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2015 Sep 15 - CC PACKETAGENDA
EL SEGUNDO CITY COUNCIL
COUNCIL CHAMBERS - 350 Main Street
The City Council, with certain statutory exceptions, can only take action upon properly posted and listed
agenda items. Any writings or documents given to a majority of the City Council regarding any matter on
this agenda that the City received after issuing the agenda packet are available for public inspection in
the City Clerk's office during normal business hours. Such Documents may also be posted on the City's
website at www.elsegundo.org and additional copies will be available at the City Council meeting.
Unless otherwise noted in the Agenda, the Public can only comment on City - related business that is
within the jurisdiction of the City Council and /or items listed on the Agenda during the Public
Communications portions of the Meeting. Additionally, the Public can comment on any Public Hearing
item on the Agenda during the Public Hearing portion of such item. The time limit for comments is five (5)
minutes per person.
Before speaking to the City Council, please come to the podium and state: Your name and residence
and the organization you represent, if desired. Please respect the time limits.
Members of the Public may place items on the Agenda by submitting a Written Request to the City Clerk
or City Manager's Office at least six days prior to the City Council Meeting (by 2:00 p.m. the prior
Tuesday). The request must include a brief general description of the business to be transacted or
discussed at the meeting. Playing of video tapes or use of visual aids may be permitted during meetings if
they are submitted to the City Clerk two (2) working days prior to the meeting and they do not exceed five
(5) minutes in length.
In compliance with the Americans with Disabilities Act, if you need special assistance to
participate in this meeting, please contact City Clerk, 524 -2305. Notification 48 hours prior to the
meeting will enable the City to make reasonable arrangements to ensure accessibility to this
meeting.
REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL
TUESDAY, SEPTEMBER 15, 2015 — 5:00 PM
5:00 P.M. SESSION
CALL TO ORDER
ROLL CALL
PUBLIC COMMUNICATION — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total) Individuals who have received value of $50 or more to communicate
to the City Council on behalf of another, and employees speaking on behalf of their employer, must so
identify themselves prior to addressing the City Council. Failure to do so shall be a misdemeanor and
punishable by a fine of $250.
SPECIAL ORDER OF BUSINESS:
CLOSED SESSION:
The City Council may move into a closed session pursuant to applicable law, including
the Brown Act (Government Code Section §54960, et ifflj for the purposes of
conferring with the City's Real Property Negotiator, and /or conferring with the City
Attorney on potential and /or existing litigation; and /or discussing matters covered under
Government Code Section §54957 (Personnel); and /or conferring with the City's Labor
Negotiators; as follows:
CONFERENCE WITH LEGAL COUNSEL — EXISTING LITIGATION (Gov't Code
§54956.9(d)(1): -3- matter
1. City of El Segundo vs. City of Los Angeles, et.al. LASC Case No. BS094279
2. Penuelas vs. City of El Segundo, LASC Case No. BC523072
3. O'Leary v. City of El Segundo WCB /EAMS Nos. ADJ8702179 and 918053
CONFERENCE WITH LEGAL COUNSEL — ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to Government Code §54956.9(d)(2): -1-
matter.
Initiation of litigation pursuant to Government Code §54956.9 (d)(4): -5- matters.
DISCUSSION OF PERSONNEL MATTERS (Gov't Code §54957): -0- matter
APPOINTMENT OF PUBLIC EMPLOYEE (Gov't. Code § 54957): -0- matter
PUBLIC EMPLOYMENT (Gov't Code § 54957) -0- matter
2
2
CONFERENCE WITH CITY'S LABOR NEGOTIATOR (Gov't Code §54957.6): -8-
matters
1. Employee Organizations: Police Management Association; Police Officers
Association; Police Support Services Employees Association; Fire Fighters
Association; Supervisory and Professional Employees Association; City
Employees Association; Executive Management Group (Unrepresented Group);
Management/Confidential Group (Unrepresented Group)
Agency Designated Representative: Steve Filarsky and City Manager
CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Gov't Code §54956.8): -0-
matters
3
3
AGENDA
EL SEGUNDO CITY COUNCIL
COUNCIL CHAMBERS - 350 Main Street
The City Council, with certain statutory exceptions, can only take action upon properly posted and listed
agenda items. Any writings or documents given to a majority of the City Council regarding any matter on
this agenda that the City received after issuing the agenda packet, are available for public inspection in
the City Clerk's office during normal business hours. Such Documents may also be posted on the City's
website at www.elsegundo.org and additional copies will be available at the City Council meeting.
Unless otherwise noted in the Agenda, the Public can only comment on City - related business that is
within the jurisdiction of the City Council and /or items listed on the Agenda during the Public
Communications portions of the Meeting. Additionally, the Public can comment on any Public Hearing
item on the Agenda during the Public Hearing portion of such item. The time limit for comments is five (5)
minutes per person.
Before speaking to the City Council, please come to the podium and state: Your name and residence
and the organization you represent, if desired. Please respect the time limits.
Members of the Public may place items on the Agenda by submitting a Written Request to the City Clerk
or City Manager's Office at least six days prior to the City Council Meeting (by 2:00 p.m. the prior
Tuesday). The request must include a brief general description of the business to be transacted or
discussed at the meeting. Playing of video tapes or use of visual aids may be permitted during meetings if
they are submitted to the City Clerk two (2) working days prior to the meeting and they do not exceed five
(5) minutes in length.
In compliance with the Americans with Disabilities Act, if you need special assistance to
participate in this meeting, please contact City Clerk, 524 -2305. Notification 48 hours prior to the
meeting will enable the City to make reasonable arrangements to ensure accessibility to this
meeting.
REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL
TUESDAY, SEPTEMBER 15, 2015 - 7:00 P.M.
7:00 P.M. SESSION
CALL TO ORDER
INVOCATION — Pastor John Svendsen, First Baptist Church
PLEDGE OF ALLEGIANCE — Council Member Dugan
0
5
PRESENTATIONS
a) Presentation — Congressman Ted Lieu
b) Commendation — Holly Socrates and committee — El Segundo Art Walk
c) Presentation - Investment Portfolio Report — Treasury Department
ROLL CALL
PUBLIC COMMUNICATIONS — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total) Individuals who have received value of $50 or more to communicate
to the City Council on behalf of another, and employees speaking on behalf of their employer, must so
identify themselves prior to addressing the City Council. Failure to do so shall be a misdemeanor and
punishable by a fine of $250. While all comments are welcome, the Brown Act does not allow Council to
take action on any item not on the agenda. The Council will respond to comments after Public
Communications is closed.
CITY COUNCIL COMMENTS — (Related to Public Communications)
A. PROCEDURAL MOTIONS
Consideration of a motion to read all ordinances and resolutions on the
Agenda by title only.
Recommendation — Approval.
B. SPECIAL ORDERS OF BUSINESS (PUBLIC HEARING)
1. Consideration and possible action to open public hearing regarding the
presentation of the Fiscal Year 2015 -2016 Preliminary Budget, including
discussion and possible direction regarding all city revenues and
expenditures.
(Fiscal Impact: Total Revenues of $122,693,100; Total Expenditures of
$133,069,402; General Fund Revenues of $62,829,300, Expenditures of
$64.033.500)
Recommendation — 1) Open Public Hearing; 2) Staff presentation of the 2015-
2016 Preliminary Budget and Council direction to staff regarding all City
revenues and expenditures (includes potential discussion and direction relating
to all City Department revenues and expenditures); 3) Continue the Public
Hearing to September 28, 2015; 4) Schedule the budget adoption for the
September 28, 2015 meeting; 5) Alternatively, discuss and take other action
related to this item.
5
9
C. UNFINISHED BUSINESS
2. [CONTINUED ITEM #C1 FROM SEPTEMBER 1, 2015 CITY COUNCIL
MEETING] Rescission of Brown Act Commitment - In Accordance with
Government Code Section 54960.2 (e), consideration and possible action to
rescind the commitment made by the City Council on November 5, 2013,
not to hold further closed session meetings regarding real property
negotiations with regard to ESCenterCal, LLC's ( "CenterCal ") proposal to
enter into a Due Diligence and Ground Lease Agreement ( "Agreement ") to
lease the driving range portion of the Lakes Golf Course from the City for
the purpose of developing a Top Golf facility.
(Fiscal Impact: unknown — depends on whether legal proceedings are
commenced.)
Recommendation — 1) Consideration and possible action to rescind the
commitment made by the City Council on November 5, 2013, to not hold further
closed session meetings regarding real property negotiations with regard to
CenterCal's proposal to enter into an Agreement to lease the driving range
portion of the Lakes Golf Course from the City for the purpose of developing a
Top Golf facility; 2) Delay consideration of this item to a future date and give
notice of such delay to Ms. Geist in accordance with Government Code Section
54960.2; 3) Alternatively, discuss and take other action related to this item.
3. Consideration and possible action to approve a Due Diligence and Ground
Lease Agreement and Reimbursement Agreement with ES CenterCal LLC
("ES CenterCal ") to lease the driving range portion of The Lakes Golf
Course for the purpose of developing the TopGolf facility consisting of a
driving range, restaurant, bar and lounge and event facilities.
(Fiscal Impact: See attached report from ProForma Advisors)
Recommendation — 1) Consideration and possible action to approve and
authorize the Mayor to execute the Due Diligence and Ground Lease Agreement
subject to ES CenterCal entering into a reimbursement agreement with the City
(see item 2); 2) Consideration and possible action to authorize the City Manager
to enter into a Reimbursement Agreement that requires ES CenterCal to pay the
cost and fees associated with the various due diligence and land use entitlement
costs; 3) Consideration and possible action to authorize the City Manager to
execute a Professional Service Agreement for CEQA review services related to
the Due Diligence and Ground Lease Agreement approved as form by the City
Attorney in an amount not to exceed $257,500.00; 4) Alternatively, discuss and
take other action related to this item.
D. REPORTS OF COMMITTEES, COMMISSIONS AND BOARDS
no
7
E. CONSENT AGENDA
All items listed are to be adopted by one motion without discussion and passed unanimously. If a call for
discussion of an item is made, the item(s) will be considered individually under the next heading of
business.
4. Warrant Numbers 3007523 through 3007693 on Register No. 23 in the total
amount of $637,754.07 and Wire Transfers from 8/17/2015 through
8/3012015 in the total amount of $893,555.80.
Recommendation — Approve Warrant Demand Register and authorize staff to
release. Ratify Payroll and Employee Benefit checks; checks released early due
to contracts or agreement; emergency disbursements and /or adjustments; and
wire transfers.
5. Regular City Council Meeting Minutes of August 18, 2015, Special City
Council Meeting Minutes of August 31, 2015 and Regular City Council
Meetina Minutes of September 1, 2015.
Recommendation — Approval.
6. Consideration and possible action to receive and file this report regarding
emergency work to repair dwelling units at the Park Vista Senior Housing
Facility due to water intrusion without the need for bidding in accordance
with Public Contracts Code §§ 20168 and 22050 and El Segundo Municipal
Code ( "ESMC ") §§ 1 -7 -12 and 1 -7A -4.
(Fiscal Impact: $50,000.00)
Recommendation — 1) Receive and file this report regarding emergency work to
repair dwelling units at the Park Vista Senior Housing Facility due to water
intrusion without the need for bidding in accordance with Public Contracts Code
§§ 20168 and 22050 and El Segundo Municipal Code ( "ESMC ") §§ 1 -7 -12 and 1-
7A-4 2) Alternatively, discuss and take other action related to this item.
7
7. Consideration and possible action to 1) receive and file this report
regarding the City of El Segundo (City) entering into a license agreement
with Warner Bros. Pictures — New Line Productions, Inc. (Warner Bros.) to
film at City Hall, in accordance with El Segundo Municipal Code ( "ESMC ")
4 -11-4: ADDITIONAL AGREEMENTS section and as to form approved by the
City Attorney; and 2) authorize filming and ancillary activities to commence
beyond the municipal code's ordinance of 10:00 p.m. on Thursday, October
8, 2015 until 4:00 a.m. on Friday, October 9, 2015 and 10:00 p.m. on Friday,
October 9, 2015 until to 6:00 a.m. on Saturday, October 10, 2015.
_(Fiscal Impact: Approximate revenue of $82,736 plus personnel cost.)
Recommendation — 1) Receive and file report regarding the City entering into a
license agreement with Warner Bros.; 2) Authorize filming and ancillary activities
to commence beyond the municipal code's ordinance of 10:00 p.m. on Thursday,
October 8, 2015 until 4:00 a.m. on Friday, October 9, 2015 and 10:00 p.m. on
Friday, October 9, 2015 until to 6:00 a.m. on Saturday, October 10, 2015; 2)
Alternatively, discuss and take other action related to this item.
8. Consideration and possible action regarding a request from the El
Segundo Kiwanis Club to operate a Beer Garden on public right of way at
the 39th Annual Richmond Street Fair on Saturday, September 26, 2015
from 11:00 am — 5:00 pm.
Fiscal Impact: None
Recommendation — 1) Approve the request from the El Segundo Kiwanis Club to
operate a Beer Garden on public right of way at the 39th Annual Richmond
Street Fair on Saturday, September 26, 2015 from 11:00 am — 5:00 pm, subject
to compliance with all Alcohol Beverage Commission regulations and permits; 2)
Alternatively, discuss and take other action related to this item.
9. Consideration and possible action regarding a thirty (30) day provisional
appointment extension for the position of Interim Deputy City Clerk II in the
City Clerk's office.
(Fiscal Impact: None)
Recommendation — 1) Approve the thirty (30) day provisional appointment
extension for the position of Interim Deputy City Clerk II; 2) Alternatively, discuss
and take other action related to this item.
9
10. Consideration and possible action regarding approval of 1) a revised Class
Specification for the classification of Revenue Manager (formerly Business
Services Manager), and 2) examination plans for Revenue Manager,
Purchasing Agent, and License Permit Specialist 1 /II and 3) adoption of a
Resolution establishing the new classification title and salary for Revenue
Manager.
(Fiscal Impact: None) _
Recommendation — 1) Approve the proposed Class Specifications for Revenue
Manager; 2) Approve the proposed examinations plans; 3) Adopt the Resolution
establishing the salary and class title for Revenue Manager: 4) Alternatively,
discuss and take other action related to this item.
11. Consideration and possible action to authorize the City Manager, or
designee, to record the Notice of Completion accepting completion of work
for forty -two (42) homes related to Project RSI 14 -18 (the City's Residential
Sound Insulation Program's Group 61)
(Fiscal Impact: Final Contract Amount $797,676.82)
Recommendation — 1) Authorize the City Clerk to file the City Manager's, or
designee's, Notice of Completion in the County Recorder's Office; 2) Authorize
the City Manager, or designee, to close out Project No. RSI 14 -18; 3) Authorize
the RSI Program Manager to sign the Title 21 Compliance Certificates in
accordance with the requirements of the grant funding from Los Angeles World
Airports (LAWA) and mail originals to LAWA; 4) Alternatively, discuss and take
other action related to this item.
12. Consideration and possible action to authorize the City Manager, or
designee, to record the Notice of Completion accepting completion of work
for twenty -four (24) homes related to Project RSI 14 -23 (the City's
Residential Sound Insulation Program's Group 65)
(Fiscal Impact: Final Contract Amount $786,461.08)
Recommendation — 1) Authorize the City Clerk to file the City Manager's, or
designee's, Notice of Completion in the County Recorder's Office; 2) Authorize
the City Manager, or designee, to close out Project No. RSI 14 -23; 3) Authorize
the RSI Program Manager to sign the Title 21 Compliance Certificates in
accordance with the requirements of the grant funding from Los Angeles World
Airports (LAWA) and mail originals to LAWA; 4) Alternatively, discuss and take
other action related to this item.
N
10
13. Consideration and possible action regarding adoption of a Resolution
authorizing the City Manager, or designee, to accept the Work of Projects
14 -12 (the City's Residential Sound Insulation Program's Group 56), 14 -14
(the City's Residential Sound Insulation Program's Group 58), 14 -25 (the
City's Residential Sound Insulation Program's Group 67) and 14 -26 (the
City's Residential Sound Insulation Program's Group 68) as complete, and
determine the appropriate liquidated damages to be assessed, after staff
has determined that remaining tasks have been completed by the
respective contractors
(Fiscal Impact: Final Contract Amount of: $885,290, $649,488.02,
$939,885.44 and $455,397.84 respectively, less any liquidated damages
determined to be appropriate)
Recommendation — 1) Adopt a resolution delegating authority to the City
Manager to accept Work as complete, determine liquidated damages and record
notices of completion for Residential Sound Insulation (RSI) Projects 14 -12
(Group 56), 14 -14 (Group 58), 14 -25 (Group 67) and 14 -26 (Group 68); 2)
Authorize the RSI Program Manager to sign the Title 21 Compliance Certificates
in accordance with the requirements of the grant funding from Los Angeles World
Airports (LAWA) and mail originals to LAWA; 3) Alternatively, discuss and take
other action related to this item.
F. NEW BUSINESS
G. REPORTS — CITY MANAGER
H. REPORTS — CITY ATTORNEY
I. REPORTS — CITY CLERK
J. REPORTS — CITY TREASURER
K. REPORTS — CITY COUNCIL MEMBERS
Council Member Fellhauer —
Council Member Atkinson —
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Council Member Dugan -
Mayor Pro Tern Jacobson —
Mayor Fuentes —
PUBLIC COMMUNICATIONS — (Related t© City Business Oniy — 5 minute limit per
person, 30 minute limit total) Individuals who have receive value of $50 or more to communicate
to the City Council on behalf of another, and employees speaking on behalf of their employer, must so
identify themselves prior to addressing the City Council. Failure to do so shall be a misdemeanor and
punishable by a fine of $250. While all comments are welcome, the Brown Act does not allow Council to
take action on any item not on the agenda. The Council will respond to comments after Public
Communications is closed.
MEMORIALS —
CLOSED SESSION
The City Council may move into a closed session pursuant to applicable law, including the Brown Act
(Government Code Section §54960, et seq.) for the purposes of conferring with the City's Real Property
Negotiator; and /or conferring with the City Attorney on potential and /or existing litigation; and /or
discussing matters covered under Government Code Section §54957 (Personnel); and /or conferring with
the City's Labor Negotiators.
REPORT OF ACTION TAKEN IN CLOSED SESSION (if required)
ADJOURNMENT
POSTED:
DATE:
TIME:
NAME�1"
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12
Presentation
Congressman Ted Lieu
13
14
Commendation
Holly Socrates and committee
El Segundo Art Walk
15
6
EL SEGUNDO CITY COUNCIL
AGENDA ITEM STATEMENT
AGENDA DESCRIPTION:
Presentation of Investment Portfolio Report
(Fiscal Impact: None)
RECOMMENDED COUNCIL ACTION:
MEETING DATE: September 15, 2015
AGENDA HEADING: Presentation
1. Receive and File
2. Alternatively, discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
Investment Portfolio Report — June, 2015
FISCAL IMPACT: $ None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
PREPARED BY: Dino Marsocci, Deputy City Treasurer II
REVIEWED BY: Crista Binder, Treasurer
APPROVED BY: Greg Carpenter, City Mana er
BACKGROUND & DISCUSSION:
The Treasury Department presents the June, 2015 Investment Portfolio Report which provides a status
of Treasury Investment activities and related economic indicators.
This report will be created and submitted to Council on a quarterly basis. The report will also be posted
to the City's web site under the Treasury Department.
17
18
i
} L
Date: September 15, 2015
From: Office of the City Treasurer
To: El Segundo City Council
RE: Investment Portfolio Report — As of June 30, 2015
This report will serve as a summary for the City of El Segundo's Treasury Department investment reporting,
compliance, investment environment and future plans; as well as subsidiary schedules which will support the
Portfolio Summary and provide additional analysis of our investments.
Investment Summary:
The investments as of June 30, 2015 are as follows:
Security Type
Government
Corp. Bonds
CD's
Union Bank Trust
LAIF Immediate
LAI F - LAWA
LAW Subtotal
Total Invested
Trust Acct. Cash
Chase Bank -
Cash
Total Portfolio
Page 1 1
June Portfolio Summary
Market
Cost
Market value
% of
Total
15,766,451.50
15,753,147.45
20.11%
3,801,142.77
3, 770, 547.50
4.81%
8,318,000.00
8,342,962.50
10.65%
27,885,594.27
27,866,657.45
35.57%
$11,012,335.65
$11,012,335.65
14.05%
$18,909,868.08
$18,909,868.08
24.13%
$29,922,203.73
$29,922,203.73
38.19%
57,807,798.00 57,788,861.18 73.75%
250,423.81 250,423.81 0.32%
$20,313,948.37 20,313,948.37 25.93%
78,372,170.18 78,353,233.36 100.00%
19
The portfolio Breakdown by Short Term (< 1 year) and Long Term is:
* Benchmark value is the Interpolated Treasury Yield to the Portfolio's Avg. Weighted Maturity
Compliance:
It is the intention of the City Treasurer's office to ensure that our investments are in compliance with the maturity
time limits and percentage allocation limits with all of our investments. The City is currently in compliance as
demonstrated below:
Partial List of Allowable Investment Instruments for Local Agencies
Short Term
Long Term
Total
Portfolio Value Market
$ 33,519,152
$ 24,520,133
$ 58,039,285
Effective Yield
0.346%
1.090%
0.661%
Average Wtd. Maturity
15.00 Days
2.45 Years
1.06 Years
Benchmark Yield
0.02%
1.01%
0.28%
* Benchmark value is the Interpolated Treasury Yield to the Portfolio's Avg. Weighted Maturity
Compliance:
It is the intention of the City Treasurer's office to ensure that our investments are in compliance with the maturity
time limits and percentage allocation limits with all of our investments. The City is currently in compliance as
demonstrated below:
Partial List of Allowable Investment Instruments for Local Agencies
Investment
Maximum
Maximum
Minimum
City of El
In
Type
Maturity
Specified %
Quality
Segundo
Compliance
of Portfolio
Requirements
Investments
Y/N
Local Agency
Bonds
5 years
None
None
°
0.00 /°
Y
U. S Treasury
Obligations
5 years
None
None
°
0.00 /°
Y
US Agency
Obligations
5 years
None
None
°
20.11 /°
Y
Negotiable
Certificates of
5 years
30%
None
10.65%
Y
Deposit
Medium Term
Notes
5 years
30%
"A" Rating
4.81%
Y
Local Agency
Investment
N/A
None
None
38.2%
Y
Fund (LAIF)
Investment Environment:
The current investment environment for the types of investments we are allowed to purchase remains one of very
low returns, and uncertainty about future rate increases. Since security and liquidity are more important than rate of
return in our policy, we are limited to very low risk investments which therefore have a lower interest rate. The
Federal Reserve is looking to possibly raise rates in September of 2015, but the lower than desired inflation and
erratic international markets are giving pause to that possible increase. While some economists believe that now is
the time for an increase, others believe the increase will be pushed back to March 2016. While short -term rates have
not changed very much from March 311t to June 30th, the long -term rates have increased to slightly above the March
rates. This is the first quarter this year where the long -term rates have increased from the prior quarter.
Page 12
20
The graphs and charts below show some of the key interest rates on items we invest in. As rates are expected to rise
over the next few years, we want to time our investments to take advantage of the increases as they occur.
1.80
1.60
1.40
1.20
W
1.00
a
L
0.80
0
0.60
;r]C1i]
0.20
MCI
US Treasury Bonds Yield Curve as of 6/30/15
Imo 3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr
6/30/2015 --*-3/31/2015
Composite Bond Rates (as of 6/30/15)
u5 I reasury t3onds
Maturity
3 Month
Yield Yesterday
0.01 0
Last Week
Last Month
(0.01)
(0.01)
6 Month
0.11
0.09
0.04
0.06
0.60
0.92
2 Year
0.64
0.62
0.67
3 Year
1.00
0.97
1.06
5 Year
1.64
1.61
1.69
1.48
Municipal Bonds
Yield Yesterday Last Week Last Month
0.83 0.84 0.85 0.84
0.81 0.84 0.87 0.76
Maturity
2yr AA
2yr AAA
2yr A
1.25
1.20
1.05
1.22
5yr AAA
1.43
1.41
1.46
1.47
5yr AA
1.46
1.47
1.52
1.58
5yr A
1.67
1.67
1.68
1.73
Page 13
21
Corporate Bonds
_ Maturity
2yr AA
Yield
Yesterday
Last Week Last Month
1.07 0.90
1.05
1.05
2yr A
1.24
1.23
1.26
1.11
5yr AAA
2.00
1.98
2.03
1.76
1.95
5yr AA
2.22
2.19
2.27__
5yr A
2.47
2.43
2.50
2.24
Data provided by ValuBond.
Source: http: /l finance .vahoo.com /bonds /con-mposite bond rates
Cash Flow Analysis:
The chart below shows the historical cash flow for the last 12 months. We can see that the majority of our funds are
received in the second quarter of the fiscal year, January thru March, primarily due to Business License Renewals and
the annual Chevron Payment. We also receive Sales and UUT taxes during the first few months of the year as well.
Our investments will be purchased with the liquidity relative to our cash flow needs.
Rolling 12 Month Cash Flow Analysis
16;000,000
N 14,000,000
12,000,000
10,000,000
c
o 8,000,000
a
6,000,000
4,000,000
2,000,000
0
Total Receipts
. -Total Disbursements
N tip` tip` ti� tip` tip` tih tih ti� ti ti�
��• Qo �• `'C. J' C,' �• gyp' �• � y, • �,
�O
This chart shows the net change in Cash as related to the Cash Flow Analysis above. Some of the larger
disbursements occur in the third and fourth quarters of the fiscal year. During Q -3, March to June, we have
Page 14
22
a significant payment to CalPERS for our Other Post - Employment Benefits, and in Q -4, July- September, a
payment to ICRMA for our citywide insurance premiums, and a large infrastructure payment for roadwork
which was completed several years ago.
EA
2,000,000
W
(2,000,000)
(4,000,000)
(6,000,000)
Rolling 12 Month Net Change in Cash Net Change
in Cash
\tio ti°` ti� �ti� Jtio
Cps �o O� �a� <<O
Additional Economic Indicators:
Economic Projections from September Meeting
The Economic Indicators presented below are key items that the Federal Reserve will look at in deciding
whether or not to change interest rates going forward.
The GDP, or Gross Domestic Product, represents the market value of all goods and services produced by
the economy during the period measured, including personal consumption, government purchases, private
inventories, paid -in construction costs and the foreign trade balance (exports are added, imports are
subtracted). This is a key indicator the Federal Reserve will look at when deciding on interest rate changes.
The target level for GDP is in the 2.5% to 3.5% range.
The Unemployment Rate shows the percentage of the labor force that is unemployed but seeking work.
The target level for Unemployment is around 5.6 %.
The PCE Inflation is the Personal Consumption Expenditures rate of inflation. This index is essentially a
measure of goods and services targeted toward individuals and consumed by individuals. The long term
Page 15
23
inflation target is around 2% per year. Gore PCE Inflation excludes items such as food and energy due to
the nature of their potential price swings.
Unemployment
01114 03114 05114 07114 09114 11114 01115 03115 05115 07115
Month
SOUCCe. htto:fldata.bIs. ovlcgi- f�in3mevmost?hls
Page 16
24
2015
2016
2017
Longerrun
Change in real GDP
1.8 to 2.0
2.4 to 2.7
2.1 to 2.5
2.0 to 2.3
March projection
2.3 to 2.7
2.3 to 2.7
2.0 to 2.4
2.0 to 2.3
Unemployment rate
5.2 to 5.3
4.9 to 5.1
4.9 to 5.1
5.0 to 5.2
March projection
5.0 to 5.2
4.9 to 5.1
4.8 to 5.1
5.0 to 5.2
PCE inflation
0.6 to 0.8
1.6 to 1.9
1.9 to 2.0
2.0
March projection
0.6 to 0.8
1.7 to 1.9
1.9 to 2.0
2.0
Core PCE inflation3
1.3 to 1.4
1.6 to 1.9
1.9 to 2.0
March projection
1.3 to 1.4
1.5 to 1.9
1.8 to 2.0
Unemployment
01114 03114 05114 07114 09114 11114 01115 03115 05115 07115
Month
SOUCCe. htto:fldata.bIs. ovlcgi- f�in3mevmost?hls
Page 16
24
2.5
2.0
1.5
1.0
0.5
(0.5)
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
(0.5)
(1.0)
Inflation Rates by Month
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average Inflation Rates by Year
�► 2014
—0-2015
L1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: httn:// www. usinflationcalculator .com /infiation /current- inflation- rates(
Page 17
25
355,000 --
350,000
345,000
340,000
335,000
330,000
Retail Trade & Food Services, ex Auto, US Total
Seasonally Adjusted Sales (Millions of $)
Jan Feb Mar Apr May Jun Jul _ Aug Sep Oct Nov Dec
Source: United States Census Bureau - http: / /www.census.gov /retail /index.html
2014
2015
Investment Strategy:
It is the City and City Treasurer's policy to invest funds in accordance with the Investment Policy and to meet all legal
requirements regarding the safeguarding of funds.
As a part of the City's migration to a new banking structure, we have maintained a cash balance in order to offset our
bank fees, and are now looking at our cash flow needs in order to determine which investments will maximize return
while providing the proper level of liquidity.
The Liquidity Schedule provides an overview of when our current investments are due to mature. We will plan our
future investments to coordinate with these maturities in order to ensure a liquidity balance to our portfolio. The
Investments by Security Type schedule provides an additional breakdown of how our funds are presently allocated.
The Portfolio Summary for the month is included as an attachment to this report.
Page 18
26
Additional Notes:
The City has funds of $208,707.24 which belong to the El Segundo Senior Citizens Housing Development Corporation
and are a part of our LAIF balance. There are also LAWA RSI (Los Angeles World Airports Residential Sound
Insulation) funds of $18,909,868.08 included in the City's LAIF balances. The applicable interest for these accounts is
accrued monthly and posted quarterly in the same manner as the regular City LAIF interest posting.
Page 19
27
City of El Segundo
Investment Advisory Committee
Liquidity Schedule
As of: June 30, 2015
$25,000,000.00
$20,000,000.00
$15,000,000.00
$10,000,000.00
$5,000,000.00
$0.00
Page 1 10
Q; 6N �0
P�
Ay ny Ay A
Cumulative
% of
% of Total
Total
Cumulative
Item
Availability
Market Value
Balances
Assets
Assets
Cash in Bank
Chase
Immediate
$20,313,948.37
Union Bank - Trust Account
Immediate
$250,423.81
Cash in Bank - Total
$20,564,372.18
$20,564,372.18
26.25%
26.25%
L.A.I.F. (State of California)
LAIF Immediate
$11,012,335.65
$31,576,707.83
40.30%
14.05%
Cash Immediate
$31,576,707.83
L.A.I.F. - LAWA (Restricted)
LAIF Immediate
$18,909,868.08
$50,486,575.91
64.43%
24.13%
Portfolio Investments:
< 30 Days
$849,418.24
$51,335,994.15
65.52%
1.08%
31 to 90 Days
$248,215.76
$51,584,209.91
65.84%
0.32%
91 to 180 Days
$1,247,540.01
$52,831,749.92
67.43%
1.59%
181 to 365 Days
$1,001,350.00
$53,833,099.92
68.71%
1.28%
1 to 2 Years
$6,875,800.02
$60,708,899.94
77.48%
8.78%
2 to 3 Years
$12,152,360.92
$72,861,260.86
92.99%
15.51%
3 to 4 Years
$4,501,045.00
$77,362,305.86
98.74%
5.74%
4 to 5 Years
$990,927.50
$78,353,233.36
100.00%
1.26%
Subtotal
$46,776,525.53
Grand Total
$78,353,233.36
100.00%
Investment Portfolio
subtotal
$58,039,284.99
Investments by Maturity Date Market...
$25,000,000.00
$20,000,000.00
$15,000,000.00
$10,000,000.00
$5,000,000.00
$0.00
Page 1 10
Q; 6N �0
P�
10 I'll
AV
ti ��
Ay ny Ay A
10 I'll
AV
ti ��
City of El Segundo
Investment Advisory Committee
Investments by Security
Type
As of: June 30, 2015
Cumulative
% of
% of Total
Total
Cumulative
Item
Availability
Market Value
Balances
Assets
Assets
Cash in Bank
Chase
Immediate
$20,313,948.37
Union Bank -Trust Account
Immediate
$250,423.81
Cash in Bank - Total
$20,564,372.18
$20,564,372.18
26.25%
26.25%
L.A.I.F. (State of California)
LAIF Immediate
$11,012,335.65
$31,576,707.83
40.30%
14.05%
Cash Immediate
$31,576,707.83
L.A.I. F. - LAWA (Restricted)
LAIF Immediate
$18,909,868.08
$50,486,575.91
64.43%
24.13%
Portfolio Investments:
CD's
$8,342,962.50
$58,829,538.41
75.08%
10.65%
Gov't Obligations
$15,753,147.45
$74,582,685.86
95.19%
20.11%
Bonds
$3,770,547.50
$78,353,233.36
100.00%
4.81%
Page 1 11
Subtotal $46,776,525.53
Grand Total $78,353,233.36 100.00%
Investment Portfolio
subtotal $58,039,284.99
Investments by Security Type
$3,770,547.50
Cash Immediate
$15,753.147.45 520,564,372.13
■ LAIF Immediate
n LAIF - LAWA
■CD's
,342,96150
511,012,335 E5 ■ Gov't Obligations
Bonds
$18,909,868.08
29
30
EL SEGUNDO CITY COUNCIL MEETING DATE: September 15, 2015
AGENDA STATEMENT AGENDA HEADING: Special Orders of Business
AGENDA DESCRIPTION:
Consideration and possible action to open public hearing regarding the presentation of the Fiscal
Year 2015 -2016 Preliminary Budget, including discussion and possible direction regarding all
city revenues and expenditures. (Fiscal Impact: Total Revenues of $122,693,100; Total
Expenditures of $133,069,402; General Fund Revenues of $62,829,300, Expenditures of
$64,033,500
RECOMMENDED COUNCIL ACTION:
(1) Open Public Hearing.
(2) Staff presentation of the 2015 -2016 Preliminary Budget and Council direction to staff
regarding all City revenues and expenditures (includes potential discussion and direction
relating to all City Department revenues and expenditures).
(3) Continue the Public Hearing to September 28, 2015;
(4) Schedule the budget adoption for the September 28, 2015 meeting;
(5) Alternatively discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
1. FY2015 -2016 Preliminary Department Budget
FISCAL IMPACT: Total Revenues of $122,693,100; Total Expenditures of $133,069,402;
General Fund Revenues of $62,829,300, Expenditures of $64,033,500
Amount Budgeted: $
Additional Appropriation:
Account Number(s):
ORIGINATED BY: Misty V. Cheng, Interim Director of Finance A+�
REVIEWED BY: Misty V. Cheng, Interim Direct r ofFinance �VV
APPROVED BY: Greg Carpenter, City Manager
I:1My k "C" K�ll��I 17 \� 1 1 Y�llj.Xy [�1►E�
FY 2€115 -2016 Budget
The City started the budget process by holding a Strategic Planning Session on August 3, 2015.
During this session, staff presented assumptions and estimates that would be used to develop the
FY 2015 -2016 Operating Budget, and identified additional critical items for funding
consideration. Based on decisions at this planning session, an additional Strategic Planning
Session was held on August 31, 2015. At this meeting, Council prioritized critical needs and
identified items to be included in the FY 2015 -2016 Preliminary Budget. On September 15th
2015, staff will present the FY 2015 -2016 Preliminary budget for revenues and expenditures,
along with the assumptions and additional positions and items as approved by Council from prior
meetings.
Summary of Assumptions used to prepare FY 2015 -2016 General Fund Budget:
General Fund Revenues
General Fund projected revenues for FY2014 -2015 are expected to be very close to what was
originally adopted for fiscal year 2014 -2015, with the projected year end $21,000 more than the
adopted budget. The FY 2015 -16 revenues are projected to be $2,165,336 or 3% higher than the
yearend estimate for fiscal year 2014 -2015. The price of natural gas, which impacts three of the
City's core tax revenues, dropped 35% in July 2015 compared to the same period last year.
Property tax revenues are expected to increase by $343,000 due to an all -time high in property
values. Sales tax revenues are expected to increase by $1.9 million due increased consumer
spending and the opening of The Point and Elevon shopping centers. Transient Occupancy Tax
revenues are expected to increase by $650,000 due to a four new /remodeled hotels coming into
the City.
Listed below is a summary of the revenue assumptions as compared to yearend estimates:
• Business License Tax — $263,900 net increase over yearend estimates. The business
license tax rates will be adjusted by a 2.4% increase due to annual 10 year rolling average
CPI;
• Property Tax — $78,950 or 1.1% increase over yearend estimates primarily due to the
home values in the City being at an all -time high;
• Transient Occupancy Tax (TOT) — $909,400 increase due to four new /remodeled hotels
expected to be completed and operating during FY 2015 -2016.
• Sales Tax — $1.9 million or 17.4 % increase from 2015 estimated yearend. This increase is
primarily due improved consumer spending, the opening of The Point and Elevon
shopping centers, and the City receiving 100% of its share of the sales tax revenues
instead of 75% due to the expiration of the Sales Tax Triple Flip program;
• Charges for Services — $157,350 or 3.4% increase from yearend estimates. It is relatively
flat, with a slight increase in planning and building safety fees and paramedic transport
fees;
• Interest on Investments — ($37,600) or 22.7% decrease from yearend estimates primarily
due to low Federal Reserve Rate;
• Utility Users' Tax — $307,000 or 3.7% decrease from yearend estimates; this category
includes cogenerated electric, electric, gas, telephone, and water utility users' tax. The
decrease is primarily due to a decrease in gas utility users' tax because the price of
natural gas dropped 35% ;
• All other revenues remain flat or have very little growth compared to yearend estimates.
Below is a summary of General Fund Revenues for FY 2015 -2016:
Table I — Fiscal Year 2015 -2016 General Fund Revenues:
Revenue Source
FY2012 -2013
Actuals
FY2013-
2014Actuals
FY2014 -2015
Adopted
Budget
Projected
Year End
FY2014 -2015
FY 2015 -2016
Adopted
Budget - First
Hearin
Business License
$10,082,800
$10,965,901
$11,118,000
$10,854,100
$11,167,300
Sales & Use Tax
6,939,296
8,290,913
7,942,500
8,074,400
10,691,700
Sales Tax in Lieu
2,651,923
2,006,796
2,758,000
2,907,652
2,209,300
Property Tax
6,332,163
6,758,032
6,356,600
6,621,400
6,700,350
Transient Occupancy (TOT)
5,156,080
5,964,403
5,459,200
5,200,000
6,109,400
Charges for Services
4,700,952
4,876,433
4,720,500
4,619,400
4,776,750
Electric Utility Tax
3,203,205
3,098,923
3,050,000
3,250,000
3,250,000
Franchise Tax
2,328,235
3,098,408
3,075,000
3,671,300
2,450,000
Cogeneration Electric
1,234,854
1,583,047
1,690,000
1,230,000
1,290,000
License & Permits
1,541,224
1,759,602
1,720,000
1,829,500
1,671,400
Gas Utility Tax
1,765,855
3,215,199
3,000,000
2,800,000
2,400,000
Interest on Investments/Rentals
151,803
549,688
267,000
545,800
533,200
Other Revenues
9,921.329
10.483.531
9,085,900
9,060,412
9,529,900
Total General Fund Revenues
Net of Transfers
Transfers In
4,541,111
200,000
400,000
0
50,000
Total General Fund Revenues
$60,550,830
$62,850,876
$60,642,700
$60,663,964
$62,829,300
General Fund Expenditures
Fiscal Year 2015 -2016 General Fund budgeted expenditures, including transfers out, show a
slight decrease of $9,600 over last year's adopted budget. FY2015 -2016 budgeted expenditures
also show a decrease of $1.2 million from the revised budget, inclusive of encumbrance
carryovers, continuing appropriations and budget amendments. Although, the fiscal year
General Fund budgeted expenditures are slightly less than the prior year adopted budget, there
are increased costs to health insurance premiums of $150,000, general liability premium increase
of $195,000, salaries and benefits for new hires /salary increases of $497,000, accrued
vacation/sick leave pay for upcoming retirements /resignations of $320,000 and contract services
for NPDES regulation program of $250,000. With respect to retirement costs, Ca1PERS
employer rates increased from 16.072% to 17.730% for FY2015 -2016 and from 43.330% to
46.595% for FY2015 -2016 for the miscellaneous and the safety group, respectively.
In addition to the base operating budget, a few critical positions and items in an amount slightly
over $1 million are included that were approved by City Council at the August 31, 2015
Strategic Planning Session.
Below is a list of the critical positions and items that were added to the General Fund base
expenditure budget:
Table 2 — Fiscal Year 201 5 -2016 Critical Positions and Items Approved.
Critical Positions and Items Approved:
Amount:
Police
3 Police Officers requested, 2 approved
$ 293,876
1 Promotion Officer to Sergeant
38,100
IS Professional & technical
50,000
1 Developer
115,000
Fire
Restore Senior Management Analyst
5,600
2 ECG Monitors
39,000
City Clerk
Part-time employee
32,500
Finance
License Permit Specialist II
38,200
Administrative Specialist
22,200
Public Works
3 Street Maintenance Workers
224,900
Operating Supplies
10,000
Small Tools & Equipment
500
Laundry & Cleaning
2,000
Recreation and Parks
Part-time Personnel
29,000
Part-time Personnel for Cable
7,600
Reclass Administrative Specialist
4,000
Upgrade audio equipment and web -cam
4,000
Tree Maintenance Contract
75,000
Centennial & Rose Parade
25,000
Repairs & Maintenance
30,000
$1,046,467
Transfers to other funds decreased $3.9 million mostly due to a one time transfer in FY2014-
2015 of $3.2 million to the Capital Improvements Fund and $350,000 to the Facilities
Maintenance Fund. In FY2015 -2016 only a $200,000 transfer will be made to the Equipment
Replacement Fund to help replenish the reserve of the fund and a transfer of $500,000 to the
Economic Uncertainty Fund (a reduction of $250,000 from the previously adopted Fund Balance
Policy).
The General Fund Reserve will be at the 19% level, based on FY2015 -2016 revenues, net of
transfers, in the amount of $12 million.
Below is a summary of General Fund Expenditures for FY 2015 -2016:
Table 3 — Fiscal Year 201 5 -2016 General Pund L'xPenditures
Table 4 — Fiscal Year 201 5 -2016 General Fund Reserve Calculatian
FUND BALANCE RESERVE CALCULATION:
FY 2012-
2013
Actuals
FY 2013-
2014
Actuals
FY 2014 -
2015
Adopted
Budget
Revised Budget
FY2014 -2015
Proposed
FY 2015 -
2016
Elected Officials
857,409
918,874
921,000
930,991
1,040,200
Administrative Support
3,529,306
3,826,338
3,975,900
4,494,020
4,268,900
Police
15,697,117
17,353,540
17,999,600
18,131,382
18,854,600
Fire
13,003,639
14,088,674
14,160,100
14,200,364
14,533,000
Communications Center
1,778,872
2,264,020
2,191,000
2,327,237
2,563,400
Planning /Building Safety
2,284,732
2,264,896
2,685,100
2,808,969
2,755,100
Public Works
5,179,535
5,552,780
5,925,600
6,132,654
6,911,300
Recreation and Parks
4,792,049
5,024,930
5,082,200
5,100,440
5,311,700
Library
2,079,375
2,162,469
2,188,400
2,199,114
2,008,900
Non department
3,657,518
4,577,597
4,337,800
4,345,850
5,086,400
Transfers to Other Funds
521,897
1,554,617
4,576,400
4,589,500
700,000
Total General Fund
Expenditures
53,381,449
59,588,735
64,043,100
65,260,521
64,033,500
Table 4 — Fiscal Year 201 5 -2016 General Fund Reserve Calculatian
FUND BALANCE RESERVE CALCULATION:
Estimated Fund Balance Reserves, 9/30/15:
$14,351,768
Less: Designations
(1,100,000)
13,251,768
FY 15/16 Revenues
62,829,260
FY 15/16 Expenditures
64,033,467
(1,204,207)
FY 15/16 Operating Deficit
Projected Undesignated Fund Balance
@ 9/30/16
12,047,561
19% reserve requirement
12,033,359
$ 14,202
Excess reserve
Calculation of Reserve Requirement
FY 15/16 Revenues
62,779,260
FY 15/16 Expenditures
63,333,467
19% reserve requirement
12,033,359
(greater of revenues or expenditures, net of
transfers multiplies by 19 %)
l
Chart 1— Fiscal Year 2015 -2016 General Fund Expenditures by Department:
TRANSFERS OUT
$700,000
1%
NONDEPARTMENT
$5,086,400
8%
LIBRARY,
$2,008,900
3%
RECREATION AND
PARKS $5,311,700
8%
PUBLIC WORK
56,911,300
11'3
Other Funds
ELECTED
OFFICIALS
$1,040,200
2%
ADMINISTRATIVE
$4,268,900
7%
PLANNING &
BUILDING SAFETY
$2,755,100
4%
Internal Service Funds
IC SAFETY
,951,000
56%
The Internal Service Funds, which include Equipment Replacement, General Liability, and
Workers' Compensation, are used to accumulate and allocate costs internally among the City's
various functions.
The Equipment Replacement Fund will charge 100% of the annual equipment replacement
charge to all funds, or $1.7 million. In addition, $200,000 will be transferred from the General
Fund to replenish amounts underfunded in previous years due to the General Fund's previous
budget shortfalls. Total expenditures of $5,406,800 are the FY 2015 -2016 estimated costs to
purchase items that are scheduled for replacement. Actual purchases will be reviewed based on
equipment conditions. There is enough accumulated fund balance to fund for these items.
The General Liability and Workers' Compensation Funds have been funded at the actuarially
determined expected rate. The City obtained the latest actuarial valuations of the City's General
Liability and Workers' Compensation actuarial valuation in May 2015. This resulted in a total
worker's compensation charge to other funds of $1,128,597.
Chart 2 — Internal Service Funds Budget — Fiscal Year 201 5 -2016
$5,406,800
Equipment
Replacement Fund
Enterprise Funds
REVENUES M EXPENDITURES
$1,713,800
$1,291,400
General Liability Fund
$2,357,800
$1,128,600
Workers'
Compensation Fund
The Enterprise Funds include Water and Sewer Funds. These funds also include an additional
Capital Outlay amount of $3,235,000 and $5,375,000, respectively, which is funded through
reserves for Capital Projects within the funds.
The Golf Course Fund has debt service payments to the General Fund and Equipment
Replacement Fund. However, if the full amount of the outstanding amount payable to these
funds exceeds the fund balance in the Golf Course Fund, then repayment cannot be made in that
year. This fund also includes $60,000 in additional Capital Outlay for equipment purchases.
Collectively, these are all separate, funds where the City charges a fee to customers to cover the
costs of services it provides.
Below is a budget summary of the three Enterprise Funds:
Table 4 — Enterprise Funds Budget — Fiscal Year 201 5 -2016
Water Wastewater Golf Course
Revenues $ 29,276,400 $ 3,515,400 $ 1,934,200
Operating Expenditures $ 25,915,902 $ 3,170,800 $ 2,087,600
$ 3,360,498
Capital Outlay $ 3,235,000
Total Fund Expenditures $ 29,150,902
$ 344,600
$ 5,375,000
$ 8,545,800
$ (153,400)
$ 60,000
$ 2,147,600
Below is an illustration of our three Internal Service Fund budgets for FY 2015 -2016.
Below is an illustration of our three Internal Service Fund budgets for FY 2015 -2016
Chart 3 — Enterprise Funds Budget — Fiscal Year 201 5 -2016
$29,150,902
Water
Summary
M REVENUES ■ EXPENDITURES
$8,545,800
$3,515.4
Wastewater
51,934,200 $2,147,600
Golf Course
General Fund — Overall, General Fund Revenues are growing at a rate of 3% compared to the
2014 -2015 yearend estimate. The City is exercising caution as demonstrated by increasing the
unreserved, undesignated balance within the General Fund from 18% to 20% over the previous
year and the next two years. In FY2015 -2016 the General Fund reserve will be at the 19% level
in the amount of $12 million.
FY 2015 -2016 General Fund budgeted expenditures, including transfers out, show a slight
decrease of $9,600 over last year's adopted budget. However, it showed a decrease of $1.2
million from the revised budget, inclusive of encumbrance carryovers, continuing appropriations
and budget amendments. Overall, the General Fund expenditures remain relatively flat
compared to the prior year's adopted budget.
In addition to the base operating budget, a few critical positions and items in an amount slightly
over $1 million were approved by City Council at the August 31, 2015 Strategic Planning
Session and included in the overall expenditures amount.
Although, the General Fund budgeted expenditures exceeded the General Fund budgeted
revenues by $1.2 million, the budget was able to be balanced using the available fund balance
and a reduction of the transfer out to the Economic Uncertainty Fund from $750,000 to $500,000
per Council direction. Furthermore, the General Fund Reserve will be able to maintain its
required reserve at the 19% level for FY2015 -2016 in the amount of $12 million.
The next step in the FY 2015 -2016 budget process is the second public hearing and final budget
adoption on September 28, 2015
m
THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
IS
CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1ST
EL SEGUNDO CITY COUNCIL MEETING DATE: June 16, 2015
AGENDA ITEM STATEMENT AGENDA HEADING: Unfinished Business
AGENDA DESCRIPTION:
Rescission of Brown Act Commitment - In Accordance with Government Code Section 54960.2 (e),
consideration and possible action to rescind the commitment made by the City Council on November 5,
2013, not to hold further closed session meetings regarding real property negotiations with regard to
ESCenterCal, LLC's ( "CenterCal ") proposal to enter into a Due Diligence and Ground Lease
Agreement ( "Agreement ") to lease the driving range portion of the Lakes Golf Course from the City for
the purpose of developing a Top Golf facility. (Fiscal Impact: unknown — depends on whether legal
proceedings are commenced.)
RECOMMENDED COUNCIL ACTION:
1. Consideration and possible action to rescind the commitment made by the City Council on
November 5, 2013, to not hold further closed session meetings regarding real property
negotiations with regard to CenterCal's proposal to enter into an Agreement to lease the driving
range portion of the Lakes Golf Course from the City for the purpose of developing a Top Golf
facility; or
2. Delay consideration of this item to a future date and give notice of such delay to Ms. Geist in
accordance with Government Code Section 54960.2; or
3. Alternatively, discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
November 5, 2013, Staff Reports (with attachments); and,
Letter of May 8, 2015 to Ms. Geist
FISCAL IMPACT: $
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
PREPARED 13Y: Mark D. Hensley, City Attorney
APPROVED BY: Greg Carpenter, City Manager
BACKGROUND & DISCUSSION:
This item is being brought back for Council consideration based upon direction given by
Council at its May 5, 2015, regular City Council meeting (Staff Report Attached). At that
time, staff provided background information to Council including the fact that the City
Council had approved the Agreement on November 5, 2013 and subsequently approved minor
amendments to the Agreement as well as a reimbursement agreement on March 18, 2014.
Staff reported that Center Cal had not signed and returned the Agreement and that the Council
then subsequently withdrew the option for CenterCal to execute the Agreement. CenterCal on
April 28, 2015 sent a new communication to the City proposing new terms. On May 5, 2015,
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the City Council directed the City Attorney's office to notify Ms. Deborah Geist that the
Council would consider rescinding its 2013 commitment not to hold closed sessions regarding
this matter. At its May 5th meeting, the Council noted that it would need to consider whether a
closed session was needed to discuss CenterCal's new terms and conditions.
Council was reminded that Ms. Geist would need to be provided 30 days written notice that
the Council will be holding a public session meeting to consider rescinding its commitment to
not have further closed session discussions regarding the Agreement (Staff Report Attached).
The Council would then need to meet thirty or more days after the notice date and consider a
public agenda item which, if passed by a majority of the members of the City Council, would
rescind the prior commitment made by Council and the Council could then schedule a closed
session meeting to discuss different lease payments or payment terms. If the Council does
rescind the letter it would restore Ms. Geist's rights (as well as any other interested party's
right, including the District Attorney's), if any, to commence a legal action for alleged Brown
Act violations.
On May 8, 2015, a letter was transmitted to Ms. Geist (with a copy to the District Attorney's
Office as required by the Brown Act), informing her that the Council on June 16, 2015 would
be meeting to discuss the potential of rescinding it prior action regarding closed session
negotiations relating to the Top Golf Agreement.
The November 5, 2013, staff report and attachments provide the details regarding Ms. Geist's
allegations of Brown Act violations and the City's response to same. It did not appear that
there were any Brown Act violations, but in order to avoid unnecessary legal actions,
particularly since the City understood the negotiations were completed, the Council approved
staff s recommendation to issue the commitment that it would not hold further closed session
meetings regarding the Agreement. However, the action referenced, and the Brown Act
provides that the Council may rescind such a commitment at a public meeting
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EL SEGUNDO CITY COUNCIL MEETING DATE: November 5, 2013
AGENDA STATEMENT AGENDA HEADING: New Business
AGENDA DESCRIPTION:
Consideration and possible action to authorize the Mayor to execute a letter in response to a
"cease and desist" letters received on October 1, 2013 and October 17, 2013 from Debra Geist
alleging various violations of the Ralph M. Brown Act relating to City's negotiations to lease out
a portion of "the Lakes" golf course. (Fiscal Impact: None)
RECOMMENDED COUNCIL ACTION:
1. Receive and file the letters dated October 1, 2013 and October 15, 2013 alleging
various violations of the Ralph M. Brown Act;
2. Authorize the Mayor to execute the draft response letter;
3. Take such additional, related, action that may be desirable.
ATTACHED SUPPORTING DOCUMENTS:
1. Letter dated October 15, 2013 (received October 17, 2013);
2. Draft response letter.
FISCAL IMPACT: N/A
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Mark D. Hensley, City A tt o i n+. y
Karl H. Berger, Assistant City
BACKGROUND AND DISCUSSION:
On October 1, 2013 and October 17, 2013, the City Clerk's office received letters alleging that
the City Council violated various provisions of the Ralph M. Brown Act when it considered the
future of "the Lakes" municipal golf course (see attached Exhibit A — the letters are identical
except for with respect to the dates set forth on the letters). These are referred to as the "October
2013 Letters."
As the City Council is aware — and is quite public — the City was approached by two private
companies in 2012 regarding a proposal for the Lakes municipal golf course. In general, the
proposal is for Centercal, LLC to make various improvements to the golf course and the driving
range; for Top Golf to operate the golf course; and for the City to receive a significant increase in
rent over a period of potentially fifty years, The details of this deal is set forth in the due
diligence and lease agreement that is being considered by the City Council as a separate agenda
item for November 5, 2013.
Since first being approached by these companies, the City Council undertook a number of
actions to not only negotiate potential deal points to implement a proposal (as set forth in the 1
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draft lease agreement), but also to solicit public input and dialogue regarding the desirability of
undertaking such an arrangement. Such activities include, without limitation;
Public meetings by the City Council and Golf Course Subcommittee in August 2012
regarding the Lakes including a Powerpoint presentation regarding the proposal and
direction from the City Council to seek public input.
Meetings in September 2012 between City staff and various community organizations
including the El Segundo Chamber of Commerce and Kiwanis Club.
Multiple meetings before the City's Recreation and Parks Corrimission in September and
December 2012.
O A presentation to the El Segundo Planning Commission on October 11, 2012.
Posting the Powerpoint® presentation, draft schematics, and other matters on the City's
website (�.•1_�i`s�trinl��, cis •��'ItC��;�'`�.11Jil.'s1•ttt�+� �,.,rw�t' ?tic•r�. til l) I I •I�Jc'� l ttl.�l I } 1 }.
Posting all disclosable public communications regarding the Lakes matter on the City's
website { rrrw+ ay. clscgtirr} dc�. crrt; Icic��tslcityc :lcrkiciccurrtct�ts,asp).
Moreover, these proposals were widely publicized in the media and on various social networks
(e.g., Facebook), And, as a result, there Was significant public participation in the process
including regular public comment during City Council meetings.
The October 2013 Letters do not acknowledge the City Council's effoi t to solicit public input
regarding the Lakes or the widespread public interest in the subject. Rather, the October 2013
Letters allege that the City Council violated the Brown Act when it discussed the matter in
closed session on several occasions in 2012 and 2013.
As you are aware, the California Legislature enacted the Ralph M. Brown Act (Government
Code' §§ 54950 - 54963) in 1953. The Legislature adopted the Brown Act to ensure that
deliberations and actions of local public agencies are performed at meetings open to the public
and free from any veil of secrecy. To further this overall goal, the Brown Act requires that the
City's meetings be properly noticed and generally open to the public.
There are certain exceptions to the general requirement that all meetings be held in public. These
are referred to as "closed session" matters. One of these is the ability for the City Council to
meet
"with its negotiator prior to the purchase, sale, exchange, or lease of real
property by or for the local agency to grant authority to its negotiator
regarding the price and terms of payment for the purchase, sale,
exchange, or lease.s3
1 Further references to an unspecified code are to the Government Code,
2 § 54950,
5 § 54956,8 (emphasis added).
2 407
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The October 2013 Letters makes various complaints regarding the City Council exercising its
ability to discuss price and terms of leasing the Lakes during closed session. In summary, these
allegations are; (1) failure to appoint real property negotiators in open session as required by the
Brown Act; (2) incorrect agenda descriptions as to closed session items; and (3) discussing items
in closed session beyond the scope of what the Brown Act allows.
The October 2013 Letters is the first step needed to file a lawsuit against the City for alleged
violations of the Brown Act. In sum, the law' requires a persons seeking to enforce the Brown
Act to first send a "cease and desist" letter to a public agency within nine months of the alleged
violations before filing a lawsuit. Upon receiving a "cease and desist" letter, the public agency
has thirty dayss within which to consider the matter and, if it chooses, respond with "with an
unconditional commitment to cease, desist from, and not repeat the past action that is alleged to
violate" the Brown Act.6 Such a response must be approved by the legislative body in open
session and be substantially in a form required by law.7 Tf the legislative body opts to tundertake
such a response, it removes the ability of a person to file a lawsuit.$
As noted more completely in the draft letter attached to this staff report, several of the alleged
violations occurred more than nine months ago and are therefore time - barred from litigation.
Moreover, all of the closed session agenda descriptions correctly identified the City's real
property negotiators and described what was being discussed. Most importantly, however, the
City Council has not yet committed to taking any action — the draft lease agreement properly
contemplated during closed session is a separate agenda item for this meeting, And, as set forth
in that draft agreement, there are multiple matters that must be resolved — in open session —
before the City (or any other party) is obligated to undertake any real property transaction.
However, in order to avoid potentially unnecessary and costly litigation, it is recommended that
the City Council authorize the Mayor to execute the draft letter attached to this staff report
(Exhibit B). As may be read, the draft letter constitutes the City Council's "unconditional
commitment" not to undertake the actions identified by the October 2013 Letters. Under the
Brown Act it is specifically recognized that sending this type of response is not an admission of
guilt and it cannot be used against the City in any future legal proceedings, Given that this
matter, as described above, has been a very public process and since the draft agreement is on the
agenda for public consideration by the Council, it seems very prudent to simply agree, without
admitting fault or that such occurred, to not undertake any further alleged action that violates the
Brown Act. This will ensure that the City avoids the need to defend against a lawsuit alleging
that the City Council violated the Brown Act.
4 § 54960.2.
i The City Council may also provide such a response after thirty days, and even during litigation, which would cause
a lawsuit to be dismissed, However, the court could under such circumstances award attorneys fees and costs (§
54960.2(b)).
6 § 54960.2(c).
7 Id.
8 Id,
3 408
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Exhibit A
October 1, 2013 and October 15, 2013 Letters
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FECENED lb- /- 13
CITY CLERK'S OFFICE I
Glty Manager's OR&
October 1, 2013
OCT 12013
Via Personal Delivery
i
Hon. BIII Fisher, Mayor RECEIVED
Mr. Carl Jacobson, Mayor Pro Tom
Ms. Suzanne Fuentes
Mr. Dave Atkinson
Me. Marie Fellheuer
City Council
City of Ell Segundo
350 Main Street,
El Segundo, CA 90245
Re: Demand to Cease and Desist from Practices Violating the Ralph M. Brown Act
Mr. Fisher and Members of the El Segundo City Council:
This notice Is to caution you that the El Segundo City Council (the "ESCC ") has violated the Ralph M. Brown
Act (California Government Code Sec. 54050 st.seq.), which mandates open and publicized meetings of
local government at which the public may be present and comment on relevant matters. ESCC Is abusing
the "safe harbor" provisions of Government Code Section 54955.8, which allow a limited exception to the
general mandate of open meetings only "to grant authority to He negotiator regarding the price and terms of
payment for... (a real property lease)." The specific violations are as follows:
1. Conducting Closed Sessions On The Proposed Lease of The Lakes Prior to a Public Hearing
On three @operate occasions, June 19, 2012, June 25, 2012 and June 17, 2012, the ESCC conducted
closed sessions for the stated purpose of discussions with Greg Carpenter, City Manager, concerning The
Lakes, a municipal golf course owned by the City of FI Segundo. Allhutigh the stated pmpu <e of such
meetings, as noted on ttis relevant Agendas, was "discussion wllh Real Properly Negotiator", ESCC had not
yet conducted a public session as required by Government Cade Section 54858.8 as follows;
However, prior to the closed session, the legislative body of the local agency shall hold an open
and public session In which it Identifies the real property... which the negotlatlons may concern and
the person or persons with whom Its negotiator may negotiate.
Additionally, the relevant Agendas fall to Identify the persons or entities Mr. Carpenter would negotiate with.
These meetings patently fall outside the "safe harbor" and are Illegal.
2. Conducting Closed Sessions with Top Golf on Related Issues
On two separate occasions, February 5, 2013, February 18, 2013, the ESCC conducted closed sessions
with Mr. Carpenter relating to Top Golf and Centercal Properties as "negotiating parties." However, the
proposed lease Is with Centercal only. The City of El Segundo will have no contractual privily with Top Golf,
who will sublet from Centercal to operate a golf entertainment business at The lakes. ESCC was not
negotiating a real property lease with Top Golf but rather consulting with Top Got( regarding lease Issues.
The Brown Act mandates that ESCC conduct any such consultations In public meeting because the "safe
harbor" provision pertains only to the proposed lessee on price and terms of payment, Consultations with
other parlles on "rc;Iryled issues" or "background Issues" aria outside the scope of the exception. See,
gtgR ro y ^ City Councii of San Dicpp, 90 Cal. App. 4' 904 (2002).
3. Conducting Serial Closed Sessions on Matters Outside Payment and Terms of Payment
On eight separate occasions, February 6, 2013, February 19, 2013, May 7, 2013, August 6, 2013, August
20, 2013, September 3, 2013, September 17, 2013, and October 1, 2013, the ESCC conducted closed
sessions with Mr. Carpenter relating to the lease with Centercal Properties as the negotiating party. The
number of closed sessions alone Is excessive and proves that the ESCC has trespassed beyond the "safe
harbor" of price and terms of payment. This situation Is analogous to Shapiro v. Col,nell of San siege,
410
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86 Cal. App. 0' 804 (2002), whore the Court of Appeal held that the San ❑fego Council had Vlolated the
Brown Act In Including discussion of a variety of "slated Issues" In a series of closed session held to oonsult
with its agent In real property negotletlons conciiming a large redevelopment project to create a nevo
baseball park. The Fourth District faulted the San Diego Council's expansive Interpretation of the `safe
harbor' as follows:
We believe the City Council's view that no detalled disclosures should be required before closed
sessions may be held to discuss a eomplox overall reel estate based transaction is Inconsistent
with the express statutory requirements ofsectlon 64946.6
The Fourth District stressed that the "safe harbor" must be narrowly and not expansively construed as
follows:
If we were to accept the City% interpretation of the Brown Act In this respect, live would be turning
the Brawls Act on Its head, by narrowly construing Ilia open mooting requirements and broadly
conslruing the statutory exceptions to it. That would be Incorrect. We do not denigrate 1110
Important consldoratlon of confidentiality in negotiations. Howovor, wo believe that in tats case, the
City Council is attempting to use the Brown Act as a shield against public disclosure of Its
consideration of Important publlo policy Issues, of the type that are Insvltabiy raised whenever such
a largo public redevelopment real estate based transaclion Is contemplated, The Important policy
consideration of the Brown Act, however, must he enforced, even where particular transncllons do
not fit neatly within Its statutory categories.
Id, at 924. Here, as in Shapira ESCC Is using closed sessions to shield Important development
considerations from public view The sheer number of closed sessions, in contrast to vto single open
session on the proposed lease, proves. that ESCC Is shirking Its duty to conduct open sessions on matters of
public interest that wilt substantially impact The hakes future. Indeed, ESCC lies disclosed relatively nothing
in open sessions regarding Its relationship with Contercal, Contorcal's rolatlonshlp with Top Golf, proposed
physical changes to the Half course, proposed physical changes to the driving range, price Increases, public
programs, changes to the liquor license and more. Members of the public are demanding to be hoard on
these Issues but have been relegated to bystanders In a closed process zealously guarded by ESCC
against its puhllc responsibilities under the Brawn Act.
4. Substantively Misleading Agenda Description
On August 21, 2012, the ESCC conducted a single public session on the proposed lease of The Lakes
which generally describes the Agenda as a direction to staff as follows:
Consideration and possible actlon to direct staff to take steps necessary to Seek Input trawl various
City Cornnhltieos regarding a potential agreement with Centorcal Proporties, LLC for enhancing the
driving range and dining facllllles at The Lakes Golf Course which would be operated by Top Golf.
Tiro agreement would be negatlated by the City Manager and City Attorney and presented for
revlaw and potonllal approval by tha Clty Council at a future date.
This description Is inaccurate because It states that the ESCC was to dlrsct staff regarding future actlon
when, In fact, the ESCC contemplated And took Immediate action to direct Mr, Carpenter to enter into
negotiations with Contercal regarding a lease of The Lakes. While the Brown Act requirements for agenda
!tarn descriptions aro quite lonlent, this Itom just falls to describe (lie action taken by ESCC to immediately
enter Into a proposed lease. It's Just wrong. The slgnlficrance of the misdescription is magnified by the fact
that this was the only open discussion on the proposed lease and therefore, it was Imperative that the ESCC
accurately convey notice to the public of what ESCC Intended to do. Without such clear notice, those
members of the public who might wall have attended the meeting to address a proposed decision
Immediately to proceed with leas* negotiations were misted into believing that there would be adequate
opportunities to do so later, at ineatings of either the "Clty Committees," the City Council or both. The ESCC
failed Its duties under the Brown Act and should be enjoined from proceeding further absent a material cure.
46
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The M oSequndo City (council has thirty dey0 from meelpt of thle letter to provide me with an unconditional
commlbnent to cease, den let fraln, and not repeat the prectices noted above, compliant with Government
Code 6ectlon 640602, subdMolon (c). Ito (allure to do so wUt entitle me to file an actlon for declaratory
judgment and Irdunctive rellef and for attorney's Bros and costa,
Respeoftiy,
0'V1 �j l'i
Debra V. Geist
(810) 489 7751
e te8elet@verizon.net
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October 15, 2013
Via U.S. Mall
Tracy Sherrill Weaver
Clly Clerk
City of El Segundo
350 Main SUM,
El Segundo, CA 90245
Hon. Bill Fisher, Mayor
Mr, Carl Jacobson, Mayor Pro Tom
Me. Suzanne Fuentes
Mr. Dave Atkinson
Ms, Merle Fellhauer
CITY �!1710E
Re: Demand to Cease and Desist from Practices Violating the Ralph M. Brown Act
Mr. f=isher and Members of the El Segundo City Council:
This notice Is to caution you that the El Segundo City Council (the "ESCC') has vlolated the Ralph M, Brown
Ad (California Government Code Sec. 54050 st.seq.), which mandates open and pubilolzed meetings of
local government at which the public may be present and comment on relevant matters. ESCC Is abusing
the "eelb harbor" provisions of Government Code Section 34956.8, which allow a tlmtfed exceptlon to the
general mandate of open meetings only "to grant authority to Its negotiator regarding the price and terms of
payment for.., (a real property fosse)," The apecift violations are as follows:
1. Conducting Closed Sessions On The Proposed Lease of The Lakes Prior to a Public Hearing
On throe separate occasions, June 19, 2012, June 26, 2012 and July 17, 2012, the ESCC conducted dosed
sessions for the stated purpose of discussions with Greg Carpenter, City Manager, concerning The lakes, a
muntctpal golf courve owned by the Clty of El Segundo. Although the stated purpose of such meetings, vs
noted on the relevant Agendas, was "discussion with Real Property Negottatoe', ESCC had not yet
conducted a public session as required by Government Coda Section 54956.8 ae follows:
However, prior to the closed aaaslon, the leglslstive body of the local agency shell Bold an open
and public seeslon In wtrlch It Identifies the real proporty —which the negottelions may concern and
the person or persons with whom Its negotiator may negotiate.
Additionally, the relevant Agendas fall to Identify the persons or entitles Mr. Carpenter would negotiate with.
These meetings patently fall outside the "safe harbor" and are Illegal.
2. Conducting Closed Sessions with Top Golf on Related Issues
On two separate occasions, February 5, 2013, February 19, 2013, the ESCC conducted dosed sessions
with Mr. Carpenter relating to Top Golf and Centercal Properties as "negotiating parties" However, the
proposed lease is wtlh Centercel only. The City of El Segundo will have no contractual privily with Top Golf,
who will sublet from Centemal to operate a golf entertainment busfness at The Lakes. ESCC was not
negotlaling a real property lease with Top Golf but rather consulting with Top Gaff regarding lease Issues.
The Brown Act mandates that ESCC conduct any such consuitatlons In public meeting because the "safe
harbor provlslon pertains only to the proposed lassee on price and terms of payment, Consultations with
other pnrllos on - related issues" or "background Issues` are outside the scope of the exception. See,
Shapiro v. Cily Ccwncil of San Dlequ, 96 Cal. App. e[104(2002).
3. Conducting Serial Closed Sessions on Matters Outside Payment and Terms of Payment
On eight separate oocsslon% February 5, 2013, February 19, 2013, May 7, 2013, August 6, 2013, August
20, 2013, September 3, 2013, September 17, 2013, and October 1, 2013, the ESCC conducted closed
413
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sessions with Mr, Carpenter relating to the loses with Centercal Properties as the negotiating party. The
number of closed sessions alone Is excessive and proves that true ESCC has trespassed beyond the "safe
harbor' of price and terms of payment. -fhis situation is nnologous to Shapira v. g1ty. CeunclE of Sam No q,
98 Cat, App. 4 "' 904 (2002), where the Court of Appeal hold that the Son Diego Council had violated the
Brown Act in Including discussion of a variety of "related Issues" in a series of closed session held to consult
with He agent In real property negotiations concaming a large redevelopment project to create a now
baseball park. The Fourth iDinblct faulted the San Dlego Council's expensive Interpretation of the "safe
harbor" as follows:
We believe the City Council's view that no detailed disclosures should be required before closed
sessions may be held to discuss a complex overall real estate based transaction Is Inconsistent
with the express statutory requirements of section 54048.8
The Fourth District stressed that the "safe harbor' must be narrowly and not expansively construed as
bllows:
If we were to accept the City's Interpretat}on of the Brown Act In this respect, we would be turning
the Brown Act on Its head, by narrowly construing the open meeting requirements and broadly
construing the statutory exceptions to it. That would be Incorrect. We do not dentgrnto the
Important consideration of confidentiality In negotiations. However, we believe that In this case, the
City Council is attempting to use the Brown Act as a shield against public disclosure of he
consideration of Important public policy Issues, of the type that are inevitably reload whenever such
a large public redevelopment real estate based transaction Is contemplated. Tho important policy
condderabon of the drown Act, however, must be enforced, avon where partlealar transactions do
not fit neatly within Its statutory categories.
Id. at 924. Here, as in Shapiro, ESCC is using closed sessions to shield Important development
conalderaVons from public view. The shear number of closed sessions, In contrast to the single open
session on the proposed lease, proves that ESCC la shirking Its duty to conduct open sesslona on matters of
public Interest that will substantially Impact The Lakes future. Indeed, ESCC has disclosed relatively nothing
In open sessions regarding its relationship with Centercal, Centercal's relationship with Top Golf, proposed
physical changes to the golf course, proposed physical changes to the d[Ning range, price Increseea, public
programs, changes to the Ilquor license and more. Members of the public are demanding to be heard on
these Issues but have been relegated to bystanders In a closed process zealously guarded by ESCC
against He public responsibilities under the Brown Act,
4. Substantively Misleading Agenda Description
On August 21, 2012, the ESCC conducted a single public session on the proposed lease of The Lakes
which generally describes the Agenda as a direction to staff as follows:
Consideration and possible action to direct staff to take steps necessary to seek input from various
City Committees regarding a potential agreement with Centercal Properties, LLC for enhancing the
driving range and dlntng faclllties at The Lakes Golf Course whleh would be operated by Top Golf.
The agreement would be nagotlated by the City Manager and City Attorney and presented for
review and potential approval by the City Council at a future date.
This description is Inaccurate because it states that the ESCC was to direct staff regarding future action
when, In fact, the ESCC contemplated and took Immediate action to direct Mr. Carpenter to enter Into
negotiations with Centercal regarding a lease of The Lakes. While the Brown Act requirements for agenda
Item descripllons aro quite lenient, this Item just fails to describe the action taken by ESCC to tmmedlately
enter Into a proposed lease. it's Just wrong. The slanlftcance of the misdescriptlon Is magnified by the fact
that thle was the only open discussion on the proposed reaso and therefore, It was imperative that the ESCC
accurately convey notice to thin public of what ESCC Intended to do. Without such clear notice, those
members of the public who might well have attended the meeting to address a proposed decision
Immediately to proceed with lease negotiations were mislod into believing that there would be adequate
opportunities to do so later, at meetings of either the "Cily Committees,` the City Council or both, The ESCC
failed Its duties under the Brown Act and should be enjoined from proceeding further absent a material cure,
49
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The 8 Segundo My Council han thkty days from recelpt of this Istter to provide me with in unwndMonsl
oommitmentto goes, doWei fhrm, and not repeat the practloea noted above. compliant Wi h Government
Cods $&Won 6WO.2, subdtvielon (C). He failure to do so will entille ms to file an Button for declaratory
Judgment and in]unctiva rellef end for sttomWs f"s and ooen:
Roe Ily,
Debra Y, Geist
(310)496 7761
olt "Iftsvedson.no
50
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Exhibit B
Draft Response Letter
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(( off, lr�`
M
417
October 30, 2013
Elected Offldala;
8111 PIshor,
Mayor
Debra V. Geist
Cart Jacobson,
Mayor Pro7im
121 16th St
Sumnna fFUentw,
CatkWoon, amper
Manhattan Beach, CA 90266
Dave AGrNeon
Counell Memb°r
Mare Pellhauer,
Council
Re: Letter dated October 15, 2013
alver,amasr
Tracy weever,
Clfy Clark
Dear Ms. Geist:
Appointed Officials:
Greg Carpenter,
Thank you for your letter dated October 15, 2013 (received by the City on
City
Mork D,HPralmy�r
October 17, 2013). As you are aware, that letter (the "October 15th Letter")
CrlatsRinder,„sy
alleges that the City Council violated the Ralph M. Brown Act and
CIW Treasurer
constitutes a "cease and desist" letter in accordance with Government Code
§ 54960.2.
Department Directors:
Deborah Cullen,
Specifically, the October 15th letter accuses the City Council of violating the
Pinance
MarthaDykefre
Brown Act on the following dates: June 19, 2012; June 25, 2012; July 17,
Human Kevin Smith,
2012• August 21 2012 February 5 2013; February' 19 2013; May 7 2013;
g ry a y
Fire Chief
Debraerlyhfon,
August 6, 2013; August 20, 2013; 'September 3, 2013;
Library Services
Sam Loa,
September 17, 2013; and October 1, 2013. In sum, the October 15th letter
Buiimnosro1y
alleges that the City Council's actions relating to the municipal golf course
Mi"PrliceChief
known as "the Lakes" violated the Brown Act as follows: (1) failure to
Stephanie Katsouless,
PublivWorft
appoint real property negotiators in open session; (2) incorrect agenda
Robert od nsParw
descriptions as to closed session items; and (3) discussing Items in closed
session beyond the scope of statutory authority. In short, the City Council
disagrees with the October 15th letter for several different reasons.
www.alsegundo.org
First, as to alleged violations occurring in 2012, these matters are time -
barred pursuant to Government Code § 54960.2(a)(2). That section requires
actions to be undertaken within nine months of the alleged violation.
