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HomeMy WebLinkAboutNathaniel Lubs, Nate Lubs Golf, Inc.-Golf Course Pro Shop Agreement-11.16.2009 GOLF COURSE PRO SHOP AGREEMENT This Golf Course Pro Shop Agreement(the"Agreement") is made and entered into as of NNt lie l 2-ez , by and between the City of Waterloo, Iowa("City") and Nathaniel Lubs, d/b/a Nate Lubs Golf Inc. ("Golf Pro"). In consideration of the mutual promises exchanged herein, City and Golf Pro agree as set forth below. 1. DEFINITIONS. Whenever used in this Agreement, these terms shall be defined as follows: Commission: Waterloo Leisure Services Commission Director: Waterloo Leisure Services Director Golf Course: Gates Park Golf Course Golf Season: Opening day through official closing as determined each calendar year by the Commission Pro Shop: Gates Park Golf Course Pro Shop 2. TERM OF AGREEMENT. This term of this Agreement shall commence on January 1, 2010, and continue until and including December 31, 2011, unless terminated sooner pursuant to this Agreement. 3. INDEPENDENT CONTRACTOR STATUS. The parties hereby acknowledge and agree that Golf Pro is an independent contractor and is not an employee, agent, partner, or joint venturer of City. Golf Pro has no power or authority to enter into contracts or agreements on behalf of City. City has in this Agreement determined the work to be done by Golf Pro, but Golf Pro shall determine the legal means by which it performs the work specified. City is not responsible for withholding, and shall not withhold, FICA or taxes of any kind from any payments it may make to Golf Pro under this Agreement. Neither Golf Pro nor any of its employees shall be entitled to receive any benefits that employees of City are entitled to receive and shall not be entitled to workers compensation, unemployment compensation, medical insurance, life insurance, pension, or any benefits of any type or nature whatsoever on account of their work for City. Golf Pro shall be solely responsible for compensating its employees. 4. ALTERNATE USE OF GOLF COURSE. City, acting through the Director, retains the right to designate golf courses for uses other than golf in order to maximize benefits to the public and provide community-wide service. With that in mind, the Director shall, with a minimum of fourteen (14) calendar days' notice to Golf Pro, designate any event to occur on the Golf Course that the Director deems necessary or proper for the public benefit or as a community-wide service. 5. PAYMENT BY GOLF PRO. In addition to other payments as set forth in the Agreement, Golf Pro shall pay City the sum of Sixteen Thousand and 00/100 Dollars ($16,000) each calendar year. Golf Pro may make said payment in installments no more than twelve (12)times per year, and in any event payment in full shall be made on or before December 31 each year. 6. CONCESSIONS AND SERVICES. A. Golf Pro shall be responsible for providing the general public with concession at the Golf Course during the Golf Season. "Concessions" shall include but not be limited to food, beverages, riding cart rentals, services, and merchandise. B. Golf Pro shall retain all income from sale of Concessions and golfing lessons and from the rental of lockers. C. Golf Pro must demonstrate and possess the ability and financial solvency to operate the Pro Shop and to fulfill all duties of Golf Pro as set forth in this Agreement. Toward this end, Golf Pro shall annually (on or before July 1 of each year) deliver the following documents or information to City: 1. A verified or certified financial statement that shows Golf Pro is not insolvent and has the ability to pay all debts as they come due. 2. In lieu of the statement required by paragraph 1, a written statement from Golf Pro's primary lender setting forth the existence and amount of any line of credit that Golf Pro has with such lender and verifying that Golf Pro is current on making all payments to the lender pursuant to such line of credit and other borrowing arrangements between them. City may, at any time and from time to time, review Golf Pro's financial records as they relate to Golf Pro's operations relating to the Golf Course. Such review shall be at City's sole expense. Golf Pro shall fully cooperate in such review. 7. COLLECTION OF GOLF FEES. City shall retain all revenue from green fees and the sale of season tickets, except as otherwise provided in this Agreement. Golf Pro shall collect daily green fees, season ticket fees, and miscellaneous revenue as required by the Director. Golf Pro shall follow all procedures set by the Director or the Director's designee for the collection and remittal of fees and for recordkeeping. 8. INCENTIVE PAYMENTS. City agrees to make to Golf Pro the incentive payments provided for in this Section 8. For purposes of this Section, the "18-Hole Base" is the number of 18-hole daily fee rounds charged and collected in 2008, the "9-Hole Base" is the number of 9-hole daily fee rounds charged and collected in 2008, and the "Four Year Average" is the average of the number of 9-hole or 18-hole, as applicable, daily fee rounds charged and collected in the four calendar years immediately preceding the year in which an incentive payment is to be made. All incentive payments shall be paid by City within 45 days after the last day of each Golf Season. 18-Hole Incentive. The incentive payment shall be an amount equal to $1.00 for each 18-hole daily fee round charged and collected in excess of the 18-Hole Base, up to the Four Year Average for 18-hole daily fee rounds charged and collected. For each 18-hole daily fee round charged and collected in excess of such Four Year Average, the incentive payment shall be an amount equal to $2.00 for each such round. 