HomeMy WebLinkAbout10/19/2010, C3 - AMENDMENT AND RESTATEMENT OF CONCESSIONAIRE AGREEMENT WITH ACHIEVEMENT HOUSE, INC. council mm'`DOctober 19,2010
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CITY OF SAN LUIS OBISPO
FROM: Shelly Stanwyck,Acting Director,Parks and Recreation
Prepared by: Sheridan Bohlken, Administrative Analyst
SUBJECT: AMENDMENT AND RESTATEMENT OF CONCESSIONAIRE
AGREEMENT WITH ACHIEVEMENT HOUSE,INC.
RECOMMENDATION
Approve an Amended and Restated Agreement with the Achievement House, Inc. to provide a
food and beverage concessionaire at Laguna Lake Golf Course:
DISCUSSION
Background
On January 5, 2010, the City Council received the Laguna Lake Golf Course (LLGC) best
practice review, which recommended a number of initiatives to increase revenues at the City's 10
hole executive golf course. One of the initiatives was to pursue a food and beverage
concessionaire through the request for proposal (RFP) process with the intent to add enhanced
food and beverage sales at LLGC. Based on Council direction, on February 18, 2010 an RFP
was issued requesting proposals for a food and beverage concessionaire at the course. Bids were
opened on March 12 with.one proposal received and later awarded to the Achievement House,
Inc. by Council on June 15, 2010.
Agreement with Achievement House,Inc.
Achievement House is a 501 (c) 3 non-profit corporation based in San Luis Obispo, California.
Achievement House provides an array of vocational services and programs to developmentally
disabled adults to assist individuals in developing appropriate workplace skills and behaviors to
enhance individuals' productivity, independence; and community integration. Achievement
House's philosophy is to work in partnership with the individual and his/her support network.
For over fifty years, Achievement House has effectively demonstrated that individuals with even
the most severe limitations can be gainfully employed and contributing members of thein
respective communities if appropriate support is developed and maintained.
While Achievement House provides a wide range of programs to serve the needs of those with
developmental disabilities, it currently provides successful concessionaire services similar to
those contracted for at LLGC for the City of Atascadero (Orange Dog Cafe), Vandenberg
Airforce Base (Cafe Bob) and Camp San Luis Obispo.
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Amended and Restated Agreement with Achievement House, Inc. Page 2
Need for an Amended Agreement
As Achievement House and City staff have worked together toward occupancy of the LLGC
Club House a wide variety of unforeseen conditions have arisen causing significant increases in
costs. The majority of those costs relate to safety improvements necessary to make the kitchen
"fire safe" as well as a series of added costs to meet Americans with Disabilities Act(ADA) code
requirements. Other added expenses include fire venting, new flooring, lighting improvements,
painting, new windows, and much more. At this time, Achievement House has stopped pursing a
building permit and liquor license pending Council's approval of an amended and restated lease.
Proposed Amended and Restated Agreement
The proposed Amended and Restated Agreement is attached for reference. Highlights are as
follows:
1. Longer Term to Recoup Investment. The initial term of the Agreement is for seven (7)
years with an option to extend an additional three (3) years with both parties' written
consent.
2. Initial 4 Years Rent "Credit." The City would waive the lease payments by
Achievement House during the first four. years of the Agreement in recognition of the
anticipated $60,000 invested in improvements to the Club House and Kitchen. $60,000
equates to the amount of rent that would have been paid during the first four years at
$1,250 per month. Further, if for some reason this Agreement ends during the initial term
the improvements will belong to the City.
3. Achievement House Obligations. Achievement House's obligations continue to
include:
a) provide service seven(7)days/week,excluding several holidays, from 7a.m. —7p.m.;
b) attempt to obtain a liquor license to sell beer and wine
c) be responsible for all employees needed to provide the service
4. Rent Amount Rent will be $1,250 plus CPI, with credit given by the City on the front
end of the contract equal to the amount expended for improvements (four years of credit).
