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be achieved on gross revenues (excluding food and beverage, merchandise, and
<br /> lessons) after established revenue thresholds have been achieved. In year one,
<br /> Pleasanton Golf, LLC would receive 15% of all gross revenues in excess of
<br /> $3,100,000. In addition, they would receive 15% of all food and beverage if
<br /> revenues exceed $850,000. In no event could Pleasanton Golf, LLC receive an
<br /> "incentive" fee that is greater than the "fixed" fee:
<br /> Total
<br /> Management 50% Fixed
<br /> Operating Year Fee Attainable Fee
<br /> July 1, 2010 to June 30, 2011 $180,000 $90,000
<br /> July 1, 2011 to June 30, 2012 $186,000 $93,000
<br /> July 1, 2012 to June 30, 2013 $192,000 $96,000
<br /> July 1, 2013 to June 30, 2014 $198,000 $99,000
<br /> July 1, 2014 to June 30, 2015 $204,000 $102,000
<br /> As noted above, the proposed Agreement with Pleasanton Golf, LLC is for a period of
<br /> five (5) years. Under this Agreement, Pleasanton Golf, LLC would not have an
<br /> ownership interest in the golf course, but merely manage the maintenance and
<br /> operations of Callippe Preserve for the City. Expenses would be passed through for
<br /> reimbursement by the City from golf course revenues. Pleasanton Golf, LLC would
<br /> receive the noted "fixed" fee each year of the contract, with any "incentive" fee
<br /> payments tied to meeting aggressive revenue goals, including green fees, cart rentals,
<br /> driving range, merchandise, lessons, and food and beverage.
<br /> In the first year, the combined fixed /incentive fee cannot exceed $180,000. The
<br /> combined management fee (fixed and incentive) increases by a maximum of $6,000
<br /> each year for the remaining four (4) years (approximately 4% each year). The City will
<br /> utilize revenues generated from golf course operations to pay for all operating costs,
<br /> with any excess funding used first to make annual debt service payments on the bonds
<br /> sold to finance the course construction, and second, to pay back the General Fund.
<br /> Submitted by: Fiscal Review: Approved by:
<br /> e g kfit/
<br /> Susan Andrade -Wax David P. Culver Nelson Fialho
<br /> Director of Parks and Director of Finance City Manager
<br /> Community Services
<br /> Attachment
<br /> 1. Golf Course Operator Agreement
<br /> Page 4 of 4
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