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HomeMy WebLinkAboutLease LAG-15-002 MAPLEWOOD GOLF COURSE CLUBHOUSE LEASE AND CONCESSION AGREEMENT THIS CONCESSION AGREEMENT ("Agreement") is made between the City of Renton, hereinafter referred to as "The City," and Northwest Restaurant Experience, Inc., hereinafter referred to as "The Concessionaire." A. LEASE PREMISES AND GRANT OF CONCESSION For and upon the conditions and provisions herein, the City hereby leases to the Concessionaire the restaurant, lounge, kitchen, kitchen storage, office, a tent pad, and related areas, banquet rooms, an office and patios adjoining the restaurant and banquet facilities within the Maplewood Golf Course Clubhouse located on the north side of Maple Valley Highway (SR 169) at approximately 130th Avenue S.E., a portion of the City's municipal golf course, which is legally described in Exhibit A attached hereto. The rooms included within the lease are described as rooms 111, 111A, 112, 114, 114A, 114B, 115, 115A, 119, 120, 121, 122A through 122D, 123, 124, and 131 on the floor plan prepared by Calvin Jordan and Associates for the Maplewood Golf Course Clubhouse, which floor plan is incorporated herein by reference as Exhibit B. Said rooms and adjoining patios, excluding fountains, are herein referred to as the "Concession Premises". The Concessionaire shall occupy, manage and operate the Concession Premises as a lounge, restaurant and banquet facility and shall also be entitled to access to and use of the hallways and restrooms within the clubhouse for the benefit of its customers and employees. The City further grants the Concessionaire the exclusive right and privilege to sell food and beverage on the golf course and the driving range and shall have the right of access to those facilities to operate vending machines, carts and other means of selling food and beverage, provided that the Concessionaire's operation does not interfere with regular operation of the golf course and driving range. The Concessionaire may use the lobby area to accommodate the Sunday Brunch. Any decorating of the lobby area must have prior approval of the City, along with a plan as to how any items will be attached. Such approval shall not be unreasonably withheld. The Concessionaire shall be responsible for any damage to the lobby caused by the attachment or removal of decorations or food service operations. B. TERM The term of this Agreement shall be for six (6) years commencing on March 1, 2015, adjusted prior to signing. Concessionaire shall have the option to extend the term of this Agreement for an additional six (6) year term commencing at the expiration of the initial term of this Agreement, upon the same terms, covenants, and provisions 1 provided in this Agreement. In order to exercise such renewal option, Concessionaire must give the City written notice of Concessionaire's exercise of the renewal option not less than one (1) year prior to the expiration of the initial term of this Agreement. The City, within thirty (30) days of such notice shall indicate to Concessionaire if the City believes the Concessionaire is in good standing. If the City indicates that the Concessionaire is not in good standing, the City and Concessionaire shall attempt to negotiate a plan to remedy any deficiencies in performance by Concessionaire. If the City doesn't respond to the notice within the thirty (30) days, it will be deemed to have agreed that Concessionaire is in good standing. The City may reasonably determine, that due to material adverse changed conditions, certain terms in this Agreement must be renegotiated for the extended term, but those changes must be in writing and agreed to by Concessionaire. C. CONSIDERATION The Concessionaire shall provide to the City the following consideration: 1. Certain services to the public under terms of this Agreement. 2. Payment to the City of the following percentages of gross receipts: for the restaurant/lounge/associated patios/tent and beverage cart, seven percent (7%) up to $775,000.00; six percent (6%) above $775,000.00; and for the banquet facilities, nine percent (9%). D. PAYMENT 1. The term "Gross Receipts" as used herein means all gross revenue received by the Concessionaire for the sale of food, beverage and other products on the Concession Premises and golf course, and off-site catering to other public facilities such as the Community Center or Senior Activity Center. It includes all monies received by the Concessionaire for food, beverages and other products sold to patrons of the lounge, restaurant and banquet facility. However, the term Gross Receipts shall not include tips or charges for Washington State sales tax or other excise taxes imposed by any government imposed directly on the sale of goods or services to be charged to the consumer, although collected by the Concessionaire. 2. Concessionaire shall record all funds which are received in a system which records and identifies the date and amount of each transaction. Records of daily sales shall be submitted to the Administrative Services Department on a monthly basis along with a written statement detailing gross and net receipts, signed by the Concessionaire. 