5. Revenue Sharing. A new section 6 has been added to the proposed Agreement which
would provide the City with a revenue sharing opportunity should Achievement House
exceed net revenues of$50,000 during the rent credit period.
Acceptance of Donation of Improvements
Per the City's Donation Policy - Resolution No. 8965 (1999 Series), any donation exceeding
$5,000 in value must be accepted through a written agreement and approved by City Council. By
approving the agreement with Achievement House, the Council accepts ownership of the
$60,000 in improvements to the pro shop to enable it to be used as a food and beverage facility.
FISCAL IMPACT
By entering into this agreement with Achievement House, LLGC will realize $60,000 in
improvements to the facility as the Tenant Improvements will belong to the City. It was
discovered during the plan review that in order to provide this facility to Achievement House for
its intended purpose LLGC will also be bearing some one time capital costs (expected to be
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Amended and Restated Agreement with Achievement House, Inc. Page 3
$5,000-$8,000) to move data cables from the kitchen area to the Manager's area and avoid
exposure to flammable kitchen substances. Currently LLGC expends approximately $8,400
annually for food and beverages (snacks) with gross revenues of $12,000, for a net of
approximately $4,000. As was the case with the original agreement, under the proposed and
restated Agreement LLGC will not receive the net $4,000 per annum in snack sales. Those lost
revenues are expected to be offset by added rounds played due to the enhanced amenity of the
food and beverage service provided by Achievement House. However, in years one through four
of the Agreement, if the concession is successful LLGC would have the opportunity share in the
revenues under a reopened contract. Further, beginning in year five of the Agreement, or once
Achievement House has recovered its initial investment cost of $60,000, whichever is sooner;
rent is to be paid to the course in an amount that is expected to be at least$1,250 per month.
ALTERNATIVES
1. Do not amend the Agreement. At this time Council could direct staff to not amend the
agreement and sever its relationship with Achievement House. This option is not recommended.
Although double its expected initial investment Achievement House is committed to this project
and feels strongly it will offer its clients and the community a much needed amenity.
2. Release the RFP again. Since the City received only one proposal to the RFP, Council could
direct staff to re-release the RFP to see if it might attract more respondents. This is not
recommended because in 2008, the City released an RFP for a concessionaire at the golf course
and had no responses. Staff attributes this lack of interest to the amount of improvements needed
to bring the kitchen into compliance with the Health Department. Achievement House, Inc., due
to the services it provides to people with developmental disabilities and its funding sources, has
the ability and desire not only to improve the facility; but provide a practical food and beverage
service to the LLGC.
ATTACHMENTS
1. Proposed Amended and Restated Agreement
2. June 15, 2010 Council Agenda Report and Agreement
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ATTACHN, 1
AMENDED AND RESTATED AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on
, 2010 by and between the CITY OF SAN LUIS OBISPO, a municipal corporation,
hereinafter referred to as City,and ACHIEVEMENT HOUSE,INC.,hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, on February 18, 2010, City requested proposals for providing food and beverage
service at Laguna Lake Golf Course per Specification No.91002.
WHEREAS, pursuant to said request, Contractor submitted a proposal that was accepted by City
for said concession operations.
WHERAS,on June 16,2010,Council entered into a Concessionaire Agreement with Contractor.
WHEREAS, due to unforeseen conditions at the Laguna Lake Golf Course Club House and
unexpected agency requirements for improvements to the Club House, added work is needed to bring the
facility into compliance with the Americans with Disabilities Act, Fire and Building Safety Codes, and
Health Department regulatory compliance.
WHEREAS, both parties continue to desire to enter into an agreement so that concession services
may be provided by Contractor at the City's golf course.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants
hereinafter contained,the parties hereto agree as follows:
I. TERM. The term of this Agreement shall be from the date this Agreement is made and
entered, as fust written above, for seven years, from the date all improvements have been completed and
accepted in writing by the City. Contractor has six months from the date this Agreement is made to
complete all improvements necessary to conduct the food and beverage operations or the Agreement will
be terminated. An additional three year extension of this agreement may be made upon mutual agreement
by the City and Contractor extending the contract term to 10 years.
