HomeMy WebLinkAboutResolution 2007-001 lease agreement with herbert kai, john kai, jr. for PGA event parking
MARANA RESOLUTION NO. 2007-01
RELATING TO REAL PROPERTY; APPROVING AND AUTHORIZING THE EXECUTION
OF A LEASE AGREEMENT WITH HERBERT KAI, JOHN KAI, JR. LLC, KAI TRUST AND
THE PGA TOUR, INC., FOR PGA EVENT PARKING.
WHEREAS, the PGA Accenture Golf Tournament will be held in Marana beginning
February 19, 2007; and
WHEREAS, temporary parking is needed to accommodate visitors to the tournament; and
WHEREAS, Herbert and John Kai have generously offered to allow the use of their
property for temporary parking in exchange for a donation by PGA Tour, Inc., to a charity of the
Kai's choice; and
WHEREAS, the Mayor and Council find that the terms and conditions of the lease
agreement between the parties are in the best interest of the Town.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, ARIZONA, that the lease agreement between the Town of Marana,
Herbert Kai, John Kai, Jr. LLC, Kai Trust and the PGA Tour, Inc., attached to and incorporated
by this reference in this resolution as Exhibit A is hereby approved, and the Mayor is hereby
authorized to execute it for and on behalf of the Town of Marana.
BE IT FURTHER RESOLVED that the Town's Manager and staff are hereby directed
and authorized to undertake all other and further tasks required or beneficial to carry out the
terms, obligations, and objectives ofthe aforementioned agreement.
PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF
MARANA, ARIZONA, this 9th day of January, 2007.
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Mayor Ed Honea
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Exhibit A to Marana Resolution No. 2007-01, entitled LEASE
AGREEMENT FOR PGA TOUR EVENT PARKING, by and
between the Town of Marana, Herbert Kai, John Kai, Jr. LLC, Kai
Trust, and the PGA TOUR, INC., was recorded separately on
January 19,2007, at Docket l..i'f7~, Page y/;f," in the Office
of the Pima County Recorder.
I
F. ANN RODRIGUEZ, RECORDER
RECORDED BY: M_S
DEPUTY RECORDER
1966 PE3
DOCKET:
PAGE:
NO. OF PAGES:
SEQUENCE:
12974
3666
9
20070130862
01/19/2007
15:56
SMARA
TOWN OF MARANA
ATTN: TOWN CLERK
11555 W CIVIC CENTER DR
MARANA AZ 85653
AG
MAIL
AMOUNT PAID
$ 10.00
LEASE AGREEMENT FOR PGA TOUR EVENT PARKING
THIS AGREEMENT is entered into by and among the Town of Marana ("Marana"), Herbert
Kai, John Kai, Jr. LLC, Kai Trust, and the PGA TOUR, INC., a Maryland corporation, with its
principal offices at 112 PGA TOUR Boulevard, Ponte Vedra Beach, Florida 32082 (the
"TOUR") acting on behalf of the INTERNATIONAL FEDERATION of PGA TOURS (the
"Federation"). Herbert Kai, John Kai, Jr., LLC, and Kai Trust are collectively referred to as the
"Owner." Marana, the Owner, and the TOUR are sometimes collectively referred to in this
Agreement as the "Parties," anyone of which is sometimes individually referred to as a
"Party. "
RECITALS
A. Marana is an Arizona municipal corporation.
B. Herbert Kai is a married man acting with respect to interests in real property which he
holds in his sole and separate right.
C. John Kai, Jr., LLC, is an Arizona limited liability company.
D. Kai Trust is dated August 1, 1997 in which Mamie Kai is settlor, and John Kai, Jr.,
Herbert Kai and Sidney Lex Felker are trustees.
E. The TOUR is hosting the Accenture Match Play Championship Golf Tournament in
Marana (the "Accenture Tournament"), beginning in 2007.
F. The 2007 Accenture Tournament is anticipated to occur from February 19 through
February 25, 2007, and future tournaments are anticipated to occur in February of 2008 and later
years, depending on the TOUR's continued commitment to hold the tournament in Marana.
G. Temporary parking is required to accommodate the Accenture Tournament.
H. Owner owns property immediately south of and fronting on Tangerine Road
approximately three-quarters of a mile east of Interstate 10, more particularly described as Pima
County Assessor's Parcel Nos. 216-09-0020 and 216-09-0030, and consisting of a total of
approximately 78.46 acres (the "Subject Property").
I. Marana and the TOUR desire to use most of the Subject Property for temporary parking to
accommodate the Accenture Tournament in 2007, 2008, 2009 and 2010, the Owner agrees to
allow the Subject Property to be so used, and the Parties wish to set forth the agreed upon terms
and conditions for this use.