Second, (as stated in the October 15th letter at p.2) the City Council (at the
latest) did appoint real property negotiators in open session on August 21,
2012 pursuant to Agenda Item No. F9:
"Direct the City Manager and City Attorney to negotiate terms
350 Main Street, El Segundo, California 90245.3813
Phone (310)524-2300 Fax (310) 640.0489
52
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THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
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CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1ST
of a [sic] agreement with Centercal Properties, LLC for a new
TopGolf facility to be located at The Lakes in place of the existing
driving range."
Moreover, the City Manager was identified on every agenda as the property negotiator
for these negotiations. The City Manager has general authority pursuant to El Segundo
Municipal Code § 1 -5A -7 to "exercise general supervision over all public buildings,
public parks and all other public property which is under the control and jurisdiction of
the city council," The City Council believes this would include (at a minimum) initial
negotiations regarding potentially leasing the Lakes. As previously noted, however,
these matters are time barred In any event.
Third, as explained below, it is plain that the City Council's consideration's regarding the
Lakes were (and are) quite public. Even a cursory glance at the City's webpage, staff
reports, and other public outreach documents demonstrate that the City Council sought
(and continues to seek) public input regarding what should happen with the municipal
golf course. Allegations, therefore, that the City Council was misleading or has
somehow attempted to avoid transparency as to the Lakes matter cannot be reconciled
with the City's efforts at encouraging public discourse regarding'this important matter.
As you know, the City Council is considering whether to lease a portion of the Lakes
municipal golf course to a private company or companies. As part of this process, the
City Is engaged in an extensive public outreach program seeking public participation.
Among other things, the City undertook the following actions:
August 21, 2012: the City Council heard a presentation regarding the Lakes
during open session and then directed the City Manager, or designee, to seek
public input regarding a potential agreement with Centercal and Top Golf,
August 29, 2012: the City Council's Golf Course Subcommittee met in public to
discuss the matter.
September 13, 2012: City staff made a presentation to the El Segundo Chamber
of Commerce.
September 18, 2012: City staff met at the El Segundo Public Library with golf
Industry stakeholders.
a September 19, 2012: City staff made a presentation to the City's Recreation and
Parks Commission during its regular meeting.
September 25, 2012: City staff made a presentation to the Kiwanis Club,
October 3, 2012: City staff provided a progress update to the City Council's Golf
Course Subcommittee.
350 Main Street, El Segundo, Callfornla •90245.3813
Phone (310)524 -2300 Fax (310) 640.0489 418
53
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THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
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CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1ST
• October 4, 2012: City staff made a presentation at the Rotary Club meeting.
• October 11, 2012: a presentation regarding the matter was made to the City's
Planning Commission during its regular meeting.
a October 11, 2012: City staff made a presentation to the City's Economic
Development Advisory Council.
V November 18, 2012: the El Segundo Chamber of Commerce voted to
endorse /support the Top Golf matter.
• December 5, 2012: the City Council's Golf Course Subcommittee reviewed the
matter. .
* December 19, 2012: the Recreation and Parks Commission reviewed the
findings and analysis.
Between October and November 2012, City staff met with most business
oriented hotels within the City of El Segundo.
CP The City posted the PowerpointO presentation, draft schematics, and other
matters on the City's website
(elsegundo.orgnews /displaws . asp? News ID =114 3 &Tear eta iD=1).
The City has posted and (continues to post) all disclosable public
communications regarding the Lakes matter on the City's website
( www. elsegundo. org/ degts /cityclerk/documents.asp).
Such proactive actions are In addition to the multiple opportunities taken by interested
citizens to provide public comment to the City Council during its regular meetings. This
matter is also being extensively scrutinized by media coverage (see e.g.,
www.easyreadernews.com/74699/resldents-assail-tojogol ;
www.dallybreeze.com /20121105 /local- olfers- balk -at- ro osed -char es-to- the- lakes-
in_iel- Segundo- course) and various social media outlets.
Based upon the foregoing, the City Council respectfully disagrees with the allegations
set forth in the October 15th Letter as to purported violations of the Brown Act,
Moreover, as you can see from the Due Diligence and Lease Agreement ("Agreement ")
that the Council will consider approving at Its November 5, 2013 regular meeting, the
alleged Brown Act violations set forth in the October 15th Letter are without merit. There
are twelve specific conditions precedent that must be accomplished before a leasehold
interest could be created. Accordingly, the City is not committed to entering into the
draft Agreement since there are numerous issues that must be resolved in public
meetings before the Planning Commission and City Council before any leasehold could
be established. Such matters include review and potential approval of a conceptual plan
for the golf course and the driving range improvements, review and potential approval of
350 Main St►1ee4 El Segundo, California 90245.3813
Phone (310)524 -2300 Fax (310) 640.0489 419
54
THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
IS
CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21 ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1 ST
a recommended action under the California Environmental Quality Act; review and
potential approval of the land use entitlements that would be needed to allow for the
uses contemplated by the draft Agreement; and many other items that identified in the
draft Agreement.
However, in an abundance of caution, to avoid unnecessary litigation, and without
admitting any violation of the Ralph M. Brown Act, the Er Segundo City Council
unconditionally commits that it will cease, desist from, and not repeat the actions
challenged in the October 15th Letter and briefly described above.
Note that the El Segundo City Council may rescind this commitment only by a majority
vote of Its membership taken in open session at a regular meeting and noticed on its
posted agenda as "Rescission of Brown Act Commitment." You will be provided with
written notice, sent by any means or media you provide in response to this message, to
whatever address or addresses you specify, of any intention to consider rescinding this
commitment at least 30 days before any such regular meeting. In the event that this
commitment is rescinded, you will have the right to commence legal action pursuant to
Government Cade § 54960(a ), That notice will be delivered to you by the same means
as this commitment, or may be mailed to an address that you have designated in
writing.
Very truly yours,
Bill Fisher,
Mayor
350 Main Street, El Segundo, California 90245.3813
Phone (390)524 -2300 Fax (310) 840 -0489 420
55
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THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
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CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1ST
May 8, 2015
Elected Officials:
Debra V. Geist
Suzanne Fuentes,
Mayor 121 16th St
Carl Jacobson Manhattan Beach CA 90266
Mayor Pm Tom �
Dave A&Inson,
Council Member
Marfe Fellhauer, Re: Notice of Rescission per Government Code § 54960.2(e)
Council Member
Michael Dugan,
Council Member
Tracy Weaver, Dear Ms. Geist:
city clef*
Crista Weider,
City Treasurer On November 5, 2013, the City Council committed to refrain from utilizing closed session
to discuss real property negotiations concerning its municipal golf course known as "the
Appointed Officials: Lakes." The reasons for such commitments are set forth in the enclosed letter (the "Letter ").
Greg Carpenter,
C1fyManager As you know, on May 5, 2015, the City Council directed our office to provide you thirty
cnrAbom y day notice that the City Council would consider rescinding the commitment set forth in the
Letter in accordance with Government Code § 54960.2(e). Accordingly, take notice that the
Department Directors: City Council will consider a "Rescission of Brown Act Commitment" as a regular agenda
Deborah Cullen, item at its regular meeting held on June 16, 2015. Should the City Council decide to rescind
Finance its commitment in the Letter, you will have the right to commence legal action in
Martha accordance with the Ralph M. Brown Act.
Res
Human an Res ources
Kevin Smith,
Fire Chief
Debra Brighton, Please note that the City reaffirms its position as set forth in the Letter: this matter is
Library Services
Sam Lee, thoroughly transparent; allegations regarding Brown Act violations are without merit.
Planning and
Building Safety Moreover, the public continues to have a vibrant dialogue regarding the City Council's
Mftch Tavern,
Police Chief actions as to the Lakes.
Stephanie Kateouleas,
Public Works
Meredith
Rec ation a Parks Note that a copy of this letter is being provided to the Public Integrity Unit of the Los
Angeles County District Attorney's office in accordance with Government Code §
54960.2(e).
www.elsegundo.org Very 16 �,Y otirs.
I Barer
Asslstans l ly Attorney
�F
C: District Attorney
City Council
City Manager
350 Main Street, El Segundo, California 90245 -3813
Phone (310)524.2300 Fax (310) 640.0489
57
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THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
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' 1 / v
October 30, 2013
Elected Offlclala:
®lll Pleher,
Mayor Debra V. Geist
Cad Jacobson,
Mayor Pro Tam 121 16th St
Susanna Pusntas,
Ceu bar
Dave Atkinson, i
Manhattan Beach CA 90266
lnaon,
Council Member
Maria fyllha uer,
Council 4aver, mbar Re: Letter dated October 15 2013
7rACy Wiewr, �
City Clerk
Dear Ms. Geist:
Appointed Officials:
arvCarpente, Thank you for your letter dated October 15, 2013 (received by the City on
MerNensloyr
ark October 17, 2013). As you are aware, that Ietter (the "October 15th Letter")
Cdaf.ralAdeQ,c•y alleges that the City Council violated the Ralph M. Brown Act and
ClfyTrassurer constitutes a "cease and desist" letter in accordance with Government Code
§ 54960.2,
Department Directors:
DeborahCulhn, Specifically, the October 15th letter accuses the City Council of violating the
Martha DUketre Brown Act on the following dates: June 19, 2012; June 25, 2012; July 17,
HvmanRuources 2012; August 21, 2012; February 5, 2013; February 19, 2013; May 7, 2013;
Kevin 8mlfh,
F`nchto August 6, 2013; August 20, 2013; 'September 3, 2013;
Dobrs &Aphron,
SamLow,ry8orvke. September 17, 2013; and October 1, 2013. In sum, the October 151h letter and
eulldingSa/aty alleges that the City Council's actions relating to the municipal golf course
MlfcPollceCMof known as "the Lakes" violated the Brown Act as follows: (1) failure to
Stephanie lass,
Public Work
s appoint real property negotiators in open session; (2) incorrect agenda
AofredCummin � descriptions as to closed session items; and (3) discussing items in closed
A Recreation A parka
session beyond the scope of statutory authority. In short, the City Council
disagrees with the October 15th letter for several different reasons.
www.elsegundo.org First, as to alleged violations occurring in 2012, these matters are time -
barred pursuant to Government Code § 54960.2(a)(2). That section requires
actions to be undertaken within nine months of the alleged violation.
Second, (as stated in the October 15th letter at p.2) the City Council (at the
latest) did appoint real property negotiators in open session on August 21,
2012 pursuant to Agenda Item No. F9:
"Direct the City Manager and City Attorney to negotiate terms
350 Main Street, El Segundo, California 90245.3813
Phone (310)524.2300 Fax (310) 640.0489
59
52
417
THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
IS
CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1ST
of a jslc] agreement with Centercal Properties, LLC for a new
TopGolf facility to be located at The Lakes in place of the existing
driving range."
Moreover, the City Manager was identified on every agenda as the property negotiator
for these negotiations. The City Manager has general authority pursuant to El Segundo
Municipal Code § 1 -5A -7 to "exercise general supervision over all public buildings,
public parks and all other public property which is under the control and Jurisdiction of
the city council." The City Council believes this would include (at a minimum) initial
negotiations regarding potentially leasing the Lakes. As previously noted, however,
these matters are time barred in any event.
Third, as explained below, it is plain that the City Council's considerations regarding the
Lakes were (and are) quite public. Even a cursory glance at the Clty`s welopage, staff
reports, and other public outreach documents demonstrate that the City Council sought
(and continues to seek) public input regarding what should happen with the municipal
golf course. Allegations, therefore, that the City Council was misleading or has
somehow attempted to avoid transparency as to the Lakes matter cannot be reconciled
with the City's efforts at encouraging public discourse regardingi this Important matter.
As you know, the City Council is considering whether to lease a portion of the Lakes
municipal golf course to a private company or companies. As part of this process, the
City is engaged in an extensive public outreach program seeking public participation.
Among other things, the City undertook the following actions:
August 21, 2012: the City Council heard a presentation regarding the Lakes
during open session and then directed the City Manager, or designee, to seek
public input regarding a potential agreement with Centercal and Top Golf,
a August 29, 2012: the City Council's Golf Course Subcommittee met in public to
discuss the matter.
6 September 13, 2012: City staff made a presentation to the El Segundo Chamber
of Commerce.
September 18, 2012: City staff met at the Ell Segundo Public Library with golf
Industry stakeholders.
a September 19, 2012: City staff made a presentation to the City's Recreation and
Parks Commission during its regular meeting.
" September 25, 2012: City staff made a presentation to the Kiwanis Club.
October 3, 2012: City staff provided a progress update to the City Council's Golf
Course Subcommittee.
350 Main Sfre94 El Segundo, California ,90246.3813
Phone (310)524 -2300 Fax (310) 640.0489 418
.E
53
THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
IS
CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1ST
October 4, 2012: City staff made a presentation at the Rotary Club meeting.
October 11, 2012: a presentation regarding the matter was made to the City's
Planning Commission during its regular meeting.
• October 11, 2012: City staff made a presentation to the City's Economic
Development Advisory Council.
November 18, 2012: the El Segundo Chamber of Commerce voted to
endorse /support the Top Golf matter.
• December 5, 2012: the City Council's Golf Course Subcommittee reviewed the
matter.
December 19, 2012: the Recreation and Parks Commission reviewed the
findings and analysis.
• Between October and November 2012, City staff met with most business
oriented hotels within the City of El Segundo,
The City posted the PowerpointO presentation, draft schematics, and other
matters on the City's website
(elseg undo, oi,,n news /display_news. asp? NewslD =1149 &T -,meth= 1).
The City has posted and (continues to post) all disclosable public
communications regarding the Lakes matter on the City's website
( www. elsegundo .oEgldeDtslcityclerk/documents. ash).
Such proactive actions are in addition to the multiple opportunities taken by interested
citizens to provide public comment to the City Council during its regular meetings. This
matter is also being extensively scrutinized by media coverage (see e.g.,
www.easyreadernews.com/74699/residents-assail-topgolf/;
www.dallybreeze.com/20 1 2 1 1 05/local- golfers- balk -at- proposed - chances -to- the- lakes-
in-ei-segundo- course) and various social media outlets.
Based upon the foregoing, the City Council respectfully disagrees with the allegations
set forth in the October 15th Letter as to purported violations of the Brown Act.
Moreover, as you can see from the Due Diligence and Lease Agreement ( "Agreement ")
that the Council will consider approving at Its November 5, 2413 regular meeting, the
alleged Brown Act violations set forth in the October 15th Letter are without merit. There
are twelve specific conditions precedent that must be accomplished before a leasehold
interest could be created. Accordingly, the City is not committed to entering into the
draft Agreement since there are numerous issues that must be resolved in public
meetings before the Planning Commission and City Council before any leasehold could
be established. Such matters include review and potential approval of a conceptual plan
for the golf course and the driving range improvements; review and potential approval of
350 Main Street, El Segundo, California 90245.3813
Phone (3f0)524 -2300 Fax (310) 640.0489
61
54
419
THE SEPTEMBER 15, 2015 CITY COUNCIL MEETING AGENDA ITEM # 1
IS
CONTINUED ITEM #2 FROM JUNE 15TH, JULY 7TH, ITEM #1 FROM JULY 21ST, ITEM #4 FROM AUGUST 4TH, ITEM #1 FROM AUGUST 18 AND SEPTEMBER 1ST
a recommended action under the California Environmental Quality Act; review and
potential approval of the land use entitlements that would be needed to allow for the
uses contemplated by the draft Agreement; and many other items that identified in the
draft Agreement.
However, in an abundance of caution, to avoid unnecessary litigation, and without
admitting any violation of the Ralph M. Brown Act, the Et Segundo City Council
unconditlonally commits that It will cease, desist from, and not repeat the actions
challenged in the October 151 Letter and briefly described above.
Note that the El Segundo City Council may rescind this commitment only by a majority
vote of its membership taken In open session at a regular meeting and noticed on its
posted agenda as 'Rescission of Brown Act Commitment." You will be provided with
written notice, sent by any meads or media you provide in response to this message, to
whatever address or addresses you specify, of any intention to consider rescinding this
commitment at least 30 days before any such regular meeting. In the event that this
commitment is rescinded, you will have the right to commence legal action pursuant to
Government Code § W60(a). That notice will be delivered to you by the same means
as this commitment, or may be mailed to an address that you have designated in
writing.
Very truly yours,
Bill Fisher,
Mayor
350 Main Street El Segundo, California 90245.3813
Phone (310)5242300 Fax(310)640-0489 420
62
55
56
EL SEGUNDO CITY COUNCIL MEETING DATE: September 15, 2015
AGENDA ITEM STATEMENT AGENDA HEADING: Unfinished Business
AGENDA DESCRIPTION:
Consideration and possible action to approve a Due Diligence and Ground Lease Agreement and
Reimbursement Agreement with ES CenterCal LLC ("ES CenterCal ") to lease the driving range portion
of The Lakes Golf Course for the purpose of developing the TopGolf facility consisting of a driving
range, restaurant, bar and lounge and event facilities. (Fiscal Impact: See attached report from ProForma
Advisors)
RECOMMENDED COUNCIL ACTION:
1. Consideration and possible action to approve and authorize the Mayor to execute the Due
Diligence and Ground Lease Agreement subject to ES CenterCal entering into a reimbursement
agreement with the City (see item 2);
2. Consideration and possible action to authorize the City Manager to enter into a Reimbursement
Agreement that requires ES CenterCal to pay the costs and fees associated with the various due
diligence and land use entitlement costs;
3. Consideration and possible action to authorize the City Manager to execute a Professional
Service Agreement for CEQA review services related to the Due Diligence and Ground Lease
Agreement approved as to form by the City Attorney in an amount not to exceed $257,500;
and/or;
4. Alternatively, discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
Due Diligence and Ground Lease
2. Reimbursement Agreement for Environmental Review Services for the CenterCal /TopGolf
Project
3. Pro Forma Advisors Financial Analysis with updated summary sheets
FISCAL IMPACT: See attached Pro Forma Advisors Report
Amount Budgeted: N/A
Additional Appropriation: $367,500
Account Number(s): Developer Reimbursed Trust Fund to be established for this
Proj ect
PREPARED BY: Mark Hensley, City Attorney
REVIEWED BY:
APPROVED BY: Greg Carpenter, City Manager,/
OVERVIEW OF ACTIONS TO BE CONSIDERED BY COUNCIL:
In November 2013 and March 2014, the City Council approved a proposed Due Diligence and
Ground Lease Agreement by and between the City of El Segundo and ES CenterCal, LLC ( "Lease')
to lease the driving range portion of The Lakes Golf Course for the purpose of developing a
TopGolf facility consisting of a driving range, restaurant, bar and lounge, and event facilities. The
Lease was not executed by CenterCal. There have been some significant changes to the Lease that are
explained in detail below. Thus, the amended lease is being presented to the Council for review and
57
Z3
potential approval.
The City and ES CenterCal have also negotiated a reimbursement agreement to cover the costs of
various conditions precedent to the Lease (for example, financial review of the Guarantors,
negotiations with Southern California Edison and Chevron, California Environmental Quality Act
review, preparation of land use entitlement documents, etc.). Staff is seeking Council approval of the
attached Reimbursement Agreement which estimates that the total costs of processing the conditions
precedents at $367,500. ES CenterCal, LLC has requested a 'Not to Exceed" clause within the
Reimbursement Agreement. Should the processing costs and fees exceed the agreed upon
amount, the reimbursement agreement provides that the City will cease processing the
conditions precedent unless and until ES CenterCal agrees to pay amounts in excess of the
currently estimated costs.
Finally, staff is seeking Council approval to enter into a contract for preparation of the necessary
environmental review for the Lease pursuant to the California Environmental Quality Act (CEQA).
The total estimated costs for environmental review services include $257,500 for an environmental
review consultant (of which $75,000 was included for traffic engineering and parking analysis
costs).
OVERVIEW OF LEASE AND CHANGES SINCE MARCH 2014 AGREEMENT APPROVED
BY THE COUNCIL
TopGolf has numerous facilities throughout the United States and feature driving ranges that have
electronic chips built into the golf balls that are hit at targets on the driving range which is tracked on a
computer at each driving range bay. This allows for keeping track of a person's accuracy or for
competitive play amongst players. TopGolf facilities also include full service restaurants and bars for
serving people within designated restaurant area and to those utilizing the driving range. TopGolf
facilities also have banquet facilities.
The Due Diligence and Ground Lease Agreement ( "Agreement ") between the City of El Segundo and
ES Centercal provides for the potential reconstruction of the Lake's golf course and lease of the driving
range for purposes of having it operated as a TopGolf facility. The golf course's reconstruction is
necessary due to the increased size of the proposed driving range facility necessary for TopGolf s
operations.
It is important to note that if the Council approves the Agreement, it does not mean that the TopGolf
project has been approved or that there is a lease in existence between the City and CenterCal. As will
be discussed in some length below, there are numerous conditions that have to be satisfied and
discretionary approvals that the City Council will have to review and either approve or deny at a public
hearing to be held in the future. In short, this is just the first step in a relatively lengthy and complex
process.
Use, Term and Rent
The Agreement provides that portion of the property that may be leased to CenterCal and then subleased
to TopGolf may only be used for a driving range and related clubhouse with restaurant, bar, lounge and
event space. The initial term of the lease is twenty years with the potential of CenterCal /Top Golf
exercising up to six options to extend the lease by 5 years for each option if Top Golf is in compliance
with the Agreement at the time the options can be exercised. Thus, the agreement could be in place for
50 years
If the lease portion of the Agreement becomes effective and during the construction period of the
Agreement, CenterCal is required to pay the City $18,000 per month. Once the TopGolf facility is open
for business and the golf course reconstruction is completed then the fixed rent is $525,000 per year.
This is an increase of $100,000 a year in fixed rent payments from the March 2014 draft Agreement.
This amount will be adjusted by 2% per year for the second through 5 "' year of the operation of the
TopGolf facility and then by 10% for each five year period thereafter. In addition to the fixed rent,
commencing with third year of TopGolf's operation, Centercal is required to pay the City an annual
variable rent payment that is equal to 3% of TopGolf s gross revenues for beverage sales. This variable
rent payment was not part of the March 2014 draft Agreement.
Golf Course Lighting
In addition to the increased fixed rent and inclusion of the variable rent since the March 2014 draft
Agreement, CenterCal has also agreed to pay $400,000 towards installing lights on the golf course. The
money will be placed in an interest bearing escrow account and if the City does not use the funds
within five years, they will be returned to CenterCal.
Due Diligence
The due diligence portion of the Agreement is anticipated to take approximately 12 months to complete
and unless and until all of the due diligence conditions are completed, the lease does not become
effective. The due diligence conditions are:
1. CenterCal must file an application with the City within 90 days for purposes of the City
beginning to process the land use entitlements and conduct the California Environmental Quality Act
( "CEQA ") review for the proposed TopGolf facility and the reconstruction of the golf course.
CenterCal will need a General Plan Amendment, alcohol permit and CEQA approval, and other permits
and approvals, that will be the subject of public hearings before the Planning Commission and City
Council which is estimated to be approximately 10 months from the date the agreement is executed.
The Council may approve or disapprove of these matters at the public hearing so CenterCal has no
guarantee that it will ever gain a leasehold interest in the property and be able to operate a TopGolf
facility on the property. This is a very important point as while some members of the Council may like
the idea of the potential project, the Council needs to consider the CEQA (traffic, air quality, noise, etc.,
impacts on the environment) and the land use entitlements and all studies related to such before it can
make a decision on the proposed project. The initial portion of the Agreement only provides for the due
diligence activities to commence.
2. CenterCal must prepare final building plans for the TopGolf facilities and the golf course
reconstruction. The plans for the golf course must conform with the requirements of Exhibit D to the
Agreement that require among that a golf shop, starter desk, restrooms, management office, cafe /bar,
outdoor patio seating area, and a nine hole golf course, and other improvements. The golf course must
have the same or better degree of play difficulty as the current golf course, a safety rating that is as good
or better than the existing course, two Par 4 holes, and the course must maintain the total current play
yardage as that which exists at the course currently.
59
3. TopGolf must have entered into construction contracts to build the TopGolf facility and golf
course facilities.
4. TopGolf must execute a sub -lease with CenterCal that requires that TopGolf operate a TopGolf
facility on the property for at least seven years.
5. TopGolf must have received approval from Chevron that permits it to operate a TopGolf facility
on the property. While the City does not necessarily agree that this is necessary, TopGolf will not move
forward with the project without this approval. Chevron's approval cannot affect the City's current
rights and obligations regarding Chevron or otherwise burden the land in the future.
6. The Southern California Edison ("SCE ") license agreement between SCE and the City must be
extended to the satisfaction of both the City and TopGolf. The license agreement allows the City to use
the area of land that is adjacent to or under the SCE power lines on the property. The license agreement
will expire in 2021 and given the length of the potential lease in the Agreement, it is desirable to get a
long term extension to the license agreement. It is unknown at this time how long of an extension SCE
may be willing to give the City.
7. There are conditions relating to guaranties that the City is requiring; from the parent companies
of CenterCal and TopGolf as well as subsidiary of TopGolf: CenterCal is responsible for paying for and
constructing the golf course improvements while TopGolf is responsible for paying for and constructing
the TopGolf driving range and related improvements. The TopGolf subsidiary is responsible for
guarantying that the facility is operated as a TopGolf facility for a seven year period as well as all rent
payments and other lessee and TopGolf obligations during this period. The Agreement and lease and
sublease are with subsidiaries of the parent companies and the City needs to ensure that the
improvements are completed or that the golf course and driving range are returned to their current
condition if for some reason the deal falls apart in the future. The City is most at risk with respect to
having its current improvements on the property demolished and not having the golf course and
TopGolf improvements completed. Thus the City is requiring the parent companies to guaranty that the
improvements are completed or that the golf course and driving range are returned to their current
condition. The two conditions related to the guaranties are that the City must determine, in its sole
discretion, that the parent companies are sufficiently capitalized and that the guaranties are properly
executed and delivered to the City. The City is still reviewing the subsidiary guaranty and there may be
some revisions made to that particular guaranty prior to Tuesday, September 15, 2015 Council Meeting.
8. CenterCal Golf must have executed an irrevocable license that provides the City with sufficient
parking for the golf course users as the lease provides that TopGolf will lease and maintain the parking
lot. The agreement provides that 70 spaces must be available for such use and 30 of the 70 spaces be
marked for exclusive use for the golf course. It is noted in the Agreement that until the parking studies
are completed that these parking numbers are estimates and that the numbers may change.
There are additional conditions that must be met such as TopGolf finding that it can obtain adequate
title to the property and that the condition of the soils on the property are suitable for its purposes of
constructing the improvements. The City and TopGolf must agree on the underlying value of the land in
the event that in the future some third -party condemns the property so that proceeds of the
condemnation can be appropriately apportioned between the City and TopGolf. Finally, in the event that
all of the due diligence conditions are satisfied, TopGolf has to issue a written statement to the City that
it is going to proceed with the project.
0
The Agreement provides that the due diligence period will be twelve months but can be extended for an
additional sixty days by TopGolf. TopGolf is required to enter into a separate agreement with the City
to pay for all of the staff, consultant, legal fees, and costs associated with the due diligence
requirements.
Operation of the Top Golf Facilities
TopGolf is required to have the bottom level of the driving range open for business seven days a week
from 6:00 a.m. until 9:00 p.m. and the rest of its facilities from 8:00 a.m. until 9:00 p.m. seven a week
except on holidays. Following the expiration of TopGolf's commitment to be the operator of the
facilities, TopGolf may close for up to two years while it finds another operator so long as it is paying
rent and otherwise complies with the terms of the Agreement. The City has the right to operate the
TopGolf facilities during any such closure period and the rent during such time will be reduced by the
amount of net revenue being derived by the City during such operation.
TopGolf is required to provide a 10% discount to City residents that have a City recreation card. This
discount is addition to all other discounts offered by TopGolf including a 20% discount for senior
citizens and active military personnel.
During the hours of 6:00 a.m. to noon on Monday through Friday and 6:00 a.m. to 9:00 a.m. on
Saturday and Sunday, TopGolf must charge driving range fees to El Segundo residents (with City
recreation cards) that are consistent with fees charged by other driving ranges open to the public. This
provision has been changed from the March 2014 draft Agreement as the prior draft provided for the
discount for all patrons from 6:00 a.m. to 9:00 a.m. everyday. Based upon the Council's direction, this
change was made to include only El Segundo residents and extend the time period for discounted
driving range fees.
TopGolf must also offer discounted monthly user access cards for frequent users similar to those
provided at its other facilities, promote youth and junior golf programs such "Good Swings Happen,"
employ golf professionals including those currently providing services at the driving range including
employing two during the time period that the facilities are being constructed, use commercially
reasonable efforts to include a practice putting element as part of its facilities, and allow junior high
school and high school players from El Segundo and Manhattan Beach to use the portion of the
facilities used as a driving range from 2:30 p.m. until 5:00 p.m. at no charge when such is a formal
practice event and a rate commensurate with surrounding public driving ranges when they are practicing
at other times. The provisions re junior golf and employment of golf professionals were tightened up
since the March 2014 draft Agreement such that it makes it much more likely that TopGolf will
continue these programs as they exist today.
Insurance and Indemnity
The March 2014 draft Agreement provided that TopGolf would maintain $1 million insurance during
the due diligence period and $3 million thereafter. Based upon the City Attorney's experience over the
past couple of years of seeing increased verdict and settlement amounts, the City Attorney
recommended increasing these amounts to $2 million and $5 million respectively, which CenterCal has
agreed to. TopGolf is required to defend, indemnify hold the City harmless for claims resulting from
TopGolf s use of the property unless such is the result of the City's actions in which event the City is
61
required to defend, indemnify and hold TopGolf harmless.
Assignment and Sublease
The Agreement provides and requires that CenterCal sublease the property to TopGolf for at least a
seven year period. Following this seven year period, or if there is a default by TopGolf, CenterCal does
have the right to sublease the property to another operator with the City's consent which the City can
withhold if the sublessee does not have sufficient experience or financial strength.
Mortgage of the Leasehold Interest
TopGolf does have the authority to take out a mortgage against the leasehold interest which may be
done for purposes of financing the improvements on the property. If TopGolf were to default on the
mortgage, so long as rents are kept current and the other provisions of the Agreement are honored the
lender has the right to essentially step into TopGolf s shoes and operate the driving range in accordance
with terms of the agreement or enter into an identical lease with the City.
City's Right to Audit
The City has the right to audit TopGolf for purposes of determining whether the City has been paid the
proper amount for TopGolf s gross revenues from beverage sales. In the event that the audit shows that
the City has been underpaid by 3% or more then TopGolf must pay the City the difference between
what TopGolf paid and what it should have paid the City, the cost of the audit, and a 4% penalty on the
underpaid amount.
Taxes
TopGolf is responsible for payment of all taxes associated with its use and operation of the property.
Additionally, TopGolf has agreed that it will not be entitled to the offset its City's business license tax
liability by the amount of sales tax it generates for the City which is an offset that is available to other
businesses in the City.
62
DUE DILIGENCE AND GROUND LEASE AGREEMENT
Between
THE CITY OF EL SEGUNDO,
a General Law Municipal corporation
( "Lessor")
And
ES CENTERCAL, LLC,
a Delaware limited liability company
(as "Lessee ")
Dated .101 "eluc:alber 211t?
Formatted: Font: 12 pt, Not Bold
Formatted: Left, None, Space After: 12 pt
Formatted: Font: 14 pt, Bold
Formatted: Centered, Level 1, Indent: First
line: 0 ", Space After: 24 pt
63
M
TABLE OF CONTENTS
Page
Section1.
Demise ............................................ ...............................
2
Section 2.
Lease Term ....................................... ...............................
2
Section3.
Rent ............................................... ...............................
3
Section4.
Use ................................................ ....,..........................
4
Section 5.
Due Diligence; Condition of Premises ....... ...............................
5
Section6.
Liens .............................................. ...............................
l l
Section 7.
Utilities, Taxes, and Other Charges .......... ...............................
12
Section 8.
Insurance ......................................... ...............................
14
Section 9.
Lessor's Right to Perform Lessee's Covenants ...........................
16
Section 10.
Compliance with Legal Requirements ...... ...............................
16
Section 11.
Operation, Repairs and Maintenance ........ ...............................
19
Section 12.
Development of the Golf Course Premises; Premises Improvements.
20
Section 13.
Title to Improvements ......................... ...............................
22
Section14.
No Waste ......................................... ...............................
22
Section 15.
Inspection and Access .......................... ...............................
22
Section 16.
Lessor's and Lessee's Exculpation and Indemnity .......................
22
Section 17.
Condemnation .................................. ...............................
24
Section 18.
Assignment and Sublease ..................... ...............................
26
Section 19.
Lessor Default; Remedies .................... ...............................
28
Section 20.
Lessee Default; Remedies .................... ...............................
28
Section 21.
No Abatement of Rent; Encroachments .... ...............................
30
Section 22.
Leasehold Mortgages .......................... ...............................
31
Section 23.
Lessor's Right to Encumber .................. ...............................
33
Section 24.
Nonmerger ...................................... ...............................
34
Section 25.
Quiet Enjoyment ............................... ...............................
34
Section26.
Surrender ......................................... ...._..........................
34
Section 27.
Invalidity of Particular Provisions ........... ...............................
35
Section 28.
No Representations ............................ ...............................
35
Section 29.
Estoppel Certificate ............................ ...............................
35
Section30.
Force Majeure ....................... ............................... .......
35
4
M
Section 31.
Notices ........................................... ...............................
35
Section 32.
Venue ............................................ ...............................
38
Section 33.
Entire Agreement ............................... ...............................
38
Section 34.
Applicable Law ................................. ...............................
39
Section 35.
License Agreement ............................ ...............................
39
Section 36.
Late Charge ..................................... ...............................
39
Section37.
Nonwaiver ...................................... ...............................
39
Section38.
Brokerage ...................................... ...............................
40
Section 39.
Miscellaneous Provisions .................... ...............................
40
Section 40.
Covenants to Bind and Benefit Parties.. . .................................
40
Section 41.
Captions and Table of Contents .............. .....,..................... ...
40
Section 42.
[Intentionally Omitted]......................... .............. ...............
40
Section 43.
Hazardous Material s ....................... ...............................
41
Section 44.
Counterparts ...................... ............................... .........
41
Section 45.
Consent and Approval Rights ............... ...............................
41
Section 46.
Prevailing Wages ............................. ...............................
41
Section47.
Golf Course ................................... ...............................
41
4
65
DUE DILIGENCE AND GROUND LEASE AGREEMENT ( "LEASE ")
Date: . 'r�2015 (the "Commencement Date ")
Lessor: THE CITY OF EL SEGUNDO, a general law City and municipal corporation
( "Lessor ").
Lessee: ES CENTERCAL, LLC, a Delaware limited liability company
( "Lessee ").
Guarantors: CenterCal, LLC, a Delaware limited liability company
( "CenterCal Guarantor ")
ri�►.►rra�r nsl- rrs� om, nTm
I "opC:ioll' Qntc� ntitiusial. Inc. a Delaware coloration ("TGI ") for the construction
of the Premises Improvements and a wholly myned subsidiary of •1'G1 ('`'1"GI Subsidlary
Guarantor ") fbr the Operating � eriod
("col lectivcly. Tolt,golf Guarantors ")
RECITALS
A. Whereas Lessor owns or is the Licensee of certain real property in the City of El
Segundo, County of Los Angeles, State of California, more particularly described in Exhibit
"A "(the "Prot et -ty ") attached hereto and by this reference incorporated herein and delineated
on the Site Plan attached hereto as Exhibit "B" and by this reference incorporated herein. A
portion of the Property consists of that certain real property in the City of El Segundo, County of
Los Angeles, State of California, more particularly described in Exhibit "A -1" attached hereto
and by this reference incorporated herein and delineated on the Site Plan (the "Premises "). Also
attached hereto as Exhibit "13 -1" is a current preliminary Site Plan for the golf course and
related improvements (the "Golf Course "), more particularly described in Exhibit A -2, which
makes up a portion of the Property but is not part of the Premises. A portion of the Property is
subject to that certain License Agreement dated June 24, 1991, by and between Southern
California Edison as "Licensor" and the Lessor as Licensee, a copy of which is attached hereto
as Exhibit "C" attached hereto and by this reference incorporated herein (the "License Formatted: Underline
Agreement"); and,
B. Whereas subject to all of the Conditions Precedent and other terms and conditions
of this Lease. Lessor desires to lease the Premises to Lessee and Lessee desires to lease the
Premises from Lessor and to sublease the Preniises to TopGoIC USA l:l Segundo 1.1,C, a
Dda�% ;Ve H111 tcd liability company- ( "Topgolf El Segundo'") for the purpose of operating a
commercial driving range, full service restaurant, clubhouse, and event space lhcrcin called the
"Sublease ") and Lessee wishes to lease the Premises from Lessor, for such use subject to all of
the Conditions Precedent and other terms and conditlons of this Lcusc; and,
C. Whereas Lessee shall be making certain improvements to the Golf Course ( "Golf
Course Improvements ") and the Premises ( "Premises Improvements ") for the benefit of
Lessor and Lessee as described on Exhibit OD's attached hereto and by this reference Formatted: underline
incorporated herein; and,
D. Now Therefore Lessor and Lessee enter into this Lease based on the terms and
conditions hereinafter set forth. I or purposes ol'this [.ease. Top oil, Guarantors ,end Toni;oll' Ill
ticgundn are sometimes collectivcly relbrenced as - Topeolf ").
TERMS
Section L Demise
Lessor and Lessee hereby enter into this Lease for purposes of allowing: Lessee to
perform due diligence on the Property; and to provide an opportunity for the parties to
potentially satisfy the Conditions Precedent. Upon satisfaction of the Conditions Precedent
Lessor shall lease the Premises to Lessee, and Lessee shall lease the Premises from Lessor, upon
the terms and conditions set forth in this Lease.
Section 2. Lease Term
2.1 The "Basic Term" of this Lease shall begin when all of the Conditions Precedent
have been satisfied and Lessee has notified Lessor that it desires to have this Lease become
effective as provided in Section 5.4 hereof ( "Premises Turnover Date ") and shall end on the
twentieth (201h) anniversary of the Premises Turnover Date. The Basic Term shall also be
referred to herein as the "Initial Term ". The parties agree to execute and record a memorandum
of an addendum to this Lease setting forth the Premises Turnover Date. While the terms
"Lease ", "Lessor" and "Lessee" are used throughout this agreement /Lease, the Lessee shall not
be deemed to have a leasehold interest in the Premises until the Premises Turnover Date.
On the Premises Turnover Date, Lessor shall deliver to Lessee, in conformance with all
applicable laws, and except as otherwise explicitly provided herein `in g-- vAihaw"Fnitation
tape-- Reiff" e" T_'_.:_ -A L. P '';? - Woense*, exclusive possession and control of the
Premises in its "AS IS" condition except it shall be free of any and all occupants, liens,
encumbrances, and security interests except for non - delinquent real estate taxes, And th
Pe►+t�+k4 --f pEit t° (W ' •" iROl idesthe larking L'seense. the License Agreement and the
I rl: lee )JIennitted Exceptions as shown on Exhibit "E."
2.2 Lessee shall have six (6) successive options to extend the term of this Lease, each
for a separate additional period of five (5) years: (cacti. an "Option Option Period "), from the date upon
which such term would otherwise expire, provided that Lessee shall be entitled to exercise an
M
67
ci{H�x opjion Pollod only if at the time of exercise Lessee is in compliance with all of the
material terms of this Lease, including but not limited to all Rent payments being current and the
Premises being open to the public and operating as a driving range with food/beverage service.
However, to the extent Lessee has received a default notice from Lessor and is diligently curing
a default in accordance with Section 20 hereof, this Lease shall not be extended until such time
as the default is cured and then the term may be extended. If Lessee does not cure such default
within the time periods set forth in Section 20 hereof then Lessee shall forfeit the extension
rights set forth in this Section. Subject to the above limitations, unless Lessee gives Lessor at
least six (6) months prior written notice of its intent not to exercise an opflonOntion Period to
extend this Lease, this Lease shall automatically be extended for an additional five (5) year term.
Each such extension shall be upon and subject to the same terms, covenants and conditions as
those herein specified except that Lessee may not again exercise any previously exercised option
under this section.
The words "Lease Term, term of this lease ", "the term hereof', or words of like import
shall be deemed to refer to the Initial Term of this Lease provided for in Section 2.1 hereof
together with any extension or renewal thereof which shall become effective pursuant to the
provisions of this Lease or by reason of the exercise of an option or right granted hereunder.
Section 3. Rent
3.1 Lessee covenants and agrees to pay to Lessor, promptly when due, without notice
or demand and without deduction or setoff of any amount whatsoever unless otherwise
specifically provided in this Lease, the following amounts: (a) the amount of Eighteen Thousand
and No /100 Dollars ($18,000.00) per month ( "Initial Rent ") from the Premises Turnover Date
until the "Fixed Rent Commencement Date" (as defined in Section 3.2), not to exceed One
Hundred Eighty Thousand and No /100 Dollars ($180,000) in the aggregate, and (b) the amount
of 'f = #ti t,F-1 iveh "arty -'l hree Thousand FourSeven Hundred Si eR -a4id C 6/400LUIj Dollars
($3 5, 4 �6 3,750) per month ($422-35;04100525,000 per year) as rent for the Premises from the
Fixed Rent Commencement Date through the end of the Lease Term, except as increased as
specified below (the "Fixed Rent "). In addition to the Fixed Rent- Less. lw4t)ay. Lessee shill
Lay to Lessor: (i) ror each calendar year during the term or this Lease. an amount equal to three
rx:rcent (3%) of the Gross Receipts from all beyeniges (alcoholic and non- alcoholic) sul_d on the
Premises during the epplicabic calendar vear ("Variable Rent -): and J!) its pro -rata share of the
consideration payable under the License Agreement as and when required by the License
Agreement based upon the land area of the Premises located within the area subject to the
License relative to all of the land area of the Premises and the Golf Course located within the
area subject to the License. The obligation of Lessee to pay Fixed Rent-wwk*Aer! its
t(,4- e,m- ,r--a4 heWff er pre is 1, Variable Itent and other sums hereunder may be satistied by
any person or entity making payment of Fixed Rent. Variable Rent or other sums to Lessor as
hereinalter Provided. The term "Cross Receipts" wherever used in this Lease shall mean the
aggregate amount of -sales (whether Cor cash. on credit or otherwise) oC all alcoholic and non-
alcoholic beverages made and rendered on the Premises in connection with the business
•:
gpel-dtion conducted on the Premises. but :shall not include uny Jbdera 1. slate, munichil or otl7er
sales. value added or retailer's cxcise taxes paid or ac:ertted., regcuM11;ss of % hcthcr such t.IxCS ,Ire
collected from customers or absorbed . sales to em lovices, comLiLflinentury sales, donations for
charitable events. discounts afforded customers from the redemption O' coo ons fees l2aid to
credit card issuers and processors. bulk and /or _ transfers -of inventory (provided no
such transfer is made to avoid liability to Variabic Rent), or alcohol beverage license lbes Ol'
any.
Within Line hundred (120) days after the end of each calendar year Hollowing the Variable
Dent Commencement late (defined in Section 3.2 helow), Lessic,e shall deliver to Landlord a
written statement setting 6orth the amount cif Gross ftecei its For the preceding, calelular year.
Simultaneously with the delivery of' such statement. Lessee shall pay" to Landlord the Variable
Bent shown by such statement to be then due and owing. In computing, the Variable Itch tart #te
first calendar year following the Variable Bent Commencement Dale, il'soch calendar year shall
tiontain leas than 305 days. then the Variable Rent shall be multlpIicd by traction. the numerator
of which shall be the number of days in such shorter calendar year, and the denominator of
which shall be 365.
3.2 The first installment of Initial Rent shall be payable on the Premises Turnover
Date in a pro -rata amount based upon the number of days remaining in the month. The first
installment of Fixed Rent shall be payable from the earlier of the date that the Premises opens
to the public for business or ffiLten (10) months following the Premises Turnover Date, subject
to #arse -+ ajew %e orcc Maieurs as defined in Section 30 and delays caused by Lessor (the "Fixed
Rent Commencement Date "). All Rent (other than Variable [tend from and after the Fixed
Rent Commencement Date shall be paid in advance, on the first day of each month. Upon
termination of this Lease, Rent payable for less than a full month shall be paid in a pro -rata
amount based on the number of days that the Lease was in effect for the month. 'Hic oblation to
away Variable (tent shall commence on the third anniversar ol'the Fixed Rent Commencement
Date ("Variable (tent Commencement Date"), Within ninety days of the termination of this
Lease, Lessee shall pav to Lessor all Variable [Unt payments owed to the Lessor based upon the
payments being pride in arrears This agreement shall not be construed as giving lessor any.
partnership or other 'interest in Lessec's or Toligoll's busi[ress. It is understood and kt regWd by
Lessor that there has been no represematioii of any kind whatsoever made by Lessee or'ropgolf
as to the amount of Gross Receipts w1ficli may or ~_hull be made from the Premises durine and
year of the term of this Lease. ,.I +' r����u `,� .�. '`
Xi The eCfRSenP i%&inu1-ett�R'ErtT� a end of eN,er' , Ave yeapiw vd dul-ing 04e Ye ;n}
fOF wiffimp
= i4ow.;ttn "•,ae,- - f4*t; te rek, 1-'«:1 y L ht ;( 10'958 211
+tg -i�► -�
I, .. '1`......, rl... E::... -.] 1)...,I {..•'rrTwo - >•nousan 1 kight 1 lundred
{ I Err-i 14he-- lr&EY.xL
•1 eon tile 1:' Ii W 1: F. y-Geyen'I'liousan.l_! \.e.s Ll,� ,i�r..ti•...
t �„-- �.;o��ceEl- I�e�t -ti}ta c�-= i= l�irt� -- %title-- rtstd�31 -I�]��
39
PA I . n 10I.PI 0007 1? 49740
M
3.3 The Fixed Rent shall. 1'or the 1ii:5t live 5 ears fiollowing the fixed (tent
f'oinmencc:nlent Dule.. inc,aeaase at the comnleneement of Years 2.3 4 kind 5 by iwo Ilercent 2%
and at the commencement of each five -) car lls:liod lhcrculler O.c. Year 6, Year 11. Year 16), the
Fixed Rent shall hicrease by ten percent 10% which shall Include any Option-Periods. that m y
be exercised by Tenant). -
3.4 All amounts payable under Section 3.1 above, as well as all other amounts
payable by Lessee to Lessor under the terms of this Lease, shall be paid at the address of Lessor
set forth in Section 31.1, or at such other place within the continental limits of the United States
as Lessor shall from time to time designate by written notice to Lessee, in lawful money of the
United States, which shall be legal tender in payment of all debts and dues at the time of
payment.
3.5 It is intended that the Initial Rent, the Fixed pent. the Variable Rent and any
Additional Rent provided for in this Lease (together "Rent ") shall be an absolutely net return to
Lessor throughout the Lease Term, free of any expense, charge, or other deduction whatsoever,
including all claims, demands, or setoffs of any nature whatsoever, except as otherwise explicitly
provided in this Lease.
3.6 Except as may be provided in this Lease, Lessee shall also pay without notice and
without abatement, deduction, or setoff, as "Additional Rent," all sums, impositions, costs, and
other payments that Lessee in any of the provisions of this Lease assumes or agrees to pay, and
in the event of any nonpayment, but subject to the terms and provisions of this Lease and all
applicable laws, Lessor shall have (in addition to all other rights and remedies) all the rights and
remedies provided for in this Lease or by law or equity in the case of nonpayment of the Rent.
Section 4. Use
4.1 Notwithstanding any other provision of this Lease, Lessee may only use the
Premises, and the Premises Improvements, for a driving range and related clubhouse with
restaurant, bar, lounge, grill and event space, subject to the provisions of Section 4.2 (the
"Permitted Use "). Lessee shall not be permitted to conduct any of the driving range or
clubhouse operations on the Premises until the Golf Course Improvements described in Exhibit
I'D" are substantially completed (which for purposes hereof means that the Golf Course
Improvements are completed subject to minor alterations or corrections, that is, "punch list"
items and that the nine -hole course, clubhouse, pro -shop and bathrooms are capable of being
open for business) as reasonably determined by Lessor. Lessor acknowledges and agrees that the
operation of a TepOel TTo _ og_lf driving range, restaurant, bar, lounge, grill and event space, that
is similar with regard to the current operations of that certain existing TopGelffopgolt facility
located at 2700 Esperanza Crossing, Austin, Texas 78758 and is generally consistent with regard
to its construction with those renderings and descriptions attached hereto as Exhibits "D" and
"G" and by this reference incorporated herein (the "Prototype Facility "), including a driving
range and related teaching facilities and both indoor and outdoor cafe / bar / grill facilities
serving alcoholic beverages, and meeting and banquet facilities, also serving alcoholic beverages
(referred to herein as a " Te2fiollTol)golf Facility") is a Permitted Use under this Section 4.1.
39
IPAIAte.Meoa03
70
4.2 Lessee shall not use or occupy, or permit or suffer all or any part of the Premises
or any Premises Improvements to be used or occupied except as provided in Section 4.1 and
Lessee's use of the Premises is further restricted and cannot be used: (i) for any unlawful or
illegal business, use, or purpose, or (ii) for any purpose or in any way that is in violation of a
lawfully issued existing certificate of occupancy for the Premises, or of any "Legal
Requirements" (as defined below), including but not limited to "Legal Requirements" respecting
"Hazardous Substances" (as defined in Section 42). For the purposes of this Lease, the term
"Legal Requirements" means all present and future laws, ordinances, orders, judgments, rules,
regulations, and requirements of all federal, state, regional, and municipal governments,
departments, agencies, commissions, boards, and officers, foreseen or unforeseen, ordinary as
well as extraordinary, applicable to the Premises or to the use or manner of uses of the Premises
or any Premises Improvements or the owners or users of any Premises Improvements.
4.3 Nothing contained in this Lease shall be deemed to be a gift or dedication of any
portion of the Premises to the general public or for the general public or for any public purpose
whatsoever, or an agreement to do so, it being the intention of Lessor and Lessee that this Lease
shall be strictly limited to and for the purposes herein expressed and strictly for the benefit of
Lessor and Lessee. Unless required otherwise by a governmental authority, Lessee shall take
commercially reasonable actions to prevent the Premises from being used by any individual or
entity, or the public, from and after the Premises Turnover Date, in such manner as might
reasonably make possible a claim or claims of adverse usage, adverse possession, or prescription,
or of implied dedication, of the Premises or any Premises Improvements or any portion thereof.
Section 5. Due Diligence; Condition of Premises
5.1 Due Diligence l'crnui. Unless earlier terminated pursuant to Section 5.5, Lessee
shall have until twelve (12) months from the Commencement Date (such period, as the same
may be extended hereunder, is referred to herein as the "Due Diligence Period ") to complete its
due diligence investigations of the Premises. During the Due Diligence Period, Lessee and
Lessee's authorized representatives, during normal business hours, shall have the right to enter
upon the Property for the purposes of conducting studies, inspections and investigations of the
Property (without unreasonably interfering with the operations of the current facilities located on
the Property) and analyzing all documents and matters pertaining to the Property as Lessee
reasonably deems necessary or desirable in connection with its leasing of the Premises, including
geotechnical, seismic, mechanical, engineering and environmental testing, and to satisfy itself in
its sole and absolute discretion that the Property is suitable for the Golf Course Improvements
and the Premises Improvements and Lessee's intended use of the Premises, including without
limitation, zoning classifications, building regulations, governmental entitlements, land use
entitlements permitting private recreational use at the Premises (including without limitation, a
general plan amendment, specific plan designation, alcohol permits, and lot line adjustments), a
determination under the California Environmental Quality Act ( "CEQA ") on all actions subject
to CEQA (including without limitation the leasehold interest that may be granted to Lessee under
this Lease), and all other legal matters applicable to the Premises (collectively, the "Required
Project Entitlements "), all at Lessee's sole expense (collectively, the "Investigation ").
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Notwithstanding the foregoing, the Due Diligence Period may be extended by Lessee for an
additional sixty (60) days in duration by Lessee providing written notice to Lessor before the end
of the Due Diligence Period to secure the approvals it reasonably deems necessary for the
operation of the Premises as contemplated by this Lease. If Lessor has not received a notice
from Lessee that Lessee has elected to exercise a permitted extension of the Due Diligence
Period, then it shall be presumed that Lessee intended not to extend the Due Diligence Period
and the Due Diligence Period will be deemed to have expired and not been so extended. The
Due Diligence Period shall not exceed 425 days except in the event that any person or entity that
is not a party to this Lease nor a guarantor of this Lease challenges any of the Required Project
Entitlements, then the Due Diligence Period shall automatically be extended to end upon the
thirtieth (30th) day following the final disposition of any such challenge (i.e. the entry of a non-
appealable order of a court of competent jurisdiction dismissing such challenge, granting some or
all of the relief sought by such person or entity, or settlement of the challenge), provided that
Lessee is diligently defending and pursuing such challenge. - rixtept with respect to provisions
that cxnressly survive the tennination of this Agreement, upon exaltation or the Due Diligence
Period Oich shall not be extended under any circumstance by Force lylaicurel. the failure to
satisl' the Conditionns Precedent and the termination of this Lease. all of the rights
ohl_i,gadons ol`the Rartles hereunder shall terminate and each party represents and warrants that it
understands and agrees that it shall have no right to lib: a legal or equitable action aphist the
otltcr,Varly irthe Conditions Precedent are not satisfied during the Due Diligence Period, unless
the failed condition was a condition that failed because of a hreach or this Agreement by the
other party or because or such party's leuud or willful misconduct For the avoidance or doubt
the Merl, exercise ordisc etionary authority by the Ck is not a bre_agh- offfthis Lease or fraud or
wiilhll misconduct by the City or Lessor- provided that in no event shall a partv's damages in
connection with such legal or a unable action exceed One Hundred Thousand and no/100
Do[lars ($ 100.000.00).
5.2 Cooperation and Entry Notice. Lessor and Lessee agree to reasonably cooperate
during the Due Diligence Period, including but not limited to Lessor providing public
information to Lessee in Lessee's efforts to obtain approvals from other governmental agencies.
Lessee agrees to make reasonable efforts to notify Lessor, a minimum of twenty -four (24) hours
before each entry onto the Premises and/or contact with employees on the Premises.
5.2.3 Title Due Diligence. At the Premises Turnover Date, the real property comprising
the Premises must be free from all easements, encumbrances, or restrictions other than those set
forth on Exhibit "E ", which will be finalized and attached hereto within sixty (60) days from the
Commencement Date (the "Permitted Exceptions "). Lessee at its option may procure an
ALTA extended leasehold owner's policy of title insurance from Chicago Title Insurance
Company (the "Title Company" or "Escrowee ") which policy must be free and clear of any
exceptions or objections other than the Permitted Exceptions (the "Title Policy "). The Lessor
shall have no obligation to take any action to remove any exceptions or objections that the Title
Company may place on the Title Policy. The cost of a standard leasehold title policy and/or the
Title Policy shall be borne by Lessee.
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Lessee shall use reasonable efforts to cause the Title Company to deliver to Lessee a Preliminary
Report issued by the Title Company covering the Premises (the "Preliminary Report "),
together with true and legible copies of all documents evidencing matters of record shown as
exceptions to title thereon ( "Underlying Documents ") as soon as practicable after the
Commencement Date. The Preliminary Report and Underlying Documents shall hereinafter
sometimes be collectively referred to as the "Title Documents ". Lessee shall have the right to
object to any exceptions contained in the Preliminary Report, in Lessee's sole and absolute
discretion by giving written notice to Lessor within fifteen (15) business days after Lessee has
received the Title Documents. Lessee shall have the right to object to any matters revealed by the
Survey (as defined below) by giving written notice to Lessor within fifteen (15) business days
after Lessee has received the Survey. If Lessee disapproves of any matter affecting title or the
Survey (the "Title Disapproval "), Lessor shall have the option until 5:00 p.m. on the day that is
five (5) business days after delivery to Lessor of the Title Disapproval to elect in Lessor's sole
and absolute discretion by written notice to Lessee ( "Lessor's Title Response ") to (i) cure or
remove such disapproved matter(s) on or before the Premises Turnover Date or (ii) not cure
some or all of such disapproved matters, in which case Lessee may, by written notice to Lessor
within five (5) business days after Lessor's Title Response, elect to waive this contingency or
terminate this Lease (in which event the parties shall have no further obligations to one another
except with respect to the obligations that survive the termination of this Lease). Lessor's failure
to timely notify Lessee of its election aforesaid shall conclusively be deemed to be Lessors'
election not to cure any objection. If Lessee elects not to terminate this Lease as provided above,
Lessee agrees that the matters expressly approved or waived by Lessee in writing shall added
Enid be attached to this Lease as Exh % bit�E" as the "Permitted Exceptions "). Notwithstanding - - Formatted: Font: Bold
the above, Lessor shall have no obligation to take any action to remove any exceptions or
objections that the Title Company may place on the Title Policy, whether or not Lessee
disapproves such matters. Lessee's approval of the Preliminary Report shall be without
prejudice to Lessee's right to disapprove the "Survey" (defined below) as provided above, or any
supplementary reports issued by Title Company except those that arise after the Premises
Turnover Date. The cost of a standard leasehold title policy and/or the Title Policy shall be borne
by Lessee.
Within five (5) business days after the Commencement Date, Lessor shall provide Lessee with a
copy of any existing ALTA survey of the Real Property in Lessor's possession, if any (the
"Existing Survey "). Lessee shall be responsible, as its sole cost and expense, for thereafter
obtaining and paying for any update to the Existing Survey ( "Survey ") to meet the requirements
of Lessee or its lender for the Title Policy.
5. 3 -5.4 Indemnification. All Investigations shall be at the sole risk and expense of
Lessee and Lessee shall defend, indemnify and hold Lessor and its employees, agents, officers
and elected officials, (collectively the "Indemnified Parties ") harmless for, from and against
any and all claims, causes of action, demands, injuries, damages, costs, expenses (including
reasonable attorneys' fees) or liability (collectively, the "Liability ") imposed upon, suffered by,
incurred by or asserted against the Indemnified Parties as a result of or relating to the
Investigations conducted by or on behalf of Lessee in connection with the Property, except for
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73
damages resulting from the negligence or willful misconduct of Lessor or those acting at its
request or on its behalf or the discovery of Hazardous Substances (as defined in Section 42) on
the Property that were not released on the Property by Lessee or its agents. However, if Lessee
takes possession of the Premises then it shall be responsible for all Hazardous Substance (as
defined in Section 42) clean -up costs that are required for purposes of completing the Premises
Improvements on the Property. Lessee shall maintain and shall cause any person performing
work or investigation on the Premises on behalf of Lessee to maintain a policy of comprehensive
general liability insurance with premiums fully paid, issued by an insurance company reasonably
acceptable to Lessee in an amount not less than $12,000,000.00 to insure the risks covered by the
indemnity provided above, which policy shall name the Indemnified Parties as insureds. The
insurance shall not act as a limit on Lessee's Liability. This indemnity shall survive any
termination or expiration of this Lease. Notwithstanding any other provision in this Lease, in the
event that the Conditions Precedent are not satisfied and Lessee does not take possession of the
Premises, then Lessee shall return the Golf Course and Premises to substantially their same
condition as they existed prior to the Commencement Date.
5,45.5 Conditions 11rceeMdent. The following shall be conditions precedent to the Premises
Turnover Date and commencement of the Basic Term hereunder (items (i) through (xiii) shall be
collectively referred to as the "Conditions Precedent "): (i) (A) Lessee filed an application
within ninety (90) days of the Commencement Date for the Required Project Entitlements which
Required Project Entitlements kessop rthe City Council may in its sole and absolute discretion
either approve or disapprove and (B) prior to the end of the Due Diligence Period, Lessee has
obtained such Required Project Entitlements; (ii) Lessee has prepared and the City has approved
final building plans for the Golf Course Improvements and the Premises Improvements
(collectively, the "Plans and Specifications "), which Plans and Specifications for the Golf
Course Improvements shall be approved by Lessor if they are consistent in all material respects
with the description of the Golf Course Improvements described on Exhibit "D' =" anti till xx�nin
and building and safety laws and regulations. and for the Premises Improvements that shall be
approved by the City if they are consistent in all material respects with the Prototype Facility and
all applicable zoning and building and safety laws and regulations; Lessee shall cause the City to
be named as an additional insured under the certiflealcis) of insurance issued by the architects
and design prol'cssionals re;stwnsible for preparing the plans for the (half Course and Premises
Improvements; (iii) Lessee has entered into construction contracts consistent with this Lease, for
the completion of the Golf Course Improvements on Exhibit "D" hereto, and "' West ;
Cr
na er TopG it "ak,°Toneolf has entered into construction contracts consistent with this Lease,
for the completion of the Premises Improvements as described and depicted on Exhibit 11134"
hereto but such shall not relieve Lessee as being obligated for completing such improvements
and Lessee shall cause the City to be named as an additional insured under the certificate(s) of
insurance issued bX tltc contracto s for construction of the Goll' Course lin ro % -e nients and
Premises Improvenben[s, (iv) Lessee has entered into a sub- leaseSublease of the Premises with
0—Wes! i1ersilitig and 30 West Per 4; g baN me d into A sm-blemse WI c...,t 041' LN A.'1'OP&o11. Formatted: Font color: Black
El Segundo. - 1�l�.—a-- F)ela+ are-- lin�iiteik -4e - eoFnpao,%- (.t!T&pGolf~') that requires
TapGaltlopgolf to operate the Premises for at least seven (7) years in accordance with the
Continuous Operation Requirement (the "Operating Period "); (v) Lessee has delivered within
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ten (10) business days following the expiration of the Due Diligence Period written notice to
Lessor that it desires to have this Lease become effective ( "Due Diligence Acceptance Notice ");
(vi) Lessor and Lessee have obtained within sixty (60) days from the Commencement Date an
extension to the License in a form acceptable to the Lessor and Lessee in their respective sole
and absolute discretion; (vii) Lessee has received written confirmation from Chevron USA, Inc.,
a Pennsylvania corporation ( "Chevron "), within thirty (30) days from the Commencement Date
approving of the Premises Improvements and use of the Premises as contemplated by this Lease
in a recordable form acceptable to Lessee in its sole and absolute discretion (provided that,
Lessee may, in is sole discretion, grant one or more extensions of the foregoing thirty day period
during which this Condition Precedent may be satisfied by delivery of written notice to Lessor
setting forth the time period of any such extension(s) but in no event shall the initial thirty (30)
day period and any extension thereto exceed the initial twelve month portion of the Due
Diligence Period set forth in Section 5.1, plus, if applicable, the sixty day (60) day extension
period); however, such approval front Chevron may not impose any obligations on the City or on
the Property but may place obligations on the Lessee and the Premises during the term ol° this
Lease which arise limn Lessee's use of the Premises! (viii) Lessor has in its sole and absolute
discretion determined within sixty (60) days from the Commencement Date that the CenterCal
Guarantor has sufficient financial strength to guarantee the construction of the Golf Course
Improvements TG1 has sulfcient financial strength to guarantee construction of the Premises
Improvements, and the 3 '� '-.: s Q1 Subsidiary Guarantor has sufficient financial strength to
guarantee eon4wctio cal- thhe-- lean}ise- -4mproveinent* ,Hnd -the operation of the Premises during
the Operating Period and to GuaranteegggLanice Rent payments through completion of the Coif
6cat En>p ° • ^ -,r and the Period as expressly required by
this Lease and asset forth in the 30 Guaranties. In the event
that despite Lessor's efforts as set forth above, the financial review of the CenterCal Guarantor
and the 30- WwA- Gu*mPAef I'on€ oll' C'ruaaanturs cannot be completed within such 60 day period,
Lessor shall notify Lessee and the 60 day period shall be automatically extended for an
additional 30 days; (ix) (A) 4he 3�*t {; °,tea; .I�a',� ;;Krc a4atate, d e Guts .;0 141
a. ta. hed liew I
E° hbot 14l`GI shall have executed the Guaranty for the Premises
Improvements in the form attached hereto as Exhibit "H" and delivered such to the Lessor and
TGI Subsidiary Guarantor shall have executed u guaranty for the operation of the Premises
during the Operating Period and to guarantee Rent pavmcnts through completion of the
Operating Period in the room attached hereto as )Exhibit "Ii" and delivered such to the Lessor,
and (B) the CenterCal Guarantor shall have executed the Guaranty in the form attached hereto as
Exhibit "H" and delivered such to Lessor (Delivery of these Guaranties shall also constitute
performance of Condition Precedent item (iv); and neither the 34- 44s "�. of IL(.)
Guarantors nor the CenterCal Guarantor shall have withdrawn such Guarantees within five (5)
business days as set forth in Section 5.5 of this Lease; (x) Lessee shall have entered into an
irrevocable license with the Lessor that grants the Lessor ingress and egress to and from the
parking lot located on the Premises and the right to use seventy (70) parking spaces on the
parking lot on the Premises and provides that up to thirty (30) of such seventy (70) parking
spaces will be marked with appropriate signage to indicate that they are to be used exclusively by
the patrons of the Golf Course during the Golf Course's hours of operation as provided in
Exhibit "D" ( "Parking License "); (xi) Lessor and Lessee have entered into an Access
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75
Agreement granting Lessee the right to have access to the Golf Course to construct the Golf
Course Improvements; (xii) Lessee shall have prepared at its expense within one hundred and
twenty (120) days after the Commencement Date the legal descriptions for Exhibits A -1', and
A -2" for Lessor's approval,_ and (xiii) Lessor and Lessee shall have agreed upon the Land
Value (as defined in Section 17.2.1.1 hereof) in their respective sole and absolute discretion
within 180 days from the Commencement Date,--; and. (xiv) provided Top olf has received al
nceessary rrcrmirs and aUarovals to commence construction of its ' opgolf l'acility upon the
Premises. lessee shall derx)Sit Four hundred thousand dollars ($400,00U) into an escrow account
with the `]'itle Company ("Escrow ]]older ") and entered into an escrow agreentcm (the' l'serow
Atrreunrcnl" )with. Lessor and EscrmN- l ]older solely lim the purposc of funding a portion (if the
Cost to pUrChaSC and i nstal I lights on the Sol f ecrurse on the [Imperty for the purpose of allowing;
golf to be played on the golf course during twilight and after sunset hours. The Escrow
Rgrg,mem shall provide thus ifthe City shall not have installed lights on the goircourse within
Live years front the date of the l scrow Agreement, then the funds shall be prortiptl , returned
LO the lessee. Notwithstanding any provision hereof to the contrary, the parties agree and
acknowledge that in connection with obtaining the Required Project Entitlements Lessee will
obtain a parking study from a third party consultant. In the event that such parking study reveals
that the parking requirements for the Golf Course and the Premises require an adjustment of the
total number of parking spaces needed for the Golf Course or that providing Lessor with thirty
(30) exclusive parking spaces during the Golf Course's hours of operation as described in clause
(x) hereof is incompatible with the Permitted Use and Lessor's use of the Golf Course, then prior
to the end of the Due Diligence Period, the parties shall work together to modify the Parking
License (and the number of parking spaces and exclusive parking spaces granted thereunder) in
such a manner so as to be compatible with the Permitted Use and the Lessor's operation of the
Golf Course.
4 5; 5.6 lease Termination. Items (vi), (vii) and (viii) of Section 5.4 shall be
collectively referred to as the "Preliminary Conditions Precedent,' If, on or before the
expiration of the time periods set forth for any of the Preliminary Conditions Precedent, Lessee
shall determine in its sole and absolute discretion that any of the Preliminary Conditions
Precedent will not be satisfied, then Lessee may notify Lessor of such determination at any time
before or within ten (10) days after the expiration of such applicable time period that it has
elected to terminate this Lease. With respect to the Preliminary Conditions Precedent set forth in
items (vi) and (viii) above, if, on or before the expiration of the time periods set forth in items
(vi) and (viii) above Lessor shall determine in its sole and absolute discretion that items (vi) and
(viii) will not be satisfied within the applicable time period, then Lessor may notify Lessee of
such determination at any time before or within ten (10) days after the expiration of such
applicable time period that it has elected to terminate this Lease. Additionally, if Lessee does not
file its application for the Required Project Entitlements within the time period set forth in 5.4
(i)(A), then unless the parties agree to extend the time period in writing, this Lease shall
terminate except those provisions that expressly survive a termination of this Lease. If this Lease
is not so terminated by either Lessee or Lessor, then Lessee shall continue with its Investigation
and shall have the right to terminate this Lease as set forth herein, including without limitation,
the Conditions Precedent, and Lessor shall have also have the right to terminate this Lease by
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76
notice to Lessee if the Conditions Precedent are not satisfied within the Due Diligence Period;
Lessee may terminate this Lease for any reason at any time in its sole and absolute discretion
during the Due Diligence Period by notifying Lessor of such determination (the "Due Diligence
Termination Notice "), whereupon any termination by Lessor or Lessee of this Lease and the
obligations of the parties hereunder shall terminate (and no party hereto shall have any further
obligations in connection herewith except under those provisions that expressly survive a
termination of this Lease). Each party hereto agrees to diligently pursue the satisfaction of all
Conditions Precedent within the time frames set forth herein. In the event that Lessee determines
to proceed with the leasing of the Premises and all of the Conditions Precedent are satisfied and
thereby waive its right to terminate this Lease as provided in this Section 5.5, then Lessee shall
notify Lessor of such determination in writing on or before 5:00 p.m. (Pacific time) on the date
that the Due Diligence Period shall expire (the "Due Diligence Acceptance Notice "). If the
Lessee delivers the Due Diligence Acceptance Notice and neither the 30 West Guar"I of i'
Guarantors or the CenterCal Guarantor have withdrawn their Guarantees by providing written
notice of such within five (5) business days of the Due Diligence Acceptance Notice then the
Guarantees shall be deemed to be in full force and effect and the 30 `es, I wiFenterivZO-11
Guarantors and the CenterCal Guarantor shall have waived any rights, if any, to claim that their
respective Guarantees are not in full force and effect. If either Guarantor has given written
notice of the withdrawal of their Guaranty then this Lease shall be deemed terminated and the
parties shall have no further obligations under this Lease except those that expressly survive the
termination of this Lease. The Due Diligence Acceptance Notice shall be deemed to be a
confirmation from Lessee that the parties have entered into the sub - leases of the Premises further
described in clause (iv) of Section 5.4 hereof. In the event that Lessee shall fail to deliver either
the Due Diligence Termination Notice or the Due Diligence Acceptance Notice to Lessor on or
before 5:00 p.m. (Pacific time) on the date that is the tenth business day following the expiration
of the Due Diligence Period then this Lease shall expire and the obligations of the parties
hereunder shall terminate (and no party hereto shall have any further obligations in connection
herewith except under those provisions that expressly survive a termination of this Lease). In
addition to the foregoing, if, on or before the expiration of the Due Diligence Period the
Conditions Precedent have not been satisfied or the City does not approve of the Required
Project Entitlements, then this Lease and the obligations of the parties hereunder shall terminate
and no party hereto shall have any further obligations in connection herewith except under those
provisions that expressly survive a termination of this Lease. It is expressly understood that the
City is not committing to issuance of the Required Project Entitlements, including the CEQA
determination or that the Conditions Precedent shall otherwise be satisfied by executing this
Lease as such are subject to a separate discretionary land use entitlement processes, including
public hearings, and/or are outside of the City's control and/or are, as applicable, subject to the
approval of the City.
Within five (5) business days of the delivery by Lessee to Lessor of the Acceptance Notice, so
long as neither the ` *Rrtnti�oolf Guarantors nor the CenterCal Guarantor have
provided written notice that it has withdrawn its Guarantee, Lessor and Lessee shall each execute
a memorandum evidencing this Lease that may be recorded by Lessee at Lessee's sole cost and
expense and in the form of Exhibit "F." If, for any reason at any time during the Term of this
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77
Lease the legal description of the Premises changes, Lessor and Lessee agree to execute and
record a new Memorandum of Lease, modifying the original Memorandum to reflect such new
legal description. Notwithstanding the foregoing sentence, the parties are under no obligation to
modify the legal description of the Premises. In the event this Lease is terminated pursuant to
the terms hereof the parties agree, upon written request of either party, to execute and record
evidence of such termination of the above Memorandum.
.4.6 — Notwithstanding anything in this Lease to the contrary, Lessee shall have no right
to terminate this Lease and f Guarantors and Centercal Guarantor shall
have no right to terminate or diminish their obligations under their respective guarantees
following the Premises Turnover Date through the time that the Golf Course Improvements and
the Premises Improvements are completed and a certificate of occupancy has been issued for the
Golf Course and the Premises, except for termination due to a material default of this Lease by
Lessor that Lessor has not remedied after being notified of the default and afforded the
opportunity to cure it as provided in Section 19. Notwithstanding the foregoing, if, during
construction of the Golf Course Improvements or the Premises Improvements, Lessee discovers
that due to the discovery of Hazardous Substances (as defined in Section 42) on or under the
Golf Course or Premises after the Turnover Date which: (i) could not have not been reasonably
discovered by Lessee as part of its investigation of the Premises and Golf Course; or (ii) were
not caused by Lessee, its agents, contractors, employees, tenants, occupants or invitees or
otherwise resulting from Lessee's use of the Premises; and Lessee is not able to construct its
contemplated Premises Improvements in accordance with desired or approved plans, site plans
and the Required Project Entitlements, Lessee shall be obligated to return the Golf Course and
Premises to the same or better condition, including all improvements that existed thereon, they
were in prior to the Premises Turnover Date and terminate this Lease and the parties shall have
no further rights or obligations under this Lease except as expressly set forth herein.
5.7 —Upon any termination of this Lease pursuant to this Section 5, and provided that
Lessor is not in default of any material provision hereunder, Lessee shall deliver to Lessor,
within ten (10) days of such termination and without any representation or warranty whatsoever
as to the truth, accuracy or completeness of such information and Lessor shall rely on such
information at Lessor's sole risk and expense, originals or copies of all studies, reports, maps,
documents and other material obtained by Lessee from third parties as part of Lessee's
Investigation that are in Lessee's possession and that Lessee is not expressly prohibited from
providing to Lessor.
5.87 Survival.All those provisions of this Section 5 whose full performance are not
accomplished prior to any termination of this Lease shall survive such termination to allow such
performance within a reasonable time. However, this provision shall not extend the Due
Diligence Period, provide additional time for satisfying the Conditions Precedent or in any way
result in a leasehold or other possessory interest to be created in the Lessee or any other party
with respect to the Premises or the Property.
Section 6. Liens
39
6.1 Except as otherwise specifically provided in this Lease, Lessee shall have no
power to do any act or to make any contract that may create or be the foundation for any lien,
mortgage, or other encumbrance on the reversion or other estate of Lessor, or on any interest of
Lessor in the Property.
6.2 Lessee shall not suffer or permit any liens to attach to the interest of Lessor or the
interest of Lessee in all or any part of the Property by reason of any work, labor, services, or
materials done for, or supplied to, or claimed to have been done for or supplied to, Lessee or
anyone occupying or holding an interest in all or any part of any the Golf Course Improvements
on the Property or the Premises Improvements on the Premises through or under Lessee;
provided, that if any such lien shall at any time be filed against the Property, Lessee shall cause
the same to be discharged of record within sixty (60) days after the date of filing the same by
either payment, deposit, or bond. Lessee may, however, postpone its obligation to discharge a
lien arising out of work done by or for Lessee if Lessee provides Lessor or any prospective
purchaser of Lessor's fee interest with title insurance that insures Lessor's title and either: (i)
omits the lien, or (ii) insures against collection of the debt underlying the lien, and Lessee shall
not be in default of its obligations under this Section 6.2 during any such period of
postponement, provided such title insurance is provided within the aforesaid sixty (60) day
period, at Lessee's expense.
