HomeMy WebLinkAboutR19-Economic Development Agency ECONOMIICYDEVELOPPMENITOAGENCY ORIGINAL
FROM: Emil A.Marzullo SUBJECT: Shandin Hills Golf Course Lease - Consent to
Interim Executive Director Assignment of Lease to CNL Income EAGL
Leasehold Golf, LLC (State College
Redevelopment Project Area)
DATE: February 27,2008
-------------------------------------------------------------------------------------------------------—----------------------------------------------------—------------------------------------------
Synopsis of Previous Commission/Council/Committee Action(s):
On January 24, 2008, Redevelopment Committee Members Estrada, Johnson and Baxter unanimously voted to recommend(1)
that the RDA Committee and Agency Staff inspect the golf course and address issues of maintenance prior to moving this item
forward;and(2)that the Community Development Commission consider this action for approval.
--------------------- ----- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Recommended Motion(s):
(Community Development Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving the assignment of
the 1985 Shandin Hills Golf Club Lease along with its amendments, from Shandin Hills Golf Club, a California
corporation,to CNL Income EAGL Leasehold Golf, LLC, a Delaware limited liability company, and authorizing the
Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency") to execute (1)
the Consent to Assignment of Lease and Sublease, Assumption of Lease Obligations and Release; (2) the Estoppel
Certificate; (3) the Memorandum of Understanding; and (4) the Memorandum of Lease (State College
Redevelopment Project Area)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Contact Person(s): Mike Trout Phone: (909)663-1044
Project Area(s): State College Ward(s): 5 and 6
0 Staff Report 0 Resolution(s) ❑Agreement(s)/Contract(s) ❑Map(s) ❑Letter(s)
0 Consent to Assignment of Lease and Sublease,Assumption of Lease Obligations and Release
Supporting Data Attached: 0 Estoppel Certificate 0 Memorandum of Understanding 0 Memorandum of Lease
FUNDING REQUIREMENTS: Amount: $ -0- Source: N/A
Budget Authority: N/A
Signature: Fiscal Review: `Q 6,,-z u S�/,�5,-
Er4A7MaruT1,-,Interim Executive Director Barbara Lindseth,Administrative Services Director
-----------------------------------------------------------------------------------------------—-----------------------------------------------------------------------------------------—---------------
Commission/Council Notes:
r"-Z)
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
P:\Agendas\Comm Dev Commission\CDC 2008\03-03-08 Shandin Hills-Consent to Assignment of Lease SR.doe COMMISSION MEETING AGENDA
Meeting Date: 03/03/20008
Agenda Item Number: Q I l
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
SHANDIN HILLS GOLF COURSE LEASE —CONSENT TO ASSIGNMENT OF LEASE TO
CNL INCOME EAGL LEASEHOLD GOLF, LLC
(STATE COLLEGE REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On or about May 1, 1978, the Redevelopment Agency of the City of San Bernardino ("Agency")
entered into a Lease and Operating Agreement ("First Lease"), later recorded on May 8, 1980, as
Instrument No. 80-109858, with All America City Public Golf, Inc. ("Former Operator"), relative to
the Shandin Hills Golf Course ("Golf Course").
The Former Operator took possession of and accepted the Golf Course "as is" on or about August 1,
1981, and maintained the same, but did not open it up for public play. The Former Operator defaulted
under the First Lease and a notice of default was recorded on November 28, 1984, as Instrument No.
84-284506. The default was never cured and the rights of the Former Operator under the First Lease
were terminated.
On January 1, 1985, the Agency entered into another lease agreement ("Current Lease") with Shandin
Hills Golf Club, a California corporation, ("Tenant"), for the operation and maintenance of the Golf
Course. The Current Lease has been amended 7 times and is still in effect.
CURRENT ISSUE:
The Agency has been approached by Shandin Hills Golf Club to consent to an assignment of the lease
to CNL Income EAGL Leasehold Golf, LLC ("CNL"). With the consent of the Agency, the current
lease permits an assignment of the Current Lease to another entity. Review of the assignment
documents indicated that the Agency would have its same rights and benefits afforded by the Current
Lease and there would be no change in lease terms or lease payment arrangements.
CNL is a real estate investment trust ("REIT")that invests in income producing properties with a focus
on lifestyle-related industries. During the last three years, CNL has built their portfolio to more than
$1 billion across 7 asset classes (Ski Resorts, Golf Courses, Destination Retail Centers, Dealerships,
Merchandise Marts, Marinas and Attractions) in 21 States and 2 provinces in Canada, with 18
operators. There are currently 21 golf courses in their portfolio with an additional 28 golf courses to
be added to their portfolio this year. As a REIT, CNL does not operate the golf courses but uses long-
term subleases with Evergreen Alliance Golf Limited, L.P. ("EAGL"), for the operations of the golf
courses.
EAGL, as the 6th largest golf course operator in the United States, currently operates or maintains 52
golf courses in 16 States with a portfolio that includes high-end resorts, municipal and daily fee golf
courses, as well as semi-private and private golf courses. The Senior Management Team of EAGL has
420 years of golf course operation experience.
-------------------------------------------------------------------------------------------------------------------
-------------------------
P:\Agendas\Comm Dev Cotmnission\CDC 2008\03-03-08 Shandin Hills-Consent to Assignment of Lease SR.doc COMMISSION MEETING AGENDA
Meeting Date: 03/03/2008
Agenda Item Number:
Economic Development Agency Staff Report
Shandin Hills— Consent to Assignment of Lease
Page 2
The documents to be executed in conjunction with the action are: (1) the Consent to Assignment of
Lease and Sublease, Assumption of Lease Obligations and Release; (2) the Estoppel Certificate; (3) the
Memorandum of Understanding; and (4) the Memorandum of Lease. These documents are described
below.
Consent to Assignment of Lease and Sublease Assumption of Lease Obligations and Release
Pursuant to Section 16 of the Master Lease (Current Lease), having the caption "Assignments and
Subleases", the Agency must approve and consent to the Assignment Agreement by Shandin Hills of
the Current Lease to CNL, and the Sublease Agreement by CNL to EAGL of the Shandin Hills Golf
Course. In the Consent, the Agency consents, without limitation, to the Assignment Agreement and to
the Sublease Agreement.
Estoppel Certificate
The Agency Estoppel Certificate is a certificate from the Agency to CNL and to CNL Income Partners,
LP, an affiliate of CNL, regarding the Current Lease. The Agency Estoppel Certificate provides,
without limitation, that: (i) the Agency is the owner of the Shandin Hills Golf Course, (ii) the Current
Lease is the entire agreement by and between the Agency, as Landlord, and Shandin Hills, as
Tenant, regarding the Current Lease by the Agency to Shandin Hills of the Shandin Hills Golf
Course, (iii) that Shandin Hills is not in default in the payment of any rent, additional rent or other
charges under the Lease, and (iv) the term of the Lease. CNL and CNL Income Partners LP require
the Agency to execute and deliver the Agency Estoppel Certificate as a condition to the consummation
of the transactions contemplated by the Assignment Agreement and the Sublease Agreement
Memorandum of Understanding
The Memorandum of Understanding will need to be executed by the Agency, Shandin Hills, CNL and
EAGL as the Memorandum of Understanding clarifies among the parties those fees, charges or
rentals that will not be included within the meaning of"gross receipts" for purposes of determining the
percentage rental under the Lease. This Memorandum of Understanding clarifies the second paragraph
of Section 28 of the Master Lease (Current Lease), having the caption "Definitions", as it relates to the
exclusion of those fees, charges or rentals that are not to be included within the meaning of "gross
receipts" for purposes of determining the percentage rental under the Current Lease, and specifically
states that the Memorandum of Understanding will not amend the Current Lease.