9-Hole Incentive. The incentive payment shall be an amount equal to $0.50 for each 9-hole daily fee round charged and collected in excess of the 9-Hole Base, up to the Four Year Average for 2 9-hole daily fee rounds charged and collected. For each 9-hole daily fee round charged and collected in excess of such Four Year Average, the incentive payment shall be an amount equal to $1.00 for each such round. Special Promotions Incentive. In addition to the above incentives, Golf Pro and the Director or Director's designee may agree on terms for other incentives from time to time. 9. RESPONSIBILITIES OF THE CITY. In connection with the operation of the Pro Shop, City will be responsible for the following: A. Provide Golf Pro with such areas as are now existing in the Pro Shop building to be used for the purpose of providing Concessions and services. City reserves the right to increase or decrease the size of, or to alter any part of, the Pro Shop building. B. Make all ordinary or reasonable structural repairs required for maintenance and upkeep of the Pro Shop building. C. Furnish tables, chairs, counters, and supplies, such as scorecards, pencils, light bulbs, and any other furnishings as it deems necessary. City will also furnish toilet paper and necessary restroom cleaning supplies. D. Provide the garbage pick up from outdoor receptacles to be provided by City at the Pro Shop building. E. Provide Golf Pro with the use of a storage building for motorized golf carts at the Golf Course. F. Waive greens fees for two (2)tournaments sponsored by the Golf Pro during each season. Golf Pro must request prior approval of these tournaments from City's Golf Manager. To qualify for a waiver, at least one of the tournaments must not be a repeat of a tournament conducted during any of the previous three (3) golf seasons. G. Golf Pro shall have first right to salvage all lost golf balls from any body of water within the boundaries of the Golf Course, and upon salvage all such balls shall be the sole property of Golf Pro. 10. RESPONSIBILITIES OF GOLF PRO. A. The parties acknowledge that Nathaniel Lubs ("Lubs") is a key employee and principal of Golf Pro. The personal services that Lubs will provide in operation of the Pro Shop and Golf Course are a material inducement for City to enter this Agreement with Golf Pro, and the parties acknowledge that, without the services to be provided by Lubs hereunder, City would not enter this Agreement with Golf Pro. Golf Pro agrees that it shall, at all times during the term of this Agreement, continue to employ Lubs as a key employee and officer of Golf Pro. In light of the foregoing, if Lubs ceases to be an active employee of Golf Pro for any reason, or if Lubs ceases to own a controlling interest in Golf Pro, then City may choose to terminate this Agreement as set forth in Section 16 below. 3 B. Golf Pro shall keep accurate accounts of ticket sales and deposits, and assure conscientious and efficient service to the general public. Golf Pro shall provide a list of its employees to the Director at the beginning of each Golf Season and shall supplement such list anytime thereafter when employee changes are made. All such employees shall be hired and terminated at Golf Pro's discretion. Golf Pro agrees to make all decisions regarding the hiring or termination of employees in compliance with State and Federal laws requiring equal opportunity in employment without discrimination, segregation, or regard to an applicant's or employee's race, color, religion, national origin, sex, age, handicap, or disability. C. Golf Pro shall keep the Pro Shop facility open and in operation during hours approved by the Director. Golf Pro shall, at the beginning of each Golf Season, and thereafter when any changes are proposed, provide the Director with a schedule of proposed hours when the Pro Shop will be open. D. Golf Pro shall make no alterations, affixations, or repairs to any part of the Pro Shop building or furnishings without first obtaining written approval of the Director. E. Golf Pro shall be responsible for the operation, care and cleaning of locker room facilities and restrooms in the Pro Shop building. Golf Pro shall be responsible for providing necessary cleaning supplies for all areas of the Pro Shop, except for the restrooms. F. Golf Pro shall be responsible for keeping the immediate area outside the Pro Shop free of litter and debris. G. Golf Pro shall be responsible for providing and maintaining all equipment necessary to operate a food and beverage concession and for providing the other services that Golf Pro is required to furnish pursuant to this Agreement. H. Golf Pro shall be responsible for providing and maintaining all golf carts. During each golf season from March through November, the minimum number of operable golf carts during the term of this Agreement shall be no less than thirty-six(36). I. Lubs shall be permitted reasonable time to participate in golf tournaments and other professional activities, including schools and seminars which are necessary to maintain and improve Golf Pro's professional status. J. Golf Pro shall have the exclusive right to give golf lessons at the Golf Course. Golf Pro shall be solely responsible to set and collect fees for lessons. Golf Pro shall provide competent and high-level golf instruction for all groups and levels of players. Golf Pro understands and agrees that a solid developmental junior program is of the highest priority to City, and to that end shall make every effort to ensure the success of a junior program. However, Golf Pro shall allow area high school and college coaches to give instruction to their team members during team practices as authorized and scheduled by Commission staff 4 K. Golf Pro shall be responsible to comply, and to operate the Golf Course and Pro Shop in a manner that complies, with all applicable laws, rules, regulations and orders of federal, state or local governing authority. 