3. Concessionaire shall make payment to the City for each calendar month of operation, said payment being due and payable no later than the tenth (10`h) of the following month, accompanied by the above-described Statement of Gross Receipts. 2 All payments or reports to the City of Renton shall be paid or delivered to: 1055 South Grady Way, Renton,Washington 98057. 4. If any payment specified herein is not paid to the City within ten (10) days after the date specified, a late charge of ten percent (10%) of the payment due and unpaid shall be added to the payment as a penalty, and the total sum shall become immediately due and payable. Any amount remaining unpaid by the first day of the month following the due date for payment (i.e. approximately twenty (20) days late) shall bear interest at the rate of one percent (1%) per month. E. CITY OBLIGATIONS The City shall have the following obligations under this Agreement: 1. To replace the banquet facility's rectangular, serpentine and round tables, if destroyed or damaged (unless the damage or destruction was the Concessionaire's fault), in a style to be coordinated with the Concessionaire in sufficient quantity to accommodate a dinner buffet for up to three hundred (300) people. 2. To replace or repair the kitchen floor. The City will use its best efforts to accomplish this no later than November 18, 2017. 3. To provide office space to Concessionaire for marketing activities. 4. To provide janitorial service for the driving range, clubhouse common areas, including restrooms, pro shop, golf pro office, and golf course management office. 5. To operate the municipal golf course on a continuous basis, subject to the interruption for inclement weather, earthquakes and other events beyond the City's control. 6. To provide heating and cooling to the Concession Premises to maintain temperatures within the Concession Premises within a temperature range customary for the use of the Concession Premises during its normal business hours; provided that when the air conditioning is on, the Concessionaire will use its best efforts to keep the doors closed. It is understood that doors may be opened to permit traffic in and out of the restaurant, including the movement of food and equipment, and that where portions of the kitchens are hot notwithstanding the air conditioning, the kitchen door may be opened to provide ventilation and cooling for such areas. 7. To provide utility services to the Concession Premises (i.e., electricity, water, natural gas, sewer, and trash removal). 3 8. To maintain the clubhouse building, hallways, restrooms, the parking lot, sidewalks, and the grounds surrounding the clubhouse in good repair and attractive condition. 9. To provide and maintain for the use of the Concessionaire, its patrons and employees, the parking lots on the golf course property, which shall be used in common with patrons of the golf course driving range from October through March. Due to parking constraints, April through September it is required that all Maplewood/RiverRock staff park in the designated area west of the driving range. To the extent reasonably necessary, the City shall endeavor to remove accumulations of snow and ice from the parking lot and from sidewalks leading to the clubhouse. F. CONCESSIONAIRE'S OBLIGATIONS Concessionaire shall perform the following tasks: 1. To provide janitorial services for the lounge, restaurant, marketing office, kitchen, a tent pad, excluding fountain and dumpster area, and banquet facilities according to the standards set forth in Exhibit E attached hereto. 2. To provide all reservation activities associated with the restaurant and banquet facilities, and coordinate with the golf course management so as to not conflict with the golf course activities, particularly parking when there are tournaments or other heavy usage periods. Parking may be a problem if both the golf course and restaurant and banquet facilities have scheduled events. Requirements noted in E9 above will be followed. If problems develop, the Concessionaire and the City will discuss methods of resolving the difficulties. If the Concessionaire and the City cannot come to an agreement, then they will resolve this difficulty through binding arbitration. The parties will attempt to select a single arbitrator to resolve the difficulty, but if they cannot agree on a single arbitrator, then each party will appoint an arbitrator and those two will select a third arbitrator. The decision will be by majority vote. The costs of the arbitration will be equally shared by the City and the Concessionaire. 3. To perform normal and periodic maintenance for the range hood, bar and refrigerator, but repair and replacement shall be the responsibility of the City. The Concessionaire acknowledges that the range hood, bar and walk-in refrigerator shall remain the property of the City. The City acknowledges that the kitchen equipment listed in Exhibit D (will be updated by concessionaire) has been purchased by the Concessionaire. 