Memorandum of Lease
The Memorandum of Lease will need to be executed by and between the Agency, as the current
landlord under the Current Lease, and Shandin Hills, the current Tenant under the Current Lease. In
addition, it will need to be duly acknowledged and must be recorded in the Official Records of the
County Recorder's Office for the County of San Bernardino, State of California (the "Public
Records").
---------------------—--------------------------------------—---------------------------------------------------------------------------------------------------
P:\Agendas\Comm Dev Commission\CDC 2008\03-03-08 Shandin Hills-Consent to Assignment of Lease SR.doc COMMISSION MEETING AGENDA
Meeting Date: 03/03/2008
Agenda Item Number:
Economic Development Agency Staff Report
Shandin Hills— Consent to Assignment of Lease
Page 3
The Memorandum of Lease identifies, without limitation, the existence of the Current Lease,
the current Landlord and Tenant under the Current Lease and the term of the Current Lease. After the
Memorandum of Lease is recorded in the Public Records, the public, including, without limitation,
CNL and EAGL, will be placed on notice regarding the existence of the Current Lease, the names of
the Landlord and Tenant thereunder and the term of the Current Lease.
On February 7, 2008, Agency Staff along with Redevelopment Committee Member Baxter, Shandin
Hills representatives and Warner Hodgdon toured the golf course to see the concerns (condition of
trees, fairways and facilities) that were brought up at the January 28, 2008 Redevelopment Committee
meeting.
On February 14, 2008, Agency Staff along with Shandin Hills, CNL and EAGL, met to discuss the
concerns brought up during the tour of the golf course. Concerning the issue about the Eucalyptus
trees, the Shandin Hills representative stated that since 1999, throughout Southern California,
including Shandin Hills, there has been some stress on Eucalyptus trees by a new pathogen pest called
Lerp Psyllid. He went on to state that they had spent more than $30,000 at Shandin Hills alone over
the last 18 months, abating the damage and trying to combat the Lerp Psyllid which is an insect having
detrimental effects similar to that of a bark beetle on trees. However, to date, according to their
research and that of the University of California, there is no known natural predator to the Lerp Psyllid
and there are no known chemicals that effectively combat it without also killing the tree. Shandin Hills
has been following the management guidelines outlined by the University of California Integrated Pest
Management program. To date, Shandin Hills had cut down several of the dead trees and planted new
trees in their place. During the tour it was observed that there were still a few tree stumps that needed
to be removed and Shandin Hills committed to doing that. CNL and EAGL committed to follow the
University of California Integrated Pest Management program and to remove dead trees and replace
them to add to the beauty and functionality of the golf course.
Also discussed was the condition of the fairways and facilities. The representative for Shandin Hills
stated the golf course is very well-conditioned and has some of the finest putting greens in the area.
Unlike other area courses that have struggled over the last few years with greens conditions, Shandin
Hills has been able to maintain excellent playing conditions. Shandin Hills Golf Course, funded 100%
by the tenant Shandin Hills Golf Club Inc., has received nearly $750,000 in clubhouse and course
improvements over the last 3 years. As judged by the most important and most objective measurement
standard, golf course usage and rounds played, Shandin Hills' customers have been very happy with
the improvements and the course conditions. Rounds counts are at historical highs, over 51,000 rounds
and more than 2,000 higher than 2003. Even though the golf course is currently in the dormant season
for Bermuda grass (winter), the golf course has remarkably extensive turf coverage with very little
color variations due to the Bermuda dormancy. However, Shandin Hills did commit to do a better job
in dealing with very little color variations in the course.
The final item of concern was the drainage easement located south of the condominiums on Little
Mountain Drive. At one time, the drainage easement was used as a nursery. However, the usage of
the drainage easement as a nursery was discontinued and was replaced by a new nursery planted and
maintained by Shandin Hills near the maintenance facility. Though the drainage easement is not an
integral component to the customer experience or the golf course Shandin Hills CNL and EAGL
P:Wgendas\Comm Dev Commission\CDC 2008\03-03-08 Shandin Hills-Consent to Assignment of Lease SR.d- COMMISSION MEETING AGENDA
Meeting Date: 03/03/2008
Agenda Item Number:
Economic Development Agency Staff Report
Shandin Hills- Consent to Assignment of Lease
Page 4
committed to maintain the drainage easement in a manner that will increase the visual aesthetics of the
area.
CNL and EAGL will bring considerable financial resources and golf course operational experience
beyond that of Shandin Hills Golf Club, which will greatly enhance the viability, beauty and customer
experience of the golf course.
ENVIRONMENTAL IMPACT:
None.
FISCAL IMPACT:
None.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
Emil A. Marzullo, Interi cutive Director
— --- ---------------------------------------------------------------------------------------------------------------------
P:Agendas\Comm Dev Commission\CDC 2008\03-03-08 Shandin Hills-Consent to Assignment of Lease SR.doc COMMISSION MEETING AGENDA
Meeting Date: 03/03/2008
Agenda Item Number:
F_D�y1 RESOLUTION NO. C (0 r
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
3 OF THE CITY OF SAN BERNARDINO APPROVING THE ASSIGNMENT
OF THE 1985 SHANDIN HILLS GOLF CLUB LEASE ALONG WITH ITS
4 AMENDMENTS, FROM SHANDIN HILLS GOLF CLUB, A CALIFORNIA
CORPORATION, TO CNL INCOME EAGL LEASEHOLD GOLF, LLC, A
5 DELAWARE LIMITED LIABILITY COMPANY, AND AUTHORIZING
6 THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
7 EXECUTE (1) THE CONSENT TO ASSIGNMENT OF LEASE AND
SUBLEASE, ASSUMPTION OF LEASE OBLIGATIONS AND RELEASE;
8 (2) THE ESTOPPEL CERTIFICATE; (3) THE MEMODRANDUM OF
9 UNDERSTANDING; AND (4) THE MEMORANDUM OF LEASE (STATE
COLLEGE REDEVELOPMENT PROJECT AREA)
10
11 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a
12 public body, corporate and politic, existing under the laws of the State of California, Health and
13 Safety Code 33101; and
14 WHEREAS, on January 1, 1985, the Agency entered into a Lease Agreement ("Lease")
15 with Shandin Hills Golf Club, a California corporation ("Tenant") and on August 19, 1985, the
16 Agency and the Tenant entered into a First Amendment ("First Amendment") to the Lease to revise
17 the definition of"lease year" upon which rental payments are based; and
18 WHEREAS, on January 1, 1986, the Agency and the Tenant entered into a Second
19 Amendment ("Second Amendment") to the Lease to revise the payment schedule for the payment
20 of the $700,000 one-time fee, evidenced by a promissory note- and
21 WHEREAS, on February 10, 1986, the Agency and the Tenant entered into a Third
22 Amendment ("Third Amendment") to the Lease to reduce, on an interim basis, the amount of
23 liability insurance required; and
24 WHEREAS, on February 16, 1987, the Agency and the Tenant entered into a Fourth
25 Amendment (denoted as a Revised Fourth Amendment) ("Fourth Amendment") to the Lease to
26 revise the payment schedule for the payment of the amount owing of the one-time fee, evidenced
27 by a promissory note; and
28 WHEREAS, on May 12, 1988, the Agency and the Tenant entered into a Fifth Amendment
1
P.\Agendas\Resolutions\Resolutions\2008''\03-03-08 Shandin Hills-Consent to Ass i¢ment of Lease CDC Reso.doc
I ("Fifth Amendment") to the Lease to further revise the payment schedule for the payment of the
2 amount owing of the one-time fee, evidenced by a promissory note, and to provide that the Tenant
3 shall maintain a drainage easement; and
4 WHEREAS, on August 7, 1989, the Agency and the Tenant entered into a Sixth
5 Amendment ("Sixth Amendment") to confirm the legal description; and
6 WHEREAS, on May 5, 1990, the Agency and the Tenant entered into a Seventh
7 Amendment ("Seventh Amendment") refining the need for the Tenant to provide a security deposit;
8 and
9 WHEREAS, the Tenant desires to assign the Lease to CNL Income EAGL Leasehold Golf,
10 LLC ("CNL") and CNL desires to accept the assignment of the Lease and comply with the terms
11 and conditions of the Lease and its Amendments; and
12 WHEREAS, the Lease requires the Agency to consent to the assignment of the Lease, in
13 writing, prior to the transfer of the Lease.
