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HomeMy WebLinkAbout01/09/2007 Blue Sheet PGA Parking Lease Agreement TOWN COUNCIL MEETING INFORMATION TOWN OF MARANA MEETING DATE: January 9,2007 AGENDA ITEM: D.3 TO: MAYOR AND COUNCIL FROM: Frank Cassidy, Town Attorney SUBJECT: Resolution No. 2007-01: Relating to Real Estate; approving and au- thorizing the execution of a lease agreement with Herbert Kai, John Kai, Jr. LLC, Kai Trust and the PGA TOUR, Inc., for PGA Event Parking. DISCUSSION This item would approve a proposed lease agreement for PGA event parking with Herbert Kai, John Kai, Jr. LLC, Kai Trust, and the PGA TOUR, Inc., for parking at the Kai property located on the southside of Tangerine Road about three quarters of a mile east of Interstate 10. This agreement would allow parking for the PGA Accenture Golf Tournament for 2007,2008,2009, and 2010. The Kai's 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. RECOMMENDATION Staff recommends adoption of Resolution No. 2007-01, approving and authorizing the Mayor to execute the Kai Lease Agreement for PGA event parking. A TT ACHMENT(S) Kai Lease Agreement SUGGESTED MOTION I move to adopt Resolution No. 2007-01. {00002862.DOC / 3} FJC/cds 1/3/2007 12:36 PM 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 ofthe 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 of the aforementioned agreement. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 9th day of January, 2007. Mayor Ed Honea ATTEST: Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney {00002863.DOC / 3} FJC/cds 1/3/200712:39 PM 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 of2008 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"). 1. 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. 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: {00002701.DOC / 10} - 1 - 12/19/20063:04 PM FJC 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 of time 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 onsite 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 {OOO02701.DOC / 10} - 2 - 12/19/20063:04 PM FJC 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. 6. Refund of Out-oi-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 ofthe 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 if there 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 certificate knows, Marana is not in default under any provisions of this Agreement; and (d) such other matters as Marana may reasonably request. {00002701.00C /IO} - 3 - 12/19/20063:04 PM FJC 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 OracIe Road, Bldg 2 Tucson, Arizona 85704-6373 If to the TOUR, to: PGA TOUR, INe. 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. 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. {00002701.00C / 10} - 4 - 12/19/20063:04 PM FJC 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 ofthis Agreement. 25. Force Majeure. Notwithstanding any other term, condition or provlSlon 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 ofthis Agreement on the part ofthe 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. 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 {00002701.DOC IIO} - 5 - 12/19/20063:04 PM F1C 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. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.] {00002701.DOC / 1O} - 6 - 12/19/20063:04 PM FJC IN WITNESS WHEREOF, the Parties have duly executed this instrument below. "MARAN A" TOWN OF MARANA "OWNER" HERBERT KAI Ed Honea, Mayor Date: Date: ATTEST: JOHN KAI, JR., LLC By John Kai, Jr., LLC Date: Town Clerk Date KAI TRUST ApPROVED AS TO FORM: By Date Town Attorney Date [Print Name] "TOUR" PGA TOUR, INC. By Date [Print Name] {00002701.DOC / 1O} - 7 - 12/19/20063:04 PM FJC o .. -- TANGERINE ROAD i ;, I; Ii il,; I; Ii Ii ''lip' Ii II I; . ,i Ii.: I; I 1 ' I. lit j Ii Ii 'i 1 Ii I" " 'i! Ii oj 1i "Ii II ill.: l! L Ii ( " Iii 11 l; rs Ii!] II' :,1' il" . ii:, illi' ~ Z -l (I) m t::l P c+ t.!! !;l - ru I - (Xl I o C]\ DEPARTMENT OF PUBLIC WDRKS ~ ~~ ~ ~/I' 11_ If. CivIc c.ntr "I... ~..,-- ,.t'(:I!lD___ r.. (3!lI) -.&MI '---'" -- Pil;: Ii " :'iIHI ,I :1 i[ ,., X ;, :1,; II : Ii " ,1 IHi II , , : ,: I il'i;' I; : [I ",: [, ;1 ilil II Ii Ii =' =i'i " ': it' il,! I; ;1 'li'lil'" i' 't ;111 !, H,. 'I Ii !1 11 Itl! ;1 I q 11 ,; 1 ,i,!: Ii jl II <I ,,,: !i." I it ii 11 j! 1\ II.. !, Ii I Ii Ii iH; iH; iil! :! I, I " i I II Ii :1 H; ;"illl Ii !I Ii Ii Ii II ii EXHIBIT A TO LEASE AGREEMENT _...~ - ...~ _...~ MiL'" SA. lI!M ....-. Ul.EllICA __It_ APPROVALS - o