4. To open the restaurant no later than 6:30 a.m. Events may require earlier opening service to be coordinated by golf course management and concessionaire, provided that the restaurant may be closed during such times as the golf course is closed or not being used because of snow, inclement weather or any other reason. The 4 Take-Out Window shall be open for coffee and limited food service September through April from 6:00 a.m. until the golf course closes, and open May through August from 5:00 a.m. until the golf course closes. 5. To provide necessary advertising to publicize the restaurant, lounge, banquet facilities, and joint promotions with the golf course to include external and club customers, and to establish an advertising program acceptable to and approved by the Parks and Golf Course Division Director. However, the City shall not unreasonably withhold its approval of an advertising program proposed by the Concessionaire. 6. Concessionaire shall secure all required City permits after setting up the Banquet Tent. The Tent shall be removed at the time of permit expiration. 7. To operate the beverage cart at least on the following basis: seven (7) days per week during the months of May through Labor Day in September, Friday through Sunday commencing the date after Labor Day through September 30, and Friday through Sunday during the month of April and the Winter Tournament Series events; provided that the beverage cart need not be operational during inclement weather unless there is a scheduled event. The City shall provide gasoline for the operation of the beverage cart, to be paid for by the Concessionaire. 8. To request shuttle service and/or double parking be provided if the Concessionaire schedules an event that it anticipates will require overflow parking. The City will make an effort to provide such service, should City staffing not be available, the Concessionaire will be trained and will serve as the alternate. The labor and fuel costs will be split equally between the two parties, with the City invoicing the Concessionaire for such services. 9. To provide seasonal (May through September) patio flowers/pots for the restaurant, bar and banquet patios approved by the City representative. 10. To monitor and correct banquet guests actions, should they not abide golf course restrictions, behave in an unacceptable manner, or cause damage to the facility or its grounds. G. CONCESSIONAIRE'S STAFF The Concessionaire shall employ competent, courteous and efficient staff in numbers to adequately serve its patrons. All Concessionaire staff members shall, while on duty, be equipped with any apparatus or clothing that may be required by law, ordinance or regulation. An experienced on-site manager shall be selected and designated as the Concessionaire's authorized representative who shall oversee all concession 5 operations on the Concession Premises and transmit and receive communications to and from the City. The on-site manager or designee shall ensure that the following items are addressed in a timely manner: 1. Have customer service training plan that is in place, including beverage cart training. A City representative or designee will provide concessionaire management with initial beverage cart training and training documents. 2. Communicate and coordinate tournaments and events with City representative or designee for use of the banquet facility. 3. Provide monthly calendar of scheduled events in the banquet facility. 4. Provide a weekly beverage cart schedule in season. 5. Attend, at a minimum, two (2) golf course staff meetings monthly. 6. Notify City representative or designee immediately of any repairs needed that are the City's responsibility, i.e., plumbing, electrical, doors, lighting, etc. 7. Provide City representative with current management team contact information for emergency purposes. 8. Ensure that banquet staff is trained on the use and care of the Audio Visual system. H. SIGNAGE All graphics placed upon or affixed to any of the Concession Premises shall be subject to the prior written approval of the City or its representative, which approval shall not be unreasonably withheld. The Concessionaire will follow all City sign codes. The Concessionaire shall submit detailed plans and secure any needed permits/approvals for all exterior and interior signs. In all cases, signage shall be consistent in size, color, lettering and theme to regular park signage and specifications. The Concessionaire must secure prior approval from the City's representative for all exterior decorations. Such approval shall not be unreasonably withheld. CAPITAL IMPROVEMENTS/REMODELING 6 Concessionaire shall, prior to commencing any alterations, improvements, or construction, submit to the City in writing, plans for alterations, improvements, and construction along with a breakdown of costs for such improvements. All plans submitted are subject to the approval of the City or its representative prior to commencement of any alteration, improvements or