14 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
15 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
16 FOLLOWS:
17 Section 1. The Recitals contained in this Resolution are true and correct in all respects.
18 Section 2. The Community Development Commission of the City of San Bernardino
19 ("Commission") hereby approves the assignment of the Lease to CNL and authorizes the Interim
20 Executive Director of the Agency to execute (1) the Consent to Assignment of Lease and Sublease,
21 Assumption of Lease Obligations and Release; (2) the Estoppel Certificate; (3) the Memorandum of
22 Understanding ("MOU"); and (4) the Memorandum of Lease on behalf of the Agency, and the
23 Interim Executive Director of the Agency is hereby authorized to make minor corrections, additions,
24 clarifications and interpretations to the Consent to Assignment of Lease and Sublease, Assumption
25 of Lease Obligations and Release, the Estoppel Certificate, the MOU and the Memorandum of
26 Lease, provided, however, that said changes are not substantive in nature, do not increase the
27 monetary impact to the Agency and are consented to by Agency Counsel.
28 Section 3. This Resolution shall take effect upon its adoption and execution.
2
P.\Agendas\,Resolutions\Resolutions\2008\03-03-08'Shandin Hills-[onsent to Assigment of Lease CDC Reso.doc
I RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING THE ASSIGNMENT
2 OF THE 1985 SHANDIN HILLS GOLF CLUB LEASE, ALONG WITH ITS
3 AMENDMENTS, FROM SHANDIN HILLS GOLF CLUB, A CALIFORNIA
CORPORATION, TO CNL INCOME EAGL LEASEHOLD GOLF, LLC, A
4 DELAWARE LIMITED LIABILITY COMPANY, AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
5 AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE (1) THE CONSENT TO ASSIGNMENT OF LEASE AND
6 SUBLEASE, ASSUMPTION OF LEASE OBLIGATIONS AND RELEASE;
7 (2) THE ESTOPPEL CERTIFICATE; (3) THE MEMODRANDUM OF
UNDERSTANING; AND (4) THE MEMORANDUM OF LEASE (STATE
g COLLEGE REDEVELOPMENT PROJECT AREA)
9 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
10 Development Commission of the City of San Bernardino at a meeting
11 thereof, held on the day of , 2008, by the following vote to wit:
12 Commission Members: Ayes Nays Abstain Absent
13 ESTRADA
BAXTER
� 14
BRINKER
15
DERRY
16
KELLEY
17
JOHNSON
18
MC CAMMACK
19
20
21 Secretary
22 The foregoing resolution is hereby approved this day of , 2008.
23
24 Patrick J. Morris, Chairperson
25 Community Development Commission
of the City of San Bernardino
26 Approved as to Form:
27
By:
28 Agenc ou el
3
P.1Agendas�Resolutions\Resolu[ions\2008\03-03-OR Shandln Hm�_r,..,....,.,.�...:..._.__.,.a.____.--___ __
CONSENT TO ASSIGNMENT OF LEASE AND SUBLEASE,
ASSUMPTION OF LEASE OBLIGATIONS AND RELEASE
(Shandin Hills Golf Course)
THIS CONSENT TO ASSIGNMENT OF LEASE AND SUBLEASE,
ASSUMPTION OF LEASE OBLIGATIONS AND RELEASE (this "Agreement") is entered
into as of this day of March 2008, by and among THE REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic ("Lessor"), the
lessor under the Lease defined and described below, SHANDIN HILLS GOLF CLUB, a
California corporation ("Lessee" or"Shandin Hills"), the current lessee under the Lease, CNL
INCOME EAGL LEASEHOLD GOLF, LLC, a Delaware limited liability company (the
'Assignee" or"CNL"), as the assignee of Lessee, and EVERGREEN ALLIANCE GOLF
LIMITED, L.P., a Delaware limited partnership ("EAGL"), which will operate the premises
described by the Lease (as defined below) under a sublease agreement with the Assignee.
RECITALS:
A. Lessor and Lessee are parties to that certain Lease Agreement, dated as of January
1, 1985, by and between Lessor, as lessor, and Lessee, as lessee, as amended, modified or
otherwise affected b_v the documents listed on Exhibit A attached hereto and incorporated herein
by this reference (collectively, the "Lease"), relating to the golf course property known as
I "Shandin Hills Golf Course" and more particularly described in the Lease (the "Golf Course")-
,
�r
1 B. Lessor and Lessee desire to execute and deliver the Memorandum of
Understanding defined and described below;
1 C. Lessor and Lessee desire to execute, acknowledge and deliver the Memorandum
of Lease defined and described below;
D. Lessee, American Golf Corporation, a California corporation, NGP Realty Sub,
LP, a Delaware limited partnership, Golf Enterprises Inc., a Kansas corporation, as sellers, and
CNL Income Partners, LP, a Delaware limited partnership, as buyer, have entered into that
certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of October 29, 2007
(the "Purchase Agreement"), which Purchase Agreement is joined by Evergreen Alliance Golf
Limited, LP, a Delaware limited partnership, and Premier Golf Properties, Inc., a Delaware
corporation, for the purposes therein stated, pursuant to which Lessee has agreed, among other
things, to convey and assign all of its right, title and interest in, to and under the Lease to the
Assignee, following which Assignee shall be obligated to perform all of the obligations of the
Lessee under the Lease;
E. Lessee has requested the Lessor's consent to the assignment of Lessee's right,
title and interest in, to and under the Lease pursuant to the terms, covenants and conditions of
the Assignment of Lease defined and described below;
F. Assignee has agreed to accept the assignment by Lessee to the Assignee of
Lessee's right, title and interest in, to and under the Lease, and has agreed to assume the
obligations and liabilities of Lessee under the Lease, pursuant to the Assignment of Lease.
u DC-0289871000002-2670569 v 1 I
1
G. Assignee has asked for Lessor's consent to the sublease of Assignee's right, title
and interest in, to and under the Lease, including, without limitation, with respect to the Golf
Course, pursuant to the terms, covenants and conditions of the Sublease Agreement defined and
described belox; and
H. Lessor has agreed to grant the foregoing consents on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the above recitals, the premises, and the
undertakings of the parties under the Lease, the Memorandum of Understanding, the
Memorandum of Lease, the Assignment of Lease and the Sublease Agreement (as defined
below), and their mutual agreements and undertakings set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, the
parties hereby agree as follows:
1. Consent by Lessor to the Assignment and to the Sublease
1.1 Lessor consents to the terns, covenants, and conditions of the
Memorandum of Understanding attached hereto as Exhibit B and incorporated herein by this
i reference (the "Memorandum of Understanding").
g').
1.2 Lessor consents to the terns, covenants, and conditions of the
Memorandum of Lease attached hereto as Exhibit C and incorporated herein by this reference
(the "Memorandum of Lease").
