HomeMy WebLinkAbout09679
ORDINANCE NO. 9679
AN ORDINANCE APPROVING AMENDMENT NO. 5 TO THE
LEASE AND MANAGEMENT AGREEMENT BETWEEN THE
CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND ON
IN 2, INC., RELATING TO THE WALKING STICK GOLF
COURSE RESTAURANT, AND AUTHORIZING THE
MAYOR TO EXECUTE THE SAME
WHEREAS, the City of Pueblo and On In 2, Inc. entered into the Lease and
Management Agreement dated January 1, 2012 (“Lease”) under which the City granted
On In 2, Inc. the exclusive right to occupy, use, and operate the food and beverage
operations within the Restaurant and Lounge of the Walking Stick Municipal Golf Course
clubhouse; and
WHEREAS, City and On In 2, Inc. have extended the term of the Lease through
four separate amendments; and
WHEREAS, City and On In 2, Inc. desire to further amend the terms of said Lease;
NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1:
Amendment No. 5 to the Lease and Management Agreement between the City of
Pueblo, a Municipal Corporation, and On In 2, Inc., a Colorado Corporation, for Certain
Premises at Walking Stick Golf Course, attached hereto and having been approved as to
form by the City Attorney, is hereby approved.
SECTION 2:
The Mayor is hereby authorized to execute and deliver said Amendment on behalf
of the City, and the City Clerk shall affix the Seal of the City thereto and attest the same.
SECTION 3:
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Ordinance and the attached Lease Agreements to implement
the transactions, policies and procedures described herein.
SECTION 4:
This Ordinance shall become effective on the date of final action by the Mayor and
City Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on February 24, 2020.
Final adoption of Ordinance by City Council on March 9, 2020 .
President of City Council
Action by the Mayor:
☒ Approved on March 12, 2020 .
☐ Disapproved on based on the following objections:
Mayor
Action by City Council After Disapproval by the Mayor:
☐ Council did not act to override the Mayor's veto.
☐ Ordinance re-adopted on a vote of , on
☐ Council action on __________________failed to override the Mayor’s veto.
President of City Council
ATTEST
City Clerk
City Clerk’s Office Item # R-6
BACKGROUND PAPER FOR PROPOSED
ORDINANCE
COUNCIL MEETING DATE: February 24, 2020
TO: President Dennis E. Flores and Members of City Council
CC: Nicholas A. Gradisar, Mayor
VIA: Brenda Armijo, City Clerk
FROM: Steven Meier, Director of Parks and Recreation
SUBJECT: AN ORDINANCE APPROVING AMENDMENT NO. 5 TO THE LEASE AND
MANAGEMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A
MUNICIPAL CORPORATION, AND ON IN 2, INC., RELATING TO THE
WALKING STICK GOLF COURSE RESTAURANT, AND AUTHORIZING
THE MAYOR TO EXECUTE THE SAME
SUMMARY:
This Ordinance would approve Amendment No. 5 to the Walking Stick Golf Course Restaurant
Management Agreement to allow for the replacement of the existing walk-in freezer/cooler and
make needed renovations to the main bar area in lieu of monthly rent equal to the project costs.
PREVIOUS COUNCIL ACTION:
None.
BACKGROUND:
Early February 2020, Walking Stick Golf Course/Restaurant Contract Manager Dave Lewis
reported that a recent inspection by the Pueblo Department of Public Health & Environment
revealed that the subfloor of the existing walk-in freezer/cooler has rotted away and was no longer
acceptable. Mr. Lewis was informed that the unit would need to be removed and replaced or face
closure of the kitchen. Mr. Lewis reported that he has received quotes to replace the existing
walk-in freezer/cooler with numerous reach-in freezer/coolers, which once installed would
enhance the existing kitchen space and prove to be much more efficient. In addition to the
replacement of the walk-in freezer/cooler, Mr. Lewis has also received estimated costs to enhance
the main bar area in order to make the area more functional and efficient.
Mr. Lewis would purchase the new reach-in freezer/coolers for the kitchen and pay for the bar
area improvements and repairs in lieu of equal value rent credit. Once purchased and installed,
the new equipment would be owned by the City. There are no funds available through the 2020
Golf Course Enterprise operating budget to purchase this equipment. If approved, the existing
walk-in freezer/cooler replacement and the associated kitchen and bar renovations would take
place concurrently with the restaurant roof replacement scheduled to begin March 16, 2020.
FINANCIAL IMPLICATIONS:
Once purchased and installed by the Golf Course Manager, the City would own all new
equipment. The Golf Course Enterprise would not collect restaurant rent in lieu of equal value to
the equipment purchase and bar area renovation.
BOARD/COMMISSION RECOMMENDATION:
The Golf Course Enterprise Citizens’ Advisory Committee recommends approval of this
Ordinance.
STAKEHOLDER PROCESS:
None.
ALTERNATIVES:
Should Council choose not to approve the On In 2, Inc. proposal, the walk-in freezer/cooler will
not be replaced, and the restaurant will inevitably be closed due to failure of the Health
Department inspection.
RECOMMENDATION:
Approval of the Ordinance.