construction. The City agrees to promptly review said plans, and if the alterations, improvements, and construction are acceptable, to promptly approve the same, and the plans as approved shall be attached to an executed copy of this Agreement and incorporated herein. All work performed shall be done to the satisfaction of the City's representative and shall be carried out in a manner that minimizes impact upon the use of the golf course by the public. Concessionaire shall be responsible for obtaining all governmental permits and meeting all code requirements and shall submit copies of the same to the City or its representative prior to commencing any construction on the Concession Premises. The City or its representative may conduct inspection of any capital improvement work at any time to assure itself that such work is in accordance with the plans approved by the City. In the event any such work is not according to plans as then approved by the City, the City or its representative shall send a Notice of Noncompliance to the Concessionaire. In the event the Concessionaire fails to make corrections within twenty (20) days after the Concessionaire's receipt of such Notice of Noncompliance, the Department may make whatever corrections are necessary to bring such work into compliance with the plans as approved, and shall charge the Concessionaire for all costs of such corrective work. Concessionaire shall, prior to commencement of any construction work, provide payment and performance bond(s) in form(s) approved by the City Attorney, payable to the City in the full and just value of such capital improvements, conditioned that all provisions of this Agreement relating to capital improvements shall be faithfully performed by the Concessionaire, or the surety, if required. Concessionaire shall furnish the City with a complete set of reproducible 24" x 36" mylar drawings reflecting the final "as-built" condition of all capital improvements within thirty (30) days after completion of the construction. Concessionaire shall furnish to the City copies of all operating manuals, equipment brochures, paint schedules, and material brochures for such improvements. Concessionaire will use recycled products whenever possible. All alterations, fixtures and tenant improvements, and construction shall become the property of the City upon termination or expiration of this Agreement and shall be installed solely at the Concessionaire's expense unless the City expressly agrees in 7 writing to contribute toward the costs thereof. The Concessionaire shall not be required to remove or pay the cost of removal of any approved and accepted alterations, fixtures, or tenant improvements at the expiration or earlier termination of this Agreement. The kitchen equipment which is the personal property of the Concessionaire, including, without limitation, the equipment listed on Exhibit D, shall not be considered "fixtures" for the purpose of this paragraph. The value of tenant provided improvements is subject to leasehold tax. J. UTILITIES Concessionaire shall pay for all utilities associated with the operation of the Concession Premises. The Concessionaire shall install and maintain a private telephone to serve the Concession Premises. The City may decide to install secondary metering for electricity. The Concessionaire shall be billed the prorated share of electrical costs, as follows: Cost sharing formula without the booster pump station in operation: Customer charge Split 50%/50% Demand charge Golf course-35%/concess.-65% Kilowatt charge Golf course-37%/concess.-63% With Booster Pump Station in operation, the Concessionaire will pay the following: Customer charge 25% of total Demand charge 65% of 170 (kilowatts) Energy charge 63% of remaining 30% balance The City of Renton and Concessionaire will split 50/50 year round the water and sewer utility costs for the Maplewood Clubhouse. The City will be responsible for twenty-five percent (25%) of the natural gas expenses (year round) for the Maplewood Clubhouse. The Concessionaire will be responsible for the remaining seventy-five percent (75%) (year round) of the natural gas billings for the Clubhouse. If there is a significant variation in costs for utilities, the City and Concessionaire will revisit these percentages and costs. If any payment due under this clause is not paid to the City within ten (10) days after the date specified, a late charge of ten percent (10%) of the payment due and unpaid shall be added to the payment as a penalty, and the total sum shall become immediately due and payable. Any amount remaining unpaid by the first day of the month following the due date for the payment (i.e. approximately twenty (20) days late) shall bear interest at the rate of one percent (1%) per month from the due date. 8 K. TAXES/FEES The Concessionaire shall pay, before delinquency, all fees, charges, and costs arising out of the Concessionaire's use and occupancy of the Concession Premises including, but not limited to, charges imposed for governmental inspections or examinations, license and