1.3. Lessor consents to the assignment of the Lease by Shandin Hills to
Assignee pursuant to the terms, covenants and conditions of the Assignment of Lease attached
hereto as Exhibit D and incorporated herein by this reference(the "Assignment of Lease'').
1.4. Lessor consents to the sublease of the Golf Course by Assignee to EAGL
pursuant to the terms, covenants and conditions of the Sublease Agreement attached hereto as
Exhibit E and incorporated herein by this reference (the "Sublease Agreement"); provided the
parties hereby agree that nothing in the Sublease Agreement will be deemed to limit or expand
the Lessor's rights or obligations under the Lease. The Sublease Agreement is subject and
subordinate to the Lease. Upon a termination of the Lease (whether at the expiration of the term
or by early termination in accordance with the terms of the Lease), the Sublease Agreement shall
automatically terminate.
1.5. Subject to Section 4 of this Agreement. Lessor confirms that all conditions
under the Lease to (a) the effective assignment of the Lease by Shandin Hills to Assignee
pursuant to the Assignment of Lease and (b) the sublease by Assignee to EAGL pursuant to the
Sublease Agreement have been satisfied or waived.
1`;;DC-028987;000002-2670569 vl 1
2
2. Assumption of Obligations Following Assignment of Lease and Sublease
2.1 Upon the effective date (the "Effective Date") as defined in the
Assignment of Lease, wherein Lessee assigns to Assignee all of Lessee's right, title and interest
in and to the Lease and Assignee assumes all obligations and liabilities of "Tenant" under the
Lease arising or accruing after the Effective Date of the Assignment of Lease. Assignee shall be
the "Tenant' under the Lease, and Shandin Hills shall be released from and shall have no further
liability to Lessor with respect to the obligations and liabilities of "Tenant' under the Lease
arising or accruing after the Effective Date of the Assignment of Lease. Percentage rental shall
continue to be calculated in the manner described in the Lease, based on the percentages stated
therein of green fees, motorized cart rental fees, hand cart rental fees, golf pro shop items, goods,
wares and merchandise sold or rented at the Golf Course and/or at the pro shop, driving range
fees, and revenues from the sale, or charges made for the use of, banquet facilities, food and
beverage sales and all other revenues from any other items or services common to golf courses
not mentioned above and not expressly excluded from "gross receipts" (as defined in the Lease),
whether collected by Lessee, Assignee, EAGL or any other subtenant or operator approved by
Lessor. Lessor's rights to audit Golf Course operations under the Lease shall be enforceable
against Lessee, Assignee, EAGL, and each such other subtenant or operator approved by Lessor,
or any of them in Lessor's sole discretion.
2.2 Without in any way limiting the rights of the Assignee under the Lease, or
the rights of its successors and assigns, as to any matters concerning the Lease or the Golf
Course, Shandin Hills, for itself and its officers, directors, employees, agents, affiliates,
successors and assigns (collectively, the "Releasors,'' it being understood and agreed by the
Lessor that the term "successors and assigns" of Shandin Hills shall not include Assignee or its
successors and assigns as the "Tenant' under the Lease), does hereby fully, completely, finally
and forever release and discharge Lessor, the officers, agents, employees, successors and assigns
of Lessor, (collectively, the "Releasees"), from any and all claims, actions, causes of action,
demands, rights, debts, promises, liabilities, damages, accountings, costs and expenses and fees,
whether known or unknown, suspected or unsuspected, contingent or non-contingent of every
nature whatsoever, which Lessee has or may have against the Releasees, or any one of them,
with respect to any and all matters arising out of, in connection with, or relating to: (1) the Lease,
(ii) the Golf Course, or any portion thereof, (iii) the use of the Golf Course (or any portion
thereof), (iv) the acts, omissions or wrongful conduct of the Releasors, or any one of them, (v)
Hazardous Substances (as defined in the Sublease Agreement), (vi) the manufacture, production,
storage, presence, discharge, disposal of Hazardous Substances on, at, in, above, under, from or
about the Golf Course, or any portion thereof, or the removal of Hazardous Substances from the
Golf Course, or any portion thereof, or(vii) the violation of any federal, state, municipal or local
law, statute, ordinance, regulation, rule, code, license, permit, order or judgment, now or
hereafter in existence or thereafter amended, all of which released matters shall collectively be
referred to as the "Released Claims" and singularly as the "Released Claim."
IT IS THE INTENTION OF SHANDIN HILLS, ON BEHALF OF ITSELF AND THE
RELEASORS AND NOT ON BEHALF OF THE ASSIGNEE OR ITS SUCCESSORS OR
ASSIGNS THAT THIS AGREEMENT SHALL BE EFFECTIVE AS A FULL AND FINAL
\%ADC-028987/000002-2670569 v)I
3
RELEASE BY RELEASORS OF EVERY RELEASED CLAIM. IN FURTHERANCE OF
THIS INTENTION, SHANDIN HILLS, ON BEHALF OF ITSELF AND THE OTHER
RELEASORS, BUT NOT ON BEHALF OF THE ASSIGNEE OR ITS SUCCESSORS OR
ASSIGNS, ACKNOWLEDGES THAT THE RELEASORS HAVE BEEN ADVISED
BY LEGAL COUNSEL AND ARE FAMILIAR WITH THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR"
SHANDIN HILLS, ON BEHALF OF ITSELF AND THE OTHER RELEASORS, BUT NOT
ON BEHALF OF THE ASSIGNEE OR ITS SUCCESSORS OR ASSIGNS, BEING AWARE
OF THIS CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS THE
RELEASORS MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER
STATUTES OR COMMON LAW DOCTRINES OF SIMILAR EFFECT.
Shandin Hills Initials
Shandin Hills. on behalf of itself and the other Releasors, but not on behalf of the Assignee or its
successors or assigns, acknowledges that hereafter Releasors may discover facts in addition to, or
different from, those that Releasors now know or believe to be true with respect to the subject
matter of this Agreement and the Released Claims, but that, notwithstanding the foregoing, it is
the intention of the Releasors, acting by and through Shandin Hills, hereby to fully and forever
settle and release each of the Released Claims, and that in furtherance of this intention, the
releases herein given shall be and remain in effect as full and complete releases.
Shandin Hills, on behalf of itself and the other Releasors, but not on behalf of the Assignee or its
successors or assigns, hereby represents and warrants to Lessor that, as to any Released
Claims, Shandin Hills has the right, ability and sole power to release said Released Claims on
behalf of the Releasors.
Notwithstanding anything in this Section 2.2 to the contrary, the release and discharge of the
Relessees, or any one of them, from any or all Released Claims is not, and shall under no
circumstances be deemed to be, a release by Assignee of any or all Released Claims it being
acknowledged, understood and agreed to by Lessor, that the release and discharge by Releasors
of the Released Claims is personal to the Releasors and upon the effectiveness of the assignment
of the Lease by Shandin Hills to Assignee, Assignee shall have any and all rights of the "Tenant"
under the Lease with respect to any such Released Claims, whether arising, accruing or relating
to the period prior to, on or after the Effective Date of the Assignment of Lease.
2.3. On and after the Effective Date of the Assignment of Lease, Assignee
shall assume all obligations as the "Tenant" under the Lease including the obligation to make
payments, as and when due, of Minimum Annual Rental and "percentage rental" (as defined in
\\\DC-028987/000002-2670569 v 11
4
the Lease). Upon execution and delivery of the Sublease Agreement by Assignee to EAGL,
EAGL shall be responsible for the fulfillment of all obligations of the "Tenant' under the Lease;
provided that Assignee shall not thereby be released from its obligations and duties to Lessor
under the Lease including, without limitation, the obligation to timely pay to Lessor the
Groundlease Rent (as defined in the Sublease Agreement).