6.3 Subject to Section 12, unless otherwise set forth to the contrary herein, nothing in
this Lease shall be deemed to be, or be construed in any way as constituting, the consent or
request of Lessor, express or implied, by inference or otherwise, to any person, firm, or
corporation for the performance of any labor or the furnishing of any materials for any
construction, rebuilding, alteration, or repair of or to the Property or to any Golf
Course Improvements or Premises Improvements, or as giving Lessee any right, power, or
authority to contract for or permit the rendering of any services or the furnishing of any materials
that might in any way give rise to the right to file any lien against Lessor's interest in the
Property or against Lessor's interest, if any, in the Golf Course Improvements or Premises
Improvements. Lessee is not intended to be an agent of Lessor for the construction of any Golf
Course Improvements or Premises Improvements on the Property. Lessor shall have the right to
post and keep posted at all reasonable times on the Property and on any Golf Course
Improvements or Premises Improvements, any notices that Lessor shall be required to post for
the protection of Lessor, the Property, and of the Golf Course Improvements or Premises
Improvements from any such lien. The foregoing shall not be construed to diminish or vitiate
any rights of Lessee in this Lease to construct, alter, or add to any Golf Course Improvements or
Premises Improvements in accordance with the terms of this Lease.
Section 7. Utilities, Taxes, and Other Charges
7.1 Lessee shall pay or cause to be paid all charges for water, gas, electricity, garbage,
telephone, sanitary sewer, storm water, drainage, and any and all other services used by Lessee
in or upon the Premises or any Premises Improvements.
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7.2 Subject to Section 7.7, Lessee shall pay and discharge, or cause to be paid and
discharged, before any fine, penalty, interest, or cost may be added for nonpayment, all real
estate taxes, personal property taxes, privilege taxes, excise taxes, business and occupation taxes,
gross sales charges, assessments (including but not limited to, assessments for public
improvements or benefits), and all other governmental impositions and charges of every kind and
nature whatsoever, whether or not now customary or within the contemplation of the parties and
regardless of whether the same shall be extraordinary or ordinary, general or special, unforeseen
or foreseen, or similar or dissimilar to any of the foregoing which, at any time during the Lease
Term following the Premises Turnover Date, shall be or become due and payable and which:
7.2.1 Shall be levied, assessed, or imposed against the Premises or any Premises
Improvements or any interest of Lessor or Lessee under this Lease; or
7.2.2 Shall be or become liens against the Premises or any Premises
Improvements or any interest of Lessor or Lessee under this Lease unless caused by or on behalf
of Lessor; or
7.2.3 Shall be levied, assessed, or imposed on or against Lessor by reason of
any actual or asserted engagement by Lessee, or by Lessor at the direction of, directly or
indirectly, in any business, occupation, or other activity in connection with the Premises or any
Premises Improvements; or
7.2.4 Shall be levied, assessed, or imposed on or in connection with the
ownership, leasing, operation, management, maintenance, repair, rebuilding, use, or occupancy
of the Premises or any Premises Improvements under or by virtue of any present or future Legal
Requirement, it being the intention of the parties that, insofar as the same may lawfully be done,
Lessor shall be free from all such expenses and all such real estate taxes, personal property taxes,
privilege taxes, excise taxes, business and occupation taxes, gross sales taxes, occupational
license taxes, water charges, sewer charges, assessments, and all other governmental impositions
and charges of every kind and nature whatsoever (all of such taxes, water charges, sewer
charges, assessments, and other governmental impositions and charges that Lessee is obligated to
pay being collectively called "Tax" or "Taxes ").
7.3 If by law any Tax is payable, or may at the option of the taxpayer be paid, in
installments, Lessee may, whether or not interest shall accrue on the unpaid balance, pay the
same, and any accrued interest on any unpaid balance, in installments as each installment
becomes due and payable, but in any event before any fine, penalty, interest, or cost may be
added for nonpayment of any installment or interest. With respect to any assessments for public
improvements or any similar assessments, Lessee may request amortization of such assessments
over the longest period permitted by governmental authority so long as such does not exceed the
Basic Term or any extension thereof exercised by Lessee. Lessee shall be obligated to pay off
any unpaid balance of any such installment payment plan upon the termination of this Lease.
7.4 Any Tax relating to a fiscal period of the taxing authority, a part of which is
within the Lease Term and a part of which is not within the Lease Term, shall be apportioned
399
0
and adjusted between Lessor and Lessee so that Lessee shall pay only the portions that
correspond with the portion of such fiscal periods included within such period. Any such
adjustments shall be resolved, as applicable, at the Premises Turnover Date and the expiration of
the Lease Term.
7.5 Lessee covenants to furnish to Lessor, within thirty (30) days after the last date
when any Tax must be paid by Lessee as provided in this section, official receipts, if such
receipts are then available to Lessee, of the appropriate taxing authority, or other proof
reasonably satisfactory to Lessor, evidencing payment.
7.6 Lessee shall have the right at Lessee's expense to contest or review the amount or
validity of any Tax or to seek a reduction in the assessed valuation on which any Tax is based, by
appropriate legal proceedings. Lessee may defer payment of such contested Tax on condition,
however, that if such contested Tax is not paid beforehand and if such legal proceedings shall not
operate to prevent the enforcement of the collection of the Tax so contested and shall not prevent
the sale of the Premises or any Premises Improvements to satisfy the same, then before
instituting any such proceedings, Lessee shall furnish to Lessor a surety company bond, cash
deposit, or other security reasonably satisfactory to Lessor as security for the payment of such
Tax, in an amount sufficient to pay such Tax, together with all interest and penalties in
connection with such Tax and all charges that might be assessed against the Premises or any
Premises Improvements in the legal proceedings. On termination of such legal proceedings, the
security originally deposited shall be applied to the payment, removal, and discharge of the Tax
and the interest and penalties in connection with the Tax and the charges and costs accruing in
such legal proceedings and the balance, if any, shall be paid to Lessee. If such security shall be
insufficient for this purpose, Lessee shall forthwith pay over to Lessor an amount sufficient,
together with the security originally deposited, to pay the same. Lessee shall not be entitled to
interest on any money deposited pursuant to this section.
7.7 Any contest as to the validity or amount of any real or personal property tax, or
assessed valuation on which such tax was computed or based, whether before or after payment,
may be made by Lessee in the name of Lessor or of Lessee, or both, as Lessee shall determine,
and Lessor agrees that it will cooperate with Lessee in any such contest to such extent as Lessee
may reasonably request, and Lessee covenants to indemnify and save Lessor harmless from any
such costs or expenses. Lessee shall be entitled to any refund of any such Tax and penalties or
interest that have been paid by Lessee.
7.8 Lessee shall be responsible and shall pay or cause to be paid all costs directly or
indirectly related to Lessee's development and use of the Premises and Premises Improvements
constructed thereon.
7.9 The parties shall use reasonable efforts to see that all communications from
governmental authorities respecting Taxes are sent directly by such authorities to Lessee. The
certificate, advice, receipt, or bill of the appropriate official designated by law to make or issue
the same or to receive payment of any Tax or nonpayment of such Tax, shall be prima facie
`r.,
I 116 AYeI]4j�1 240;][1..]
1115 rirs�a �.. � � s�s�+rs a+s
•
evidence that such Tax is due and unpaid or has been paid at the time of the making or issuance
of such certificate, advice, receipt, or bill.
Section 8. Insurance
Lessee, at its expense, shall maintain at all times during the Lease Term commercial
general liability insurance in respect of the Premises and use of the Premises with Lessor as
additional insured, with therulive million dollars ($x:5,000,000.00) in `Constant Dollars" (as
defined below) minimum combined single -limit coverage, or its equivalent. Such insurance shall
include contractual liability coverage in such amount for Lessee's indemnification and other
obligations contained herein. Such insurance policy shall be written as a primary policy and
shall not be contributing with or be in excess of the coverage that either Lessor or Lessee may
carry and shall be issued in the name of Lessee, with Indemnified Parties as being included in the
insurance policy definition of who is an additional insured, and shall be primary to any insurance
available to Lessor. Lessee shall also maintain during the Basic Term, at no expense to Lessor,
fire and extended coverage insurance sufficient to replace all Premises Improvements
notwithstanding the amounts set forth below. Such policies of insurance shall be issued by good,
responsible companies that are reasonably acceptable to Lessor and qualified to do business in
the state of California. An insurance certificate or certificates evidencing such insurance shall be
delivered to Lessor prior to the Commencement Date (evidencing coverage in the amount of
onet%,vo Million Dollars ($4- 2,000,000) covering the Due Diligence Period), and thereafter prior
to the Premises Turnover Date (evidencing coverage in the amount of ttivc million dollars
($35,000,000)), and renewal ,policies shall be delivered to Lcssor within ten (�10) days before the
expiration of the term of each such policy or policies. As often as any such policy or policies
shall expire or terminate, renewal or additional polices shall be procured and maintained by
Lessee in like manner and to like extent. All policies of insurance must contain a provision that
the company writing the policy will give Lessor thirty (30) days' written notice in advance of
any cancellation, non - renewal substantial change of coverage, or the effective date of any
reduction in amount of insurance.
During the term of this Lease, Lessor shall maintain, or cause to be maintained, in full
force and effect, on and with respect to the Golf Course, either proof of self - insurance, or
insurance through a joint powers authority, reasonably acceptable to Lessee in the amounts and
with additional insured requirements set forth in this paragraph or policies of. (i) commercial
general liability insurance, written on an "occurrence' policy form, with bodily injury and
property damage coverage arising out of or relating to Lessor's ownership, business operations,
use or occupancy of the Golf Course, which shall name Lessee, Lessee's first mortgagee, N
w pen4wit-and xA Vie-; lie Top olrs first mortgagee and as
additional insureds as their respective interests may appear, and (ii) first party property insurance
written on a "special form" policy covering loss or damage to the improvements on the Golf
Course for not less than the amount of the full replacement value of such improvements. The
limits of the commercial general liability policy shall be at least :1:�.)livc Million Dollars
($2- 5,000,000) per person, with a combined single limit of not less than a-dt+eeliy _e. Million
Dollars ($3 ,000,000.00) on a "per occurrence" basis (bodily injury and property damage), or in
39
11 /19 RO MT.9.3RI1
•
such higher amounts and with such additional coverages as Lessor may be required pursuant to
agreement with any mortgage lender of Lessor or pursuant to any other contractual agreement
relating to the Golf Course or any part thereof to which Lessor is a party. At Lessee's request,
Lessor shall furnish appropriate certificates of such insurance to lessee.
The insurance required of Lessee and Lessor by this provision or otherwise in this Lease
shall not limit such party's liability under any indemnity provision set forth in this Lease or any
other liability that such party may have under this Lease.
"Constant Dollars" shall mean the value of the U.S. dollar to which such phrase refers,
as adjusted from time to time. An adjustment shall occur on the 1st day of June of the sixth (611)
full calendar year following the date of this Lease, and thereafter at five (5) year intervals.
Constant Dollars shall be determined by multiplying the dollar amount to be adjusted by a
fraction, the numerator of which is the Current Index Number and the denominator of which is
the Base Index Number. The "Base Index Number" shall be the level of the Index for the year
of the Commencement Date; the "Current Index Number" shall be the level of the Index for
the year immediately preceding the adjustment year; the "Index" shall be the Consumer Price
Index for All Urban Consumers, published by the Bureau of Labor Statistics of the United States
Department of Labor for U.S. City Average, All Items (1982 -84 =100), or any successor index
thereto as hereinafter provided. If publication of the Index is discontinued, or if the basis of
calculating the Index is materially changed, then Lessor and Lessee shall substitute for the Index
comparable statistics as computed by an agency of the United States Government or, if none, by
a substantial and responsible periodical or publication of recognized authority most closely
approximating the result which would have been achieved by the Index.
Section 9. Lessor's Right to Perform Lessee's Covenants
9.1 If Lessee at any time fails to pay any Tax in accordance with the provisions of this
Lease or fails to make any other payment (other than Rent) or perform any other material act on
its part to be made or performed (in each instance, to the extent applicable, within the applicable
notice and cure periods provided in this Lease), then Lessor may (but shall be under no
obligation to):
9.1.1 Obtain the same on Lessee's behalf, and without waiving or releasing
Lessee from any obligation of Lessee contained in this Lease or from any default by Lessee and
without waiving Lessor's right to take such action as may be permissible under this Lease as a
result of such default, and after Lessee's failure to obtain any required liability insurance or
evidence thereof, procure such insurance and Lessee shall pay to Lessor the actual costs and
expenses thereof as applicable to that period of time between the expiration of such notice and
the date upon which Lessee provides such certificate or evidence of liability insurance to Lessee
as required hereinabove, and any actual costs incurred by Lessor in obtaining or terminating its
procured insurance; and/or
3-9
9.1.2 After ten (10) days prior written notice to Lessee which specifies what
action is required, perform the same on Lessee's behalf, make any other payment or perform any
other act on Lessee's part to be made or performed as provided in this Lease.
9.2 All sums so paid by Lessor and all actual costs and expenses incurred by Lessor,
in connection with the performance of any such act, shall constitute Additional Rent payable by
Lessee under this Lease and shall be paid by Lessee to Lessor on demand.
Section 10. Compliance with Legal Requirements
10.1 Throughout the Lease Term Lessee shall promptly comply with all Legal
Requirements (as defined in Section 4.2). To the extent that there is any change in Legal
Requirements such that the Permitted Use is no longer a lawful use of the Premises, Lessee may
terminate this Lease upon delivery of written notice to Lessor. Lessee shall pay all costs of
compliance with Legal Requirements.
10.2 Lessee shall have the right, after prior written notice to Lessor, to contest by
appropriate legal proceedings, diligently conducted in good faith, in the name of Lessee or
Lessor or both, without cost or expense to Lessor, the validity or application of any Legal
Requirement subject to the following:
10.2.1 If, by the terms of any Legal Requirement, compliance may legally be
delayed pending the prosecution of any such proceeding without the incurrence of any lien,
charge, or liability of any kind against all or any part of the Premises and without subjecting
Lessor to any liability, civil or criminal, for failure to comply, Lessee may delay compliance
until the final determination of such proceeding; or
10.2.2 If any lien, charge, or civil liability would be incurred by reason of any
such delay, Lessee nevertheless may contest the matter and delay compliance, provided that such
delay would not subject Lessor to criminal or civil liability or fine, and Lessee prosecutes the
contest with due diligence.
10.3 Lessor shall execute and deliver any appropriate papers, as determined in the
Lessor's sole discretion, that may be necessary, proper or desirable to permit Lessee to contest
the validity or application of any Legal Requirement, provided all the requirements of this
section have been satisfied by Lessee.
10.4 Each party shall promptly provide the other party, in the manner provided in
Section 31 below, copies of all material correspondence or other documents sent to or received
from governmental agencies or other persons: (i) relating to Lessee's development of the
Premises; and/or (ii) that may materially adversely affect the fair market value of the Premises.
10.5 Lessor represents and warrants to Lessee, that as of the Commencement Date and
as of the Premises Turnover Date:
39
10.5.1 Lessor shall not during the Lease Term initiate any action that would
create any encumbrances except for taxes, assessments and fees imposed pursuant to California
Constitution Articles XII C and D (or other applicable laws), that would adversely affect
Lessee's use, operation or occupancy of the Premises.
10.5.2 All persons and entities supplying labor, materials, and equipment to the
Premises have been paid, there are no claims of liens and there are no service contracts
applicable to the Premises.
10.5.3 To the best of Lessor's knowledge there is no action in the nature of
litigation, claim, investigation or other proceeding pending or to Lessor's best knowledge,
threatened against or affecting the Premises, the use thereof, or Lessor, or if there is, then Lessor
shall promptly disclose such matter to Lessee.
10.5.4 Lessor has not committed nor obligated itself in any manner whatsoever to
sell or lease the Premises to any person other than Lessee. Without limiting the generality of the
foregoing, no right of first refusal regarding the Premises exists. Lessor will not, prior to the
Premises Turnover Date, offer to or enter into any backup or contingent option or other
agreement to sell or lease the Premises to any other person.
10 1 t liar- ; rteTl�ct+ cx*"� k mum
and-k+ev.. h, �.. �i.� i it the 130, I verDate°thew - .._ :: 910.5.5
There is an existing agreement with Lane Donovan Golf Partners to
overate and manage the Property (the "Managentent Agreement*'). but the Lessor shall by tile
expiration of the Due Diligence Period provide l,essc;e with reasonable evidence that as of the
Commencement Date and as of the Premises Turnover flatc, such Management Agreement shall
have been terminated with respect to the Leased Premise and that there are no leases,
tenancies, rental agreements or entitlements or use agreements, or unrecorded restrictive
covenants affecting all or any portion of the Premises except for the Permitted Exceptions:
10.5.6 Lessor is not a foreign person, nonresident alien, foreign corporation,
foreign partnership, foreign trust, or foreign estate, as those terms are defined in the Internal
Revenue Code and the Income Tax Regulations promulgated thereunder.
10.5.7 Lessor has made no untrue statements or representations in connection
with this Lease.
10.5.8 Lessor has to the best of its knowledge provided or made available to
Lessee all information in Lessor's possession that Lessee has requested, and Lessor to the best of
its knowledge has provided or made available to Lessee any public information or knowledge
actually obtained by Lessor of any change contemplated in any applicable laws, ordinances or
restrictions, or any judicial or administrative action, or any action by adjacent landowners, or
natural or artificial condition, financial or otherwise, which would prevent, limit or impede the
use of the Premises as contemplated by this Lease.
!
i
10.5.9 All documents delivered or made available to Lessee by or on behalf of
Lessor are to the best or Lessor's knowledge true and correct copies of the documents in Lessor's
possession.
10.5.10 Prior to the Premises Turnover Date, and except as otherwise provided in
this Lease, Lessor has: (i) performed all of its obligations under any lien indebtedness, and (ii)
except as expressly permitted by this Lease, not allowed any lien to attach to the Premises or
any portion thereof which is not discharged at the Premises Turnover Date, nor granted, created,
modified or permitted the creation of, any easement, right -of -way, encumbrance, restriction or
covenant affecting the Premises or any part thereof.
10.5.11 To Lessor's actual knowledge, except as may be contained in the written
materials delivered or made available to Lessee during the Due Diligence Period, Lessor is not
aware of the existence of Hazardous Substances (as defined in Section 42), at the Property. For
purposes of this Section 10.5.11, the phrase "actual knowledge" shall mean the present, actual
knowledge of the City Manager ( "Lessor's Designated Representative ") with no duty of
investigation, inquiry or inspection. In no event shall Lessee be entitled to assert any cause of
action against Lessor's Designated Representative, nor shall such individual have any personal
liability whatsoever for any matter under or related to this Lease. Lessor represents and warrants
that Lessor's Designated Representative is the City Manager and the person on behalf of Lessor
most knowledgeable about the matters which are the subject of this Section.
Section 11. Operation, Repairs and Maintenance
11.1 Lessee shall maintain and repair or cause to be maintained and repaired the
Premises and any Premises Improvements Lessee constructs on the Premises, and off the
Premises but in conjunction with the development of the Premises and that Lessee is required by
Legal Requirements to maintain, as necessary to keep them in first -class order, condition, and
repair throughout the entire Lease Term after the Premises Turnover Date, at no cost to Lessor,
provided that during the periods that TepGaIfTopgol is operating the Premises, this condition
shall be satisfied by keeping the Premises in a condition substantially comparable to other
facilities currently being operated by T ItTg og_lf. Lessor and Lessee agree that wherever
in this Lease an obligation is imposed on Lessee, Lessee, without being released from any of its
obligations under this Lease or requiring that the City pursue any party other than Lessee for
performance of such obligations, shall have the right to delegate responsibility for performing
such obligations and will delegate such responsibility for performing such obligations to
Tap6eIT�o golf or to any other occupant of the entire Premises approved by Lessor under
Section 18 of this Lease (an "Operator ") and performance of such obligation by
TepGeIfTopgolf or the Operator in accordance with the terms of this Lease shall be deemed
performance by Lessee.
11.2 During the Lease term (i) Lessee shall operate or cause to be operated the ground
level (or other suitable portion) of the Premises Improvements as a driving range open for
business seven days a week from at least 6:00 a.m. until at least 9:00 p.m., other than on any
Specified Holidays and (ii) the remainder of the Premises Improvements, such that the same are
311
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open for business seven days a week from at least 99:00 a.m. until at least 9:00 p.m., other than
on any Specified Holidays ( "Continuous Operation Requirement). The only exception to
these requirements shall be during periods of damage or destruction, condemnation, or when
Lessee is conducting alterations, routine repairs, maintenance and upgrades to the facilities and
in such cases Lessee shall work diligently to minimize the number of hours and/or days that the
driving range and/or restaurant are not open during the Continuous Operation Requirement. For
purposes hereof, "Specified Holidays" means collectively, the following holidays: New Year's
Day, President's Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, and
Christmas Day. Notwithstanding anything to the contrary contained or implied in this Lease, in
the event that at any time after the expiration of the Operating Period the Lessee provides written
notice that the Premises will not be operated by 4C -*p-Go ljoff or another Operator for the
Permitted Use (a "Non- Operation Notice "), then Lessee shall not be deemed to be in default so
long as (i) it is paying Rent and any other sums owing the Lessor hereunder in a timely manner,
and (ii) Lessee either terminates this Lease as provided below or reopens the Premises for
business to the public, in either event within two (2) years after any Non - Operation Notice
(provided that any replacement Operator of the driving range is approved by Lessor pursuant to
Section 18 hereof). Following receipt of the Non - Operation Notice, Lessor may notify Lessee
that Lessor has elected to operate the driving range or cause the driving range to be operated on
an interim basis during the period that the Premises is not open for business to the public, then
Lessor shall then operate the driving range or cause the driving range to be operated during the
time period set forth in Lessor's notice in accordance with the standards of operation set forth in
this Lease until such time as Lessee finds a new Operator for the Premises. In the event that
Lessor elects to operate the driving range as set forth above, Lessor shall operate the driving
range pursuant to a month to month sublease in form and content reasonably acceptable to
Lessor, Lessee and 30 W s ' ,i „F;f cjj�gol 1; which shall provide, among other things, for (i)
the reduction of the Fixed Rent in an amount equal to the monthly net revenues that Lessor
derives from its operation of the Premises (i.e. the aggregate gross revenues received by Lessor
in connection with the operation of the driving range minus all reasonable third party out of
pocket costs incurred by Lessor in connection with the operation of the driving range, as
evidenced by monthly income and expense reports and other reasonable back -up information
reasonably requested by Lessee and/or X'ess ing`fopgolf delivered to Lessee and 30
:r"e;. :s oopgolf by Lessor along with the monthly rental payments), and (ii) the right of
termination by Lessee or Lessor of the sublease upon thirty business days' prior written notice
upon Lessee identifying an Operator that will sublease the Premises and operate the same for the
Permitted Use. -Noo ithstanding anything herein k) the contrary. in tit) evoit durins*. I.essor`s
operation of the. Premises shall lessor utilize any proprietary ecLnrnent and/or other proprietary
elements of omoll`s business. including, without limitation. computer hardware and soiltivare
and other intellection lyo> y. located upon or about the Premises.
Following the expiration of the Operating Period, including during the two year period following
delivery of the Non - Operation Notice, the Lessee shall have the right to terminate this Lease
upon thirty (30) days written notice to Lessor and shall be obligated to pay Rent and all other
sums due through the date of the termination of this Lease and no party hereto shall have any
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•
further obligations in connection herewith except under those provisions that expressly survive a
termination of this Lease.
11.3 Lessee shall make driving bays available for youth sports and provide a ten
percent (10 %) discount on_golf chargcs for residents of the City of El Segundo that have City of
El Segundo Parks and Recreation Identification Cards. This discount will be in addition to all
other gol ling discounts offered by Lessee such as the twenty percent (20%) frhrtli' discount offered
to senior citizens and active military personnel.
11.4 During such times that Tc�l'on olt' is the operator, it shall: (a) between the
hours of 6:00 a.m. and 12:00 p.m. on Monday through Friday, and 6:00 a.m. and 9:00 a.m.
k1haFge uwFiogn Satur�dav and Sunday. allow City of FA Scgtnido residents that have a Parks and
Recreation Card to use the portion of the Premises wyatkp aidcntificd in Section 1 ].2(i) ol`this
Agreement lbi: driving range s tl►at a►r�l u5c,_and cltargccl s� lc� ies4 the p�nlictrbPe
discounts identified in Scetion 11.3. that is consistent with fees charged by other driving ranges
in Los Angeles County that are open to the public and that are maintained in a similar first class
condition; (b) provide discounted monthly user access cards for frequent customers similar to
those provided at other Top Csrall "I'o. olE' facilities; (c) wie-von-m— ,11,. ........
�Y" r -, •ter
promote youth and junior golf programs, including but not limited to allowing the "Good Swings
Happen" program to continue as well as associated camps, programs and lessons for junior and
youth to W4%
alaca;e etaaa -ellfl difl lessons and °eMees on !he Propfart! Y and allow use of the driving range
for such groups on the Premises at rates commensurate with those currently charged to youth
groups utilizing—due driving range which rates may he adjusted on an annual basis using the Los
Angeles Area Consumer price index l'nr All Urban Consumers -,d) employ or contract with golf
professionals (at salaries or rates commensurate with amounts paid to gcg elf prof tisionals in 1.0s
Angeles C c?untyj. including using a good ftaith cffixrt to emplov or contract with those gtil`
aiolt.ssionals euiicntly providing lessons and services on the Property, subject lu the parties
rya mutuall) acceptable employment terms and Topgolf`s rec cipl of required employment
and wage documentation from each prospective hire (Topgolf agrees to use ,good faith efforts to
consider emplovinent terms commensurate ►with employment turns offered to similarly suited
larofessionals in Los Angeles County), to continue to provide lessons and services in a similar
manner as they are currently provided on the Property; including using a good faith effort to
errigly_rar ectrstra� t _►with twcoll "_prfcsslnnuls lhat`a�c qurrentl► providing services on the
Property during the time period between the Initial Term and Prerises Turnover Date; (e) if the
Site Plan (including the parking layout) will allow, use commercially reasonable efforts to
include a putting practice element on the Premises to replace the existing putting practice
element on the Property; (f) allow junior high school and high school players attending schools
located in El Segundo and Manhattan Beach to use the portion of the Premises used as a driving
range between the hours of 2:30 p.m. and 5:30 p.m. at no charge when such is a formal school
practice event and at a rate commensurate with fees charged by other driving ranges open to the
public that are maintained in a first class condition when they are practicing at other times
(provided that such times are prior to 7:00 p.m. local time); and, (g) use commercially reasonable
39
- DA1�4r {11:2[l;k?NL}Rl':'�tn_ Tzn..w
efforts to introduce the game of golf to a wider audience and work with PGA of America, PGA
of Southern California, and the SCGA in this regard.
11.5 Lessor shall not be required to furnish to Lessee any facilities or services of any
kind whatsoever during the Lease Term, including but not limited to, water, steam heat, gas, hot
water, electricity, light, and power. Lessor shall in no event be required to make any alterations,
rebuildings, replacements, changes, additions, improvements, or repairs to the Premises during
the Lease Term.
11.6 Lessor assigns to Lessee such rights, if any, as Lessor may have against any
parties causing damage during the Lease Term to any Premises Improvements on the Premises,
to sue for and recover amounts expended by Lessee as a result of such damage.
Section 12. Development of the Golf Course Premises; Premises Improvements
12.1 Promptly following the Premises Turnover Date, Lessee shall at no cost or expense
to Lessor modify and demolish, as necessary, and improve (or cause to be modified and
demolished, as necessary, and improved) the Golf Course and Premises in accordance with the
Golf Course Improvements and Premises Improvements as set forth in this Lease, and diligently
prosecute the same to completion, provided that the Golf Course Improvements and Premises
Improvements shall be substantially in accordance with the Plans and Specifications approved by
Lessor as provided in this Lease, all applicable laws, building regulations, and other applicable
restrictions on the use of the Premises, and further provided that Lessee shall be responsible for
obtaining, at no cost or expense to Lessor, all governing and regulatory agency approvals and
permits that may be required in connection with such Golf Course and Premises Improvements.
Notwithstanding the foregoing, in the event that 3" - defaults in its
construction obligations under its tiialse8tiblease with Lessee after the expiration of any
applicable notice and cure periods set forth in this Lease, which would also constitute a default
by Lessee, Lessee shall have the right in its sole and absolute discretion to either: (a) complete
the Premises Improvements as provided above, or (b) terminate this Lease and return the Golf
Course and Premises to the same or better condition as they were in on the Premises Turnover
Date. Lessee shall not be relieved of any obligation to pay Rent or any other payment in the
event of any such default by 30 "�, Wes! P f 4wffW_Top&ol f or any other default hereunder by Lessee
unless and until this Lease is terminated as set forth above in (b) and the Lessor is in possession
of the Golf Course and the Premises and both have been returned to the same or better condition
as they existed prior to the Premises Turnover Date. No action by Lessee to complete the
Premises Improvements shall alter or diminish the '' "'f; ;hires — Eyna►�tee l'uJ�
Guaruntom Guaranties. All improvements to the Golf Course and the Premises shall be
completed within teas (10) months of the Premises Turnover Date, subject to events of e
nit�Jeurel-'orcc Majcure and delays caused by Lessor.
12.2 Lessor and Lessee shall meet and attempt to agree on a plan, including but not
limited to addressing any and all construction, operational and liability issues, that would result
in keeping the Golf Course, or portions thereof, open for business during the construction of the
Golf Course Improvements and the Premises Improvements, and Lessee shall be entitled to
39
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retain fifty percent (50 %) of any net revenue resulting from the Golf Course operations for the
period commencing on the Premises Turnover Date and ending on the Fixed Rent
Commencement Date or until the Golf Course Improvements are completed and the Golf Course
is capable of being operated in accordance with Section 4.1 of this Lease before the expiration of
such ten month period. Notwithstanding the foregoing Lessee shall retain in its sole and absolute
discretion the absolute and unconditional right to shut down the Golf Course operations or
portions thereof at any time during the period commencing on the Premises Turnover Date and
ending on the Fixed Rent Commencement Date. Within ninety (90) days after the
Commencement Date, Lessee shall deliver to Lessor the conceptual Golf Course Improvement
Plans and Specifications for Lessor's approval as provided in Section 5.4 of this Lease.
12.3 Lessor shall review and approve the Plans and Specifications, such approval not to
be unreasonably withheld, conditioned or delayed, and/or provide Lessee with its comments
within thirty (30) days after Landlord's receipt of the Plans and Specifications. If disapproved
Lessee shall make all necessary revisions within ten (10) days after Lessee's receipt thereof. This
procedure will be repeated until Lessor ultimately approves the conceptual Plans and
Specifications or until this Lease is terminated in accordance with Section 5.4 and/or 5.5 hereof.
Notwithstanding the foregoing, the conceptual Plans and Specifications for the Premises
Improvements shall be approved if they are consistent in all material respects with the Prototype
Facility and all applicable zoning and building and safety laws and regulations, and the
conceptual Plans and Specifications for the Golf Course Improvements shall be approved if they
are consistent in all material respects with Exhibit "17" and all applicable zoning and building Formatted: Font: Bold
and safety laws and regulations.
Section 13. Title to Premises Improvements
Title to any Premises Improvements and any modifications, additions, restorations,
repairs and replacements thereof hereafter placed or constructed by or through Lessee shall be
and remain in Lessee until the expiration or termination of the Lease Term. On such expiration
or sooner termination, title to any Premises Improvements shall automatically pass to, vest in,
and belong to Lessor without further action on the part of either party and without cost or charge
to Lessor in accordance with Section 26.2 hereof; provided, however, that no lien rights created
or allowed by Lessee or any assignee or sublessee shall extend beyond the Lease Term. During
the Lease Term, Lessee shall be entitled, for all taxation purposes, to claim cost recovery
deductions and the like on any Premises Improvements.
Section 14. No Waste
Lessee shall not intentionally commit any material waste on or to the Premises.
Section 15. Inspection and Access
39
Iliii�syiZYT�i1(i��ryTlR'�.Ly y Nd��i7
9N
Lessor shall have the right to enter on the Premises and any Premises Improvements at all
reasonable times during usual business hours upon not less than three (3) business days' notice
for the purpose of preventing the creation of any prescriptive rights to any third person, allowing
inspection by mortgagees, and, within one hundred eighty (180) days of the expiration of the
Lease Term, Lessor shall have the right to enter the Premises for the purpose of showing the
Premises to prospective lessees or purchasers. Notwithstanding anything to the contrary herein,
any access given to Lessor to enter the Premises for the purposes explicitly stated above shall be
subject to Lessee's reasonable security rules and regulations. Lessee reserves the right to
accompany Lessor at all times during any entry by Lessor. Lessor shall use commercially
reasonable efforts to minimize any interference with the day to day operations of the Premises in
exercising any of its rights under this Section 15. In the event any subtenant has the right to
abate rent, as a result of Lessor's activities under this Section 15, then Lessee shall be entitled to
an abatement of Fixed Rent to the extent of such subtenant rent abatement, less any rent loss
insurance proceeds received by Lessee, provided that Lessee has given Lessor prior written
notice of the terms of such subtenant abatement rights.
Section 16. Lessor's and Lessee's Exculpation and Indemnity
16.1 After the Premises Turnover Date, Lessee is and shall be in exclusive control of
the Premises and of any Premises Improvements, and except as otherwise provided herein,
Lessor shall not in any event whatsoever be liable for any injury or damage to any property or to
any person happening on, in, or about the Premises or any Premises Improvements or any injury
or damage to the Premises or any Premises Improvements or to any property, whether belonging
to Lessee or to any other person, caused by any fire, flooding, earthquake, storm, act of God,
terrorist act, breakage, leakage, defect, or bad condition in any part or portion of the Premises or
of any Premises Improvements, or from steam, gas, electricity, water, or rain, that may leak into,
or issue or flow from any part of the Premises or any Premises Improvements from the drains,
pipes, or plumbing work of the same, or from the street, subsurface, or any place or quarter, or
due to the use, misuse, or abuse of all or any of any Premises Improvements or from any kind of
injury that may arise from any other cause whatsoever on the Premises or in or on any Premises
Improvements, including defects in construction of any Premises Improvements, latent or
otherwise. Notwithstanding the foregoing, Lessor shall indemnify, defend and hold harmless
Lessee from and against all claims and all costs, expenses, and liabilities incurred in connection
with all claims, including any action or proceeding brought thereon, arising from or as a result
of. (i) any accident, injury, loss, or damage whatsoever caused to any person or to the property of
any person, as shall occur on or about the Premises prior to the Premises Turnover Date, except
to the extent such is caused by the negligent or wrongful acts of the Lessee, (ii) any failure on the
part of Lessor to perform or comply with any of the covenants, agreements, terms, provisions,
conditions, or limitations contained in this Lease on its part to be performed or complied with, or
(iii) any negligent act of Lessor or the agents, contractors, servants, or employees of Lessor. In
case any action or proceeding is brought against Lessee by reason of any claims covered in this
Section 16.1, Lessor on written notice from Lessee shall, at Lessor's expense, resist or defend
such action or proceeding by counsel approved by Lessee in writing, which approval shall not be
unreasonably withheld, conditioned or delayed.
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pAt-.0II IL .11 N1IIIlFl1 �rrS ]31R'
91
16.2 To the extent not caused by the negligence or willful misconduct of Lessor or its
official, officers, agents, employees or contractors, Lessee shall indemnify, defend and hold
Lessor harmless for, from and against all liabilities, obligations, damages, penalties, claims,
costs, charges, and expenses, including reasonable attorneys' fees, that may be imposed on or
incurred by or asserted against Lessor by reason of or in any way related to any of the following
occurrences following the Premises Turnover Date:
16.2.1 Any work done in, on, or about all or any part of the Property by or on
behalf of Lessee�i' T., " est Ve;R; g or I typ(f l 1-1 tip Qi)1 I' or any Premises Improvements related to
the use, occupancy or development of the Property by or on behalf of Lessee, - 3tt--- Wiist- M5shijig
or of *iollTo golI -,
16.2.2 Any use, nonuse, possession, occupation, condition, operation,
maintenance, or management of all or any part of the Premises or any Premises Improvements;
16.2.3 Any negligence or willful misconduct on the part of Lessee or any of its
agents, contractors, servants, employees, sublessees, licensees, or invitees;
16.2.4 Any accident, injury, or damage to any person or property occurring in,
on, or about the Premises or any Premises Improvements; or
16.2.5 Any failure on the part of Lessee to perform or comply with any of the
covenants, agreements, terms, provisions, conditions, or limitations contained in this Lease on its
part to be performed or complied with.
16.3 [Intentionally Omitted]
16.4 In case any action or proceeding is brought against Lessor by reason of any claims
covered in Section 16.2, Lessee on written notice from Lessor shall, at Lessee's expense, resist
or defend such action or proceeding by counsel approved by Lessor in writing, which approval
shall not be unreasonably withheld, conditioned or delayed.
16.5 If Lessor or Lessee asserts any claim against the other party by reason of the other
party's ownership interest, the party asserting the claim shall have no claim against the other
party's officers, directors, employees or agents.
16.6 The provisions of this Section 16 shall survive any termination of this Lease.
Section 17. Condemnation
17.1.1
17.1 If all the Premises and Premises Improvements are taken or condemned, by right
of eminent domain or by purchase in lieu of condemnation, or if such portion of the Premises or
any Premises Improvements shall be so taken or condemned that the portion remaining is not
sufficient and suitable for operation of a commercial driving range and restaurant, in Lessee's
39
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reasonable judgment, to permit the restoration of any Premises Improvements following such
taking or condemnation or for Lessee's use of the Premises, then this Lease and the Lease Term,
at Lessee's option, shall cease and terminate as of the date on which the condemning authority
takes possession or title (any taking or condemnation of the land described in this section being
called a "Total Taking "), and the Fixed Rent and Additional Rent shall be apportioned and paid
to the date of such Total Taking.
17.2 If this Lease expires and terminates as a result of a Total Taking, the rights and
interests of the parties shall be determined as follows:
17.2.1 The total award or awards for the Total Taking shall be apportioned and
paid to Lessee and Lessor in Proportionate Shares. For purposes hereof, the "Proportionate
Shares" of Lessee and Lessor shall be expressed as a percentage of the whole and shall be
calculated as of the date of the Total Taking, as follows: (i) Lessor's Proportionate Share shall
equal the percentage obtained by dividing the Land Value by the Aggregate Sum, and (ii)
Lessee's Proportionate Share shall equal the percentage obtained by dividing the Amortized
Improvements Cost by the Aggregate Sum. In the event that the Golf Course is condemned then
as between Lessor and Lessee (and the CenterCal Guarantor and the 3i1'est (l��x +airtf�r�rc�l f
c �4i;n of htd , s) any condemnation award with respect to the Golf Course or Golf Course
Improvements shall be exclusively awarded to the City.
17.2.1.1 The term "Land Value" shall mean the fair market value of
the land and the driving range improvements currently located thereon (prior to any development
activity of Lessee or its sublessees or assigns) as determined as of the date of this Lease and
without regard to this Lease, but encumbered by the License Agreement as the same may be
amended pursuant to Section 5.4, the use restriction on the Premises imposed by Chevron in that
certain Corporation Grant Deed form Chevron to Lessor, dated May 16, 1988 and recorded in the
Official Records of Los Angeles County, California on May 24, 1988 as Instrument No. 88
826097 and any other liens or encumbrances existing as of the date of this Lease not including
this Lease. Lessor and Lessee will work in good faith to agree upon the Land Value within 180
days from the Commencement Date. Each of Lessee and Lessor may, at its sole cost and
expense, retain one or more appraisers or other valuation consultants to perform appraisals or
other analyses of the Land Value and assist with the determination of the Land Value hereunder.
Following the agreement of Lessor and Lessee with regard to the Land Value, such Land Value
shall remain fixed and shall not be subject to adjustment hereunder.
17.2.1.2 The term "Amortized Improvements Cost" shall mean at
a given point in time the then unamortized cost of the Premises Improvements (i.e. the aggregate
cost of the Premises Improvements as amortized using 40 year straight line depreciation
commencing on the date that rent commences under the Sublease with 30 West Pershing IL(Amaol '
1 l. S =u� ndo through the date of the Total Taking hereunder).
17.2.1.3 The term "Aggregate Sum" shall mean, at any given point
in time, the sum of the Land Value and the Amortized Improvements Cost.
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93
17.3 If, during the Lease Term, there is a taking or condemnation of the Premises or
any Premises Improvements that is not a Total Taking and not a temporary taking of the kind
described below, or if there is a change in the grade of the streets or avenues on which the
Premises abuts, this Lease and the Lease Term shall not cease or terminate, but shall remain in
full force and effect with respect to the portion of the Premises and of any Premises
Improvements not taken or condemned (any taking or condemnation or change of grade of the
kind described in this section being referred to as a "Partial Taking "), and in such event:
17.3.1 The total award or awards for the taking shall be apportioned and paid to
Lessee and Lessor in Proportionate Shares (as calculated as of the date of the Partial Taking).
17.3.2 Following any such taking or condemnation, Rent shall be equitably
abated based on the portion of the Premises taken.
17.4 In the event of a taking of all or a part of the Premises or any Premises
Improvements for temporary use, this Lease shall continue without change, as between Lessor
and Lessee, and Lessee shall be entitled to the entire award made for such use; provided that
Lessee shall be entitled to file and prosecute any claim against the condemnor for damages and
to recover the same, for any negligent use, waste, or injury to the Premises or any Premises
Improvements throughout the balance of the then - current Lease Term. The amount of damages
so recovered shall belong to Lessee.
17.5 In the event of any dispute between Lessee and Lessor regarding any issue of fact
arising out of a Taking mentioned in this Section 17, such dispute shall be resolved by the same
court in which the condemnation action is brought, in such proceedings as may be appropriate
for adjudicating the dispute.
Section 18. Assignment and Sublease
18.1 Lessee shall have the right, to assign this Lease or any interest therein, and shall
further have the right to sublease or sublet all or any portion or portions of the Premises or any
interest therein, with the Lessor's consent which may be withheld in the Lessor's reasonable
discretion based upon the financial strength of the proposed assignee or subtenant and its
experience in operating commercial driving ranges and restaurants. Any such assignment or
subletting by Lessee shall also be subject to all the following provisions:
18.1.1 Lessee shall not then be in default under this Lease beyond the expiration
of any applicable notice and cure period;
18.1.2 The assignee of Lessee shall expressly assume in writing all of Lessee's
obligations hereunder from and after the effective date of any such assignment;
18.1.3 Any sublease shall be subject to the terms and provisions of this Lease
with respect to such subtenant's or occupant's use and occupancy of the premises in question and
shall not work to alter any term or condition of this Lease;
m
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18.1.4 Except as provided hereinbelow, no such subleasing or assignment shall
relieve Lessee from liability for payment of Rent herein provided or from the obligations to
observe and be bound by the terms, conditions, and covenants of this Lease. No transfer of
corporate shares of Lessee, if Lessee is a corporation, unless such transfer of shares will result in
a change in the present voting control of the Lessee by the person or persons owning a majority
of said corporate shares on the date of this Lease, shall constitute an assignment and be subject to
the conditions of this Section 18.2. Notwithstanding the foregoing, after completion of the Golf
Course Improvements and the Premises Improvements and payment of all Rent owing as of the
effective date of the assignment, Lessee shall be released from any and all further liabilities
under this Lease from and after the effective date of an assignment of this Lease to either: (i) an
assignee entity, that is not a so called "special purpose entity," which has a net current worth and
net tangible assets at the time of the assignment, determined according to generally accepted
accounting principles consistently applied, of not less than Ten Million Dollars ($10,000,000.00)
in Constant Dollars as defined in Section 8, or (ii) an approved assignee entity (as provided
above), that is a so called "special purpose entity," which is able to demonstrate to Lessor's
reasonable satisfaction the prospective financial ability and fiscal resources (which may include,
but shall not be limited to, the cash flow from the business operations conducted or to be
conducted on the Premises) to fulfill the monetary obligations of Lessee under this Lease; so
long as the assignee also has significant experience in operating a commercial driving range and
restaurant. Lessee's release from liability pursuant to subsection (ii) of this Section 18.2.4 (i)
shall be effective only if Lessee provides Lessor within thirty (30) days of request therefor a
copy of the assignment and reasonable evidence of the assignee's qualifications hereunder (and
Lessor shall have sixty (60) days thereafter to review such evidence and render a reasonable
determination in writing to the Lessee); and
18.1.5 Provided that Lessee, within sixty (60) days following final execution of
any sublease or other occupancy agreement for the Premises, provides Lessor with a copy of
such sublease or occupancy agreement certified by Lessee to be a true and correct copy thereof,
and further provided that Lessee does not thereafter amend such sublease or occupancy
agreement without providing to Lessor a similar certification within sixty (60) days following
final execution thereof along with a copy of the sublease or occupancy agreement as amended as
well as such other and further documentation that is reasonable and necessary to adequately
review the financial strength and experience of the proposed sublessee, Lessor shall have sixty
(60) days to provide written notice to Lessor of its approval or rejection of such sublease or other
occupancy agreement. If Lessor approves of such subtenant or other occupancy agreement,
within sixty (60) days following Lessee's written request therefor, Lessor shall execute such
other documents or instruments as may be reasonably requested by any subtenant or occupant of
the Premises affirming and evidencing Lessor's recognition of the sublease or occupancy
agreement in question as provided hereinabove so long as: (i) the term of the sublease, inclusive
of renewal options, shall not exceed the Lease Term, (ii) the subtenant's permitted use is not in
violation of Section 4 hereof, and (iii) the subtenant certifies that the sublease is subject to the
terms and provisions of this Lease with respect to such subtenant's or occupant's use and
occupancy of the premises in question.
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Notwithstanding the foregoing, the sublease of the Premises to'f o?i;o L°I Segundo shall Formatted: Font: 12 pt
prohibit -Lhc assignment orthe Sublease by TopgolITA Segundo until. the expiration ofth4
Operating Period. except in connection with a * *Pcrnmitied TopgoIt" ]'ransf'4r" (as such term is
hereinatler defined), Topeoll' I l Scpindo shall have the right at any time to assign the Sublease
without the consent of Lessor or Lessee to: 1a1 apy business entity �ylfllch may. as the result ol'a
rcorg~aniiation, merger. consolidation. or sale or assets succeed Lu substantially till of the business
carried (in by TG]. Cb1 any affiliate of"Mil rAriillate" means any entity direetly or indirectly.
throut;li one or more intermediaries. controlling., controlled by. or under common control Nvith
T'GI. The term %ontrol" means the possession, directly or indirectly, ol'the Ixiwer ro direct or
cause the direction of the M,;4nakLmcnt and policies ofTG1. whether through (lie ownership of"
votin securities. by contract or othcrwisc)..t0_Un emit .which may, as a result ol° l
j°eorga lzation. merger, consolidation or sale of agwt& succeed to substuntial ly all of the T'Op
business now carried on by TGl and dI any entity ►►°hick ace wires 50% or more orthe issued
and outstanding, voting; stock or ownership interests or such lesser percentage as shall be
sufficient Lo acquire votin control of To =011' El Se undo or or the corporation or other emit
which controls Topgolf El Segundo. l "Ach of the above (a) through (d) referred -to he_rcin is a
"Permitted Topizol €Transfer."
Lessor hereby approves the sublease of the Premises to'�'� ;Y;z;; 1rlm++ inEl ttblr,el t#e
3-ovesi Topgoir El Se undcD so long as such .4a+bl+HtVS-
deSublease does not alter the terms or conditions of this Lease. Lessor also agrees that in the
event that Lessor terminates this Lease as a result of any Event of Default by Lessee, it shall
deliver written notice to 30 We,,i Pemh ingToMol I' Guarantors and 'Wp Gofj:a �nlr of such
termination and shall provide 30 West Pet-sh'Ag °.nd''`op r Golf 1 'o roll' with -thirty (30) days in
which to agree -- Yee+- ieff re -� t determine whether enter
into a lease of the Premises on the identical rental and other terms and conditions as this Lease
(and Lessor shall afford therm To a golf'the opportunity to enter into such lease during such thirty
(30) day period) which shall take effect immediately upon termination of this Lease; provided
that (i) in connection with its execution and delivery of such lease, 30 West Pefsh �g
ci♦m+ `1'c >LDg+olt' GuaranCOr or = k4p- trDll'-'1 "0_ ps oI I pays- Lessor any unpaid Rent owing by Lessee to
Lessor under this Lease (as determined without regard to any acceleration of or addition to any
such Rents pursuant to Section 20.2.4 hereof) and cures any existing defaults that are capable of
being cured by a person or entity other than the Lessee or CenterCal Guarantor, and (ii) in the
event that Lessee - disputes any such termination of this Lease, and Lessor and/or Lessee -bring
legal action to determine its rights hereunder, -30 We t Izerskm'1"o alt (and Operator)_ shall
have the right to continue to occupy the Premises during the pendency of such legal action
(provided they continue to pay Rent and other sums to Lessor as they become due hereunder, as
determined without regard to any acceleration or addition to Rents pursuant to Section 20.2.4
hereof) and Lessor shall provide 3i1�W Rc lei+ a 1 "upr oil' Gu�is °ante�rs or TopGo1lTous:c it as
applicable, the right to enter into the new lease as described above during the thirty (30) day
period after a court of competent jurisdiction determines that this Lease has terminated or Lessee
agrees or otherwise concedes that this Lease has terminated.
18.2 If this Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, 11 USC § 101, et seq. (the "Bankruptcy Code "), any and all monies or other
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4 I .fl W31939) 007-22197IR..9
M
consideration payable or otherwise to be delivered to Lessor shall (subject to the Bankruptcy
Code) be and remain the exclusive property of Lessor and shall not constitute property of Lessee
within the meaning of the Bankruptcy Code. -Any and all monies or other considerations
constituting Lessor's property under the preceding sentence not paid or delivered to Lessor shall
be held in trust for the benefit of Lessor and be promptly paid or delivered to Lessor. -Any
person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy
Code shall be deemed without further act or deed to assume all of the obligations arising under
this Lease. Any such assignee shall upon demand execute and deliver to Lessor an instrument
confirming such assumption.
18.3 The exercise of any right or other action under this Section 18 shall not diminish or
alter the obligations of 40 - We-A-C.it tnt- Eip]'o�Folf' Uuarant rs or CenterCal Guarantor under
their respective guaranties.
Section 19. Lessor Default; Remedies
19.1 If Lessor, whether by action or inaction, is in default of any of its obligations
under this Lease and such default continues and is not remedied within thirty (30) days after
Lessee has given Lessor written notice of the same (or, in the case of a default that can be cured
but not within such period of thirty (30) days, if Lessor has not: (i) commenced curing such
default within such thirty (30) day period, (ii) notified Lessee within such thirty (30) day period
of Lessor's intention to cure the default, and (iii) continuously and diligently completed the cure
of the default), except as otherwise expressly set forth in this Lease Lessee shall be entitled to
pursue any right or remedy available to Lessee under this Lease, at law or in equity, including,
without limitation: (a) the right to specific performance, and (b) the right to cure such default and
deduct the cost of curing such default from the Rent payable under this Lease.
19.2 No failure by Lessee to insist on the strict performance of any agreement, tern,
covenant, or condition of this Lease or to exercise any right or remedy consequent on a breach,
and no payment of Rent during the continuance of any such breach, shall constitute a waiver of
any such breach or of such agreement, term, covenant, or condition. No agreement, term,
covenant, or condition to be performed or complied with by Lessor, and no breach by Lessor,
shall be waived, altered, or modified, except by a written instrument executed by Lessee. No
waiver of any breach shall affect or alter this Lease, but each and every agreement, term,
covenant, and condition of this Lease shall continue in full force and effect with respect to any
other then - existing or subsequent breach.
19.3 Each right and remedy provided for in this Lease in favor of Lessee shall be
cumulative and shall be in addition to every other right or remedy provided for in this Lease or
now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by Lessee of any one or more of the rights or remedies provided for in
this Lease or now or hereafter existing at law or in equity or by statute or otherwise, shall not
preclude the simultaneous or later exercise by the party in question of any or all other rights or
remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute
or otherwise.
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Section 20. Lessee Default; Remedies
20.1 The occurrence of any one or more of the following shall constitute a breach of
this Lease by Lessee and an "Event of Default ":
20.1.1 If Lessee defaults in the payment of Rent or any other payment due and
payable by Lessee or the provision of insurance, and such default continues for ten (10) days
after Lessor has given Lessee a written notice specifying the same; or
20.1.2 If Lessee, whether by action or inaction, is in default of any of its
obligations under this Lease (other than a default in the payment of Rent or the provision of
insurance by Lessee) and such default continues and is not remedied within thirty (30) days after
Lessor has given Lessee a written notice specifying the same, or, in the case of a default that can
be cured but not within a period of thirty (30) days, if Lessee has not: (i) commenced curing such
default within such thirty (30) day period, (ii) notified Lessor of Lessee's intention to cure the
default, and (iii) continuously and diligently completed the cure of the default, not to exceed five
(5) months with respect to a failure to comply with the Continuous Operation Requirement. For
purposes of this provision, except for the Continuous Operation Requirement, the filing of and
diligent prosecution of successful litigation by Lessee against any sublessee to effect such cure
(including any such litigation to gain possession of the Premises from 'n Wesi 11en; L^g1Lo) of f
or its successor) shall constitute commencement of and continuous and diligent completion of
cure of default so long as Rent is paid when due hereunder.
20.2 On the occurrence of an Event of Default and subject to Lessor's obligations as
provided under this Lease and under California law to mitigate Lessor's damages, Lessor shall
be entitled to pursue any right or remedy available to Lessor under this Lease, at law or in equity,
including, without limitation: (a) the right to specific performance, and (b) any one or more of
the remedies set forth in this section or any other remedy specifically set forth in this Lease.
20.2.1 Subject to Section 20.2.3, Lessor or Lessor's agents and employees may
immediately, or at any time thereafter, reenter the Premises either by summary eviction
proceedings or by any available action or proceeding at law or equity, without being liable to
indictment, prosecution, or damages (except for any damages caused by their negligence or
willful misconduct), and may repossess the same, and may remove any person from the
Premises, to the end that Lessor may have, hold, and enjoy the Premises.
20.2.2 Lessor may relet the whole or any part of the Premises from time to time,
either in the name of Lessor or otherwise, to such lessees, for such terms ending before, on, or
after the termination of the Lease
20.2.3 Whether or not Lessor retakes possession or relets the Premises, Lessor
has the right to recover its damages, including, without limitation, all lost rentals, all reasonable
34
nwi .nrnasuai(a�,�47ca4V?
M
costs incurred by Lessor in restoring the Premises or otherwise preparing the Premises for
reletting, and all reasonable costs incurred by Lessor in reletting the Premises.
20.2.4 To the extent permitted under California law: (i) Lessor may sue
periodically for damages as they accrue without barring a later action for further damages; and
(ii) Lessor may, in one action, recover accrued damages plus damages attributable to the
remaining Lease Term equal to the difference between the Rent reserved in this Lease for the
balance of the Lease Term after the time of award, and the fair rental value of the Premises for
the same period, discounted at the time of award at a reasonable rate not to exceed twelve
percent (12 %) per annum. To avoid a multiplicity of actions, Lessor may obtain a decree of
specific performance requiring Lessee to pay the damages stated in Sections 20.2.3 and 20.2.4 as
they accrue.
20.2.5 Termination of this Lease shall not constitute a waiver of Lessor's other
remedies nor an election of remedies.
20.3 No failure by Lessor to insist on the strict performance of any agreement, term,
covenant, or condition of this Lease or to exercise any right or remedy consequent on a breach,
and no acceptance of full or partial Rent during the continuance of any such breach, shall
constitute a waiver of any such breach or of such agreement, term, covenant, or condition. No
agreement, term, covenant, or condition to be performed or complied with by Lessee, and no
breach by Lessee, shall be waived, altered, or modified, except by a written instrument executed
by Lessor. No waiver of any breach shall affect or alter this Lease, but each and every
agreement, term, covenant, and condition of this Lease shall continue in full force and effect with
respect to any other then - existing or subsequent breach.
20.4 Each right and remedy provided for in this Lease in favor of Lessor shall be
cumulative and shall be in addition to every other right or remedy provided for in this Lease or
now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by Lessor of any one or more of the rights or remedies provided for in
this Lease or now or hereafter existing at law or in equity or by statute or otherwise, shall not
preclude the simultaneous or later exercise by the party in question of any or all other rights or
remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute
or otherwise.
Section 21. No Abatement of Rent; Encroachments
21.1 Except as otherwise specifically provided in this Lease, no abatement, refund,
diminution, or reduction of Rent or other compensation shall be claimed by or allowed to Lessee,
or any person claiming under it.
21.2 Unless directly or indirectly caused by or on behalf of Lessor, if any adjoining
building or structure encroaches on the Premises, no claim, demand, or objection of any kind
shall be made by Lessee against Lessor by reason of such encroachments and no claim for
abatement of Rent due under this Lease shall be made by reason of such encroachments or acts
39
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••
of, or in connection with, removal of the encroachments. The rights, liabilities, and obligations
of the parties shall be the same as if there were no encroachments. In any related legal
proceedings, the Premises may properly and without prejudice be described according to the
description previously used without reference to any such encroachments. Lessor agrees to fully
cooperate at Lessee's expense with Lessee in any proceedings sought by Lessee to remove such
encroachments.
Section 22. Leasehold Mortgages
22.1 Lessee shall have the right, in addition to any other rights granted and without any
requirement to obtain Lessor's consent, to mortgage or grant a security interest in Lessee's
interest in this Lease and the Premises and the Premises Improvements and any subleases, under
one or more leasehold mortgages or pursuant to a sale - leaseback financing arrangement to one or
more "Lending Institutions" (as defined in Section 22.2), and /or under one or more purchase -
money leasehold mortgages, and to assign this Lease and any subleases as collateral security for
such leasehold mortgages or pursuant to the sale - leaseback financing arrangement, on the
condition that all rights acquired under such leasehold mortgages or pursuant to the sale -
leaseback financing arrangement shall be subject to each and all of the covenants, conditions,
and restrictions set forth in this Lease and to all rights and interests of Lessor, none of which
covenants, conditions, restrictions, rights, or interests is or shall be waived by Lessor by reason
of the right given to mortgage or grant a security interest in Lessee's interest in this Lease and
the Premises and the Premises Improvements, except as expressly provided otherwise in this
Lease.
22.2 Any mortgage or sale - leaseback financing arrangement made pursuant to this
section is referred to as a "Permitted Leasehold Mortgage," and the holder of or secured party
under a Permitted Leasehold Mortgage is referred to as a "Permitted Leasehold Mortgagee."
The Permitted Leasehold Mortgage that is prior in lien or interest among those in effect is
referred to as the "First Leasehold Mortgage," and the holder of or secured party under the
First Leasehold Mortgage is referred to as the "First Leasehold Mortgagee." For the purposes
of any rights created under this section, any so- called wraparound lender shall be considered a
First Leasehold Mortgagee. If a First Leasehold Mortgage and a Permitted Leasehold Mortgage
that is second in priority in lien or interest among those in effect are both held by the same
Permitted Leasehold Mortgagee, the two Permitted Leasehold Mortgages are collectively
referred to as the "First Leasehold Mortgage." A Permitted Leasehold Mortgage includes,
without limitation, mortgages and trust deeds as well as financing statements, security
agreements, sale - leaseback instrumentation, and other documentation that the lender may
require. The words "Lending Institution," as used in this Lease, mean any commercial,
national, or savings bank, savings and loan association, trust company, pension trust, foundation,
or insurance company, and any other entity, person, corporation or partnership making a loan on
the security of Lessee's interest in this Lease or all or any part of the Premises Improvements.
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22.3 If a Permitted Leasehold Mortgagee sends to Lessor written notice specifying the
name and address of the Permitted Leasehold Mortgagee, then provided this Lease is still in
effect and as long as such Permitted Leasehold Mortgage remains unsatisfied of record or until
written notice of satisfaction is given by the holder to Lessor, the following provisions shall
apply (in respect of such Permitted Leasehold Mortgage and of any other Permitted Leasehold
Mortgages):
22.3.1 There shall be no amendment, or modification, except those explicitly
contemplated by this Lease, of this Lease without in each case the prior consent in writing of the
Permitted Leasehold Mortgagee and the Subtenant under the Sublease described in Section
5.4(iv). Nor shall any merger result from the acquisition by, or devolution on, any one entity of
the fee and the leasehold estates in the Premises.
22.3.2 Lessor shall, upon delivering Lessee any notice, whether of default or any
other matter, simultaneously deliver a copy of such notice to the Permitted Leasehold
Mortgagee, and no such notice to Lessee shall be deemed delivered unless a copy is so delivered
to the Permitted Leasehold Mortgagee in the manner provided in this Lease for giving notices.
22.3.3 In the event of any default by Lessee under this Lease, each Permitted
Leasehold Mortgagee shall have the same concurrent period as Lessee has to remedy or cause to
be remedied or commence to remedy and complete the remedy of the default complained of for
such default, and Lessor shall accept such performance by or at the instigation of such Permitted
Leasehold Mortgagee as if the same had been done by Lessee. Each notice of monetary default
given by Lessor will state the amounts of whatever Rent or other payments are then claimed to
be in default. Nothing herein shall require any Permitted Leasehold Mortgagee to cure any
Event of Default. No such cure shall constitute an assumption of any liability by such Permitted
Leasehold Mortgagee (unless the Permitted Leasehold Mortgagee assumes this Lease or enters
into a new lease with Lessor in their respective sole discretion) unless a liability arises directly
from a negligent or wrongful act of the Permitted Leasehold Mortgagee and in such a case the
Permitted Leasehold Mortgagee shall have the obligation to defend and indemnify the Lessor
consistent with the Lessee's obligation to defend and indemnify Lessor, nor prejudice the right
of such Permitted Leasehold Mortgagee and/or Lessee to later contest or continue to contest the
validity of the claim of the Event of Default.
22.3.4 Lessor agrees that the name of the Permitted Leasehold Mortgagee may be
added to the "Loss Payable Endorsement" of any and all insurance policies required to be carried
by Lessee.
22.3.5 Except as otherwise explicitly provided in this Lease, no liability for the
payment of Rent or the performance of any of Lessee's covenants and agreements shall attach to
or be imposed on the Permitted Leasehold Mortgagee (other than any obligations expressly
assumed by the Permitted Leasehold Mortgagee), all such liability (other than any obligations
expressly assumed by the Permitted Leasehold Mortgagee) being expressly waived by Lessor.
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22.3.6 Lessor, within thirty (30) days after a request in writing by Lessee or
any Permitted Leasehold Mortgagee, shall furnish a written statement, duly acknowledged, that
this Lease is in full force and effect and unamended, or if there are any amendments, such
statement will specify the amendments, and that there are no defaults by Lessee that are known
to Lessor, or if there are any known defaults, such statement shall specify the defaults Lessor
claims exist.
22.3.7 Intentionally Omitted
22.3.8 inter 'mall y OmittedAttornment
Lessor, on request, shall execute, acknowledge, and deliver to each Permitted Leasehold
Mortgagee an agreement prepared at the sole cost and expense of Lessee, in form satisfactory to
the Permitted Leasehold Mortgagee and Lessor, among Lessor, Lessee, and the Permitted
Leasehold Mortgagee, agreeing to all the provisions of this section. Lessor shall attom to any
Permitted Leasehold Mortgagee or any other person who becomes Lessee by, through, or under a
Permitted Leasehold Mortgage, to the extent such is consistent with Section 18.1.5 and as long as
(i) all Rent and other monetary payments due under this Lease have been made; and (ii) the
Permitted Leasehold Mortgage has sufficient net worth, subject to the reasonable approval of the
Lessor, to operate the driving range and restaurant on the Premises.
22.3.9 Lessor shall at no time be required to subordinate its interest in the
Premises to the lien of any leasehold mortgage, including any Permitted Leasehold Mortgage,
nor to mortgage its fee simple interest in the Premises as collateral or additional security for any
leasehold mortgage, including any Permitted Leasehold Mortgage.
22.3.10 If following completion of the Golf Course Improvements and the
Premises Improvements Lessee is declared bankrupt or insolvent and this Lease is thereafter
lawfully canceled or rejected, Lessor shall to the extent permitted by law promptly execute a new
lease with , ", --. 11'R-;•hi,"f-4-0116olr W 30- I'VeM-41i
kjsoJv,erAa under the identical terms and conditions as this Lease, provided (i)
all Rent and other monetary payments due under this Lease have been made; (ii) all defaults that
are capable of being cured by a person or entity other than the Lessee or CenterCal Guarantor
have been cured, and (ii) the replacement lessee or a guarantor of its obligations hereunder has a
net worth of at least $10,000,000.00 -ands .
22.3.11 If Lessor declares bankruptcy and Lessor's bankruptcy trustee rejects
this Lease when there is a Permitted Leasehold Mortgagee, Lessee's right to elect to terminate
this Lease or to retain its rights pursuant to 11 USC § 365(h)(1) shall be exercised by the
Permitted Leasehold Mortgagee.
22.3.12 No filing of bankruptcy by Lessee, a sublessee, assignee, or
Permitted Leasehold Mortgagee or any other party, other than Lessor, under, subject to or
otherwise having rights or obligations under or through this Lease, shall relieve the CenterCal
Guarantor or the 3 h cam - mAefl`oppolf Guarantors of their respective- obligations.
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Section 23. Lessor's Right to Encumber
Lessor, during the Lease Term, may encumber or mortgage its fee simple interest in the
Premises so long as Lessee has reasonably consented, which consent shall be promptly granted if
each of the following conditions have been satisfied: (i) Lessee has received thirty (30) days
prior written notice of any such encumbrance, (ii) the holder of any such encumbrance executes
with Lessee a mutually agreeable nondisturbance and attornment agreement, and (iii) at no time
shall the aggregate amount of all such encumbrances of Lessor's fee simple interest in the
Premises exceed a seventy percent (70 %) loan to value ratio (using the land value only without
Premises Improvements). Except as explicitly provided above, Lessor covenants and agrees that
Lessor shall not permit any liens to attach to the Premises that are created by, through or under
Lessor. If any such liens do attach to the Premises, Lessor shall immediately pay off such liens;
provided that if any such liens are not paid off by Lessor within thirty (30) days of the date that
Lessor receives written notice from Lessee that such liens are recorded against the Premises and
a demand that they be removed, Lessee may, at its option, pay off such liens and deduct the
payment from Fixed Rent.
Section 24. Nonmerger
There shall be no merger of this Lease, or of the leasehold estate created by this Lease,
with the fee estate in the Premises by reason of the fact that this Lease, the leasehold estate
created by this Lease, or any interest in this Lease or in any such leasehold estate, may be held,
directly or indirectly, by or for the account of any person who shall own the fee estate in the
Premises or any interest in such fee estate, and no such merger shall occur, unless and until all
persons at the time having an interest in the fee estate in the Premises and all persons having an
interest in this Lease, or in the leasehold estate created by this Lease, shall join in a written
instrument effecting such merger and shall duly record the same.
Section 25. Quiet Enjoyment
Lessee, on paying the Rent and observing and keeping all covenants, agreements, and
conditions of this Lease on its part to be kept, shall quietly have and enjoy the Premises during
the Lease Term without hindrance or molestation by anyone claiming by, through, or under
Lessor as such, subject, however, to the exceptions, reservations, and conditions of this Lease.
Section 26. Surrender
26.1 Except as otherwise provided, Lessee, on the last day of the Lease Term or upon
any earlier termination, shall surrender and deliver up the Premises and any Premises
Improvements to the possession and use of Lessor, free and clear of all liens and encumbrances
other than those, if any, existing on the Premises Turnover Date or created or consented to in
writing by Lessor that Lessor expressly agreed would remain following termination of this
Lease, without any payment or allowance whatsoever by Lessor on account of any Premises
Improvements on the Premises, and in a broom clean as -is condition and with the Premises in its
then condition being capable of being operated as a driving range generally consistent with the
3-9
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operation of the driving range in existence as of the Premises Turnover Date (a "Driving
Range "). Subject to the preceding and Lessee's other obligations under this Lease:
26.2 When furnished by or at the expense of Lessee, fixtures, and equipment may be
removed by Lessee at or before this Lease terminates. For purposes hereof, Lessee's fixtures and
equipment include the outfield target equipment, golf balls, any proprietary technology in the
golf ball dispensers and touch screens, and other proprietary or related technology equipment.
Notwithstanding the foregoing, Lessee shall ensure that the Premises are capable of being
operated as a Driving Range on the last day of the Lease Term or upon any earlier termination
and Rent shall be due and payable until Driving Range is operational.
26.3 Any personal property of Lessee that shall remain on the Premises after the
termination of this Lease and the removal of Lessee from the Premises may, at the option of
Lessor, be deemed to have been abandoned by Lessee, and may either be retained by Lessor as
its property or be disposed of, without accountability, in such manner as Lessor may see fit, or if
Lessor gives written notice to Lessee to such effect, such personal property shall be removed by
Lessee at Lessee's sole cost and expense. If this Lease terminates early for any reason other than
the default of Lessee, then, anything to the contrary notwithstanding, Lessee shall have ninety
(90) days thereafter to remove its personal property and Lessee shall be responsible for paying
all Rent and other costs required hereunder until the Premises are delivered to the Lessor.
26.4 Lessor shall not be responsible for any loss or damage occurring to any property
owned by Lessee unless such loss or damage is caused by Lessor's negligence or willful
misconduct, or that of its agents, employees or contractors.
26.5 If, with the written consent of Lessor, Lessee fails to vacate the Premises after the
expiration of the Lease Term, or any earlier termination hereof, Lessee shall become a tenant
from month to month upon the terms of this Lease; provided, however, that Rent shall be
adjusted beginning on the first day after the expiration or earlier termination to be one hundred
ten percent (110 %) of the Rent then in effect under this Lease.
26.6 Notwithstanding anything contained herein to the contrary, Lessee shall be liable
to Lessor for any and all actual and direct damages caused by its failure to vacate the Premises
after the expiration or any earlier termination of this Lease hereof, but not including incidental
and consequential damages to Lessor. Lessee shall pay such damages within thirty (30) days of
demand. Lessee shall not be subject to the preceding liability to the extent that Lessor has
elected to allow Lessee to continue as a month -to -month tenant beyond the expiration or earlier
termination of this Lease.
26.7 The provisions of this Section 26 shall survive any termination of this Lease.
Section 27. Invalidity of Particular Provisions
If any term or provision of this Lease or the application of the Lease to any person or
circumstances is, to any extent, invalid or unenforceable, the remainder of this Lease, or the
39
104
application of such term or provision to persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected, and each term and provision of this Lease
shall be valid and be enforced to the fullest extent permitted by law.
Section 28. No Representations
Lessee acknowledges that it has examined the Premises and that no representations as to
the condition of the Premises or as to any other matters have been made by Lessor or any agent
or person acting for Lessor except as expressly provided in this Lease.
Section 29. Estoppel Certificate
Either party, within twenty (20) days after a request from time to time made by the other
party and without charge, shall give a certification in writing to any person, firm, or corporation
reasonably specified by the requesting party stating: (i) that this Lease is then in full force and
effect and unmodified, or if modified, stating the modifications; (ii) that Lessee is not in default
in the payment of Rent to Lessor, or if in default, stating such default; (iii) that as far as the
maker of the certificate knows, neither party is in default in the performance or observance of
any other covenant or condition to be performed or observed under this Lease, or if either party
is in default, stating such default; (iv) that as far as the maker (if Lessor) of the certificate knows,
no event has occurred that authorized, or with the lapse of time will authorize, Lessee to
terminate this Lease, or if such event has occurred, stating such event; (v) that as far as the maker
of the certificate knows, neither party has any offsets, counterclaims, or defenses, or, if so,
stating them; (vi) the dates to which Rent have been paid; and (vii) any other matters that may be
reasonably requested by the requesting party. Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Premises or encumbrancer of the
interest of Lessee hereunder. A party's failure to deliver such statement within such time shall
be conclusive upon such party: (a) that this Lease is in full force and effect without modification,
except as may be represented by the party requesting the certificate, and (b) that there are no
uncured defaults in such requesting party's performance.
Section 30. Force Majeure
If the performance by either of the parties of their respective obligations under this Lease
(excluding Rent or other monetary obligations) is delayed, or prevented in whole or in part by
any acts of God, fire or other casualty, floods, storms or other natural disasters, explosions,
accidents, epidemics, war, civil disorders, labor strikes, shortage or failure of supply of materials,
labor, fuel, power, equipment, supplies or transportation, third -_party legal challenges, actions
taken by governmental agencies that could not have been reasonably anticipated by and timely
resolved by a party. or y other labl , ° llif' the pany's ee mmok wIteikes ,
nt.)� iwe4&ally- txe►tt4ofled -( "Force Majeure "), the party's obligation to perform shall be delayed
for a time period equivalent to the Force Majeure (excluding any monetary obligation).
Notti ithstanding the lurcgoing. in no event shall an event of Force Majeure emend the Due
Diligence Period (except in the case of certain third party challenges to Required Project
VAOTicments as more uaiticularly described in Section 5.1 ) .
311
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105
Section 31. Notices
31.1 Any notice required or permitted by the terms of this Lease shall be in writing and
shall be deemed given: (i) when delivered personally to an officer or other authorized
representative of the party to be notified, or (ii) after deposit in the United States mail as certified
mail, postage prepaid, return - receipt requested, or ( i i i sent by reputable overnight courier, and
addressed as follows:
If to Lessor: The City of El Segundo
350 Main Street
El Segundo, CA 90245 -4635
Attention: City Clerk
With a copy (which shall
not constitute notice) to:
If to Lessee
And/or Guarantors:
The City of El Segundo
350 Main Street
El Segundo, CA 90245 -4635
Attention. City Manager
ES CenterCal, LLC,
1600 East Franklin Street
El Segundo, CA 90245
Attention.: Jean Paul Wardy
CenterCal, LLC,
1600 East Franklin Street
El Segundo, CA 90245
Attention.: Fred W. Bruning
30 Wes! 7'i Golf' USA I:1 Se undo, LLC
ono u7,.lnu
8750 N. Central _l .r_press%vav, Suite 2W
Phone: (816) 472 1799
m
Foi: (816) 472 57941200
Dallas. Texas 75231
Attn: Asww og teot %ach Shor, 'Vies President of Real Estate
30! "e,: r7' °:„;:1'o pCinl f' U5A EI 4c t inclu, LLC
909 Walflu
�o�-- ..- m'x'ccrs
8750 N. Central kxpressway, Suite 290
Formatted: Tab stops: Not at 2"
106
Kansas City, Mkwaui- 64 10
Paw (816) 472 57941200
Dallas, Texas 75231
Attn: Getiertiall:lizabeth lion esio, Corp gralL Counsel
1717 MoKonne , Avenue
ilEl1-wwr
L`.,,.. (866) 5'7'7_4617
ARm Randall 11. Siam %liee President Des,ekTmem
With a copy (which shall
not constitute notice) to:
Griffin Fletcher & Herndon, LLP
6857 Amber Lane
Carlsbad, CA 92009
Attention.: Edward Krasnove, Esq.
a i'm assmial God
4-510 Bellevie""t -.300
Kansas City, n4k. -;R-re 64 1 11
MW Fred W1. Cmuch. Esq.
LiOke LeFdDentons US LLP
"r' ^'�%200.0 McKinnc, Avenue, Suite X801 900
Dallas, Texas 75201
Fax: (214) 756 4582
Attn: Donald A. Hammett, Jr.
oPAMiOr such other addresses as may be designated by either party by written notice to the
other. Notwithstanding anything in this section to the contrary, any notice sent or mailed to the
last designated address of any person or party to which a notice may be or is required to be
delivered pursuant to this Lease or this section, shall not be deemed ineffective if actual delivery
cannot be made due to a change of address of the person or party to which the notice is directed
or if such notice is rejected by such party.
Section 32. Venue
32.1 The venue for any claim, controversy, or dispute between the parties arising out
of or relating to this Lease, or to the interpretation or breach thereof, shall be the Los Angeles
'I"
I.)A1t ;I.Iti }19 i+dlgl?tL74249M1,41
• ( Formatted: Tab stops: Not at 2"
Formatted: Tab stops: Not at 2"
107
Superior Court. The parties may, but are not required to, engage in mediation prior to the
initiation of any litigation.