excise fees, taxes on personal property of the Concessionaire and on the leasehold interest created by this Agreement. L. EQUALITY OF TREATMENT Concessionaire shall conduct its business in a manner which assures fair, equal and nondiscriminatory treatment at all times in all respects to all persons without regard to race, color, religion, sex, sexual orientation, marital status, age, or national origin. No person shall be refused service, be given discriminatory treatment or be denied any privilege, use of facilities, or participation in activities on the Concession Premises on account of race, color, religion, sex, sexual orientation, marital status, age, or national origin. Failure to comply with any of the terms of this provision shall be a material breach of this Agreement. M. NONDISCRIMINATION Concessionaire shall comply with all applicable Federal, State, County, and City laws, ordinances, rules and regulations regarding nondiscrimination in employment, the provision of services to the public in a nondiscriminatory manner, including, but not limited to, the provisions of the City of Renton Fair Practices Policy as attached hereto and incorporated herein by this reference. The City shall be responsible for making any structural changes to the building and Concession Premises required by the Americans with Disabilities Act (ADA). The Concessionaire shall be responsible for complying with the ADA with respect to any subsequent improvements installed by the Concessionaire, the placement of furniture and furnishings, and the Concessionaire's operations. N. ALL RISK INSURANCE During the term of this Agreement and any extension thereof, the City shall maintain an insurance policy on the clubhouse building in the amount of the replacement cost of the clubhouse building, including the Concession Premises, restrooms and hallways, for damage from fire, earthquake and other perils. Said insurance policy shall also insure the replacement value of the kitchen equipment and banquet tables and chairs provided by the City pursuant to paragraph E.1 above. The Concessionaire shall reimburse the City annually fifty percent (50%) of the premium charged to the City for such fire and hazard insurance policy. The proceeds on a claim against said insurance policy for damage to the clubhouse building, Concession Premises or personal 9 property provided by the City shall be used to repair damage to the clubhouse building and the Concession Premises and to repair or replace any damaged personal property provided by the City. The Concessionaire shall be responsible for maintaining its own fire and hazard insurance on personal property and leasehold improvements placed within the Concession Premises by the Concessionaire. O. ALL-RISK LIABILITY INSURANCE The Concessionaire shall secure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the Concessionaire's operation and use of the leased premises. Minimum Scope of Insurance Concessionaire shall obtain insurance of the types described below: 1. Commercial General Liability insurance shall be written on Insurance Services Office (ISO) occurrence form CG 00 01 and shall cover premises, products/completed operations, broad form property damage, independent contractors, personal injury/advertising liability, and contractual liability. The City shall be named as an additional insured on Concessionaire's Commercial General Liability insurance policy using ISO Additional Insured-Managers or Lessors of Concession Premises Form CG 20 11, or a substitute endorsement providing equivalent coverage. 2. Property insurance shall be written on all risk basis. 3. Automobile Liability insurance covering all owned, nonowned, hired and leased vehicles. Coverage shall be written on insurance services office (ISO) form CA 00 01 or a substitute form providing equivalent liability coverage. Minimum Amounts of Insurance Concessionaire shall maintain the following insurance limits: 1. Commercial General Liability insurance shall be written with limits no less than one million dollars and no cents ($1,000,000.00) each occurrence, two million dollars and no cents ($2,000,000.00) general aggregate. 2. Property insurance shall be written covering the full value of Concessionaire's property and improvements with no coinsurance provisions. 10 3. Automobile Liability insurance shall be written with a minimum combined single limit for bodily injury and property damage of one million dollars and no cents ($1,000,000.00) per accident. Other Insurance Provisions The insurance policies are to contain, or be endorsed to contain, the following provisions for Commercial General Liability insurance: 1. The Concessionaire's insurance coverage shall be primary insurance as respect to the City. Any Insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Concessionaire's insurance and shall not contribute to it. 2. The Concessionaire's insurance shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. Verification of Coverage Concessionaire shall furnish the City with original certificates and a copy of the amendatory