3. Representations and Warranties of the Parties
3.1 Representations and Warranties of Shandin Hills.
(a) Shandin Hills represents and warrants that (i) it is a corporation organized,
validly existing and in good standing under the laws of the State of California, (ii) it has the
corporate power and authority under its articles of incorporation and bylaws to enter into and
perform the transactions contemplated hereby (and by the various agreements referred to herein),
(iii) the execution, delivery and performance of this Agreement, the Purchase Agreement, the
Memorandum of Understanding, the Memorandum of Lease, the Assignment of Lease and of
each of the other agreements referred to herein or therein have been duly authorized by the
appropriate officers and governing bodies of Lessee, which authorizations remain in full force
and effect, and (iv) this Agreement, the Purchase Agreement, the Memorandum of
Understanding, the Memorandum of Lease, and the Assignment of Lease are, and each such
other agreement will be at the time of their execution, duly executed and delivered by Lessee and
represent the legal, valid and binding obligations of Lessee, enforceable against Lessee in
accordance with its terms.
(b) Lessee represents and warrants to the other parties hereto that "gross
receipts" under the Lease for the period July 1, 2007 through January 31, 2008 are $1,347,297.03,
of which $561,736.08 are subject to percentage rental at the rate of 5% and $785,560.95 are
subject to percentage rental at the rate of 20%.
3.2 Representations and Warranties of CNL. CNL represents and warrants
that (1) it is a limited liability company organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) it is qualified to do business and in good standing in the State
of California, (iii) it has the power and authority under its certificate of limited liability company
and operating agreement to enter into and perform the transactions contemplated hereby (and by
the various agreements referred to herein), (iv) the execution, delivery and performance of this
Agreement, the Purchase Agreement, the Memorandum of Understanding, the Assignment of
Lease, the Sublease Agreement and the other agreements referred to herein or therein have been
duly authorized by the appropriate officers and governing bodies of Assignee, which
authorizations remain in full force and effect, (v) this Agreement, the Purchase Agreement, the
Memorandum of Understanding, the Assignment of Lease and the Sublease are, and each such
other agreement will be at the time of their execution, duly executed and delivered by Assignee
and will at the time of their execution and delivery represent the legal, valid and binding
obligations of Assignee, enforceable against Assignee in accordance with their respective terms,
and (vi) CNL shall pay, or cause EAGL to pay, to Lessor the Groundlessor Rent (as that term is
defined in the Sublease Agreement) in accordance with and pursuant to the terms of the Lease.
Without limiting, enhancing or modifying any other provision in this Agreement, the Lease, the
DC-028987,000002-2670569 v11
5
Assignment and/or the Sublease Agreement, in any manner whatsoever, CNL shall pay, or shall
cause EAGL to pay to Lessor at the time and in the manner required under the Lease, in addition
to any other sums that may be or become due thereunder, the difference between the percentage
rental due and payable under the Lease for the fiscal year beginning July 1, 2007 and ending
June 30, 2008, less the Minimum Annual Rent due and payable under the Lease in the amount of
two hundred thousand dollars ($200,000) for such fiscal year, together with any other
Groundlessor Rent due and payable under the Lease, for the term of the Lease.
3.3 Representations and Warranties of EAGL. EAGL represents and warrants
that (i) it is a limited partnership organized, validly existing and in good standing under the laws
of the State of Delaware, (ii) it is qualified to do business and in good standing in the State of
California, (iii) it has the power and authority under its certificate of limited partnership and its
limited partnership agreement to enter into and perform the transactions contemplated hereby
(and by the various agreements referred to herein), (iv) the execution, delivery and performance
of this Agreement, the Purchase Agreement, the Memorandum of Understanding, the Sublease
Agreement and the other agreements referred to herein or therein have been duly authorized by
the appropriate officers and governing bodies of EAGL, which authorizations remain in full
force and effect, (v) this Agreement, the Purchase Agreement, the Memorandum of
Understanding and the Sublease are, and each such other agreement will be at the time of their
execution, duly executed and delivered by EAGL and will at the time of their execution and
delivery represent the legal, valid and binding obligations of EAGL, enforceable against EAGL
in accordance with their respective terms, and (vi) EAGL shall pay to CNL or pay to Lessor the
Groundlessor Rent in accordance with and pursuant to the terms of the Lease. Without limiting,
enhancing or modifying any other provision in this Agreement, the Lease, the Assignment and/or
the Sublease Agreement, in any manner whatsoever, EAGL shall pay to CNL or to Lessor, at the
time and in the manner required under the Lease, in addition to any other sums that may be or
become due thereunder, the difference between the percentage rental due and payable under the
Lease for the fiscal year beginning July 1, 2007 and ending June 30, 2008, less the Minimum
Annual Rent due and payable under the Lease in the amount of two hundred thousand dollars
($200,000) for such fiscal year, together with any other Groundlessor Rent due and payable
under the Lease, for the term of the Lease.
3.4 Representations and Warranties of Lessor. Lessor represents and warrants
that (i) it is a public body, corporate and politic, organized and validly existing under the laws of
the State of California, (ii) it has the power and authority to enter into and perform the
transactions contemplated hereby, (iii) the execution, delivery and performance of this
Agreement has been duly authorized by the appropriate governing bodies of Lessor, which
authorizations remain in full force and effect, and (iv) this Agreement has been duly executed
and delivered by Lessor and represents the legal, valid and binding obligations of Lessor,
enforceable against Lessor in accordance with its terms.
3.5 Representations and Warranties Survive. The representations and
warranties of the parties survive the execution and delivery hereof and of the agreements
contemplated hereby and further survive the performance, expiration and early termination of the
Lease or the Sublease, as applicable.
\;'.DC-028987/000002-2670569 v I I
6
4. Conditions Precedent. The following conditions precedent must be fully
performed, as follows: (i) the Memorandum of Understanding must be duly executed and
delivered by the parties thereto: (ii) the Assignment of Lease must be duly executed and
delivered by the parties thereto, (iii) the Sublease Agreement must be duly executed and
delivered by the parties thereto, (iv) this Agreement must be duly executed and delivered by the
parties thereto, (v) the Estoppel Certificate to be executed and delivered by Shandin Hills to
Lessor must be duly executed by and delivered by Shandin Hills. If one (1) or more of the above
conditions precedent is not fully satisfied and performed by April 17, 2008, this Agreement, the
Assignment of Lease, the Sublease and any other agreement, document, instrument or certificate
executed or to be executed in connection therewith shall be null and void and of no further force
and effect, unless otherwise agreed to in writing by the parties to this Agreement.
5. Miscellaneous Provisions
5.1 Lessor confirms that the attached Exhibit A sets forth a complete list of
documents that make up the Lease. The Lease represents the entire agreement between Lessee
and Lessor with respect to the Golf Course. The Lease is in full force and effect and has not been
assigned, modified, supplemented or amended in any way except as described on Exhibit A.
5.2 Upon the execution of this Agreement, Lessor agrees to provide Assignee
and EAGL with copies of all notices which may be provided to Shandin Hills pursuant to the
terms and provisions of the Lease prior to the Effective Date of the Assignment of Lease by
Shandin Hills to Assignee. All notices, requests and other communications to Lessor, Assignee
and EAGL under this Agreement shall be in writing and shall be given to Lessor, Assignee and
EAGL at its address set forth below or such other address as such party may hereafter specify for
the purpose of notice in accordance with the terms of the Lease.
Assignee: CNL Income EAGL Leasehold Golf, LLC
c/o CNL Income Properties, Inc.