10.1 SEPARATE ENTITY. Golf Pro has represented to City that Golf Pro will, in January 2010, create a corporation or limited liability company to carry on the business of Golf Pro under this Agreement. Promptly following the creation of such entity, Golf Pro will forward proof of organization to City, and thereupon the new entity will be deemed substituted as Golf Pro hereunder. Golf Pro and its successor in interest agree to cooperate with City in good faith to execute any documents requested by City for purposes of formally effectuating such substitution. 11. UTILITIES. A. Golf Pro will pay City twenty-five percent(25%) of all costs for utilities, including but not limited to heat, lights, water, and local telephone service at the Pro Shop during the months of March through November, and thirty-seven and one-half percent(37.5%) of all such costs during the months of December through February. City shall invoice Golf Pro monthly for such costs, and Golf Pro shall remit payment to City within fourteen (14) days. B. Golf Pro shall be responsible for long distance calls made on by it or its staff at the Pro Shop. Golf Pro may obtain expanded cable television service at its own expense. Golf Pro shall be responsible to pay for all inspection services provided by City. C. Golf Pro shall pay for all gasoline and/or electrical service necessary to operate and/or charge golf carts. Gasoline will be available through the Golf Course maintenance shop pumps and billed to Golf Pro on a monthly basis through the Commission office. Payment for gasoline will be ten (10) days after mailing or delivery of the bill. Electrical service charges will be billed to Golf Pro through the Commission's local utility account(currently with MidAmerican Energy). Payment of electrical service charges will be due ten (10) days from mailing or delivery to Golf Pro. D. Golf Pro acknowledges that it has been fully apprised of City's Energy Audit Agreement with MidAmerican Energy, and Golf Pro agrees that it will fully cooperate with City and MidAmerican to keep Pro Shop energy efficient and consistent with City's Energy Audit Program. If Golf Pro fails to cooperate with this provision, Golf Pro shall be solely responsible to pay for all charges for utilities identified in paragraph A above. 12. INSURANCE AND BONDS. A. City will provide public liability, property damage and fire insurance coverages on the Pro Shop structure through its policies. B. Golf Pro shall, at its own expense, procure and maintain insurance sufficient to meet the requirements of the Iowa worker's compensation laws. Golf Pro shall provide the Director with proof of coverage at the beginning of each Golf Season. C. Golf Pro shall, at its own expense, procure and maintain casualty and liability insurance with one or more responsible companies that are authorized to do business in the State of 5 Iowa, in the annual aggregate amount of not less than Five Million Dollars ($5,000,000.00). At the beginning of each Golf Season, Golf Pro shall provide the Director and City's Insurance Coordinator with proof of such insurance coverage. D. The Commission and City shall be named as additional insureds on the insurance policies Golf Pro is required to maintain pursuant to this Section 12. Furthermore, Golf Pro agrees to indemnify, defend, and hold harmless the Commission and City from and against(1)all claim, demand, cause of action, or damages of any type or nature relating to or arising from any and all bodily injury to or death of any person or persons, or any and all damage to any property, occasioned by any act, omission, neglect, or wrong-doing of Golf Pro and/or its employees and/or(2) any and all claim, demand, cause of action, or damages of any type or nature relating to or arising from the existence of this Agreement, other than any claim, demand, cause of action, or damages that one party hereto may have against the other for breach of the terms of this Agreement. The above-described insurance policies shall not be canceled or otherwise altered in any way without at least thirty(30) days' written notice delivered to the Director. E. Golf Pro shall, at its own expense, procure and maintain a fidelity bond in the minimum amount of$25,000 covering any loss or misuse of Golf Course monies due to any fraudulent or dishonest act on the part of Golf Pro and any of its employees. Golf Pro shall provide the Director with proof of same at the beginning of each Golf Season. 13. SUPERVISION AND COOPERATION. A. Golf Pro shall work with the Director or the Director's designee to promote and provide the most efficient service for the golfers of the community. B. Golf Pro shall work with the Director or the Director's designee to provide the highest quality Pro Shop services, Concessions, merchandise, and marketing. 