endorsement, including, but not necessarily limited to, the additional insured endorsement, evidencing the insurance requirements of the Concessionaire. Waiver of Subrogation Concessionaire and City hereby release and discharge each other from all claims, losses and liabilities arising from or caused by any hazard covered by property insurance on or in connection with the premises of said building. This release shall apply only to the extent that such claim, loss or liability is covered by insurance. City's Property Insurance City shall purchase and maintain during the term of this Agreement all-risk property insurance covering the building for their full replacement value without any coinsurance provisions. P. INDEMNITY 11 Concessionaire will indemnify, defend, and hold harmless the City and its respective officials, officers, employees, agents, attorneys, and assigns from and against all actions, causes of action, liabilities, claims, suit, penalties, fines, judgments, liens, awards, and damages of any kind whatsoever (hereinafter "Claims"), for injury to or death of any person (including without limitation claims brought by invitees of Concessionaire or employees, or invitees of any Contractor of Concessionaire or damage to or loss of any property or clean up of any discharge or release by Concessionaire or any Contractor of Concessionaire, and expenses, costs of litigation, and reasonable attorneys' fees related thereto, or incident to establishing the right to indemnification, to the extent such Claims arise out of or are in any way related to this Agreement or the presence on the Concession Premises of Concessionaire, any Contractor of Concessionaire or such Contractor's employees or invitees. Concessionaire expressly waives any immunity under industrial insurance whether arising from Title 51 of the Revised Code of Washington or any other statute or source, to the extent of the indemnity set forth in this paragraph. In the event that Concessionaire is successful in proving that the foregoing indemnity is limited by RCW 4.24.115, Concessionaire shall defend, indemnify and hold harmless the indemnities to the full extent allowed by RCW 4.24.115. In no event shall Concessionaire's obligations hereunder be limited to the extent of any insurance available to it. The City will indemnify, defend, and hold harmless the Concessionaire and its respective officers, employees, agents, attorneys, and assigns from and against all actions, causes of action, liabilities, claims, suit, penalties, fines, judgments, liens, awards, and damages of any kind whatsoever (hereinafter "Claims"), for injury to or death of any person (including without limitation claims brought by invitees of City , or invitees of any Contractor of City or damage to or loss of any property or clean up of any discharge or release by City or any Contractor of City, and expenses, costs of litigation, and reasonable attorneys' fees related thereto, or incident to establishing the right to indemnification, to the extent such Claims arise out of or are in any way related to this Agreement or to any acts or omissions of the City, any Contractor of the City or such Contractor's employees or invitees. The City expressly waives any immunity under industrial insurance whether arising from Title 51 of the Revised Code of Washington or any other statute or source, to the extent of the indemnity set forth in this paragraph. In the event that the City is successful in proving that the foregoing indemnity is limited by RCW 4.24.115, the City shall defend, indemnify and hold harmless the indemnities to the full extent allowed by RCW 4.24.115. In no event shall City's obligations hereunder be limited to the extent of any insurance available to it. Neither indemnity obligation shall apply in cases of the sole negligence or wrongful misconduct of the indemnitee. Q. MUTUAL RELEASE AND WAIVER 12 The Concessionaire and City shall not assign to any insurance company any right or cause of action for damages which the parties now have or may subsequently acquire against the other party during the term of this Agreement, and shall waive all rights or subrogation for such damage. R. STANDARDS Concessionaire recognizes that although it is operating its facilities as an independent operator for profit, the City is organized and exists for the purpose of maintaining park and recreation facilities for the use and enjoyment of the general public. The Concessionaire, its agents and employees, will devote their efforts toward rendering courteous service to the public as though they were employees of the City, with a view of adding to the enjoyment of the patrons of this recreational facility. Concessionaire shall operate and conduct the facilities in the Concession Premises in a businesslike manner, and will not permit any illegal acts or conduct on the part of the Concessionaire's employees which would be detrimental to the City's operation of the Maplewood Golf Course. Concessionaire will not conduct, or allow to be conducted, activities that generate excessive noise or light or otherwise