City Council - Regular Meeting

We are back from executive moving on towards a new business consideration of allowing the beach and swim center concession agreement to enter into its extension period. If I could have a motion, please.

Madam Mayor, members of council, motion to allow the beach and swim center concession agreement to enter into its extension period.

I second. Second. Great. Opening up for discussion. Any questions, comments?

No?

Okay. I would like to call a vote for all this in favor of approving extending this contract into its extension period.

Aye.

That carries unanimously. All right, next item is consideration of the first amendment to the management agreement with the Tiga Cay Golf Management LLC. Could I have a motion, please?

Madam Mayor and members of council, a motion to amend the management agreement with TKK Golf Management LLC and authorize the city manager to execute said agreement.

Second. Thank you. All right. Any discussion or comments? Yep. If I could have Charlie Yu and Chaplain please go through the amendments on this.

Yes, ma'am. So again, this is the first amendment to the golf agreement. So the remainder of the golf agreement that's not being addressed in this amendment will stay in place as far as the terms on things like that. So the first thing that you'll see in the agreement is we've actually put some defined terms in there, specifically what the facilities are, is that has slightly changed with moving them out to the, moving the pro shop out to the old pavilion and things of that nature. So we defined those and included a exhibit A, just so everybody's on the same page there. We did remove two sections from the agreement, and I'm gonna let our attorney touch on those. The first one is Section 2D, effective termination, and then the other one was in Section 12, removing that as it related to arbitration. So, Chaplain, I'll let you cover that.

Okay, with the Section 2D, it was just a strange sentence that confused me and I think was probably left in from another agreement, but it talked about – No duty survived the agreement unless it was expressly stated, and it really wasn't expressly stated, so it's just a strange sentence. Probably would have left it in, but we're trying to clean things up. We cleaned a few other things up, and then the arbitration provision, that was paragraph 12 or section 12, and there was a section that had arbitration. You usually really don't see that in this type of agreement. I also had it in Charlotte, but More importantly, there was a separate section, 13F, that said typical language. It did say any dispute is within the courts of York County, South Carolina. So we just deleted the arbitration so we wouldn't have two conflicting provisions. Cleaned it up a little bit. And that's just going to happen when you get long agreements. Sometimes you'll get language from one agreement that probably doesn't apply, and you just stick it in there. So we were cleaning it up while we were doing the amendment.

Other changes made with this amendment under Section 4G of the agreement, cleaning up what the services to be performed by the operator. And in speaking with TK Golf Management, Pinnacle, this really reflects what they are actually doing up here and what they have been doing. A new section 4L, or excuse me, a new section of L added to section 4, and this is really kind of probably the biggest thing we've added into. Now that we have the new pro shop and snack shop up and running, this just defines, one, they as our operator will perform those limited food and beverage services out there, including with beverage carts out on the golf course and that type of thing. It does limit them to prepackaged food items, sandwich items, and hot dogs, which is what they're selling, and beverage, alcoholic and non-alcoholic, and that they're open during normal business hours for the golf course. So not going to be open all night. It's not a competition with the garrison or anything else. It's literally a snack shack. with its primary focus on enhancing the golfer's experience while they're up here. Additionally to that, because of the additional duties that Pinnacle will have involved with that, they have requested, and it is in the agreement, to take the management fee, which is paid through the golf budget, from where it currently is at $5,500 per month or $66,000 per year, to $7,500 per month or $90,000 per year. So a two grand increase per month for the additional duties that Pinnacle as the parent company will be taking on. The Section 7B, as it relates to the incentive fee, while the incentive fee is still going to stay the same and is still capped at the $66,000 once they cross over, I believe it's $1.15 million in revenues. We had to clean up what the year would be to reflect the new fiscal year because we The agreement referenced October 1 until September the following year. So now that 12-month calculation period shall be from July 1 of the year to the following June 30th. That's pretty much it as far as the bulk of what got changed or removed out of the amendment.

Thank you. And, David, I want to say thank you for being here tonight and for participating. presenting your perspective on specifically the management fees. I do understand and I know that there's additional responsibilities, time and effort that goes into now running a whole separate entity for the golf course. So thank you for the patience in getting all of this put together. All right, so we've had a motion. We've had a second. Now I'm calling for a vote. All those in favor of approving this amendment as has been presented to us? Aye. That carries unanimously. Thank you. I think that brings us to the end of our meeting and adjournment. I would like a motion to adjourn, please. Second? Second. We are adjourned.