2023-26 Landmark Golf Management Amendment 6 - SilverRock Golf ManagementAMENDMENT NO. 6
TO GOLF COURSE MANAGEMENT AGREEMENT
This Amendment No. 6 ("Amendment 6") to Golf Course Management Agreement
("Agreement") is made and entered as of the 1st day of July 2023 ("Effective Date") by
and between the CITY OF LA QUINTA ("City"), a California municipal corporation, and
LANDMARK GOLF MANAGEMENT, LLC. ("Manager").
RECITALS
WHEREAS, on or about July 1, 2013, the City and Manager entered into an
Agreement to provide services related to managing golf course operations at SilverRock
Resort; and
WHEREAS, on or about July 1, 2018, the City and Manager executed Amendment
No. 1 and mutually agreed to amend Section 4.1.1 increasing the Management Fee for a
total not to exceed amount of $114,000, and to extend the term for one additional year
from July 1, 2018 until June 30, 2019 ("Extended Term"); and
WHEREAS, on or about June 19, 2019, the City and Manager executed
Amendment No. 2 and mutually agreed to amend:
• Section 2.2 Management Term by extending the Term for one additional
year, from July 1, 2019 to June 30, 2020 ("Extended Term"); and
• Section 3.10.1 Capital Improvement Funds by suspending deposit from the
Golf Course Accounts for the 2% Capital Improvement Funds until June
30, 2020; and
• Section 4.1.1 Management Fee by increasing the annual management fee
by 4% for a total not to exceed amount of $119,000 for fiscal year 2019/20;
and
• Section 8.1 Termination by City by granting the City sole discretion, without
penalty or cause to terminate the Agreement on any date after June 30,
2020 with a minimum sixty (60) day prior Written Notice on early
termination to Landmark.
WHEREAS, on or about June 16, 2020, the City and Manager executed
Amendment No. 3 and mutually agreed to amend:
• Section 2.2 Management Term by extending the Term for one additional
year, from July 1, 2020 to June 30, 2021 ("Extended Term"); and
• Section 4.1.1 Management Fee by decreasing the annual fee by 5% to a
total not to exceed amount of $112,632 for fiscal year 2020/21.
WHEREAS, on or about June 1, 2021, the City and Manager executed
Amendment No. 4 and mutually agreed to amend:
• Section 2.2 Management Term by extending the Term for one additional
year, from July 1, 2021 to June 30, 2022 ("Extended Term"); and
• Section 3.10.1 Capital Improvement Funds by reinstating deposits from the
Golf Course Accounts for the 2% Capital Improvement Funds until June
30, 2022; and
• Section 4.1.1 Management Fee by implementing an annual increase to the
annual fee, reinstating it to the previous not to exceed amount of $118,560
for fiscal year 2021 /22.
WHEREAS, on or about June 21, 2022, the City and Manager executed
Amendment No. 5 and mutually agreed to amend:
• Section 2.2 Management Term by extending the Term for one additional
year, from July 1, 2022 to June 30, 2023 ("Extended Term"); and
• Section 3.10.1 Capital Improvement Funds by reinstating deposits from the
Golf Course Accounts for the 2% Capital Improvement Funds until June
30, 2023; and
• Section 4.1.1 Management Fee by implementing an annual increase to the
annual fee, reinstating it to the previous not to exceed amount of $124,488
for fiscal year 2022/23.
WHEREAS, City and Manager would like to execute Amendment No. 6 and
mutually agree to extend the term of the Agreement for three additional years, from July
1, 2023 to June 30, 2026 ("Extended Term") pursuant to Section 2.2 Management Term;
and
WHEREAS, City and Manager mutually agree to reinstate deposits from the Golf
Course Accounts for the 2% Capital Improvement Funds pursuant to Section 3.10.1
Capital Improvement Funds until June 30, 2026; and
WHEREAS, City and Manager mutually agree to amend Section 4.1.1
Management Fee by implementing a five percent (5%) annual increase to the
Management fee for a total not to exceed annual amount of $130,704 for fiscal year
2023/24 and an annual 5% increase for consecutive years; and
WHEREAS, Section 8.1 Termination by City was amended via Amendment No. 2
to change the date by which the City, in its sole discretion, without penalty or cause, may
terminate the Management Term on any date after June 30, 2020, with a minimum sixty
(60) day prior Written Notice on early termination to Landmark, and will remain in full force
and effect.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree as follows:
AMENDMENT
In consideration of the foregoing Recitals and the covenants and promises hereinafter
contained, and for good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:
2.2 Management Term
The Management Term shall commence July 1, 2023. The Management Term
and this Agreement shall end on June 30, 2026.