create a nuisance to the surrounding neighborhoods. Once informed by the City that it believes such activity is occurring, or that it has been receiving reasonable complaints from the neighborhood, the City and Concessionaire will meet to try and arrive at a method of operation by Concessionaire that will eliminate, or sufficiently ameliorate the problems. The City retains the right under its police power, or under its ownership interest of the property, to direct Concessionaire to make changes in its methods of operation that will eliminate conduct or activities that the City reasonably believes creates a nuisance. S. CONTINUOUS OPERATION Concessionaire shall keep the Concession Premises open and use them to transact business with the public on a continuous basis during hours listed in Section F7 hereof. Subject to the prior written approval of the City, the Concessionaire may close the Concession Premises or any portion thereof for a reasonable period for repairs or remodeling, for taking inventory, or to accommodate the construction by the City of public improvements, provided that a written notice of such impending closure is posted in a conspicuous place on the Concession Premises or any portion thereof in an emergency without the approval of the City. In the case of an emergency, the City reserves and retains the right to close the Concessionaire's operation or any portion thereof if necessary to prevent harm caused by the emergency. This closure shall not continue longer than the least amount of time necessary to prevent such harm. 13 T. COMPLIANCE WITH LAWS Concessionaire shall comply with all applicable Federal or State laws and City ordinances, and with applicable Federal, State, City and local directions, rules and regulations. U. UNUSABILITY In the event the Concession Premises or the clubhouse building is damaged by fire, flood, earthquake, act of war or other casualty, the City shall promptly repair the same, provided that if the peril causing the damage is not covered by insurance on the building and Concession Premises required to be maintained by the City pursuant to paragraph N above, then the City may terminate this Agreement by giving written notice to the Concessionaire within thirty (30) days of the date of the damage. If the damages interfere with the operation of the restaurant lounge or banquet facility operations, the Concessionaire's obligation to make payments to the City shall abate until the repairs are completed and the term of this Agreement shall be extended by the number of days equal to the duration of time from the date of the damage to the date of completion of the repairs. V. SURRENDER OF PREMISES AND REMOVAL OF CONCESSIONAIRE'S PROPERTY 1. Upon termination or expiration of this Agreement, the Concessionaire shall surrender the Concession Premises to the City and promptly surrender and deliver to the City all keys that it may have to any and all parts of the Concession Premises. 2. The Concession Premises shall be surrendered to the City in as good a condition as at the date of execution of this Agreement, except for the effects of reasonable wear and tear, alterations, and repairs made with concurrence of the City, and property damage by fire and other perils insured in contracts or policies of all risk insurance. 3. Within thirty (30) days after the termination of this Agreement or the expiration of its term, Concessionaire shall remove from the Concession Premises, at its sole expense, all equipment, furnishings, and other personal property owned and placed in or on the Concession Premises by the Concessionaire, but not including the range hood, freezer, walk-in cooler, and bar. 4. In the event that after termination or expiration of this Agreement, the Concessionaire has not removed its equipment, furnishings, and other personal property within the time allowed, the City may, but need not, remove said personal property and hold it for the owners thereof, or place the same in storage, all at the expense and risk of the owners thereof, and the Concessionaire shall reimburse the City for any expenses incurred by the City in connection with such removal and 14 storage. The City shall have the right to sell such stored property, without notice to Concessionaire, after it has been stored for a period of thirty (30) days or more, the proceeds of such sale to be applied first to the cost of sale, second to payment of any charges for storage, and third to the payment of any other amounts which may then be due from Concessionaire to the City, and the balance, if any, shall be paid to the Concessionaire. W. LIENS AND ENCUMBRANCES Concessionaire shall keep the Concession Premises free and clear of any liens and encumbrances arising or growing out of its use and occupancy of the Concession Premises. At the City's request, Concessionaire shall furnish the City written proof of payment of any item which would or might constitute the basis for such a lien on the Concession Premises if not paid. X. ENTRY The City's representative may enter the Concession Premises during normal operating