2. INCORPORATION BY REFERENCE. City Specification No. 91002(Exhibit A)and
Contractor's revised proposal dated April 23,2010(Exhibit B),and Insurance Requirements(Exhibit D)are
hereby incorporated in and made a part of this Agreement.
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ATTACHMENT 1
3. CITY'S OBLIGATIONS. The City agrees to provide space and other amenities for the
proposed food and beverage service, as described in Exhibit C, attached hereto and incorporated into this
Agreement.
4. CONTRACTOR'S OBLIGATIONS.
a. Contractor will provide food and beverage service at Laguna Lake Golf Course seven
days a week, excluding specified holidays. Hours of operation will be from 7:00 a.m. to 7:00 p.m. daily,
adjusting hours for special events and seasonal demands. '
b. Contractor will perform site'improvements by a licensed contractor at prevailing wage to
bring the existing kitchen area up to County Health Department standards and be in compliance with State
and City building codes. Cost for this work is estimated at$60,000.
C. Contractor shall attempt to obtain a liquor license to sell beer and wine on the premises,
contingent upon approval by the State Alcohol Beverage Control. Contractor shall maintain liquor liability
insurance for the term the license is in effect(Exhibit D).
d. Contractor shall obtain a license to operate a business within the City limits and maintain
said license for the term of the agreement.
e. Contractor will be responsible for all employees operating the kitchen and handling on-
site sales. Contractor will also be responsible for maintaining a clean and safe environment in the kitchen
and serving area.
f. Contractor will be responsible for all food and beverage inventory on the premises.
Contractor will be given space to store supplies and is responsible for securing all inventory items during
non-operating hours.
5. RENT. Contractor will be charged rent for the space utilized at a cost of$1250/month
once the improvements have been completed. Contractor shall provide City with itemized invoices
documenting the actual costs of improvements to the kitchen area. Subject to approval by the Parks and
Recreation Director, the City shall credit the amount actually expended by Contractor for work to upgrade
the kitchen area against Contractor's rent obligation for a period not to exceed four years, in an amount
equal to the actual costs of improvements,not to exceed$60,000. At the beginning of five years,or at such
earlier time as the full amount of improvements performed by contractor has been credited against
Contractor's monthly rent obligation, the Contractor will pay a monthly rent to lease the space. Rent will
be increased each subsequent year beginning year five by the current year's Consumer Price Index as
defined in June of that year. Contractor shall be responsible for paying the monthly rent by the 10th of each
month; if rent is not received by the 20`h of the month, the Contractor will be charged a late fee of
$25/occurrence. If rent has not been paid within 30 days, the City shall take steps to terminate the
agreement.
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ATTACHMENT 1
6. REVENUE SHARING. Contractor hereby agrees that during the course of this
Agreement City shall credit amounts actually expended by Contractor to upgrade the kitchen area against
rent due under the lease.During years one through four of the Agreement,the parties expect such credits to
apply provided, however, that the parties agree to renegotiate this contract to provide for revenue sharing
between the City and Contractor in the event that the contractor's net revenues from the operation of this
Concession exceed$50,000 per year in the first four years of the contract,Contractor will open the contract
to negotiate revenue sharing with the City of San Luis Obispo.
7. OWNERSHIP OF IMPROVEMENTS. Upon completion of building improvements
by Contractor, all improvements shall become the sole property of the City of San Luis Obispo and shall
remain the sole property of the City of San Luis Obispo upon termination or non-renewal of the
Agreement. If this contract is terminated for convenience by the City before the end of the second year,
City shall reimburse Contractor for a pro-rated amount of the amount actually expended by contractor to
complete the site improvements agreed to herein.
