07-21-1993 RACC RPTS - Laserfiche WebLink

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CITY OF RIVERSIDE CITY COUNCIL MEMORANDUM HONORABLE MAYOR AND CITY COUNCIL DATE: May 18, 1993 ITEM NO.: 23 SUBJECT: AMENDMENT TO LEASE DATED JANUARY 31, 1992, BETWEEN THE CITY OF RIVERSIDE AND FAIRMOUNT GOLF PARTNERS, LTD Background: The subject lease was executed on January 31, 1992, and provides for lease of a 48.88 acre City -owned site located at 2681 Dexter Drive, Riverside. The term of the lease is 10 years commencing February 1, 1992. The lessee has the option to extend the lease up to three times for five year periods each, under the same terms and conditions as the original lease. The uses permitted under the lease are operation of a public golf course, pro shop, driving range, snack bar, restaurant and bar, putting course, and parking areas for patrons. In consideration of rent, the lessee pays to the City on a monthly basis 20% of the total green fees, driving range fees, and putting course fees. Upon completion of certain required improvements, the lease payment is $10,000 per month, or 20% of the above-mentioned gross receipts, whichever is greater. The lease provides that the Lessee shall construct certain improvements benefitting the property as follows: • Install lighting on the golf course and driving range • Expand parking area • Install a new irrigation system • Enlarge the driving range and provide protective netting • Demolish the existing building improvements and provide a new clubhouse, pro shop and coffee shop Operation of the golf course has not been profitable according to the Lessee. In fact, the Lessee indicates that the facilities are operating with a deficit. The existing revenue collected by the Lessee is not sufficient to cover costs, nor to complete the improvements required under the Lease. In order to facilitate securing a C.U.P. by the Lessee and to complete the required improvements, staff has explored the advisability of reducing the rent from 20% to 10% during the application process for a C.U.P. and during the construction period. The C.U.P. process is estimated to take approximately 3-4 months, which period is anticipated to be July through October or November, 1993. If an EIR is required, it is anticipated that the process will take from 9-12 months.