Section 33. Entire Agreement
This Lease contains the entire agreement between the parties and, except as otherwise
provided, can be changed, modified, amended, or terminated only by an instrument in writing
executed by the parties. It is mutually acknowledged and agreed by Lessee and Lessor that there
are no verbal agreements, representations, warranties, or other understandings affecting this
Lease. This Agreement was negotiated by and jointly drafted by the parties and the language
contained herein shall not be construed against either party hereto based upon any presumption
or evidence that particular language was drafted by one of the parties hereto. All Exhibits
referenced in the Lease and attached hereto are incorporated into and are considered a part of this
Lease.
Section 34. Applicable Law
This Lease shall be governed by, and construed in accordance with, the laws of the state
of California.
Section 35. License Agreement
Lessor represents and warrants to l vtia u! L.sscc that as of the date of this Lease, there are
no uncured defaults under the License Agreement and, to Lessor's knowledge, no events have
occurred, which with the giving of notice or the passage of time could become a default under
the License Agreement.
Lessor and Lessee agree not to take any action that would result in the termination of the
License Agreement or to modify the License Agreement without both parties written consent.
Lessor and Lessee agree to perform all of their respective obligations under the License
Agreement in a timely manner so as not to cause the termination of the License Agreement. If
Lessor or Lessee receives a notice of default from Licensor, then the party receiving the notice
shall promptly give notice of the default to other party, which notice shall include a copy of any
such notice of default that is so given or received.
In the event of a default by Lessor or Lessee under the License Agreement, both parties shall
have the right, but not the obligation, to cure the default of the other party by giving notice
thereof to the other party, and any reasonable costs incurred by non - defaulting party in curing
such default shall be borne by the defaulting party.
Section 36. Late Charge
Lessee acknowledges that late payment by Lessee to Lessor of any Rent or other
payments due hereunder will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs may include, without
34
1:
limitation, processing and accounting charges and late charges which may be imposed on Lessor.
Accordingly, if any Rent payment is not received by Lessor within ten (10) days after receipt by
Lessee of notice from Lessor that such Fixed Rent is past due, Lessee shall pay to Lessor a late
charge equal to four percent (4 %) of the unpaid Fixed Rent (the "Late Charge "). The parties
hereby agree that such late charge represents a fair and reasonable estimate of the costs incurred
by Lessor by reason of the late payment by Lessee. Acceptance of any Late Charge by Lessor
shall, in no event, constitute a waiver of Lessee's default with respect to the overdue amount in
question, nor prevent Lessor from exercising any of the other rights and remedies granted
hereunder.
Section 37. Nonwaiver
No provision of this Lease shall be deemed to have been waived by Lessor or Lessee,
unless such waiver is in writing signed by Lessor or Lessee, as applicable. Waiver of a breach of
any term or condition of this Lease shall not be deemed a waiver of any subsequent breach.
Acceptance of any Rent or other payments shall not be deemed a waiver of such breach.
Section 38. Brokerage
Lessor and Lessee represent to each other that they have not employed any brokers in
negotiating and consummating the transaction set forth in this Lease, but have negotiated directly
with each other. Lessor represents and warrants to Lessee, and Lessee represents and warrants to
Lessor, that no other broker or finder has been engaged by it, respectively, in connection with
this Lease. In the event of any claims for additional brokers' or finders' fees or commissions in
connection with the negotiation, execution, or consummation of this Lease, then Lessee shall
indemnify, hold harmless, and defend Lessor from and against such claims if they shall be based
on any statement or representation or agreement by Lessee, and Lessor shall indemnify, hold
harmless, and defend Lessee if such claims shall be based on any statement, representation, or
agreement made by Lessor.
Section 39. Miscellaneous Provisions
39.1 Lessee shall have the right in its sole and absolute discretion to obtain, at its cost,
a lot line adjustment approval, as part of the Required Project Entitlements process which
comprise the Conditions Precedent, to reconfigure the lots currently comprising the Premises to a
reconfiguration reasonably agreed upon with Lessor. As part of or separate from this process,
Lessor and Lessee shall reasonably cooperate with each other in their efforts to subdivide the
Premises.
39.2 Except as expressly set forth in this Lease, Lessee shall have the right to choose
the name of the project in its sole and absolute discretion.
Section 40. Covenants to Bind and Benefit Parties
Bull
i�Jk� i`i F:3!1(ulnrt^ag,��» sar7l; y _i
109
Subject to the limitations set forth in Section 18, the covenants and agreements contained
in this Lease shall bind and inure to the benefit of Lessor, its successors and assigns, and Lessee,
its successors and assigns.
Section 41. Captions and Table of Contents
41.1 The captions of this Lease are for convenience and reference only, and in no way
define, limit, or describe the scope or intent of this Lease or in any way affect this Lease.
41.2 The table of contents preceding this Lease but under the same cover is for the
purpose of convenience and reference only, and is not to be deemed or construed in any way as
part of this Lease, nor as supplemental or amendatory.
Section 42. Hazardous Materials
The term "Hazardous Substances" shall mean and refer to the following: petroleum
products and fractions thereof, asbestos, asbestos containing materials, urea formaldehyde,
polychlorinated biphenyls, radioactive materials and all other dangerous, toxic or hazardous
pollutants, contaminants, chemicals, materials, substances and wastes listed or identified in, or
regulated by, any Environmental Law. The term "Environmental Laws" shall mean and refer
to the following: all federal, state, county, municipal, local and other statutes, laws, ordinances
and regulations which relate to or deal with human health or the environment, all as may be
amended from time to time. The term "Release" shall mean and refer to any spilling, leaking,
pumping, pouring, emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment, including the abandonment or discarding of barrels, drums, containers,
tanks, or other receptacles containing or previously containing any Hazardous Substance.
Section 43. }Intc4Aionul4y-Omi# v*Audit, Formatted: Font: Bold
Lessor shall have the a•ight no more than once annually. to conduct an audit of the Gross
Receipts for the immediately preceding calendar year or Vrior two Ygars with a qualified
Cer•lilted Public Account. I'hc audit shall be conducted with at least ninety (9U} days I)for notice.
to Lessee and during, regular• bus netts hours at I.,essee's or Topeoll''s cornorate on ice. solely for
the purpose of delennining the accuracy of tits Variable bent calculations and payments fur the
preceding calendar year or prior two yeam. An such audit shall not unreasonublw interfere with
Lessee's business operations. Any such audit by Lessor r shaall be at Lessor's owwn expense. I$
such audit reveals that the Lessor %vas undcrnaid by three percent (3%) or more for the audited
period, -Lessee shall pay Lessor the reasonable cost of the audit_to� ether with the amount of the
underpayment plus a (bur percent 0%) penalty on the amount of the underpayment within thirty
days of beingpresented with a cony of the audit from the Lessor. Except as required 12Y law,
lessor agrees not to divulge to anXperson tar per :lions. tirm or c9r}xxr- ttion. the amount of Gross
Receipts made from the Premises except to the taxis , a� uthorities and to the extent neeessarv.
Lessor's attorneys. accountants (and other professional advisors ). provided dial the public
disclosure ol'the amount of Variable pent 12aid by Lessee shall not be a violation of this
Provision. If the City receives a request Cor such information it shall immediately nodt'y lessee.
3-9
110
ofsuch request and il'(lie City determines the infoniiation requested is a matter of ublic record
then the City shall immediately notify the Lessee it) writing lifsuch dem- urination and deliver to
Lessee copies of all corms ondence received by City relating to such request. I f lessee provides
writLen notil"ication Lo the City kvidiin live (5) business clays that it disagrees with the City's
�1tLerminadon. Lhcii [lie t'ily' slialf not release the information and in the evt nL there is hLtgallon
filed against the City for not releasing the niformat %on then the City shall immediately notify'
I.essee in writing of such litigation. and deliver to Lessee copies of all pleadings. and the Lessee
shall be responsible Im paying all ol'the City's reasonable legailLLS and cons cis ►veil as
monetary award, including legal Cecs and costs, that a court ol'compcteni o1 jurisdiction awards
to the plainti (Tor petitioner. provided that any counsel selected by the City must be acceptable to
Lessee and be independent counsel tree of any conflict of interest..In the alternative lessee
shall have the right to retain its own counsel and utxin written notice Lo the City. take over the
litigation, provided Lhat any counsel selected by Lessee must be acceptable to the City and be
inde endent cow nsel free ofany con 11ict or interest. In the event oI'an , Iiti oilcan y4�itli restrespect to
this matter each tparly shall reasonably cpoperaLC with tl _Widtout wst. expense or lial,ilit_y
other than de niinintis costs will, ms eet to any such re guest for inforination and/or litigglion,
Section 44. Counterparts
This Lease may be executed in any number of counterparts and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts together shall
constitute but one Lease.
Section 45. Consent and Approval Rights
Except as otherwise expressly set forth in this Lease or provided by law, references in
this Lease to "consent," "approval," "acceptable," and "satisfactory" shall not be interpreted as
justifying arbitrary rejection but shall imply a good faith, reasonable application of judgment
taking into consideration customary leasing practice and commercial custom.
Section 46. Prevailing Wages
Lessee shall pay prevailing wages as defined by the California Labor Code and
applicable regulations for all the Golf Course Improvements and the Premises Improvements and
other work performed on the Property. Lessee shall provide to Lessor all records required by
state law, including but not limited to the California Labor Code and applicable regulations, to
prove that prevailing wages are being paid, including without limitation maintaining and
providing weekly certified payroll records to the Lessor evidencing that Lessee paid prevailing
wage for all of the Premises Improvements and Golf Course Improvements and other work
performed on the Property.
Section 47. Golf Course
39
PA ifT�9Q
111
Lessor shall maintain the appearance of the Golf Course in accordance with the sanle- Formatted: Space After: 0 pt
standards that it is maintained as of the execution of this Lease. In the event that the use of the
Golf Course changes the Lessor shall maintain the appearance of the property that comprises the
Golf course in a clean and aesthetically reasonable manner. The Lessee's sole remedy for a
breach of this Section shall be specific performance. In addition, in the event that all or any
portion of the Golf Course is used for business of a sexually oriented nature, such as a strip club
or adult novelty store, then in such event Fixed Rent shall be reduced by fifty percent (50 %) for
as long as such use continues on the Golf Course { Formatted: Font: sold
Section 48. Business License Taxes
Lessee herebp waives and a,srrecs it shall have no right to offyel L111! 11111oUlit elf hUS410S
license taxes Cawed to the City pursuunt to 1 ?i ScgundO Municipal Code C l maters 3 or 4 bayed
upon sales tax the City receives fi -om operations occurring on the I'reinises during the tern, a
this Lease. and any such applicable salts tax credits are hereby waived.
THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK Formatted: Justified, Indent: First line: 0.5 ",
SpM After: 36 pt
M
14A 1 S1I15411ui1 vV UI�]T.y73 71n
112
IN WITNESS WHEREOF, Lessee and Lessor have caused this Lease to be executed by their
duly authorized representatives.
Lessor: THE CITY OF EL SEGUNDO, a Chartered City
and Municipal corporation
By:_
Name:
Lessee: ES CENTERCAL, LLC,
a Delaware limited liability company
By: CENTERCAL, LLC,
a Delaware limited liability company
By: CENTERCAL ASSOCIATES, LLC,
a Delaware limited liability company
By
Print Name
Print Title: Its Manager
Exhibit "A" —
Legal Description
Exhibit "A -1"
— The Premises
Exhibit "A -2 "-
The Golf Course
Exhibit `B" —
Site Plan
Exhibit "B -1"
— Preliminary Site Plan
Exhibit "C" —
License Agreement
Exhibit "D" —
Golf Course and Premises Improvements
Exhibit "E" —
Permitted Exceptions
311
113
Exhibit "F" — Form of Memorandum of Lease
Exhibit "G" — Prototype Facility
Exhibit "H" — Form of Guaranties
39
UALIGI1AU73f809P7 ?4734v
114
EXHIBIT "A"
LEGAL DESCRIPTION
44AL -G4 V A9OY'4 745413
115
Exhibit "A"
Legal Description
PARCEL b (4188-014 -913)
PARCEL A.
PARCEL 1, IN THE CITY OF EL SEGUNDO, IN THE COUNTY OF LOS ANMLES, STATE OF
CALIFORNIA, AS SHOWN ON MAP lei ®. 17749, FILED IN SC C+ 207 PAGES 56 �-0. 64 INCISIVE
OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,
EXCEPT THAT PORTION OF SAID LAND DESCRIBED IN GRANT DEED RECORDED MARCH
12, 1999 AS INAT,99,MENJ NO, 1492 -41 LM OF OFFICIAL RErCORDS,
ALSO EXCEPTING AND RESERVING TO CHEVRON U.S.A. INC., A PENNSYLVANIA
CORPORATION, ITS SUCCESSORS AND ASSIGNS, ALL OIL, GAS AND OTHER
HYDROCARBONS, NON - HYDROCARBON GASSES OR GASEOUS SUBSTANCES, ALL OTHER
MINERALS OF WHATSOEVER NATURE, WITHOUT REGARD TO SIMILARITY TO THE
ABOVE - MENTIONED SUBSTANCES, AND ALL SUBSTANCES THAT MAY BE PRODUCED
THEREWITH FROM THE PROPERTY, BY DEED RECORDED MAY 24, 1988 AS I, 1JMEN1
NO. 88- 826092, OF OFFICIAL RECORDS.
PARCEL B;
A PARCEL OF LAND BEING A PORTION OF PARCELS 7 AND 8 OF PARCEL MAP NO, 1775011
THE CITY OF EL SEGUNDO, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER
MAP RECORDED IN BOOK 207, PAGL,S (4 TO 66 INCLUSIVE, OF PARCEL MAP RECORDS
FILLED IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY AND DESCRIBED AS
FOLLOWS;
BEGINNING AT THE MOST NORTH WEST CORNER OF SAID LOT 7; THENCE SOUT1109° 46'
55" EAST ALONG THE WESTERLY LINE OF SAID LOT 7 A DISTANCE OF 134.51 FEET;
THENCE, NORTH 63° 57'01" EAST A DISTANCE OF 202,06 FEET; THENCE, SOUTH 26® 06' 20"
EAST A DISTANCE OF 1.00 FEET; THENCE, NORTH 63° 53'40" EAST A DISTANCE OF 607.71
FEET TO A POINT IN THE NORTH LINE OF SAID LOT 8, SAID POINT BEARS SOUTH. 73° 28'
25" EAST A DISTANCE OF 27204 FEET FROM THE MOST NORTH EAST CORNER OF SAID LOT
8; THENCE, SOUTH 73° 28'25" WEST ALONG THE NORTHERLY LINE OF SAID LOTS 7 AND 8
A DISTANCE OF 782.89 FELT BACK TO THE POINT OF BEGINNING.
EXCEPT ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBON SUBSTANCES, AND ALL
OTHER MINERALS WHETHER SIMILAR TO THOSE HEREINABOVE SPECIFIED OR NOT,
DEPOSITED OR CONTAINED IN, OR THAT MAY BE PRODUCED FROM THOSE
FORMATIONS, ZONES OR HORIZONS LYING BELOW FIVE HUNDRED (500') FEET FROM
THE SURFACE OF THE ABOVE DESCRIBED REAL PROPERTY, TOGETHER WITH THE SOLE
AND EXCLUSIVE RIGHTS AND PRIVILEGES TO INJECT INTO ANY FORMATION, ZONE OR
HORIZON LYING BELOW FIVE HUNDRED FEET (500') FROM THE SURFACE OF SAID REAL
241
69
116
PROPERTY, ETHER WET OR DRY OAS, REGARDLESS OF WHERE THE SAME IS PRODUCED,
TO STORE THk SAME THEREIN, AND TO REMOVE OR WITHDRAW THE SAME THEREFROM
AT ANY TIME, OR FROM TIME TO TIME, PROVIDED THAT SAID GRANTOR, ITS
SUCCESSORS AND ASSIGNS, SHALL NOT HAVE ANY RIGHT OF ENTRY, AND SHALL NOT
ENTER OR UPON ANY PART OF THE SURFACE OF SAID REAL PROPERTY OR IN, UPON OR
THROUGH ANY PORTION OF THE SUBSURFACE OF SAID REAL PROPERTY WHICH LIES
WITHIN FIVE HUNDRED (500') FEET VERTICALLY FROM THE SURFACE OF SAID REAL
PROPERTY; BUT SAID GRANTOR, ri'S SUCCESSOR AND ASSIGNS SHALL DAVE TIME RIGHT,
IN CONNECTION WITH THE FOREGOING RESERVATION AND EXCEPTING, TO PRODUCE,
EXTRACT AND REMOVE SUCH OIL, OAS, ASPHALTUM AND OTHER HYDROCARBON
SUBSTANCES, AND OTHER MINM;LALS DEPOSITED OR CONTAINED IN OR THAT MAY BE
PRODUCED FROM FORMATIONS, ZONES OR HORIZONS LYING BELOW FIVE HUNDRED
(500') FEE" FROM THE SURFACE OF SAID READ PROPERTY, BY MEANS OF WIMP. STOCK,
SLANT OR DIRECTIONAL DRILLING OR ANY OTHER MBTFIOI) OF PRODUCTION OR
EXTRACTION CONDUCTED FRONT, ON OR UPON ANY OTHER REAL PROPERTY THAN
T14 AT HEREINABOVE DESCRIBED, AS RESERVED IN DEED RECORDED DECEMBER 11 1447
AS INSTRUMENT NO. 534, OF OFFICIAL RECORDS,
ALSO EXCEPT ALL OIL, GAS AND OTHER. HYDROCARBONS, NON - HYDROCARBON BASSES
OR GASEOUS SUBSTANCES, ALL OTHER MINERALS OR WHATSOEVER NATURE, WITHOUT
REGARD TO SIMILARITY TO THE ABOVE MENTIONED SUBSTANCES, AND ALL
SUBSTANCES THAT MAYBE PRODUCED THEREWITH FROM THE PROPERTY, AS
RESERVED IN DEAD RECORI)ED MAY 24, 1988 AS WSTA MINT NO, 1025, OF
OFFICIAL RECORDS,
ALSO EXCEPT ALL GEOTHERMAL RESOURCES, EMBRACING INDIGENOUS STEAM, HOT
WATER AND HOT SPRINGS, STEAM AND OTHER GASSES, HOT WATER AND HOT BRIDES
RESULTING FROM WATER, GAS OR OrrHER FLUIDS ARTIFICIALLY INTRODUCED INTO
SUBSTANCES FORMATIONS HEAT OR OTHER ASSOCIATED ENERGY FOUND BENEATH
THE SURFACE OF THE EARTH, AND BYPRODUCTS OF ANTI OF T'EM FOREGOING SUCH AS
MNERALS (EXCLUSIVE OF OIL OR HYDROCARBON GAS THAI` CAN BE SEPARATELY
PRODUCED) WHICH ARE FOUND IN SOLUTION OR ASSOCIATION WITH OR DERIVED
FROM ANY OIL THE FOREGOING, AS RESERVED IN DEED RECORDED MAY 24, 1958 AS
OIL OFFICIAL RECORDS.
ALSO EXCEPT THE SOLE AND HXCLUSIVE RIGHT FROM TIME TO TIME TO DORE, DRILL
AND MAINTAIN WELLS AND OTHER WORKS INTO OR THROUGH SAID PROPERTY AND
THE ADJOi1+I'iNG STREETS, ROADS AND HIGHWAYS BELOW A DEPTH OF 500 FEET FROM
THE SURFACE THEREOF FOR THE PURPOSE OF EXPLORING FOR AND PRODUCING
EVER. ®Y "SOURCES, TO PRODUCE, INrECT, STORE AND REMOVE FROM AND THROUGH
SUCH WELLS OR WORKS, OIL., GAS, WATER AND OTHER SUBSTANCES OF W14ATEVER
NATURE, INCLUDING THE RIGHT TO PERFORM BELOW SAID DEPTH ANY AND ALL
OPERATIONS DEEMED NECESSARY OR CONVENIENT FOR THE EXERCISE OF SUCH
RIGHTS.
THE RIGHTS HEREWABOVE EXCEPTED AND RESERVED TO GRANTOR DO NOT INCLUDE
AND DO NOT EXCEPT OR RESERVE ANY RIGHT TO USE THE SURFACE OF THE PROPERTY
OF THE FIRST 500 FEET BELOW T14B SURFACE OF THE PROPERTY OR TO CONDUCT ANY
OPERATIONS THEREON OR THEREIN UNLESS HEREINAFTER SPECIFICALLY EXCEPTED
AND RESERVED, ALL RIGHTS AND INTERESTS IN THE SURFACE OF THE PROPERTY ARE
242
70
117
HEREBY CONVEYED TO GRANTEE AS PROVIDED IN DEED RECORDED MAY 24, 1988 AS
INSTRUMENT T 88n82 5 876, OF OFFICIAL RECORDS,
PARCEL 2: (4138 -014 -910)
BEING A PORTION OF PARCEL NO. 6 OF PARCEL MAP NO. 17750, IN THE CITY OF EL
SEGUNDO, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED
IN BOQK Z07. FACIE$ 64 IBRU 66, INCLUSIVE, OF PARCEL MAPS, DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL NO. 6; THENCE NORTH 891 56'
00" EAST, ALONG THE NORTHERLY LINE OF SAM PARCEL NO. 6, A DISTANCE OF 45.20
FEET; THENCE SOUTH 00° 04' 00" EAST, ALONG A LINE THAT IS 45.00 FEET EASTERLY,
MEASURED AT RIGHT ANGLES, AND PARALLEL WITH, THE TANGENT PORTION OF THE
WESTERLY LINE OF SAID PARCEL NO. 6, A DISTANCE OF 530.00 FEET; THENCE WORTH 890
56' 33" EAST A DISTANCE OF 135.00 FEET; THENCE SOUTH 000 03'2711 EAST A DISTANCE OF
60.00 FEET, TO THE SOUTHERLY LINE OF SAID PARCEL NO. 6; THENCE SOUTH 890 56' 33"
WEST, ALONG SAID SOUTHERLY LINE, A DISTANCE OF 140.00 FEET TO THE BEGINNING
OF A 40.00 FOOT TANGENT CURVE, CONCAVE TO THE NORTHEAST; THENCE
NORTHWESTERLY, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 890 59'27" AN
ARC DISTANCE OF 62.83 FEET; THENCE NORTH 00° 04' 00" WEST, ALONG THE WESTERLY
LINE OF SAID PARCEL NO. 6, A DISTANCE OF 531.36 FEET, TO THE BEGINNING OF A 860.00
FOOT TANGENT CURVE, CONCAVE TO THE WEST; THENCE NORTHERLY, ALONG SAID
CURVE, THROUGH A CENTRAL ANGLE OF 01- 14'3 1" AN ARC DISTANCE OF 18.64 FEET TO
THE POINT OF BEGINNING.
END OF LEGAL DESCRIPTION
118
243
71
EXHIBIT A -1
THE PREMISES
THIS EXHIBIT TO BE PREPARED WITHIN ONE HUNDRED TWENTY DAYS OF
COMMENCEMENT DATE AND ATTACHED HERETO.
119
EXBHIT A -2
THE GOLF COURSE
THIS EXHIBIT TO BE PREPARED WITHIN ONE HUNDRED TWENTY DAYS OF
THE COMMENCEMENT DATE AND ATTACHED HERETO.
•!- iA{ �•:�3.13�?931(J(}iH3T- �?:97�4v2
120
EXHIBIT "B"
SITE PLAN
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EXHIBIT "B-1"
PRELIMINARY SITE PLAN
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EXHIBIT "C"
SCE LICENSE AGREEMENT
124
EXHIBIT C LICENSE AGREEMENT
WPX \RVW \AGR50945
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LICHNOZ AGREEMENT "rmw
RP File NO.W05- 91-005MM
THIS AGREEMENT, made as of this 24th q) day
of Jun'd' , 1991, between SOUTHERN CALIFORNIA EDISON
Ir
COMPANY, a corporation organized under the laws of the State
of California, hereinafter called "Licensor ", and the CITY
OF EL SEGUNDO, a Municipal Corporation, hereinafter called
"Licensee ";
WITNESSETH: That Licensor, for and in consideration of the
faithful performance by Licensee of the terms, covenants and
agreements hereinafter set forth to be kept and performed by
Licensee, does hereby give to Licensee a license to use that
certain real property hereinafter described and referred to
as "licensed property," solely for the purpose hereinafter
specified, upon and subject to the terms, reservations,
covenants and conditions hereinafter set forth.
The licensed property hereinabove referred to is
located in the City of E1 Segundo, County of Los Angeles,
State of California, and being the parcel delineated on the
print attached hereto and made a part hereof, marked
Exhibit "All.
-I-
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248
79
WWWWIJ
WPX \RVW \AGR50945
r�• �reUlaon
This license shall be subject to those covenants,
conditions, restrictions, reservations, exceptions, and
rights and easements, all as set forth on Exhibit H, which
is attached hereto and hereby made a part hereof and shall
also be subject to, but not necessarily limited to, the
following rights of way and easements which licensor hereby
specifically reserves to
itself
Easements and rights of way to construct,
operate, use, maintain, inspect, repair,
renew, replace, reconstruct, enlarge, alter,
add to, improve, relocate and remove, at any
time and from time to time, electric lines,
consisting of one or more lines of metal
towers, poles and other structures, wires,
cables, including ground wires and communi-
cation circuits, both overhead and under-
ground, with necessary and convenient
foundations, conduits, pullboxes, guy wires
and anchors, insulators and crossarms placed
on said structures, and other fixtures,
appliances and appurtenances connected
therewith, necessary or convenient for the
construction, operation, regulation, control,
-2-
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249
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WPX\RVW\AGR5O945
I,VIV L KHIi 6�
21 21
grounding and maintenance of electric lines r,. "�'AURRA
and communication circuits, for the purpose of
transmitting, distributing, regulating and
controlling electric energy to be used for
light, heat, power, communication, and other
purposes, together with the easement and right
of way for roads, ingress, egress and other
convenient purposes needed or desired at any
time and from time to time by Grantee, and the
right to clear and to keep clear said ease-
ments and rights of way and the real property
affected thereby, free from explosives,
buildings, structures, equipment, combustible
materials and any and all other obstructions
of any kind, including, but not in any way in
limitation of the generality of the foregoing,
swimming pools, lighting standards, protective
netting, and appurtenances, fences (other than
farm, grazing or pasture fences), and the
parking of automobiles, trucks or other
mechanical equipment, for protection from fire
and other hazards and from interference with
ingress and egress and with the unobstructed
use of said easements and rights of way and
-3-
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250
WPX \RVW \AGR509 a 5 WIV I hRk; I,
2121
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every part thereof, and for any and all
purposes herein mentioned.
The foregoing license is also made subject to the
following terms and conditions, all of which Licensee hereby
agrees to comply with and perform.
(1) Use: Licensee agrees to use the licensed
property only for tees, greens fairways, and sandtraps for a
Municipal Golf Course.
(2) Terms Unless otherwise terminated as provided
herein, this license shall be for a term of Thirty (30)
years commencing on the date T -Y Nursery vacates the license
and allows Licensee to take possession, and ending thirty
years from that date.
(3) Consideration_: Licensee agrees to pay to
Licensor the sum of One Thousand Five Hundred Dollars
($1,500) per acre upon the execution and delivery of this
license, and thereafter the same amount on the anniversary
date of its taking possession in each year for the first
three years of this license.
-4-
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251
WPX \RVW \AGR50945 Jvujl I KAY'` ki
2121
ell ITOUN04
(4)'40calation: In the fourth year of this
license, licensee shall pay the sum of Three Thousand
Dollars ($3,000) per acre (or a total annual payment of
$10,800).
in the fifth year of this license and for four
years thereafter licensee shall pay six Thousand Dollars
($6,000) per acre per year (or a total annual payment of
$21,600).
In the tenth year of this license and every five
years thereafter the annual rent shall be subject to upward
adjustment which reflects any cumulative percentage increase
for the f ive years preceding the adjustment in the consumers
price index for Los Angeles /Long Beach, all urban consumers,
which is published in the monthly labor review of the U.S.
Department of Labor Bureau of Labor Statistics. However, in
no case shall the rent be reduced by said adjustment.
(5) Nptipes:_ All notices which are required to be
given by either party hereto to the other, shall be deemed
to have been duly given when made in writing and deposited
in the United States mail, first class, postage prepaid,
addressed as follows:
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WPX \RV'W \AGR509 4 5 4.#UIV I hAQ IA
2121
P1. VAIINnn
To Licensor: Southern California Edison Company
Regional Manager
Land Services Division
Real Properties and Administrative Services
P. 0. BOX 410
Long Beach, California 90801
To Licensee: City Manager
City of El Segundo
350 Main Street
El Segundo, CA 90245
Each Party hereto agrees to promptly notify the other of any
address change.
(6) Liability Insurance: Licensee agrees to
insure its liabilities and /or require its construction
contractor or franchisee to insure such liabilities, which
may arise from its activities hereunder, by the purchase of
a liability insurance policy with a Combined Single Limit of
not less than One Million Dollars ($1,000,000.00) and shall
include Licensor as an additional insured. Licensee agrees
to provide evidence of such insurance upon request.
-6-
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253
WPX \RVW \AGR50945 I JQjA`j"
21 21
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(7) Halaht _Li it do s: Licenses agrees that at
all times during the term of this license and equipment used
by it or its agents, employees or contractors on and
adjacent to the licensed property shall be used and operated
so as to at all times maintain a minimum clearance of
seventeen (17) feet from all overhead electrical conductors
located on said licensed property.
Licensee also agrees that all trees or plants
located on the licensed property shall be maintained by
Licensee, and Licensee shall trim or, if requested by
Licensor, shall remove any tree or other planting which
exceeds fifteen (15) feet in height.
(S) Maintenance By Licensor: In addition to the
rights of way and easements heretofore reserved, Licensor
specifically reserves for itself, its successors and
assigns, the right to periodically wash Licensor's elec-
trical insulators. Licensee shall notify Licensor of any
special event it has planned which would be interfered with
by such washing operations and Licensor shall use its best
efforts to avoid interfering with such event.
(9) Licensee's Improvements: Licensee must submit
complete improvement plans for the licensed property,
including grading plans, identifying all existing and
-7-
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1�UIV I iNti Ij
21 21
proposed improvements. Licensee shall obtain Licensor's
written approval of said plans, including any subsequent
modification thereof, prior to making any use of the
property. said approval shall not be unreasonably withheld
by Licensor. Licensor shall not be called upon or required,
at any time, to make any improvements, alterations, changes
or additions of any nature whatsoever to the licensed
property. Licensee shall give Licensor 15 days notice of
its intention to commence construction prior to entering
upon the licensed property to commence construction.
(10) Clearancesx Licenses shall provide
Licensor with adequate access to all of Licensor's facili-
ties and at no time is there to be any interference with the
free movement of Licensorts equipment and materials.
Licensee shall construct and maintain an access road
immediately parallel to the eastern boundary of the property
which shall run the full length of the licensed property.
Said road shall be tifteen (15) feet in width and provide
access to adjacent property of Licensor at the southern and
northern borders of the licensed property. said road
together with applicable driveway aprons and curb
depressions shall be capable of supporting a gross load of
forty (40) tons on a three -axle vehicle, and shall be
maintained by Licensee, at Licensees expense, so as to be
-8-
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WIV I hhk ( f
2-121
1" 'reumm
passable at all times, and shall be kept clear of any
planting or other obstructions at all times so as to provide
ready access to Licensor's facilities. in connection with
the use of said licensed property Licensee shall maintain
the following clearances from the transmission line towers
at all times;
a. A 25- foot - radius around all tower legs
capable of supporting a gross load of
forty (40) tons on a three axle vehicle.
b. A 10- foot - radius around all steel poles.
a. A 10 -foot- radius around all wood poles.
(11) Dust control: Licensee shall also provide
adequate controls for dust, odors and noise and take
appropriate steps necessary to prevent dust contamination of
Licensor's facilities located on, near or adjacent to the
licensed property. Licensee also agrees to take preventive
action to eliminate such dust, odors, noise or any other
nuisance which may disturb the adjacent or nearby community
and agrees to be responsible for and to assume all liability
for such dust, ddor, noise or other nuisance disturbances.
(12) Pesti Pest ides and Herbicides Licensee agrees
that any pesticide or herbicide applications on the licensed
-9-
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VQA4. i hAh ; JA
2121
property shall be made in accordance with all federal,
state, county and local laws. Licensee further agrees to
dispose of any pesticides, herbicides or any other toxic
substances which are declared to be either a health or
environmental hazard in such a manner as prescribed by
law. This will include, but not be limited to, contaminated
containers, clothing, equipment or any other contaminated
material.
(13) Hazardqug Wastat Licensee shall not engage
in, or permit any other party to engage in, any activity on
the premises that violates any federal, state county or
local law, rules or regulations pertaining to hazardous,
toxic or infectious materials and /or waste. Licensee shall
indemnify and hold Licensor, its directors, harmless from
any and all claims, loss, damage, actions, causes of action,
expenses and /or liability arising from leaks of, spills of,
and /or contamination by or from hazardous materials and /or
wastes as defined by applicable laws or regulations, which
are attributable solely to the actions of, or failure to act
by, Licensee.
(14) VndergK2Mnd Facilities: Licensee shall
construct no underground facilities other than irrigation
and drainage pipelines and electrical and telephone lines.
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All underground facilities installed on the right of way
shall have a minimum cover of three feet and shall be
capable of withstanding a gross land of 40 tons on a 3 -axle
vehicle.
(15) PaKkway6 and andogaoina: Licensee agrees to
keep parkway and sidewalk areas adjacent to said licensed
property, if any, free of weeds and trash. Licensee further
agrees to maintain said parkways and to provide landscaping
in a manner that is compatible with the adjoining properties
and in a manner satisfactory to Licensor.
(16) Fencing: Licensee may install fencing on said
licensed property, provided Licensee obtains the prior
written approval of Licensor therefor. In the event
Licensee installs fencing, double drive gates sixteen (16)
feet in width shall be provided at each and of the access
road required in Section 10 herein and shall be designed to
accommodate Licensorls locks. Any metallic fencing shall be
effectively grounded by Licensee. Licensee agrees to
maintain said fencing at Licenseets sole cost and expense.
Notwithstanding the above, Licensee sh 411 not install,
operate or maintain or cause to permit to be installed,
operated or maintained any electrically charged fence on the
licensed property.
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(17) Qigns: Licensee agrees not to allow the
construction or placement of any sign, signboard or other
form of outdoor advertising on said licensed property
without prior written approval of Licensor. In the event of
a violation of this provision by Licensee or any one
claiming under Licensee, Licensor shall have the right to
enter upon said licensed property and to remove and dispose
of any such sign, signboard or other outdoor advertising to
charge the cost and expense of any such removal and disposal
to Licensee who agrees to pay the same on demand.
(18) Authority: This license is given pursuant to
the authority of and upon and subject to the conditions
prescribed by General Order No. 69 -C of the Public Utilities
Commission of the State of California dated and effective
July 10, 1965, which General Order No. 69 -C, by this
reference, is hereby incorporated herein and made a part
hereof.
(19) indemnificatip -w Licensee hereby agrees to
hold harmless and indemnify Licensor, its officers, agents
and employees, and its successors and assigns, from and
against all claims, loss, damage, actions, causes of action,
expense and /or liability arising from or growing out of loss
-12-
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or damage to property, or injury to or death of persons,
including employees of Licensor resulting in any manner
whatsoever, directly or indirectly, by reason of this
license or the use or occupancy of said licensed property by
Licensee or any person claiming under Licensee.
(20) Utilities: Licensee agrees to pay all charges
and assessments for or in connection with water, electric
current or other utilities which may be furnished to or used
upon said licensed property by Licensee during the continu-
ance of this license. it is further agreed that in the
event Licensee shall fail to pay the above - mentioned charges
when due, Licensor shall have the right to pay the same and
charge the amount thereof to Licensee, who agrees to pay the
same on demand, together with interest at the maximum rate
allowed by law, from the date of expenditure by Licensor.
(21) ,dub- LiCeasa; Licensor understands that it is
Licenseers intent to franchise the operation of the
municipal golf course for which the licensed property is to
be used to an experienced golf course operator. Any such
franchise shall be deemed to be a sub - license, subject to
all the terms and conditions of this License, and Licensee
shall make this License a part of any such franchise
agreement. Licensor shall have the right to reasonably
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object to said sub - licensing based upon evidence of the
unreliability or fiscal incapacity of the proposed golf
course operator but shall not otherwise have any right to
object. It is specifically understood and agreed that in
the event of such a sublicense, that the original Licensee,
to wit the city of E1 Segundo, shall remain responsible for
all of the terms and conditions of this license and that in
event of a violation, breach or failure to perform, that
Licensor may, at its option, enforce this License or
otherwise pursue its legal remedies against either said
original Licensee or sub - licensee.
(22) esa Licensee agrees
to pay, when due, all taxes and assessments which may be
levied upon any crops or personal property which Licensee
caused to be grown, placed or maintained upon the said
licensed property, and agrees to keep said licensed property
free from all liens, including but not limited to mechanics
liens, and encumbrances by reason of the use or occupancy of
said licensed property by Licensee or any person claiming
under Licensee. It is further agreed that in the event
Licensee shall fail to pay the above - -mentioned taxes,
assessments, or liens when due, Licensor shall have the
right to pay the same and charge the amount thereof to
Licensee, who agrees to pay the same on demand, together
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with interest at the maximum allowed by law, from the date
of expenditure by Licensor.
(2 3 ) GQYy.,rn nq La_W Licensee agrees that in the
exercise of its rights under this license, Licensee shall
comply with all applicable federal, state, county and local
laws, and regulations in connection with its use of the
licensed property.
The existence, validity, construction, operation
and effect of this license and all of its terms and
provisions shall be determined in accordance with the laws
of the state of California.
(24) Hgldincr Over: It is further agreed that if
Licensee shall retain possession of said licensed property
beyond the term hereof, or any renewal or extension hereof,
without the consent, express or implied, of Licensor, such
holding over may be terminated by Licensor at any time by
giving to Licensee thirty (30) days' prior notice in writing
for that purpose, and shall be subject to all of the terms,
covenants and conditions of this license, and Licensee shall
pay for such license during any such holding over, at the
last prevailing rate specified in paragraph 3, "Considera-
tion" hereof.
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(25) erminatign for__Sreach; In the event Licensee
breaches or otherwise fails to perform any of the terms
hereof, this License shall be subject to termination at the
option of Licensor by Licensor giving Licensee 6o days
notice of its intention to terminate by reason of such
breach or failure to perform. Should Licensee fail to cure
such breach or perform within said 60 day period of time
this License shall be deemed terminated.
In the event of such termination, or when this
license expires by its express term, Licensee agrees, if so
requested in writing by Licensor, to remove at that time all
of its personal property from the licensed property and to
restore the ground to as near its original condition and
appearance as possible at its sole expense and risk. No
such termination hereof shall release Licensee from any
liability or obligation (whether of indemnity or otherwise),
which may have attached or accrued previous to or which may
be accruing at the time of, or by reason of such termination
or expiration.
Upon the termination of this license, Licensee
agrees to peaceably quit and surrender the licensed property
to Licensor in good order and condition. Any and all
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property of whatever kind or character remaining upon the
licensed property upon the reversion of the Licensoe's
interest in the licensed property shall be and become the
personal property of Licensor, unless otherwise agreed in
writing by Licensor, but this shall not prevent Licensor
from requiring Licensee to remove, at Licensee's expense and
rink, any and all such property remaining upon the licensed
property.
Notwithstanding the foregoing, should Licensee's
activities on the licensed property interfere with or
endanger Licensor's use of the licensed property or in any
way create a nuisance or danger to the public or violate the
terms of this license, then Licensor shall be entitled to
terminate the license.
(26) Aban!ft nment._ In the event the use of said
licensed property shall be abandoned by Licensee or said
licensed property shall not be used by Licensee for a period
of Ninety (90) days, then at the option of Licensor, the
license hereby granted shall be deemed terminated without
further notice. Upon such termination, Licensee agrees to
comply with the conditions as specified in paragraph 26,
"Termination' hereof.
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(27) Attorneys' Feag: if any action, proceeding,
arbitration or other dispute arising out of or relating to
this license is commenced, the prevailing party shall be
entitled to receive, in addition, to any other relief that
may be granted, the reasonable attorney's fees, costs and
expenses incurred by the prevailing party.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed in duplicate as of the day
and year herein first above written
SOUTHERN CALIFORNIA EDISON COMPANY
"Licensor" A
By .'G
Real Properties & Administrative
Services
CITY OF EL SEGUNDO
"Licenseell
By
Mayor
AT E.' ,
City Clerk
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38231 1255224 v '►N!4�p4�,
21
TICOR TITLE INSURANCE COMPANY OF CALIFORNIA
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NW. RECORDED NOVEMBER 1, 1974 IN BOOK D6460 PAGE 733 OFFICIAL RECORDS.
{X. RECORDED MARCH 1, 1975 IN BOOK D6578 PAGE 104, OFFICIAL RECORDS.
YY. RECORDED MARCH 15, 1976 IN BOOK D7006 PAGE 412, OFFICIAL RECORDS.
SAID MORTGAGE HAS BEEN RELEASED AS TO THE EASEMENTS SHOWN AS ITEM NO'S. 8 AND
9. ,
i. AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR THE
: URPOSES STATED HEREIN, AND INCIDENTAL PURPOSES,
=N FAVOR OF : SHELL OIL COMPANY, INCORPORATED, A CORPORATION
NO REPRESENTATION IS MADE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
7OR : PIPE LINES
RECORDED : AUGUST 6, 1941 IN BOOK 18534 PAGE 320, OFFICIAL RECORDS
,FFECTS : A STRIP OF LAND 10 FEET IN WIDTH, A CENTER LINE OF WHICH STRIP
IS DESCRIBED AS FOLLOWS:
3EGINNING AT A POINT WHICH BEARS SOUTH 47 DEGREES 30 MINUTES 42 SECONDS EAST
50.00 FEET FROM MOST WESTERLY CORNER OF LOT 8 AS SHOWN ON MAPS OF PROPERTY OF
SOUTHERN CALIFORNIA EDISON COMPANY, LTD., FILED IN BOOK 3 PAGE 1 OF MAPS;
THENCE NORTH 09 DEGREES 00 MINUTES 06 SECONDS WEST 33.77 FEET TO POINT IN
NORTHERLY LINE OF LOT 8, WHICH BEARS NORTH 89 DEGREES 59 MINUTES 54 SECONDS
EAST 36.87 FEET FROM MOST WESTERLY CORNER OF LOT S.
ALSO BEGINNING AT POINT WHICH BEARS SOUTH 89 DEGREES 59 MINUTES 54 SECONDS
WEST 97.12 FEET FROM MOST EASTERLY CORNEROF LOT 9, AS SHOWN ON MAPS; THENCE
NORTH 0 DEGREES 00 MINUTES 06 SECONDS WEST 82.18 FEET; THENCE NORTH 47 DEGREES
20 MINUTES 42 SECONDS WEST PARALLEL WITH AND 5.0 FEET AT RIGHT ANGLES FROM
` 70RTHEASTERLY LINE OF LOTS 9 AND 10, 222.20 FEET TO POINT IN WESTERLY LINE OF
SOT 10, WHICH LIES SOUTH 0 DEGREES 03 MINUTES 13 SECONDS WEST 6.77 FEET FROM
;40ST NORTHERLY CORNER OF LOT 10.
ALSO BEGINNING AT A POINT IN EASTERLY LINE OF LOT 11 SHOWN ON MAP, WHICH LIES
5.0 FEET SOUTHWESTERLY FROM AND AT RIGHT ANGLES TO SOUTHEASTERLY PROLONGATION
OF NORTHEASTERLY LINE OF LOT 11; THENCE NORTHWESTERLY PARALLEL WITH AND 5.0
FEET AT RIGHT ANGLES FROM VARIOUS COURSES COMPRISING NORTHEASTERLY BOUNDARY OF
lOT 11 TO POINT IN WESTERLY LINE THEREOF, ALSO BEGINNING AT POINT IN SOUTHERLY
SINE OF LOT 12, SHOWN ON MAPS, WHICH LIES 5.0 FEET SOUTHWESTERLY FROM AND AT
RIGHT ANGLES TO SOUTHEASTERLY PROLONGATION OF MOST SOUTHERLY COURSE OF
NORTHEASTERLY BOUNDARY OF LOT 12; THENCE NORTHWESTERLY DIRECTLY PARALLEL WITH
AND 5.0 FEET AT RIGHT ANGLES FROM VARIOUS COURSES AND 5.0 FEET MEASURED
RADIALLY FROM VARIOUS CURVES COMPRISING NORTHEASTERLY BOUNDARY OF SAID LOT 12
TO POINT IN NORTHERLY LINE THEREOF.
ALSO BEGINNING AT POINT ON SOUTHERLY LINE OF LOT 13, SHOWN ON MAPS; WHICH LIES
NORTH 89 DEGREES 56 MINUTES 54 SECONDS WEST 16.01 FEET FROM MOST EASTERLY
CORNER OF LOT 13; THENCE NORTH 41 DEGREES 42 MINUTES 29 SECONDS WEST 36.39
?EET; THENCE NORTH 14 DEGREES 28 DEGREES 04 MINUTES WEST 86.44 FEET; THENCE
NORTH 26 DEGREES 54 MINUTES 21 SECONDS WEST PARALLEL WITH AND 5.0 FEET AT
RIGHT ANGLES FROM NORTHEASTERLY LINE OF LOT 13, 84.85 FEET TO POINT ON
WESTERLY LINE OF LOT 13, WHICH BEARS SOUTH 0 DEGREES 02 MINUTES 49 SECONDS
EAST 11-07 FEET FROM MOST NORTHERLY CORNER THEREOF.
8514095 PAGE 05
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88231 1255224
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TICOR TITLE INSURANCE COMPANY OF CALIFORNIA 21 e1
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7.' AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR TOE
PURPOSES STATED HEREIN, AND INCIDENTAL PURPOSES,
IN FAVOR OF : CITY OF EL SEGUNDO, A MUNICIPAL CORPORATION
(NO REPRESENTATION IS MADE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
FOR : PUBLIC ROAD AND HIGHWAY PURPOSES
RECORDED : FEBRUARY 26, 1953 IN BOOK 41067 PAGE 370, OFFICIAL RECORDS
AFFECTS : THAT PORTION OF LOT 12 AS PER MAP NO. 8 OF THE' PROPERTY OF THE
SOUTHERN CALIFORNIA EDISON COMPANY, LTD.,', RECORDED IN BOOK 3
PAGE 5 OF MAPS, DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHEASTERLY CORNER•OF -SAID LOT 12; THENCE WESTERLY ALONG
THE NORTH LINE OF SAID LOT 12 TO THE EAST LINE OF SEPULVEDA BLVD., AS
ESTABLISHED BY FINAL DECREE OF CONDEMNATION ENTERED ON DECEMBER 4, 1934 IN
CASE NO. 357580 SUPERIOR COURT, LOS ANGELES COUNTY, AS RECORDED IN BOOK 13174
PAGE 92, OFFICIAL RECORDS; THENCE SOUTHERLY ALONG SAID EAST LINE TO THE
NORTHEASTERLY LINE OF THAT CERTAIN RIGHT OF WAY 80 FEET WIDE, DESCRIBED IN
DEED TO THE PACIFIC RAILWAY ELECTRIC RAILWAY COMPANY, RECORDED MAY 27, 1919 IN
BOOK 5750 PAGE 43 OF DEEDS; THENCE SOUTHEASTERLY ALONG SAID NORTHEASTERLY LINE
TO A POINT WHICH IS 10.00 FEET EASTERLY, MEASURED AT RIGHT ANGLES FROM SAID
EAST LINE OF SEPULVEDA BLVD.; THENCE NORTHEASTERLY IN A DIRECT LINE TO A POINT
WHICH IS LOCATED 30.0 FEET SOUTHERLY; MEASURED AT RIGHT ANGLES, FROM SAID
NORTH LINE OF LOT 12 AND 30.0 FEET EASTERLY, MEASURED AT RIGHT ANGLES, FROM
SAID EAST LINE OF SEPULVEDA BLVD., THENCE EASTERLY PARALLEL WITH SAID NORTH
LINE, TO THE NORTHEASTERLY LINE OF SAID LOT 12; THENCE NORTHWESTERLY ALONG
SAID LAST MENTIONED NORTHEASTERLY LINE TO THE POINT OF BEGINNING.
THAT PORTION OF LOT 13, COUNTY OF LOS ANGELES, AS PER MAP RECORDED 8,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 13; THENCE WESTERLY ALONG THE
SOUTH LINE OF SAID LOT 13 TO THE EAST LINE OF SEPULVEDA BLVD. AS ESTABLISHED
BY SAID DECREE OF CONDEMNATION; THENCE NORTHERLY ALONG SAID EAST LINE TO ITS
INTERSECTION WITH THE NORTHEASTERLY LINE OF SAID LOT 13; THENCE SOUTHEASTERLY
TO A POINT WHICH IS LOCATED 131.0 FEET NORTHERLY MEASURED AT RIGHT ANGLES,
FROM SAID SOUTH LINE OF LOT 13 AND 10.0 FEET EASTERLY, MEASURED AT RIGHT
ANGLES, FROM SAID EAST LINE OF SEPULVEDA BLVD., THENCE SOUTHERLY PARALLEL WITH
SAID EAST LINE, 81.0 FEET TO A POINT; THENCE SOUTBEASTERLY.IN A DIRECT LINE TO
A POINT WHICH IS LOCATED 30.0 FEET EASTERLY, MEASURED AT RIGHT ANGLES, FROM
SAID EAST LINE AND 30.0 FEET NORTHERLY, MEASURED AT RIGHT ANGLES, FROM SAID
SOUTH LINE; THENCE EASTERLY, PARALLEL WITH SAID SOUTH LINE, TO SAID
NORTHEASTERLY LINE OF LOT 13; THENCE SOUTHEASTERLY ALONG SAID NORTHEASTERLY
LINE TO THE POINT OF BEGINNING.
8. AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR THE
PURPOSES STATED HEREIN, AND INCIDENTAL PURPOSES,
IN FAVOR OF : STATE OF CALIFORNIA
(NO REPRESENTATION IS MADE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
FOR : PUBLIC HIGHWAY
RECORDED : OCTOBER 7, 1971 AS INSTRUMENT NO. 317
AFFECTS : DESCRIBED AS FOLLOWS:
8514095 PAGE 06
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TICOR TITLE INSURANCE COMPANY OF CALIFORNIA
of 0% —r.IINniq
COMMENCING AT THE INTERSECTION OF THE EASTERLY LINE OF SEPULVEDA BOULEVARD, A$
ESTABLISHED BY FINAL DECREE OF CONDEMNATION ENTERED ON DECEMBER 4, 1934 IN.
CASE NO. 357580, IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND F6R
SAID COUNTY, AS RECORDED IN BOOK 13174, PAGE 92 OF OFFICIAL RECORDS, IN SAID
OFFICE, WITH THE SOUTHERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRIBED IN
DEED TO JOHN RAMANO AND ANTHONY BRENT, RECORDED IN BOOK D -4017, PAGE 234 OF
OFFICIAL RECORDS, IN SAID OFFICE; THENCE NORTH 4 DEGREES 13 MINUTES 15 SECTION
EAST, 336.77 FEET; THENCE NORTH 0 DEGREES 04 MINUTES 00 SECONDS WEST, 225.58
FEET TO THE SOUTHEASTERLY LINE OF PARCEL "B" DESCRIBED IN DEED TO THE CITY OF
EL SEGUNDO, RECORDED IN BOOK 56432, PAGES 339 THROUGH 348, INCLUSIVE, OF
OFFICIAL RECORDS IN SAID OFFICE, AND THE TRUE POINT OF BEGINNING; THENCE,
ALONG SAID SOUTHEASTERLY LINE, SOUTH 68 DEGREES 24 MINUTES 34 SECONDS WEST,
1.87 FEET TO THE SOUTHWESTERLY LINE OF SAID LOT 12; THENCE ALONG SAID
SOUTHWESTERLY LINE, SOUTH 23 DEGREES 53 MINUTES 13 SECONDS EAST, 4.32 FEET TO
THE INTERSECTION OF SAID SOUTHWESTERLY LINE WITH THAT CERTAIN COURSE
HEREINBEFORE DESCRIBED AS NORTH 0 DEGREES 04 MINUTES 00 SECONDS WEST, 225.58
FEET ", SAID POINT BEING SOUTH 0 DEGREES 04 MINUTES 00 SECONDS EAST, 4.64 FEET,
MEASURED ALONG SAID COURSE, FROM THE NORTHERLY TERMINUS OF SAID COURSE; THENCE
ALONG SAID COURSE, NORTH 0 DEGREES 04 MINUTES 00 SECONDS WEST, 4.64 FEET TO
THE POINT OF BEGINNING.
9. AN EASEMENT AFFECTING
PURPOSES STATED HEREIN, AND
IN FAVOR OF : CITY OF EL
(NO REPRESENTATION IS MADE
FOR : SLOPE
THE PORTION OF SAID LAND AND FOR THE
INCIDENTAL PURPOSES,
SEGUNDO
AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
RECORDED OCTOBER 10, 1972 AS INSTRUMENT NO. 4419
AFFECTS THAT PORTION OF LOT 12, AS SHOWN ON MAP NO. 8 OF PROPERTY OF
SOUTHERN CALIFORNIA EDISON COMPANY, LTD, RECORDED IN BOOK 3,
PAGE 5 OF OFFICIAL MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHEASTERLY CORNER OF THE
PARCEL "B" IN THE ROAD EASEMENT FROM SOUTHER
CORPORATION, TO THE CITY OF EL SEGUNDO, DATE
JANUARY 27, 1958 IN BOOK 56432, PAGE 339 OF
SAID RECORDER; THENCE ALONG THE SOUTHERLY LI
DEGREES 24 MINUTES 34 SECONDS WEST 62 FEET;
57 SECONDS EAST, 67.74FEET TO A POINT IN THE
SAID POINT BEING SOUTH 23 DEGREES 47 MINUTES
MEASURED ALONG SAID EASTERLY LINE, FROM THE
23 DEGREES 47 MINUTES 54 SECONDS WEST, 25.00
8514095 PAGE 07
LAND DESCRIBED AND DESIGNATED AS
N CALIFORNIA EDISON COMPANY, A
D JANUARY 29, 1957 AND RECORDED
OFFICIAL RECORDS, IN THE OFFICE OF
NE OF SAID PARCEL 8, SOUTH 68
THENCE SOUTH 89 DEGREES 56 MINUTES
EASTERLY LINE OF SAID LOT 12,
54 SECONDS EAST 25.00 FEET,
POINT OF BEGINNING; THENCE NORTH
FEET TO THE POINT OF BEGINNING.
145
268
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TICOR TITLE INSURANCE COMPANY OF CALIFORNIA 21 Rl
_111IN01
;0. AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR THE
PURPOSES STATED HEREIN, AND INCIDENTAL PU'RPOSFPS,
_N FAVOR OF : CITY OF EL SEGUNDOr A MUNICIPAL CORPORATION
{NO REPRESENTATION IS MARE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
FOR : SEWER AND STORM DRAIN
RECORDED : NOVEMBER 25, 1980 AS INSTRUMENT NO. 80- 1192121
,AF'F'ECTS : DESCRIBED AS FOLLOWS:
THAT PORTION OF LOT 12 AS SHOWN ON A MAP ENTITLED "PROPERTY OF SOUTHERN
CALIFORNIA EDISON COMPANY, LTD. MAP NO. 8" RECORDED IN BOOK 3, PAGES 1 TO 7,
INCLUSIVE, OF OFFICIAL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, DESCRIBED AS FOLLOWS:
3EGINNING AT A FOUND 2 INCH IRON PIPE WITH BRASS CAP SET AT A POINT IN THE
NORTHEASTERLY BOUNDARY OF SAID LOT 12, SAID POINT ALSO BEING IN THE
SOUTHWESTERLY BOUNDARY OF THE 143.84 ACRE PARCEL OF LAND SHOWN ON A MAP FILED
N BOOK 89, PAGES 25 AND 26 OF RECORDS OF SURVEYS IN THE OFFICE OF SAID COUNTY
RECORDER, SAID POINT BEING DISTANT NORTH 75 DEGREES 13 MINUTES 23 SECONDS
WEST, 33.31 FEET FROM THE SOUTHEASTERLY TERMINUS OF THAT PARTICULAR COURSE
SHOWN AS SOUTH 75 DEGREES 13 MINUTES 23 SECONDS EAST, 737.68 FEET" ON SAID
AAP; THENCE SOUTH 46 DEGREES 09 MINUTES .45 SECONDS WEST, 193.34 FEET TO THE
POINT OF INTERSECTION OF THE NORTHEASTERLY PROLONGATION OF THE NORTHWESTERLY
LIME OF THAT CER'T'AIN PARCEL OF LAND DESCRIBED IN A DEED TO PACIFIC ELECTRIC
LAND COMPANY, RECORDED JULY 7, 1914, IN BOOK 5839, PAGE 185 OF DEEDS, IN THE
OFFICE OF SAID COUNTY RECORDER, WITH THE NORTHEASTERLY BOUNDARY OF THAT
CERTAIN 80 FOOT WIDE STRIP OF LANs] DESCRIBED IN A DEED TO PACIFIC ELECTRIC
RAILWAY COMPANY, RECORDED MAY 27, 1413, IN BOOK 5750, PAGE 43 OF DEEDS IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT ALOS BEING IN THE SOUTHEASTERLY
BOUNDARY OF SAID LOT 12, SAID POINT ALSO BEING IN THE SOUTHEASTERLY BOUNDARY
OF SAID LOT 12, SAID POINT ALSO BEING IN THE WESTERLY PROLONGATION OF A
LION— TANGENT CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 914.93 FEET, AS SHOWN
:N THE SOUTHERLY LINE OF SAID 143.84 ACRE PARCEL OF LAND, A RADIAL OF SAID
CURVE FROM SAID POINT SEARS NORTH 1 DEGREES 00 MINUTES 23 SECONDS WEST; THENCE
WESTERLY 84.20 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 5 DEGREES 16
MINUTES 22 SECONDS; THENCE NORTH 46 DECREES 09 MINUTES 45 SECONDS EAST, 215.77
FEET TO SAID NORTHEASTERLY LINE OF LOT 12; THENCE ALONG SAID NORTHEASTERLY
LINE, SOUTH 75 DEGREES 13 MINUTES 23 SECONDS EAST 70.28 FEET TO THE POINT OF
BEGINNING.
11. COVENANTS, CONDITIONS AND RESTRICTIONS IN THE ABOVE RECORDED
INSTRUMENT.
RESTRICTIONS, IF ANY, BASED ON RACE, COLOR, RELIGION OR NATIONAL ORIGIN
ARE DELETED.
12. AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR THE
PURPOSES STATED HEREIN, AND INCIDENTAL PURPOSES,
IN FAVOR OF : SOUTHERN CALIFORNIA GAS COMPANY, A CORPORATION
(NO REPRESENTATION IS MADE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
FOR ' : GAS PIPE LINES
8514095 PAGE 08
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TICOR TITLE INSURANCE COMPANY OF CALIFORNIA
RECORDED : DECEMBER 17, 1980 AS INSTRUMENT NO. 80»1268253 nv .rr+(Nnil
AFFECTS : DESCRIBED AS FOLLOWS:
A STRIP OF LAND, 10 FEET WIDE, LYING WITHIN THAT PORTION OF LOT 12, AS SHOWN
ON A MAP ENTITLED "PROPERTY OF SOUTHERN CALIFORNIA EDISON COMPANY, LTD., MAP
NO. 8 ", RECORDED IN BOOK 3, PAGES 1 TO 7, INCLUSIVE, OF OFFICIAL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, THE CENTERLINE OF SAID STRIP OF
LAND BEING DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE NORTHEASTERLY BOUNDARY OF SAID LOT 12, SAID POINT
ALSO BEING IN THE SOUTHWESTERLY BOUNDARY OF THE 143.84 ACRE PARCEL OF LAND
SHOWN ON A MAP FILED IN BOOK 69, PAGES 25 AND 26 OF RECORD OF SURVEYS, IN THE
OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING DISTANT NORTH 75 DEGREES 13
MINUTES 23 SECONDS" WEST, 33.31 FEET FROM THE SOUTHEASTERLY TERMINUS OF THAT
PARTICULAR COURSE SHOWN AS "SOUTH 75 DEGREES 13 MINUTES 23 SECONDS EAST,
737.68 FEET" AS SHOWN ON SAID RECORD OF SURVEY MAP; THENCE SOUTH 46 DEGREES 09
MINUTES 45 SECONDS WEST, 193.34 FEET TO THE POINT OF INTERSECTION OF THE
NORTHEASTERLY PROLONGATION OF THE NORTHWESTERLY LINE OF THAT CERTAIN PARCEL OF
LAND DESCRIBED IN THE DEED TO PACIFIC ELECTRIC LAND COMPANY, RECORDED JULY 7,
1914, IN BOOK 5839, PAGE'185 OF DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER,
WITH THE NORTHEASTERLY BOUNDAJ
DESCRIBED IN A DEED TO PACIFII
1913, IN BOOK 5750, PAGE 43 0.
SAID POINT ALSO BEING IN THE
ALSO BEING IN THE WESTERLY PR
NORTHERLY HAVING A RADIUS OF
SAID 143.84 ACRE PARCEL OF LA.
NORTH 1 DEGREES 00 MINUTES 23
SAID CURVE THROUGH A CENTRAL
POINT ON A LINE PARALLEL WITH
ANGLES, FROM THE COURSE HEREI
45 SECONDS WEST, 193.34 FEET"
ALSO BEING THE TRUE POINT OF
PARALLEL LINE, NORTH 46 DEGRE
POINT IN THE NORTHEASTERLY BO
3Y OF THAT ULKWALN ou ruvw WlUri 0-AmIC Vr' LALVU
: ELECTRIC RAILWAY COMPANY, RECORDED MAY 27,
DEEDS, IN THE OFFICE OF SAID COUNTY RECORDER,
3OUTHEASTERLY BOUNDARY OF SAID LOT 12, SAID POINT
)LONGATION OF A NON - TANGENT CURVE CONCAVE
)14.93 FEET, AS SHOWN IN THE SOUTHERLY LINE OF,
ID, A RADIAL OF SAID CURVE FROM SAID POINT BEARS
SECONDS WEST; THENCE WESTERLY 77.46 FEET ALONG
ANGLE OF 4 DEGREES 51 MINUTES 03 SECONDS TO A
AND 55.00 FEET NORTHWESTERLY, MEASURED AT RIGHT
9BEFORE DESCRIBED AS "SOUTH 46 DEGREES 09 MINUTES
AND ITS SOUTHWESTERLY PROLONGATION, SAID POINT
BEGINNING OF THIS DESCRIPTION; THENCE ALONG SAID
ES 09 MINUTES 45 SECONDS EAST, 214.30 FEET TO A
JNDARY OF SAID LOT 12.
THE SIDELINES OF SAID STRIP OF LAND SHALL BE PROLONGED OR SHORTENED SO AS TO
TERMINATE IN THE NORTHEASTERLY AND SOUTHEASTERLY BOUNDARIES OF SAID LOT 12.
13. COVENANTS, CONDITIONS AND RESTRICTIONS IN THE ABOVE RECORDED
INSTRUMENT.
RESTRICTIONS, IF ANY, BASED ON RACE, COLOR, RELIGION OR NATIONAL ORIGIN
ARE DELETED.
14. AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR THE
PURPOSES STATED HEREIN, AND INCIDENTAL PURPOSES,
IN FAVOR OF : CITY OF EL SEGUNDO, A MUNICIPAL CORPORATION
(NO REPRESENTATION IS MADE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
FOR : ROAD PURPOSE
RECORDED : MAY 4, 1981 AS INSTRUMENT NO. 81- 445502
AFFECTS : DESCRIBED AS FOLLOWS:
8514095 PAGE 09
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101
88231 1255224 G 708
%jQ i41
TICOR TITLE INSURANCE COMPANY OF CALIFORNIA 21 Pi
THAT PORTION OF LOT 12 AS SHOWN ON A MAP ENTITLED "PROPERTY OF SOUTHERN
CALIFORNIA EDISON COMPANY, LTD., MAP NO. 8" RECORDED IN BOOK 3, PAGES 1 TO 7,
INCLUSIVE OF OFFICIAL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, DESCRIBED AS FOLLOWS:
PARCEL 1:
A STRIP OF LAND 115.00 FEET WIDE LYING 60.00 FEET NORTHWESTERLY AND 55.00 FEET
SOUTHEASTERLY MEASURED AT RIGHT ANGLES, RESPECTIVELY, FROM THE FOLLOWING
DESCRIBED LINE:
BEGINNING AT THE SOUTHEASTERLY TERMINUS OF THAT PARTICULAR COURSE SHOWN AS
"SOUTH 44 DEGREES 21 MINUTES 07 SECONDS EAST, 1393.78 FEET" ALONG THE
NORTHEASTERLY LINE OF SAID LOT 12, SAID COURSE ALSO SHOWN ON A MAP FILED IN
BOOK 89, PAGES 25 AND 26 OF RECORDS OF SURVEY IN THE OFFICE OF SAID COUNTY
RECORDER: THENCE NORTH 44 DEGREES 21 MINUTES 07 SECONDS WEST, 125.00 FEET
ALONG SAID NORTHEASTERLY LINE TO THE TRUE POINT OF BEGINNING: THENCE SOUTH 45
DEGREES 38 MINUTES 53 SECONDS WEST, 119.55 FEET TO THE SOUTHWESTERLY LINE OF
SAID LOT 12.
THE SIDELINES OF SAID STRIP OF LAND SHALL BE PROLONGED OR SHORTENED SO AS TO
TERMINATE IN SAID SOUTHWESTERLY LINE.
PARCEL 2:
THAT PORTION OF LOT 12 AS SHOWN ON A MAP ENTITLED "PROPERTY OF SOUTHERN
CALIFORNIA EDISON COMPANY, LTD., MAP NO. 8" RECORDED IN BOOK 3, PAGES 1 TO 7,
INCLUSIVE, OF OFFICIAL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHERLY CORNER OF THE ABOVE DESCRIBED PARCEL 1; THENCE
ALONG THE NORTHWESTERLY LINE OF SAID PARCEL 1, SOUTH 45 DEGREES 38 MINUTES 53
SECONDS WEST, 58.00 FEET TO A POINT OF CUSP WITH A TANGENT CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 75.00 FEET AND FROM WHICH POINT A RADIAL
BEARS NORTH 44 DEGREES 21 MINUTES 07 SECONDS WEST; THENCE NORTHERLY ALONG SAID
CURVE THROUGH A CENTRAL ANGLE OF 50 DEGREES 38 MINUTES 56 SECONDS A DISTANCE
OF 66.30 FEET TO THE NORTHEASTERLY LINE OF SAID LOT 12; THENCE SOUTH 44
DEGREES 21 MINUTES 07 SECONDS EAST, 27.44 FEET, MORE OR LESS, ALONG SAID
NORTHEASTERLY LINE TO THE POINT OF BEGINNING.
PARCEL 3:
THAT PORTION OF LOT 12 AS SHOWN ON A MAP ENTITLED "PROPERTY OF SOUTHERN
CALIFORNIA EDISON COMPANY, LTD. MAP NO. 8" RECORDED IN BOOK 3, PAGES 1 TO 7,
INCLUSIVE, OF OFFICIAL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE EASTERLY CORNER OF THE ABOVE DESCRIBED PARCEL 1; THENCE ALONG
THE SOUTHEASTERLY LINE OF SAID PARCEL 1, SOUTH 45 DEGREES 36 MINUTES 53
SECONDS WEST, 51.01 FEET TO A POINT OF CUSP WITH A TANGENT CURVE CONCAVE
SOUTHERLY HAVING A RADIUS OF 100.00 FEET AND FROM WHICH POINT A RADIAL BEARS
SOUTH 44 DEGREES 21 MINUTES 07 SECONDS EAST; THENCE EASTERLY ALONG SAID CURVE
THROUGH A CENTRAL ANGLE OF 30 8DGS 40 MINUTES 20 SECONDS A DISTANCE OF 53.53
FEET, TO THE NORTHEASTERLY LINE OF SAID LOT 12; THENCE NORTH 44 DEGREES 21
MINUTES 07 SECONDS WEST, 13.99 FEET, MORE OR LESS, TO TEE POINT OF BEGINNING.
8514095 PAGE 10
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102
8823. 1295224 G 708
TICOR TITLE IN9UMME COKPANY OF CALIFORNIA
15. COVENANT$r CONDITIONS MD RESTRICTIONS IN THE ADM RECORDED
INSTRUMENT.
RESTRICTIONS, iF ANYr BASED ON RACE, COLOR, RELIGION OR NATIONAL ORIGIN
ARE LIELETED.
8514095 PAGE 11
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88231 1255224 G 108
TICOR TITLE INSURANCE COMPANY OF CALIFORNIA
GUARANTEE NO. : 8514095
TITLE OFFICER : A. WILLIAMS 'asV�Ylh(Fti�.
FEE : $400.00
REFERENCE : CITY OF EL SEGUNDO GOLF COURSE 2121
EFFECTIVE DATE= JULY 28, 1988
ASSURED : ��I1Nnr1
BURK, WILLIAM & SORENSEN
LIABILITY: $25,000.00
NATURE OF ACTION: TO CONDEMN
THE NECESSARY PARTIES DEFENDANT IN AN ACTION TO
CONDEMN
ARE AS HEREIN STATED.
TITLE TO THE ESTATE OR INTEREST REFERRED TO HEREIN, AT THE DATE
HEREOF, IS VESTED IN:
SOUTHERN CALIFORNIA EDISON COMPANY, LTD.
THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR
REFERRED TO COVERED BY THIS GUARANTEE IS A FEE.
EXCEPTIONS:
1. ANY TAXES, BONDS OR ASSESSMENTS WILL BE REPORTED LATER.
2. THE LIEN OF SUPPLEMENTAL TAXES, IF ANY, ASSESSED PURSUANT TO THE
PROVISIONS OF CHAPTER 3.5 (COMMENCING WITH SECTION 75) OF THE REVENUE
AND TAXATION CODE OF THE STATE OF CALIFORNIA.
3. AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR THE
PURPOSES STATED HEREIN, AND INCIDENTAL PURPOSES,
IN FAVOR OF : COUNTY OF LOS ANGELES
(NO REPRESENTATION IS MADE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
FOR : PUBLIC ROAD AND HIGHWAY
RECORDED : DECEMBER 9, 1913 IN BOOK 5670, PAGE 48 OF DEEDS
AFFECTS : THE NORTHERLY 20 FEET
8514095 PAGE 01
EXHIBIT "B"
151
274
105
88231 1255224 G 708
TICOR TITLE INSURANCE COMPANY OF CALIFORNIA
21 r I
4. AN EASEMENT AFFECTING THE PORTION OF SAID LAND AND FOR THEIk�1
PURPOSES STATED HEREIN, AND INCIDENTAL PURPOSES,
IN FAVOR OF : STATE OF CALIFORNIA
(NO REPRESENTATION IS MADE AS TO THE PRESENT OWNERSHIP OF SAID EASEMENT)
FOR PIPE LINES, PUBLIC UTILITIES, SPUR TRACKS AND GAS PIPES
RECORDED IN BOOK 9840 PAGE 33, OFFICIAL RECORDS
AFFECTS STREETS, ROADS AND ALLEYS
S. THE INTEREST OF SOUTHERN CALIFORNIA EDISON COMPANY IS SUBJECT TO:
A MORTGAGE OR DEED OF TRUST DATED AS OF OCTOBER 1, 1923, EXECUTED BY SOUTHERN
CALIFORNIA EDISON COMPANY, A CORPORATION TO HARRIS TRUST AND SAVINGS BANK, AN
ILLINOIS CORPORATION, AND PACIFIC-SOUTHWEST TRUST AND SAVINGS BANK, WHICH HAS
BEEN SUCCEEDED BY SECURITY -FIRST NATIONAL BANK OF LOS ANGELES, A CORPORATION,
TRUSTEE, TO SECURE AN INDEBTEDNESS EVIDENCED BY BONDS, AND ANY OTHER AMOUNTS,
PAYABLE UNDER THE TERMS THEREOF, RECORDED NOVEMBER 15, 1923, IN BOOK 2963 PAGE
1 OF OFFICIAL RECORDS AND RE- RECORDED SEPTEMBER 16, 1935, IN BOOK 13715 PAGE 1
OF OFFICIAL RECORDS.
A CERTIFICATE OF RE- RECORDATION OF SAID MORTGAGE OR DEED OF TRUST AND OF
SUPPLEMENTAL INDENTURES, A., B., C., AND D., HEREAFTER SHOWN WAS RECORDED
SEPTEMBER 13, 1939, IN BOOK 16891 PAGE 160 OF OFFICIAL RECORDS.
THE FOLLOWING INDENTURES SUPPLEMENTAL THERETO ARE FOUND OF RECORD:
A. DATED MARCH 1, 1927, RECORDED APRIL 2$, 1927, IN BOOK 6634 PAGE 235 OF
OFFICIAL RECORDS, AND RE- RECORDED SEPTEMBER 16, 1935 IN BOOK 13681 PAGE 78 OF
OFFICIAL RECORDS.
B. DATED APRIL 25, 1935, RECORDED APRIL. 29, 1935, IN BOOK 13333 PAGE 352 OF
OFFICIAL RECORDS.
C. DATED JUNE 24, 1935, RECORDED JULY 1, 1935, IN BOOK 13416 PAGE 386 OF
OFFICIAL RECORDS.
D. DATED SEPTEMBER 1, 1935, RECORDED SEPTEMBER 27, 1935, IN HOOK 13730 PAGE
15 OF OFFICIAL RECORDS.
E. DATED AUGUST 15, 1939, RECORDED AUGUST 18, 1939, 89 16833 PAGE 164 OF
OFFICIAL RECORDS.
F. DATED AUGUST 21, 1939, RECORDED AUGUST 24, 1939, IN BOOK 16889 PAGE 146 OF
OFFICIAL RECORDS.
G. DATED SEPTEMBER 1, 1940, RECORDED OCTOBER 15, 1940, IN BOOK 17933 PAGE 1
OF OFFICIAL, RECORDS.
CERTIFICATE OF RE- RECORDATION OF SAID MORTGAGE OR DEED OF TRUST AND OF THE
SUPPLEMENTAL INDENTURES ABOVE ENUMERATED WERE RECORDED AUGUST 16, 1943, IN
BOOK 20215 PAGE 143 OF OFFICIAL RECORDS, AND MAY 12, 1947, IN BOOK 24610 PAGE
1 OF OFFICIAL RECORDS.
H. DATED JANUARY 15, 1948, RECORDED JANUARY 21, 1948, IN BOOK 25875 PAGE 356,
OFFICIAL RECORDS.
8514095 PAGE 02
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275
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88231 1255224 G � 'Q "'�IV1f%b
2121
TICOR TITLE INSURANCE COMPANY OF CALIFORNIA
rf 'rr4IMnh
I. DATED AUGUST 15, 1948, RECORDED AUGUST 18, 1948 IN BOOK 26958 PAGE 1 OF
OFFICIAL RECORDS.
J. DATED FEBRUARY 15, 1951, RECORDED FEBRUARY 21, 1951, IN BOOK 35626 PAGE 2
OF OFFICIAL RECORDS.
K. DATED AUGUST 15, 1951, RECORDED AUGUST 29, 1951, IN BOOK 37100 PAGE 327 OF
OFFICIAL RECORDS. It
L. DATED AUGUST 151 1953, RECORDED AUGUST 26, 1953, IN BOOK 42557 PAGE 1 OF
OFFICIAL RECORDS.
M. DATED AUGUST 15, 1954, RECORDED AUGUST 18, 1954, IN BOOK 45342 PAGE 1 OF
OFFICIAL RECORDS,
N. DATED AUGUST 15, 1956, RECORDED APRIL 17, 1956 IN BOOK -50909 PAGE 68 OF
OFFICIAL RECORDS.