8. AMENDMENTS. Any amendment, modification or variation from the terms of this
Agreement shall be in writing and shall be effective only upon approval by the City Manager of the City.
9. COMPLETE AGREEMENT. This written Agreement, including all writings
specifically incorporated herein by reference, shall constitute the complete agreement between the parties
hereto. No oral agreement, understanding or representation not reduced to writing and specifically
incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding or
representation be binding upon the parties hereto. In the event that there are conflicts between the terms of
this Agreement and the terms of Contractor's Proposal(incorporated herein as Exhibit B), including but not
limited to duration,compensation and termination,the terms of this Agreement shall prevail.
10. TERMINATION. Either parry may terminate the Agreement for convenience provided
that 30 days written notice is given. The Agreement may be terminated by either party for cause,provided
that written notice has been given in the manner specified herein stating the reasons for the intended
termination and providing the other party at least 10 days to cure any alleged breach. If the party receiving
notice fails or refuses to cure the alleged breach within 10 days,or to make substantial progress toward cure
to the satisfaction of the party demanding cure,this Agreement may be terminated 10 days after receipt of
the notice as specified herein.
11. HOLD HARMLESS AND INDEMNIFICATION. The Contractor agrees to defend,
indemnify,protect and hold the City and its agents, officers and employees harmless from and against
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ATTACHMENT 1
any and all claims asserted or liability established for damages or injuries to any person or property,
including injury to the Contractor's employees, agents or officers that arise from or are connected with
or are caused or claimed to be caused in whole or in part by the acts or omissions of the Contractor,and
its agents, officers or employees, in performing the work or services herein, and all expenses of
investigating and defending against same;provided, however, that the Contractor's duty to indemnify
and hold harmless shall not include any claims or liability arising from the established sole negligence
or willful misconduct of the City, its agents,officers or employees.
12. NOTICE. All written notices to the parties hereto shall be sent, postage prepaid by
registered or certified mail addressed as follows:.
City City Clerk
City of San Luis Obispo
990 Palm Street
San Luis Obispo,CA 93401
Contractor Achievement House,Inc
496 Linne Rd
Paso Robles,CA 93446.
13 AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant
that each individual executing this agreement on behalf of each party is a person duly authorized and
empowered to execute Agreements for such party.
IN WrrNESS WHEREOF, the parties hereto have caused this instrument to be executed the day
and year first above written.
ATTEST: CITY OF SAN LUIS OBISPO
By:
Elaina Cano,City Clerk David F.Romero,Mayor
APPROVED AS TO FO CONTRACTOR
By:
Christ ietrick,City ArIeWey Achievement House,Inc.
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CITY O F SAN LUIS OBI S P O
FROM: Betsy Kiser, Parks and Recreation Director
SUBJECT: AGREEMENT WITH ACHIEVEMENT HOUSE, INC.. FOR
CONCESSIONAIRE AT LAGUNA LAKE GOLF COURSE
RECOMMENDATION
1. Accept a donation from Achievement House, Inc for $30,000 in improvements to the
Laguna Lake Golf Course pro-shop;
2. Enter into a 5-year agreement with Achievement House, Inc. to provide a food and beverage
concessionaire at Laguna Lake Golf Course;
3. Authorize the Mayor to execute the agreement.
DISCUSSION
Background
On January 5, 2010, the City Council received the Laguna Lake Golf Course (LLGC) best
practice review, which recommended a number of best practice initiatives to increase revenues at
the golf course. One of the initiatives was to pursue a food and beverage concessionaire through
the request for proposal (RFP) process with the intent to add alcohol sales at Golf Course. Based
on Council directive, on February 18, 2010 an RFP was issued requesting sealed proposals for a
food and beverage concessionaire at the course. Bids were opened on March 12 with one
proposal received from Achievement House, Inc.
Achievement House,Inc.