450 S. Orange Avenue
Orlando, Florida 32801
Attention: Tammie A. Quinlan, Chief Financial Officer
Attention: Amy Sinelli, Esq., Senior Vice President
and Corporate Counsel
Fax: (407) 540-2544
With a copy to: Lowndes, Drosdick, Doster, Kantor and Reed, P.A.
215 North Eola Drive
P.O. Box 2809
Orlando, Florida 32801
Attention: William T. Dymond, Jr., Esq.
Fax: (407) 843-4444
EAGL: Evergreen Alliance Golf Limited, L.P.
4851 LBJ Freeway, Suite 600
`,,ADC-028987/000002-2670569.11
7
Dallas. Texas 75244
Attention: Lynn Marie Mallery
Fax: (214) 722-6052
With a copy to: The Addison Law Firm
14901 Quorum Drive, Suite 650
Dallas, Texas 75254
Attn: Randy Addison, Esq.
Fax: (972) 960-7719
Lessor: Redevelopment Agency
of the City of San Bernardino
c/o Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
(909) 663-1044 (Phone)
With a Copy: Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Attn.- Timothy J. Sabo
The addresses set forth above may be changed as to any party by such party delivering to
the other parties at least thirty (30) calendar days' written notice as to such change of address.
[Signature pages follows on the next page]
DC-028987/000002-2670569 v 1 I
8
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of the
date first set forth hereinabove, to be effective upon the assignment of the Lease by Lessee to
Assignee.
LESSOR:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO,
a public body, corporate and politic
By:
Name: Emil A. Marzullo
Title: Interim Executive Director
Dated: Date:
ATTEST:
By:
Agency Secretary
APPROVED AS TO FORM AND
CONTENT:
By:
Agency el
LESSEE:
SHANDIN HILLS GOLF CLUB,
a California corporation
By:
Name: Mark J. Friedman
Title: Secretary
[Signatures continue on the next page]
d\DC-026987!000002-2670569 vi 1 9
ASSIGNEE:
CNL INCOME EAGL LEASEHOLD
GOLF, LLC,
a Delaware limited liability company
By:
Name:
Title:
EAGL:
EVERGREEN ALLIANCE GOLF
LIMITED, LP,
a Delaware limited partnership
By: PREMIER GOLF EAGL, GP,
LLC,
a Delaware limited liability company, its
General Partner
By:
Name:
Title:
[End of signatures)
NOTARIES FOLLOW ON THE NEXT PAGE
VnOC-028987/000002-2670569 v]1 10
STATE OF CALIFORNIA
COUNTY OF SS.
On before me, a Notary
Public in and for said County and State, personally appeared Mark J. Friedman, Secretary of
Shandin Hills Golf Club, a California corporation, who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument, and acknowledged
to me that he executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
I certify under penalty of perjury under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SEAL Notary Public
\\\DC-0289875000002-2670569 v]I
11
STATE OF FLORIDA §
COUNTY OF ORANGE §
The foregoing instrument was acknowledged before me this day of March,
2008, by , as of CNL INCOME EAGL LEASEHOLD GOLF,
LLC, a Delaware limited liability company, on behalf of the limited liability company. She is
personally known to me or has produced as identification.
(NOTARY SEAL)
Notary Public Signature
1
(Name typed, printed or stamped)
Notary Public, State of
Commission No.:
My Commission Expires:
STATE OF
COUNTY OF
The foregoing instrument was acknowledged before me this _ day of March,
2008 by , as of PREMIER GOLF EAGL, GP, LLC,
a Delaware limited liability company, on behalf of the . He,/she is personally known
to me or has produced as identification.
(NOTARY SEAL)
Notary Public
Printed Name:
Notary Public, State of
Commission#:
My Commission Expires:
01 IL
1\\DC-0289871000002-2670569 v 11 12
STATE OF CALIFORNIA
SS.
COUNTY OF )
On , before me, , a Notary
Public in and for said County and State, personally appeared , who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SEAL Notary Public
\\\DC-0289871000002-2670569 v 11
13
EXHIBIT A
LEASE
1. Lease Agreement effective January 1, 1985 by and between the Redevelopment Agency of
the City of San Bernardino and Shandin Hills Golf Club.
2. First Amendment to Lease Agreement dated August 19, 1985 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
3. Second Amendment to Lease Agreement effective January 1, 1986 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
4. Third Amendment to Lease Agreement effective February 10, 1986 by and between the
IRedevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
5. Revised Fourth Amendment to Lease Agreement, dated February 16, 1987, by and between
the Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
6. Fifth Amendment to Lease Agreement effective May 12, 1988 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
7. Sixth Amendment to Lease Agreement effective June 1989 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
8. Seventh Amendment to Lease Agreement, dated March 5, 1990, by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
I
1\\DC-028987!000002-2670569 v 11
14
EXHIBIT B
MEMORANDUM OF UNDERSTANDING
(See attached)
\DC-028987/000002-2670569 v I I
15
EXHIBIT C
MEMORANDUM OF LEASE
(See attached)
\�\DC-028987/000002-2670569 v11
16
`"- EXHIBIT D
ASSIGNMENT OF LEASE
(See attached)
%DC-028987/000002-2670569 v I 1 17
EXHIBIT E
FORM OF SUBLEASE AGREEMENT
(See attached)
\\ADC-0289871000002-2670569 v]I p
18
ESTOPPEL CERTIFICATE
Shandin Hills Golf Course, San Bernardino, California
March 2008
CNL INCOME PARTNERS, LP
CNL INCOME EAGL LEASEHOLD GOLF, LLC
c/o CNL Income Properties, Inc.
450 South Orange Avenue
Orlando, Florida 32801
Evergreen Alliance Golf Limited, L.P.
4851 LBJ Freeway, Suite 600
Dallas, Texas 75244
Re: The documents described in the attached Exhibit A (collectively, the
"Lease").
Gentlemen:
The undersigned, the Redevelopment Agency for the City of San Bernardino, a public
body, corporate and politic (the "Landlord"), intending to be legally bound, hereby certifies to
you and agrees as follows:
1. Landlord is the owner of the fee simple estate of the golf course property known
as the Shandin Hills Golf Course, and more fully described in the Lease (the
"Premises").
2. The Lease represents the entire agreement between Shandin Hills Golf Club, a
California corporation (the "Tenant") and Landlord with respect to the Premises
and there do not exist any other agreements between the Tenant and Landlord
concerning the Premises, whether oral or written. The Lease is in full force and
effect and has not been assigned, modified, supplemented or amended in any way
except as described on Exhibit A attached to this certificate and incorporated
herein by this reference.
3. Tenant is not in default in the payment of any rent, additional rent or other
charges under the Lease.
4. Minimum rent is payable under the Lease at a monthly rate of $16,667.67.
Tenant pays percentage rent in arrears at the conclusion of the calendar year in
excess of minimum rent. All amounts due and payable by the Tenant under the
Lease have been paid in full through February 28, 2008 (except for any
\\\DC-028987/000002-2677682�s Shandin Hills Estoppel
- 1 -
adjustments in payments of percentage rent or additional rent as may be called for
by any annual accounting and adjustment procedure called for under the Lease).
5. To Landlord's knowledge, Tenant is not in default in the performance of any
other obligation of Tenant under the Lease. Except for the agreements and other
documents referred to herein (the "Lease Related Documents"), there are no other
agreements or undertakings by the Tenant to the Landlord relating to the Lease or
the Premises and there are no documents under which any of Tenant's obligations
under the Lease and/or Lease Related Documents have been altered or waived by
Landlord. Tenant is not in default of, and Tenant has performed to Landlord's
satisfaction any and all conditions or obligations to be performed on or prior to
the date hereof, under the Lease and/or Lease Related Documents. Neither
Landlord nor, to the Landlord's knowledge, Tenant has acted or failed to act in a
manner which, with notice or the.passage of time, or both, could result in a default
under the Lease.