0. DATED FEBRUARY 15, 1957, RECORDED FEBRUARY 19, 1957, IN BOOK 53689 PAGE 8
OF OFFICIAL RECORDS.
P. DATED JULY 1, 1957, RECORDED JULY 1, 1957, IN BOOK 54935 PAGE 94 OF
OFFICIAL RECORDS.
Q. DATED AUGUST 15, 1957, RECORDED AUGUST 27, 1957, 88 55451 PAGE 116 OF
OFFICIAL RECORDS.
R. DATED AUGUST 15, 1958, RECORDED AUGUST 25, 1958, IN BOOK D -196 PAGE 105 OF
OFFICIAL RECORDS.
S. DATED JANUARY 15, 1960, RECORDED JANUARY 26, 1960, IN BOOK T -1117 PAGE 165
OF OFFICIAL RECORDS.
T. DATED AUGUST 15, L960, RECORDED AUGUST 239 '1960, IN BOOK 0-953 PAGE 252 OF
OFFICIAL RECORDS.
U. DATED APRIL 1, 1961, RECORDED APRIL 4, 1961, IN BOOK 5 -1741 PAGE 231 OF
OFFICIAL RECORDS.
V. DATED MAY 1, 1962, RECORDED MAY 1, 1962, IN BOOK S -1126 PAGE 237 OF
OFFICIAL RECORDS.
W. DATED OCTOBER 15, 1962, RECORDED OCTOBER 30, 1962, IN BOOK-T -2673 PAGE
873, OFFICIAL RECORDS.
X. DATED MAY 15, 1963, RECORDED MAY 22, 1963, IN BOOK T -3030 PAGE 470 OF
OFFICIAL RECORDS.
AA. DATED FEBRUARY 15, 1964, RECORDED FEBRUARY 25, 1964, IN BOOK T -3540 PAGE
20 OF OFFICIAL RECORDS, 3828.
88. DATED FEBRUARY 1, 1965, RECORDED FEBRUARY 9, 1965, IN BOOK D -2793 PAGE
418 OF OFFICIAL RECORDS, INSTRUMENT NO. 3447.
CC. DATED FEBRUARY 1, 1965, RECORDED FEBRUARY 9, 1965, IN BOOK 0-2793 PAGE
8514095 PAGE 03
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107
98231 1255224 G
�+U►�1*i ja7,0'8
TICOR TITLE INSURANCE COMPANY OF CALIFORNIA
r -rf;i{Nnn
445 OF OFFICIAL RECORDS, INSTRUMENT NO. 3448.
DD. DATED MAY le 1966, RECORDED MAY 11, 1966, IN BOOK D -3301 PAGE 219 OF
OFFICIAL RECORDS, INSTRUMENT NO. 2669.
EE. DATED AUGUST 16, 1955, RECORDED AUGUST 23, 1966, IN BOOK D -3406 PAGE651
OF OFFICIAL RECORDS, INSTRUMENT 2249.
FF. DATED AUGUST 15, 1966, RECORDED AUGUST 23, 1966, IN BOOK D -3406 PAGE 672
OF OFFICIAL RECORDS, INSTRUMENT NO. 2250. It
GG. DATED MAY 1, 1967, RECORDED MAY 10, 1967, IN BOOK D -5340 PAGE 706 OF
OFFICIAL RECORDS, INSTRUMENT NO. 2267'.
HH. DATED FEBRUARY 1, 1968, RECORDED FEBRUARY 6, 1968, IN BOOK D -3906 PAGE 71
OF OFFICIAL RECORDS, INSTRUMENT NO. 1999-
II. DATED FEBRUARY 1, 1968, RECORDED FEBRUARY 6, 1968 IN BOOK D -3906 PAGE 93
OF OFFICIAL RECORDS, INSTRUMENT NO. 2000.
JJ. DATED AUGUST 1, 1968, RECORDED AUGUST 21, 1968, IN BOOK R -3047 PAGE 651
OF OFFICIAL RECORDS, INSTRUMENT NO. 2161.
KK. DATED JANUARY 15, 1969, RECORDED JANUARY 23, 1969, IN BOOK D -4259 PAGE
611 OF OFFICIAL RECORDS, INSTRUMENT NO., 2271.
LL. DATED JANUARY 15, 1969, RECORDED JANUARY 23, 1969, IN BOOK D -4259 PAGE
627 OF OFFICIAL RECORDS, INSTRUMENT NO. 2272.
MM. DATED OCTOBER 1, 1969, RECORDED OCTOBER 21, 1969 IN BOOK D -4532 PAGE 5 OF
OFFICIAL RECORDS, INSTRUMENT NO. 1826,
NN. DATED OCTOBER 1, 1969, RECORDED OCTOBER 21, 1969 IN BOOK D -4532 PAGE 19
OF OFFICIAL RECORDS, INSTRUMENT NO. 1827.
00. DATED DECEMBER 1, 1970, RECORDED DECEMBER 3, 1970 IN BOOK D -4906 PAGE 72
OF OFFICIAL RECORDS, INSTRUMENT NO. 2202,
PP. DATED DECEMBER 1, 1970, RECORDED DECEMBER 3, 1970 IN BOOK D -4906 PAGE 90
OF OFFICIAL RECORDS, INSTRUMENT NO. 2203.
QQ. DATED SEPTEMBER 15, 1971, RECORDED SEPTEMBER 21, 1971 IN BOOK T -7213.
PAGE 971 OF OFFICIAL RECORDS, INSTRUMENT NO. 2349.
RR. DATED SEPTEMBER 13, 1971, RECORDED SEPTEMBER 21, 1971 IN BOOK T 7214 PAGE
31, OFFICIAL RECORDS, INSTRUMENT NO. 2350.
SS. DATED AUGUST 15, 1972, RECORDED AUGUST 16, 1972 IN BOOK D -5569 PAGE 726,
OFFICIAL RECORDS INSTRUMENT NO. 2643
TT: DATED AUGUST 15, 1972, RECORDED AUGUST 16, 1972, IN BOOK D -5569 PAGE 715,
OFFICIAL RECORDS, INSTRUMENT NO. 2642.
UU. . RECORDED FEBRUARY 1, 1974 IN BOOK D668 PAGE 403 OFFICIAL RECORDS.
W. RECORDED JULY 1, 1974 RECORDED IN BOOK D6350 PAGE 122 OFFICIAL RECORDS.
8514095 PAGE 04
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1:
EXHIBIT "D"
GOLF COURSE AND PREMISES IMPROVEMENTS
-611L- 04.0xi9?-0 424:744
155
Exhibit D
GOLF COURSE AND PREMISES IMPROVEMENTS
GOLF COURSE IMPROVEMENTS
Lessee and a Task Force appointed by the City Council shall work together and reasonably
cooperate for purposes of preparing a preliminary and conceptual design of the following golf
course and clubhouse improvements to be presented to the City Council for approval consistent
with the Lease provisions, The final design shall be consistent with the conceptual design.
During the course of design and ultimate construction, a "standard of quality" shah be
retained throughout the newly constructed facility as iatuwolly agreed upon by both parties,
The use of the word "Quality" in this agreement is intended to main that the building, building
materials and furnishings shall convey design, interest and coordination, craf'temanship and use
of durable and visually attractive finlsi~cs and materials. With respect to the design of the
improvements to the course itself, "Quality" is intended to mean that, in consultation with an_
approved golf course architect, the safety rating of the facility shall be maintained or improved,
that the level of difficulty in play. -ig the course shall be maintained or improved, In both the
case of the buildings and the course improvements, the City's intent is that they shaft be of the
same, or better quality than what currently exist, This exhibit contains photos of the existing
Facility as examples of the current level of quality, The facility is intended to be In "turnkey"
condition at the time of completion meaning that the Lessee shall provide at facility that
furnished and ready for operations.
> Construction of new pro chop at approxi
contain the aynvunt of fixture units consistent with city code and capacity
of the facility and be consistent with the existing clubhouse (including
installation of soap dispensers, hand drying devices and trash
enclosures), Restrooms shall be accessed solely from the interior of the
newly constructed facility.
o MMagernent ffzct -- within the described (structure) a separate, office
for management operations shall be included, This office shall include a
door and wall safe as required by current permitting policy,
a 6 J )3ar Vdth seatiMMa -. The facility shall be sufficiently constructed
to include wiring for sound and wi -ft capabilities, Additionally,
televisions of sufficient size (55 ") shall be included and mounted on the
interior acid potentially on the exterior patio axem, Exterior television
equipment shall be constructed with exterior placement /waterproof
integrity, lnd.00r snack bar portion of facility shall consist of sufficient
squ,aa:e footage to maintain and operate a sniall commercial kitchen- with
equipment such as commercial grade reach -in freezer and cooling units, a
tree compartment sink, mop closet, griddle (with grill), microwave and
fryer. New facility shall also contain sufficient space for and include an
ice raking .machine and soft drink dispenser (typically vendor
provided), All equipment shall be included and will be farther outlined
through the collaborative efforts with the Task force during the design,
process. A bar with sufficient beer taps and spacing for refrigeration of
the same number of kegs (minhnurn 5). Dining area should be able to
accommodate 2N30 guests and in accordance with established LA
County Health Department guidelines.
0 1'o ([IQ extent tnalrjcal, all t Ui 111unt that, is in t ooO repair sx��
facility, not'vast Its useful life shall be utilized w-kd InstafteLl at the new
ffidity.
o Outdoor patio space with seating area - Outdoor space shall include lard
floor surfaces (i.e concrete or other approved material) and maintain
position directly adjacent to the snack bar entry. Generally this will be at
least 750 square feet with some or all the area covered, The Covered
outdoor area shall be of sufficient size to accommodate adequate seating
for 15-20. The balance of outdoor dining area (which may not be covered)
shall accommodate seating for at least an additional 2035 `Pius area shall
also be equipped with appropriate space heaters, lighting and outdoor
furniture / seating,
➢ Construction of a practice putting green and practice chipping /bunker area with
the one contiguous putting green surface area being no less than 4,500 square
feet with the intent being that the area sha11 be the maximum allowable by the
physical constraints of the site. Prior to construction, the existing putting green
surface area shall be given sole and exclusive priority to the golf course putting
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green, Any remainder putting green may be utilized as a putting green within
the 'TopGolf site,
> Screening poles and safety netting will be installed to ensure the safety of
golfers, the public, automobiles, and surrounding properties and rights of way
per golf course architect recommendations
9 Golf course modifications;
o Upon completion of construction, the golf course with described
Improvements shall maintain or increase in degree of difficulty compared
to its current condition. The approved Golf Course Architect shall
provide an assessment of difficulty of the course before and after; Lessee
will maintain and or improve the difficulty of the golf course,
o The overall final design of the golf course after modifications shall
maintain a safety rating consistent or safer than existing conditic►nts, For
the purposes of determ4 -zing golf course safety, the Minimum Safety
Envelope (MSE) shall be utilis=ed as adopted by the United Stated Golf
Association such that all factors applicable from the Feast vs, McStain
(Colorado) case shall be applied -in the. calculations of structures and
roadways to any physically altered portions of the course, In the event
that during the design process, more stringent safety zn Measures are
Implemented in California, the mutually agreed upon Golf Course
Architect shall determine the best practice for this type of facility,
o The course shall have a minimum of two par 4 holes, While no specific
definition has been established in yardage for distinguishing a range for a
Par 4 hole, effective length as defined by the USDA, in conjunction with
consultation by a golf course architect shall prevail. In general, a Par 4 is
considered to maintain yardage with a range of 230 -270 yards, In
developing yardage, the Lessee and City will maintain an objective
approach while providing flexibility,
o Construction of new hole 3 green and bunkers and tee box.
o Reset both par 4 tee boxes to accommodate new modifications.
o Where possible, the existing tee boxes shall be leveled and lengthened,
Lessee shall make every effort (within the project scope and budget) in
consultation with an approved golf course architect (approved mutually
by the Lessee and City), to expand tee boxes. The intention of this effort is
to increase yardage from tee boxes to holes to achieve the minimum
USDA standard of 1,500 (or current minimum) yardage for a nine hole
course to establish a Course bating and Course Slope, In no instance shall
the course modifications result in the total yardage of the course to be
shortened or lessened from its current and existing state of play, The total
current yardage of play for the existing nine -hole course is approximately
1,340 yards from the white tee line (Men's), The City will be responsible
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for any cosh, not including design or construction costs, for certifying the
Course Rating and Slope per USG,A guidelines,
o Lessee to add bunkers and/ or sand traps to the north side of hole
number S with the intention of increasing speed of play, placement,
sizing and number of bunkers and/or sand traps will be based upon
approved golf course architect recommendations,
o When possible, Lessee shall utilize existing and available poles and
nettfng not otherwise repurposed by TopGolf project,
o dole three will be redesigned in such a fashion to maintain a m inimurn
Par g and play over the existing northern body of water feats,
PREMISES IMPROVEMENTS
Prior to disposal of the existing Pro Shop and Restaurant roof surfaces, further
direction, shall be given to the disposal or repurposing of the copper roof.
Direction may come from the assigned Taskforce or directly from the City
Council in a timely manner.
Construction of the 'Top Golf Driving Range and Facility approximately 40,000 SF
of indoor area and 20,000 SF of outdoor butting bays which shall be substantially
similar to the Top Golf Prototype Facility defined in the Lease with regard to
construction materials, quality, type and size and facilities, Attached are pictures
of the prototype Facility.
Replacement/ relocation of the existing net poles with the Top Golf required
poles, which will adhere to all building and safety codes, SCE safety standards
and other applicable safety standards. Any /all poles not specifically used in the
construction of the TopGolf facility shall be repurposed, to the extent possible,
for the golf course modifications,
• Expansion of the existing parking which shall extend over the area where hole
number one is currently located on the golf course and provide adequate parking
per city code, During the design process, the City shall determine the number
and location of parking spaces that will be reserved (during the hours of
operation of the Lakes) for patrons of the Lakes golf course, consistent with
Section 5,4 of this Lease and subject to the terms and conditions of the approved
Required Project Entitlements (as defined in the Lease), Should parking conflicts
arise after the commencement of joint use of the parking facility, the City and the
Lessee shall mutually cooperate and work together to implement parking control
measures to further reserve parking spaces by use of patrons of the Lakes.
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EXHIBIT "E"
PERMITTED EXCEPTIONS
[TO BE FINALIZED AND ATTACHED WITHIN 60 DAYS FROM THE
COMMENCEMENT DATE]
163
EXHIBIT "F"
FORM OF MEMORANDUM OF LEASE
THIS EXHIBIT TO BE PREPARED PRIOR TO EXECUTION OR CONDITION
PRECEDENT TO BE ADDED REQUIRING THAT IT BE PREPARED WITHIN NINETY
DAYS AND ATTACHED HERETO.
raw ��r„rr73��ianv„nnY'rt7!17,i9v
164
EXHIBIT "G"
PROTOTYPE FACILITY
- F3A�3J+4�� ?G �O11�[#7�39vd
165
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EXHIBIT I'M
FORM OF GUARANTIES
171
CONSTRUCTION AND OPERATING ING ERIOI) GUARANTEE AGREEMENT
THIS CONSTRUCTION nkEn OPURATINCI n 1101) GUARANTEE AGREEMENT
(this "Guaranty ") is executed and delivered as of the " "?�cia�r or
2015, by 30 We Grim; !4,C -, oBGolf International, Ine., a mi sc-Wi
1: »,7 „} }.,,,.,., .,,. fn2n tits,.,t 12L-- !.1.:».'I)elmLgrc C:orlorW1011 ( "TGI" or "Guarantor "),
whose address is 404 Ja x+kg75i1 N. Cenmil FxpresswaVr Suite "' :;ter; E i!y. N-1( 6410
1200, Dallas, Texas 75231 for the benefit of the City of El Segundo (referred to herein as "City”
or "Lessor ").
A. Pursuant to that certain Due Diligence and Ground Lease Agreement entered into
on or about , 243k320I5 (the "Contract ") by and between ES Formatted: Font: Bold
..........-
Centercal, LLC, a Delaware limited liability company (referred to herein as the ",Company" or Formatted: Font: Bold
Lessee ") and the City, and subject to the terms and conditions set forth in the Contract, as may _ . Formatted: Font: Bold
be amended in writing from time to time, the Company has agreed f4to complete, or cause to be
completed, certain improvements to the Golf Course and the Premises as described in the
Contract, or return the Premises to the same or better condition as it existed prior to the
Commencement Da s. ih
Sit r�lt il3
B. 30 ►t esi Pe h 4ygTonGoll' USA El Segundo, l.l.C' [ "TG El Segundo "I is a
wholly-owned subsidiary ofl "Cil and is contemplated as being a sublessee of the Company and it
is one of the Conditions Precedent under the Contract that 341 —i448-1 D10 gj,( -r 1:1 Sc�tindct
become the sublessee under a Ground Sublease with Company covering the Premises (the
"Sublease ").
C. As a condition precedent to the City's agreeing to enter pinto the Contract, 30
R#TGl is required to deliver two fully and properly executed originals of this
Guaranty to the City.
D. Capitalized Terms used herein and not otherwise defined shall have the respective
meanings given such terms in the Contract.
NOW THEREFORE, in consideration of the Contract, and for other good and valuable
considerations the receipt and sufficiency of which are hereby irrevocably acknowledged by the
Guarantor, the Guarantor agrees as follows:
THE GUARANTY.
(a) Upon satisfaction of all Conditions Precedent in the Contract and the
occurrence of the Premises Turnover Date in the Contract, Guarantor - hereby guarantees
all of the obligations of the Company (or any assignee of Company) under the Contract
with regard to (i) the completion of the Premises Improvements or the return of the
Premises to the same or better condition as the Premises existed prior to the
Commencement Date ('Tremises Construction Obligations ") and full payment of all Formatted: Font: Bold
172
costs and expenses of every kind whatsoever associated with such completion of the
Premises Construction Obligations including all loss, cost, damage, liability, claim or
expense the City may suffer by reason of mechanic's liens or similar claims or by reason
of the Company's or Guarantor's failure to complete the Premises Construction
Obligations ("fremises Project Costs "); (ii) Formatted: Font: Bold
Coni;t ut flwough ,:,f . (a) 1h d w ,h., 13.0 l� ,u. „.. ..l.,, ,.d „I 0*0
*se! txe o
lYl7t1- taikFl-e ary w-wir ..4i, i.... ,4... -140h . :.. ed as .,i' the
tHHH{H,” -14Yi ;gall costs expenses. damn e5 losses and other unounts liar ►vl i h
the City may become liable as a consequence of or in connection with the Company's or
Guarantor's completion of or failure to complete the Premises Construction Obligations
and/or, when so obligated, to cause the Premises to be are returned to the City to the same
or better condition as the Premises existed as of the Premises Turnover Date pursuant to
the terms and conditions of the Contract, and
;r, ,he Cx:,irecssiina ri viii) if the City exercises its right under this Guaranty to take over
construction of the Premises Improvements, to reimburse City for all costs and expenses
incurred by City in taking over construction of the Premises Improvements and
completing construction of the Premises Improvements.
(b) Notwithstanding any other provision in the Contract or this Guaranty,
recognizing that the Company, 'rte Centercal Guarantor and 90 West
GWI'G USA GI Segundo all have various contractual obligations that they have entered
into by and between themselves to which the City is not a party and that the City has
limited rights or no rights to enforce, in the event that (i) 40 '� Rep-shingTGI does
oni�aFensure that TO USA 1-1 Segundo enters into the Sublease, (ii) G1 executes and
delivers this Guaranty to the Lessor, and (iii) the Company delivers to the Lessor the Due
Diligence Acceptance Notice as provided for in the Contract, then unless 341- 114asi
Persking'i'Gl within five (5) business days of issuance of the Notice of Acceptance
provides written notice to the Lessor that it has withdrawn this Guaranty, Guarantor is
deemed to have waived any rights it might have under the Contract or this Guaranty, or in
law or equity, to assent that the Guarantor's obligations under this Guaranty have in any
way been altered or diminished. Receipt of the Due Diligence Acceptance Notice by
Lessor shall be deemed notice to Lessor that "? Wes! 11ei-shing`I`6 USA El Segundo and
Company have entered into the Sublease.
(c) Guarantor covenants and agrees to cooperate with the Company and/or
CenterCal Guarantor to coordinate construction scheduling, access and all other matters
related to the performance by Guarantor of its Premises Construction Obligations and
payment of the Premises Project Costs and performance of its other obligations under this
Guaranty —. Guarantor waives the right to claim any defense to performance of any of its
obligations under this Guaranty based on a claim that the Company has failed to perform
under the Contract or any other agreement, nor may Guarantor claim a failure to perform
by the Company under the Contract or any other agreement as a defense to a default by
Guarantor under this Guaranty. Guarantor waives the right to claim any defense to
173
performance of any of its obligations under this Guaranty based on a claim that
Cen4epeaRhc Centercal Guarantor has failed to perform- under that certain Construction
Guarantee Agreement from the Centercal Guarantor for the benefit of the City or any
other agreement nor may Guarantor claim a default by the Centercal Guarantor under its
Construction Guarantee Agreement in favor of the City or any other agreement as a
defense to a default by Guarantor under the Guaranty. Guarantor covenants and agrees
that no assignment of the Company's interest as Lessee under the Contract or any other
assignment or sublease permitted by the Contract shall release Guarantor from any of its
obligations hereunder. Guarantor covenants and agrees that no assignment of it-S. T(i IJSA
I?9 Scs:unda's interest as sublessee under the Sublease shall release Guarantor from any of
its obligations hereunder.
2. PREMISES IMPROVEMENTS BY GUARANTOR AND THE CITY'S OPTION
TO COMPLETE THE PROJECT.
At the City's election as to the timing of making a demand (following the expiration of
any applicable notice and cure period), if the Premises Improvements have not been completed
within ten (10) months of the Premises Turnover Date (subject to force majeure as defined in
Section 30 of the Contract or delays caused by the City), or if there are material delays with
construction of the Premises Improvements such that the City has a good faith, reasonable belief
that the Premises Improvements will not be completed within such period except for delays
caused by force majeure as defined in Section 30 of the Contract or except for delays caused by
the City, then the City shall make written demand on Guarantor to so complete the same and to
honor all of the obligations set forth in Section 1 of this Guaranty. If the Guarantor, within ten
(10) days of receiving the following written demand by City:
"THIS NOTICE OF DEFAULT IS BEING SENT PURSUANT TO SECTION 3
OF THE GUARANTY, AND IF GUARANTOR FAILS TO CURE SUCH
DEFAULT WITHIN TEN (10) DAYS OF ITS RECEIPT OF THIS NOTICE,
OR IF GUARANTOR HAS NOT COMMENCED SUCH CURE WITHIN
SUCH TEN (10) DAY PERIOD AND IS DILIGENTLY PROSECUTING THE
SAME TO COMPLETION, THEN CITY MAY EXERCISE SELF HELP
RIGHTS UNDER SECTION 3 OF THIS GUARANTY. ""
fails diligently to commence and/or continue performance thereof to completion as required
under the Contract, the City in its sole and absolute discretion, at any time thereafter, shall have
the right to complete the Premises Improvements or return the Premises to the same or better
condition as such existed prior to the Premises Turnover Date, either before, during or after the
pursuing of any other remedy of the City against the Company and/or the Guarantor, and expend
such sums as the City in its sole and absolute discretion deems proper in order to complete the
Premises Improvements pursuant to the requirements of the Contract.
In such event, the Guarantor shall fully and promptly reimburse and repay the City for all
costs and expenses incurred by the City and such shall not relieve Guarantor from performing
any or all of its additional obligations set forth in Section 1 of this Guaranty, ineluding the
13 - Any amounts payable by the Guarantor shall be payable on demand, with
174
such amounts bearing interest from and after the date incurred by the City until paid as provided
in Section 3 hereof.
3. INTEREST ON UNPERFORMED OBLIGATIONS.
The Guarantor agrees to pay to the City interest at the interest rate of 5% per annum on
the amounts advanced by the City pursuant to Section 2. Such interest shall be payable for the
period commencing with each such advance by the City.
4. REPRESENTATIONS AND WARRANTIES.
The Guarantor makes the following representations and warranties to the City to the best
of Guarantor's knowledge and the Guarantor acknowledges that the City intends to enter into the
Contract in reliance thereon:
(a) The Guarantor is not in default under any agreement to which it is a party,
the effect of which will materially impair performance by the Guarantor of its obligations
pursuant to and as contemplated by the terms of this Guaranty. Neither the execution and
delivery of this Guaranty nor compliance with the terms and provisions hereof (i) will
violate any presently existing provision of law or any presently existing regulation, order,
writ, injunction or decree of any court or governmental department, commission, board,
bureau, agency or instrumentality applicable to Guarantor; or (ii) will conflict or will be
inconsistent with, or will result in any breach of, any of the terms, covenants, conditions
or provisions of, or constitute a default under (with an effect that will materially impair
performance by the Guarantor of its obligations pursuant to and as contemplated by the
terms of this Guaranty) any indenture, mortgage, deed of trust, instrument, document,
agreement or contract of any kind that creates, represents, evidences or provides for any
lien, charge or encumbrance upon any of the property or assets of the Guarantor, or any
other indenture, mortgage, deed of trust, instrument, document, agreement or contract of
any kind to which the Guarantor is a party or by which any of the property of the
Guarantor may be subject to, in the event of any such conflict, the required consent or
waiver of the other party or parties thereto has been validly granted, is in full force and
effect and is valid and sufficient therefor;
(b) There are no actions, suits or proceedings pending or threatened against
the Guarantor before any court or any governmental, administrative, regulatory,
adjudicatory or arbitrational body or agency of any kind that will (if adversely
determined) materially adversely affect performance by such Guarantor of its obligations
pursuant to and as contemplated by the terms and provisions of this Guaranty;
(c) aQ West ller;ni*g!! Gl is a duly organized, validly existing limited li ty
eempasty+corporatinn under the laws of the State of "i]elawarti and is in good
standing in the States of h4issour iDela ► ware and California, and has requisite authority to
execute, deliver and perform its obligations under this Guaranty pursuant to the terms and
provisions of this Guaranty and has executed and delivered this Guaranty pursuant to
proper authority duly granted;
175
(d) The Guarantor is deriving a material financial benefit from the entering
into of the Contract by the Company, and the City has given sufficient consideration to
the Guarantor by entering into the Contract; and
(e) Each obligation under this Guaranty is legal, valid, binding and
enforceable against the Guarantor in accordance with its terms, subject at all times to
matters of bankruptcy and insolvency and other laws affecting the enforcement of
creditors' rights.
COVENANTS.
The Guarantor agrees and covenants that:
(a) No payment or performance by the Guarantor under any provision of this
Guaranty shall entitle the Guarantor, by subrogation to the rights of the City or otherwise,
to any payment from or rights in any applicable bonds, title insurance certifications,
commitments or indemnities or other security held by or for the benefit of the City in
connection with the Premises Improvements, until all of the Premises Construction
Obligations have been discharged in full; provided nothing herein shall constitute a
waiver of the right of subrogation of the Guarantor after discharge in full of such
obligations;
(b) The liability of the Guarantor shall in no way be affected, diminished or
released by any of the following: (i) any extension of time or forbearance that may be
granted by the City to the Company or to the Guarantor; (ii) any waiver by the City under
the Contract; (iii) any change or modification in the Contract (subject to the provisions of
(c) below); (iv) the acceptance by the City of additional security or any increase,
substitution or changes therein; (v) the release by the City of any security or any
withdrawal thereof or decrease therein; (vi) the failure or election by the City to pursue or
not to pursue any remedies it may have against the Guarantor or against the Company or
any of the general partners of the Company under the Contract; (vii) any failure by the
Company to provide Guarantor or any other party written or other notice as may be
required under the Contract; or (viii) the exercise of any extension of time or other option
for performance or assignment of obligations specifically set forth in the Contract.
(c) The City may at any time enter into agreements with the Company, or its
stieee4,4carsucccssors or assigns, to amend and modify the Contract, but such amendments
or modifications shall not be binding on Guarantor without Guarantor's consent thereto if
such materially affect to Guarantor's detriment its -obligations or liabilities under this
Guaranty;
(d) Nothing contained herein or otherwise shall prevent the City from
pursuing concurrently or successively all rights and remedies available to the City
pursuant to any document or agreement or in law or in equity and against any persons,
firms or entities whatsoever (and particularly, but not by way of limitation, the City may
exercise any other rights available to it under the Contract or any other agreement or
security instrument), and the exercise of any of its rights or the completion of any of its
176
remedies shall not constitute a discharge of the Guarantor's obligations hereunder, it
being the purpose and intent of the Guarantor that, subject to the terms and provisions of
this Guaranty, its obligations hereunder shall be absolute, independent and unconditional
under any and all circumstances whatsoever;
(e) The liability of the Guarantor hereunder or any remedy for the
enforcement thereof shall in no way be affected by (i) the release or discharge of the
Company, or any general partner of the Company, in any creditors', receivership,
bankruptcy or other proceedings, (ii) the impairment, limitation or modification of the
liabilities of the Company or any general partner of the Company under the Contract or
of any remedy for the enforcement thereof, or of the estate of the Company or any such
general partner in bankruptcy, resulting from the operation of any present or future
provision of the federal bankruptcy act or other statute or from the decision in any court,
(iii) the rejection or disaffirmance of the Contract in any such proceedings, (iv) cessation
from any cause whatsoever of the liability of the Company or any such general partner to
the City, or (v) any defense, current or future, of the Guarantor to any action, suit or
proceeding at law or otherwise, that may be instituted on this Guaranty other than one
based upon nonfulfillment by the City of a material obligation to be performed by the
City pursuant to this Guaranty or the Contract.
6. WAIVERS.
The Guarantor hereby expressly irrevocably waives:
(a) Notice of acceptance of this Guaranty by the City, and any and all notice
and demands of every kind that may be required to be given by any statute, rule or law
except any specifically required by this Guaranty or the Lessor under the Contract;
(b) Any defense arising by reason of any incapacity, lack of authority, death
or disability of any other person or entity (except the City) or from the failure of the City
to file or enforce a claim against any person or entity in any administrative, bankruptcy or
other proceeding;
(c) Any obligation the City might otherwise have to disclose to the Guarantor
any facts the City now or hereafter may know or have reasonably available to it regarding
the Company or its financial condition, whether or not the City has a reasonable
opportunity to communicate such facts or has reason to believe that any such facts are
unknown to the Guarantor or materially increase the risk to the Guarantor beyond the risk
the Guarantor intended to assume hereunder. Guarantor shall be fully responsible for
keeping informed of the financial condition of the Company and of all other
circumstances bearing upon the risks of nonpayment or nonperformance of the Company
under the Contract;
(d) Any defense based on an election of remedies by the City, whether or not
such election may affect in any way the recourse, subrogation or other rights of the
Guarantor against the Company or any of its partners in connection with the Premises
Construction Obligations;
177
(e) All diligence in collection or protection of or realization upon or
enforcement of the Premises Construction Obligations, any other obligation hereunder, or
any security for or guaranty of any of the foregoing, and any and all formalities that
otherwise might be legally required to charge the Guarantor with liability; and
(f) Any lien, security interest or charge on the Golf Course Property, the
equipment and personal property located thereon, all rights therein and thereto, the
revenue and income to be realized therefrom, or on any proceeds or products of any
thereof, which the Guarantor may have or obtain as a result of the City's enforcement of
this Guaranty.
(g) With respect to those matters set forth in Sections 1(b) and (c),5, 6, 7
and 9 of this Guaranty, Guarantor waives any and all laws or regulations (including
without limitation California Civil Code Sections 2787 and 2855, and Code of Civil
Procedure Sections 580a, 580b, 580d and/or 726, regardless of whether such are
applicable or not to this Guaranty) that would (i) in any respect or manner diminish or
eliminate the obligations of the Guarantor hereunder regardless of whether the terms of
such laws or regulations have been specifically referenced herein or the substance of such
laws or regulations have been set forth herein or addressed by this Guaranty; or (ii)
provide some procedural defense to Guarantor with regard to any action or proceeding
the City may institute to enforce its rights under this Guaranty.
EFFECT OF THE CITY'S DELAY OR ACTION.
No delay on the part of the City in the exercise of any right or remedy under this
Guaranty or the Contract shall operate as a waiver thereof, and no single or partial exercise by
the City of any right or remedy shall preclude other or further exercise thereof or the exercise of
any other right or remedy. No action by the City permitted hereunder shall in any way affect or
impair the rights of the City and the obligations of the Guarantor under this Guaranty, provided,
however, that the Guarantor shall be entitled to enforce, and the City shall be bound by, the
obligations of the City under the Contract so long as the Guarantor shall perform its obligations,
or cause its obligations to be performed, hereunder.
CONTINUING GUARANTY.
This Guaranty shall in all respects be a continuing, absolute, irrevocable and
unconditional guaranty, and shall remain in full force and effect and shall be binding upon the
heirs, personal representatives, successors and assigns of the Guarantor, and shall inure to the
benefit of the respective successors and assigns of the City. All references herein to the
Company, its general partners or the Guarantor shall be deemed to include the respective
successors and assigns of same, as the case may be. Any proposed assignment of the Guarantor's
obligations hereunder to a substitute guarantor shall be subject to the City's approval which may
be withheld in the City's sole and absolute discretion.
9. CERTAIN PERMITTED ACTIONS OF THE CITY.
The City may from time to time, in its sole discretion and without notice to the
Guarantor, take any of the following actions without in any way affecting the obligations of the
178
Guarantor: (a) obtain the primary or secondary obligation of any additional obligor or obligors
with respect to any of the Premises Construction Obligations; (b) enforce this Guaranty against
the Guarantor, whether or not the City shall have (1) proceeded against the Company or any of
the other guarantors or sureties or any other party primarily or secondarily obligated or (2)
resorted to or exhausted any other remedy or any other security or collateral; and (c) enforce any
other rights under the Contract.
10. TIME OF ESSENCE.
Time is of the essence of this Guaranty.
11. NO MODIFICATION WITHOUT WRITING.
This Guaranty may not be modified, amended, revised, revoked, terminated, changed or
varied in any way whatsoever except by the express terms of a writing signed by the parties
hereto. This Guaranty, and the Company's obligations set for the in Contract represent the entire
understanding between the City and the Guarantor and no other prior written or oral
understanding shall be of any force or effect.
12. NOTICES.
All notices required or permitted pursuant to this Guaranty shall be in writing and shall
be deemed given when (a) - personally delivered to an officer or other authorized representative
of the party to be notified or (b) after deposit in the United States mail as certified mail, postage
prepaid, return receipt requested or (c) sent by reputable overnight courier and addressed as
follows=
_(or to such other address as a party may specify by notice given to the other party Formatted: Indent: First line: 0.5"
pursuant to this provision):
If to the Guarantor:
909 Mlablut, Suille 200
L s O(A14W
179
If to the City:
i� ri •r ^rc^sosi
1-44! (214056 8682
TupGoIf t�l .. ............................. ..
•.. -..
�44iaa-- IiutKlNlt u,-s,,,._ �r:„-- ,- ,.� -�-.a. n_....iticsHl- Nr�4taf3►HtlHF
94minternatinntal, Inc,
r.50 N. Central Expressway,. ,_WoSuilc 1200
l)alla�,'I`cxas 75231
Attention: liiizabc;th Boneslo, Esq.
To12Qol f tJSA I'.1 Segundo 1.1. -C
Attn: Mr. /..ach Shor -
5750 N. Central Isxnressway. Suite 1200
Dallas, Texas 75231
Kam (630) 35A 6901
City of El Segundo
Attn: City Clerk
350 Main Street
City of El Segundo, CA 90245
Formatted: Font: 12 pt, Font color: Black
Formatted: Font: 12 pt, Font color: Black
• •... Formatted: space After: o pt
Notwithstanding anything in this section to the contrary, any notice sent or mailed to the
last designated address of any person or party to which a notice may be or is required to be
delivered pursuant to the Guaranty, shall not be deemed ineffective if actual delivery cannot be
made due to a change of address of the person or party to which the notice is directed or if such
notice is rejected by such party.
13. GOVERNING LAW.
This Guaranty shall be construed in accordance with and governed by the laws of the
State of California and any suit, action or other legal proceeding relating to this Guaranty may be
brought only in the Los Angeles Superior Court. The Guarantor irrevocably consents to the
service of process of the aforementioned court in any such action or proceeding by the mailing of
copies thereof by certified or registered mail, postage prepaid, return receipt requested to the
Guarantor at its address set forth in SECTION 12 hereof, as such address may be changed from
time to time in accordance with such SECTION 12. Nothing herein shall affect the right of the
City to serve process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Guarantor in any other jurisdiction in which the Guarantor may be
subject to suit.
14. INDEPENDENT OBLIGATIONS.
The obligations of the Guarantor hereunder are independent of the obligations of the
Company. In the event of any default hereunder, the City may institute a separate action against
the Guarantor with or without joining or instituting a separate action against the Company.
15. CUMULATIVE.
:1
f
All rights and remedies of the City and all obligations of the Guarantor under this
Guaranty are cumulative. In addition, the City shall have all rights and remedies available to it at
law or equity for the enforcement of this Guaranty.
16. SEVERABILITY.
Wherever possible each provision of this Guaranty shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
17. LEGAL TENDER OF UNITED STATES.
All payments hereunder shall be made in coin or currency which at the time of payment is legal
tender in the United States of America for public and private debts.
18. NO MERGER OR ALTERATION
In the event the Guarantor acquire some real or personal property interest through the
Contract or otherwise with regard to the Premises, such shall not alter or impair the City's rights
or the Guarantor's obligations under this Guaranty.
IN WITNESS HEREOF, the Guarantor has duly executed this Guaranty as of date first
written above.
111d
°+
'I'opGol I' l nternational. Inc..
a Delaware corporation
By:
Name:
Its:
[Signatures continued on next page]
City of El Segundo
181
Bill Fisher, Mayor
Approved As to Form:
Mark D. Hensley, City Attorney
Attest:
Tracy Weaver, City Clerk
182
r�llAtc'7•RUCTION Arun OPERATING PERIOD GUARANTEE AGREEMENT
CONSTRUCTION a rprs r�i7u
THIS rnxrc•rrol rr' •rinar n wrn OPERATING PERIOD GUARANTEE AGREEMENT
(this "Guaranty ") is executed and delivered as of the 201-3 day of
2015, by 30 Ales! l i+tg+ T, T —a i+ r;e u livnited li kiil ii r y-("30
" ,4—I rl;l�i g --cam f' "Guarantor "), ;t wholly tf,41'ned
Formatted: Font: Bold
subsidiary ul` '1'copGoll' International, Inc.} a Qelawarc corfiurtttion, whose address is 51419
WaNx+#R750 N. Central 1'. Suite 7!'fy n City. —NU) 64100 1200, Dallas, Texas
75231 for the benefit of the City of El Segundo (referred to herein as '.Ci(y" or "Lessor ).
Formatted: Font: Bold
Formatted: Font: Bold
A. Pursuant to that certain Due Diligence and Ground Lease Agreement entered into
on or about 241+32015 (the "Yon tract ") by and between ES ,•_...•'
Formatted: Font: Bold
Centercal, LLC, a Delaware limited liability company (referred to herein as the'Company" or _
....• Formatted: Font: Bold
"Lessee ") and the City, and subject to the terms and conditions set forth in the Contract, as may
A. .:....... ...
Formatted: Font: Bold
be amended in writing from time to time, the Company has agreed (0 to
_
.I.
C1„ traot of turli the I7re, to rlie bee -' lit"" ',' '' "+ ! io rlle
K. l!1'1 r rC ' [!v6 CrIYl.;e7 Cr�ri� :TRTiIt"Y�TT61[tCl� ccir�yr{rC)j}- {}�j•-- �'�ry�
C � P-11,- -tom •' i4Lo lease the Premises, subject to the Conditions Precedent set
forth in the Contract, and operate a driving range and other facilities on the Premises and pay
Rent to City as well as perform other obligations under the Contract during the Operating Period.
B. 40 Wes! Pen Top(ioll' USA l -il Seatindo, I IX V' TG El Sep-undo") is an
affiliate of Guarantor and is contemplated as being a sublessee of the Company and it is one of
the Conditions Precedent under the Contract that 30 Mles! Persl-' ° T6 lit Sggundt become the
sublessee under a Ground Sublease with Company covering the Premises (the 5ublease ").
Formatted: Font: Bold
C. As a condition precedent to the City's agreeing to enter +pinto the Contract, 39
West ' Guarantor is required to deliver two fully and properly executed originals of this
Guaranty to the City.
D. Capitalized Terms used herein and not otherwise defined shall have the respective
meanings given such terms in the Contract.
NOW THEREFORE, in consideration of the Contract, and for other good and valuable
considerations the receipt and sufficiency of which are hereby irrevocably acknowledged by the
Guarantor, the Guarantor agrees as follows:
THE GUARANTY.
(a) Upon satisfaction of all Conditions Precedent in the Contract and the
occurrence of the Premises Turnover Date in the Contract, Guarantor - hereby guarantees
all of the obligations of the - Company (or any assignee of Company) under the Contract
with regard to , IhP (41, the
.' nsf�eti�nn !renae+�errresr�rnrr�wra� n+rrsts�aene rin r r_erer_�aesrn 4
132215 / 66600; 497504.7 1
183
r t...,.,ai... r►t, +HF1ti 3iiE3 H lr It 1. —A. a., I:..0 a1 I.. expenthe flie
CII)i � ' I (IF- to iii� ai i'
Gampably's '. itEFfllkt
i1 2
. Fe Opel! tk)
fewf
W1W! ihU G . W r;::t ..II „.e...• ., dti #eth I., ,i1 .11h0l ..:i_Eff -high
F; -FlzW, a�;
�iiFi3h8it7kEH -'ti t3flt i li+kH3H f11 kH liftikifLa kE> iaE3h „leke he Pre! }4 � klFi ii.l4J�FHFi r3�il{ +iitiftfi
i4)i -k H
1,.. ...,,I s "In..11l1.,.,.•..,f'.,ke G,..,t...,a.,,.,.1 t.- +-the operation of the Premises by
GoWl'o olf or other permitted Operator under the Contract "-and payinenk of Bunk
during the Operating Period as defined in the Contract; and ra..y_ r 1he_r;ity ofi.,..ni....,,;i�..
ti#hI-- .
Felmhul-sa r•,f. r al;
..L, .x......11.. 1' �I ,.,u,..,..ti!1#�llltiFRN+iifi,
(b) Notwithstanding any other provision in the Contract or this Guaranty,
recognizing that the Company, 30 Wom " ibis° • n Guarantor. Centercal Guarantor and
14-T-041-TO Ej Segundo ndo all have various contractual obligations that they have entered
into by and between themselves to which the City is not a party and that the City has
limited rights or no rights to enforce, in the event that (i) ?0 "�,-.,'est P'epAingCivarantor
does a f:Kwgq ure that '1`G E:I Se sundo enters into the Sublease, (ii} Guarantor executes
and delivers this Guaranty to the Lessor, and (iii) the Company delivers to the Lessor the
Due Diligence Acceptance Notice as provided for in the Contract, then unless 30 We'st
12eik aingGuarantor within five (5) business days of issuance of the Notice of Acceptance
provides written notice to the Lessor that it has withdrawn this Guaranty, Guarantor is
deemed to have waived any rights it might have under the Contract or this Guaranty, or in
law or equity, to assert that the Guarantor's obligations under this Guaranty have in any
way been altered or diminished. Receipt of the Due Diligence Acceptance Notice by
Lessor shall be deemed notice to Lessor that 11i NI Sa undo and
Company have entered into the Sublease.
GwamnFy Guarantor waives the right to claim any defense to performance of any of its
obligations under this Guaranty based on a claim that the Company has failed to perform
under the Contract or any other agreement, nor may Guarantor claim a failure to perform
by the Company under the Contract or any other agreement as a defense to a default by
Guarantor under this Guaranty. Guarantor waives the right to claim any defense to
performance of any of its obligations under this Guaranty based on a claim that
Ge the Centercal Guarantor has failed to perform- under that certain Construction
{32215 / 66600; 497504.7 }
M
Guarantee Agreement from the Centercal Guarantor for the benefit of the City or any
other agreement nor may Guarantor claim a default by the Centercal Guarantor under its
Construction Guarantee Agreement in favor of the City or any other agreement as a
defense to a default by Guarantor under the Guaranty. Guarantor covenants and agrees
that no assignment of the Company's interest as Lessee under the Contract or any other
assignment or sublease permitted by the Contract shall release Guarantor from any of its
obligations hereunder. Guarantor covenants and agrees that no assignment of+tsTQj USA
f:l Se wido's interest as sublessee under the Sublease shall release Guarantor from any of
its obligations hereunder.
k 44he 140FIROWS
.Oli fl tee 1 Ills M0141111? k Oi c e 4 i O 1 c FR N-O Pat j��iE- tEY-H" Mined
C.,..c:on 40 of the f',...r....et or delays, ...,.,�,,..1 1... �I,..�,�a.— i -k'_f� ..u_.s.- ,�_..,..c.,�:..1 delays with
uc.T. �, zuza- �c -sr-vf
kh„ !':r- — 01811 LhO C �_ Nhlill ., U .gee.,. &FR Ad , G .,c., - - c- aii7:ca�pni�+
kle
ent, 111L. L•u RLOF ,ltiA JbIl„ aild . ..el. .',B-*ff.F repay the 94 ibl. all
„6. ,d _ o ed h)' el,. (41)' d 61, AI„ it 1- .41.P..35,'. v£:.. Mor. I "r .,..+:,
111tymen! 0!, Relit. !N!I), amokinis Pa�-able by Wie Giim-antor --hall he payable aii demaiid. with sue!
H
{32215 / 66600; 497504.7 }
185
FM ler H11MUM on;
the ib .nt% 11dV. ed r,., ,r,., rare..., ,.,, ,.. te.,,s.ar,. 2 X.....i, ,.,,........, ,a..,er i,,., ,. �..s,i„ s.,.. �y
�7 i3�Fl�re�4l l) F�FiiR?fk�C�IFii11�- kPElk3i�- SkEBI}�1i��ays.�' 'sli��c� � ky . ,
42 REPRESENTATIONS AND WARRANTIES.
The Guarantor makes the following representations and warranties to the City to the best
of Guarantor's knowledge and the Guarantor acknowledges that the City intends to enter into the
Contract in reliance thereon:
(a) The Guarantor is not in default under any agreement to which it is a party,
the effect of which will materially impair performance by the Guarantor of its obligations
pursuant to and as contemplated by the terms of this Guaranty. Neither the execution and
delivery of this Guaranty nor compliance with the terms and provisions hereof (i) will
violate any presently existing provision of law or any presently existing regulation, order,
writ, injunction or decree of any court or governmental department, commission, board,
bureau, agency or instrumentality applicable to Guarantor; or (ii) will conflict or will be
inconsistent with, or will result in any breach of, any of the terms, covenants, conditions
or provisions of, or constitute a default under (with an effect that will materially impair
performance by the Guarantor of its obligations pursuant to and as contemplated by the
terms of this Guaranty) any indenture, mortgage, deed of trust, instrument, document,
agreement or contract of any kind that creates, represents, evidences or provides for any
lien, charge or encumbrance upon any of the property or assets of the Guarantor, or any
other indenture, mortgage, deed of trust, instrument, document, agreement or contract of
any kind to which the Guarantor is a party or by which any of the property of the
Guarantor may be subject to, in the event of any such conflict, the required consent or
waiver of the other party or parties thereto has been validly granted, is in full force and
effect and is valid and sufficient therefor;
(b) There are no actions, suits or proceedings pending or threatened against
the Guarantor before any court or any governmental, administrative, regulatory,
adjudicatory or arbitrational body or agency of any kind that will (if adversely
determined) materially adversely affect performance by such Guarantor of its obligations
pursuant to and as contemplated by the terms and provisions of this Guaranty;
(c) 30est Pet-iiiingL uarantor is a duly organized, validly existing li+riked
litN44,yt ycgiToration under the laws of the State of AissatiriDelaware and is in
good standing in the States of {11 r+Uelaware and California, and has requisite
authority to execute, deliver and perform its obligations under this Guaranty pursuant to
the terms and provisions of this Guaranty and has executed and delivered this Guaranty
pursuant to proper authority duly granted; 20 Alea °°- .•s,:.,n is a ,..r,, lly owned ,_..1.sidi,,.,.,
(32215 / 66600; 497504.7 )
IM
(d) The Guarantor is deriving a material financial benefit from the entering
into of the Contract by the Company, and the City has given sufficient consideration to
the Guarantor by entering into the Contract; and
(e) Each obligation under this Guaranty is legal, valid, binding and
enforceable against the Guarantor in accordance with its terms, subject at all times to
matters of bankruptcy and insolvency and other laws affecting the enforcement of
creditors' rights.
.3. COVENANTS.
The Guarantor agrees and covenants that:
(a) No payment or performance by the Guarantor under any provision of this
Guaranty shall entitle the Guarantor, by subrogation to the rights of the City or otherwise,
to any payment from or rights in any applicable bonds, title insurance certifications,
commitments or indemnities or other security held by or for the benefit of the City in
connection with the Premises Improvements, until all of the Premises Construction
Obligations have been discharged in full; provided nothing herein shall constitute a
waiver of the right of subrogation of the Guarantor after discharge in full of such
obligations;
(b) The liability of the Guarantor shall in no way be affected, diminished or
released by any of the following: (i) any extension of time or forbearance that may be
granted by the City to the Company or to the Guarantor; (ii) any waiver by the City under
the Contract; (iii) any change or modification in the Contract (subject to the provisions of
(c) below); (iv) the acceptance by the City of additional security or any increase,
substitution or changes therein; (v) the release by the City of any security or any
withdrawal thereof or decrease therein; (vi) the failure or election by the City to pursue or
not to pursue any remedies it may have against the Guarantor or against the Company or
any of the general partners of the Company under the Contract; (vii) any failure by the
Company to provide Guarantor or any other party written or other notice as may be
required under the Contract; or (viii) the exercise of any extension of time or other option
for performance or assignment of obligations specifically set forth in the Contract.
(c) The City may at any time enter into agreements with the Company, or its
suee successors or assigns, to amend and modify the Contract, but such amendments
or modifications shall not be binding on Guarantor without Guarantor's consent thereto if
such materially affect to Guarantor's detriment its -obligations or liabilities under this
Guaranty;
(d) Nothing contained herein or otherwise shall prevent the City from
pursuing concurrently or successively all rights and remedies available to the City
pursuant to any document or agreement or in law or in equity and against any persons,
firms or entities whatsoever (and particularly, but not by way of limitation, the City may
exercise any other rights available to it under the Contract or any other agreement or
security instrument), and the exercise of any of its rights or the completion of any of its
(32215 / 66600; 497504.7 )
187
remedies shall not constitute a discharge of the Guarantor's obligations hereunder, it
being the purpose and intent of the Guarantor that, subject to the terms and provisions of
this Guaranty, its obligations hereunder shall be absolute, independent and unconditional
under any and all circumstances whatsoever;
(e) The liability of the Guarantor hereunder or any remedy for the
enforcement thereof shall in no way be affected by (i) the release or discharge of the
Company, or any general partner of the Company, in any creditors', receivership,
bankruptcy or other proceedings, (ii) the impairment, limitation or modification of the
liabilities of the Company or any general partner of the Company under the Contract or
of any remedy for the enforcement thereof, or of the estate of the Company or any such
general partner in bankruptcy, resulting from the operation of any present or future
provision of the federal bankruptcy act or other statute or from the decision in any court,
(iii) the rejection or disaffirmance of the Contract in any such proceedings, (iv) cessation
from any cause whatsoever of the liability of the Company or any such general partner to
the City, or (v) any defense, current or future, of the Guarantor to any action, suit or
proceeding at law or otherwise, that may be instituted on this Guaranty other than one
based upon nonfulfillment by the City of a material obligation to be performed by the
City pursuant to this Guaranty or the Contract.
(f) (ivaramor shall at all limes maintain a net worth of not less than
$10,000.000.00. Upon Inquest by the City (not more than once tu7nually), Guarantor
sllall deliver to the City linwicial statements certified by the Chief financial Officer of
Guarannor (or Guarantor's parent). I Note. Mark, we would tyylculltp keep this net worth
covenant closer to 101 x Annual Fiver) Reid but rare willing to expand our obligettion In
order to ntake this deal ltuvven I
6 4. WAIVERS.
The Guarantor hereby expressly irrevocably waives:
(a) Notice of acceptance of this Guaranty by the City, and any and all notice
and demands of every kind that may be required to be given by any statute, rule or law
except any specifically required by this Guaranty or the Lessor under the Contract;
(b) Any defense arising by reason of any incapacity, lack of authority, death
or disability of any other person or entity (except the City) or from the failure of the City
to file or enforce a claim against any person or entity in any administrative, bankruptcy or
other proceeding;
(c) Any obligation the City might otherwise have to disclose to the Guarantor
any facts the City now or hereafter may know or have reasonably available to it regarding
the Company or its financial condition, whether or not the City has a reasonable
opportunity to communicate such facts or has reason to believe that any such facts are
unknown to the Guarantor or materially increase the risk to the Guarantor beyond the risk
the Guarantor intended to assume hereunder. Guarantor shall be fully responsible for
keeping informed of the financial condition of the Company and of all other
{32215 / 66600; 497504.7 1
IM
circumstances bearing upon the risks of nonpayment or nonperformance of the Company
under the Contract;
(d) Any defense based on an election of remedies by the City, whether or not
such election may affect in any way the recourse, subrogation or other rights of the
Guarantor against the Company or any of its partners in connection with the Premises
Construction Obligations;
(e) All diligence in collection or protection of or realization upon or
enforcement of the Premises Construction Obligations, any other obligation hereunder, or
any security for or guaranty of any of the foregoing, and any and all formalities that
otherwise might be legally required to charge the Guarantor with liability; and
(f) Any lien, security interest or charge on the Golf Course Property, the
equipment and personal property located thereon, all rights therein and thereto, the
revenue and income to be realized therefrom, or on any proceeds or products of any
thereof, which the Guarantor may have or obtain as a result of the City's enforcement of
this Guaranty.
(g) With respect to those matters set forth in Sections 1(b) and (c),3. 4 5: 6,7
and 97 of this Guaranty, Guarantor waives any and all laws or regulations (including
without limitation California Civil Code Sections 2787 and 2855, and Code of Civil
Procedure Sections 580a, 580b, 580d and/or 726, regardless of whether such are
applicable or not to this Guaranty) that would (i) in any respect or manner diminish or
eliminate the obligations of the Guarantor hereunder regardless of whether the terms of
such laws or regulations have been specifically referenced herein or the substance of such
laws or regulations have been set forth herein or addressed by this Guaranty; or (ii)
provide some procedural defense to Guarantor with regard to any action or proceeding
the City may institute to enforce its rights under this Guaranty.
�5. EFFECT OF THE CITY'S DELAY OR ACTION.
No delay on the part of the City in the exercise of any right or remedy under this
Guaranty or the Contract shall operate as a waiver thereof, and no single or partial exercise by
the City of any right or remedy shall preclude other or further exercise thereof or the exercise of
any other right or remedy. No action by the City permitted hereunder shall in any way affect or
impair the rights of the City and the obligations of the Guarantor under this Guaranty, provided,
however, that the Guarantor shall be entitled to enforce, and the City shall be bound by, the
obligations of the City under the Contract so long as the Guarantor shall perform its obligations,
or cause its obligations to be performed, hereunder.
&.6. CONTINUING GUARANTY.
This Guaranty shall in all respects be a continuing, absolute, irrevocable and
unconditional guaranty, and shall remain in full force and effect and shall be binding upon the
heirs, personal representatives, successors and assigns of the Guarantor, and shall inure to the
benefit of the respective successors and assigns of the City. All references herein to the
Company, its general partners or the Guarantor shall be deemed to include the respective
(32215 / 66600; 497504.7 )
M
successors and assigns of same, as the case may be. Any proposed assignment of the Guarantor's
obligations hereunder to a substitute guarantor shall be subject to the City's approval which may
be withheld in the City's sole and absolute discretion.
4 7. CERTAIN PERMITTED ACTIONS OF THE CITY.
The City may from time to time, in its sole discretion and without notice to the
Guarantor, take any of the following actions without in any way affecting the obligations of the
Guarantor: (a) obtain the primary or secondary obligation of any additional obligor or obligors
with respect to any of the Premises Construction Obligations; (b) enforce this Guaranty against
the Guarantor, whether or not the City shall have (1) proceeded against the Company or any of
the other guarantors or sureties or any other party primarily or secondarily obligated or (2)
resorted to or exhausted any other remedy or any other security or collateral; and (c) enforce any
other rights under the Contract.
4 -0-8. TIME OF ESSENCE.
Time is of the essence of this Guaranty.
44.9, NO MODIFICATION WITHOUT WRITING.
This Guaranty may not be modified, amended, revised, revoked, terminated, changed or
varied in any way whatsoever except by the express terms of a writing signed by the parties
hereto. This Guaranty, and the Company's obligations set for the in Contract represent the entire
understanding between the City and the Guarantor and no other prior written or oral
understanding shall be of any force or effect.
1.110. NOTICES.
All notices required or permitted pursuant to this Guaranty shall be in writing and shall
be deemed given when (a) - personally delivered to an officer or other authorized representative
of the party to be notified or (b) after deposit in the United States mail as certified mail, postage
prepaid, return receipt requested or (c) sent by reputable overnight courier and addressed as
follows:
_(or to such other address as a party may specify by notice given to the other party *°• ° " "' Formatted: Indent: First line: 0.5"
pursuant to this provision):
If to the Guarantor:
Pershing, 30 West khC
9f3p W +lffU4;-
8750 N, Central. Expressway. Suite 2 -W1200
K,,. sab City. N40 re 106Dallas. "Texas 75231
Attention: Gene -Fat Ge ... iset zlizabeth Bonesio, Esq.
{32215 / 66600; 497504.7 l
190
If to the City:
While Cl' r.` iEi� 'c"^r�"^�'- '.r��iAm'••••1r �co- c�rc'r.'+Sxiric+i4it
a ProwssH4ii#�FNI1Ft!{ IEll1
45 10 BelleN-iew Avef! Top(3olCUSA l.sl Segundo. LLC.
Attn: Mr. Zach Shor
8750 N. Central Expressway, Suite A*
Kansas, C4Y. Mis-souwil 64,11111111 4M
Mwhiiiem lied W GFoueh, ksq. -
L'UK; (81 6) 753 0201
r..-la'&'c' kord 114..12
a -nn t�,...s c..'tu 2200
earn+- rssrrrrAr+timw:�rrn�rc.,s-
Dal las, 'I'exas 75201
(2 14) 756 9591
` ` o 1?Yn, r t„rt , 4,v- . Formatted: Space After: Opt
- ��3�i��iffi` .
Min; I7....dall 11 Stow, l ioe 14.,.,:aen
QUA Is'. Ce-Al"al Sk-4646M)
Dallas, Texas 75231
City of El Segundo
Attn: City Clerk
350 Main Street
City of El Segundo, CA 90245
Notwithstanding anything in this section to the contrary, any notice sent or mailed to the
last designated address of any person or party to which a notice may be or is required to be
delivered pursuant to the Guaranty, shall not be deemed ineffective if actual delivery cannot be
made due to a change of address of the person or party to which the notice is directed or if such
notice is rejected by such party.
11, GOVERNING LAW.
This Guaranty shall be construed in accordance with and governed by the laws of the
State of California and any suit, action or other legal proceeding relating to this Guaranty may be
brought only in the Los Angeles Superior Court. The Guarantor irrevocably consents to the
service of process of the aforementioned court in any such action or proceeding by the mailing of
copies thereof by certified or registered mail, postage prepaid, return receipt requested to the
Guarantor at its address set forth in SECTION 4-2 10 hereof, as such address may be changed
from time to time in accordance with such SECTION 4-2 10. Nothing herein shall affect the right
of the City to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Guarantor in any other jurisdiction in which the
Guarantor may be subject to suit.
12. INDEPENDENT OBLIGATIONS.
{32215 / 66600; 497504.7 1
191
The obligations of the Guarantor hereunder are independent of the obligations of the
Company. In the event of any default hereunder, the City may institute a separate action against
the Guarantor with or without joining or instituting a separate action against the Company.
1,5-.13. CUMULATIVE.
All rights and remedies of the City and all obligations of the Guarantor under this
Guaranty are cumulative. In addition, the City shall have all rights and remedies available to it at
law or equity for the enforcement of this Guaranty.
446r.14. SEVERABILITY.
Wherever possible each provision of this Guaranty shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
-V;L� 15. LEGAL TENDER OF UNITED STATES.
All payments hereunder shall be made in coin or currency which at the time of payment is legal
tender in the United States of America for public and private debts.
4- 16. NO MERGER OR ALTERATION
In the event the Guarantor acquire some real or personal property interest through the
Contract or otherwise with regard to the Premises, such shall not alter or impair the City's rights
or the Guarantor's obligations under this Guaranty.
IN WITNESS HEREOF, the Guarantor has duly executed this Guaranty as of date first
written above.
(32215 / 66600; 497504,7 )
By:
Name:
Its:
[Signatures continued on next . a e
10
192
City of El Segundo
Bill Fisher, Mayor
Approved As to Form:
Mark D. Hensley, City Attorney
Attest:
Tracy Weaver, City Clerk
{32215 / 66600; 497504.7 }
193
CONSTRUCTION GUARANTEE AGREEMENT
THIS CONSTRUCTION GUARANTEE AGREEMENT (this "Guaranty ") is executed
and delivered as of the , 201 =6 by CenterCal, LLC, a Delaware limited liability Deleted: 3
......
company ( "CenterCal" or "Guarantor "), whose address is 1660 East Franklin Street, El Segundo,
CA 90245 for the benefit of the City of El Segundo (referred to herein as "City" or "Lessor ").
A. Pursuant to that certain Due Diligence and Ground Lease Agreement entered into
on or about , 201 the "Cnntract ") by and between ES Centercai, (Do fated: 3
LLC, a Delaware limited liability company (referred to herein as the "Company" or "Lessee ")
and the City, and subject to the terms and conditions set forth in the Contract, as may be
amended in writing from time to time, the Company has agreed (i) to complete, or cause to be
completed, certain improvements to the Golf Course and the Premises as described in the
Contract, or return the Premises to the same or better condition as it existed prior to the
Commencement Date and to (ii) lease the Premises, subject to the Conditions Precedent set forth
in the Contract, and operate a driving range and other facilities on the Premises and pay Rent to
City as well as perform other obligations under the Contract.
B. As a condition precedent to the City's agreeing to enter in the Contract, CenterCal
is required to deliver two fully and properly executed originals of this Guaranty to the City.
C. Capitalized Terms used herein and not otherwise defined shall have the respective
meanings given such terms in the Contract.
NOW THEREFORE, in consideration of the Contract, and for other good and valuable
considerations the receipt and sufficiency of which are hereby irrevocably acknowledged by the
Guarantor, the Guarantor agrees as follows:
THE GUARANTY.
(a) Upon satisfaction of all Conditions Precedent in the Contract and the
occurrence of the Premises Turnover Date in the Contract, Guarantor hereby guarantees
all of the obligations of the Company (or any assignee of Company) under the Contract
with regard to (i) the completion of the Golf Course Improvements or the return of the
Premises to the same or better condition as the Premises existed prior to the
Commencement Date ( "Golf Course Construction Obligations ") and full payment of all
costs and expenses of every kind whatsoever associated with such completion of the Golf
Course Construction Obligations including all loss, cost, damage, liability, claim or
expense the City may suffer by reason of mechanic's liens or similar claims or by reason
of the Company's or Guarantor's failure to complete the Golf Course Construction
Obligations ( "Golf Course Project Costs "); (ii) all costs, expenses, damages, losses and
other amount for which the City may become liable as a consequence of or in connection
with the Company's or Guarantor's completion of or failure to complete the Golf Course
Construction Obligations and /or, when so obligated, to cause the Premises to be are
returned to the City to the same or better condition as the Premises existed as of the
Premises Turnover Date pursuant to the terms and conditions of the Contract; and (iii) if
(32215 / 66600; 497504.5 1
194
137
the City exercises its right under this Guaranty to take over construction of the Golf
Course Improvements, to reimburse City for all costs and expenses incurred by City in
taking over construction of the Golf Course Improvements and completing construction
of the Golf Course Improvements.
(b) Notwithstanding any other provision in the Contract or this Guaranty,
recognizing that the Company, 30 West Pershing, and CenterCal and Top Golf all have
various contractual obligations that they have entered into by and between themselves to
which the City is not a party and that the City has limited rights or no rights to enforce, in
the event that (i) 30 West Pershing does enter into the Sublease, (ii) executes and delivers
this Guaranty to the Lessor, and (iii) the Company delivers to the Lessor the Due
Diligence Acceptance Notice as provided for in the Contract, then unless CenterCal
within five (5) business days of issuance of the Notice of Acceptance provides written
notice to the Lessor that it has withdrawn this Guaranty, Guarantor is deemed to have
waived any rights it might have under the Contract or this Guaranty, or in law or equity,
that the Guarantor's obligations under this Guaranty have in any way been altered or
diminished. Receipt of the Due Diligence Acceptance Notice by Lessor shall be deemed
notice to Lessor that 30 West Pershing and Company have entered into the Sublease,
(c) Guarantor covenants and agrees to cooperate with the Company and /or
CenterCal Guarantor to coordinate construction scheduling, access and all other matters
related to the performance by Guarantor of its Golf Course Construction Obligations and
payment of the Golf Course Project Costs and performance of its other obligations under
this Guaranty. Guarantor waives the right to claim any defense to performance of any
of its obligations under this Guaranty based on a claim that the Company has failed to
perform under the Contract or any other agreement nor may Guarantor claim a failure to
perform by the Company under the Contract or any other agreement as a defense to a
default by Guarantor under this Guaranty. Guarantor waives the right to claim any
defense to performance of any of its obligations under this Guaranty based on a claim
that 30 West Pershing has failed to perform under that certain Construction and
Operating Period Guarantee Agreement from 30 West Pershing for the benefit of the City
or any other agreement nor may Guarantor claim a default by 30 West Pershing under its
Construction and Operating Period Guarantee Agreement in favor of the City or any
other agreement as a defense to a default by Guarantor under the Guaranty. Guarantor
covenants and agrees that no assignment of the Company's interest as Lessee under the
Contract or any other assignment or sublease permitted by the Contract shall release
Guarantor from any of its obligations hereunder. Guarantor covenants and agrees that no
assignment of its interest as sublessee under the Sublease shall release Guarantor from
any of its obligations hereunder.
2. GOLF COURSE IMPROVEMENTS BY GUARANTOR AND THE CITY'S
OPTION TO COMPLETE THE PROJECT.
At the City's election as to the timing of making a demand (following the expiration of
any applicable notice and cure period), if the Golf Course Improvements have not been
completed within ten (10) months of the Premises Turnover Date (subject to force majeure as
defined in Section 30 of the Contract or delays caused by the City), or if there are material delays
(32215 / 66600; 497504 5 )
195
W •
with construction of the Golf Course Improvements such that the City has a good faith,
reasonable belief that the Golf Course Improvements will not be completed within such period
except for delays caused by force majeure as defined in Section 30 of the Contract or except for
delays caused by the City, then the City shall make written demand on Guarantor to so complete
the same and to honor all of the obligations set forth in Section 1 of this Guaranty. if the
Guarantor, within ten (10) days of receiving the following written demand by City:
"THIS NOTICE OF DEFAULT IS BEING SENT PURSUANT TO SECTION 3
OF THE GUARANTY, AND IF GUARANTOR FAILS TO CURE SUCH
DEFAULT WITHIN TEN (10) DAYS OF ITS RECEIPT OF THIS NOTICE,
OR IF GUARANTOR HAS NOT COMMENCED SUCH CURE WITHIN
SUCH TEN (10) DAY PERIOD AND IS DILIGENTLY PROSECUTING THE
SAME TO COMPLETION, THEN CITY MAY EXERCISE SELF HELP
RIGHTS UNDER SECTION 3 OF THIS GUARANTY."
fails diligently to commence and /or continue performance thereof to completion as required
under the Contract, the City in its sole and absolute discretion, at any time thereafter, shall have
the right to complete the Golf Course Improvements or return the Premises to the same or better
condition as such existed prior to the Premises Turnover Date, either before, during or after the
pursuing of any other remedy of the City against the Company and/or the Guarantor, and expend
such sums as the City in its sole and absolute discretion deems proper in order to complete the
Golf Course Improvements pursuant to the requirements of the Contract.
In such event, the Guarantor shall fully and promptly reimburse and repay the City for all
costs and expenses incurred by the City and such shall not relieve- Guarantor from performing
any or all of its additional obligations set forth in Section I of this Guaranty, . Any amounts
payable by the Guarantor shall be payable on demand, with such amounts bearing interest from
and after the date incurred by the City until paid as provided in Section 3 hereof;
INTEREST ON UNPERFORMED OBLIGATIONS.
The Guarantor agrees to pay to the City interest at the interest rate of 5% per annum on
the amounts advanced by the City pursuant to Section 2. Such interest shall be payable for the
period commencing with each such advance by the City.
4. REPRESENTATIONS AND WARRANTIES.
The Guarantor makes the following representations and warranties to the City to the best
of Guarantor's knowledge and the Guarantor acknowledges that the City intends to enter into the
Contract in reliance thereon:
(a) The Guarantor is not in default under any agreement to which it is a party,
the effect of which will materially impair performance by the Guarantor of its obligations
pursuant to and as contemplated by the terms of this Guaranty. Neither the execution and
delivery of this Guaranty nor compliance with the terms and provisions hereof (i) will
violate any presently existing provision of law or any presently existing regulation, order,
writ, injunction or decree of any court or governmental department, commission, board,
bureau, agency or instrumentality applicable to Guarantor; or (ii) will conflict or will be
(32215 / 66600; 497504.5 )
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inconsistent with, or will result in any breach of, any of the terms, covenants, conditions
or provisions of, or constitute a default under (with an effect that will materially impair
performance by the Guarantor of its obligations pursuant to and as contemplated by the
terms of this Guaranty) any indenture, mortgage, deed of trust, 'instrument, document,
agreement or contract of any kind that creates, represents, evidences or provides for any
lien, charge or encumbrance upon any of the property or assets of the Guarantor, or any
other indenture, mortgage, deed of trust, instrument, document, agreement or contract of
any kind to which the Guarantor is a party or by which any of the property of the
Guarantor may be subject to, in the event of any such conflict, the required consent or
waiver of the other party or parties thereto has been validly granted, is in full Force and
effect and is valid and sufficient therefor;
(b) There are no actions, shits or proceedings pending or threatened against
the Guarantor before any court or any governmental, administrative, regulatory,
adjudicatory or arbitrational body or agency of any kind that will (if adversely
determined) materially adversely affect performance by such Guarantor of its obligations
pursuant to and as contemplated by the terms and provisions of this Guaranty;
(c) CenterCal is a duly organized, validly existing limited liability company
under the laws of the State of'Delaware and is in good standing in the State of California,
and has requisite authoriy to execute, deliver and perform its obligations under this
Guaranty pursuant to the terms and provisions of this Guaranty and has executed and
delivered this Guaranty pursuant to proper authority duly granted;;
(d) Tile Guarantor is deriving a material financial benefit from the entering
into of the Contract by the Company, and the City has given sufficient consideration to
the Guarantor by entering into the Contract; and
(e) hach obligation under this Guaranty is legal, valid, binding and
enforceable against the Guarantor in accordance with its terms, subject at all times to
matters of bankruptcy and insolvency and other laws affecting the enforcement of
creditors' rights.
5. COVENANTS,
The Guarantor agrees and covenants that:
(a) No payment or performance by the Guarantor under any provision of this
Guaranty shall entitle the Guarantor, by subrogation to the rights of the City or otherwise,
to any payment from or rights in any applicable bonds, title insurance certifications,
commitments or indemnities or other security held by or for the benefit of the C'sty in
connection with the Golf Course Improvements, until all of tite Golf Course Construction
Obligations have been discharged in Frill; provided nothing herein shall constitute a
waiver of the right of subrogation of the Guarantor after discharge ill full of Stich
obligations;
(b) The liability of the Guarantor shall in no way be affected, diminished or
released by any of the following: (i) any extension of time or forbearance that may be
(32215 / 66600; 497504.5 1
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granted by the City to the Company or to the Guarantor; (ii) any waiver by the City under
the Contract; (iii) any change or modification in the Contract (subject to the provisions of
(c) below); (iv) the acceptance by the City of additional security or any increase,
substitution or changes therein; (v) the release by the City of any security or any
withdrawal thereof or decrease therein; (vi) the failure or election by the City to pursue or
not to pursue any remedies it may have against the Guarantor or against the Company or
any of the general partners of the Company under the Contract; (vii) any failure by the
Company to provide Guarantor or any other party written or other notice as may be
required under the Contract; or (viii) the exercise of any extension of time or other option
for performance or assignment of obligations specifically set forth in the Contract.
(c) The City may at any time enter into agreements with the Company, or its
successor or assigns, to amend and modify the Contract, but such amendments or
modifications shall not be binding on Guarantor without Guarantor's consent thereto if
such materially affect to Guarantor's detriment its obligations or liabilities under this
Guaranty;
(d) Nothing contained herein or otherwise shall prevent the City from
pursuing concurrently or successively all rights and remedies available to the City
pursuant to any document or agreement or in law or in equity and against any persons,
firms or entities whatsoever (and particularly, but not by way of limitation, the City may
exercise any other rights available to it under the Contract or any other agreement or
security instrument), and the exercise of any of its rights or the completion of any of its
remedies shall not constitute a discharge of the Guarantor's obligations hereunder, it
being the purpose and intent of the Guarantor that, subject to the terms and provisions of
this Guaranty, its obligations hereunder shall be absolute, independent and unconditional
under any and all circumstances whatsoever;
(e) The liability of the Guarantor hereunder or any remedy for the
enforcement thereof shall in no way be affected by (i) the release or discharge of the
Company, or any general partner of the Company, in any creditors', receivership,
bankruptcy or other proceedings, (ii) the impairment, limitation or modification of the
liabilities of the Company or any general partner of the Company under the Contract or
of any remedy for the enforcement thereof, or of the estate of the Company or any such
general partner in bankruptcy, resulting from the operation of any present or future
provision of the federal bankruptcy act or other statute or from the decision in any court,
(iii) the rejection or disaffirmance of the Contract in any such proceedings, (iv) cessation
from any cause whatsoever of the liability of the Company or any such general partner to
the City, or (v) any defense, current or future, of the Guarantor to any action, suit or
proceeding at law or otherwise, that may be instituted on this Guaranty other than one
based upon nonfulfillment by the City of a material obligation to be performed by the
City pursuant to this Guaranty or the Contract.
WAIVERS.
The Guarantor hereby expressly irrevocably waives:
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(a) Notice of acceptance of this Guaranty by the City, and any and all notice
and demands of every kind that may be required to be given by any statute, rule or law
except any specifically required by this Guaranty or the Lessor under the Contract;
(b) Any defense arising by reason of any incapacity, lack of authority, death
or disability of any other person or entity (except the City) or from the failure of the City
to file or enforce a claim against any person or entity in any administrative, bankruptcy or
other proceeding;
(c) Any obligation the City might otherwise have to disclose to the Guarantor
any facts the City now or hereafter may know or have reasonably available to it regarding
the Company or its financial condition, whether or not the City has a reasonable
opportunity to communicate such facts or has reason to believe that any such facts are
unknown to the Guarantor or materially increase the risk to the Guarantor beyond the risk
the Guarantor intended to assume hereunder. Guarantor shall be fully responsible for
keeping informed of the financial condition of the Company and of all other
circumstances bearing upon the risks of nonpayment or nonperformance of the Company
under the Contract;
(d) Any defense based on an election of remedies by the City, whether or not
such election may affect in any way the recourse, subrogation or other rights of the
Guarantor against the Company or any of its partners in connection with the Golf Course
Construction Obligations;
(e) All diligence in collection or protection of or realization upon or
enforcement of the Golf Course Construction Obligations, any other obligation
hereunder, or any security for or guaranty of any of the foregoing, and any and all
formalities that otherwise might be legally required to charge the Guarantor with liability;
and
(f) Any lien, security interest or charge on the Golf Course Property, the
equipment and personal property located thereon, all rights therein and thereto, the
revenue and income to be realized therefrom, or on any proceeds or products of any
thereof, which the Guarantor may have or obtain as a result of the City's enforcement of
this Guaranty.