AHI, Inc. is a 501 (c) 3 non-profit corporation based in San Luis Obispo, California, established
to provide vocational training and residential services to developmentally disabled adults. AHI's
corporate headquarters is located at 496 Linne Road in Paso Robles and has been serving San
Luis Obispo County since 1957. AHI's mission statement is: "To provide vocational
opportunities for individuals with special needs that respect personal choice and diversity and
that refect individualized goals that support enhanced independence, personal responsibility
and self-esteem. " AHI provides an array of vocational services and programs to assist
individuals in developing appropriate workplace skills and behaviors so as to enhance individual
productivity, independence and community integration. AHI's philosophy is that in order to be
in an effective program, we must work in partnership with the individual and his/her support
network. AHI has effectively demonstrated that individuals with even the most severe limitations
can be gainfully employed, contributing members of their respective communities if appropriate
supports are developed and maintained.
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i\�r ✓ Trrru';iENT Z
Agreement with Achievement House, Inc.for Concessionaire at LLGC 6.15.10 Page 2
While Achievement House provides a wide range of programs to serve the needs of those with
developmental disabilities, it currently provides successful concessionaire services similar to
those being proposed for LLGC for the City of Atascadero (Orange Dog Cafe), Vandenberg
Airforce Base (Cafe Bob) and Camp San Luis Obispo.
Terms of the Agreement
Over the last couple of months, staff from the Parks andRecreation and Finance and Information
Technology (FIT) Departments has met with representatives from Achievement House to
negotiate terms of an agreement to satisfy the needs of both organizations. The agreement
includes the following primary terms:
1. The agreement is for five (5)years to conduct food and beverage operation at LLGC.
2. The City's obligation is to provide space and some amenities for the service.
3. Achievement House's obligation is to:
a) provide service seven (7) days/week, excluding several holidays, from 7a.m. —7p.m.;
b) make $30,000 in site improvements to bring the facility up to code with the Health
Department, including flooring, installation of four (4) required sinks, exhaust hood,
lighting adjustments, FRP to walls, electrical upgrades, painting and a number of new
appliances
c) attempt to obtain a liquor license to sell beer and wine
d) be responsible for all employees needed to provide the service
4. Rent will be $1,250 plus CPI, with credit given by the City on the front end of the
contract equal to the amount expended for improvements.
Acceptance of Donation of Improvements
Per the City's Donation Policy - Resolution No. 8965 (1999 Series), any donation exceeding
$5,000 in value must be accepted through a written agreement and approved by City Council.
By approving the agreement with Achievement House, the Council accepts ownership of the
$30,000 in improvements to the pro shop to enable it to be used as a food and beverage facility..
CONCURRENCES
FIT staff participated in the negotiations and concurs with the terms of the agreement. Staff
from LLGC, the Building Division, Public Works and Information Technology has been working
with Achievement House on mutually acceptable plans and the process for making
improvements to the pro shop.
FISCAL IMPACT
By entering into this agreement with Achievement House, the LLGC will realize a net increase
in revenues of$25,000 over the five year period of the contract plus $30,000 in improvements..
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Agreement with Achievement House, Inc.for Concessionaire at LLGC 6.15.10 Page 3
Current revenues: Currently LLGC expends $8,400 annually for food and beverages with
revenues of$12,000, for a net gain of approximately $4,000 ($4,000/year x 5 years = $20,000 in
revenues).
Future revenues under agreement: $15,000 per year rent (+ CPI) x 5 years = $75,000 minus
$30,000 credit for improvements= $45,000.
ALTERNATIVES
Release the RFP again. Since the City received only one proposal to the RFP, Council could
direct staff to re-release the RFP to see if it might attract more respondents. This is not
recommended because in 2008, the City released an RFP for a concessionaire at the golf course
and had no responses. Staff attributes this lack of interest to the amount of improvements needed
to bring the kitchen into compliance with the Health Department. Achievement House, Inc., due
to the services it provides to people with developmental disabilities and its funding sources has
the ability and desire to not only improve the facility, but provide a practical food and beverage
service to the LLGC.