6. The term of the Lease is for fifty-two (52) years commencing on January 1, 1985 .
7. Each "Lease Year" under the Lease commences on July 1 at 6:00 AM in each
year and ends on July 1 at 5:59 AM of the following year.
8. Tenant has not granted Landlord any lien or security interest in any assets of
Tenant, including without limitation, Tenant's accounts receivable or Tenant's
furniture, fixture equipment or other personal property located on the Premises,
whether now owned or hereafter acquired.
9. Landlord is not holding a security deposit under the Lease and no security
payments are owing to Landlord. Further, the Tenant has not paid any rents due
under the Lease more than thirty (30) days in advance of the date due under the
Lease.
10. The Landlord has not assigned, transferred or pledged all or any part of its interest
under the Lease to any other person or entity. Landlord has the capacity, power
and authority to issue this letter without the consent of any person or entity that
has not been obtained or that does not remain in effect. This letter is binding
against Landlord and may be relied on by the addressees hereof and their lenders.
11. All construction, improvements, alterations, or additions, if any, to the Premises
required under the Lease have been fully completed in accordance with the terms
of the Lease.
12. Pursuant to the terms of the Fifth Amendment to the Lease, the Promissory Note
executed by Tenant in favor of Landlord in the amount of$195,175.66 has been
paid in full, and the Security Agreement, if any, securing Tenant's obligations
under the Note has been terminated.
13. Landlord's address for notice is:
\Amc-028987/000002-2677682 0 Shandin Hills Estoppel
- 2 -
Redevelopment Agency of the City of San Bernardino
201 North E Street
Suite 301
San Bernardino, California 92401
14. Landlord acknowledges that Tenant intends to assign all of its rights under the
Lease to CNL Income EAGL Leasehold Golf, LLC, a Delaware limited liability
company (the "Assignee"). By separate instrument delivered to the Tenant and
the Assignee, Landlord has consented to such assignment of the Lease to
Assignee and to the further sublease of the Premises by the Assignee to Evergreen
Alliance Golf Limited, LP on the terms described in the sublease.
15. This letter is issued with the intent that the Assignee and its lenders may rely
hereon in taking an assignment of the Lease.
Sincerely yours,
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO,
a public body, corporate and politic
By:
Name: Emil A. Marzullo
Title: Interim Executive Director
Dated: Date:
ATTEST:
By
Agency Secretary
APPROVED AS TO FORM AND
CONTENT:
Bv:
. Agency Counsel
\UDC-028987/000002-2677682 v5
Shandin Hills Estoppel
3 -
EXHIBIT A
LEASE
1. Lease Agreement effective January 1, 1985 by and between the Redevelopment Agency
of the City of San Bernardino and Shandin Hills Golf Club.
2 First Amendment to Lease Agreement dated August 19, 1985 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
3. Second Amendment to Lease Agreement effective January 1. 1986 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
4. Third Amendment to Lease Agreement effective February 10, 1986 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
5. Revised Fourth Amendment to Lease Agreement, dated February 16, 1987, by and
between the Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
6. Fifth Amendment to Lease Agreement effective May 12, 1988 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
7. Sixth Amendment to Lease Agreement effective June 1989 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
8. Seventh Amendment to Lease Agreement, dated March 5, 1990, by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
\\\DC.028987/000002-2677682 v5
Shandin Hills Estoppel
-4 -
MEMORANDUM OF UNDERSTANDING
ti
THIS MEMORANDUM OF UNDERSTANDING (this "MOU") is entered into as of
this day of March, 2008, by and among the REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO, a public body, corporate and politic ("Lessor"), the lessor
under the Lease defined and described below, SHANDIN HILLS GOLF CLUB, a California
corporation (`Lessee" or "Shandin Hills"), the current lessee under the Lease, CNL INCOME
EAGL LEASEHOLD GOLF, LLC, a Delaware limited liability company (the "Assignee" or
"CNL"), as the assignee of Lessee, and EVERGREEN ALLIANCE GOLF LIMITED, L.P., a
Delaware limited partnership ("EAGL"), which will operate the premises described by the Lease
(as defined below) under a sublease agreement with the Assignee.
RECITALS:
A. Lessor and Lessee are parties to that certain Lease Agreement, dated as of January
1, 1985, by and between Lessor, as lessor, and Lessee, as lessee, as amended, modified or
otherwise affected by the documents listed on Exhibit A hereto and incorporated herein by this
reference (collectively, the "Lease"), relating to the golf course property known as "Shandin
Hills Golf Course" and more particularly described in the Lease (the "Golf Course");
B. Pursuant to that certain Consent to Assignment of Lease and Sublease,
Assumption of Lease Obligations and Release (Shandin Hills Golf Course) dated on or about the
date hereof by and among the parties thereto (the "Consent Agreement"), a copy of which is
attached hereto and incorporated herein by this reference as Exhibit B, Lessor has consented to
(1) the assignment by Lessee to Assignee on or about the date hereof of Lessee's right, title and
interest in, to and under the Lease pursuant to the Consent Agreement and the Assignment of
Lease (Shandin Hills Golf Course) dated on or about the date hereof by and among the parties
thereto (the "Assignment of Lease"), a copy of which is attached hereto and incorporated herein
by this reference as Exhibit C, and (2) the sublease of the Golf Course on or about the date
hereof by and among Assignee to EAGL, pursuant to the Sublease Agreement (Shandin Hills
Golf Course, San Bernardino, California), a copy of which is attached hereto and incorporated
herein by this reference as Exhibit D;
C. Without amending the Lease, the parties hereto have agreed: (1) to clarify their
interpretation of certain language in the Lease concerning the exclusion of certain revenues from
"Gross receipts", "gross receipts" and/or "Gross Receipts", as defined in the Lease, for purposes
of calculating payments of"percentage rental" (as defined in the Lease), and (ii) to clarify their
interpretation of Section 2 of the Fifth Amendment to Shandin Hills Golf Club Lease, effective
May 12, 1988 by and between the Lessor and the Lessee (the "Fifth Amendment").
NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and
valuable consideration, the receipt and sufficiency of which the parties hereto hereby
acknowledge, the parties agree as follows:
1. Definitions. For purposes of this MOU, the following terms shall have the
meanings given them below:
1
"Excluded Receipts" means fees, charges or rentals and revenues of the kind
described in the Exclusion Clause. The Excluded Receipts shall include sublease rental
payments received or payments received by a Rent Paying Party from another Rent
Paying Party out of the Remaining Funds, for each month and/or each lease year for the
term of the Lease. The Excluded Receipts do not include, and are excluded from, the
Gross Receipts.
"Exclusion Clause" means the second paragraph of Section 28 of the Lease which
provides as follows: "Gross receipts shall not include fees, charges or rentals paid to
Tenant by a sublessee where the gross receipts of such sublessee are reported and subject
to the percentage rental schedule provided for hereinbefore."
"Gross Receipts" means the "Gross receipts", "gross receipts" and/or "Gross
Receipts" defined in the first paragraph of Section 28 of the Lease and/or in the Lease.
Gross Receipts shall include, without limitation, all money, cash, receipts, assets,
property or revenues from the operations of the Golf Course, including, but not limited to,
green fees, motorized cart rental fees, hand cart rental fees, proceeds of golf pro shop
items, goods, wares and merchandise sold or rented at the Golf Course and/or at the pro
shop, driving range fees, or charges made for the use of, banquet facilities, food and
beverage sales and all other revenues from any other items or services common to golf
courses not mentioned above, for each month and/or lease year for the term of the Lease.