hours for the purpose of inspecting or repairing the same except in the case of emergency, but this right shall impose no obligation upon the City to make inspections to ascertain the condition of the Concession Premises in addition to the City's responsibility to conduct annual inspections. Y. ACCESS TO BOOKS AND RECORDS; CASH RECEIPTS The Concessionaire shall provide basic financial statements on a monthly basis to the City. The basic financial report shall include a detailed income statement that provides detail sales, costs of sales, wages/benefits, operating expenses, administrative expenses, internal corporate payments, and depreciation/amortization; a statement of cash flow; monthly Business and Occupation Tax return filed with the State of Washington; and a structured balance sheet that show changes in each owners' equity position. Additionally, the Concessionaire shall provide the City with annual financial statements accompanied by its federal income tax return, with all applicable schedules, within one hundred eighty (180) days of each fiscal year end. The Concessionaire shall retain all books and records supporting the above financial reports and transactions covered by this Agreement for a period of four (4) years after the end of its fiscal year. The City shall have the right, with reasonable notice, to examine and inspect books and records of the Concessionaire to determine compliance with the provisions of this Agreement. Concessionaire shall record all sales in a point of sale system approved by the City that records and identifies the date type of sale, and the amount of each transaction. 15 In addition, to assure the Concessionaire is able to fulfill its obligation under this Agreement and maintain sufficient liquidity for the ongoing operation, the Concessionaire hereby agrees to provide/maintain the following: 1. Personal Guarantee: Concessionaire shall provide personal guaranty for its obligation under this Agreement. The guaranty is limited to two hundred thousand dollars and no cents ($200,000.00) which consists of one (1) year lease payment inclusive of leasehold tax at one hundred forty thousand and no cents ($140,000) based on 2014 operating income plus one (1) year utility expenses averaging around $60,000 per year. Upon completion of the second year of the agreement, the Personal Guarantee will be reviewed annually by both the City and Concessionaire for adjustments. 2. Working Capital: Concessionaire shall maintain working capital in the form of cash or cash equivalent in the amount not less than seventy-five thousand dollars and no cents ($75,000.00) by no later than six (6) months after the effective date of this Agreement. Z. APPROVAL OF MENUS AND PRICING. Menus and pricing at current market prices will be established with the City representative's approval after this concession has been awarded. Once established, the Concessionaire may not change the items on the menu more than twenty-five percent (25%) or the prices more than an average of ten percent (10%) without the written approval of the City's representative. AA. DELIVERIES All deliveries are to be made prior to 11:00 a.m. Deliveries made after 11:00 a.m., are restricted to the southeast portion of the building in order to minimize the impact to the golfers. Any damage done to the turf by delivery drivers must be repaired at Concessionaire's expense. BB. DEFAULT OR FAILURE OF CONSIDERATION The City may terminate this Agreement and take immediate possession of the Concession Premises in the event that the Concessionaire shall have failed to perform any of the covenants or conditions of this Agreement, and such default or deficiency in performance was not remedied by the Concessionaire within thirty (30) days after 16 receiving notice in writing stating the nature of the default or deficiency and the City's intention to terminate if not corrected. CC. ASSIGNMENT OF AGREEMENT Concessionaire shall not assign or transfer this Agreement nor otherwise convey any right or privilege granted hereunder or any part of the Concession Premises unless the written consent of the City be first obtained, which consent shall not be unreasonably withheld. Neither this Agreement nor any right, privilege or interest therein or thereunder shall be transferable by operation of law or by any process or proceeding of any court DD. MODIFICATION The parties hereto reserve the right to amend this Agreement from time to time as may be mutually agreed. No amendment hereto shall be effective unless written and signed by authorized representatives of the parties hereto. EE. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties. IN WITNESS WHEREOF, the Ciity has caused this Agreement to be executed by its proper officers duly authorized this 2 day of /41 it-CIN , 2015 , and the Concessionaire has hereunto set its hand. CONCESSIONAIRE THE CITY OF RENTON Northwest Restaurant Experience, Inc. • 0 - 6)0t--1-- -----' 4,,,,,,,,, „4„„ B : By: Denis Law, Mayor Its: fp J J ATTEST$Y: Chris Chau, Deputy City Clerk \\`\\�r��,,.. ,� OF RAN�v,,, J TSEAL ! �,�,