14. PERFORMANCE REVIEW AND TERMINATION. City's objective with respect to the Golf Course and other courses under its ownership is to provide high quality golfing facilities and services to the general public and to provide value to taxpayers. To achieve this end, Golf Pro agrees to cooperate with City in good faith for evaluation and review of all aspects of Golf Course facilities and operations. Each calendar year during the term of this Agreement, either party shall have the right, exercisable without cause or reason, to terminate this Agreement by giving written notice to the other party no later than October 31 of the intent to terminate the Agreement as of the following December 31. 15. DISPUTE RESOLUTION. In the event either party claims that provisions of this Agreement have been breached by the other party, as an alternative to termination of this Agreement as set forth in Section 14 above, the party may request a conference by delivering written notice to the other party. The written notice shall detail the violations alleged. A conference between the Director and Golf Pro will be arranged within ten (10) days of the date of notice, or such later date as the parties may consent to in writing, and the parties shall in good faith make every reasonable effort to reach an amicable solution. If the parties do not reach a mutually satisfactory resolution of the dispute, they may exercise any remedies available to them under this Agreement and/or applicable law. 6 • 16. TERMINATION FOR CAUSE. A. In addition to the election to terminate this Agreement as provided in Section 14 above, this Agreement may be terminated for cause by the Director upon the occurrence of any of the following events (each an "Event of Default"): 1. Death or incapacitating physical or mental disability of Lubs, his termination from employment by Golf Pro, or his sale of a controlling interest of the issued and outstanding ownership interests of Golf Pro. 2. Dishonesty or other conduct detrimental to the best interests of the Commission or City by Golf Pro or its principal officers. 3. Continuing inattention to or neglect of duties by Golf Pro or its principal officers. 4. Insolvency or bankruptcy of Golf Pro. 5. Illegal conduct of Golf Pro or its principal officers. 6. Insolvency of Golf Pro or Golf Pro's failure to deliver the documents required under Section 6.0 above. 7. Failure of Golf Pro to maintain the insurance or bonds required under Section 12 above. 8. Golf Pro's violation of state or local alcohol licensing and control laws, including but not limited to laws restricting sales of alcohol to persons under legal age. 9. The breach by Golf Pro of any other material term of this Agreement. Termination may be immediate or upon advance notice, in the sole discretion of the Director. Waiver of any default shall not constitute or be construed as a waiver of any other or subsequent default. Director shall not be deemed to have waived the right to terminate for any given Event of Default until ninety(90) days have elapsed after the occurrence of such Event of Default. B. Upon termination of the Agreement under this section, Golf Pro shall, within thirty (30) days, surrender to City possession of all buildings and furnishings in reasonable condition, subject to ordinary wear and tear. Within said period, Golf Pro shall remove all personal property belonging to it, or its affiliates, agents or permittees. Any personal property of Golf Pro or other persons that remains upon the premises after said 30-day period shall be deemed abandoned and shall become the property of City, and City may use, retain or dispose of said property in any manner it deems fit without incurring liability therefor to Golf Pro or any other person. 17. TRANSFER OR ASSIGNMENT. Except as expressly set forth in Section 10.1 above, Golf Pro shall not transfer or assign this Agreement or sublet the privileges or premises without the prior written consent of City. This Agreement shall be binding upon and inure to the benefit of the parties and the respective personal representatives, successors, and assigns of each. 18. NO LEASE. The parties acknowledge and agree that this Agreement does not constitute a lease by Golf Pro of the Pro Shop, Golf Course, or any other real property owned by City, nor is this Agreement to be construed as a lease or rental agreement. The rights granted to Golf Pro hereunder are personal and contractual in nature. 7 19. NO JOINT VENTURE. Nothing in this Agreement shall, or shall be deemed or construed to, create or constitute any joint venture, partnership, agency, employment, or any other relationship between the parties nor to create any liability for one party with respect to the liabilities or obligations of the other party or any other person. 20. GENERAL. This Agreement represents the entire agreement between the parties with respect to the subject matter hereof, superseding all prior or other agreements or understandings relating thereto. This Agreement may not be modified except by the mutual written consent of both parties. Time is of the essence in the performance of the terms of this Agreement. IN WITNESS WHEREOF, the parties have entered into this Golf Course Pro Shop Agreement by their duly authorized representatives as of the date first set forth above. CITY OF WATERLOO, IOWA NATHANIEL LUBS, d/b/a NATE LUBS GOLF, INC. By: By: Timothy J. Hu , Mayor Nathaniel Lubs Proprietor and President Attest: @Idle, FG,;46 Carol Failor, Deputy City Clerk 8 • STATE OF IOWA ) ) ss. COUNTY) Signed before me on , by Nathaniel Lubs, as Proprietor and President of Nathaniel Lubs, d/b/a Nate Lubs Golf, Inc. Notary Public STATE OF IOWA ) ) ss. BLACK HAWK COUNTY ) Signed before me onQkY(kk" l(Ot , by Timothy J. Hurley and Carol Failor, as Mayor and Deputy City Clerk, respectively, of the City of Waterloo, Iowa. Not Public 3�9-49611 9