2022-23 Landmark Golf Management Amendment 5 - SilverRock Golf ManagementAMENDMENT NO. 5
TO GOLF COURSE MANAGEMENT AGREEMENT
This Amendment No. 5 (“Amendment 5”) to Golf Course Management
Agreement (“Agreement”) is made and entered as of the 1st day of July 2022
(“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 agree 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 agree 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, City and Manager would like to execute Amendment No. 5
and mutually agree to extend the term of the Agreement for one additional
year, from July 1, 2022 to June 30, 2023 (“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, 2023; 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 $124,488 for fiscal
year 2022/23; 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
City of La Quinta
CITY COUNCIL MEETING: June 21, 2022
STAFF REPORT
AGENDA TITLE: APPROVE AMENDMENT NO. 5 TO GOLF COURSE
MANAGEMENT AGREEMENT WITH LANDMARK GOLF MANAGEMENT, LLC FOR
SILVERROCK GOLF COURSE MANAGEMENT SERVICES
RECOMMENDATION
Approve Amendment No. 5 to Golf Course Management Agreement with
Landmark Golf Management, LLC to provide SilverRock golf course
management services for one additional year until June 30, 2023, for a total
not to exceed amount of $124,488; 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, and 2021 (Amendment Nos. 1, 2, 3, and 4), and will
expire effective June 30, 2022.
Amendment No. 5 (Attachment 1) will extend the term for one year,
through June 30, 2023; the Agreement allows for one additional
extension if desired to continue coordinating with the development of
the hotels and other adjacent facilities.
Amendment No. 5 includes a 5% increase to the annual management
fee from $118,560 to $124,488.
FISCAL IMPACT
The golf course annual management fee pursuant to Amendment No. 5 for
2022/23 would be $124,488. This amount is included in the proposed
2022/23 SilverRock Resort Annual Plan and the fiscal year 2022/23 budget in
account 601-0000-60208.
CONSENT CALENDAR ITEM NO. 7
135
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), 2019 (Amendment No. 2), 2020 (Amendment No. 3);
and in 2021 (Amendment No. 4); the term will expire on June 30, 2022.
As SilverRock Development Company proceeds with construction of the hotels,
conference center, and adjacent amenity buildings, it is in the best interest of
the City to continue using Landmark as the golf course operator during this
period.
Amendment No. 5 provides the following changes:
Extend the term until June 30, 2023 (Section 2.2 Management Term);
Reinstate the deposits from the Golf Course Accounts for the 2% Capital
Improvement funds until June 30, 2023 (Section 3.10.1 Capital
Improvement Funds);
Increase the annual Management Fee by 5% for a total annual amount
of $124,488 (Section 4.1.1) for fiscal year 2022/23;
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
2022/23 is $75,000 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. 5 to Golf Course Management Agreement
136