3.10.1 Capital Improvement Funds
City shall reinstate deposits from the Golf Course Accounts for the 2% Capital
Improvement Funds until June 30, 2026.
4.1.1 Management Fees
Manager shall receive from City an annual Management Fee in the amount of One
Hundred and Thirty Thousand Seven Hundred and Four Dollars ($130,704) for
fiscal year 2023/24 and an annual 5% increase for consecutive years.
In all other respects, the Agreement, Amendment No. 1, Amendment No. 2, Amendment
No. 3, Amendment No. 4, and Amendment No. 5 shall remain in effect.
IN WITNESS WHEREOF, the City and Manager have executed this Amendment
No. 6 to the Agreement on the respective dates set forth below.
CITY OF LA QUINTA
a California municipal corporation
and Charter City
By:
Jon McMillen, ity Manager
Date: 1 0 k
1 1 w.
LANDMARK GOLF MANAGEMENT, LLC
f
By:
Andy Vossle President & CEO
Date: J �,l
ATTEST:
Monika Radeva, Deputy City( Clerk
City of La Quinta, Californi
APPROVED AS TO FORM:
William H. Ihrke, City Attorney
City of La Quinta, California
City of La Quinta BUSINESS SESSION ITEM NO. 2
CITY COUNCIL MEETING: June 20, 2023
STAFF REPORT
AGENDA TITLE: APPROVE AMENDMENT NO. 6 TO GOLF COURSE MANAGEMENT
AGREEMENT WITH LANDMARK GOLF MANAGEMENT, LLC FOR SILVERROCK
GOLF COURSE MANAGEMENT SERVICES
RECOMMENDATION
Approve Amendment No. 6 to Golf Course Management Agreement with Landmark Golf
Management, LLC to provide SilverRock golf course management services for three
additional years until June 30, 2026, for a total not to exceed amount of $130,704 for
fiscal year 2023/24 and an annual 5% increase for consecutive years; and authorize the
City Manager to execute the amendment.
EXECUTIVE SUMMARY
• In 2013, the City entered into a five-year Golf Course Management Agreement
(Agreement) with Landmark Golf Management (Landmark) for SilverRock golf
course management services, which was extended in 2018, 2019, 2020, 2021,
and 2022 (Amendment Nos. 1, 2, 3, 4, and 5), and will expire effective June 30,
2023.
• Amendment No. 6 (Attachment No. 1) will extend the term for three years, through
June 30, 2026; the Agreement allows for additional extensions if desired to
continue coordinating with the development of the hotels and other adjacent
facilities.
• Amendment No. 6 includes a 5% increase to the annual management fee from
$124,488 to $130,704, with an annual 5% increase for consecutive years.
FISCAL IMPACT
The golf course annual management fee pursuant to Amendment No. 6 for 2023/24 would
be $130,704, with an annual 5% increase for consecutive years. This amount is included
in the proposed 2023/24 SilverRock Resort Annual Plan and the fiscal year (FY) 2023/24
budget in account 601-0000-60208.
BACKGROUND/ANALYSIS
In July 2013, the City entered into a five-year Agreement with Landmark for SilverRock
golf course management services, which was extended in 2018 (Amendment No. 1),
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2019 (Amendment No. 2), 2020 (Amendment No. 3); 2021 (Amendment No. 4); and in
2022 (Amendment No. 5); the term will expire on June 30, 2023.
As SilverRock Development Company proceeds with construction of the hotels,
conference center, and adjacent amenity buildings, it is in the best interest of everyone
served to continue using Landmark as the golf course operator during this period.
Amendment No. 6 provides the following changes:
• Extend the term until June 30, 2026 (Section 2.2 Management Term);
• Reinstate the deposits from the Golf Course Accounts for the 2% Capital
Improvement funds until June 30, 2026 (Section 3.10.1 Capital Improvement
Funds);
• Increase the annual Management Fee by 5% for a total annual amount of $130,704
(Section 4.1.1) for (FY) 2023/24 and an annual 5% increase for consecutive years;
• Reinstatement of the 2% Capital Improvement funds is recommended to ensure
funding is available for anticipated improvements as aging infrastructure reaches
its useful life. The estimated amount for FY 2023/24 is $82,000 and is included in
the proposed SilverRock operating budget.
ALTERNATIVES
Due to the timeline of the development by SilverRock Development Company and the
operational knowledge of the golf course by Landmark, no alternatives are recommended
at this time.
Prepared by: Claudia Martinez, Finance Director
Approved by: Jon McMillen, City Manager
Attachment: 1. Amendment No. 6 to Golf Course Management Agreement
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