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AGREEMENT
Now, THEREFORE, based on the foregoing recitals, which are incorporated here as the
intentions of the Parties in entering into this Agreement, and in consideration of the terms of this
Agreement, the Parties hereby agree as follows:
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1. Lease Term. Marana shall lease the Subject Property beginning on the effective date of
this Agreement and ending March 31, 2007, and from January 1 through March 31 in years
2008,2009, and 2010. This period oftime is referred to in this Agreement as the "Lease Term."
2. Rent. Owner hereby leases the Subject Property to Marana in consideration for the terms
and conditions of this Agreement including the following, all of which shall be collectively
referred to in this Agreement as "Rent":
a. Base Rent. The TOUR shall pay to a charitable organization designated by the Owner
within 30 days after the conclusion of each year's Accenture Tournament $5,000 or one
dollar for each vehicle charged onsite for parking at the Subject Property, whichever amount
is higher. For purposes of calculating the dollar-per-vehicle amount, the TOUR shall count
the number of vehicles charged onsite for parking at the Subject Property and shall provide
the Owner with a written report showing the number of vehicles charged onsite for parking at
the Subject Property during each day of the Accenture Tournament. The dollar-per-vehicle
amount shall be one dollar times the sum of all days' vehicles charged on site for parking at
the Subject Property. Owner acknowledges and agrees that volunteer parking passes and
parking passes sold as part of a hospitality or ticket package are excluded from the
calculation of base rent hereunder.
b. Additional Rental. In addition to the Base Rental required to be paid pursuant to the
terms of this Agreement, the TOUR agrees to pay, as additional rent, all sums and other
charges required to be paid by the TOUR pursuant to other provisions and exhibits to this
Agreement, whether or not the same be designated "Additional Rental" (hereinafter called
"Additional Rental"), and Owner shall have the same remedies for the TOUR's failure to pay
same when and as required as Owner's remedies for the TOUR's failure to pay base rent.
3. Insurance. The TOUR shall at its cost procure commercial general liability and property
damage insurance, each of which shall be in the amount of not less than $5,000,000 per
occurrence and $5,000,000 cumulative during the Lease Term and any extension or renewal of
this Agreement. All insurance policies shall name Marana and the Owner as additional insureds.
Copies of documentation evidencing coverages required by this paragraph shall be provided to
Marana and/or the Owner upon request.
4. Use and Care of Subject Property. Marana and the TOUR shall use the Subject Property
for parking lot purposes and no other. In connection with the parking lot use, it is understood
and agreed that Marana shall have the right to clear and grub any and all vegetation, remove and
install temporary fencing, import and spread dirt and rock materials, remove miscellaneous
abandoned improvements and junk, and install temporary roadway entrances and associated
culverts from Tangerine Road to the Subject Property (which will be removed each year at the
conclusion of the Accenture Tournament). Marana shall also be permitted to install or cause to
be installed light standards on the Subject Property in locations to be approved by the Owner.
The currently anticipated layout of parking on the Subject Property is depicted on Exhibit A.
The Subject Property shall not be used for any illegal purposes or to create any nuisance or
trespass. Marana shall not use, store or dispose of, or permit the use, storage or disposal of, upon
the Subject Property, any hazardous, toxic or flammable materials, contaminants, oil, radioactive
or other material the removal of which is required or the maintenance of which is prohibited,
regulated or penalized by any local, state or federal agency, authority or governmental unit. If
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any such materials are brought into the Subject Property during the Lease Term, Marana shall
immediately remove them at its sole expense.
5. Reservation of Owner's Rights during the Accenture Tournament. The Owner shall have
the right to set up or to allow to be set up booths, trailers, and/or recreational vehicles on other
lands owned by the Owner that are adjacent to the Subject Property during the Lease Term, and
specifically during the Accenture Tournament, which may be used for real estate promotions,
charitable and/or non-profit organization fundraising, or other similar activities at the Owner's
discretion; provided, however, that any use of TOUR or the Accenture Tournament trademarks
or any implied association with TOUR or the Accenture Tournament by Owner or Marana shall
be subject to the prior approval of TOUR.
6. Refund of Out-of-Pocket Costs for the Owner's Early Termination. In addition to any other
remedy available to the TOUR and/or Marana, if the Owner terminates this Agreement prior to
the end of the Lease Term, the Owner shall pay to Marana an amount determined as follows:
a. First, Marana shall provide supporting documentation establishing its out-of-pocket
expenses for preparing the Subject Property for use as a temporary parking lot, including
without limitation all material and labor costs for preparing the site and importing, spreading
and maintaining rock materials on the Subject Property.
b. Second, a fraction shall be determined using as the numerator the total number of
anticipated Accenture Tournament days remaining under the Lease Term (assuming seven
Accenture Tournament days for each year of the Accenture Tournament) and using as the
denominator the number 28 (the total number of anticipated Accenture Tournament days in
the entire Lease Term).
c. The fraction determined as set forth in paragraph b above shall be multiplied by the
out-of-pocket expenses determined as set forth in paragraph a above. The product of this
equation shall be paid by the Owner to Marana not later than 30 calendar days after the
Owner terminates this Agreement.