(g) With respect to those matters set forth in Sections 1(b) and (c),5, 6, 7
and 9 of this Guaranty, Guarantor waives any and all laws or regulations (including
without limitation California Civil Code Sections 2787 and 2855, and Code of Civil
Procedure Sections 580a, 580b, 580d and/or 726, regardless of whether such are
applicable or not to this Guaranty) that would (i) in any respect or manner diminish or
eliminate the obligations of the Guarantor hereunder regardless of whether the terms of
such laws or regulations have been specifically referenced herein or the substance of such
laws or regulations have been set forth herein or addressed by this Guaranty; or (ii)
provide some procedural defense to Guarantor with regard to any action or proceeding
the City may institute to enforce its rights under this Guaranty.
(32215 / 66600; 497504.5 )
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7. EFFECT OF THE CITY'S DELAY OR ACTION,
No delay on the part of the City in the exercise of any right or remedy under this
Guaranty or the Contract shall operate as a waiver thereof, and no single or partial exercise by
the City of any right or remedy shall preclude other or further exercise thereof or the exercise of
any other right or remedy. No action by the City permitted hereunder shall in any way affect or
impair the rights of the City and the obligations of the Guarantor under this Guaranty, provided,
however, that the Guarantor shall be entitled to enforce, and the City shall be bound by, the
obligations of the City under the Contract so long as the Guarantor shall perform its obligations,
or cause its obligations to be performed, hereunder.
8. CONTINUING GUARANTY.
This Guaranty shall in all respects be a continuing, absolute, irrevocable and
unconditional guaranty, and shall remain in full force and effect and shall be binding upon the
heirs, personal representatives, successors and assigns of the Guarantor, and shall inure to the
benefit of the respective successors and assigns of the City. All references herein to the
Company, its general partners or the Guarantor shall be deemed to include the respective
successors and assigns of same, as the case may be. Any proposed assignment of the Guarantor's
obligations hereunder to a substitute guarantor shall be subject to the City's approval which may
be withheld in the City's sole and absolute discretion.
9. CERTAIN PERMITTED ACTIONS OF THE CITY.
The City may from time to time, in its sole discretion and without notice to the
Guarantor, take any of the following actions without in any way affecting the obligations of the
Guarantor: (a) obtain the primary or secondary obligation of any additional obligor or obligors
with respect to any of the Golf Course Construction Obligations; (b) enforce this Guaranty
against the Guarantor, whether or not the City shall have (1) proceeded against the Company or
any of the other guarantors or sureties or any other party primarily or secondarily obligated or (2)
resorted to or exhausted any other remedy or any other security or collateral; and (c) enforce any
other rights under the Contract.
10. TIME OF ESSENCE.
Time is of the essence of this Guaranty.
11. NO MODIFICATION WITHOUT WRITING.
This Guaranty may not be modified, amended, revised, revoked, terminated, changed or
varied in any way whatsoever except by the express terms of a writing signed by the parties
hereto. This Guaranty, and the Company's obligations set for the in Contract represent the entire
understanding between the City and the Guarantor and no other prior written or oral
understanding shall be of any force or effect.
12. NOTICES.
{322] 5 / 66600; 497504 5 )
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143
All notices required or permitted pursuant to this Guaranty shall be in writing and shall
be deemed given when (a) personally delivered to an officer or other authorized representative of
the party to be notified or (b) after deposit in the United States mail as certified mail, postage
prepaid, return receipt requested or (c) sent by reputable overnight courier and addressed as
follows:
(or to such other address as a party may specify by notice given to the other party pursuant to this
provision):
If to the Guarantor:
CenterCal, LLC,
If to the City:
1600 East Franklin Street
El Segundo, CA 90245
Attention.: Fred W. Bruning
ES CenterCal, LLC,
1600 East Franklin Street
El Segundo, CA 90245
Attention.: Jean Paul Wardy
Griffin Fletcher & Herndon, LLP
6857 Amber Lane
Carlsbad, CA 92009
Attention.: Edward Krasnove, Esq.
City of El Segundo
Attn: City Clerk
350 Main Street
City of El Segundo, CA 90245
Notwithstanding anything in this section to the contrary, any notice sent or mailed to the
last designated address of any person or party to which a notice may be or is required to be
delivered pursuant to the Guaranty, shall not be deemed ineffective if actual delivery cannot be
made due to a change of address of the person or party to which the notice is directed or if such
notice is rejected by such party.
13. GOVERNING LAW.
This Guaranty shall be construed in accordance with and governed by the laws of the
State of California and any suit, action or other legal proceeding relating to this Guaranty may be
brought only in the Los Angeles Superior Court. The Guarantor irrevocably consents to the
service of process of the aforementioned court in any such action or proceeding by the mailing of
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144
copies thereof by certified or registered mail, postage prepaid, return receipt requested to the
Guarantor at its address set forth in SECTION 12 hereof, as such address may be changed from
time to time in accordance with such SECTION 12. Nothing herein shall affect the right of the
City to serve process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Guarantor in any other jurisdiction in which the Guarantor may be
subject to suit.
14. INDEPENDENT OBLIGATIONS.
The obligations of the Guarantor hereunder are independent of the obligations of the
Company. In the event of any default hereunder, the City may institute a separate action against
the Guarantor with or without joining or instituting a separate action against the Company.
15. CUMULATIVE.
All rights and remedies of the City and all obligations of the Guarantor under this
Formatted: Indent: First line: 0.5 ",
Guaranty are cumulative. In addition, the City shall have all rights and remedies available to it at
No bullets or numbering
law or equity for the enforcement of this Guaranty. To the extent there are obligations that
explicitly apply to Guarantor and are forth in the Contract that are not contained in this Guaranty,
Guarantor covenants and agrees to honor such obligations as part of this Guaranty, If there are
lmovision,s (it' (lie Contract tlapl_ etipres1_gl1ftly_ to Guarantor that rare not colttttittccl__in this
C;untu�t Guarantor t:ovcn:anls and a rrecs to honor stich �rovlsit�I as art of this Qua it y.- .'�".! _ _ � t_.�.. �.._�_.._,.- _�.��e._._.._. _ t_�]._
Deleted: 7'o the extent there are
jEVERABILITY,
inconsistencies between the Contract and
lids Guaranty, the provision that provides
Wherever possible each provision of this Guaranty shall be interpreted in such manner as
the greatest level of protection to the City
shall govern I
to be effective and valid under applicable law, but if any provision of this Guaranty shall be
s
prohibited by or invalid under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
16. LEGAL TENDER OF UNITED STATUS.
All payments hereunder shall be made in coin or currency which at the time of payment
is legal tender in the United States of America for public and private debts,
17. NO MERGER OR ALTERATION
In the event the Guarantor acquire some real or personal property interest through the
Contract or otherwise with regard to the Premises, such shall not alter or impair the City's rights
or the Guarantor's obligations under this Guaranty.
IN WITNESS HEREOF, the Guarantor has duly executed this Guaranty as of date first
written above.
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CENTERCAL, LLC,
a Delaware limited liability company
By: CENTERCAL ASSOCIATES, LLC,
a Delaware limited liability company
By
Print Nana
Print Title: Its Manager
City of El Segundo
Bill Fisher, Mayor
Approved As to Form:
Mark D. I3ensley, City Attorney
Attest:
Tracy Weaver, City Clerk
(32215/66600 :497504,5 }
10
203
146
204
03.05.14 EK DRAFT
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement ( "Agreement ") is entered into as of , 2014
by and between the City of El Segundo, a general law city and municipal corporation
( "City "), and ES Centercal, LLC, a Delaware limited liability company ( "Centercal "),
who agree as follows:
1. Recitals. This Agreement is made with reference to the following facts and
circumstances:
a. Centercal has entered into that certain Due Diligence and Ground Lease
Agreement with City dated . 2014, which may result in
Centercal obtaining a long term leasehold interest in the real property
generally located at 400 S. Sepulveda Blvd, El Segundo, CA 90245(the
"Lease ") if the Conditions Precedent in the Lease are satisfied.
Capitalized terms used herein shall have the same meaning as those
defined in the Lease.
b. Pursuant to the Lease, Centercal is seeking to develop the Premises and
construct or cause to be constructed approximately 45,000 square feet of
Premises Improvements, including a golf driving range and related
clubhouse with a full service restaurant and event space, and will also be
modifying the existing Golf Course with the Golf Course Improvements.
C. In order for Centercal to lease the Premises from City and complete such
Premises Improvement and Golf Course Improvements, there are a
number of Conditions Precedent that must be satisfied under the Lease
that will require that the City assign certain City staff or consultants to
complete the following administrative tasks and other related work,
including but not limited to: real estate appraisal, financial analysis of the
Guarantors, meetings and potential negotiations with Chevron and SCE,
environmental review, zoning review, public hearings, plans review for
compliance with City standards, building code compliance, analysis of
technical studies, preparation of staff reports, development of potential
mitigation measures, and project management duties (collectively,
"Services ") which will exceed the capacity of the current city staff.
d. Centercal, is agreeing to pay for such Services as set forth in this
Agreement.
2. City Reimbursement. Exhibit "A" hereto sets forth an estimated budget for the
costs for the Services. The Services to be performed by the outside consultants
and other professionals (the "Consultants ") shall be set forth in the contracts
205
between the City and the Consultants (the "Consultant Contracts "). Centercal
agrees to reimburse the City for the full amount of such actual costs and expenses
in accordance with the terms and conditions of this Agreement and in the manner
provided in this Agreement. Upon completion of the Services, City will provide
Centercal with a detailed accounting of all costs and expenses. The total of the
costs and expenses, as disclosed by the accounting, is called the "Reimbursement
Amount." The City may contract with the Consultants for the performance of any
of the Services required to be performed hereunder. Except with respect to legal
services, the scope of services to be performed by the Consultants shall be in
accordance with a detailed scope of work which includes the timing for the work.
Centercal shall have only be provided with monthly billing totals for legal
services to be performed as the underlying bills are subject to the attorney - client
privilege between the City and its legal counsel, provided that such billing totals
shall contain a summary of the work performed to provide reasonably satisfactory
evidence that such work was performed in connection with the Services.
3. Method of Reimbursement.
Except as provided below, within days from the execution of this
Agreement, Centercal agrees to deposit with City $ ( "Deposit
Amount ") which represents twenty -five percent (25 %) of the estimated
Reimbursement Amount. Not more often than monthly, within thirty (30)
days of Centercal's receipt of written notice from the City that the balance
of the Project Account is less than $ together with a detailed
accounting (except legal fees) including without limitation unpaid and /or
paid invoices and other reasonable evidence of cost to date of the Services,
Centercal shall deposit into the Project Account such additional amount
which is requested by the City, up to the amount of $ per
additional deposit. Upon completion of all services contemplated
hereunder, should the actual Reimbursement Amount exceed the Deposit
Amount, Centercal agrees to promptly pay City any difference in
accordance with Exhibit "A, " and -,, s .: 1 1 ! 1 : �- , 1 ; ag to by
Dev r. Should the Reimbursement Amount be less than the Deposit
Amount, City will refund Centercal any remaining Deposit Amount to
Centercal within thirty (30) days after determining the Reimbursement
Amount. Notwithstanding the foregoing, Centercal shall have the right in
its sole and absolute discretion to notify the City that Centercal refuses to
make any further deposits in which event this Agreement and the Lease
shall terminate and the City shall have no further obligation to continue
services related to the Conditions Precedent in the Lease, but Centercal
shall still be obligated to pay for any Services rendered or costs incurred
through such date. The Deposit Amount will be placed in a non - interest
bearing trust account established by the City Manager (the "Project
Account "). Centercal understands and agrees that City will not pay
interest to Centercal on the Deposit Amount and Centercal will not seek
such interest payments from City. Costs associated with the Services will
be charged against the deposit amount. ii-, � I The
206
Administrative costs estimated and set forth on Exhibit "A" and incurred
by City, including, without limitation, staff time, fees and services (the
"City Administrative Costs "), must be reimbursed on a time and materials
basis based on current City reimbursement rates. Centercal agrees that it
will pay for such costs on a monthly basis within thirty (30) days of
receiving an invoice from City. Notwithstanding the foregoing, The
aggregate compensation payable to the Consultants shall not exceed two
hundred and fifty thousand dollars ($250,000) with respect to the cost of
an environmental consultant to perform the documentation required under
the California Environmental Quality Act, Public Resources Code §§
21000 et seq., and one hundrend and ten thousand Dollars ($110,000) with
respect to the cost of the balance of the Services and the City
Administrative Costs except as approved in writing by Centercal. [n (lie
event that the costs exceed, . or reach a_point where it is anticipated the
costs will exceed the amounts set forth on Exhibit A and Centercal does
not approve �1 paying for additional costs, the Agreement and the [.case
shall terminate and the City shall have no further obligation to continue
services related to the Conditions Precedent in the Lease but Centercal
shall still be obli &rlted to pay for any Services rendered or costs incurred
throurrh such date.
4. Centercal Default. Should Centercal fail to perform any of its obligations under
this Agreement after ten (10) days notice, then City may, at its option, pursue any
one or more or all of the remedies available to it under this Agreement, at law or
in equity. Without limiting any other remedy which may be available to it, if
Centercal fails to perform any of its obligations under this Agreement and /or the
deposit account has a zero or negative balance, City shall no obligation to perform
additional services under this Agreement or the Lease until such time as Centercal
has cured any failure to perform and /or deposited sufficient additional funds into
the deposit account. The city may also bring an action to recover all costs and
expenses incurred by the City in completing the Services, together with interest
thereon from the date incurred at the rate of 10% per annum.
5. Co Ipliance with Law. Centercal will, at its sole cost and expense, comply with
all of the requirements of all federal, state, and local authorities now in force, or
which may hereafter be in force, pertaining to this Agreement. Centercal
understands and agrees that the City may not ultimately approve the project and
that Centercal is obligated to pay for the Services in accordance with this
Agreement regardless of the decision made by the City on the project.
6. Waiver of Breach. Any express or implied waiver of a breach of any term of this
Agreement will not constitute a waiver of any further breach of the same or other
term of this Agreement.
7. Insolvency; Receiver. Either the appointment of a receiver to take possession of
all or substantially all of the assets of Centercal, or a general assignment by
Centercal for the benefit of creditors, or any action taken or offered by Centercal
207
under any insolvency or bankruptcy action, will constitute a breach of this
Agreement by Centercal, and in such event this Agreement will automatically
cease and terminate.
8. Notices. Except as otherwise expressly provided by law, all notices or other
communications required or permitted by this Agreement or by law to be served
on or given to either party to this Agreement by the other party will be in writing
and will be deemed served when personally delivered to the party to whom they
are directed, or in lieu of the personal service, upon deposit in the United States
Mail, certified or registered mail, return receipt requested, postage prepaid,
addressed to:
Centercal at: ES CenterCal, LLC,
1600 East Franklin Street
El Segundo, CA 90245
Attention.: Jean Paul Wardy
City at: City of El Segundo
Attn: Director of Planning and Building Safety
350 Main Street
El Segundo, CA 90245
Either party may change its address for the purpose of this Section by giving
written notice of the change to the other party.
9. Acceptance of Facsimile or Electronic Signatures. The Parties agree that
agreements ancillary to this Agreement and related documents to be entered into
in connection with this Agreement will be considered signed when the signature
of a party is delivered by facsimile or electronic transmission. Such facsimile or
electronic signature will be treated in all respects as having the same effect as an
original signature.
10. Governing Law. This Agreement has been made in and will be construed in
accordance with the laws of the State of California, and exclusive venue for any
action involving this Agreement will be in Los Angeles County.
11. Partial Invalidity. Should any provision of this Agreement be held by a court of
competent jurisdiction to be either invalid or unenforceable, the remaining
provisions of this Agreement will remain in effect, unimpaired by the holding.
12. Integration. This instrument and its attachments constitute the sole agreement
between City and Centercal respecting the matters above and correctly set forth
the obligations of City and Centercal. Any Agreement or representations
respecting the property or its licensing by City to Centercal not expressly set forth
in this instrument are void.
ON
13. Corastructiort. The language of each part of this Agreement will be construed
simply and according to its fair meaning, and this Agreement will never be
construed either for or against either party.
14. Authority /Modification. The parties hereto represent and warrant that all necessary
action has been taken by the parties to authorize the undersigned to execute this
Agreement and to engage in the actions described herein. This Agreement may be
modified solely by written amendment. City's city manager, or designee, may
execute any such amendment on behalf of City.
15. Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be an original, but all of which together will constitute one
instrument executed on the same date.
209
IN WITNESS WHEREOF the parties hereto have executed this contract the day
and year first hereinabove written.
City of El Segundo,
a municipal corporation.
Greg Carpenter, City Manager
ATTEST:
Tracy Weaver, City Clerk
APPROVED AS TO FORM:
MARK D. HENSLEY, City Attorney
go
Karl H. Berger,
Assistant City Attorney
CENTERCAL:
ES CENTERCAL, LLC,
a Delaware limited liability company
By: CENTERCAL, LLC,
a Delaware limited liability company
a California Corporation.
[president]
[secretary]
By: CENTERCAL ASSOCIATES, LLC,
a Delaware limited liability company
By
Print N;
Print Title: Its Manager
210
EXHIBIT "A"
SERVICES AND COSTS
Estimated Applicant Costs:
1. Planning Staff Cost: (based upon a time and materials estimate) $80,000
2. City Attorney Cost: $30,000 @ $265.00 /hour
3. Environmental Consultant Cost (including traffic consultant): Maximum of
$250,000 (including $75,000 in traffic engineering and parking analysis costs)
Total Cost Anticipated: Approximately $360,000
211
Summary Sheets
Updated to Reflect
Participation Rent
212
Annual Benefits
Golf Complex Direct Net Contribution
TopGolf Lease Revenue
TopGolf Participation Rent
Fiscal Revenue
Total Benefits
Annual Costs
Citywide Administrative /Overhead /Insurance
Construction Impact
Capital Cost*
$476.7
($106.3)
($106.3)
($106.3)
--
425.0
525.0
525.0
--
-
--
198.0
5-6
163.6
207.9
207.9
$482.3
$482.3
$626.6
$824.6
$160.0
$150.0
$150.0
$150.0
- --
21.1
21.1
21.1
159.5
105.7
63.0
- -_
$234.1
$392.5
49.0
Fiscal Service Costs
Total Costs
Net Annual Cost - Benefit
"$319.5
$162.8
- --
$276.8
$205.5
$220.1
$604.5
" Represents annual reserve amount necessary to fund capital improvement
requirements.
213
Benefits
Golf Complex Net Contribution
$6,041.7
($1,347.3)
($1,347.3)
($1,347.3)
TopGolf Lease Revenue
TopGolf Participation Rent
Fiscal Revenue
Total Benefits
Costs
Citywide Administrative /Overhead
Capital Cost -- Construction Impact"
Capital Cost`
- --
5,163.4
6,388.8
6,388.8
--
2,153.0
71.0
2,074.0
2,634.9
2634.9
$6,112.7
$5,890.1
$7,676.4
$1,901.1
250.0
$9,829.4
$1,901.1
250.0
816.8
$2,027.8
- --
1,445.2
$1,901.1
250.0
$585.3
$446.4
Fiscal Service Costs
- --
- --
- - -_
Total Costs
Net Cost - Benefit
$3,473.0
$2,639.7
$2,967.9
$2,922,2
$2,736.4
$2,597.5
$4,940.0
$7,232.0
* Present value of 25 -year stream.
214
16 Pro Forma
Advisors LI C
Draft Report
Financial Analysis and Comparison of
The Lakes at El Segundo Golf Course
& the TopGolf Development Proposal
El Segundo, California
Prepared for: City of Ell Segundo
Prepared by: Pro Forma Advisors, LLC
April 2015
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Version: 1.1
Pro Forma Advisors, LLC Los Angeles T 310.616.5079 New York Metro T 203.604.9007 F 888.696.9716 www.ProFormaAdvisors.com
215
Pro Forma
/advisors PLC
General Limiting Conditions
4
I. Introduction /Background
5
II. Summary of Findings
7
Concept
7
The Lakes Historical Performance
7
Golf Market Overview
8
Revenue Enhancement
9
Capital Improvement Requirements
9
Projected Direct Golf Course Performance
10
Projected TopGolf Performance
11
Fiscal Impact
12
Comparative Economic Summary
13
Other Issues
14
Ill. The Lakes at El Segundo
17
Project Description
17
Operating History
19
Course Condition /Capital Cost
23
IV. TopGolf
27
TopGolf Project Concept
27
TopGolf at The Lakes
27
V. Golf Market Overview
32
Demographics
32
Golf Market Overview
34
VI. Revenue Enhancement /Cost Efficiencies
44
Revenue Enhancements
44
VII. Direct Economics
48
Golf Course Economics
48
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TopGolf
53
Vill: Fiscal Impact
56
Revenue Sources
56
Existing Golf Course Scenario
56
TopGolf Scenario
57
Comparative Fiscal Impact
58
IX: Comparative Economics
59
Average Annual Impact
59
Present Value Comparison
59
X. Valuation of Project Components
62
Net Operating Income
62
Capitalization Rate
64
Asset Value
64
XI. Other Issues
66
Appendix A
69
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1WPro Forma
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Limiting Conditions
General Limiting Conditions
Certain information included in this report contains forward- looking estimates, projections and /or statements.
Pro Forma Advisors LLC has based these projections, estimates and /or statements on expected future
events. These forward- looking items include statements that reflect our existing beliefs and knowledge re-
garding the operating environment, existing trends, existing plans, objectives, goals, expectations, anticipa-
tions, results of operations, future performance and business plans.
Further, statements that include the words "may," "could," "should," "would," "believe," "expect," "anticipate,"
"estimate," "intend," "plan," "project," or other words or expressions of similar meaning have been utilized.
These statements reflect our judgment on the date they are made and we undertake no duty to update such
statements in the future.
No warranty or representation is made by Pro Forma Advisors that any of the projected values or results con-
tained in this study will actually be achieved.
Although we believe that the expectations in these reports are reasonable, any or all of the estimates or pro-
jections in this report may prove to be incorrect. To the extent possible, we have attempted to verify and
confirm estimates and assumptions used in this analysis. However, some assumptions inevitably will not
materialize as a result of inaccurate assumptions or as a consequence of known or unknown risks and un-
certainties and unanticipated events and circumstances, which may occur. Consequently, actual results
achieved during the period covered by our analysis will vary from our estimates and the variations may be
material. As such, Pro Forma Advisors accepts no liability in relation to the estimates provided herein.
In the production of this report, Pro Forma Advisors has served solely in the capacity of consultant and Pro
Forma Advisors has not rendered any "expert" opinions and does not hold itself out as an "expert" (as the
term "expert" is defined in Section 11 of the Securities Act of 1933).
This report is not to be used in conjunction with any public or private offering of securities, and may not be
relied upon without the express written consent of Pro Forma Advisors.
This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions, and
considerations.
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Pro Forma
AdVISors Introduction/Background
I. Introduction /Background
The Lakes at El Segundo golf facility is comprised of a 9 -hole, par -29, executive length golf course, two -level
practice range with 58 tee stations, 4,000- square foot clubhouse, and other support facilities developed on a
30 -acre parcel. The golf complex is owned by the City of El Segundo and operated under the oversight of
the City (the golf course is managed and maintained by Lane - Donovan, a golf course professional
management firm, under a fee - for - service management agreement). The Lakes at El Segundo operates as
an enterprise fund within the City, with the objective of operating as a self- sustaining economic entity without
General Fund assistance.
The City has been approached by ES CenterCal, LLC (CenterCal), a local developer, to develop a TopGolf
facility on the existing practice range site. The TopGolf concept combines a technology- driven golf driving
range with an entertainment complex featuring extensive food and beverage facilities. The concept is
designed to serve a much broader market than traditional golfers working on their game, and the facility is
often used as an event venue. There are about 13 existing TopGolf facilities already operating across the
country, and another 10 under construction or in advanced planning. Typically, a TopGolf facility is a 3 -level
structure with about 35,000 square feet of indoor space, and includes about 100 tee stations.
CenterCal would develop the facility under a ground lease agreement with the City of El Segundo. TopGolf
would operate the facility under a sublease agreement with CenterCal. The proposed project would require
zoning modifications, reconfiguration of the golf course, replacement of the existing clubhouse, and a parking
lot sharing agreement.
The City is interested in a comparative economic analysis of the proposed complex (modified golf course and
clubhouse, and TopGolf facility) and the existing golf course. Such a comparative evaluation is dependent on
numerous factors and considerations including: the comparative direct economics of both scenarios from
the perspective of the City; short- and long -term capital improvement needs at the existing facility; indirect
revenues /benefits related to each scenario; construction impacts on existing facilities; risks related to the
income stream; parking impacts /requirements; and other such issues.
Work tasks performed for this assignment included the following:
Inspection of the existing golf course and support facilities
A series of interviews with individuals employed at The Lakes in various capacities
Review of historical operating performance of the existing facility
Assessment of the TopGolf concept proposed for the site, including interviews of general managers at
several comparable TopGolf facilities
Analysis of the local and regional golf market
Evaluation of current golf facility conditions and long -term capital improvement requirements
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16Pro Forma
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Introduction/Background
Projections of performance relating to retaining the existing facility as -is and the TopGolf development
scenario
Comparative analysis of the direct economics of the existing facility and the TopGolf project
Assessment of the fiscal benefits associated with each project scenario, along with potential indirect
impacts
It should be noted that an initial proposal was submitted by CenterCal/TopGolf, which was followed by a
revised proposal submitted in August 2014. In the analysis, the economics of the existing golf complex are
compared with both the initial and revised proposals.
Following this Introduction, a summary of key findings is presented in Section Il, with documentation and
analysis contained in subsequent sections of the report.
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II. Summary of Findings
Summary of Findings
A summary of principal findings and conclusions is presented in this section, with documentation and
analysis contained in the subsequent sections of the report.
Concept
► The analysis focuses on comparing the economics related to the existing 9 -hole, executive length golf
course operation with that of a TopGolf facility combined with a reconfigured standalone golf course/
clubhouse. The economics are viewed from the perspective of the City. The economics of the existing
complex are compared with both the initial CenterCal/TopGolf proposal and its August 2014 revised
proposal.
The existing golf course operation is evaluated assuming modest revenue enhancement and cost
efficiencies. The analysis also assumes that capital reinvestment in the facility is performed on an as-
needed basis.
Under the CenterCal/TopGolf proposal, a state -of- the -art TopGolf facility would be developed on the
existing driving range /clubhouse site, with a reconfigured 9 -hole golf course which will remain at
approximately the same length as the existing course. This analysis also assumes that modest golf
course revenue enhancement and cost efficiency measures are implemented.
The TopGolf concept effectively integrates a food & beverage- oriented entertainment complex with a
practice range, providing patrons with a wide variety of entertainment games, including many using the
state -of- the -art practice range.
► CenterCal/TopGolf would lease their site from the City, and be responsible for all facility development
costs, including construction of a new small pro shop /snack bar, and the cost of reconfiguring the 9-
hole golf course. Total development costs are estimated at $25 million for the TopGolf facility, plus
about $2.5 million for the new clubhouse and reconfigured golf course. In its revised proposal,
TopGolf also includes a contribution of $250,000 toward the cost of night lighting the golf course.
The Lakes Historical Performance
i. Mirroring national and regional trends, market support for The Lakes has been impacted by a number
of external factors including the overall decline in the demand for golf, unprecedented expansion in the
supply of golf courses, and more recently the severe economic downturn which commenced in
2007/2008. Golf rounds on the 9 -hole course have declined steadily from over 60,000 in 2000 to a
current level of 43,200. Similarly, range revenue has declined from over $900,000 annually to
$720,000 over this same period.
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Gross revenue for 2014 is reported as follows:
Summary of Findings
Net operating income from the golf course, before Citywide administrative charges, the City insurance
allocation, debt service, capital improvement reserves, and capital charges, has been relatively stable
over the last five years, ranging from about $350,000 to $450,000 per year, although 2014 net income
declined about 20 percent from the 2013 results. This most recent decline is attributed to a drop -off in
play, coupled with a sharp increase in the cost of irrigation water.
The golf course is now over 20 years old. Other than driving range safety improvements (perimeter
poles and netting), there has not been any major capital reinvestment in the course or support
facilities.
Golf Market Overview
The national and regional golf markets performed exceptionally well in the late 1980s and early 1990s,
which resulted in the unprecedented expansion of the golf course inventory in the late 1990s and early
2000 - period. As a result of this oversupply condition, combined with declining demand which
commenced in the early 2000 - period and more recently the severe economic downturn, the golf
industry has contracted markedly, with individual golf courses at all levels adversely impacted.
The Lakes more localized golf market has not fared any better than most, despite minimal increases in
the supply of courses, and the strong demographics of the local market area residents. The last two
courses added to the inventory include The Lakes in 1993 and the Manhattan - Marriott golf course (9-
hole par -3), added in 1995.
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Lakes The
Revenue
Department
I
Greens Fees
$689,200
i
Practice Range Fees
721,100
Pro Shop Sales
164,300
Food & Beverage
287,1001
Alcohol - -City Share
7,200_1
Lessons /Camps
176,700
Miscellaneous
1.400
Total
$2,047,100
Net operating income from the golf course, before Citywide administrative charges, the City insurance
allocation, debt service, capital improvement reserves, and capital charges, has been relatively stable
over the last five years, ranging from about $350,000 to $450,000 per year, although 2014 net income
declined about 20 percent from the 2013 results. This most recent decline is attributed to a drop -off in
play, coupled with a sharp increase in the cost of irrigation water.
The golf course is now over 20 years old. Other than driving range safety improvements (perimeter
poles and netting), there has not been any major capital reinvestment in the course or support
facilities.
Golf Market Overview
The national and regional golf markets performed exceptionally well in the late 1980s and early 1990s,
which resulted in the unprecedented expansion of the golf course inventory in the late 1990s and early
2000 - period. As a result of this oversupply condition, combined with declining demand which
commenced in the early 2000 - period and more recently the severe economic downturn, the golf
industry has contracted markedly, with individual golf courses at all levels adversely impacted.
The Lakes more localized golf market has not fared any better than most, despite minimal increases in
the supply of courses, and the strong demographics of the local market area residents. The last two
courses added to the inventory include The Lakes in 1993 and the Manhattan - Marriott golf course (9-
hole par -3), added in 1995.
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Summary of Findings
Despite the golf market decline, the local market for less- than - regulation length golf courses remains
roughly in balance in terms of demand and supply, while the area is well under - supplied with respect to
regulation length golf courses.
The outlook for golf over the mid- to long -term is highly uncertain. Most golf analysts are projecting
0.5 to 1.0 percent average annual growth, primarily attributable to the aging baby boom generation, as
golf participation and frequency of play increase with age. However, the impact of aging baby
boomers has not yet been apparent, and there remains significant concern about the diminishing rate
of new entrants to the game.
Revenue Enhancement
► Without strategic capital improvements and intensified programming, operating performance at The
Lakes at El Segundo is likely to remain at its current level, with negligible or no growth, over the
foreseeable term, even with an improving economy.
► With regard to the existing golf course, there appear to be several potential improvements where the
cost - benefit is positive:
Night lighting the golf course would increase play (note that the course was designed for lighting,
with electrical conduit and junction boxes in place).
- Heating the lower level of the driving range tee stations would increase range utilization.
Expanding junior golf camps to selected non - summer periods.
With regard to the reconfigured golf course (TopGolf scenario), night lighting of the golf course also
appears justified. It is likely that the junior programs would be scaled back somewhat with a
reconfigured golf course.
The existing golf course is operated very efficiently, and there does not appear to be any potential
significant cost reduction measures that could be undertaken without affecting revenue.
Scaling down the restaurant operation to more of a snack bar would likely result in some cost
reduction.
Capital Improvement Requirements
The golf course is in relatively good condition at this time, but given its age there will be required
improvements over the next 25 years. Under the TopGolf scenario, some of the required golf course
improvements will be completed as part of the TopGolf construction involving the reconfiguration of the
golf course.
The estimated capital costs required over the next 25 years, expressed in constant 2015 dollars, is
indicated as follows:
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liPro Forma
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Golf Course Lighting
Golf Course Improvements
Driving Range
Clubhouse /Parking
Total
Projected Direct Golf Course Performance
Summary of Findings
$450 $450 $200
1,475 765 765
210 - -
X40 I ___ Z____
$2,475 $1,215 $965
► The stable year economics of the golf course under two basic scenarios has been analyzed:
Existing golf course, clubhouse and driving range
- Reconfigured golf course as a standalone facility
► Under each scenario, City administrative expenses have been estimated at their historical "average"
cost, and depreciation and other non -cash items have been excluded.
The direct golf course economics of each scenario is projected as follows:
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16 Pro Forma
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Summary of Findings
Gross Revenue
$2,047.1
$2,227.5 $1,100.0 1
Less: Cost of Sales
261.2
254.8 118.8
Gross Profit
$1,785.9
$1,972.7 $981.2
Less: Operating Expenses
1.430.8
1.496.0 1.087.5
Net Operating Incomev
$355.1
$476.7 ($106.3)
1/ Projections reflect implementation of revenue enhancement measures.
v Before City administrative expenses, insurance allocation, debt service and capital charges, and capital
improvement reserves.
The economics of a standalone practice range also have been projected:
Gross Revenue $839.0
Less: Operating Expenses'/ $445.0
Capital Improvement Reserve a0_Q
Net Operating Income $364.0
1/ Expenses include a provision for insurance and administrative
expenses currently provided through Citywide overhead.
Projected TopGolf Performance
► The initial CenterCalfTopGolf proposal offered the City a triple -net ground lease with a fixed $425,000
annual amount, increasing by 10 percent every 5 years.
In August 2014, CenterCal/TopGolf revised its proposal, offering the City a triple -net ground lease with
a fixed $525,000 annual amount, increasing by 2 percent per year over the initial five years, and then
by a cumulative 10 percent every five years thereafter. TopGolf is obligated to pay CenterCal $710,000
annually, of which the City receives $525,000, after amortization of CenterCal's $2.5 million front -end
capital investment.
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Summary of Findings
The annual ground rent ($710,000) represents approximately 3.5 -4.0 percent of TopGolf's projected
annual gross revenue, which is consistent with the percentage ground rents observed for food and
beverage and entertainment facilities in California coastal locations, which center around 3.5 percent of
gross revenue.
Fiscal Impact
Both the existing golf course and TopGolf scenarios will generate ongoing fiscal revenues which
accrue to the City of El Segundo. The principal sources of revenue include the City's share of sales
tax, possessory interest tax, utility users tax, and business license fees.
The annual fiscal revenue of each scenario at stabilization is summarized below:
Fiscal Revenue
Sales Tax
$5,600
$110,590
$110,590
Utility Users Tax
-
20,940
20,940
Possessory Interest Tax
--
20,200
20,200
Business License Fees
11 915
56.1991
Total
$5,600
$163,645
$207,929
Less: Fiscal Service Costs
Net Fiscal Benefit
$5,600 $163,645
$207,929
1/ Reflects TopGolf's waiver of sales tax credit against business license fee.
Neither scenario is deemed to have a significant impact on service costs.
In addition to ongoing fiscal revenues, the TopGolf project will generate several one -time fees related to
planning, building permits, legal review reimbursement, and other miscellaneous fees. While these
revenues may be substantial, they are expected to be fully offset by one -time service costs, and thus
no net one -time fiscal impact is likely.
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Summary of Findings
Comparative Economic Summary
The annual stable year economics of each scenario is comprised of direct annual golf course income
(net of City administrative and other overhead charges), annual lease payments from TopGolf, fiscal
revenues, and the annualized cost of capital improvement requirements. The annual cost of capital
improvements is based on the annual amount necessary to amortize the discounted present value of
the capital improvements over a 25 -year term at a 6 percent cost of capital.
The comparative annual economics of the two basic scenarios is summarized as follows:
Annual Benefits
Golf Complex Direct Net Contribution
TopGolf Lease Revenue
Fiscal Revenue
($106.3)
525.0
$476.7
($106.3)
- --
425.0
5-6
163.6
247.9
Total Benefits
$482.3
$482.3
$626.6
Annual Costs
Citywide Administrative /Overhead /Insurance
$160.0
$150.0
$150.0
Construction Impact*
21.1
21.1
Capital Cost'
Fiscal Service Costs_
Total Costs
Net Annual Cost- Benefit
159.5
105.7
63.0
$319.5
$276.8
$234.1
$162.8
$205.5
$392.5
Represents annual amount necessary to amortize the discounted present value of the
capital improvements.
While the average annual net benefit to the City provides one measure of the comparative economics
of the two scenarios, the most accurate measurement is the net present value of the 25 -year stream of
revenues and costs accruing to the City. Such an analysis takes into account the timing of the
revenues and costs associated with each scenario, Within a 2 percent inflation environment, an 8.0
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Summary of Findings
percent present value discount rate is considered reasonable and appropriate in measuring the
present value of the cash flow stream.
The net present value of each scenario is compared as follows:
Benefits
Golf Complex Net Contribution
$6,041.7
($1,347.3)
($1,347,3)
TopGolf Lease Revenue
Fiscal Revenue
Total Benefits
Costs
-
5,163.4
2,074.0
$5,890.1
6,388.8
2634.9
$7,676.4
71_Q
$6,112.7
Citywide Administrative /Overhead
$2,027.8
$1,901.1
$1,901.1
Construction Impact
- --
250.0
250.0
Capital Cost
1,445.2
816.7
585.3
Fiscal Service Costs
- - -=
Total Costs $3,473.0
Net Cost - Benefit $2,639.7
$2,967.8
$2,736.4
$2,922.31
$4,940.1
* Present value of 25 -year stream.
Otherlssues
There are a series of other issues which may be considered, but have not been quantified, in the
comparative analysis between the existing golf course and TopGolf scenarios.
Risk of Default: There is always a risk of default on the ground lease payments, particularly for a
concept which does not have a long track record. However, the likelihood of a default on the
ground lease is substantially mitigated by the non - subordination of the ground lease, and with a
pro forma ground lease coverage ratio (annual net operating income to ground lease payment) of
nearly 10:1.
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Summary of Findings
Golf Course Design: While there are concept renderings which illustrate that the golf course can
be reconfigured in such a way to preserve, or even extend, the length of the golf course, there
clearly are some safety issues with regard to the design. A qualified golf course architect will be
needed to ensure that the reconfigured golf course length and par rating can be safely maintained.
Economic Impact: The TopGolf scenario will produce over 400 jobs (250 -300 full time
equivalents) and employee payroll of over $8 million annually. The gross multiplier effect (rounds of
respending the initial expenditures) will produce nearly $40 million in regional gross product, 600
jobs, and over $15 million in annual payroll based on a gross multiplier of 2.0. Residents and
businesses in the City of El Segundo will capture a relatively small percentage of this overall
economic impact.
Marketing Benefits: TopGolf is budgeting about $400,000 per year in sales and marketing
expenses to promote their facility. This large marketing budget will not only benefit the TopGolf
facility, but should heighten awareness of The Lakes at El Segundo golf course. Moreover, this
TopGolf promotion would be expected to elevate the City's image and identity.
Instruction Revenue: This analysis assumes that any fees from independent contractors for use
of the TopGolf practice range would accrue to TopGolf. TopGolf has indicated their intention to
split such fees with the City, which could generate an additional $30,000 - $35,000 annually in City
revenue.
Transient Occupancy Tax: In most TopGolf facilities, corporate special events account for a
substantial portion of overall business activity and, in those locations which have a heavy
concentration of regional and national corporate headquarters, some corporate attendees from
out of the area utilize local lodging establishments. Conservative numbers suggest that this
activity may produce on the order of $15,000 annually in transient occupancy tax, much of which
would accrue to the City of El Segundo.
TopGolf Reversionary Value: At the conclusion of the lease period (including lease extensions),
both the land and the improvements related to TopGolf will revert to the City. Even though this
may be 50 years in the future, the present value of these improvements may still be substantial.
CIP Reserve: In its pro forma projections, TopGolf has a capital improvement replacement
reserve of about $400,000, or approximately 2 percent of gross revenue. While this appears to be
an appropriate reserve level, mandating that this amount is reserved annually would help preserve
the quality of the asset at the conclusion of the lease period.
Upside Participation: At one of their older facilities (Wood Dale, Illinois TopGolf), the lease
structure has evolved into a combination of a fixed annual amount, plus a percentage of food and
beverage revenue. It may be appropriate for the City of El Segundo to negotiate some upside
participation if revenues exceed certain annual thresholds.
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Summary of Findings
Guaranteed Fiscal Revenue: Based on TopGolf pro forma projections, fiscal revenue accruing
to the City is projected at nearly $210,000 per year ($165,000 under initial proposal). As this fiscal
revenue is directly correlated with TopGolf's performance, it may be appropriate to establish a
guaranteed total fiscal revenue amount, with TopGolf funding any shortfall between the budgeted
and actual fiscal revenue generated.
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III. The Lakes at El Segundo
The Lakes at El Segundo
The following section presents a description of the Lakes at El Segundo, a review of the golf facility's
operating history, and an evaluation of mid- and long -term capital improvement needs.
Project Description
The Lakes at El Segundo is a 9 -hole, executive length municipal golf course owned by the City of El
Segundo and managed by Lane /Donovan Partners, a professional golf course management company.
Opened in 1994, The Lakes complex consists of the nine -hole golf course, a golf practice range, a 4,000 -
square -foot clubhouse, and other support facilities. The overall site measures approximately 30 acres,
including a 4.0 -acre right -of -way parcel leased from Southern California Edison. The course is located on
the east side of Sepulveda Boulevard (State Highway 1), between El Segundo Boulevard and Rosecrans
Avenue, in the City of El Segundo. An aerial view of the golf course is shown in Figure III -1.
With approximately $2 million in annual gross revenue, The Lakes at El Segundo is among the most
successful 9 -hole short course facilities in the country. It is often used as a model for small golf facilities
developed on limited size sites.
The golf course is a par -29, 1,340 -yard layout designed by Martin Hawtree /Fred Hawtree. The course offers
seven par -3 and two par -4 holes. There are several lakes on the golf course, which come into play on a a
number of holes, along with approximately 26 sand bunkers. The course is recognized for the excellent
condition of its greens.
The golf practice range is a lighted two -level facility with 58 tee stations. The range depth is approximately
250 yards, substantially shorter than the 280 -300 yard desired depth, requiring the use of limited flight golf
balls. There is 80 -120 foot high fencing on the sides and back of the range. The landing area is natural turf.
The 4,000- square -foot clubhouse houses the pro shop, modest size bar /grill, a small meeting room, men's
and women's restrooms, and circulation area.
The maintenance facility is located on the north side of the golf course (adjacent to the #4 hole).
The source of golf course irrigation water is reclaimed water delivered under pressure from the West Basin
Water District Reclamation Plant located immediately south of the golf course. Annual consumption
averages about 100 acre feet per year. The cost of the water currently is about $1,268 per acre foot ($2.12
usage charge per hundred cubic feet plus a $.79 recycle water surcharge). In FY2013/2014, annual water
costs at The Lakes totaled just over $150,000.
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The Lakes at El Segundo
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Figure III -1: The Lakes Golf Course Existing Layout
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Operating History
Annual historical play (starts) on the golf course are summarized as follows:
Annual rounds by type for 2014 are approximately as follows:
Regular 2,964
Senior 908
Monthly Passes 284
Punch Cards' 600
Junior 83
Replay /Lessons /Other' 284
Total 5,119
Resident /Non - Resident distribution based on
I 23,588
6,521
411
4,285
1,246
1252
$12.00
18.00
2010
56,901
12.00
2011
52,850
play.
2012
49,464
2013
49,172
2014
43,129
Annual rounds by type for 2014 are approximately as follows:
Regular 2,964
Senior 908
Monthly Passes 284
Punch Cards' 600
Junior 83
Replay /Lessons /Other' 284
Total 5,119
Resident /Non - Resident distribution based on
I 23,588
6,521
411
4,285
1,246
1252
$12.00
18.00
- --
- --
12.00
38,010
ratio of regular and senior
play.
26,552
7,429
695
4,885
1,329
2.239
43,129
As indicated, resident rounds account for approximately 12 percent and non - resident rounds about 88
percent of total play at The Lakes.
Current greens fees are as follows:
Pro Forrna Advisors, LLC
Resident Regular
Non - Resident Regular
i
Resident Senior
Non- Resident Senior
Resident Junior
Non - Resident Junior
$10.00
15.00
8.00
12.00
8.00
11.00
$12.00
18.00
- --
- --
12.00
15.00
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The Lakes at El Segundo
Current staffing at the golf complex is distributed by department as follows:
Course Maintenance 4 1 5
Golf Operations 4 1 5
Range 1 1
Food & Beverage 6 3 9
General & Admin 1 1 2
Total 16 5 22
In addition to the golf course employees, there are 10 independent contractors (teaching professionals) who
work at the range providing instruction.
Annual gross revenue for fiscal years 2009 -2014 (fiscal year ending September 30), by department is shown
in Table III -1. Note that the food and beverage gross revenue excludes alcoholic beverages, which average
just under $80,000 per year. Rather, the City's 10 percent share of gross revenue (lease income) is shown in
the table. Lessons revenue is comprised of rent from the independent teaching professional contractors
(9 -10 contractors at $600 per month per contractor), plus revenue from the junior golfer summer camp
program. Also note that a greens fees increase went into effect in May 2013.
Table
Greens Fees
Range Revenue
Pro Shop Merchandise
Food & Beverage
Alcohol -Net Lease
Lessons
Miscellaneous
Total
The
00•
$676.2
744.0
306.3
324.6
8.8
59.2
4.4
$2,123.6
Lakes Annual
2010
$639.2
698.7
255.4
285.0
7.3
60.4
15.7
$1,961.6
Gross Revenue
2011
$657.0
696.0
252.2
263.9
8.4
67.1
9.9
$1,954.5
000
2012
$662.8
675.0
172.9
275.3
7.7
124.8
29.3
$1,947.8
2013
$711.8
2014
$689.2
752.1
721.1
167.4
164.3
298.9
287.1
7.7
7.2
171.4
176.7
7.4
1.4
$2,116.6
$2,047.1
Annual operating expenses for The Lakes for fiscal year 2014, by department, are shown in Table III -2. The
expenses have been reclassified to conform to a more standardized accounting format for golf course
properties.
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The Cafes at El Segundo
Table 111-2: The Lakes Operating Expenses By Department--2014 ($000)
Department
Course Maintenance
Payroll & Benefits $220.5
Services & Supplies 112.6
Irrigation Water (80% of total) 121.0
Equipment Replacement Charge $.Z
Subtotal
$462,8
Golf Operations
Payroll & Benefits (Pro Shop)
$44.1
Range Expenses/Utilities
147.6
Services & Supplies (Golf)
14 $
Subtotal
$202.5
Lessons
$81.2
Food & Beverage
Payroll & Benefits
$158.5
Services & Supplies
44.Z
Subtotal
$199.2
Clubhouse Undistributed
$74.2
General & Administrative
Payroll & Benefits
$143.1
Marketing & Promotion
17.5
Credit Card
Services & Supplies
35.8
76.7
Management Fee
96.0
SCE Right -of -Way Lease
41.8
Subtotal
$410.9
Total- -Golf Course Level
$1,430.8
Plus: City Administration
$130.2
Insurance & Bonds
119.6
Adjusted Total
$1,680.6
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1WPro Forma
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As noted, at the golf course level, operating expenses for 2014 total $1.43 million. Adding the City
administrative expense and the allocation for insurance and bonds yields total operating expenses of $1.68
million for the year.
Golf course operating income is summarized for the past 6 -year period in Table III -3. As shown, Net
operating income is first shown at the golf course level, before City administrative and insurance charges.
Then, City administrative expenses and the allocation for insurance and bonds are deducted from the course
level, yielding adjusted net operating income. Note that non -cash depreciation expenses have been omitted
from the analysis. As indicated, net operating income at the course level declined from just over $460,000 in
FY 2013 to about $355,000 in FY2014, reflecting the decline in rounds played and a slight increase in
operating expenses. After Citywide deductions, net operating income declined sharply in FY2014, mostly
due to the significant burden of insurance and bonds costs, as well as a significant increase in the cost of
irrigation water.
Gross Revenue
$2,123.6
$1,961.6
$1,954.5
$1,947.8
$2,116.6
$2,047.1
Less: Cost of Sales
$130.0 $127.0
179.2 150.6
$309.2 $277.6
$1,814.4 $1,684.0
1,340.9 1. 332.2
$473.5 $351.8
$130.2 $130.2
Food & Beverage
Merchandise
Total
Gross Profit
$127.2
$131.4
$131.2
$134.7
141.9
97-Q
138.1
126.5
$269.1
$228.4
$269.3
$261.2
$1,685.4
1.398.6
$286.8
$130.2
iaL
$138.1
$1,719.4
$1,847.3
$1,785.9
Less: Operating Expenses
Net Operating Income
Less: City Administrative
1,351.5 1.389.4
$367.9 $457.9
$130.2 $130.2
1$Q 23-1
$219.71 $304.6
1,430.6
$355.,3
$130.2
119.6
$105.5
Insurance & Bonds
MA au
Adjusted Net Income"
$282.9 $161.1
Before depreciation and interest payments on General Fund debt.
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Course Condition /Capital Cost
The Cafes at H Segundo
The Lakes at El Segundo is nearly 25 years old such that there are a number of capital improvements which
the existing golf complex will need to address, particularly in the mid- to long -term. The reconfigured golf
course under the TopGolf proposal also will require capital improvements, although the scale of these
improvements will be reduced compared to the existing complex for two reasons. First, under the TopGolf
scenario, the driving range will be the responsibility of TopGolf, and second, a substantial portion of the golf
course will be renovated as part of the reconfiguration of the golf course - -that is, with at least 4 holes
affected, greens, tees, bunkers, irrigation components will be reconstructed as part of the estimated $2.5
million CenterCal expenditure.
Existing Golf Course and Range
Based on discussions with representatives of Lane - Donovan (golf course management) and the golf course
superintendent, along with visual inspection and analysis of the golf course infrastructure, capital
improvement replacement for the existing golf course and driving range are shown in Table III -4. The costs
are expressed in constant 2015 dollars, and generally reflect prevailing wage rates. For most of the
components, the timing of the cost is based on current condition and typical useful life experience.
Nonetheless, the timing is highly variable, and there is often a tradeoff between deferring capital costs and
maintenance intensity. As well, depending on the availability of capital, some improvements may be
deferred. The estimated capital cost and timing assumes that capital is available as needed. Also, it should
be noted that the cost of replacing maintenance equipment is included as an annual equipment replacement
reserve in the pro forma operating statements.
Greens - -For the most part the greens are in very good condition, although some authoritative sources such
as the USGA call for replacement of greens every 25 years. Actual experience suggests that, with proper
maintenance, the greens may last much longer, and may never need to be rebuilt. Nonetheless, this
analysis includes an allowance of $300,000 for greens replacement in year 20 is included, equal to about
$30,000 per green for 10 greens.
Bunkers - -There are 26 bunkers on the existing golf course, all of which are in generally poor condition. The
analysis assumes that the bunkers are the highest priority, with the reconstruction of all bunkers in year 1. A
cost allowance of $200,000, equal to approximately $7,500 per bunker, is included in the analysis.
Tees - -The golf course tees are in fair condition, and will need to be replaced over the mid -term. While it may
be sufficient to complete 2 -3 tees every couple of years, the analysis assumes that all of the tees are rebuilt
in year 5. The cost of leveling (and rebuilding where necessary) is indicated at $100,000, equal to about
$10,000 per hole.
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Golf Course
The Lakes at El Segundo
Greens 1
Bunkers
Tees
Irrigation System
Lighting
Other
Soft Costs (@10 %)
Subtotal
Driving Range
Netting
Heating /Other
Subtotal
Clubhouse /Parking
Clubhouse
Parking
20
$300,000
20
$150,000
10
200,000 1
100,000 1
550,000 15
450,000 1
150,000 15
175+000 •--
$1,925,000 - --
160,000 - --
50,000 - -
$210,000 --
$240,000 - --
100,000 - --
100,000
5
50,000
15
275,000
1
200,0002/
15
100,000
- --
- --
90_000
$965,000
15
- --
1
- --
- --
5
- --
10
- -
Total 1 1 $2,475,000 1 1 $965,0002/
11 Values expressed in constant 2015 dollars.
2/ Under the initial proposal, lighting is indicated at $450,000, yielding a total cost of $1,215,000
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The Lakes at El Segundo
Irrigation System - -The irrigation system is nearly 25 years old, about the expected life of the system. The
system currently is in satisfactory condition, but eventually will need replacement. Based on approximately
22 irrigated acres and a cost factor of $25,000 per acre, the cost of replacing the irrigation system is
indicated at $550,000. The project is scheduled in year 15 of the analysis,
Course Lighting - -The analysis of the existing golf course assumes that the course is night lighted. Given
that much of the installation work was completed when the golf course was originally built, the cost of
lighting the existing golf course, including additional required installation costs, is indicated at $450,000. The
analysis assumes the lighting project is undertaken in year 1.
Range Netting - -Most of the driving range netting was replaced recently, along with poles. The lifetime of
netting is about 15 years. As such, an allowance for replacing the netting at a cost of $160,000 is included
in year 15 of the analysis.
Other Capital Costs - -In addition to the major components identified above, there will be periodic other
capital cost requirements relating to such items as lake linings, major tree trimming, course safety netting,
perimeter fencing, signage, and other miscellaneous items. An allowance of $150,000 in year 15 is included.
Clubhouse Renovation /Parking -- Capital costs for the clubhouse are based on the premise that the
existing structure will be preserved, with substantial cosmetic improvements. An allowance of $60 per
square foot ($240,000) is included in year 5 of the analysis for these improvements. Parking lot
refurbishment is estimated at $100,000 in year 10.
Soft Costs - -An allowance of soft costs at 10 percent of hard costs shown above is included.
Reconfigured Golf Course
The Center Cal/TopGolf proposal stipulates that the developer will reconfigure the golf course, replace
parking, replace the clubhouse and complete any other capital improvements to provide a standalone golf
complex. CenterCal has budgeted $2.5 million for these items, which appears to of appropriate magnitude.
In addition, under their revised proposal, TopGolf has committed to contributing $250,000 towards night
lighting the golf course.
Until the final golf course reconfiguration is designed, exactly how much of the golf course will be replaced
can only be estimated. At this time, it appears that perhaps 50 percent of the golf course will be affected,
and 50 percent not impacted. For planning purposes, it is assumed that the undisturbed portion of the golf
course will generally require capital improvements at a proportionate cost and time to that estimated for the
existing course (that is, 50 percent).
To preserve the quality and consistency of the golf course experience, it may be necessary to complete
improvements for some items such as bunkers and tees at the same time as the improvements related to
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The Cafes at El Segundo
reconfiguring the golf course are completed. Thus, the timing of those components is accelerated to year 1
of the analysis.
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IV. TopGolf
TopGolf
The following section describes the proposed TopGolf project, and presents estimates of operating
performance.
TopGolf Project Concept
The TopGolf concept integrates a golf practice complex with an entertainment facility, offering a unique
experience in the golf industry. The TopGolf concept can best be described as a large upscale "sports bar"
featuring a broad range of amenities and games, including a series of technology- driven golf games utilizing
the driving range. Utilizing golf balls embedded with a microchip and targets in the landing area with
sensors, players score points by hitting balls into the targets. The more accurate the shot and farther the
distance, the more points earned. The golf games are designed to appeal to a broad range of golfers, from
those with no experience to golf professionals.
The proposed TopGolf El Segundo facility would consist of a 65,000 square foot enclosed structure (35,000
square feet of climate - controlled space) , along with a three level driving range offering 102 hitting stations.
Each station would accommodate up to 6 golfers, and also include a seating area for food and beverages.
Each station would have a high tech electronic display for recording scores much like a bowling alley.
Stations would be rented on a pay and play basis, with pricing ranging from $20 -$25 for non -peak times to
$40 -$45 for peak times. In addition, individual games are priced at an average of about $5 each.
Memberships also are offered, with a single (executive) membership priced at $125 per month and a family
(two adults, two children) membership in the range of $200 per month. Both memberships require a $100
one -time initiation fee.
The sports bar component of TopGolf features two principal bar /grill areas, about 200 television monitors,
and numerous competitive table (e.g. billiards, foosball, shuffle board) and virtual games. The sports bar
concept has some similarities to a Dave and Buster's establishment where bar /grill and entertainment
activities are combined. While clearly catering to a young demographic segment, TopGolf facilities have also
demonstrated substantial support derives from the family market.
TopGolf also is designed to accommodate events including corporate outings, social gatherings and kid's
parties.
While TopGolf is characterized as a food and beverage oriented entertainment enterprise, the facility also
caters to a component of the traditional golfer segment. Most avid golfers elect to purchase a membership
rather than use the facility on an hourly basis.
TopGolf at The Lakes
A conceptual plan for the proposed TopGolf facility at The Lakes is presented in Figure IV -1. The plan would
involve the following components:
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TopGolf
Figure IV -1: TopGolf Conceptual Plan
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TopGolf
A new TopGolf facility, including the structure and practice range, would be developed utilizing the
existing driving range, practice green area, clubhouse site, and a portion of the parking lot. In total, the
building envelope for the TopGolf complex is approximately 12 acres.
Replacement of existing and additional parking would be developed on the western portion of the site,
along Sepulveda Boulevard, impacting existing hole #1.
A new practice putting green, with a minimum of 4,500 square feet, and practice bunkers would be
constructed.
A new, smaller 2,500- square -foot clubhouse (small pro shop and snack bar) would be developed,
along with an outdoor patio area.
A new on- course restroom would be constructed.
The golf course would be reconfigured, with four holes being affected to the extent that tees and /or
greens would be constructed. The course length would be at least as long as the existing 1,340 -yard
layout, with the objective of lengthening the course to 1,500 yards, subject to the design feasibility.
The course would remain a par -29 layout, again subject to design feasibility.
The initial terms of the proposed ground lease agreement between CenterCal/TopGolf and the City of El
Segundo called for annual lease payments of $425,000 per year, with escalations of 10 percent every five
years over the lease term.
In August 2014, CenterCal/TopGolf revised their proposal. The basic terms of the revised proposed ground
lease agreement between CenterCal/TopGolf and the City of El Segundo are summarized as follows:
Lease Term: 20 years
Options to Extend: six 5 -year options
Ground Rent
Construction Period (10 months)
Operating Period
Year 1
Year 2
Year 3
Year 4
Year 5
Rent Escalation
$18,000 per month
$525,000
535,500
546,210
537,135
568,280
10% every 5 years, beginning year 11
In both the original and revised proposals, the agreement stipulates that CenterCal/TopGolf will fund all of the
costs to develop the TopGolf facility, and all related costs including the replacement parking, reconfiguration
of the golf course, new clubhouse and other support facilities. As well, the proposed ground lease is a triple -
net agreement such that TopGolf is responsible for all operating expenses related to the TopGolf facility. The
City of El Segundo would be responsible for maintenance, operation and management of the golf course and
clubhouse only.
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TopGolf
The revised proposal also included a commitment of $250,000 towards the installation of lights on the
reconfigured golf course, and offered to waive the business license fee sales tax credit.
The turnkey development cost of the TopGolf facility is estimated, based primarily on the experience of the
Roseville, California project, at approximately $25 million. In addition, the CenterCal/TopGolf proposal calls
for the cost of the reconfiguration of the golf course to be funded by CenterCal/TopGolf. The costs related to
the reconfiguration of the golf course are estimated by CenterCal at approximately $2.5 million.
TopGolf has provided stable year revenue projections for the TopGolf El Segundo project. The annual gross
revenue for the first operating year is projected, by major component, as follows:
TopGolf
$8,128.4
F &B (ind. events)
10,561.7
Net Event
2,009.5
Retail & Other
197.0
Total Revenues
$20,896.6
As part of this assignment, the managers of several contemporary TopGolf facilities considered directly
comparable to that proposed for El Segundo were contacted. Specifically, the managers of the Tampa
TopGolf, Colony TopGolf (Dallas) and Gilbert TopGolf (Phoenix) were interviewed regarding their performance
and experience at their facility. The results of these interviews is highlighted as follows:
Each facility features 102 driving range "bays" with a gross structure size of 65,000 square feet, of
which about 35,000- 40,000 square feet is climate controlled, essentially identical to the facility
proposed for El Segundo.
The revenue volume and distribution by major component at each of these TopGolf facilities was
entirely consistent with the El Segundo projections provided by TopGolf. In particular, taxable food and
beverage and retail sales achieved at these comparable facilities support the El Segundo projections.
Event sales and related activity represent an estimated 20 -25 percent of total gross revenue volume.
These events range widely from birthday parties for children to corporate team building functions. On
average, between 25 and 50 percent of the events are corporate related.
There is monthly variation in the business activity, which is influenced primarily by climate.
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TopGolf
TopGolf offers a range of membership types priced from $80 to $250 per month which allow use of
the range at designated times. First year membership sales appear to be at about the 200 member
level at facilities surveyed, although some facilities have twice that number of members,
Avid golfers who want to work on their golf game typically purchase a membership rather than using
the driving range on a daily fee basis.
The facilities have been successful at creating numerous programs which target varied market
segments, including corporate leagues, tournaments, a junior golf academy and golf instruction.
Each facility employs approximately 450 employees, with about one -half full -time and one -half part -
time.
The TopGolf facilities have established relationships with local hotels and with meeting planners as part
of their corporate event promotion. It is not uncommon for hotel guests to patronize a nearby TopGolf
facility, and there is a small percentage of corporate event attendees who are from outside the area,
thus utilizing local hotels.
Construction Impact
Construction of the TopGolf facility and reconfigured golf course will result in closure of the golf course for a
10 -month period, depriving the City of nearly one year's net operating income (at the course level), or
approximately $450,000. There may also be costs related to maintaining key staff during the construction
period, and it could be argued that closure of the course during the construction period will have a short
term adverse impact on the rate at which displaced golfers return to The Lakes. While these other potential
costs are acknowledged, for analysis purposes, only the loss of operating income during the construction
period is included. Offsetting part of the loss in revenue is $18,000 per month paid during the construction
period, or an estimated $180,000. Thus, the net construction impact is estimated at $270,000.
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V. Golf Market Overview
Golf Market Overview
The following section presents an overview of the golf market in which The Lakes at El Segundo golf course
competes.
Demographics
The Lakes at El Segundo
Executive length golf courses and golf driving ranges typically draw support from a relatively local market
area. In a suburban setting such as that provided in the South Bay, the majority of market support for an
executive length golf course would derive from residents (and employees) located within a relatively small
market area. A demographic profile for market area defined by a 5 -, 10- and 15- minute drive time is
presented in Table V -1. The 5- minute drive time market area includes most of El Segundo, and small
portions of Manhattan Beach to the south and Hawthorne to the east. The broader 15- minute drive time
area generally extends from Marina del ReyNenice on the north to south Redondo Beach on the south, and
from the coastline on the west to Hawthorne Boulevard on the east, Key characteristics are summarized
below.
Population density in the market areas is relatively high, consistent with suburban residential
development. As expected, the population expands significantly as the drive time is increased from 5-
to 10- minutes, and from 10- to 15- minutes. For example, while there currently is only about 17,500
population within a 5- minute drive time of The Lakes, there is nearly 190,000 population within the
band between 5- and 10- minutes drive time, and nearly 440,000 between a 10- and 15- minute drive
time.
Population growth within the 15- minute drive time area is projected at less than .5% per year,
confirming that this region of the County is relatively built -out. Most of the slight new growth will derive
from redevelopment at somewhat higher densities.
The median age for the 5- minute drive time area is 41.0 years, substantially higher than the statewide
median of 35.2, while the median for the 15- minute drive time area is only slightly higher than the
California median. The population age 65+ in the 5- minute drive time area is notably higher than
observed statewide, while the percentage of senior population with the 15- minute drive time market
area corresponds to the statewide share. Growth in the 65+ population is forecast to increase sharply
over the next 5- to 10 -year period as the first wave of the baby boom continues to age.
The more localized area is relatively affluent with a median household income of just over $103,000.
The median for the 15- minute drive time area is reported at about $59,000, slightly higher than the
statewide median.
The percentage of the population within a 5- minute drive time is predominantly non - Hispanic white
(70.7 percent), declining sharply as the market area expands to the 15- minute drive time (16.9
percent).
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Population
2010 (census)
16,910
2014 (estimated)
17,497
2019 (projected)
18,135
Average Annual Growth 2014 -2019
0.72%
Age Distribution
Under 20
26.6%
20 -64
60.3%
65+
13.1
Total
100.0%
Median Age
41.0
Income
Median Household Income
$103,080
Households Exceeding:
$100,000
51.7%
$150,000
32.7%
$200,000
20.0%
Race (percent)
White + Asian
86.9%
Hispanic
16.2%
Non- Hispanic White
60.3%
Source: ESRI Business Analyst; Pro Forma Advisors, LLC
Pro Forma Advisors, LLC Page 33
Golf Market Overview
202,978
205,670
210,476
0.46%
26.3%
62.9 %
10.8%
100.0%
36.0
$70,996
36.7%
20.5%
11.9%
65.8%
39.5%
26.3%
637,091
643,983
658,223
0.44%
i
25.9%
62.5%
11.6%
100.0%
35.9
$58,964
29.9%
15.0%
8.1%
55.2%
38.3%
16.9%
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In general, the localized (5- minute drive time) market area is relatively more affluent, older and predominantly
non - Hispanic white, all factors which favorably affect golf. As the market area expands, population increases
significantly, although income levels and age profiles approach the levels observed statewide.
A very significant factor which favorably affects demand for golf and the driving range is the daytime
population in and around the City of El Segundo. The daytime population within the City of El Segundo is
estimated at over 70,000, which compares with a resident population of only about 16,900.
TopGolf
In general, a TopGolf facility serves a much broader market area than a 9 -hole executive length golf course.
According to TopGolf, an estimated 75 -80 percent of market support derives from about a 10 -mile radius
(equivalent to a 15- to 20- minute drive time). The balance of market support would be generated from
residents beyond 10- miles, mostly within the south and western segments of Los Angeles County.
Golf Market Overview
National Market
Nationwide, golf play increased steadily between the mid -1980s and 2000. As shown in Table V -2, during
this period, the total number of annual rounds played nationally increased at an average rate of 2.4 percent
per year. Golf balls sold, perhaps the best indicator of play, increased at a similar rate (2.5 percent per year).
This unprecedented growth in golf play was due to a number of factors including:
An increase in the number of golfers
The increasing importance of golf- oriented real estate
Expansion of the golf tourism industry
One of the longest economic expansions in the nation's history.
The increase in golf demand and the popularity of golf - related housing development during the 1990s stimu-
lated extraordinary expansion of the national golf course inventory, primarily between 1995 and 2002. Over
the full 1990 -2010 period, the inventory of golf courses in the United States increased by 34 percent, while
the U.S. population registered only a 24 percent gain, and golf demand (play) increased only 12 percent over
this same period.
Right after the new century started, the first signs of industry problems surfaced, and have persisted for the
past 10 years. While total golfers and rounds played are down industrywide, individual golf courses have
experienced steeper declines in utilization, along with revenue contraction and falling net operating income,
as the market totals are spread over an increased supply of facilities. Further, golf course transaction prices
have declined precipitously, bankruptcies and foreclosures have become routine, and new golf course con-
struction has virtually ceased while the number of courses closing now well exceeds new openings. The
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1985
365 f 17.5 10.2
400 27.8 13.5
420 25.0 11.6
518 28.8 11.7
518 29.5 11.9
502 29.5 12
495 30.4 12.4
499 29.5 11.5
489 29.3 11.2
493 29.4 11.2
490 29.5 11.1
481 28.6 10.7
477 'I 27.1 10
475 f 26.1 9.6
463 25.7 9.2
490 25.3 9.0
36.0
1990
42.0
1995
46.0
2000
52.2
2001
50.0
46.7
43.4
43.4
43.6
44
2002
2003
2004
2005
2006
2007
43.5
2008
42.2
2009
40.1
2010
s
2011
-•s
2012
- s
2013
465
24.7
8.9
s
Average Annual Growth
1985 -1990
1.8%
9.7%
3.1%
1990 -1995
1.0%
(2.1)%
1.8%
1995 -2000
4.3%
2.9%
2.6%
Subtotal
2.4%
3.4%
- --
2.5%
2000 -2005
(1.1 %)
0.3%
-
(3.5 %)
2005 -2010
(1.0 %)
(2.3%)
(2.1 %)V
2010 -2013
(0.7 %)
(1.8 %)
--
s
1/ Represents golfers over 12 years of age.
2/ Estimated by PFA.
3/ Estimated by PFA based on "soft goods" sales recorded by
Data Tech and golf ball manufacture sales. 4/ For period 2005 -2009. -Data for 2010 -2013 not available incomparable format.
Source: National Golf Foundation and Pro Forma Advisors LLC.
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Golf Market Overview
impact of market softness has been widespread and affected all segments of the market and all geographic
areas.
The National Golf Foundation (NGF) reports that over the 2001 -2011 period, annual golf play in the United
States declined from 518 million to 463 million rounds, or over 11 percent, rebounding somewhat in 2012 to
490 million rounds before declining again in 2013 and 2014 to about 465 million rounds. Golf ball sales, per-
haps a better indicator of demand, declined by about 20 -25 percent over this time period. The golf partici-
pation rate, after rising steadily through 2003, has fallen precipitously from 12.4 percent in 2004 to a current
level estimated at just under 9.0 percent. (It should be noted that the golfer participation rate is based on the
number of golfers relative to the population over the age of 6 years old), Since 2007, the golf market has
been significantly impacted by the national economic recession. Annual rounds in the U.S., according to
industry reports, have declined by nearly 5 percent since 2007. Other independent sources indicate a much
more severe contraction, which is borne out by other market indicators.
Since 2002, the construction of new courses has declined sharply, and the rate at which courses have
closed has accelerated. Between 2006 and 2014, for example, the number of courses closed exceeded
new course openings. New courses have been added to the inventory since 2006 at an annual rate of 50-
60 courses per year, while course closings have averaged about 120 per year over this period. Despite the
slowing expansion of new supply over the past eight years, golf market conditions in most markets contin-
ued to deteriorate, although most markets experienced some stability over the past three years.
Regional Golf Market
Golf demand in Southern California also increased steadily over the 1980 -2000 period. Through the mid -
1990s, there was relatively limited expansion of the inventory of golf facilities. In the early 1990s, the munici-
pal golf courses and limited number of daily fee golf courses in Southern California were performing excep-
tionally well, with municipal golf course play exceeding 100,000 rounds at many Southern California courses
and play on daily fee courses in the range of 60,000- 80,000 annual rounds.
In response to increasing demand and a static supply situation, a number of golf courses were developed. A
total of 55 public golf courses have opened in Southern California since 1995. These additions represent a
33 percent increase in the Southern California public golf course inventory. At the same time, six regulation
length public golf courses have been closed in Southern California over the past 6 -7 years, reducing the net
increase to 49 courses (29 %).
Play at public golf courses in the region for the 2008 through 2014 period has varied according to market
positioning. High -end daily fee courses have generally experienced declines in play averaging about 15 to 25
percent from 2007 levels. Entry level and mid - market courses have experienced moderate (10 -15 percent)
changes in play over the 2007 -2014 period. The loss in play on shorter courses (par -3 and executive length)
has generally been greater than on regulation length courses, apparently reflecting the decline in new golf
participants as well as the general falloff in golf participation.
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Regional Market Characteristics
Golf Market Overview
An inventory of regional golf courses is contained in Table V -3. The inventory of par -3 and executive length
public golf courses located within (or on the periphery of) the primary market area is as follows:
Lakes at El Segundo`
Manhattan- Marriott*
Westchester*
Alondra Park*
Penmar
Rancho Park
Executive
Par -3
Executive
Par -3
Executive
Par -3
9
---
9
1.7
18
4.6
18
5.3
9
8.3
9
9.8
1* Within 15- minute drive time market area
Selected characteristics of nine hole par -3 and executive length courses is presented in Table V -4. The
following provides a brief overview of golf market conditions.
Nationally and in California, short courses (executive and par -3) account for 11 percent and 20 percent
of the total number of public golf courses, respectively. In Los Angeles County, about 30 percent of
the public inventory is less than regulation length.
The ratio of population per short course (18 -hole equivalent), a general measure of supply- demand
condition, is calculated at 321,500 within the primary (15- minute drive time) market area compared
with 335,000 in Los Angeles County and 300,000 statewide. This gross measure suggests that the
local less- than - regulation length golf market is generally in- balance at this time.
Par -3 and executive length courses typically attract three distinct market segments -- juniors, seniors,
and beginning golfers. These courses, in many respects, serve as the incubator for the golf industry
Combining practice facilities with the short courses creates the opportunity for a full - service golf
learning center.
In addition to these shorter courses, there are three regulation length 18 -hole golf courses available to
the public in the broader market area. The ratio of regulation length golf courses in the broader region
is calculated at about 500,000 population per course compared with a statewide ratio of only 90,000,
suggesting this region is substantially underserved with regard to public access regulation length golf
courses.
Annual play (starts) at this selected sample of short courses varies widely. Most facilities without lights
accommodate 40,000 to 60,000 rounds per year.
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Golf Market Overview
The Lakes - -- 9
29
1,340
58
Manhattan Marriott 1.7 9
Westchester 4.6 18
27
1,209
---
64
4,339
80
Alondra Park -Reg
5.3
18
72
6,323
40
Alondra Park -Exec
IChester Washington
C Penmar
Rancho Park -Reg
Rancho Park -Par 3
5.3
18
54
2,356
40
1 6.0
8.3
9.8
18
72
6,348
20
9
33
2,501
- --
18
72
6,585
1,984
45
9.8
9
27
45
Victoria
10.5
18
72
6,616
30
Harbor Park
14.3
9
36
3,161
---
Links at Terranea 14.7
Los Verdes 15.6
9
27
1,239
- --
18
72
6,273
44
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Type of Course
Owner
Operator
Year Opened
# of Holes
Par
Lighted
FLength (yards)
Type of Tees
Practice Range
# of Tees
Lighted
NaturaVArtificial
Annual Rounds
Greens Fees
WD Regular
WD Senior
WD Junior
WE Regular
WE Senior
WE Junior
Golf Carts- Inventory
1 Fee /Player
Pro Forma Advisors, LLC
Executive
City of El Segundo
Lane /Donovan
1994
9
29
No
1,340
Natural Turf
Yes
58
Yes
Artificial Mats
43,200
Golf Market Overview
Par -3
Executive
Executive
Marriott
City of Los Angeles
City of Los Angeles
1962
9
33
City of Los Angeles
City of Los Angeles
1964
9
33
Marriott
1988
9
27
No
No
No
1,213
2,501
2,400
6.00
Natural Turf
Natural Turf
No
No
No
25,000 90,000 75,000
$15/$101/ 19.00
-
$17.50/$14.501
- 1
$17.50/$14.501
12/81/ 15.00/12.001/
12.00/9.001/
12.00/9.001/
11/81/ 15.00/12.001/
5.00
5.00
$18/$121/ 22.00
22.00/19.0011
22.00/19.001/
$18/$121/ - --
14.00/11.001/
14.00/11.001/
$15/$121/ - --
6.00
6.00
none
none none
none
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16 Pro Forma
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Type of Course
Owner
Operator
Year Opened
# of Holes
Par
Lighted
i
Length (yards)
Type of Tees
Practice Range
# of Tees
Lighted
Natural /Artificial
Annual Rounds
Greens Fees
WD Regular
WD Senior
WD Junior
WE Regular
WE Senior
WE Junior
Golf Carts- Inventory
Fee /Player
Pro Forma Advisors, LLC
Golf Market Overview
Executive
Executive
Par -3
City of Cerritos
L.A. Dept of Airports
American Golf
City of Cerritos
1977
So. Cal. Golf LLC
1965
American Golf
1963
9
9
9
29
30
27
No
Yes
No
1,468
1,574
915
Both
Artificial Mats
Turf
Yes
Yes
Yes
25
42
30
Yes
Both
1 35,000
Yes Yes
Both Artificial Mats
55,000 60,000
$13.00/11.001/
9.00/8.001/
$13.00
11.00
$13.00
10.00
8.50/7.501/
11.00
10.00
14.00/12.001/
17.00
16.00
Yes
1,115
8,50/7.501/
---
none
none
none
Yes
Page 40
_J_
Executive
County of Orange
American Golf
1991
9
29
Yes
1,115
Turf
Yes
86
Yes
Artificial Mats
50,000
$14.00
9.00
9.00
16.00
11.00
11.00
3
$7.00
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f Pro Forma
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Golf Market Overview
Use of golf course night lighting extends the capacity of the course by an average of four hours in the
winter and two hours in the summer. A high percentage (40 -50 percent) of additional capacity is
utilized in the summer, and 20 -30 percent in the winter, Overall, night lighting should result in an
increase of about 15 -20 percent in play levels annually.