ATTACHMENT
Agreement
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6.15.I O.doc
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ATTACHMENT
AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on
, 20I0 by and between the CITY OF SAN LUIS OBISPO, a municipal corporation,
hereinafter referred to as City,and ACHIEVEMENT HOUSE,INC.,hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, on February 18, 2010, City requested proposals for providing food and beverage
service at Laguna Lake Golf Course per Specification No.91002.
WHEREAS, pursuant to said request, Contractor submitted a proposal that was accepted by City
for said concession operations.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants
hereinafter contained, the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be from the date this Agreement is made and
entered, as first written above, for five years, from the date all improvements have been completed and
accepted in writing by the City. Contractor has three months from the date this Agreement is made to
complete all improvements necessary to conduct the food and beverage operations or the Agreement will
be terminated. An additional one year extension of this agreement may be,made upon mutual agreement by
the City and Contractor.
2. INCORPORATION BY REFERENCE. City Specification No. 91002 (Exhibit A) and
Contractor's revised proposal dated April 23,2010(Exhibit B),and Insurance Requirements(Exhibit D)are
hereby incorporated in and made a part of this Agreement.
3. CITY'S OBLIGATIONS. The City agrees to provide space and other amenities for the
proposed food and beverage service, as described in Exhibit C, attached hereto and incorporated into this
Agreement.
4. CONTRACTOR'S OBLIGATIONS.
a. Contractor will provide food and beverage service at Laguna Lake Golf Course seven
days a week, excluding specified holidays., Hours of operation will be from 7:00 a.m. to 7:00 p.m. daily,
adjusting hours for special events and.seasonal demands.
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b. Contractor will perform site improvements by a licensed contractor at prevailing wage to
bring the existing kitchen area up to County Health Department standards and be in compliance with State
and City building codes. Cost for this work is estimated at$30,000.
C. Contractor shall attempt to obtain a liquor license to sell beer and wine on the premises,
contingent upon approval by the State Alcohol Beverage Control. Contractor shall maintain liquor liability
insurance for the term the license is in effect(Exhibit D).
d. Contractor shall obtain a license to operate a business within the City limits and maintain
said license for the term of the agreement.
e. Contractor will be responsible for all employees operating the kitchen and handling on-
site sales. Contractor will also be responsible for maintaining a clean and safe environment in the kitchen
and serving arca.
f Contractor will be responsible for all food and beverage inventory on the premises.
Contractor will be given space to store supplies and is responsible for securing all inventory items during
non-operating hours.
5. RENT. Contractor will be charged rent for the space utilized at a cost of$1250/month
once the improvements have been completed. Contractor shall provide City with itemized invoices
documenting the actual costs of improvements to the kitchen area. Subject to approval by the Parks and
Recreation Director, the City shall credit the amount actually expended by Contractor for work to upgrade
the kitchen area against Contractor's rent obligation for a period not to exceed two years, in an amount
equal to the actual costs of improvements, not to exceed $30,000. At the end of two years, or at such
earlier time as the full amount of improvements performed by contractor has been credited against
Contractor's monthly rent obligation, the Contractor will pay a monthly rent to lease the space. Rent will
be increased each subsequent year beginning year four by the current year's Consumer Price Index.
Contractor shall be responsible for paying the monthly rent by the 10'h of each month; if rent is not received
by the 201h of the month, the Contractor will be charged a late fee of$25/occurrence. If rent has not been
paid within 30 days,the City shall take steps to terminate the agreement.
6. OWNERSHIP OF IMPROVEMENTS. Upon completion of building improvements
by Contractor, all improvements shalt become the sole property of the City of San Luis Obispo and shall
remain the sole property of the City of San Luis Obispo upon termination or non-renewal of the
Agreement. If this contract is terminated for convenience by the City before the end of the second year,
City shall reimburse Contractor for a pro-rated amount of the amount actually expended by contractor to
complete the site improvements agreed to herein.