Attachments:
Ordinance
Proposal from On In 2, Inc.
Amendment No. 5 to the Walking Stick Golf Course Restaurant Management Agreement
Itemized Project Expense List
AMENDMENT NO. 5 TO 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
THIS AMENDMENT to the 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("Amendment"), is made and entered into as of the x'44- day of M rs R c ,
2020, by and between the City of Pueblo, a Municipal Corporation ("City") and On In 2, Inc., a
Colorado corporation ("Manager").
WHEREAS, City and Manager entered into the Lease and Management Agreement dated
January 1,2012 (the "Lease") under which the City granted Manager the exclusive right to occupy,
use, and operate the food and beverage operations within the Restaurant and Lounge of the
Walking Stick Municipal Golf Course clubhouse; and
WHEREAS, by an amendment dated December 31, 2012 between City and Manager
("Amendment No. 1"), the City and Manager agreed to an extension of the Lease to and until
December 31, 2014, subject to the terms and conditions of the Lease; and
WHEREAS, by an amendment dated December 31, 2014 between City and Manager
("Amendment No. 2"), the City and Manager agreed to an extension of the Lease to and until
December 31, 2016, subject to the terms and conditions of the Lease; and
WHEREAS, by an amendment dated December 31, 2016 between City and Manager
("Amendment No. 3"), the City and Manager agreed to an extension of the Lease to and until
December 31, 2018, subject to the terms and conditions of the Lease; and
WHEREAS, by an amendment dated January 1, 2019 between City and Manager
("Amendment No. 4"), the City and Manager agreed to extension and automatic renewals of the
Lease, subject to the terms and conditions of the Lease; and
WHEREAS, the walk-in freezer on the Leased Premises is failing and requires
replacement; and
WHEREAS, Manager is willing to replace the freezer and make improvements to the
Leased Premises, and City is willing to accept said replacement and improvements in lieu of rent,
subject to the terms and conditions of the Lease hereby modified.
NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set
forth herein, the parties agree as follows:
1. Manager shall replace the walk-in freezer on the Leased Premises with no less than
three(3)reach-in freezers of the kind and at the costs shown in the Itemized Project
List attached hereto as Exhibit A, and make such further improvements as detailed
in the Itemized Project List. Manager shall pay for all costs of purchase and
replacement, including all necessary installation. City shall not be liable for any
associated cost. All items purchased and installed by Manager shall be tagged with
City identification and shall become and remain the property of the City.
2. Manager shall upgrade and improve the bar area of the Leased Premises as detailed
in the Itemized Project List. This shall include replacement of the existing three
compartment sink with a single hand sink, purchase and installation of a bottle
display rack, purchase and installation of a draft beer cooler to replace the existing
taps, purchase of a new stainless-steel worktable, and necessary plumbing work.
Manager shall pay for all costs of purchase and replacement,including all necessary
installation. City shall not be liable for any associated cost. All items purchased and
installed by Manager shall be tagged with City identification and shall become and
remain the property of the City.
3. Manager shall make any additional repairs or improvements necessitated by the
installation of the reach-in freezers and improvements to the bar, including repairs
to the surrounding walls, flooring, water lines, and electrical connections. All
repairs and improvements shall be in keeping with the surrounding portion of the
premises, including paint colors and types of flooring, and shall be at the sole cost
of the Manager.
4. Manager shall provide City with copies of all invoices and receipts, evidencing
amounts due and payment thereof, within one week of their receipt. Manager shall
provide any other documentation requested by City immediately upon notice.
Failure by Manager to produce the requested documentation shall constitute a
material breach for which City may immediately upon notice terminate this
Amendment and charge rent for the Waived Months.
5. All work shall be completed by a certified contractor licensed within the State of
Colorado. All work shall be inspected by Pueblo Regional Building, the Pueblo
Department of Public Health and Environment, and any other required
governmental agencies. Manager shall obtain warranties for the installed equipment
and improvements and shall provide a copy of said warranties to City.
6. Only the improvements to the Leased Premises detailed herein have received
approval from City. All installed equipment and fixtures, and the additions,
changes, and improvements made to the Leased Premises, shall become the
property of the City upon their installation and completion. Manager shall maintain
and repair the equipment and improvements in accordance with the terms of the
Lease, including Sections (3)(a)(I) and (9)(c) thereof, and all warranties.
7. In consideration for Manager timely making the improvements and repairs detailed
herein, City shall waive the required rent under the Lease for the months of April
2020 through May 2021 ("Waived Months"). The amount of rent waived shall not
exceed $30,000.00. Waiver of rent shall not excuse Manager from payment of
2
applicable fees or taxes, nor affect the calculation of rent in future years. Should
Manager fail to make improvements and repairs in a timely manner, as determined
by City in its sole and absolute discretion, City may upon notice to Manager forego
any waiver and charge rent for the Waived Months. Said rent shall be immediately
due upon notice without offset or deduction.
8. Should the Lease or this Amendment be terminated by either party or expire prior
to completion of the Waived Months, City shall not be liable to Manager for any
amounts of waived rent or costs associated with the replacements and
improvements made to the Leased Premises.