7. Other Temporary Parking Use Effects. If the use and/or improvement of the Subject
Property for temporary parking results in claims by third parties or damages to the Subject
Property, the Parties shall negotiate in good faith either to amend this Agreement or to reach
some other mutually acceptable resolution concerning any such claims or damages. Nothing in
this paragraph shall be interpreted to limit Marana's obligations under paragraph 34 below.
8. Abandonment of the Subject Property. Marana agrees not to abandon or vacate the Subject
Property during the Lease Term and agrees to use the Subject Property for the purpose herein
leased until the expiration hereof.
9. Regulatory Compliance and Approvals. Marana shall at its expense comply with all
applicable Federal, State and local laws, rules, and regulations in connection with this Agreement
and the improvement and use of the Subject Property for a temporary parking lot.
10. Estoppel Certificate. Owner shall, at any time and from time to time upon not less than
ten days prior request by Marana, deliver to Marana a statement in writing certifying that (a) the
leasehold interest created by this Agreement is unmodified and in full force (or ifthere have been
modifications, that the Agreement is in full force as modified and identifying the modifications);
(b) the dates to which rent and other charges have been paid; (c) so far as the person making the
{00002701.DOC / ] ] }
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certificate knows, Marana is not in default under any provisions of this Agreement; and (d) such
other matters as Marana may reasonably request.
11. Notices. All notices, requests, demands, and other communications under this Agreement
shall be in writing and shall be deemed given if personally delivered or mailed, certified mail,
return receipt requested; to the following addresses:
If to Marana, to: Town Manager
11555 W. Civic Center Drive - Bldg A3
Marana, AZ 85653
If to Owner, to: Herbert Kai, John Kai, Jr., LLC and Kai Trust
c/o Sid Lex Felker, Esq.
LEONARD FELKER ALTFELD BATTAILE & GOLDMAN, P.C.
7440 North Oracle Road, Bldg 2
Tucson, Arizona 85704-6373
If to the TOUR, to: PGA TOUR, INC.
c/o Stephen Nutt
103 Championship Way
Ponte Vedra Beach, FL 32082
With a copy to: PGA TOUR, INC.
Attn: General Counsel
100 PGA TOUR Blvd
Ponte Vedra Beach, FL 32082
12. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the Parties, their respective heirs, personal representatives, successors and assigns.
13. No Waiver of Strict Performance. The failure of Owner or Marana to insist upon a strict
performance of any of the agreements, terms, covenants and conditions of this Agreement shall
not be deemed a waiver of any rights or remedies that Owner or Marana may have and shall not
be deemed a waiver of any subsequent breach or default in any of such agreements, terms,
covenants and conditions.
14. Authority to Execute Agreement. The individuals executing this Agreement hereby
represent that they have full right, power, and authority to execute this Agreement on behalf of
their respective Parties.
15. Entire Agreement. This Agreement constitutes the entire agreement and understanding of
the Parties pertaining to the subject matter of the Agreement and supersedes all offers,
negotiations, and other agreements of any kind. All prior and contemporaneous agreements,
representations and understandings of the Parties, oral or written, are superseded and merged in
this Agreement. There are no representations or understandings of any kind not set forth herein.
16. Governing Law. This Agreement shall be construed in accordance with the laws of the
State of Arizona.
17. Non-Severability. The provisions of this Agreement shall not be given effect individually,
and to this end, the provisions of this Agreement are not severable.
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18. No Brokers. The Parties acknowledge that no brokers were involved in this transaction,
and no other Parties are thus eligible for compensation as a result of this Agreement.
19. Headings. The descriptive headings of the sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of any of the
Agreement's provisions.
20. Exhibits. Any exhibit attached to this Agreement shall be deemed to have been
incorporated in this Agreement by this reference with the same force and effect as if it were fully
set forth in the body of the Agreement
21. Further Acts. Each of the Parties to this Agreement shall promptly and expeditiously
execute and deliver all such documents and perform all such acts as reasonably necessary, from
time to time, to carry out the matters contemplated by this Agreement.
22. Recordation. This Agreement shall be recorded in its entirety in the official records of
Pima County, Arizona, not later than ten days after this Agreement is executed by all Parties and
a resolution is enacted by the Marana Mayor and Council adopting this Agreement.