Greens fees also vary widely depending on the course location, quality, length and other factors.
However, a reasonable rule -of -thumb is a standard rate structure based on about $10 per 1,000 yards
of course length:
Lakes at El Segundo ,
Manhattan Marriott !`
Westchester !
Van Nuys
Alondra Park
Verdugo Hills
Heartwel l
El Cariso
Vista Valencia -Exec
Vista Valencia -Par 3
Bixby Village
LLake Forest _
1,340
1,209
4,339
2,181
2,356
1,805
2,143
4,463
4,366
915
1,795
1,115
$15.00
$18.00
$11.19
$13.43
19.00
22.00
15.72
18.20
23.50
30.50
5.42
7.03
16.00
20.00
7.34 9.17
5.52 6.90
8.86 9.97
7.47 8.40
5.15 6.78
- i
5.15 6.76
14.21 17.49
8.08 9.19
12.56 14.35
13.00
16.25
16.00
18.00
16.00
18.00
23.00
30.25
22.50
29.50
16.00
16.50
16.00
13.00
14.50
14.00
Seniors and juniors typically receive greens fees discounts at the competitive courses surveyed.
However, most facilities impose restrictions when discount play is accepted. Generally, discount play
is either totally restricted on weekends, or limited until afternoon on these days.
Nearly all 18 -hole courses offer twilight or 9 -hole rates, typically set at about 60 percent of the regular
rate. Courses with night lighting have varying price policies. Some charge the twilight rate, but most
charge either the regular rate or the weekend rate for night play.
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Golf Market Overview
Short courses in this region are used heavily by juniors and seniors. The percentage of play at Los
Angeles County courses, for example, is summarized as follows:
Note: Regular play also includes senior /junior golfers paying regular greens fees.
In general, most par -3 and executive length golf courses have experienced modest declines in play,
while regulation length golf course play has been relatively stable. While The Lakes experienced a
decline in play of about 12 percent in 2014 compared with 2013, Westchester's 18 -hole executive
course has showed no decline at all over the past several years. On the other hand, play on the 18-
hole par -3 golf course at Alondra Park has declined nearly 20 percent over the past year.
There are six golf course - affiliated practice ranges in (and on the periphery of) the primary market area:
Lakes at El Segundo - --
Westchester 4.6
Alondra Park 5.3
Chester Washington 6.0
Rancho Park 9.8
Los Verdes 15.6
Total Market Area - --
Executive
Yes
Yes
Yes
No
Ak C(n�p C
Regular
20
71%
69%
Junior
T28%
-
3%
3%
Senior
18%
21%
Tournament
2%1
7%
6%
Complimentary/Special
2%
_
1
10/0
114
Total
100%
i
100%
100%
Note: Regular play also includes senior /junior golfers paying regular greens fees.
In general, most par -3 and executive length golf courses have experienced modest declines in play,
while regulation length golf course play has been relatively stable. While The Lakes experienced a
decline in play of about 12 percent in 2014 compared with 2013, Westchester's 18 -hole executive
course has showed no decline at all over the past several years. On the other hand, play on the 18-
hole par -3 golf course at Alondra Park has declined nearly 20 percent over the past year.
There are six golf course - affiliated practice ranges in (and on the periphery of) the primary market area:
Lakes at El Segundo - --
Westchester 4.6
Alondra Park 5.3
Chester Washington 6.0
Rancho Park 9.8
Los Verdes 15.6
Total Market Area - --
58
Yes
Yes
Yes
No
80
40
20
43
42
Yes
No
283
-
Most of the facilities are price in the $.12 per ball range for medium -sized buckets (60 -70 balls) and
$.10 per ball for a large bucket (100 balls).
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Golf Market Overview
Annual gross revenue at the lighted facilities with 40 -60 tee stations is generally in the $10,000 to
$12,000 per tee station.
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Revenue Enhancement
VI. Revenue Enhancement/Cost Efficiencies
Several modifications to the facility and changes in operating policies have been suggested in an effort to
increase play and revenue on the golf course. The following section evaluates the merit of several suggested
modifications.
Revenue Enhancements
Night Lighting
The concept of night lighting at The Lakes is evaluated on a cost - benefit basis. The benefit of night lighting
is attributed to extending the capacity of the golf course by both allowing play to start pre -dawn and into the
evening. A number of par -3 and executive length golf courses in Southern California feature night lighting
including Westchester Golf Course in Westchester, David Baker Golf Course in Fountain Valley, Lake Forest
Golf and Practice Center in Irvine, Newport Beach Golf Course in Newport Beach, Mission Bay Golf Course
in San Diego, Arroyo Seco in South Pasadena, and Van Nuys Golf Course in Van Nuys. A survey of these
courses revealed the following observations:
The moderate Southern California climate lends itself to night time play.
Night lighting creates greater capacity, ranging from four additional hours in the winter and two
additional hours in the summer. At an average of 30 golfer tee times per hour, additional capacity
averages about 90 tee times per day on a year -round basis.
Utilization of night time tee times varies among golf course depending on location, strength of market,
climate, pricing, product quality and other factors. On average, utilization tends to average about
20 -30 percent, resulting in about 20 -30 additional rounds per day.
Most of the existing lighted courses operate with older generation systems which are less effective and
more costly than current technology provides.
The pricing strategy for night play varies among courses. Some courses charge the same rates
throughout the day /night, while others charge the twilight rate for night time play.
Night lighting creates greater opportunity to accommodate league play.
Most night lighted golf courses also offer lighted driving ranges such that there are clear economies in
staffing at night.
Managers believe that while the economics of night lighting are not overwhelmingly positive given the
age of their lighting systems, the uniqueness of the lighting is beneficial in project identification and
image.
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The electrical cost of the older lighting systems average about $3.50 -$4.00 per acre per hour,
substantially more than the $1.00 per acre per hour cost associated with contemporary systems.
Importantly, The Lakes was designed and constructed with the idea that night lighting could be easily added.
As such, the course includes a network of junction boxes, and underground electrical conduit for lighting is
in- place. Given this situation, and based on discussions with a sports lighting manufacturing representative
with golf course lighting experience, the "turnkey" capital cost of a lighting system for The Lakes is roughly
estimated at about $450,000, including the lighting system and installation. The annual amortization cost,
based on a 25 -year life and 5 percent cost of capital, is calculated at $32,000.
Based on the experience of other Southern California lighted courses, it is estimated that night lighting at The
Lakes will result in an average of about 25 rounds of golf per day, or 8,750 rounds annually. Thus, the annual
economic cost - benefit of providing night lighting is projected as follows:
Incremental Gross Revenue
Greens Fees (8,750 @$12)
Ancillary Net Revenue (8,750 @$1)
Total
Incremental Expenses
Additional Staffing (4 hours /day @$15 /hour)
Utilities (20 acres @$1 /acre /hour, 4 hours daily)
Debt Service
Total
Net Operating Income
Golf Retailer
$105,000 $105,000
8,750 8.750
$113,750 $113,750
$105,000
8.750
$113,750
$21,000
28,000 28,000 28,000
16,000 32.000 16.000
$44,000 $60,000 $65,000
$69,750 $53,750 $48,750
$105,000
$750
$113,750
$21,000
28,000
32,000
$81,000
$32,750
Occasionally, a golf course /driving range location also serves as a desirable location for a large golf retailer
like a Roger Dunn Golf Shop. The ability to demonstrate golf clubs on the golf practice range offers an
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Act" so s Revenue Enhancement
additional benefit for the retailer. Successful golf retail shops operate at the Del Mar Golf Center in San Diego
County and The Islands Golf Center in Anaheim.
A representative of one of the country's leading golf retail outlets indicated that The Lakes location may offer
an opportunity for a major golf retailer. Most retailers desire a store with about 3,000 square feet of leasable
floor area. Minimum store annual gross sales volume ranges upward from $1,5 million ($500 per square foot
per year). Typically such stores operate with percentage rents, averaging about 5 percent of gross sales,
triple -net. At gross sales volume of $1.5 to $2 million, annual rent would be on the order of $75,000 to
$100,000, equal to $25 to $33 per square foot per year.
Locating a major retailer at The Lakes would require major modification to the existing clubhouse and /or
construction of a new facility to house a 3,000 square foot retailer, provide a small snack bar, a small starter
house and administrative office space. In addition to the cost of creating the floor area required, locating a
major retailer would displace the net margin currently generated by pro shop sales, estimated at about
$50,000 per year (30 percent margin on $170,000 annual pro shop sales).
If the cost of modifying /adding space to facilitate locating a major golf retailer exceeded $600,000, the
additional net rent collected would be fully offset by the cost to amortize the capital cost and the loss of the
net contribution from existing pro shop sales.
Electric Golf Carts
A few 9 -hole executive length golf courses have a small inventory, typically 2 -4, of electric golf carts available
to golfers. However, such carts are primarily provided for senior golfers requiring mobility assistance. Most
short 9 -hole golf courses with carts report that utilization is relatively low. Thus, most of the revenue
generated from the rental of the carts is offset by the cost of their amortization and maintenance costs,
resulting in negligible net income. Moreover, additional up -front capital would be required for a minimal cart
path system and cart storage.
Expanded Instructional Programs
Under the leadership of teaching professional Josh Alpert, The Lakes at El Segundo has developed a very
strong junior golf program. The Junior Summer Camp has been a resounding success, introducing and
developing young golfers to the game, and generating a modest income flow for the golf course. There
appears to be an opportunity to expand junior golf programs at The Lakes through both offering several
camps during the non - summer months, and group instructional programs.
Heated Driving Range Tee Stations
Heating the lower tee line (29 tee stations) would provide a more desirable environment for range users
during cold periods, primarily in the evenings. The range currently generates gross revenue of about
$12,400 per tee station per year. It is estimated that heating the lower tee line would generate an additional
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Revenue Enhancement
$40,000 to $50,000 per year in gross revenue, with minimal associated expenses, thus increasing the gross
revenue per tee station from $12,400 to about $13,000 per year (5% increase).
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VII. Direct Economics
Direct Economics
The following section presents projections for the two basic scenarios - -(1) continuation of The Lakes golf
facility under its current configuration (golf course and range); and (2) development of a TopGolf complex
along with a similar standalone golf course.
Golf Course Economics
The golf complex is analyzed under both basic scenarios. The existing golf course scenario assumes the
golf course and driving range continue to operate under their current structure, with the facility owned by the
City and maintained, managed, and operated by a professional golf course management company on a fee -
for- service basis. The TopGolf scenario assumes the golf course is reconfigured as a standalone facility,
operated without a golf practice range. The golf course also is maintained, managed and operated by a
professional golf course management company.
The comparative analysis is based on the following general assumptions:
The analysis period is 25 years, with no reversionary value assigned at the end of the analysis period.
Capital improvements are implemented in a timely manner.
The golf course would be lighted for night play under both scenarios.
The lower level of the driving range is equipped with heaters under the existing golf course scenario.
Junior golf camps, and other programs are extended from the Summer months to year -round
availability under both scenarios.
Irrigation water is available from the West Basin Water District.
The course continues to provide resident greens fees discounts.
Revenues and expenses increase at a 2 percent average annual rate, unless otherwise noted. All
values shown in the documentation below are expressed in constant 2015 dollars.
Golf Course Revenues
Golf Course Play- -Both Scenarios:
Current 43,200
Projected* 50,000
* Assumes night lighting
Greens Fees (average revenue per paid round) - -Both Scenarios:
Current $15.95 per round
Projected $15.20 per round (reflects lower rate for night play)
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Direct Economics
Practice Range Revenue -- Existing Course Scenario (with heated tee line):
Current $721,100 ($12,430 per tee)
Projected $754,000 ($13,000 per tee)
Pro Shop Retail Sales:
Current $3.80 per round
Projected -- Existing Course Scenario: $3,50 per round
Projected -- TopGolf Scenario: $1.50 per round
Food & Beverage Sales (excluding alcoholic beverages)
Current $6.65 per round
Projected -- Existing Course Scenario: $6.00 per round (reflects night lighting)
Projected -- TopGolf Scenario: $3.50 per round
Alcoholic Beverage - -Net Lease (10 %)
Current $0.17 per round
Projected -- Existing Course Scenario: $0.17 per round
Projected -- TopGolf Scenario: $0.10 per round
Lessons (assumes expanded year -round junior golfer programming)
Current $176,700 per year (includes range lessons)
Projected -- Existing Course Scenario: $225,000 per year (includes range lessons)
Projected -- TopGolf Scenario: $80,000 per year (30% reduction from current level)
Miscellaneous
Current
$0.10 per round
Projected --Existing Course Scenario: $0.10 per round
Projected -- TopGolf Scenario: $0.10 per round
Cost of Sales (both scenarios)
Pro Shop Merchandise
Current
Projected (both scenarios)
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64% of merchandise gross revenue
65% of merchandise gross revenue
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Food & Beverage
Current
Projected- Existing Course Scenario
Projected - TopGolf Scenario:
Operating Expenses
Direct Economics
47% of F & B gross revenue (excluding alcohol)
47% of F & B gross revenue (excluding alcohol)
40% of F & B gross revenue (excluding alcohol)
Annual stable year operating expenses for each scenario are presented in Table VII -1, by major component.
The expenses are expressed in constant 2015 dollars. Projected expenses for the existing golf course
scenario approximate current levels, while projected expenses for the TopGolf scenario are based on the
standalone golf course, without the range operations.
Stable Year Net Operating Income
Stable year net operating income for the existing golf course /clubhouse and golf practice range, and
reconfigured golf course as a standalone facility is projected in Table VII -2. The values in the table are
expressed in constant 2015 dollars. As noted above, the revenue estimates (and operating expenses) reflect
a series of improvements including night lighting of the golf course, heating of the lower tee line of the
practice range, and expanded year -round junior golf programming.
The net income shown is on the course level, before deductions for several other overhead and "below the
line" items including City administrative charges, City insurance allocations, interest on General Fund debt,
and depreciation.
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Course Maintenance
Payroll & Benefits
$220.5 $220.0
$220.0
115.0
Services & Supplies
112.6 115.0
140.0
Irrigation Water /Electricity (80 %)
121.0 150.0
Equipment Replacement Charge
8.7 14 4
l2Q
$485.0'
Subtotal
$462.8 $495.0
Golf Operations
Payroll & Benefits (Pro Shop)
$44.1
$45.0
$55.0
147.6
$140.0
---
Range Expenses /Utilities
10
124
14=4
Services & Supplies (Golf)
$202.5
$197.0
$65.0
Subtotal
Lessons
$81.2
$120,0
$60.0
Food & Beverage
Payroll & Benefits
$158.5
$160.0
$75.0
43 9
44.4
Services & Supplies
13-L
$199.2
$200.0
Subtotal
$87.5
Clubhouse Undistributed
$38.0
$74.2
$75.0
General & Administrative
Payroll & Benefits
$143.1 $140.0
$140.0
Marketing & Promotion
17.5 20.0
15.0
Credit Card
35.8 36.0
20.0
Services & Supplies
76.7 75.0
60.0
Management Fee
96.0 96.0
84.0
SCE Right -of -Way Lease
41.8 42.0
33.4
Subtotal
$410.9 $409.0
$352.0
Total
$1,430.8 $1,496.0
$1,087.5
Plus: City Administration
$130.2 $130.2
$130.2
Insurance & Bonds
119.6 34.4
224
Adjusted Total
$1,680.6 $1,656.2
$1,237.7
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Gross Revenue
Greens Fees $689.2 $760.0 $760.0
Range Revenue 721.1 754.0
Pro Shop Sales 164.3 175.0 75.0
Food & Beverage 287.1 300.0 175.0
Alcoholic Beverage -Lease Payment 7.2 8.5 5.0
Lessons /Camps 176.7 225.0 80.0
Other /Miscellaneous 1.4 59 5.4
Total $2,047.1 $2,227.5 $1,100.0
Less: Cost of Sales I
Pro Shop Sales $126.5 $113.8 $48.8
Food & Beverage 1547 141.0 79 4
Total $261.2 $254.8 $118.8
Gross Profit $1,785.9 $1,972.7 $981.2
Operating Expenses
Course Maintenance $462.8 $495.0 $485.0
Golf Operations /Range 202.5 197.0 65.0
Lessons 81.2 120.0 60.0
Food & Beverage 199.2 200.0 87.5
Clubhouse Undistributed 74.2 75.0 38.0
General & Administrative 410.9 409.0 5520
Total $1,430.8 $1,496.0 $1,087.5
Net Operating Income -- Course Level $355.1 $476.7 ($106.3)
V '/ Projections reflect implementation of revenue enhancement measures.
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Direct Economics
The TopGolf scenario is comprised of a new TopGolf facility and modified 9 -hole executive length golf course.
The economics of just the TopGolf component are shown below. The analysis is based on the following
general assumptions:
The analysis period is for 25 years, plus one year construction period (assumes term extension option
exercised).
The TopGolf rent is triple -net, with all expenses relating to the TopGolf facility (including the driving
range) the responsibility of the lessee.
The golf course would continue to be owned by the City and operated on a fee - for - service
management contract basis.
The existing clubhouse would be razed and replaced by a small starter operation /snack bar of
approximately 2,500 square feet.
A number of the TopGolf driving range stations would be available at selected times at no cost for
junior golf programs.
Teaching professionals would contract for range use directly with TopGolf.
The initial CenterCal/TopGolf proposal called for annual ground lease payments of $425,000, with a 10
percent escalation every five years.
Based on the revised proposal submitted by CenterCal/TopGolf, the following ground lease payments are
projected:
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Construction
$180,000
13
$625,100
1
525,000
14
625,100
2
535,500
15
625,100
3
546,200
16
687,600
4 4
557,100
17
687,600
5
568,300
18
687,600
6
568,300
19
687,600
7
568,300
20
687,600
8
568,300
21
756,400
9
568,300
22
756,400
10
568,300
23
756,400
11
625,100
24
756,400
12
625,100
25
756,400
Standalone Golf Practice Range
Net operating income projections for a standalone practice range at The Lakes are presented in Table VII -4.
As a standalone facility, the practice range would require its own administrative and operating overhead,
while under a combined golf course /driving range operation, these duties would be shared. For example, as
golf course and practice range standalone operations, each would require operations personnel and
management, whereas under a single operation, this redundancy would be eliminated.
Net operating income of a standalone practice range, expressed in constant 2015 dollars, is projected at
$394,000 per year. The net income is presented before before any City overhead, debt service, or
depreciation, and capital improvement reserves. In effect, the projections relate to a privately owned/
operated practice range.
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Table Net
Golf Practice Range
._ .
A
000
Revenue
Range Fees
$754
Instruction (net)
60
Golf Repair Shop /Other (net)
25
Total Revenue
$839
Operating Expenses
$150
Salaries and Benefits
40
Golf Ball /Mat Replacement
12
Promotion & Advertising
Utilities & Water
45
Maintenance & Repair
15
Insurance
20
Property Taxes
45
Services & Supplies
20
Management Fee
90
SCE Right -of -Way Lease
$
Total Expenses
$445
Net Operating Income/
$394
Before capital improvement replacement reserve,
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VIII: Fiscal Impact
Fiscal Impact
Both the existing golf course and the TopGolf project would generate fiscal revenue to jurisdictions providing
services, including the City of El Segundo.
Revenue Sources
The principal fiscal components include the following:
Sales and Use Tax: The City receives 1 percent (out of 9.00 %) of taxable retail sales, including
merchandise and food and beverage purchases.
Utility Users Tax: The City imposes a 3 percent utility users tax on non - residential water, power and natural
gas consumption, and 2 percent on telephone charges.
Possessory Interest Property Tax: Lessees are subject to possessory interest property tax. The
possessory interest in land and improvements of leasehold property is assessed the 1 percent ad valorem
property tax, of which the City is allocated 6.4 percent.
Business License Fees: Entities doing business in the City of El Segundo are required to secure an annual
business license fee. There is a base rat of $99,66 for the first 10 employees and 5,000 square feet of
indoor covered space. In addition, employers are assessed $123.44 per employee (full time and part time)
over 10, plus $0.23 per square foot of indoor covered space. Note that, under the initial proposal, a credit
against the business license fee is applied, with the credit equal to 40% of the local 1 % sales and use tax
collected by the City. Under the revised proposal, the sales tax credit is waived.
Existing Golf Course Scenario
City Fiscal Revenue
Sales and Use Tax
Pro Shop Sales ($175,000 Q1 percent) $1,750
Food & Beverage Sales ($300,000 Q1 percent) 3,000
Alcohol Sales ($85,000 Q1 percent) 850
Total Sales and Use Tax $5,600
Utility Users Tax- -None
Property /Possessory Interest Tax- -None
Business License Fees -41,580, fully offset by sale and use tax credit, yielding net revenue of zero.
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City Service Costs
Fiscal Impact
The existing golf course receives police, fire and other City services. However, with the systems in -place
there is no marginal cost associated with the existing golf course operation.
TopGolf Scenario
City Fiscal Revenue
Sales and Use Tax
TopGolf Food & Beverage Sales ($10,562,000 @1 percent) $105,620
TopGolf Merchandise Sales ($197,000 @1 percent) 1,970
Golf Course Pro Shop Sales ($75,000 @1 percent 750
Golf Course Snack Bar Sales ($225,000 @1 percent) 2.250
Total Sales and Use Tax $110,590
Utility Users Tax
TopGolf ($682,000 utility costs @3 %; $24,000 telephone costs @ 2 %) $20,940
Golf Course - -None
Property /Possessory Interest Tax
Assessed Valuation
TopGolf Improvements
$25,000,000
Possessory Interest Land (8% cap)
6,560,000
Golf Course - -None
- --
Total
$31,560,000
Possessory Interest Tax @1 %- -City Share 6.4%
$20,200
Business License Fees
TopGolf
First 10 employees /5,000 sq. ft.
$99
Next 400 employees @ $123
49,200
Next 30,000 square feet @ $.23
6.900
Subtotal
$56,199
Sales Tax Credit (40% credit)'
Net Business License Fees
$56,199
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Golf Course - -None (fees offset by sales tax credit)
FiscaI Impact
11 TopGolf revised proposal waives the sales tax credit. Initial proposal includes sales tax credit, reducing the
net business license fees to $11,915.
City Service Costs
The TopGolf facility and reconfigured standalone golf course also will receive police, fire and other City
services. A report prepared by the City Police Department indicates that no additional resources will be
required. Similarly, the fire network which is in -place is capable of providing needed services. As such, there
are no marginal costs likely to be incurred as a result of the TopGolf project.
Comparative Fiscal Impact
The stable year net fiscal impact of the two scenarios are compared as follows:
Fiscal Revenue
Sales Tax
$5,600 $110,590
$110,590
Utility Users Tax
Possessory Interest Tax
Business License Fees
Total
Less: Fiscal Service Costs
Net Fiscal Benefit
--- 20,940 20,940
- 20,200 20,200
- -- 11.915 56,199
$5,600 $163,645 $207,929
-
- --
—
$5,600
$163,645
$207,929
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IX: Comparative Economics
Comparative Economics
Based on the analysis presented in the previous sections of the report, the overall comparative economics of
the two scenarios is projected.
Average Annual Impact
The analysis illustrates the differential between the annual average net operating contribution and the
associated costs for each scenario. Annual benefits consist of the direct golf course level economics,
CenterCal/TopGolf lease revenue, and fiscal revenue produced. Annual costs include Citywide
administrative /overhead expenses, the capital cost requirements, and fiscal service costs. The annual capital
costs is based on amortization of the discounted present value (at 4 percent) of the capital component over a
25 -year term at a 6 percent cost of capital.
The full comparative economics of the two scenarios, expressed on an annual basis in constant 2015
dollars, is presented in Table IX -1.
Present Value Comparison
While the average annual net benefit to the City provides one measure of the comparative economics of the
two scenarios, the most accurate measurement is the net present value of the 25 -year stream of revenues
and costs accruing to the City. Such an analysis takes into account the timing of the revenues and costs
associated with each scenario.
The 25 -year annual cash flow for each scenario is presented in Appendix A. Again, the golf course revenues,
expenses and capital costs are subject to a 2.0 percent average annual rate of increase. Within a 2 percent
inflation environment, an 8.0 percent present value discount rate is considered reasonable and appropriate in
measuring the present value of the cash flow stream.
The net present value of each scenario is compared in Table IX -2. Under the existing golf course scenario,
deducting the present value of the costs from the present value of the benefits yields a net present value of
$2.64 million, which compares with the TopGolf scenario at $2.92 million under the initial TopGolf proposal,
and $4.94 million under the revised proposal.
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Annual Benefits
Comparative Economics
Golf Complex Direct Net Contribution
TopGolf Lease Revenue
Fiscal Revenue
Total Benefits
$476.7
($106.3)
425.0
($106.3)
525.0
--
5
163.6
207.9
$482.3
$482.3
$626.6
Annual Costs
Citywide Administrative /Overhead /Insurance
Construction Impact
Capital Cost - -Golf Course*
Capital Cost -- Clubhouse /Maintenance Facility*
Capital Cost -- Driving Range*
Capital Cost -- Course Lighting*
Capital Cost -- Parking Lot*
Fiscal Service Costs
Total Costs
Net Annual Cost - Benefit
$160.0
$150.0
$150.0
21.1
21.1
84.1
67.0
47.4
17.1
--
- --
13.2
--
- --
38.7
38.7
15.6
6.4
-
- -
- -- - --
$319.5 $276.8
$162.8 $205.5
- --
$234.1
$392.5
* Represents annual reserve amount necessary to fund capital improvement requirements.
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Comparative Economics
Table Net -
Existing
Course
Benefits
Golf Complex Net Contribution $6,041.7
TopGolf Lease Revenue - --
Fiscal Revenue 71.4
000
TopGolf Concept
Initial Revised
Proposal ...
($1,347.3)
5,163.4
2,074.0
$5,890.1
($1,347.3)
6,388.8
2.634.9
$7,676.4
Total Benefits
$6,112.7
Costs
Citywide Administrative /Overhead
Capital Cost -- Construction Impact"
$1,901.1 $1,901.1
250.0 250.0
$400.1 $400.1
- -
$2,027.8
---
Capital Cost - -Golf Course*
636.0
180.3
Capital Cost -- Clubhouse /Maintenance Facility
Capital Cost -- Driving Range'
114.1
-
Capital Cost -- Course Lighting*
458.3
416.7
185.2
Capital Cost -- Parking Lot*
56.5
-
Fiscal Service Costs
- --
- --
--
Total Costs
$3,473.0
$2,967.9
$2,736.4
Net Cost- Benefit $2,639.7 $2,922.2
Present value of 25 -year stream.
$4,940.0
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X. Valuation of Project Components
This section estimates the value of the project components as follows:
- Total integrated Golf Course and Practice Range
- Standalone Practice Range & Related Activity
- Standalone Golf Course /Clubhouse
Vauation
The market value of the components is estimated as a fee simple interest - -that is, the value the entity would
command on the open market rather than from the City perspective. As an enterprise fund, where the
objective is to breakeven, the entity has no economic value.
The value of these components is estimated based on the income approach to value. The cost or market
approaches are not considered in this valuation analysis. Direct capitalization of the stable year net operating
income is the basic methodology employed in the valuation analysis.
Net Operating Income
The value of the asset is estimated by capitalizing annual net operating income at an appropriate direct
capitalization rate. Net operating income is defined as earnings before interest, taxes, depreciation and
amortization (EBITDA). Net operating income is equal to gross revenue less direct operating expenses,
management fees, and the Southern California Edison lease payment.
Based on estimates presented in Section VII (Direct Economics) of the report, Table X -1 presents stable year
net operating income for the existing golf course, standalone golf course and standalone driving range. Note
that the cost of the services currently provided by the City (administration and overhead) are incorporated in
the general and administrative expenses of the component being valued. That is, adjustments to general and
administrative expenses are applied to reflect the self- contained operation of the component.
In analyzing the economics of The Lakes golf course, the sum of the net operating income of each principal
component (golf course /clubhouse and practice range) is less than that of the combined operation as a
single entity. Specifically, as standalone facilities, each entity would require its own administrative and
operating overhead, while under a combined operation, these duties would be shared. For example, as
standalone operations, each would require operations personnel and management, whereas under a single
operation, this redundancy would be eliminated.
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Gross Revenue
Greens Fees $760.0
Range Revenue 754.0
Pro Shop Sales 175.0
Food & Beverage 300.0
Alcoholic Beverage -Lease Payment 8.5
Lessons /Camps 225.0
Other /Miscellaneous Q,Q
Total $2,227.5
Less: Cost of Sales
Pro Shop Sales $113.8
Food & Beverage 141.0
Total $254.8
Gross Profit $1,972.7
Operating Expenses
Course Maintenance $495.0
Golf Operations /Range 197.0
Lessons 120.0
Food & Beverage 200.0
Clubhouse Undistributed 75.0
General & Administrative 459.02
Total $1,546.0
Net Operating Income $426.7
Projections reflect implementation of revenue enhancement measures.
L. y Includes $50,000 to account for current City administrative services /overhead.
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$760.0
75.0
175.0
5.0
80.0
5�4
$1,100.0
$48.8
ZQ.Q-
$118.8
- -_
$754.0
- --
- --
- --
60.0
25-Q
$839.0
- -
---
$981.2
$839.0
$485.0
65.0
60.0
87.5
38.0
392.0
$1,127.5
($146.3)
- --
--
--
- --
- --
$445.0
$394.0
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Capitalization Rate
Valuation
The income approach to value generally is regarded as the most reliable in valuing public and semiprivate
golf course properties. The value of golf courses which are operating efficiently and at stabilized play levels
typically is determined by capitalizing current annual net operating income at an appropriate rate. Applying a
direct capitalization rate yields the value of the property.
It is very difficult to establish market -based capitalization rates for golf properties for a variety of reasons.
One of the most significant factors is that very few golf courses are sold at a point of stabilized operation.
The actual capitalization rates observed on most golf course transactions, therefore, generally are very low,
typically in the 4 to 6 percent range. In many cases, the capitalization rate is lower, and many courses are
selling for significant amounts when operating at little more than a breakeven level. Capitalization rates for
California golf properties tend to be lower than observed in other markets nationally. This difference is
attributed to several factors including longer playing seasons (climate), population /market growth,
inexpensive maintenance labor, high barriers to entry, and higher construction costs.
While actual capitalization rates observed based on trailing 12 -month EBITDA are in the 4 to 6 percent range,
pro forma capitalization rates, based on buyer revenue /expense "expectations," buyers in the market are
seeking returns based on capitalization rates in the 8 -10 percent range, although the capitalization rate at the
time of the transaction often is well below this target return. The buyers believe, however, that through both
improvements in revenues and reductions in expenses, capitalization rates in the 8 -10 percent range will be
achieved within a short period of time. At stabilization, we believe a 8 percent direct capitalization rate is
reasonable for The Lakes at El Segundo.
Asset Value
Table X -2 presents the as -is valuation of The Lakes at El Segundo, as well as each of its two principal
components. As indicated, the direct capitalization rate is applied to "adjusted" net operating income. The
adjustment accounts for a capital improvement replacement reserve, reflecting the future anticipated needs
of the golf course (including night lighting).
As shown, the value of the existing golf complex is estimated at $3.71 million. There is no value assigned to
the golf course as a standalone facility, and the value of the standalone practice range is indicated at $4.55
million. That is, virtually all of the value of the combined complex is attributable to the golf practice range.
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Net Operating Income
Less: Allowance for Capital
$426,700
($146,300) $394,000
130.000
100.000 30,000
Improvement Reserve
Adjusted Net Operating Income
$296,700
($246,300) $364,000
Direct Capitalization Rate
8.0%1
8.0% 8.0%
L Capitalized Value
$3,708,700
I� - -- $4,550,000
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XI. Other Issues
Other Issues
The following presents a discussion of other issues which may be considered, but have not been quantified,
in the comparative analysis.
Risk of Default
As with any ground lease, there is always the possibility of a default. According to City representatives, the
ground lease payment would not be subordinated, and thus the City would be in a first position regarding
encumbrances on the property. That is, the City would be entitled to their ground lease payment before debt
service, if any, on the facility.
A review of projections by TopGolf indicate a lease payment coverage ratio (annual net operating income to
ground lease payment) of nearly 10:1. This suggests that the risk of default on the ground lease payment is
relatively low.
Golf Course Design
Several conceptual golf course routing plans have been formulated relative to the reconfigured golf course.
These plans have been developed without the input of a qualified golf course architect. This analysis
assumes that the reconfigured golf course has at least equal length to the existing golf course, without any
safety concerns. It will be necessary for a golf course architect to prepare the routing plan for the
reconfigured golf course.
Economic Impact
As noted, annual spending at the TopGolf facility in El Segundo is projected at approximately $20 million.
This initial round of spending creates over 400 jobs (275 -300 full time equivalent), and over $8 million in
annual payroll. Subsequent rounds of re- spending the initial impact dollars will create additional spending,
payroll and employment (the multiplier effect). The Department of Commerce, Bureau of Economic Analysis
produces regional multipliers for major industry classifications. The overall gross multiplier for both
recreational activities and food and beverage establishments is in the range of 2.0 for Los Angeles County.
Applying this multiplier suggests the gross regional output associated with the TopGolf facility will be in the
range of $40 million annually, and account for nearly 600 jobs (FTE) and over $15 million in annual payroll.
Again, this annual impact relates to the region, with the City of El Segundo capturing a portion of this impact.
Based on the City's residential population and economic base, El Segundo would likely capture a relatively
small portion of the overall impact, although even a small percentage potentially translates into a significant
level of local impact. In addition to the ongoing annual impact, there will be one -time construction impact
with the City of El Segundo again capturing a relatively small portion.
TopGolf has been well received in the market, with annual attendance estimated at approximately 500,000
patrons at other metropolitan locations similar to El Segundo. The TopGolf concept has received significant
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Other Issues
media coverage both inside and outside the golf industry. The profile of the facility also has been raised
through the many corporate outings and events hosted.
In addition to the impacts related to the "multiplier effect" of initial spending at the TopGolf facility, TopGolf
may play a part in stimulating interest in El Segundo as a business location. Clearly, there are numerous
factors which are evaluated in a major employer's site selection including area image, the residential location
of officers and employees, regional and local access, surrounding land uses, airport proximity, climate,
occupancy cost, local suppliers and services, and the like. It would appear that development of a TopGolf
would help in establishing the identity and image of the City of El Segundo, and represent a community
amenity which enhances the attractiveness of the City.
It is not possible to isolate the specific impact on business attraction stemming from locating a TopGolf
facility in El Segundo, and thus quantifying the impact would be extremely speculative, and clearly the impact
would vary by type of business.
Transient Occupancy Tax
The experience at some TopGolf locations -- primarily those where there are heavy concentrations of regional
and national headquarters companies - -is that some of the attendees at corporate events are from out -of-
town, and thus patronize local lodging establishments. Events account for about 20 -25 percent of TopGolf
total business activity, with corporate events representing about 25 -50 percent of events. With annual
attendance of about 500,000, corporate attendance at a TopGolf is in the range of 45,000 attendees. If 2 -3
percent of attendees are from out of the area, in the range of 1,000 -1,200 room nights would be generated,
producing about $15,000 annually in transient tax revenue, much of which would accrue to the City of El
Segundo.
Capital Improvement Replacement Reserve
As with all entertainment oriented facilities, there are periodic requirements for replacing and updating capital
components of the project. TopGolf's pro forma projections include a capital replacement reserve equal to
$400,000 per year. This annual amount represents about 2 percent of annual gross revenue, consistent with
industry standards for projects of this scale.
While TopGolf has provided an allowance for a capital improvement reserve, it may be in the City's best
interest to mandate funding the reserve annually at a rate of 2 percent of gross revenue. The proceeds
would be placed in a fund, and withdrawn for TopGolf project components at the mutual agreement of both
TopGolf and the City of El Segundo. This would ensure that capital improvements are completed on a timely
basis.
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Guaranteed Fiscal Revenue
Other Issues
Based on TopGolf pro forma projections, fiscal revenue accruing to the City is projected at about $165,000
per year. As this fiscal revenue is directly correlated with TopGolf's performance, it may be appropriate to
establish a guaranteed total fiscal revenue amount, with TopGolf funding any shortfall between the budgeted
and actual fiscal revenue generated.
Upside Participation
The agreement between CenterCal/TopGolf and the City of El Segundo calls for CenterCal to pay $525,000
in Year 1 fixed ground rent, with escalations scheduled over the full lease term. Clearly, the TopGolf concept
is unique, and there is limited long term performance history with the facility. Because of the degree of
uncertainty in TopGolf performance at The Lakes location, it may be appropriate to structure the ground
lease agreement with some City upside participation. One such structure would be to establish an annual
gross revenue threshold, with the City sharing in annual gross revenue which exceeds the threshold. For
example, the City might receive 3 to 5 percent of gross revenue which exceeds the budgeted amount.
TopGolf Reversionary Value
The TopGolf lease, assuming all of the six 5 -year options are exercised, extends for a total of 50 years. At
the conclusion of the 50 -year term, the improvements on the property revert to the City. At that point, the
rent for the facility would be based on land and improvements rather than land value alone. Although the
present value of this potential asset is 50 years in the future, the value is nonetheless substantial.
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Appendix A
Appendix
Year
1
Course Table A-1:
476,700
Existing Golf Course--Summary
5,600
of Net Present
- 160,000
Value
- 545,000
.
- 222,700
2
486,234
5,712
- 163,200
-
328,746
3
495,959
5,826
- 166,464
-
335,321
4
505,878
5,943
- 169,793
342,027
5
515,995
6,062
- 173,189
- 386,000
- 37,132
6
526,315
6,183
- 176,653
355,845
7
536,842
6,307
- 180,186
362,962
8
547,578
6,433
- 183,790
-
370,221
9
558,530
6,561
6,693
6,826
- 187,466
377,626
10
569,701
- 191,215
- 385,000
178
11
581,095
- 195,039
- 198,940
392,882
400,740
12
592,717
6,963
13
604,571
7,102
- 202,919
-
408,754
14
616,662
7,244
- 206,977
416,929
15
628,996
7,389
- 211,117
- 1,251,000
- 825,732
16
641,575
7,537
- 215,339
-
433,773
17
654,407
7,688
- 219,646
442,449
18
667,495
7,841
- 224,039
451,298
19
680,845
7,998
- 228,519
460,324
20
21
694,462
708,351
8,158
8,321
- 233,090
- 237,752
- 490,000
- 20,470
478,921
22
722,518
8,488
- 242,507
- 247,3571
- 252,304
- 257,350
488,499
23
736,969
8,657
498,269
24
751,708
8,831
508,235
518,399
25
766.742
9.007
Total
NPV @8%
$15,268,844
$179,370
- $5,124,848 - $3,057,000 $7,266,366
- $2,027,846 - $1,445,1601 $2,639,682
$6,041,713
$70,975
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Appendix
Year
1
Table A-2:
Top Golf
$425,000
Top Golf ...
. urse NOI
Benefits
163,645 - 106,300
Citywide OH
- 150,000
Construction Cap Ex
- 270,000 - 635,000
Net CashFlow
- 572,654
2
$425,000
166,918
- 108,426
- 153,000
330,494
3
$425,000
170,256
- 110,595
- 156,060
328,605
4
$425,000
173,661
- 112,806
- 159,181
-
326,678
5
$425,000
177,135
- 115,063
- 162,365
-
324,712
6
467,500
180,677
- 117,364
- 165,612
-
365,207
7
467,500
184,291
- 119,711
- 168,924
363,162
6
467,500
187,977
- 122,105
- 172,303
361,077
9
467,500
191,736
- 124,547
- 175,749
358,949
10
467,500
195,571
- 127,038
- 179,264
356,779
11
514,250
199,482
- 129,579
- 182,849
401,315
12
514,250
203,472
- 132,171
- 186,506
399,057
13
514,250
207,541
- 134,814
- 190,236
396,754
14
514,250
211,692
- 137,510
- 194,041
-
394,405
15
514,250
215,926
- 140,261
- 143,066
- 197,922
- 559,000
- 166,991
16
565,675
220,245
- 201,880
440,990
17
565,675
224,650
- 145,927
- 205,918
-
438,497
18
565,675
229,143
- 148,846
- 151,823
- 210,036
435,954
19
565,675
565,675
233,725
- 214,237
- 218,522
433,360
20
238,400
- 154,859
- 245,000
185,714
21
622,250
243,168
- 157,956
- 222,892
- 227,350
- 231,897
- 236,535
- 241,266
484,591
22
23
24
25
622,250 248,031
622,250 252,992
622,250 258,052
622.250 263,213
- 161,115
481,838
- 164,338
479,030
- 167,624
476,166
_170.977
473,245
Total
$12,973,375 $5,241,598
- $3,404,821
- $4,804,545
- $270,000
- $1,439,000
$8,296,608
N
$5,163,360 $2,074,043
- $1,347,250
- $1,901,105
$250,000
- $816,747
$2,922,398
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Appendix
Year
1
Table A-3:
TopGolf
$525,000
TopGolf Scenario
Fiscal
Benefits
207,900
Revised Proposal- -Summary
Course NOI Citywide
- 106,300 - 150,000
of Net Present
- 270,000
Value
- 385,000
.
I
- 282,654
2
535,500
212,058
- 108,426
- 153,000
461,394
3
546,200
216,299
- 110,595
- 156,060
470,613
4
557,100
220,625
- 112,806
- 159,181
-
480,002
5
568,300
225,038
- 115,063
- 162,365
489,661
6
568,300
229,538
- 117,364
- 165,612
-
488,089
7
568,300
234,129
- 119,711
- 168,924
486,486
8
568,300
238,812
- 122,105
- 172,303
484,850
9
568,300
568,300
243,588
- 124,547
- 175,749
483,182
10
248,460
- 127,038
- 179,264
481,481
11
625,100
253,429
- 129,579
- 182,849
536,545
12
625,100
258,498
- 132,171
- 186,506
534,775
13
625,100
263,667
- 134,814
- 190,236
-
532,969
14
625,100
268,941
- 137,510
- 194,041
531,127
15
625,100
274,320
- 140,261
- 197,922
- 559,000
- 29,752
16
687,600
279,806
- 143,066
- 201,880
-
589,832
17
687,600
285,402
- 145,927
- 205,918
587,877
18
687,600
291,110
- 148,846
- 210,036
585,883
19
687,600
296,932
- 151,823
- 214,237
583,850
20
687,600
302,871
- 154,859
- 218,522
- 245,000
336,775
21
756,400
308,928
- 157,956
- 222,892
648,459
22
756,400
315,107
- 161,115
- 227,350
-
646,301
23
24
756,400
321,409
- 164,338
- 231,897
644,100
756,400
756.400
327,837
334,394
- 167,624
- 170,977
- 236,535
-4 ,266
641,854
25
-
639,564
Total
$15,919,100
$6,659,099
- $3,404,821
- $4,804,545
- $270,000
-$1,189,0001
$12,909,833
NPV @ 8% L $6,388,823
$2,634,932
- $1,347,250
- $1,901,105
- $250,000
$585,266 $4,940,232
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Appendix
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288
CITY OF EL SEGUNDO
PAYMENTS BY WIRE TRANSFER
8/17/15 THROUGH 8/30/15
Date
Payee
Description
811712015
IRS
268,973.71
Federal 941 Deposit
8/17/2015
Employment Development
3,413.75
State SDI payment
8/17/2015
Employment Development
59,296.77
State PIT Withholding
8/19/2015
Cal Pers
99,896.73
EFT Retirement Misc
8/19/2015
Cal Pers
281,312.01
EFT Retirement Safety
8/19/2015
Cal Pers
3,078.18
EFT Retirement Safety - Police
8/19/2015
Cal Pers
15,790.25
EFT Retirement Misc
8/20/2015
Pitney Bowes
10,000.00
Postage for City Hall
8/21/2015
Health Comp
1,384.25
Weekly claims
8/27/2015
State of CA EFT
853.45
EFT Child support payment
8/28/2015
Unum
208.70
Long Term Care Premium
8/28/2015
Health Comp
3,091.58
Weekly claims
8/28/2015
Manufacturers & Traders
27,168.52
457 payment Vantagepoint
8/28/2015
Manufacturers & Traders
477.31
IRA payment Vantagepoint
8/28/2015
US Bank - Trust Acct
5,534.88
PARS payment
8/28/2015
South Bay Credit Union
12,500.38
Payroll credit union deduction pmt
8/28/2015
Nationwide NRS EFT
37,413.33
EFT 457 payment
8/20/2015
Lane Donovan Golf Ptr
24,474.39
Payroll Transfer
8/15/15 - 8/21/15
Workers Comp Activity
18,334.50
SCRMA checks issued
8/22/15 - 8/28/15
Workers Comp Activity
19,569.07
SCRMA checks issued
8/15/15 - 8/21/15
Liability Trust - Claims
784.04
Claim checks issued
8/22/15 - 8/28/15
Liability Trust - Claims
0.00
Claim checks issued
893,555.80
DATE OF RATIFICATION: 8/31/15
TOTAL PAYMENTS BY WIRE:
893,555.80
Certified as to the accuracy of the wire transfers by:
Deputy City Treasuref II Date `
//i .,LL, / q - j -or
Director cif Fiance_ V/'% I Date
Information 6r actual expenditures is available in the City Treasurer's Office of the City of El Segundo.
P: \City Treasurer \Wire Transfers \Wire Transfers 10 -01 -14 to 9 -30 -15 82284015 1/1
City Manager
Date
Information 6r actual expenditures is available in the City Treasurer's Office of the City of El Segundo.
P: \City Treasurer \Wire Transfers \Wire Transfers 10 -01 -14 to 9 -30 -15 82284015 1/1
REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL
TUESDAY, AUGUST 18, 2015 — 5:00 PM
5:00 P.M. SESSION
CALL TO ORDER — Mayor Fuentes at 5:00 PM
ROLL CALL
Mayor Fuentes -
Present
Mayor Pro Tern Jacobson -
Present
Council Member Atkinson -
Present
Council Member Fellhauer -
Present
Council Member Dugan -
Present
PUBLIC COMMUNICATION — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total) None
SPECIAL ORDER OF BUSINESS:
Mayor Fuentes announced that Council would be meeting in closed session pursuant to
the items listed on the Agenda.
CLOSED SESSION:
The City Council may move into a closed session pursuant to applicable law, including
the Brown Act (Government Code Section §54960, et seq.) for the purposes of
conferring with the City's Real Property Negotiator; and /or conferring with the City
Attorney on potential and /or existing litigation; and /or discussing matters covered under
Government Code Section §54957 (Personnel); and /or conferring with the City's Labor
Negotiators; as follows:
CONFERENCE WITH LEGAL COUNSEL — EXISTING LITIGATION (Gov't Code
§54956.9(d) (1): -3- matter
1. City of El Segundo vs. City of Los Angeles, et.al. LASC Case No. BS094279
2. Penuelas vs. City of El Segundo, LASC Case No. BC523072
3. O'Leary v. City of El Segundo WCB /EAMS Nos. ADJ8702179 and 918053
CONFERENCE WITH LEGAL COUNSEL — ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to Government Code §54956.9(d) (2): -1-
matter.
Initiation of litigation pursuant to Government Code §54956.9 (d) (4): -4- matters.
290
DISCUSSION OF PERSONNEL MATTERS (Gov't Code §54957): -0- matter
APPOINTMENT OF PUBLIC EMPLOYEE (Gov't. Code § 54957): -0- matter
PUBLIC EMPLOYMENT (Gov't Code § 54957) -0- matter
CONFERENCE WITH CITY'S LABOR NEGOTIATOR (Gov't Code §54957.6):-8-
matters
Employee Organizations: Police Management Association; Police Officers
Association; Police Support Services Employees Association; Fire Fighters
Association; Supervisory and Professional Employees Association; City
Employees Association; Executive Management Group (Unrepresented Group);
Management/Confidential Group (Unrepresented Group)
Agency Designated Representative: Steve Filarsky and City Manager
CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Gov't Code §54956.8): -0-
matters
Adjourned at 6:55 PM
2
291
REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL
TUESDAY, AUGUST 18, 2015 - 7:00 P.M.
7:00 P.M. SESSION
CALL TO ORDER — Mayor Fuentes at 5:03 PM
INVOCATION — Pastor Lee Carlile, United Methodist Church
PLEDGE OF ALLEGIANCE — Council Member Jacobson
ROLL CALL
Mayor Fuentes -
Present
Mayor Pro Tern Jacobson -
Present
Council Member Atkinson -
Present
Council Member Fellhauer -
Present
Council Member Dugan -
Present
ITEM E6 MOVED FORWARD
6. Authorize the Mayor to approve the sale of police canine, "Arthur ", to his handler,
Officer Chris Cameron, for the nominal fee of one dollar ($ 1.00), Agr. No. #4900.
(Fiscal Impact: None)
Presentation by Mitch Tavera, El Segundo Police Chief.
MOTION by Mayor Pro Tern Jacobson, SECONDED by Council Member Fellhauer
approving the sale of police canine, "Arthur ", to his handler, Officer Chris Cameron, for
the nominal fee of one dollar ($ 1.00). MOTION PASSED BY UNANIMOUS VOICE
VOTE. 5/0
PRESENTATIONS
a. Presentation by LA Sanitation — Hyperion Reclamation Treatment Plant,
concerning the Water Reclamation Plant EPP Header Replacement Project.
b. Presentation by Scott Houston, Director, West Basin Municipal Water District,
Division IV, on the West Basin Municipal Water District's drought updates and
efforts.
C. Presentation by Council Member Atkinson, on the Special Olympics World
Games Los Angeles 2015 and El Segundo as a Host Town. Video presented by
El Segundo Cable TV.
3
292
PUBLIC COMMUNICATIONS — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total)
Elyse Rothstein, resident and South Bay Workforce Investment Board (SBWIB)
representative, presented the quarterly update.
Matt Stauffer, with Autumn Burke's office, invited all to attend a Back to School Health
and Wellness Fair on Saturday, August 22, 2015 at Oakwood Park in Venice, CA.
Mike Robbins, resident, commented on the recent campaign by the members of the El
Segundo Coalition of Labor Association, ES Fire Fighter Association and ES Police
Officer Association.
Marc Rener, resident, commented on the Fire Department's practice to collect fees for
services rendered that are not paid for by insurance during an emergency call.
Laura McConahey, resident, not in favor of making salary cuts to the Fire and Police
Departments.
CITY COUNCIL COMMENTS — (Related to Public Communications)
A. PROCEDURAL MOTIONS
Consideration of a motion to read all ordinances and resolutions on the Agenda
by title only.
MOTION by Mayor Pro Tem Jacobson, SECONDED by Council Member Fellhauer to
read all ordinances and resolutions on the Agenda by title only. MOTION PASSED BY
UNANIMOUS VOICE VOTE. 5/0
B. SPECIAL ORDERS OF BUSINESS (PUBLIC HEARING)
C. UNFINISHED BUSINESS
OPENED ITEMS C1 AND C2 CONSECTIVELY
[CONTINUED ITEM #C3 FROM AUGUST 4, 2015 CITY COUNCIL MEETING]
Rescission of Brown Act Commitment - In Accordance with Government Code
Section 54960.2 (e), consideration and possible action to rescind the
commitment made by the City Council on November 5, 2013, not to hold further
closed session meetings regarding real property negotiations with regard to
ESCenterCal, LLC's ( "CenterCal ") proposal to enter into a Due Diligence and
Ground Lease Agreement ( "Agreement ") to lease the driving range portion of the
Lakes Golf Course from the City for the purpose of developing a Top Golf facility.
(Fiscal Impact: unknown — depends on whether legal proceedings are
commenced.)
MOTION by Council Member Fellhauer, SECONDED by Mayor Pro Tern Jacobson to
continue item #C1 to the September 1, 2015 City Council Meeting. MOTION PASSED
BY UNANIMOUS VOICE VOTE. 5/0
El
293
2. Consideration and possible action regarding receiving an update with respect to
the City's negotiations with CenterCal and Top Golf regarding the draft Due
Diligence Lease Agreement that provides for the leasing of the driving range at
the Lake's Golf Course to CenterCal and Top Golf for purposes of operating a
Top Golf facility and the reconstruction of the golf course.
(Fiscal Impact: None)
Mark Hensley, City Attorney, presented the Council with an update on the Due
Diligence and Ground Lease Agreement for item #C2.
Council Discussion
Mark Hensley, City Attorney, answered and clarified questions from Council.
Council consensus agreed to discounts to El Segundo residents only from 6:00 am —
12:00 pm.
Item #C2 will be brought back to Council at the September 1, 2015 City Council
meeting.
D. REPORTS OF COMMITTEES, COMMISSIONS AND BOARDS
E. CONSENT AGENDA
All items listed are to be adopted by one motion without discussion and passed
unanimously. If a call for discussion of an item is made, the item(s) will be considered
individually under the next heading of business.
3. Approve Warrant Numbers 3007105 through 3007332 on Register No. 21 in the
total amount of $1,000,990.95 and Wire Transfers from 7/13/2015 through
8/09/2015 in the total amount of $2,708,616.62. Authorized staff to release.
Ratified Payroll and employee Benefit checks; checks released early due to
contracts or agreement; emergency disbursements and /or adjustments; and
wire transfers.
4. Approve Special City Council Meeting Minutes of August 3, 2015, Special City
Council Meeting Minutes of August 4, 2015, and Regular City Council Meeting
Minutes of August 4, 2015.
5. Authorize the Chief of Police to hire one Police Officer to backfill a vacancy
created by filling a position with the "Taskforce for Regional Autotheft
Prevention" (TRAP).
(Fiscal Impact: Net savings of approximate $76,000)
6. MOVED FORWARD ON THE AGENDA
5
294
7. Authorize the City Manager to execute a contract amendment No. 44808, in a
form approved by the City Attorney, for an additional $30,000 with DownStream
Services, Inc. for pump stations on -call repair services in the 2014 -15 Fiscal
Year.
(Fiscal Impact: None)
8. Consideration and possible action to award a standard Public Works Contract
No. 4901 to the lowest responsible bidder, American Asphalt South, Inc., for the
FY 14 -15 Slurry Seal Project in the area bounded by the west City boundary, the
north City boundary, Sheldon Street and Mariposa Avenue. Project No.: PW 15-
02.
(Fiscal Impact: $500,000.00)
9. Authorize the City Manager to execute agreement No. 4902, adopt Resolution
No. 4929 authorizing the examination of prepaid mobile telephony services
surcharge and local charge records and approve Resolution No. 4930 allowing
the State Board of Equalization to collect and administer local user utility taxes
( "UUT ") on the City's behalf.
(Fiscal Impact: None)
10. Approve the thirty (30) day provisional appointment extension for the position of
Interim Deputy City Clerk II.
(Fiscal Impact: None)
11. Authorize the City Manager to execute an amendment No. 4802A, in a form
approved by the City Attorney, to MuniTemps agreement number 4802 for
temporary staffing in City Clerk's Office / Deputy City Clerk I.
(Fiscal Impact: $16,000.00)
12. Receive and file this report regarding emergency work to repair dwelling units at
the Park Vista Senior Housing Facility due to water intrusion without the need for
bidding in accordance with Public Contracts Code §§ 20168 and 22050 and El
Segundo Municipal Code ( "ESMC ") §§ 1 -7 -12 and 1 -7A -4.
(Fiscal Impact: $50,000.00)
MOTION by Council Member Atkinson, SECONDED by Council Member Fellhauer to
approve Consent Agenda items 3, 4, 5, 7, 8, 9, 10, 11, and 12. MOTION PASSED BY
UNANIMOUS VOICE VOTE. 5/0
F. NEW BUSINESS
G. REPORTS — CITY MANAGER — Welcomed Barbara Voss, our new Economic
Development Manager.
H. REPORTS — CITY ATTORNEY - None
G
295
I. REPORTS — CITY CLERK - None
J. REPORTS — CITY TREASURER — Not present
K. REPORTS — CITY COUNCIL MEMBERS
Council Member Fellhauer — Mentioned she would be unable to attend the EDAC
meeting on Wednesday, August 19, 2015.
Council Member Atkinson — Thanked the community and council members for their
support of the Special Olympics World Games.
Council Member Dugan — None
Mayor Pro Tern Jacobson — None
Mayor Fuentes — Attended the 2015 Aerospace Summer Games at Dockweiler State
Beach.
PUBLIC COMMUNICATIONS — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total).
Marc Rener, resident, stated he has nothing against our Fire Fighter's or Police
Officer's, however, he does not agree with the practice of collecting for fees not covered
by one's insurance company by the Fire Department for services rendered during an
emergency.
Mike Robbins, resident, commented on the compensation data posted to the City's
website.
MEMORIALS — Robert L. "Bob" Dugan
ADJOURNMENT at 8:46 PM
Tracy Weaver, City Clerk
7
296
297
SPECIAL MEETING OF THE EL SEGUNDO CITY COUNCIL
MONDAY, AUGUST 31, 2015
El Segundo Public Library
111 W. Mariposa Avenue, El Segundo, CA 90245
6:00 p.m.
6:00 P.M. SESSION
CALL TO ORDER — Mayor Fuentes at 6:01 PM
PLEDGE OF ALLEGIANCE — Council Member Atkinson
ROLL CALL
Mayor Fuentes -
Present
Mayor Pro Tern Jacobson -
Present
Council Member Atkinson -
Present
Council Member Fellhauer -
Present
Council Member Dugan -
Present
PUBLIC COMMUNICATIONS — (Related to City Business Only) — 5 minute limit per person, 30
minute limit total. None
SPECIAL ORDERS OF BUSINESS:
Greg Carpenter, City Manager, gave a brief overview of the Agenda for the meeting.
1. Consideration and possible action regarding a strategic planning workshop resulting in City
Council receiving and filing of staff's analysis and recommendations for the Fiscal Year
2015 -2016 Preliminary Budget which includes Council approved departmental requests
from August 3rd Strategic Planning Session. Staff will present an update Fiscal Year 2014-
2015 year -end estimates and fund balance.
Misty Cheng, Acting Finance Director, gave a report on the FY 2014 -2015 Fund balance.
2. Information System Division Assessment updates — Presented by Larry Klingaman, IS
Manager.
Council discussion and questions
3. Recreation & Parks updates — Presented by Meredith Petit, Recreation and Parks Director.
Council discussion and questions
4. Fire Equipment updates — Presented by Kevin Smith, Fire Chief.
Council Discussion and questions
WN
5. Public Works and Capital Projects updates — Presented by Stephanie Katsouleas, Public
Works Director and Misty Cheng, Acting Finance Director.
Council Discussion and questions
6. Transient Occupancy Tax Option — Presented by Greg Carpenter, City Manager and Misty
Cheng, Acting Finance Director.
Council Discussion and questions
Council Consensus directing staff to begin the process of writing a TOT (Transient Occupancy
Tax) initiative for placement on the April 2016 ballot.
Mayor Fuentes recessed the meeting at 7:11 PM
Mayor Fuentes reconvened the meeting at 7:26 PM
7. A revised Fiscal Year 2015 -2016 Preliminary Budget with various options to meet the needs
of the approved departmental requests and an updated fund balance for each option —
Presented by Greg Carpenter, City Manager and Misty Cheng, Acting Finance Director.
Council Discussion and questions
MOTION by Council Member Atkinson, SECONDED by Council Member Fellhauer to approve
modified Option #2 of the FY 2015 -2016 Department requests. (Options are listed in the
presentation attached to the minutes) MOTION PASSED BY VOICE VOTE. 4/1 YES: Atkinson,
Dugan, Fellhauer, Fuentes; NO: Jacobson.
Option #2 worksheet with modifications by Council for the Fiscal Year 2015 -2016 Preliminary
Budget is attached.
8. Council may raise other developments, fiscal policy, capital projects and other related topics
as part of staff's preparation for the Fiscal Year 2015 -2016 Preliminary Budget. None
9. Dates and time for FY 2015 — 2016 first hearing and budget adoption
Misty Cheng, Acting Finance Director, stated the Preliminary Budget for Fiscal Year 2015 -2016 will
be ready for the first hearing at the regular City Council Meeting of September 15, 2015.
Council consensus to hold a Special City Council meeting on Monday, September 28, 2015 to
adopt the Final Budget for Fiscal Year 2015 -2016/
ADJOURNMENT at 8:43 PM
Tracy Weaver, City Clerk
299
Deecrlodon
0dalnal Amount Revb.d
AmourR
Damon2
Projected Beginning Fund Balance
13,031,661
14,351,768
14.351,768
Revenue Adjustment
Estimated Operating Revenues
62,672,000
62,715,000
62,779,260 64,260
64,300
Twmlm.,
168,600
501000
%OW
50,000 Film Permits
Total Rev.pue4
404M
W.11651OW
@7,229]00
14,300 Commercial Industrial
CWrMI OwW4tmg 6apemill-
82072,100
67,3V3,500
62,3(18500
64,300
iramim pro
1. 170,000
950,000
MOW
Tell Expamhure4
53,.442.100
Ci ;259,500
61,009,500
62,715,000 Reported Or SPS
FidIM4C Ending Fund Bakntt
12,630,144
IM71Mg
24,171526
62,715,800 Per Revenue detail worksheet
te14: DnIgnmiad
147$10001
ik:10o.LOm
11.10010001
(800) Commercial Industrial
µrolettM Upar5yp144M Fend Wlmrr
S2.Y5$,.1M
17,.75717£5
Y3A7.Wil
39%ReifionORere"
LA90'7,6110
1(,916050
420-059
E.MU / {VnawlOes.st.
7b7;488
&IUIR.
6lyA -
D.p.rmlMdl R.go.sd
WOW Ars- Resins!
Amount ]Vl1
j
P9/1Eg
3 Poke Officers requested, 2 approved
440,800
440,800 y
797.86!S7k,W7srxa . plrmn lBW
114wnotlan O+Ikn to Sri ;rani
38,100
38,100 Y
38,100
Estimated Fund Balance 9/M/15:
5 14,351,768
Document lmagingscanning
100,000
100,000
-
Less: Designed-
(11100,0001
IS Professional & technical
50,000 V
50,000
13,251,768
1 Dayebper
115,000 V
115,000
FL
FY35 /16RMenues
62,829,260
Restore Senior Management Analyst
5,600
SAM Y
5.657
FY15 /I6 Expenditures
64,033,467
25DI GESpot Free Systems
7,400
7AW
FY15 /16 Operating Deficit
(1,204,207)
Telestaff Automated Scheduler
54,ODD
515017
Lexlpol Digital Fire Paltry Manual
41,400
47A00
Projected Undmign -d Fund Balance
2 ECG MORRo s
39,000
34,ODb Y
1910110
@9/30116
12,067,561
15 Firefighting Turnouts
51,000
51,000
funo,rl lr.m PW
19% reserve requirement
12,033,359
2 Fire Engines requested, l appr ... d
531,800
531 00
fund F Mu ERF
Excess reserve
$ 14,202
2 Rescue Ambulances requested, l approved
267,300
267,400
tut .rll tram ERF
City M ..w
Emergency Coordinator
-
622700
-
City
Part-time employee
56,000
37,900 y
17,904
[A'14tkw vl Aa544Nr R4Wimrent
Flmmce
FVI5/11iR 'elf-
62,779,260
License Permit Specialist ll
38,200
0700 V
34,200
FVI'-7166epeodK..
63,333,467
AdminBtratNe Specialist
22,200
MOD V
M."
Budget /Payroll 5uWmmor
-
-
19%re4e+ve+adua4mesr
12,033,359
PubRC Works
Iiv-w W r4rnmi.s d - p.pmeures, r1.t of
35treet Maintenance Workers
224,900
224,900 V
224,400
Iramferl mu4lpned W l9Ry
Opefating Supplles
10,000
10,000 y
50000
Small Toab & Equipment
500
500 Y
500
Laundry &Clearing
2,000
2,000 T
4001
ubrory
LlbraryAssBtant
t EsdldlnaSnkN
76,500
76,500
PI.niJn.
Building Inspector l
-
-
-
UcensePermit Specialistl
RSI Construction Supervisor
-
-
-
R-flerf.n.ndil.
Part-time Personnel
50,000
29,000 y
29,0(10
Pan -time Personnelfor Cable
7,600
7,600 y
?600
Rectos Administrative Specialist
4,000
4,000 y
4,000
Upgrade audio equipmentand web -cam
4,000
4,000 Y
41000
Tree Maintenance Contract
75,000
75,000 y
71,000
Centennial &Rose Parade
30,000
25,000 y
2sAw
Repairs &Maintenance
190,000
30,000 y
30000
Truck
40,000
30,000
-
CampusElSegundoTurfReplacement
150,ODO
150,000
Adjustments:
Add: Ret Park Benefits
49.100
Add: Equipment Replacement Charges
49170
Len: Nog gewsl Impacts
017618001
176.5004
low 71."M
L597J00
- 1007,100
1,037.467
Rrpis4d OU.falufg FalwndAUnax
64;009,400
WA MIWw
F1f }5,467 700,000
64,033,467
Proles4.d Endhvift w04000.
10,0)ZI166
17,1156,16:
13,147,561
Ln Di sil"'orl
(47SSIOM
- 13,7t10A0t0 --
- _IIADD,0M
Plq"ged UIsaim 90 Fmld SAW.
91597x86
11.956,1621
520471$61
Sl!g nequb dAe44+w
17,2m MIS
771161AM
12031359
E+.+1*A7Mp4.e21fs4.YFr
PAWMI
{1.1414AW
14.784
Option R2- reduce ecanomlc uncertainty by $350,000to increase excess reserveto fund requests
Note: Due to the Equipment Replacement Fund having sufficientfunds, the Ambulance amount of $5,300 has been
absorbed by the ERF rather than funded by the General Fund. Therefore, the Excess Reserve amount has Increased
from $7,896 to 514,203.
300
301
REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL
TUESDAY, SEPTEMBER 1, 2015 — 5:00 PM
5:00 P.M. SESSION
CALL TO ORDER — Mayor Fuentes at 5:00 PM
ROLL CALL
Mayor Fuentes -
Present
Mayor Pro Tem Jacobson -
Present
Council Member Atkinson -
Present
Council Member Fellhauer -
Present
Council Member Dugan -
Present
PUBLIC COMMUNICATION — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total). None
SPECIAL ORDER OF BUSINESS:
Mayor Fuentes announced that Council would be meeting in closed session pursuant to
the items listed on the Agenda.
CLOSED SESSION:
The City Council may move into a closed session pursuant to applicable law, including
the Brown Act (Government Code Section §54960, et seq.) for the purposes of
conferring with the City's Real Property Negotiator; and /or conferring with the City
Attorney on potential and /or existing litigation; and /or discussing matters covered under
Government Code Section §54957 (Personnel); and /or conferring with the City's Labor
Negotiators; as follows:
CONFERENCE WITH LEGAL COUNSEL — EXISTING LITIGATION (Gov't Code
§54956.9(d)(1): -3- matter
1. City of El Segundo vs. City of Los Angeles, et.al. LASC Case No. BS094279
2. Penuelas vs. City of El Segundo, LASC Case No. BC523072
3. O'Leary v. City of El Segundo WCB /EAMS Nos. ADJ8702179 and 918053
CONFERENCE WITH LEGAL COUNSEL — ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to Government Code §54956.9(d)(2): -1-
matter.
302
Initiation of litigation pursuant to Government Code §54956.9 (d)(4): -5- matters.
DISCUSSION OF PERSONNEL MATTERS (Gov't Code §54957): -0- matter
APPOINTMENT OF PUBLIC EMPLOYEE (Gov't. Code § 54957): -0- matter
PUBLIC EMPLOYMENT (Gov't Code § 54957) -0- matter
CONFERENCE WITH CITY'S LABOR NEGOTIATOR (Gov't Code §54957.6):-8-
matters
Employee Organizations: Police Management Association; Police Officers
Association; Police Support Services Employees Association; Fire Fighters
Association; Supervisory and Professional Employees Association; City
Employees Association; Executive Management Group (Unrepresented Group);
Management/Confidential Group (Unrepresented Group)
Agency Designated Representative: Steve Filarsky and City Manager
CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Gov't Code §54956.8): -0-
matters
Adjourned at 6:50 PM
2
303
REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL
TUESDAY, SEPTEMBER 1, 2015 - 7:00 P.M.
7:00 P.M. SESSION
CALL TO ORDER — Mayor Fuentes at 7:02 PM
INVOCATION — Scott Lambert, Hilltop Community Church of Christ
PLEDGE OF ALLEGIANCE — Council Member Atkinson
PRESENTATIONS - None
ROLL CALL
Mayor Fuentes -
Present
Mayor Pro Tern Jacobson -
Present
Council Member Atkinson -
Present
Council Member Fellhauer -
Present
Council Member Dugan -
Present
PUBLIC COMMUNICATIONS — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total) None
Brittany Commodore, Executive Director at MDA — Los Angeles (Muscular Dystrophy
Association), thanked the El Segundo Fire Fighters for their Fill the Boot efforts. The Fill
the Boot campaign will take place on September 14, 18 and 22 on the corners of El
Segundo Blvd and Sepulveda Blvd and Sepulveda Blvd. and Grand Ave.
Nate Chittick, resident, spoke concerning letters written by Steven Filarksy, who is
representing the City during labor negotiations.
CITY COUNCIL COMMENTS — (Related to Public Communications)
Council commented
A. PROCEDURAL MOTIONS
Consideration of a motion to read all ordinances and resolutions on the Agenda by title
only.
MOTION by Council Member Fellhauer, SECONDED by Mayor Pro Tern Jacobson to
read all ordinances and resolutions on the Agenda by title only. MOTION PASSED BY
UNANIMOUS VOICE VOTE. 5/0
B. SPECIAL ORDERS OF BUSINESS (PUBLIC HEARING)
C. UNFINISHED BUSINESS
M
OPENED ITEMS C1 AND C2 CONSECTIVELY
[CONTINUED ITEM #C1 FROM AUGUST 18, 2015 CITY COUNCIL MEETING]
Rescission of Brown Act Commitment - In Accordance with Government Code
Section 54960.2 (e), consideration and possible action to rescind the
commitment made by the City Council on November 5, 2013, not to hold further
closed session meetings regarding real property negotiations with regard to
ESCenterCal, LLC's ( "CenterCal ") proposal to enter into a Due Diligence and
Ground Lease Agreement ( "Agreement ") to lease the driving range portion of the
Lakes Golf Course from the City for the purpose of developing a Top Golf facility.
(Fiscal Impact: unknown — depends on whether legal proceedings are
commenced.)
2. Consideration and possible action regarding receiving an update with respect to
the City's negotiations with CenterCal and Top Golf regarding the draft Due
Diligence Lease Agreement that provides for the leasing of the driving range at
the Lake's Golf Course to CenterCal and Top Golf for purposes of operating a
Top Golf facility and the reconstruction of the golf course.
(Fiscal Impact: None)
Greg Carpenter, City Manager, presented the Council with an update on the Due
Diligence and Ground Lease Agreement for item #C2.
Council Discussion
Karl Berger, Assistant City Attorney, answered and clarified questions from Council.
MOTION by Council Member Fellhauer, SECONDED by Mayor Pro Tern Jacobson to
continue items #C1 and #C2 to the September 15, 2015 City Council Meeting.
MOTION PASSED BY UNANIMOUS VOICE VOTE. 5/0
D. REPORTS OF COMMITTEES, COMMISSIONS AND BOARDS
E. CONSENT AGENDA
All items listed are to be adopted by one motion without discussion and passed
unanimously. If a call for discussion of an item is made, the item(s) will be considered
individually under the next heading of business.
3. Approve Warrant Numbers 3007333 through 3007522 on Register No. 22 in the
total amount of $563,765.29 and Wire Transfers from 8/10/2015 through
8/16/2015 in the total amount of $3,100,864.89. Authorized staff to release.
Ratified Payroll and employee Benefit checks; checks released early due to
contracts or agreement; emergency disbursements and /or adjustments; and wire
transfers.
2
305
4. Approve Special City Council Meeting Minutes of August 17, 2015.
5. Receive and file this report regarding emergency work to repair dwelling units
at the Park Vista Senior Housing Facility due to water intrusion without the
need for bidding in accordance with Public Contracts Code §§ 20168 and 22050
and El Segundo Municipal Code ( "ESMC ") §§ 1 -7 -12 and 1 -7A -4.
(Fiscal Impact: $50,000.00)
6. Approve the purchase of forty (40) VIEVU LE3 Body Worn Video /Audio Recorder
Systems from L3 Communications using COPS Grant Funds, pursuant to El
Segundo Municipal Code §1 -7 -10, waive the bidding process and authorize the
City Manager, or designee, to execute agreement No. 4897 in a form approved
by the City Attorney with L3 Communications piggybacking on a GSA Contract #
GS 07F- 5377P.
(Fiscal Impact: $36,480.56 from COPS Grant Fund.)
7. Approve the thirty (30) day provisional appointment extension for the position of
Interim Wastewater Supervisor.
(Fiscal Impact: $0)
8. Authorize the City Manager to execute a standard Public Works Contract No.
4889 in a form as approved by the City Attorney with FS Construction in the
amount of $229,922.75 for the 2014 -15 Curb, Gutter, Sidewalk and other
Concrete Improvements Project, authorize the City Manager to amend the
Maintenance Agreement No, 4899 with West Coast Arborist, in a form approved
by the City Attorney, for tree removal and replacement services associated with
the concrete repairs for an amount not to exceed $55,000.00, authorize an
additional contingency of $15,077.25 for unforeseen conditions and authorize an
additional $200,000.00 for additional Project locations based on the Contractor's
unit bid price. Project No. PW 14 -16.
(Fiscal Impact: $500,000.00)
MOTION by Council Member Fellhauer, SECONDED by Council Member Atkinson to
approve Consent Agenda items 3, 4, 5, 6, 7, and 8. MOTION PASSED BY
UNANIMOUS VOICE VOTE. 5/0
F. NEW BUSINESS
G. REPORTS — CITY MANAGER - None
H. REPORTS — CITY ATTORNEY - None
REPORTS — CITY CLERK
5
O
9. Consideration and possible action relating to State Legislation (Assembly Bill 254
and Senate Bill 415) regarding local election dates.
(Fiscal Impact: $0)
Tracy Weaver, City Clerk, introduced the item and gave a brief description of the bills
and how they affect the City of El Segundo.
Council Discussion
MOTION by Mayor Pro Tern Jacobson, SECONDED by Council Member Fellhauer to
oppose AB 254 and SB 415 and direct staff to send the proposed letter to Governor
Jerry Brown opposing the legislation. MOTION PASSED BY UNANIMOUS VOICE
VOTE. 5/0
J. REPORTS — CITY TREASURER — Not present
K. REPORTS — CITY COUNCIL MEMBERS
Council Member Fellhauer — None
Council Member Atkinson — None
Council Member Dugan - None
Mayor Pro Tern Jacobson — None
Mayor Fuentes — None
PUBLIC COMMUNICATIONS — (Related to City Business Only — 5 minute limit per
person, 30 minute limit total)
Jack Axelrod, resident, opposes the Pledge of Allegiance and Invocation during our City
Council meetings.
Mrs. Wilson, resident, spoke on behalf of the right to vote.
