Title
Adopt a Resolution to Approve an Appropriation of $134,049.82 from the Shoreline Enterprise Golf Course Fund (596) and Authorize the City Manager to Approve a $250,399.82 Disbursement for American Golf Corporation's Fiscal Year 2022 Incentive Management Fee for the Management of Monarch Bay Golf Club
Staffreport
COUNCIL PRIORITY
* Community & Business Development
SUMMARY AND RECOMMENDATIONS
American Golf Corporation (AGC) successfully completed the second year (July 1, 2021 to June 30, 2022) of management of Monarch Bay Golf Club for the City of San Leandro (City). The City's agreement with AGC states the City shall pay AGC 20% of the amount by which net operating income for a given operating year exceeds $750,000. Staff recommends that the City Council adopt a resolution to approve an appropriation of $134,049.82 from the Shoreline Enterprise Golf Course Fund (596) unrestricted fund balance, and to approve a $250,399.82 payment for AGC's Fiscal Year 2022 Incentive Management Fee for the management of Monarch Bay Golf Club.
BACKGROUND
On November 15, 1997, the City entered into a Lease Agreement with AGC for the operation and maintenance of Monarch Bay Golf Club, which includes the 9-hole, par 30, Marina golf course, the 18-hole, par 71, Tony Lema golf course, the Everett Rooney driving range and the 9,000 square foot clubhouse.
The general terms of the 1997 Lease Agreement were:
* 20-year term with two 5-year extensions, if mutually agreed to;
* Creation of a Golf Capital Improvement Project account;
* Minimum rent of $750,000.00 annually, or 75% of the average total annual rent paid for the previous three years, whichever is greater; and
* Escalating percentage rent from years 1-10, with the highest rate of 30% on golf revenues and 6% on clubhouse revenues.
With the City's intention to sell a portion of the 9-hole golf course to Cal Coast as part of the proposed Shoreline Development Project, this action opened the Lease Agreement between the ...
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