23. Amendments. No change or addition is to be made to this Agreement except by a written
amendment executed by all of the Parties. An amendment shall be recorded in the official
records of Pima County, Arizona, within ten days after its execution.
24. Time of Essence. Time is of the essence of this Agreement.
25. Force Majeure. Notwithstanding any other term, condition or provIsIon of this
Agreement to the contrary, if any Party to this Agreement is precluded from satisfying or
fulfilling any duty or obligation imposed upon it due to labor strikes, material shortages, war,
civil disturbances, weather conditions, natural disasters, acts of God, or other events beyond the
control of such Party, the time period provided herein for the performance by such Party of such
duty or obligation shall be extended for a period equal to the delay occasioned by such events.
26. Attorneys' Fees. In the event either Party hereto shall commence any civil action against
the other to enforce or terminate this Agreement or to recover damages for the breach of any of
the provisions, covenants or terms of this Agreement on the part of the other Party, the prevailing
Party in such civil action shall be entitled to recover from the other Party, in addition to any
relief to which such prevailing Party may be entitled, all costs, expenses and reasonable
attorneys' fees incurred in connection therewith.
27. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. The signature pages from one or more counterparts may be removed from such
counterparts and such signature pages all attached to a single instrument so that the signatures of
all Parties may be physically attached to a single document.
28. Effective Date. This Agreement is effective when it has been executed on behalf of all of
the Parties.
29. Construction of this Agreement. No failure of Owner to exercise any power given Owner
hereunder, or to insist upon strict compliance by Marana with its obligation hereunder, and no
custom or practice of the Parties at variance with the terms hereof shall constitute a waiver of
Owner's right to demand exact compliance with the terms hereof.
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30. Subordination. This Agreement is subject and subordinate to any first mortgage or first
security deed now or hereafter placed on the Subject Property; provided, however, that at the
option of the first mortgage holder the Agreement or portions of the Agreement can be made
superior to the first mortgage or security deed; provided further that unless the entire Agreement
is made superior to such first mortgage or security deed, the holder of said mortgage or the
grantee of such security deed shall agree that this Agreement shall not be divested or in any way
affected by a foreclosure or other default proceedings under said mortgage, security deed or
obligations secured thereby, so long as Marana shall not be in default under the terms of this
Agreement; and Marana agrees that this Agreement shall remain in full force and effect,
notwithstanding any default proceeding under said mortgage, security deed or obligations
secured thereby. Marana further agrees that it will attorn to the mortgagee, grantee or beneficiary
of such mortgage or security deed, and their successors or assigns and to the purchaser or
assignee under any such foreclosure. Marana will upon request by Owner, execute, deliver to
Owner, or to any other person designated by Owner, any instrument or instruments required to
give effect to the provisions of this Section.
31. No Estate in Land. This Agreement shall create the relationship of Owner and lessee
between the Parties hereto; no estate shall pass out of Owner. Marana has only a usufruct, not
subject to levy and sale, and not assignable by Marana except by Owner's consent.
32. Rights Cumulative. All rights, powers and privileges conferred hereunder upon Parties
hereto shall be cumulative but not restrictive to those given by law.
33. Transfer of Owner's Interest. This Agreement is binding on the Owner's successors and
assigns. In the event of the sale, assignment or transfer by Owner of its interest in the Subject
Property or in this Agreement (other than a collateral assignment to secure a debt of Owner) to a
successor in the interest who expressly assumes the obligations of Owner hereunder, Owner shall
thereupon be released or discharged from all of its covenants and obligations hereunder, except
such obligations as shall have accrued prior to any such sale, assignment or transfer; and Marana
agrees to look solely to such successor in interest of Owner for performance of such obligations.
Owner's assignment of the Agreement or of any or all of its rights herein shall in no manner
affect Marana's obligations hereunder. Marana shall thereafter attorn and look to such assignee
as Owner, provided Marana has first received written notice of such assignment of Owner's
interest.
34. Waiver of Claims. To the extent permitted by law, Owner and Owner's agents,
employees and contractors shall not be liable for, and Marana hereby indemnifies, holds
harmless and releases Owner, its agents, employees and contractors from and against any and all
claims for damage to persons or property sustained by Marana or any person claiming through
Marana resulting from any fire, accident, occurrence or condition in or upon the Subject Property
or which it shall be a part except where such claims arise solely out of the gross negligence or
willful misconduct of Owner, Owner's agents, employees or contractors.
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IN WITNESS WHEREOF, the Parties have duly executed this instrument below.
"OWNER"
HERBERT KAI
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KAI TRUST
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Ed Hone , Mayor
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PGA TOUR, INC.
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IN WITNESS WHEREOF, the Parties have duly executed this instrument below.
"OWNER"
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