7. AMENDMENTS. Any amendment, modification or variation from the terms of this
Agreement shall be in writing and shall be effective only upon approval by the City Manager of the City.
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8. COMPLETE AGREEMENT. This written Agreement, including all writings
specifically incorporated herein by reference, shall constitute the complete agreement between the parties
hereto. No oral agreement, understanding or representation not reduced to writing and specifically
incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding or
representation be binding upon the parties hereto. In the event that there are conflicts between the terms of
this Agreement and the terms of Contractor's Proposal(incorporated herein as Exhibit B), including but not
limited to duration,compensation and termination,the terms of this Agreement shall prevail.
9. TERMINATION. Either party may terminate the Agreement for convenience provided
that 30 days written notice is given. The Agreement may be terminated by either party for cause,provided
that written notice has been given in the manner specified herein stating the reasons for the intended
termination and providing the other party at least 10 days to cure any alleged breach. If the party receiving
notice fails or refuses to cure the alleged breach within 10 days,or to make substantial progress toward cure
to the satisfaction of the party demanding cure, this Agreement may be terminated 10 days after receipt of
the notice as specified herein.
10. HOLD HARMLESS AND INDEMNIFICATION. The Contractor agrees to defend,
indemnify,protect and hold the City and its agents, officers and employees harmless from and against
any and all claims asserted or liability established for damages or injuries to any person or property,
including injury to the Contractor's employees, agents or officers that arise from or are connected with
or are caused or claimed to be caused in whole or in part by the acts or omissions of the Contractor,and
its agents, officers or employees, in performing the work or services herein, and all expenses of
investigating and defending against same;provided, however, that the Contractor's duty to indemnify
and hold harmless shall not include any claims or liability arising from the established sole negligence
or willful misconduct of the City,its agents,officers or employees.
10. NOTICE. All written notices to the parties hereto shall be sent, postage prepaid by
registered or certified mail addressed as follows:
City City Clerk
City of San Luis Obispo
990 Palm Street
San Luis Obispo,CA 93401
Contractor Achievement House,Inc.
553 Higuera Street
San Luis Obispo,CA 93401
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10. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant
that each individual executing this agreement on behalf of each party is a person duly authorized and
empowered to execute Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day
and year first above written.
ATTEST: CITY OF SAN LUIS OBISPO
By:
Elaina Cano,City Clerk David F.Romero,Mayor
APPROVED AS TO FORM: CONTRACTOR
i t
By:
�istine Dietrick,City Attorney Achievement House,Inc.
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I 1
council ReoriIE
October 19, 2010 RECEIVED
TO: City Council
OCT 19 2010
FROM: Shelly Stanwyck, Acting Parks an a eation Director
SLO CITY CLERK
VIA: Katie Lichtig, City Manager
SUBJECT: Red File: C3 Concessionaire greeme era
Achievement House, Inc.
Two letters of correspondence have been received b Council regarding Consent Item #3 the
proposed Amended and Restated Concessionaire Agreement with Achievement House. The
.correspondence received contain some inaccurate statements which are clarified below.
Achievement House is required to obtain a beer and wine license.
Section 4c of the Amended and Restated Agreement states "that Contractor shall attempt to
obtain a liquor license to sell beer and wine on the premises, contingent upon approval by the
State Alcohol Beverage Control (the "ABC")." Contractor is not mandated to have a liquor
license. In prior reports to Council this added service was characterized as adding to the golf
experience at the Laguna Lake Golf Course. However, whether or not the ABC issues such a
license will be contingent upon that Agency's analysis of the proposed use and operational
practices by Contractor which must meet the ABC's stringent requirements to receive a license.
Will the employees ojAchievement House be able to handle patrons who imbibe too much?
