANATION OF CAPITAL IMPROVEMENTS FOR AMENDMENT NO. 4 TO CITY PARK MUNICIPAL GOLF COURSE RESTAURANT AND LOUNGE MANAGEMENT AGREEMENT 1. Manager will install new carpet tile in the restaurant (front and back). 2. Manager will take out all refrigeration units, reset and install four new lay down coolers. 3. Manager will replace the upright coolers behind the bar and install a new sink and draught beer dispensers. 4. Manager will demo existing bar and remove and replace the flooring/linoleum behind the bar. 5. Manager will tear out wet bar countertops and cabinets and install a new oak bar and cabinets. 6. Manager will disconnect all sinks, drain and supply lines and install new commercial floor drain and supply lines. 7. Manager will remove floor shelving and install shelves by the mirror behind the bar. 8. Manager will demo middle dry bar and replace with 3 high top tables and bar stools. 9. Manager will install 6 new additional televisions (sports bar effect). 10. Manager will paint back room, front dining and bar area. 11. Manager will install expansion box for additional electrical outlets and upgrade electrical outlets to handle all new equipment. 12. Manager will install LED Energy Saving Lights. 13. Manager will build new bar and Formica countertop for back bar area. 14. Manager will tear out linoleum, prep concrete floor, epoxy prime, and seal entire floor and install cove base behind bar area. 15. Manager will hauled off all demoed material to dump on a weekly basis. 16. Manager will replace damaged chairs with new chairs (approximately 12). 17. Manager will provide receipts for all work completed for an estimated cost of $45,150 per attached letter. 18. Manager will comply with any obligation to be performed by Manager under the Management Agreement. 19. Manager shall complete all work by December 15, 2013.