Laserfiche WebLink
File Number: 20-174 <br />EBITDAR*$ 901,170 $ 734,075 $ 699,982 $ 644,342 $ 690,225 $ 832,597 $1,018,676 <br />City Rent $ 800,042 $ 797,797 $ 830,379 $ 818,563 $ 877,015 $ 946,655 $ 965,573 <br />AGC Net $ 101,128 $ (63,725) $ (130,397) $ (174,221) $ (186,790) $ (114,058) $ 53,103 <br />*EBITDAR = Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent costs <br />Seven-Year Recap <br />·Gross Revenues +11% <br />·Expenses +17% (Bay Area CPI over +25%) <br />·EBITDAR +11.5% from 2013 value (-28.5% at lowest point in 2016) <br />·City’s share +17% from 2013 <br />·AGC’s share -47% (five straight years of losses between 2014 and 2018) <br />·City’s share of 7-year EBITDAR +109% <br />·AGC’s share of 7-year EBITDAR -9.3% <br />·AGC invested $9M in property from 1997-2002 <br />·AGC/City (through Golf CIP fund contributions) invested $1M+ in property improvements <br />between 2005-2018 <br />·Rental rate is at maximum allowed under Lease Agreement (30% on golf/carts/range plus <br />6% on food/beverage/merchandise/lessons) <br />·Hourly wages have increased from $8/hr. to $14/hr. (75% increase) <br />Conversion to a Management Agreement <br />The Shoreline Development purchase and sale agreement approved by the City Council earlier <br />this Spring for a portion of the 9-hole Marina Golf Course automatically reopened the lease <br />agreement between the City and AGC. AGC has proposed terminating the lease and entering <br />into a management agreement for the remaining years of the lease term. The City and AGC have <br />engaged in good faith negotiations and have proposed an agreement which would pay AGC an <br />annual fee of $150,000 to operate and maintain the two courses and associated amenities. <br />The City’s golf consultant, who has over 40 years’ experience in the management and oversight of <br />municipal golf courses, assisted staff by overseeing the current lease agreement. For the <br />negotiations of the management agreement he conferred with various municipalities and experts <br />in the golf course operation industry, and well-respected golf course consultants. Based on the <br />City consultant’s research, staff believes that a lease agreement with any credible golf operator is <br />not feasible and at this time a management agreement with the current operator is the best <br />course of action available to the City. It maintains continuity of operations, and historical <br />knowledge that will be useful for the Shoreline development’s construction. <br />Below are major points for the conversion from a lease agreement to a management agreement: <br />·Conversion to a management agreement structure is consistent with the recent directions <br />of many municipal golf courses upon the expiration of lease agreements; <br />·The City will assume greater risk; <br />·The City will have control over the operations at Monarch Bay; <br />Page 3 City of San Leandro Printed on 5/28/2020 <br />136