MEMORIALS — None
ADJOURNMENT at 7:41 PM
Tracy Weaver, City Clerk
R
307
EL SEGUNDO CITY COUNCIL
AGENDA STATEMENT
AGENDA DESCRIPTION:
MEETING DATE: September 15, 2015
AGENDA HEADING: Consent Agenda
Consideration and possible action to receive and file this report regarding emergency
work to repair dwelling units at the Park Vista Senior Housing Facility due to water
intrusion without the need for bidding in accordance with Public Contracts Code §§
20168 and 22050 and El Segundo Municipal Code ( "ESMC ")§ 1 -7 -12 and 1 -7A -4.
(Fiscal Impact: $50,000.00)
RECOMMENDED COUNCIL ACTION:
(1) Receive and file this report regarding emergency work to repair dwelling units at the
Park Vista Senior Housing Facility due to water intrusion without the need for
bidding in accordance with Public Contracts Code §§ 20168 and 22050 and El
Segundo Municipal Code ( "ESMC ")§ 1 -7 -12 and 1 -7A -4.
(2) Alternatively, discuss and take other possible action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
None
FISCAL IMPACT: Included in Adopted Budget
Amount Budgeted: $50,000.00
Additional Appropriation: No
Account Number(s): 405- 400 - 0000 -6215 (Facilities Maintenance: Repairs and
Maintenance)
ORIGINATED BY: Stephanie Katsouleas, Director of Public Works
REVIEWED BY: Gregg Kovacevich, Assistant City Attorney
APPROVED BY: Greg Carpenter, City Manaler9
BACKGROUND AND DISCUSSION:
The work will commence in September and take approximately two weeks to complete. As a
recap, the work includes installing six (6) new drains and applying new elastomeric deck coating
on the balconies of three (3) units for an estimated $38,000 plus contingency. The work is
expected to be completed before the onset of the rainy season this fall.
Public Contracts Code § 22050 (c) requires that the City Council receive updates at every
regularly scheduled meeting until the emergency repair is completed. Therefore, staff
recommends that City Council receive and file this report on the status of the emergency repair
to address the water intrusion issues at Park Vista Senior Housing Facility.
1:
i1•
EL SEGUNDO CITY COUNCIL MEETING DATE: September 15, 2015
AGENDA ITEM STATEMENT AGENDA HEADING: Consent Agenda
AGENDA DESCRIPTION:
Consideration and possible action to 1) receive and file this report regarding the City of El Segundo
(City) entering into a license agreement with Warner Bros. Pictures — New Line Productions, Inc.
(Warner Bros.) to film at City Hall, in accordance with El Segundo Municipal Code ( "ESMC ") 4 -11 -4:
ADDITIONAL AGREEMENTS section and as to form approved by the City Attorney; and 2) authorize
filming and ancillary activities to commence beyond the municipal code's ordinance of 10:00 p.m. on
Thursday, October 8, 2015 until 4:00 a.m. on Friday, October 9, 2015 and 10:00 p.m. on Friday,
October 9, 2015 until to 6:00 a.m. on Saturday, October 10, 2015.
(Fiscal Impact: Approximate revenue of $82,736 plus personnel cost.)
RECOMMENDED COUNCIL ACTION:
1. Receive and file report regarding the City entering into a license agreement with Warner Bros.
2. Authorize filming and ancillary activities to commence beyond the municipal code's ordinance
of 10:00 p.m. on Thursday, October 8, 2015 until 4:00 a.m. on Friday, October 9, 2015 and
10:00 p.m. on Friday, October 9, 2015 until to 6:00 a.m. on Saturday, October 10, 2015.
3. Alternatively, discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
1. License Agreement Template
2. Calendar of Days with Description of Activities
3. Permit Fee and Location Fee — Summary of Cost Estimate
FISCAL IMPACT: $
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): XXX- XXX- XXXX -XXXX (General Fund)
PREPARED BY: Mickie Tagle, Senior Executive Assistant PVC-
REVIEWED BY: Steve Jones, Finance Business Se ces Division Manager
APPROVED BY: Greg Carpenter, City Manager -
BACKGROUND & DISCUSSION:
Warner Bros. Pictures — New Line Productions, Inc. has turned in a film permit application and
provided the required proof of insurance coverage to film a movie, "The House"
(http: / /bit.l),/WB "rheHouse) at the City. Film license permit applications are processed and approved in
and by the Finance Business Licensing Division and usually does not pass through the City Manager's
Office nor does it require City Council approval as the Municipal Code authorizes staff to approve
applications that comply with regulations. In this case, there is a request of Council to override the
existing ordinance due to a special circumstance and to charge fees in excess of the approved resolution.
310
1) License Agreement
Warner Bros. has requested permission to film at City Hall, which is why it was escalated to the City
Manager's attention. Warner Bros. had many City Hall locations to choose from, all of which were
significantly lower in fees, but chose to pursue doing business with the City of El Segundo due to the
desirability of our location.
While the Municipal Code permits filming at City Hall, staff had concerns initially due to unknown
impact of filming at City Hall in contrast to the current daily location fee of two thousand dollars
($2,000).
After much consideration and discussion within staff, it was determined that given the disruption, and
displacement of staff and operations that five thousand dollars ($5,000) per day would be a more
appropriate fee, regardless of whether it's a prep, wrap -up /strike, or shoot day. The five thousand dollar
($5,000) per day fee would cover our location fee, custodial, disruption and displacement costs, etc.
The City's ESMC, Title 4, Chapter 11, Section 4 states the following:
4 -11 -4: ADDITIONAL AGREEMENTS:
In addition to, or in lieu of, a permit required by this chapter, use of any public
facility within the city may require a rental or use agreement. (Ord. 1424, 10 -7 -1008)
As per ESMC 4 -11 -4 above, the City will enter into a license agreement approved as to form by the City
Attorney with Warner Bros. Pictures — New Line Productions, Inc. to film at City Hall for a location fee
of five thousand ($5,000) per day.
Staff recommends that Council receive and file this report regarding entering into a license agreement
with Warner Bros.
2) Request for Waiver of Filming Hours
Warner Bros. proposes to use City Hall for 11 days in a span of two and a half weeks. Please see
Attachment 2 for calendar of days with description of activities and Attachment 3 for film permit and
location fee — summary of cost estimates.
Five of the 11 days are shoot days while the remaining six are prep and wrap -up /strike days. Two of the
five shoot days will be mostly of the Council Executive Assistant's and the City Manager Intern's
workstation areas, City Hall's hallways /corridors, and one short scene will be shot in the courtyard area
by the Police Department steps.
Staff asked if the two shoot days of said areas could take place after City Hall hours and weekends so as
to have the least impact on City staff and operations. As it turns out, it works well for Warner Bros.
because the scenes to be filmed on said two days are mostly night scenes.
311
The City's Municipal Code, Title 4, Chapter 11, Section 23 states the following:
4- 11 -23: GENERAL PERMIT CONDITIONS; ADDITIONAL REQUIREMENTS:
E. All filming and ancillary activities must commence not earlier than seven
o'clock (7:00) A.M. and cease not later than ten o'clock (10:00) P.M. Filming and ancillary
activities east of Sepulveda Boulevard and south of El Segundo Boulevard must commence
and cease at the times indicated by a valid permit, except for filming and ancillary activities
occurring within two hundred seventy five (275') of hotels which must commence not
earlier than seven o'clock (7:00) A.M. and cease at ten o'clock (10:00) P.M.
Therefore, hence this request of Council's approval to authorize filming and ancillary activities to
commence beyond the municipal code's ordinance of 10:00 p.m. on Thursday, October 8, 2015 until
4:00 a.m. on Friday, October 9, 2015 and 10:00 p.m. on Friday, October 9, 2015 until to 6:00 a.m. on
Saturday, October 10, 2015. (While one shoot day would be when City Hall is closed, the film union
requires a 12 hour break between shoots hence another similar shoot schedule on the second shoot day.)
If Council approves the exception to ESMC 4- 11 -23, E., staff will include language in the license
agreement in addition and film permit that requires steps be taken to minimize outdoor noise and
require that a city appointed film monitor be onsite during these hours in order to minimize impact on
neighboring properties.
If Council does not approve to the extended hours, staff will go back and negotiate a revised schedule
with Warner Bros.
312
313
LICENSE AGREEMENT BETWEEN THE
CITY OF EL SEGUNDO AND
WARNER BROS. PICTURES — NEW LINE PRODUCTIONS, INC.
THIS LICENSE is made and executed this 1 day of , 20_, between the CITY
OF EL SEGUNDO, a municipal corporation ( "CITY "), and , a California nonprofit
corporation ( "LICENSEE ").
1. LICENSE; DESCRIPTION OF PROPERTY. CITY licenses LICENSEE to use, on the
terms and conditions in this License, real property located at _[INSERT ADDRESS]
( "Property "). CITY's action is not, and should not be construed to be, a conveyance of a
property interest or a lease; it is a license to use property only.
2. USE OF PROPERTY.
A. LICENSEE may temporarily use the Property for the purposes of
B. CITY may change, amend, or terminate LICENSEE's use of Property at any time,
and in its sole discretion, verbally or in writing.
3. TERM. Except as provided in Section 4, the term of this license will begin on ,
20 and end on , 20 . Upon mutual written agreement between the parties, this
License may be renewed for additional time.
4. TERMINATION.
A. As stated above, CITY may terminate this License at any time with or without
cause, upon written or verbal notification. Termination will be effective upon
notification, unless CITY specifies otherwise.
B. LICENSEE may terminate this License at any time in writing at least five (5) days
before the effective termination date.
C. By executing this document, LICENSEE waives any and all claims for damages
that might otherwise arise from CITY's termination under this Section.
D. Upon termination, LICENSEE will remove all personal property and
improvements from Property within two (2) days. Property will be left in a clean
and orderly fashion.
5. COMPENSATION. In exchange for the use of the facilities at Property, LICENSEE agrees
to pay CITY a sum of dollar ($ ) for the term of this License.
Page 1 of 6
314
6. CONDEMNATION. If all or part of Property is acquired by eminent domain or purchase in
lieu thereof, LICENSEE acknowledges that it will have no claim to any compensation awarded
for the taking of Property or any portion thereof or for loss of or damage to LICENSEE's
improvements.
7. RELOCATION BENEFITS. LICENSEE acknowledges that it has been informed that
CITY is a public entity and that Property was previously acquired by CITY for a public purpose.
LICENSEE further acknowledges that any rights acquired under this License arose after the date
of acquisition of Property and that said rights are subject to termination when Property is needed
by CITY. LICENSEE hereby acknowledges that at the time of said termination of this License
by CITY, it will not be a "displaced person" entitled to any of the relocation assistance or
benefits offered to displaced persons under State or Federal law.
8. ALTERATIONS. LICENSEE will not make, or cause to be made, any alterations to
Property, or any part thereof, without CITY's prior written consent.
9. HAZARDOUS /TOXIC WASTE. CITY has not, nor, to CITY's knowledge, has any third
party used, generated, stored or disposed of, or permitted the use, generation, storage or disposal
of, any Hazardous Material (as defined below) on, under, about or within Property in violation of
any law or regulation. LICENSEE agrees that it will not use, generate, store or dispose of any
Hazardous Material (as defined below) on, under, about or within Property in violation of any
law or regulation. LICENSEE agrees to defend and indemnify CITY, to the extent stated in
Section 12, against any and all losses, liabilities, claims or costs arising from any breach of any
warranty or agreement contained in this Section. As used in this Section, "Hazardous Material"
means any substance, chemical or waste that is identified as hazardous, toxic or dangerous in any
applicable federal, state or local law or regulation (including petroleum and asbestos).
10. SIGNS. LICENSEE will not place any sign upon Property without CITY's prior written
consent. LICENSEE will pay for all costs of any approved signage and comply with all
applicable sign codes and ordinances.
11. ASSIGNMENT. LICENSEE will not be permitted to assign this License or any interest
therein.
12. INDEMNIFICATION.
A. LICENSEE will hold CITY harmless and free from any and all liability
arising out of this License, or its performance, except for such loss or damage
arising from CITY's sole negligence or willful misconduct. Should CITY be
named in any suit, or should any claim be against it, by suit or otherwise,
whether the same be groundless or not, arising out of this License, or its
performance, pursuant to this License, LICENSEE will defend CITY (at
CITY's request and with counsel satisfactory to CITY) and will indemnify it
for any judgment rendered against it or any sums paid out in settlement or
otherwise.
Page 2 of 6
315
License and such other evidence of insurance or copies of policies as may be
reasonably required by CITY from time to time. Insurance must be placed with
insurers with a current A.M. Best Company Rating equivalent to at least a Rating
of "A:VII." Certificate(s) must reflect that the insurer will provide thirty (30) day
notice of any cancellation of coverage. CONTRACTOR will require its insurer to
modify such certificates to delete any exculpatory wording stating that failure of
the insurer to mail written notice of cancellation imposes no obligation, and to
delete the word "endeavor" with regard to any notice provisions.
D. Should LICENSEE, for any reason, fail to obtain and maintain the insurance
required by this License, CITY may obtain such coverage at LICENSEE's
expense and charge the cost of such insurance to LICENSEE under this License
or terminate pursuant to Section 4.
14. COMPLIANCE WITH LAW. LICENSEE will, at its sole cost and expense, comply with
all of the requirements of all federal, state, and local authorities now in force, or which may
hereafter be in force, pertaining to Property and will faithfully observe in the use of Property all
applicable laws. The judgment of any court of competent jurisdiction, or the admission of
LICENSEE in any action or proceeding against LICENSEE, whether CITY be a party thereto or
not, that LICENSEE has violated any such ordinance or statute in the use of Property will be
conclusive of that fact as between CITY and LICENSEE.
15. BREACH OF AGREEMENT. The violation of any of the provisions of this License will
constitute a breach of this License by LICENSEE, and in such event said License will
automatically cease and terminate.
16. WAIVER OF BREACH. Any express or implied waiver of a breach of any term of this
License will not constitute a waiver of any further breach of the same or other term of this
License.
17. ENTRY BY CITY AND PUBLIC. This License does not convey any property interest to
LICENSEE. Except for areas restricted because of safety concerns, CITY and the general public
will have unrestricted access upon Property for all lawful acts.
18. INSOLVENCY; RECEIVER. Either the appointment of a receiver to take possession of all
or substantially all of the assets of LICENSEE, or a general assignment by the LICENSEE for
the benefit of creditors, or any action taken or offered by LICENSEE under any insolvency or
bankruptcy action, will constitute a breach of this License by LICENSEE, and in such event said
License will automatically cease and terminate.
19. NOTICES. Except as otherwise expressly provided by law, all notices or other
communications required or permitted by this License or by law to be served on or given to
either party to this License by the other party will be in writing and will be deemed served when
personally delivered to the party to whom they are directed, or in lieu of the personal service,
Page 4 of 6
316
upon deposit in the United States Mail, certified or registered mail, return receipt requested,
postage prepaid, addressed to LICENSEE at:
or to CITY at:
Either party may change its address for the purpose of this Section by giving written
notice of the change to the other party.
20. ACCEPTANCE OF FACSIMILE SIGNATURES. The Parties agree that agreements
ancillary to this License and related documents to be entered into in connection with this License
will be considered signed when the signature of a party is delivered by facsimile transmission.
Such facsimile signature will be treated in all respects as having the same effect as an original
signature.
21. GOVERNING LAW. This License has been made in and will be construed in accordance
with the laws of the State of California and exclusive venue for any action involving this License
will be in Los Angeles County.
22. PARTIAL INVALIDITY. Should any provision of this License be held by a court of
competent jurisdiction to be either invalid or unenforceable, the remaining provisions of this
License will remain in effect, unimpaired by the holding.
23. ENTIRE AGREEMENT. This instrument and its Attachments constitute the sole
agreement between CITY and LICENSEE respecting Property, the use of Property by
LICENSEE, and the specified License term, and correctly sets forth the obligations of CITY and
LICENSEE. Any agreement or representations respecting Property or its licensing by CITY to
LICENSEE not expressly set forth in this instrument are void.
24. CONSTRUCTION. The language of each part of this License will be construed simply and
according to its fair meaning, and this License will never be construed either for or against either
party.
25. AUTHORITY/MODIFICATION. The Parties represent and warrant that all necessary
action has been taken by the Parties to authorize the undersigned to execute this License and to
Page 5 of 6
317
engage in the actions described herein. This License may be modified by written agreement.
CITY's city manager, or designee, may execute any such amendment on behalf of CITY.
26. COUNTERPARTS. This License may be executed in any number or counterparts, each of
which will be an original, but all of which together will constitute one instrument executed on
the same date.
IN WITNESS WHEREOF the parties hereto have executed this contract the day and year
first hereinabove written.
CITY OF EL SEGUNDO
Greg Carpenter,
City Manager
ATTEST:
Taxpayer ID No,
Tracy Weaver,
City Clerk
APPROVED AS TO FORM:
MARK D. HENSLEY, City Attorney
Lo
Karl H. Berger, Assistant City Attorney
Page 6 of 6
M
OCTOBER'?.015 WAR at ER BROS
CITY HALLMING PERIOD OCTOBER
5
MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SAT /SUN
1 2 3 / /1.
R
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319
J
6 (7:.im aline)
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CM's Intern Work
CM's Intern Work
Station Areas
Station Areas
SHOOT DAY
SHOOT DAY -
CC/CM Work Areas
CC /CM Work Areas
+ Police Dept Steps
+ PREP - Chambers
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CITY COUNCIL MTG
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COMMISSION MTG
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15(7,mi inlnn)
16(7mu 101)...
17/18
RESTORE -
PREP - Chambers
Work Station n Areas
PREP - Hallways
PREP - Chambers
PREP - Hallways
SHOOT DAY -
SHOOT DAY -
SHOOT DAY -
Council Chambers
Council Chambers
Hallways
�
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-
26
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WARNER BROTHERS - THE HOUSE
COST ESTIMATES
TO FILM AT THE CITY OF EL SEGUNDO
321
FILM PERMIT
QTY
DAYS
Total
- - - -
•
-
,Permit Ap
Daily Film ;
• •
lice Personnel (IF Higher
nking, Hourly is Higher.)
Slice Vehicle
I e Personnel {(F Higher
eking, Hourly is Higher.)
Me Vehicle
e for Public Right - of -Wa;
.age
Str
Holly St (Main &
Main St (Holly & Grand)
Exec Staff •
Richmond St (Non-City Hall
�
..
P
e Inspection (Spot Check
termincd by Fire
Uri, / Personnel.]
LOCATION
FEE
4
DAYS
Total
City Hall (Council Chambers,
CM /CC's Foyer Office,
Corridor by CM /CC's Office,
Steps to Police Dept.) - FLAT
FEE (Location + Dislocation
Fee + Custodial Fee, etc.)
TOTAL
82,736
321
322
EL SEGUNDO CITY COUNCIL MEETING DATE: September 15, 2015
AGENDA ITEM STATEMENT AGENDA HEADING: Consent Agenda
AGENDA DESCRIPTION:
Consideration and possible action regarding a request from the El Segundo Kiwanis Club to operate
a Beer Garden on public right of way at the 39th Annual Richmond Street Fair on Saturday,
September 26, 2015 from 11:00 am — 5:00 pm. (Fiscal Impact: None)
RECOMMENDED COUNCIL ACTION:
1. Approve the request from the El Segundo Kiwanis Club to operate a Beer Garden on public
right of way at the 30 Annual Richmond Street Fair on Saturday, September 26, 2015 from
11:00 am— 5:00 pm, subject to compliance with all Alcohol Beverage Commission regulations
and permits;
2. Alternatively, discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
1. Request letter from Kiwanis Club
FISCAL IMPACT: None
Amount Budgeted: $0
Additional Appropriation: N/A
Account Number(s): N/A
PREPARED BY: Jackie Day, Administrative Specialist -, 'v
REVIEWED BY: Meredith Petit, Recreation & P s Director
APPROVED BY: Greg Carpenter, City Manager
BACKGROUND & DISCUSSION:
The El Segundo Kiwanis Club is sponsoring the 39th Annual Richmond Street Fair to be held on
Richmond Street between Holly Avenue and El Segundo Boulevard, Grand Avenue between Main
Street and Concord Street, and on portions of Franklin Avenue on Saturday, September 26, 2015. A
request has been submitted by the El Segundo Kiwanis Club to operate a Beer Garden at the Fair from
11:00 a.m. — 5:00 p.m.
The El Segundo Kiwanis Club is experienced in operating Beer Gardens at local special events,
including the Hometown and Richmond Street Fairs, and the club has a proven track record in
upholding state Alcoholic Beverage Commission regulations. The Beer Garden is a significant
fundraising component for the event.
The Beer Garden for this event was held on private property for the last two years. This year, the
Kiwanis Club has modified the layout of the event to have the Beer Garden on the public right of way,
therefore requiring the approval of City Council. The proposed Beer Garden will be located south of
Grand Avenue, on the east side of Richmond Street, between Sunset Carpet One and George's
Barbershop.
323
324
Aug 31 15 04:52p
5624986048 p.1
El Segundo Kiwanis Club, P.O. Box 392, El Segundo, CA 90245
August 31, 2015
City of El Segundo
350 Main Street
El Segundo, CA 90245
Honorable Mayor and Members of the City Council:
On September 26, 2015, our El Segundo Kiwanis Club will be presenting the 39th
Annual Richmond Street Fair.
We would like to request permission that our beer garden be able to be on public
property. It would be located on Richmond Street just South of Grand behind Sunset
Carpet and just North of George's Barber Shop. The hours of operation would be from
11am until 5pm.
Thank you for your consideration.
Best Regards,
Lee Ostendorf
Fair Director
El Segundo Kiwanis
325
326
EL SEGUNDO CITY COUNCIL MEETING DATE: September 15, 2015
AGENDA STATEMENT AGENDA HEADING: Consent Agenda
AGENDA DESCRIPTION:
Consideration and possible action regarding a thirty (30) day provisional appointment
extension for the position of Interim Deputy City Clerk II in the City Clerk's office.
(Fiscal Impact: $)
RECOMMENDED COUNCIL ACTION:
1. Approve the thirty (30) day provisional appointment extension for the position of
Interim Deputy City Clerk II;
2. Alternatively, discuss and take other actions related to this item.
ATTACHED SUPPORTING DOCUMENTS:
El Segundo City Code Section 1 -6 -13
FISCAL IMPACT: $
Amount Budgeted: None
Additional Appropriation: N/A
Account Number(s):
ORIGINATED BY: Tracy Weaver, City Clerk'"
REVIEWED BY: Tracy Weaver, City Clerl .
APPROVED BY: Greg Carpenter, City Manager-
BACKGROUND AND DISCUSSION:
The City Clerk's office is requesting a 30 day extension for the interim position of Deputy City
Clerk II. Mona Shilling has been acting Deputy City Clerk II since January 2015 due to the
retirement of Cathy Domann, who held the position for over 13 years. The position requires the
Deputy City Clerk II to be a Certified Municipal Clerk, a designation Ms. Shilling is expected to
receive in the latter part of September 2015. In order to allow Ms. Shilling to be eligible to
compete in the selection process for Deputy City Clerk 11, the Clerk's office is requesting an
extension for the position of Interim Deputy City Clerk II.
In accordance with El Segundo City Code (ESCC) Section 1- 6- 13(c), no person shall be
employed by the City under provisional appointment for more than six (6) months in any fiscal
year. The Code further states the provisional appointment may be extended for not more than
thirty (30) days with Council approval. Staff is requesting a thirty (30) day extension through
August 4, 2015. It is the Clerk's Office intent to request additional thirty (30) day extensions
through the remainder of the fiscal year to comply with ESCC Section 1- 6- 13(c).
327
i
EL SEGUNDO CITY COUNCIL MEETING DATE: September 15, 2015
AGENDA STATEMENT AGENDA HEADING: Consent Agenda
AGENDA DESCRIPTION:
Consideration and possible action regarding approval of 1) a revised Class Specification for the
classification of Revenue Manager (formerly Business Services Manager), and 2) examination
plans for Revenue Manager, Purchasing Agent, and License Permit Specialist I /II and 3) adoption
of a Resolution establishing the new classification title and salary for Revenue Manager. Fiscal
Impact: None.
RECOMMENDED COUNCIL ACTION:
1. Approve the proposed Class Specification for Revenue Manager
2. Approve the proposed examination plans.
3. Adopt the Resolution establishing the salary and class title for Revenue Manager
4. Alternatively, discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
1. Revenue Manager Class Specification.
FISCAL IMPACT: Included in the Adopted Budget
Amount Budgeted: $ N/A
Additional Appropriation: N/A
Account Number(s):
ORIGINATED BY: Martha A. Dia stra, Human Resources Director
REVIEWED BY: Martha A. Dijkstra, Human Resources Director
APPROVED BY: Greg Carpenter, City Manager,
BACKGROUND AND DISCUSSION:
In anticipation of the recruitment, testing and selection process to fill vacancies in the Finance and
Planning & Building Safety Departments, staff has determined the need to revise the Business
License Manager class specification and request approval of examination plans for License /Permit
Specialist I /II, Purchasing Agent, and Revenue Manager (formerly titled Business Services
Manager). Staff also requests adoption of the Resolution to recognize the title change from
Business Services Manager to Revenue Manager and establish the salary range associated with the
new title. It should be noted that there are no changes to the salary range for this position.
The Business Services Manager classification has not been revised since September 2000. The
long -time incumbent is scheduled to retire later this month so in preparation for this recruitment,
staff has reviewed the class specification and made the changes necessary to more accurately reflect
the responsibilities, scope, and nature of the position. Revisions include changing the title from
Business Services Manager to Revenue Manager and updating the essential job functions to include_
revenue management responsibilities, which were omitted from the original version. 1
329
Examination Plans
License Permit Specialist 1111 _
- Written Test (Pass /Fail)
- Structured Interview
2. Purchasing Aunt
- Structured Interview
3. Revenue Mana er
- Structured Interview
Open- Competitive
Closed - Promotional
100%
Open- Competitive
Closed - Promotional
100%
Open- Competitive
Closed - Promotional
100%
Approval of exam plans for Merit System job classifications in all City Departments has been
required since the passage of Initiative Ordinance No. 586 in April 1962.
For departments other than Police and Fire, the plan may consist of any one or combination of the
following techniques:
1. Written;
2. Oral;
Demonstration; and
4. Any evaluation of education, experience, or skills or physical fitness, which fairly
evaluated the relative capacities of the applicants.
Police and Fire Departments:
The examination plan, for entrance or promotional, for the Police and Fire Departments, shall
consist of a written examination and one or more of the following:
1. Oral;
2. Demonstration; and
3. Any evaluation of education certification, experience, or skills or any test of manual
skills or physical fitness, which fairly evaluates the relative capacities of the applicant.
330
RESOLUTION NO.
A RESOLUTION ESTABLISHING A BASIC MONTHLY
SALARY FOR THE JOB CLASSIFICATION OF REVENUE
MANAGER
The City Council of the City of El Segundo does resolve as follows:
Section 1: The City Council approves the following basic monthly salary range:
Step A Step B Step C Step D Step E
Revenue Manager
Range 5 1 M $7983.79 $8382.98 $8802.13 $9242.24 $9704.35
Section 2: The City Clerk is directed to certify the adoption of this Resolution; record this
Resolution in the book of the City's resolutions; and make a minute of the adoption of the
Resolution in the City Council's records and the minutes of this meeting.
Section 3: This Resolution will become effective immediately upon adoption and will remain
effective unless repealed or superseded.
PASSED AND ADOPTED this 15th day of _ September , 2015.
Suzanne Fuentes,
Mayor
331
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS
CITY OF EL SEGUNDO )
I, Tracy Weaver, City Clerk of the City of El Segundo, California, do hereby certify that the whole
number of members of the City Council of said City is five; that the foregoing Resolution No.
was duly passed and adopted by said City Council, approved and signed by the Mayor, and
attested to by the City Clerk, all at a regular meeting of said Council held on the 15th day of
September, 2015, and the same was so passed and adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
NOT PARTICIPATING:
WITNESS MY HAND THE OFFICIAL SEAL OF SAID CITY this day of
, 2015.
Tracy Weaver, City Clerk
of the City of El Segundo,
California
(SEAL)
APPROVED AS TO FORM:
Mark D. Hensley, City Attorney
By:
Karl H. Berger
Assistant City Attorney
332
City of El Segundo, CA Job Description
,, ... ........... ..... Deleted: Job Code: 325¶
- REVENUE,MANAGER Deleted: BUSINESS
Deleted: SERVICES
Definition: Under general supervision, plans, manages and coordinates the revenue and
business license functions yvithin_ t_he_ Finance Department and provides highly responsible and _.__- Deleted: day -to -day operations of a variety of business
complex mannement support to the Finance uniitor, ______________ services activities
Deleted: .
Essential Functions: Essential functions, as defined under the Americans with Disabilities Act,
may include the following duties and responsibilities, knowledge, skills and other characteristics.
This list of duties and responsibilities is ILLUSTRATIVE ONLY, and is not a comprehensive
listing of all functions and tasks performed by positions in this class.
Characteristic Duties and Responsibilities:
Plans and manages the work of various business services functions involving billing and
collecting revenues associated with the City's business license tax and film permits; coordinates
bringing delinquent business license accounts into compliance and making payment
arrangements with businesses where appropriate; enforces applicable municipal codes;; f Deleted: oversees the purchasing of equipment,
coordinates the administration of business services contracts; oversees—all bankruptcies and supplies and services and the disposal of surplus
general city collections for the City, Supervises and /or coordinates the processing of film permit property for the City
applications to ensure all details of the event are Identified and applications are properly Deleted:
processed in accordance with the City's Ordinance_ _ . _ Deleted: s.
Manages and monitors a variety of revenue sources far the City including business tax, utility
users' tax transient occupangy occupancy tax, sales tax franchise fees and roe ax s• participates in
fiscal year -end activities including reconeiliattonga_nd year-end accruals.
,Participates in_ the _p_lanning,_ _direction __ and _ coordination _of__business services _ activities_ and _ -. Deleted:¶
services within the Finance Department, recommending and developing technical and 4
operational procedures and systems, and policy and procedures according to applicable laws,
ordinances, rules and regulations; conducts special projects for the Department as assigned.
Resolves business services- related discrepancies or procedural problems and responds to
program procedural and /or delivery questions ensuring necessary follow -up occurs; controls
program records for operational and budget accountability; confers with and advises staff and
program participants by providing advice, problem solving assistance, answers to questions and
interpretation of program goals and policy.
Works with the Qtv's independent auditors and other City departments to. ensure effective
internal controls over revenue management: maintains a current and thoroucth working
knowledge of State and local laws and procedures regarding municipal revenue sources
including business taxes: accurately Interprets and applies such laws and implement policies
and procedures to assure compliance with such laws.
Recruits, schedules, assigns, monitors and evaluates staff; provides for and /or conducts staff
development; establishes work methods and standards; initiates corrective and /or disciplinary
(continued on reverse sidet. „ , • _ .... • . 090 ,°
Deleted: PSPC
Deleted: 00
333
e'ueaaue,Manager_. .- LDeleted:Business
Deleted: Services
action and responds to grievances and complaints according to established personnel policies
and procedures and in consultation with Human Resources.
Knowledcte, Skills and Other Charac eristies:
Knowledge of fiscal operations. revenue management. and _generally_ accepted_ accounting, Deleted:
principles and practices. Deleted: /purchasing
Knowledge of laws and regulatlons related to the management. control, and reporting of
municlpal revenue
Knowledge of automated business computing systems.
Knowledge of the principles and practices of effective supervision.
Knowledge of project management principles and practices.
Knowledge, Skills and Other Characteristics (Continued):
Skill in program implementation, management and evaluation.
Skill in preparing complex financial and statistical reports.
Skill in supervising, developing, motivating and evaluating staff.
Skill in the use of personal computers and applicable office and financial related software.
Skill in conducting research and preparing clear, concise and comprehensive reports.
Skill in understanding and applying complex regulations, procedures and guidelines.
Skill in communicating effectively orally and in writing.
Skill in working under pressure, handling day -to -day operational problems and tasks that arise
simultaneously and /or unexpectedly.
Skill in establishing and maintaining effective working relationships with staff, other City
employees, and the public.
Quafifications:
Bachelor's degree in Accounting, Business Administration, Finance or a directly related field;
and three (3) years of progressively responsible municipal financial operations experience such
as revenue management. budgeting, auditing or fEnaneial anal sis 'ncluding one __(I)_ye_ar_of _- Deleted: and /or purchasing experience
project management or supervisory experience; or an equivalent combination of education and
experience.
Deleted: PSPC
Deleted: I
Deleted: 00
Z 5 .
334
EL SEGUNDO CITY COUNCIL MEETING DATE: September 15, 2015
AGENDA STATEMENT AGENDA HEADING: Consent Agenda
AGENDA DESCRIPTION:
Consideration and possible action to authorize the City Manager, or designee, to record the
Notice of Completion accepting completion of work for forty -two (42) homes related to Project
RSI 14 -18 (the City's Residential Sound Insulation Program's Group 61).
(Final Contract Amount: $797,676.82)
RECOMMENDED COUNCIL ACTION:
1. Authorize the City Clerk to file the City Manager's, or designee's, Notice of Completion in
the County Recorder's Office;
2. Authorize the City Manager, or designee, to close out Project No. RSI 14 -18;
3. Authorize the RSI Program Manager to sign the Title 21 Compliance Certificates in
accordance with the requirements of the grant funding from Los Angeles World Airports
(LAWA) and mail originals to LAWA; and /or
4. Alternatively discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
Notice of Completion
List of homes included in Group 61 (Exhibit A to the Notice of Completion)
Sample of Title 21 Compliance Certificate
Sample of cover letter to property owners for Title 21 Compliance Certificates
FISCAL IMPACT: Included in Adopted Budget
Amount Budgeted: $823,860
Additional Appropriation: N/A
Account Number(s): 116- 400 - 0061 -8960
ORIGINATED BY: James S. O'Neill, Program Manage
REVIEWED BY: Sam Lee, Director of Planning a uilding Safety
APPROVED BY: Greg Carpenter, City Manager r '
BACKGROUND AND DISCUSSION:
The RSI Program offers modifications to owners of qualifying residential property in the City of
El Segundo that reduce interior sound levels of noise generated by air traffic from neighboring
Los Angeles International Airport (LAX).
At its meeting October 21, 2014 the City Council awarded a construction contract to Spec
Construction Co. Inc. for the construction of improvements at Forty -two (23) homes, commonly
referred to as Group 61 of the RSI Program. 1 1
Work at the forty -two (42) homes has now been completed. The final contract amount is
$797,676.82.
335
The Letter Agreement between the City of El Segundo and Los Angeles World Airports
(LAWA), which outlines City obligations with regards to grant funds received from LAWA,
states,
"The City of El Segundo will issue a Title 21 Compliance Certificate for each
eligible incompatible property that it sound insulates with LAWA and/or FAA
funds... "
With sound insulation work now complete, a Title 21 Compliance Certificate would be required
for these forty -two (42) homes.
336
Recording Requested by
and When Recorded Mail To:
City Clerk, City Hall
350 Main Street
El Segundo, CA 90245
NOTICE OF COMPLETION OF CONSTRUCTION PROJECT
Project Name: Residential Sound Insulation Program — Group 61
Project No.: RSI 14 -18
Notice is given pursuant to California Civil Code §§ 3093, et seq. that:
1. The undersigned is an officer of the owner of interest of the property described below.
2. The project owner's name is: City of El Segundo
3. The full addresses of the project are: attached as Exhibit A and incorporated by reference
4. A work of improvement on the property hereinafter described was field reviewed by City representatives
on: see attached Exhibit A
5. The work done was: Residential Sound Insulation Program Improvements
6. On September 8, 2015, City Council of the City of El Segundo accepted the work of this contract as being
complete and directed the recording of this Notice of Completion in the Office of the County Recorder.
7. The name of the Contractor for such work of improvement was: Spec Construction Co., Inc.
8. The property on which said work of improvement was completed is in the City of El Segundo, County of
Los Angeles, State of California, and is described as follows: Private Residence(s) listed in Exhibit A
9. The street address of said properties are: set forth in Exhibit A
Dated
Sam Lee
Planning and Building Safety Director
VERIFICATION
I, the undersigned, say: I am the Director of Planning and Building Safety of the City El Segundo, the
declarant of the foregoing Notice of Completion; I have read said Notice of Completion and know the
contents thereof; the same is true of my own knowledge.
I declare under penalty of perjury the foregoing is true and correct.
Executed on _ at El Segundo, California
Sam Lee
Planning and Building Safety Director
Notice of Completion
337
i
Exhibit A
RSI Number
Project Address
61.01
732 West Imperial Avenue, Unit 1
61.02
732 West Imperial Avenue, Unit 2
61.03
732 West Imperial Avenue, Unit 3
61.04
732 West Imperial Avenue, Unit 4
61.05
732 West Imperial Avenue, Unit 5
61.06
732 West Imperial Avenue, Unit 6
61.07
732 West Imperial Avenue, Unit 7
61.08
732 West Imperial Avenue, Unit 8
61.09
732 West Imperial Avenue, Unit 9
61.10
732 West Imperial Avenue, Unit 10
61.11
732 West Imperial Avenue, Unit 11
61.12
732 West Imperial Avenue, Unit 12
61.13
732 West Imperial Avenue, Unit 13
61.14
732 West Imperial Avenue, Unit 14
61.15
732 West Imperial Avenue, Unit 15
61.16
732 West Imperial Avenue, Unit 16
61.17
732 West Imperial Avenue, Unit 17
61.18
732 West Imperial Avenue, Unit 18
61.19
732 West Imperial Avenue, Unit 19
61.20
732 West Imperial Avenue, Unit 20
61.21
732 West Imperial Avenue, Unit 21
61.22
732 West Imperial Avenue, Unit 22
61.23
732 West Imperial Avenue, Unit 23
61.24
732 West Imperial Avenue, Unit 24
61.25
732 West Imperial Avenue, Unit 25
61.26
732 West Imperial Avenue, Unit 26
61.27
732 West Imperial Avenue, Unit 27
61.28
732 West Imperial Avenue, Unit 28
61.29
732 West Imperial Avenue, Unit 29
61.30
732 West Imperial Avenue, Unit 30
61.31
732 West Imperial Avenue, Unit 31
61.32
732 West Imperial Avenue, Unit 32
61.33
732 West Imperial Avenue, Unit 33
61.34
732 West Imperial Avenue, Unit 34
61.35
732 West Imperial Avenue, Unit 35
61.36
732 West Imperial Avenue, Unit 36
61.37
732 West Imperial Avenue, Unit 37
61.38
732 West Imperial Avenue, Unit 38
61.39
732 West Imperial Avenue, Unit 39
61.40
732 West Imperial Avenue, Unit 40
61.41
732 West Imperial Avenue, Unit 41
61.42
732 West Imperial Avenue, Unit 42
339
,J.Cl
Assessor's Parcel Number -
TO THE CITY OF LOS ANGELES
TITLE 21 COMPLIANCE CERTIFICATE
California Airport Noise Standards
Incompatible Land Use Sound Insulation Projects
Dated
This is to certify that the residential property for which a legal description, including addresses
and assessor's parcel number, are attached hereto and marked Exhibit "A" has been determined by the
City-of El Segundo ("City") to be compatible land within the noise impact boundary around Los Angeles
International Airport.
Certification of land use compatibility is based on compliance with the requirements of the
California Airport Noise Standards, set forth in California Code of Regulations, Title 21 "Division of
Aeronautics ", Subchapter 5 `Noise Standards ", Section 5014, in that either:
❑ (a) The residential structure(s) on the property has/have been sound insulated to achieve a
maximum interior Community Noise Equivalent Level of 45dB in all habitable rooms, or
❑ (b) The property owner has declined, either explicitly or through a lack of response to
inquiries, an offer to participate in a Sound Insulation Program administered by the
Implementing Jurisdiction which would have resulted in a maximum interior Cornniunity
Noise Equivalent Level of 45dB in all habitable rooms, and that the property may,
therefore, be considered compatible land pursuant to Section 5014 (a)(4). If declination
is through a lack of response, this is to also certify that the City of El Segundo provided
adequate opportunities and invitations for participation.
❑ (c) A noise easement has been filed with the County Recorder relative to the property in a
form and manner approved by the Los Angeles City Attorney.
This Title 21 Compliance Certificate shall serve as notice to the owner(s) of the property, the
California Department of Transportation, and Los Angeles World Airports that the property has been
determined to be compatible land within the noise impact boundary around the subject Airport pursuant to
Section 5014 of the California Airport Noise Standards.
A copy of this Certificate will be sent to Los Angeles World Airports by certified mail on the date
shown above. Return receipts will be made available to Los Angeles World Airports for a period of not
less than two years after that date.
This Certificate shall be filed in the City of El Segundo's City Clerk's Office, or in such other
permanent location as approved by Los Angeles World Airports, and shall continue in effect until the
subject Airport shall be abandoned and shall cease to be used for public airport purposes. Furthennore, in
the case where the owner has previously declined to participate in a sound insulation program under (b)
above, the Title 21 Compliance Certificate shall continue in effect until the owner(s) or owner's heirs,
successors or assigns subsequently participate in a Residential Sound Insulation Program and a new Title
21 Compliance Certificate is filed for the property with (a), above, indicated on the new recorded form.
Nothing herein contained shall constitute a waiver of any rights by the owner(s) of the property or
owner's heirs, successors and assigns.
Approved by:
James S. O'Neill
Program Manager
341
EXHIBIT A
Property Address:
APN:
342
Elected Officials:
Suzanne Fuentes,
Mayor
cars Jacobson,
Mayor Fro Tem
nave Atkinson,
Council Member
Marie Fellhauer,
Council Member
Michael Dugan,
Councii Member
Tracy Weaver,
City Clerk
Crista Binder,
City Treasurer
Appointed Officials:
Greg Carpenter,
City Manager
Mark 0. Hensley,
City Attomey
Department Directors:
Deborah Cullen,
Finance
Kevin Smith,
Fire Chief
Martha Dijkstra,
Human Resources
Debra Brighton,
Library Services
Sam Lae,
Planning and
Building Safely
Mitch Tavare,
Police Chief
Stephanie Katsouleas,
Public Works
Meredith Petit,
Recreation d Parks
www.elsegundo.org
Planning & Building Safety
. esi ential Sound Insulation Program
[DATE]
[PROPERTY OWNERS]
[MAILING ADDRESS]
[MAILING ADDRESS]
[CITY], [STATE] [ZIP CODE]
Dear [PROPERTY OWNER],
Attached is a copy of the Title 21 Compliance Certificate for your property at:
[PROPERTY ADDRESS], El Segundo, California 90245
You are receiving this notice because your property received Residential Sound
Insulation Improvements through the City of El Segundo's Residential Sound
Insulation (RSI) Program.
This Title 21 Compliance Certificate serves as notice that the property has been
determined to be compatible land within the noise impact boundary around Los
Angeles International Airport pursuant to Section 5014 of the California Airport Noise
Standards.
If you have any questions, please contact me at (310) 524 -2352 or via email at
ioneilRelse �lg ndo.org.
Respectfully,
James S. O'Neill
Program Manager
333 Main Street, Unit A, El Segundo, California 80245
Phone (390) 524 -2352 FAX (310) 662 -4052
343
EL SEGUNDO CITY COUNCIL
AGENDA STATEMENT
AGENDA DESCRIPTION:
MEETING DATE: September 15, 2015
AGENDA HEADING: Consent Agenda
Consideration and possible action to authorize the City Manager, or designee, to record the
Notice of Completion accepting completion of work for twenty -four (24) homes related to
Project RSI 14 -23 (the City's Residential Sound Insulation Program's Group 65).
(Final Contract Amount: $786,461.08)
RECOMMENDED COUNCIL ACTION:
1. Authorize the City Clerk to file the City Manager's, or designee's, Notice of Completion in
the County Recorder's Office;
2. Authorize the City Manager, or designee, to close out Project No. RSI 14 -23;
3. Authorize the RSI Program Manager to sign the Title 21 Compliance Certificates in
accordance with the requirements of the grant funding from Los Angeles World Airports
(LAWA) and mail originals to LAWA; and /or
4. Alternatively discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
Notice of Completion
List of homes included in Group 6 5 (Exhibit A to the Notice of Completion)
Sample of Title 21 Compliance Certificate
Sample of cover letter to property owners for Title 21 Compliance Certificates
FISCAL IMPACT: Included in Adopted Budget
Amount Budgeted: $828,685
Additional Appropriation: N/A
Account Number(s): 116 -400- 0065 -8960
ORIGINATED BY: James S. O'Neill, Program Manager
REVIEWED BY: Sam Lee, Director of Planning an wilding Safety
APPROVED BY: Greg Carpenter, City Manager
BACKGROUND AND DISCUSSION:
The RSI Program offers modifications to owners of qualifying residential property in the City of
El Segundo that reduce interior sound levels of noise generated by air traffic from neighboring
Los Angeles International Airport (LAX).
At its meeting November 18, 2014 the City Council awarded a construction contract to Spec
Construction Co. Inc. for the construction of improvements at twenty -four (24) homes,
commonly referred to as Group 65 of the RSI Program. 12
Work at the twenty -four (24) homes has now been completed. The final contract amount is
$786,461.08.
345
The Letter Agreement between the City of El Segundo and Los Angeles World Airports
(LAWA), which outlines City obligations with regards to grant funds received from LAWA,
states,
"The City of El Segundo will issue a Title 21 Compliance Certificate for each
eligible incompatible property that it sound insulates with LAWA and/or FAA
funds... "
With sound insulation work now complete, a Title 21 Compliance Certificate would be required
for these twenty -four (24) homes.
M
Recording Requested by
and When Recorded Mail To:
City Clerk, City Hall
350 Main Street
El Segundo, CA 90245
NOTICE OF COMPLETION OF CONSTRUCTION PROJECT
Project Name: Residential Sound Insulation Program - Group 65
Project No.: RSI 14 -23
Notice is given pursuant to California Civil Code §§ 3093, et seq. that:
1. The undersigned is an officer of the owner of interest of the property described below.
2. The project owner's name is: City of El Segundo
3. The full addresses of the project are: attached as Exhibit A and incorporated by reference
4. A work of improvement on the property hereinafter described was field reviewed by City representatives
on: see attached Exhibit A
5. The work done was: Residential Sound Insulation Program Improvements
6. On September 15, 2015, City Council of the City of El Segundo accepted the work of this contract as
being complete and directed the recording of this Notice of Completion in the Office of the County
Recorder.
7. The name of the Contractor for such work of improvement was: Spec Construction Co., Inc.
8. The property on which said work of improvement was completed is in the City of El Segundo, County of
Los Angeles, State of California, and is described as follows: Private Residence(s) listed in Exhibit A
9. The street address of said properties are: set forth in Exhibit A
Dated:
Sam Lee
Planning and Building Safety Director
VERIFICATION
I, the undersigned, say: I am the Director of Planning and Building Safety of the City El Segundo, the
declarant of the foregoing Notice of Completion; I have read said Notice of Completion and know the
contents thereof; the same is true of my own knowledge.
I declare under penalty of perjury the foregoing is true and correct.
Executed on ___ at El Segundo, California
Sam Lee
Planning and Building Safety Director
Notice of Completion
347
",I
Exhibit A
RSI Number
Project Address
65.01
723 West Pine Avenue
65.02
529 Richmond Street
65.03
135 West Palm Avenue, Unit 1
65.04
135 West Palm Avenue, Unit 2
65.05
135 West Palm Avenue, Unit 3
65.06
135 West Palm Avenue, Unit 4
65.07
540 Sheldon Street
65.08
510 East Mariposa Avenue
65.09
527 East Mariposa Avenue, Unit 1
65.10
527 East Mariposa Avenue, Unit 2
65.11
610 East Mariposa Avenue
65.12
719 Center Street
65.13
728 Indiana Court, Unit 1
65.14
728 Indiana Court, Unit 2
65.15
728 Indiana Street, Unit 3
65.16
728 Indiana Street, Unit 4
65.17
727 Indiana Court, Unit 1
65.18
727 Indiana Court, Unit 2
65.19
727 Indiana Street, Unit 3
65.20
727 Indiana Street, Unit 4
65.21
726 Indiana Court, Unit 1
65.22
726 Indiana Court, Unit 2
65.23
726 Indiana Court, Unit 3
65.24
726 Indiana Court, Unit 4
0
350
Assessor's Parcel Number -
TO THE CITY OF LOS ANGELES
TITLE 21 COMPLIANCE CERTIFICATE
California Airport Noise Standards
Incompatible Land Use Sound Insulation Projects
Dated
This is to certify that the residential property for which a legal description, including addresses
and assessor's parcel number, are attached hereto and marked Exhibit "A" has been determined by the
City-of El Segundo ("City") to be compatible land within the noise impact boundary around Los Angeles
International Airport.
Certification of land use compatibility is based on compliance with the requirements of the
California Airport Noise Standards, set forth in California Code of Regulations, Title 21 "Division of
Aeronautics ", Subchapter 5 `Noise Standards ", Section 5014, in that either:
❑ (a) The residential structure(s) on the property has/have been sound insulated to achieve a
maximum interior Community Noise Equivalent Level of 45dB in all habitable rooms, or
❑ (b) The property owner has declined, either explicitly or through a lack of response to
inquiries, an offer to participate in a Sound Insulation Program administered by the
Implementing Jurisdiction which would have resulted in a maximum interior Cornniunity
Noise Equivalent Level of 45dB in all habitable rooms, and that the property may,
therefore, be considered compatible land pursuant to Section 5014 (a)(4). If declination
is through a lack of response, this is to also certify that the City of El Segundo provided
adequate opportunities and invitations for participation.
❑ (c) A noise easement has been filed with the County Recorder relative to the property in a
form and manner approved by the Los Angeles City Attorney.
This Title 21 Compliance Certificate shall serve as notice to the owner(s) of the property, the
California Department of Transportation, and Los Angeles World Airports that the property has been
determined to be compatible land within the noise impact boundary around the subject Airport pursuant to
Section 5014 of the California Airport Noise Standards.
A copy of this Certificate will be sent to Los Angeles World Airports by certified mail on the date
shown above. Return receipts will be made available to Los Angeles World Airports for a period of not
less than two years after that date.
This Certificate shall be filed in the City of El Segundo's City Clerk's Office, or in such other
permanent location as approved by Los Angeles World Airports, and shall continue in effect until the
subject Airport shall be abandoned and shall cease to be used for public airport purposes. Furthennore, in
the case where the owner has previously declined to participate in a sound insulation program under (b)
above, the Title 21 Compliance Certificate shall continue in effect until the owner(s) or owner's heirs,
successors or assigns subsequently participate in a Residential Sound Insulation Program and a new Title
21 Compliance Certificate is filed for the property with (a), above, indicated on the new recorded form.
Nothing herein contained shall constitute a waiver of any rights by the owner(s) of the property or
owner's heirs, successors and assigns.
Approved by:
James S. O'Neill
Program Manager
351
EXHIBIT A
Property Address:
APN:
352
Elected Officials:
Suzanne Fuentes,
Mayor
cars Jacobson,
Mayor Fro Tem
nave Atkinson,
Council Member
Marie Fellhauer,
Council Member
Michael Dugan,
Councii Member
Tracy Weaver,
City Clerk
Crista Binder,
City Treasurer
Appointed Officials:
Greg Carpenter,
City Manager
Mark 0. Hensley,
City Attomey
Department Directors:
Deborah Cullen,
Finance
Kevin Smith,
Fire Chief
Martha Dijkstra,
Human Resources
Debra Brighton,
Library Services
Sam Lae,
Planning and
Building Safely
Mitch Tavare,
Police Chief
Stephanie Katsouleas,
Public Works
Meredith Petit,
Recreation d Parks
www.elsegundo.org
Planning & Building Safety
. esi ential Sound Insulation Program
[DATE]
[PROPERTY OWNERS]
[MAILING ADDRESS]
[MAILING ADDRESS]
[CITY], [STATE] [ZIP CODE]
Dear [PROPERTY OWNER],
Attached is a copy of the Title 21 Compliance Certificate for your property at:
[PROPERTY ADDRESS], El Segundo, California 90245
You are receiving this notice because your property received Residential Sound
Insulation Improvements through the City of El Segundo's Residential Sound
Insulation (RSI) Program.
This Title 21 Compliance Certificate serves as notice that the property has been
determined to be compatible land within the noise impact boundary around Los
Angeles International Airport pursuant to Section 5014 of the California Airport Noise
Standards.
If you have any questions, please contact me at (310) 524 -2352 or via email at
ioneilRelse �lg ndo.org.
Respectfully,
James S. O'Neill
Program Manager
333 Main Street, Unit A, El Segundo, California 80245
Phone (390) 524 -2352 FAX (310) 662 -4052
353
354
EL SEGUNDO CITY COUNCIL
AGENDA STATEMENT
AGENDA DESCRIPTION:
MEETING DATE: September 15, 2015
AGENDA HEADING: Consent Agenda
Consideration and possible action regarding adoption of a Resolution authorizing the City
Manager, or designee, to accept the Work of Projects 14 -12 (the City's Residential Sound
Insulation Program's Group 56), 14 -14 (the City's Residential Sound Insulation Program's Group
58), 14 -25 (the City's Residential Sound Insulation Program's Group 67) and 14 -26 (the City's
Residential Sound Insulation Program's Group 68) as complete, and determine the appropriate
liquidated damages to be assessed, after staff has determined that remaining tasks have been
completed by the respective contractors. (Final Contract Amounts of: $885,290, 649,488.02,
$939,885.44 and $455,397.84 respectively, less any liquidated damages determined to be
appropriate)
RECOMMENDED COUNCIL ACTION:
1. Adopt a resolution delegating authority to the City Manager to accept Work as complete,
determine liquidated damages and record notices of completion for Residential Sound
Insulation (RSI) Projects 14 -12 (Group 56), 14 -14 (Group 58), 14 -25 (Group 67) and 14 -26
(Group 68);
2. Authorize the RSI Program Manager to sign the Title 21 Compliance Certificates in
accordance with the requirements of the grant funding from Los Angeles World Airports
(LAWA) and mail originals to LAWA; and /or
3. Alternatively discuss and take other action related to this item.
ATTACHED SUPPORTING DOCUMENTS:
I. Resolution delegating authority to the City Manager to accept Work as complete, determine
liquidated damages and record notices of completion for Residential Sound Insulation (RSI)
Projects 14 -12 (Group 56), 14 -14 (Group 58), 14 -25 (Group 67) and 14 -26 (Group 68)
2. Notice of Completion for Group 56
3. Notice of Completion for Group 58
4. Notice of Completion for Group 67
5. Notice of Completion for Group 68
6. List of homes included in Group 56 (Exhibit A to the Notice of Completion)
7. List of homes included in Group 58 (Exhibit A to the Notice of Completion)
8. List of homes included in Group 67 (Exhibit A to the Notice of Completion)
9. List of homes included in Group 68 (Exhibit A to the Notice of Completion)
10. Sample of Title 21 Compliance Certificate
11. Sample of cover letter to property owners for Title 21 Compliance Certificates
FISCAL IMPACT: Included in Adopted Budget
Amount Budgeted: $973,819, $714,437, $988,383 and $496,100 respectively
Additional Appropriation: N/A
Account Number(s): 116 - 400 - 0056 -8960
116 - 400 - 0058 -8960
116- 400 - 0067 -8960
116- 400 - 0068 -8960
355
ORIGINATED BY: James S. O'Neill, Program Manager
REVIEWED BY: Sam Lee, Director of Planning an ilding Safet
APPROVED BY: Greg Carpenter, City Manager
BACKGROUND AND DISCUSSION:
The RSI Program offers modifications to owners of qualifying residential property in the City of
El Segundo that reduce interior sound levels of noise generated by air traffic from neighboring
Los Angeles International Airport (LAX).
Typically, the City Council would accept a project as complete after staff has concluded that all
known reports have been submitted and all physical work has been inspected, with no
deficiencies found by City staff. Staff is currently recommending the City Council authorize the
City Manager to accept projects as complete is based on the unique circumstance that the Federal
Aviation Administration (FAA) requires any project not complete by September 30, 2015 to
meet a set of criteria to confirm the eligibility of each Home within the project prior to its
inclusion in that project. The eligibility criteria for the homes in Groups 56, 58, 67 & 68 were
not confirmed to that standard, as the protocol to be followed in making that determination has
not been finalized, and the projects were contractually obligated to be complete well in advance
of the September 30"' deadline.
City staff believes the work defined by the subject four projects is nearly complete with the
exception of the following:
Group 56 — This project was to be completed in late February and was not. Numerous delays,
and lack of communication from the contractor has made it extremely difficult to have the
physical work completed. Ultimately, City staff has determined that the physical work is now
complete, yet required reports — including Federally required Certified Payroll, payment
applications that accurately reflect the status of work for the period of time covered by the
payment application, and Final Clearance Air Monitoring for asbestos activities — have not been
properly submitted by Harry Joh Construction. It is expected that the remaining work will not
have an impact on the final contract amount, yet associated liquidated damages will deduct from
the amount paid to Harry Joh Construction.
Group 58 — This project was to be completed in late February and was not. Numerous delays,
and lack of communication from the contractor has made it extremely difficult to have the
physical work completed. Ultimately, City staff has determined that the physical work is now
complete, with the exception of nine improperly sized windows that have not yet been replaced.
Also, like Group 56, required reports — including Federally required Certified Payroll, payment
applications that accurately reflect the status of work for the period of time covered by the
payment application, and Final Clearance Air Monitoring for asbestos activities — have not been
properly submitted by Harry Joh Construction. It is expected that the remaining work will not
have an impact on the final contract amount, yet associated liquidated damages will deduct from
the amount paid to Harry Joh Construction.
Group 67 — This project was to be completed in late June. City staff has determined that the
physical work is complete, yet required reports — including Final Clearance Air Monitoring for
asbestos activities, and potentially related Certified Payroll for such monitoring — have not been
properly submitted by Big West Construction. It is expected that the remaining work will not
356
have an impact on the final contract amount, yet associated liquidated damages will deduct from
the amount paid to Big West Construction.
Group 68 — This project was to be completed in late June. City staff has determined that the
physical work is complete, yet required reports — including Final Clearance Air Monitoring for
asbestos activities, and potentially related Certified Payroll for such monitoring — have not been
properly submitted by Big West Construction. It is expected that the remaining work will not
have an impact on the final contract amount, yet associated liquidated damages will deduct from
the amount paid to Big West Construction.
The Letter Agreement between the City of El Segundo and Los Angeles World Airports
(LAWA), which outlines City obligations with regards to grant funds received from LAWA,
states,
"The City of El Segundo will issue a Title 21 Compliance Certificate for each
eligible incompatible property that it sound insulates with LAWA and/or FAA
funds... "
With sound insulation work now complete, a Title 21 Compliance Certificate would be required
for these homes.
357
358
RESOLUTION NO.
A RESOLUTION DELEGATING AUTHORITY TO THE CITY MANAGER
TO ACCEPT WORK AS COMPLETE, DETERMINE LIQUIDATED
DAMAGES AND RECORD NOTICES OF COMPLETION FOR
RESIDENTIAL SOUND INSULATION PROGRAM PROJECTS 14-12,14-14
14 -25 AND 14 -26 (GROUPS 56, 58, 67 AND 68).
The City Council of the city of El Segundo resolves as follows:
SECTION I.- The City Council finds and declares as follows:
A. Currently, there are four projects in the City's Residential Sound Insulation
( "RSI ") Program (Projects 14 -12, 14 -14, 14 -25 and 14 -26) that are nearly
complete; these projects, commonly referred to as Groups 56, 58, 67 and 68,
consist of sound insulation work on homes throughout the City;
B. The work on the projects is funded in part by the Federal Aviation Administration
( "FAA "); the FAA requires these projects to be completed by September 30,
2015, or else the projects must meet certain additional criteria before the FAA
will fund the projects. For this reason, it is in the public interest for the City to
accept these projects as complete as expeditiously as is practical in order to limit
the City's exposure to any additional liabilities;
C. In order to meet the September 30, 2015, deadline, the City Council desires to
authorize and direct the City Manager to accept the work for Groups 56, 58, 67
and 68, as complete, upon staff's determination that the remaining tasks for each
Group have been completed, and also desires to authorize the City Manager to
determine the appropriate liquidated damages to be assessed for delays related to
each of these groups, and to authorize the City Manager to execute Notices of
Completion ( "NOC ") for each of these groups, as necessary;
D. The City Council believes that delegating the ministerial task of recording NOCs
for RSI Groups 56, 58, 67 and 68 to the City Manager will help ensure that such
notices are recorded promptly and avoid unnecessary delays.
SECTION 2: The City Manager is authorized to accept the Work on RSI
Projects 14 -12, 14 -14, 14 -25 and 14 -26 (Groups 56, 58, 67 and 68, respectively) as
complete, upon staff's determination that the remaining tasks for each group have
been completed. The City Manager is further authorized to determine the appropriate
liquidated damages to be assessed for each of these projects, and is authorized to
record notices of completion, in a form approved by the City Attorney, pursuant to
Civil Code § 9204.
SECTION 3: The City Manager is directed to inform the City Council regarding
the recordation of a notice of completion for each of these Groups as soon as
359
practicable but not later than thirty (30) days after such recordation. Failure to inform
the City Council within this time period will not invalidate the notice of completion.
SECTION 4: This Resolution will become effective immediately upon adoption.
PASSED AND ADOPTED this _ day of September, 2015
Suzanne Fuentes, Mayor
ATTEST:
Tracy Weaver, City Clerk
APPROVED AS TO FORM:
Mark D. Hensley, City Attorney
360
Recording Requested by
and When Recorded Mail To:
City Clerk, City Hall
350 Main Street
El Segundo, CA 90245
NOTICE OF COMPLETION OF CONSTRUCTION PROJECT
Project Name: Residential Sound Insulation Program — Group 56
Project No.: RSI 14 -12
Notice is given pursuant to California Civil Code §§ 3093, et seq. that:
1. The undersigned is an officer of the owner of interest of the property described below.
2. The project owner's name is: City of El Segundo
3. The full addresses of the project are: attached as Exhibit A and incorporated by reference
4. A work of improvement on the property hereinafter described was field reviewed by City representatives
on: see attached Exhibit A
5. The work done was: Residential Sound Insulation Program Improvements
6. On , 2015, the City Manager for the City of El Segundo accepted the work of this
contract as being complete and authorized the recording of this Notice of Completion in the Office of the
County Recorder.
7. The name of the Contractor for such work of improvement was: Harry H. Joh Construction, Inc.
8. The property on which said work of improvement was completed is in the City of El Segundo, County of
Los Angeles, State of California, and is described as follows: Private Residence(s) listed in Exhibit A
9. The street address of said properties are: set forth in Exhibit A
Dated:
Sam Lee
Planning and Building Safety Director
VERIFICATION
I, the undersigned, say: I am the Director of Planning and Building Safety of the City El Segundo, the
declarant of the foregoing Notice of Completion; I have read said Notice of Completion and know the
contents thereof; the same is true of my own knowledge.
I declare under penalty of perjury the foregoing is true and correct.
Executed on at El Segundo, California
Sam Lee
Planning and Building Safety Director
Notice of Completion
361
Exhibit A
RSI Number
Project Address
56.01
121 West Palm Ave., #1
56.02
123 West Palm Ave., #2
56.03
515 Hillcrest Street
56.04
503 Hillcrest Street
56.05
435 Valley Street
56.06
513 Whiting Street
56.07
219 W. Pine Avenue
56.08
436 Standard Street, Unit A
56.09
436 Standard Street, Unit B
56.10
211 E. Pine Avenue
56.11
540 Eucalyptus Drive
56.12
321 East Oak Avenue
56.13
323 East Oak Avenue
56.14
750 Sheldon Street
56.15
712 Penn Street
56.16
763 Sierra Street
56.17
630 Bungalow Drive
56.18
618 Bungalow Drive
56.19
1212 E. Maple Avenue
56.20
1437 E. Maple Avenue
56.21
1510 E. Maple Ave
56.22
721 Indiana Court, Unit 01
56.23
721 Indiana Court, Unit 02
56.24
721 Indiana Court, Unit 03
56.25
721 Indiana Court, Unit 04
362
Recording Requested by
and When Recorded Mail To:
City Clerk, City Hall
350 Main Street
El Segundo, CA 90245
NOTICE OF COMPLETION OF CONSTRUCTION PROJECT
Project Name: Residential Sound Insulation Program — Group 58
Project No.: RSI 14 -14
Notice is given pursuant to California Civil Code §§ 3093, et seq. that:
1. The undersigned is an officer of the owner of interest of the property described below.
2. The project owner's name is: City of El Segundo
3. The full addresses of the project are: attached as Exhibit A and incorporated by reference
4. A work of improvement on the property hereinafter described was field reviewed by City representatives
on: see attached Exhibit A
5. The work done was: Residential Sound Insulation Program Improvements
6. On , 2015, the City Manager for the City of El Segundo accepted the work of this
contract as being complete and authorized the recording of this Notice of Completion in the Office of the
County Recorder.
7. The name of the Contractor for such work of improvement was: Harry H. Joh Construction, Inc.
8. The property on which said work of improvement was completed is in the City of El Segundo, County of
Los Angeles, State of California, and is described as follows: Private Residence(s) listed in Exhibit A
9. The street address of said properties are: set forth in Exhibit A
Dated:
Sam Lee
Planning and Building Safety Director
VERIFICATION
I, the undersigned, say: I am the Director of Planning and Building Safety of the City El Segundo, the
declarant of the foregoing Notice of Completion; I have read said Notice of Completion and know the
contents thereof; the same is true of my own knowledge.
I declare under penalty of perjury the foregoing is true and correct.
Executed on _....._ _ at El Segundo, California.
Sam Lee
Planning and Building Safety Director
Notice of Completion
363
Exhibit A
RSI Number
Project Address
58.01
530 Sierra Place, Unit 01
58.02
530 Sierra Place, Unit 02
58.03
530 Sierra Place, Unit 03
58.04
530 Sierra Place, Unit 04
58.05
530 Sierra Place, Unit 05
58.06
530 Sierra Place, Unit 06
58.07
530 Sierra Place, Unit 07
58.08
530 Sierra Place, Unit 08
58.09
530 Sierra Place, Unit 09
58.10
530 Sierra Place, Unit 10
58.11
526 Sierra Place, Unit I I
58.12
526 Sierra Place, Unit 12
58.13
526 Sierra Place, Unit 13
58.14
526 Sierra Place, Unit 14
58.15
526 Sierra Place, Unit 15
58.16
526 Sierra Place, Unit 16
58.17
522 Sierra Place, Unit 17
58.18
522 Sierra Place, Unit 18
58.19
522 Sierra Place, Unit 19
58.20
729 Indiana Court, Unit 01
58.21
729 Indiana Court, Unit 02
58.22
729 Indiana Court, Unit 03
58.23
1729 Indiana Court, Unit 04
58.24
1605 Sheldon Street
364
Recording Requested by
and When Recorded Mail To:
City Clerk, City Hall
350 Main Street
El Segundo, CA 90245
NOTICE OF COMPLETION OF CONSTRUCTION PROJECT
Project Name: Residential Sound Insulation Program — Group 67
Project No.: RSI 14 -25
Notice is given pursuant to California Civil Code §§ 3093, et seq. that:
1. The undersigned is an officer of the owner of interest of the property described below.
2. The project owner's name is: City of El Segundo
3. The full addresses of the project are: attached as Exhibit A and incorporated by reference
4. A work of improvement on the property hereinafter described was field reviewed by City representatives
on: see attached Exhibit A
5. The work done was: Residential Sound Insulation Program Improvements
6. On , 2015, the City Manager for the City of El Segundo accepted the work of this
contract as being complete and authorized the recording of this Notice of Completion in the Office of the
County Recorder.
7. The name of the Contractor for such work of improvement was: Big West Construction Corporation
8. The property on which said work of improvement was completed is in the City of El Segundo, County of
Los Angeles, State of California, and is described as follows: Private Residence(s) listed in Exhibit A
9. The street address of said properties are: set forth in Exhibit A
Dated:
Sam Lee
Planning and Building Safety Director
VERIFICATION
I, the undersigned, say: I am the Director of Planning and Building Safety of the City El Segundo, the
declarant of the foregoing Notice of Completion; I have read said Notice of Completion and know the
contents thereof; the same is true of my own knowledge.
I declare under penalty of perjury the foregoing is true and correct.
Executed on at El Segundo, California.
Sam Lee
Planning and Building Safety Director
Notice of Completion
365
Exhibit A
RSI Number
Project Address
67.01
770 West Imperial Ave., Unit 37
67.02
943 Hillcrest Street
67.03
945 Hillcrest Street
67.04
938 Loma Vista Street
67.05
225 West Walnut Avenue
67.06
201 West Sycamore Avenue
67.07
818 Virginia Street
67.08
641 West Oak Avenue
67.09
709 Loma Vista Street
67.10
216 West Maple Avenue
67.11
948 Eucalyptus Drive
67.12
832 Eucalyptus Drive
67.13
861 Sheldon Street
67.14
508 East Walnut Avenue
67.15
510 East Walnut Avenue
67.16
524 East Sycamore Avenue
67.17
905 Maryland Street
67.18
1117 East Acacia Avenue
67.19
1129 East Acacia Avenue
67.20
1501 East Walnut Avenue
67.21
1419 East Walnut Avenue
67.22
835 Center Street
67.23
1609 East Maple Avenue
366
Recording Requested by
and When Recorded Mail To:
City Clerk, City Hall
350 Main Street
El Segundo, CA 90245
NOTICE OF COMPLETION OF CONSTRUCTION PROJECT
Project Name: Residential Sound Insulation Program — Group 68
Project No.: RSI 14 -26
Notice is given pursuant to California Civil Code §§ 3093, et seq. that:
1. The undersigned is an officer of the owner of interest of the property described below.
2. The project owner's name is: City of El Segundo
3. The full addresses of the project are: attached as Exhibit A and incorporated by reference
4. A work of improvement on the property hereinafter described was field reviewed by City representatives
on: see attached Exhibit A
5. The work done was: Residential Sound Insulation Program Improvements
6. On , 2015, the City Manager for the City of El Segundo accepted the work of this
contract as being complete and authorized the recording of this Notice of Completion in the Office of the
County Recorder.
7. The name of the Contractor for such work of improvement was: Big West Construction Corporation
8. The property on which said work of improvement was completed is in the City of El Segundo, County of
Los Angeles, State of California, and is described as follows: Private Residence(s) listed in Exhibit A
9. The street address of said properties are: set forth in Exhibit A
Dated:
Sam Lee
Planning and Building Safety Director
VERIFICATION
I, the undersigned, say: I am the Director of Planning and Building Safety of the City El Segundo, the
declarant of the foregoing Notice of Completion; I have read said Notice of Completion and know the
contents thereof; the same is true of my own knowledge.
I declare under penalty of perjury the foregoing is true and correct.
Executed on at El Segundo, California
Sam Lee
Planning and Building Safety Director
Notice of Completion
367
Exhibit A
RSI Number
Project Address
68.01
720 East Imperial Avenue, Unit 1
68.02
720 East Imperial Avenue, Unit 2
68.03
720 East Imperial Avenue, Unit 3
68.04
720 East Imperial Avenue, Unit 4
68.05
720 East Imperial Avenue, Unit 5
68.06
720 East Imperial Avenue, Unit 6
68.07
722 East Imperial Avenue, Unit 1
68.08
722 East Imperial Avenue, Unit 2
68.09
722 East Imperial Avenue, Unit 3
68.10
722 East Imperial Avenue, Unit 4
68.11
722 East Imperial Avenue, Unit 5
68.12
722 East Imperial Avenue, Unit 6
68.13
227 East Oak Avenue, Unit 101
68.14
227 East Oak Avenue, Unit 201
68.15
227 East Oak Avenue, Unit 301
68.16
227 East Oak Avenue, Unit 102
68.17
227 East Oak Avenue, Unit 202
68.18
227 East Oak Avenue, Unit 302
68.19
227 East Oak Avenue, Unit 103
68.20
227 East Oak Avenue, Unit 203
68.21
227 East Oak Avenue, Unit 303
.:
Assessor's Parcel Number - -
TO THE CITY OF LOS ANGELES
TITLE 21 COMPLIANCE CERTIFICATE
California Airport Noise Standards
Incompatible Land Use Sound Insulation Projects
Dated
This is to certify that the residential property for which a legal description, including addresses
and assessor's parcel number, are attached hereto and marked Exhibit "A" has been determined by the
C ity of El Segundo (`City ") to be compatible land within the noise impact boundary around Los Angeles
International Airport.
Certification of land use compatibility is based on compliance with the requirements of the
California Airport Noise Standards, set forth in California Code of Regulations, Title 21 "Division of
Aeronautics ", Subchapter 6 "Noise Standards ", Section 5014, in that either:
❑ (a) The residential structure(s) on the property has/have been sound insulated to achieve a
maximum interior Community Noise Equivalent Level of 45dB in all habitable rooms, or
❑ (b) The property owner has declined, either explicitly or through a lack of response to
inquiries, an offer to participate in a Sound Insulation Program administered by the
Implementing Jurisdiction which would have resulted in a maximum interior Community
Noise Equivalent Level of 45dB in all habitable rooms, and that the property may,
therefore, be considered compatible land pursuant to Section 5014 (a)(4). If declination
is through a lack of response, this is to also certify that the City of El Segundo provided
adequate opportunities and invitations for participation.
❑ (c) A noise easement has been filed with the County Recorder relative to the property in a
form and manner approved by the Los Angeles City Attorney.
This Title 21 Compliance Certificate shall serve as notice to the owner(s) of the property, the
California Department of Transportation, and Los Angeles World Airports that the property has been
determined to be compatible land within the noise impact boundary around the subject Airport pursuant to
Section 5014 of the California Airport Noise Standards.
A copy of this Certificate will be sent to Los Angeles World Airports by certified mail on the date
shown above. Return receipts will be made available to Los Angeles World Airports for a period of not
less than two years after that date.
This Certificate shall be filed in the City of El Segundo's City Clerk's Office, or in such other
permanent location as approved by Los Angeles World Airports, and shall continue in effect until the
subject Airport shall be abandoned and shall cease to be used for public airport purposes. 1~urtherinore, in
the case where the owner has previously declined to participate in a sound insulation program under (b)
above, the Title 21 Compliance Certificate shall continue in effect until the owner(s) or owner's heirs,
successors or assigns subsequently participate in a Residential Sound Insulation Program and a new Title
21 Compliance Certificate is filed for the property with (a), above, indicated on the new recorded form.
Nothing herein contained shall constitute a waiver of any rights by the owner(s) of the property or
owner's heirs, successors and assigns.
Approved by
James S. O'Neill
Program Manager
369
EXHIBIT A
Property Address:
APN:
370
Planning & Building Safety
Residential Sound Insulation Program
Elected Officials:
[DATE]
Suzanne Fuentes,
Mayor
Cad Jacobson,
Mayor Pro em
Dave Atkinson, ,
[PROPERTY OWNERS]
Coullhouer,
Made Fallhauer,
[MAILING ADDRESS]
eeug
Dugan,
Michael Du an,
[MAILING ADDRESS]
Council Member
Tracy weaver,
[CITY], [STATE) [ZIP CODE]
City Clerk
Cristo Sloder,
Cloy Treasurer
Dear [PROPERTY OWNER],
Appointed Officials:
Greg Carpenter,
Attached is a copy of the Title 21 Compliance Certificate for your property at:
City Maneger
Mark D. Hensley,
[PROPERTY ADDRESS], El Segundo, California 90245
City Attorney
You are receiving this notice because your property received Residential Sound
Department Directors:
Insulation Improvements through the City of El Segun.do's Residential Sound
Deborah Cullen,
Finance
Insulation (RSI) Program.
Kevin Smith,
Fire Chief
Martha Resources
This Title 21 Compliance Certificate serves as notice that the property has been
Debra a r ices
Library S
aryS ory
determined to be compatible land within the noise impact boundary around Los
SomPlanningand
Angeles International Airport pursuant to Section 5014 of the California Airport Noise
Building Safety
Tavara,
S J
Standards.
Police Chief
Stephanie Kalsouleas,
Public Works
Meredith Petit,
If you have any questions, please contact me at (310) 524 -2352 or via email at
Recreation 6 Parks
joneill cr,clsept3ndo,org.
Respectfully,
www.elsegundo.org
James S. O'Neill
Program Manager
333 Main Street, Unit A, El Segundo, California 90245
Phone (390) 524 -2352 FAX (310) 662.4052
371