The Achievement House's employees are always accompanied by professional job coach in their
workplace. This is the practice of the organization and a business model that has been very
successful for the Achievement House, its clients, and the public for many years.
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RECEIVED
From: Terry Mohan[SMTP:CATSDAD@SBCGLOBAL.NET] OCT 18 2010
Sent: Sunday, October 17, 2010 11:05:50 AM
To: Council, SloCity SLO CITY CLERK
Cc: Stanwyck, Shelly; Lichtig, Katie; Dietrick, Christine
Auto forwarded by a Rule
In reference to the current Agenda Item C-3 concerning the agreement
between Achievement House and the city I commend Achievement House
for taking the initiative of opening a food and beverage establishment where
no one else would dare for decades. My only objection is the requirement
that Achievement House obtain a beer and wine license. There are
numerous restaurants throughout the city that are able to attract clientele
without alcoholic beverages. As this will be a training facility for the
physically and mentally handicapped will they all be capable of
comprehending the current liquor sales laws to minors? With this regulation
in the agreement knowing the workers who will be training at this
establishment does the city really feel they can escape liability if liquor is
sold to underage patrons? Will the employees be able to handle patrons who
imbibe to much? Should they be required to? Patrons are not allowed to
drink in other city facilities, why here? Considering this is directly accross
from Laguna Middle School and a training facility for the handicapped, I
feel a more family friendly menu and atmosphere should be encouraged to
attract local neighbors and the after school crowd.
Given the location and purpose of the restaurant I believe the beer and wine
would be more of a detriment than a benefit. I would encourage you to
delete the requirement for a liquor license to sell beer and wine from the
agreement.
I did not notice it in the agreement but I hope Achievement House does not
have to get approval of its menu from anyone at the golf course or city hall
as this requirement it what has spelled disaster for the restaurant in the new
county building
Terry Mohan � ��L
2416 Santa Clara SCOUNCIL n-CDD DIR
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DATE 10 ITEM #
San Luis Obispo City Council RECEIVED RED FILE
City Council OCT 18 2010 MEETING AGENDA
City Hall
990 Palm Street SLO CITY CLERK DA ITEM
San Luis Obispo,CA 93401
October 18,2010
RE:Consent Agenda Item C3:Amendment and Restatement of Concessionaire Agreement with
Achievement House,Inc.
Dear City Council,
Initially,my comments are in no way to be a criticism of the good works of Achievement House
Inc.or City staffs attempt to make the Laguna Lake Golf Course viable as an enterprise. However,the
fact is that the entire operation is at a`competitive disadvantage"that is insurmountable.
The Amendment and Restatement of Concessionaire Agreement with Achievement House,Inc.
for the Laguna Lake Golf Course concessions raises a number of questions especially in an era of financial
challenges.
I. $1,250 per month rental for the LLGC clubhouse space appears to be well below market rents.
2. The agreement itself waives any rent payment until capital costs advanced by the tenant are
recovered. It will take about 4 years worth of rent during the 7 year agreement before the City
realizes any revenue.
3. During the RFP process soliciting prospective tenants;the absence of any private sector
respondents should have indicated the uphill battle in making a restaurant successfiil at this
location.
4. It is unlikely spending more money on capital improvement projects at the LLGC will have
any beneficial effect on revenue enhancement. Engaging others to spend money accordingly
is also a misallocation of resources.
5. In a time where regulation courses such as Monarch Dunes,Dairy Creek and Avila Beach are
struggling to survive there is no chance for LLGC to be competitive now or in the foreseeable
future.
I respectfully urge the City Council to undertake a more broad discussion regarding the
overall viability of the LLGC and whether the continued subsidy of the enterprise is in the best
interest of the City as a whole.
Sincerely,
Jeff Edwards r�PHlL
P.O.Box 6070 I �. OUNCIL C-:-f[)D DIR
Los Osos,CA 93412 CFGArG " E FIN DIR.
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