9. Manager shall indemnify, defend and hold harmless the City and its officers,
employees, and agents 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, contract,
statute, violation of civil rights, or any other legal theory, for any physical injury,
psychological injury, death, property damage, or loss that may be related to or
caused by the installation of equipment or making of improvements by Manager or
its contractor to the Leased Premises, including claims of nonpayment or breach of
contract by Manager's contractor. All work to the Leased Premises shall be
adequately insured by Manager or Manager's contractor.
10. Except as expressly modified by this Amendment, the Lease shall remain in full
force and effect. Except as modified by this Amendment, any obligations to be
performed under the Lease by either party are not waived nor excused in any
manner but shall be performed in accordance with the terms and conditions of the
Lease as it existed prior to this Amendment.
IN WITNESS WHEREOF, Manager and City have executed this Amendment as of the
date first written above.
CITY OF PUEBLO,
ATTEST: a Municipal Corporation
Jc1h al m-t.10 By
City Clerk is olas A. Gr isar, Mayor
APPROVED AS TO FORM:
'a rm • k o►/
City Attorney
O ► ► a olorado corporation
B ll �
Dave Lewis, President
3
Exhibit A
Itemized Project List
4
Walk-in Freezer/Cooler Replacement Project
Itemized Estimated Project Cost
AJ's at Walking Stick Restaurant
As of 2/12/2020
WALK-IN FREEZER/COOLER(KITCHEN AREA)
1. Removal/demo and disposal of existing walk-in freezer $2,200.00
2. Removal of kitchen wall and door, patch drywall and paint, remove drywall $5,300.00
soffit above walk-in freezer/cooler, install drywall at ceiling and paint, cut out
existing paneling and wall for new reach-in cooler to bar area, install trim, install
new flooring at removed walk-in freezer/cooler location.
3. Danmarc to demo all electrical for existing walk-in freezer/cooler and rooftop $3,900.00
condensers, use existing 2 bar circuits to add additional receptacles where needed,
relocate 3 dimmers on back bar wall, add conduit and wiring for 3 circuits for new
freezer and coolers,add unistrut and receptacles for kitchen equipment that is plugged
into existing ceiling receptacles, run two 60-amp circuits for double oven.
4. Purchase one(1) Refrigerated Merchandiser @ $2,400.00 ea. $2,400.00
Atosa USA, Inc. Model No. MCF8709GR with freight $380.00
$2,780.00
5. Purchase one(1) Reach-in Freezer @ $3,500.00 ea. $3,500.00
Atosa USA, Inc. Model No. MBF8003 with freight $600.00
$4,100.00
6. Purchase two(2) Reach-in Refrigerators @ $3,100.00 ea. $6,200.00
Atosa USA, Inc. Model No. MBf8006GR with freight $1,040.00
$7,240.00
TOTAL KITCHEN AREA IMPROVEMENTS $25,520.00
BAR AREA
7. Misc. Back Bar Plumbing to move drain and water lines for Back Bar in bar area $600.00
8. Purchase and install one (1) Hand Sink @ 220.00 ea. $220.00
Krowne Metal Model No. HS-1
9. Purchase and install one (1) Bottle Display @ $381.00 ea. $381.00
Omican USA Model No.43479
10. Purchase and install one (1) Draft Beer Cooler @ $2,000.00 ea. $2,000.00
Atosa USA, Inc. Model No. MKC68GR with freight and installation $500.00
$2,500.00
11. Purchase one(1) Stainless Steel Work Table @ $117.00 ea. $117.00
Klinger's Trading Model No. BSG 2424 with freight $115.00
$232.00
TOTAL BAR AREA IMPROVEMENTS $3,933.00
TOTAL REQUEST $29,453.00
On In 2, Inc.
4301 WalkingstickBCvd. rPue6Co, CO 81001 719-553-1181
February 12, 2020
RE: Walk-in Cooler/Freezer at Walking Stick Golf Course Restaurant
The walk-in cooler/freezer in the kitchen at Walking Stick Golf Course needs to be replaced. It is the
original unit installed in 1991. The subfloor has rotted away leaving nothing to attach a new deck to. A
new deck was installed in 2011. In the last inspection by the health department, we were informed the
walk-in is no longer acceptable. The health department stated the problem needed to be remedied or
the restraurant would be shut down. The doors have lost their seal as well making the unit very
inefficient. I contacted a local vendor and was told the repairs would be close to the same amount to
install a new walk-in unit, approximately$30,000.
I am submitting the attached cost estimates to replace the existing walk-in freezer with freestanding
reach-in units. I also need to do some minor upgrades to the bar area in order to make it more
functional and efficient. Attached is a breakdown of those costs. I am proposing On In 2, Inc.
purchasing the equipment in trade for rent until the project is paid off and the equipment would be the
property of the golf enterprise.
It's important that we complete these upgrades to the freezer and bar areas in March when the roof is
being replaced and the restaurant is closed.This will prevent us from closing down for a two week
period a second time this spring.
Thank you for your consideration.
Cta)25‘*---°
David Lewis, PGA
President, On In 2, Inc.
Director of Golf
Walking Stick Golf Course