"Partial Operator" means any individual or entity whom Lessee, Assignee or
Subtenant engages to operate a portion of the Golf Course, whether as a subtenant, an
independent contractor, or otherwise.
"Remaining Funds" mean the revenues that remain after the Gross Receipts have
been collected by any individual or entity (including any Rent Paying Party) for each
lease year less the percentage rental that has been paid to Lessor from such collected
Gross Receipts at the end of each lease year, in accordance with the provisions of the
Lease, for the term of the Lease. By way of example only, if$1,000,000 is collected as
Gross Receipts for a given lease year, and the Lessor under the Lease is entitled to
$200,000 as percentage rental for that lease year, the remaining $800,000 is Remaining
Funds for that lease year.
"Rent Paying Party" means any individual or entity responsible for the payment
of percentage rental under the Lease, whether pursuant to the terms of the Lease or
pursuant to a sublease or other agreement by which such party agrees to make payments
of percentage rental on behalf of another party.
"Subtenant" means EAGL or any other individual or entity to whom "Tenant" (as
defined in the Lease), with the consent of Lessor, subleases the entire Golf Course. When
used herein, the terms "gross receipts," "minimum annual rental," "percenta a rental,"
"lease year," "Tenant" and other terms that are defined in the Lease have the meanings
given to them in the Lease.
2
2 Effect of Exclusion Clause. The parties clarify acknowledge, confirm
understand and agree that, under the terms of the Lease and for each month and/or lease year: (1)
every dollar of Gross Receipts that is collected at the Golf Course during such month and/or
lease year, for the term of the Lease, is to be included in the Gross Receipts for purposes of
calculating percentage rental, whether each dollar of Gross Receipts is collected by Lessee, by
Assignee, by Subtenant, by a Partial Operator or by any other person or entity, and (ii) the Gross
Receipts do not include the Excluded Receipts for each month and/or lease year, for the term of
the Lease.
�. Example Illustrating Operation of Exclusion Clause. The example illustrating the
operation of the Exclusion Clause is attached hereto as Exhibit "E" and is incorporated herein by
this reference.
4. Section 2 of the Fifth Amendment to the Lease. The parties clarify, acknowledge,
confirm, understand, restate and agree that Lessee, Assignee and EAGL, and their permitted
successors and assigns, shall have the duty to maintain to the satisfaction of the Agency the
drainage easement located south of the condominiums on Little Mountain Drive (the legal
description of which is defined in Section 2 of the Fifth Amendment to the Lease). The parties
agree that the satisfaction of the Agency means that the drainage easement will be maintained by
Lessee, Assignee, EAGL and their permitted successors and assigns, in a manner that will
increase the visual aesthetics of the area.
5. Lease Unamended and in Effect. The Lease is not amended by this MOU. This
MOU is intended only as a clarification of: (i) the Exclusion Clause and as an illustration of the
manner in which the existing Exclusion Clause is intended to operate, and of(ii) Section 2 of the
Fifth Amendment to the Lease. The parties agree that the Lease remains in full force and effect
in accordance with its terms.
6. Governing Law. The laws of the State of California (not including the choice of
law provisions thereof) shall be applied in interpreting and enforcing this Amendment.
7. Invalid Provision. If any provision of this MOU is held to be illegal, invalid or
unenforceable, such provision shall be fully severable and the remaining provisions of this MOU
shall be construed and enforced as if such illegal, invalid or unenforceable provision had never
been a part hereof. The remaining provisions herein shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by its severance from
this MOU.
8. Counterpart Signatures. This Amendment may be executed in counterparts, and
upon all counterparts being executed, each counterpart shall be considered an original and all
counterparts together shall be considered as one Amendment.
[Signatures follow on the next page]
3
IN WITNESS WHEREOF, the parties hereto have caused this MOU to be executed on
their behalf by their duly authorized representatives as of the date first set forth hereinabove.
LESSOR:
Dated: REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO,
a public body, corporate and politic
By:
Name: Emil A. Marzullo
Title: Interim Executive Director
ATTEST:
By:
Agency Secretary
APPROVED AS TO FORM AND
CONTENT:
By:
V
Agency CiTu-nsdy
LESSEE:
SHANDIN HILLS GOLF CLUB,
a California corporation
By:
Name: Mark J. Friedman
Title: Secretary
[Signatures continue on the next page]
4
ASSIGNEE:
CNL INCOME EAGL LEASEHOLD
GOLF, LLC,
a Delaware limited liability company
By:
Name:
Title:
EAGL:
EVERGREEN ALLIANCE GOLF
LIMITED, LP,
a Delaware limited partnership
By: PREMIER GOLF EAGL, GP,
LLC,
a Delaware limited liability company, its
General Partner
By:
Name:
Title:
5
EXHIBIT A
LEASE
1. Lease Agreement effective January 1, 1985 by and between the Redevelopment Agency
of the City of San Bernardino and Shandin Hills Golf Club.
2. First Amendment to Lease Agreement dated August 19, 1985 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
3. Second Amendment to Lease Agreement effective January 1, 1986 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
4. Third Amendment to Lease Agreement effective February 10, 1986 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
5. Revised Fourth Amendment to Lease Agreement, dated February 16, 1987, by and
between the Redevelopment Agency of the City of San Bernardino and Shandin Hills
Golf Club.
6. Fifth Amendment to Lease Agreement effective May 12, 1988 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
7. Sixth Amendment to Lease Agreement effective June 1989 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
8. Seventh Amendment to Lease Agreement, dated March 5, 1990, by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
6
EXHIBIT B
CONSENT AGREEMENT
Ad
7
EXHIBIT C
ASSIGNMENT OF LEASE
8
EXHIBIT D
SUBLEASE AGREEMENT
9
EXHIBIT "E"
EXAMPLE ILLUSTRATING THE OPERATION OF THE
EXCLUSION CLAUSE
10
Exhibit "E"
Shandin Hills Golf Course
For the Period July 2006 through June 2007
(Actual — No Sublease)
Income
Greens $1,011,080
Carts 425,641
Range 40,993
Merchandise Sale 88,480
Food 650,996
Beverage 175,998
Other 152.983
Total Income $2,546,171
Gross Receipts $2,546,171
Shandin Hills Golf Course
For the Period July 2007 through June 2008
(Example—with Sublease)
Income
Greens $1,011,080
Carts 425,641
Range 40.993
Merchandise Sale 88,480
Food 650,996
Beverage 175,998
Other 152,983
Sublease Payments 400,000
Total Income $2,946,171
Gross Receipts $2,546,171
* Per Section 28 of the Current Lease, Gross receipts, shall not include fees, charges or
rentals paid to Tenant by a sublessee where the gross receipts of such sublessee are
reported and subject to the percentage rental schedule.
I
UPON RECORDING RETURN TO:
American Golf Corporation
c/o Christine Chong,V.P.Real Property
2951 286'Street,Suite 3000
Santa Monica,California 90405
Memorandum of Lease
THIS MEMORANDUM OF LEASE (this "Memorandum"), entered into as of
this day of March, 2008, by and between THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO, a public body, corporate and politic, ("Landlord"), and
SHANDIN HILLS GOLF CLUB, a California corporation("Tenant").
WITNESETH:
THAT, Landlord and Tenant have heretofore entered into a certain Lease
Agreement effective as of January 1, 1985, as amended, modified, or otherwise affected by the
documents listed on Exhibit A attached hereto and incorporated herein by this reference
(collectively, the "Lease ') covering certain real property located in the City of San Bernardino,
County of San Bernardino, California, more particularly described on Exhibit B attached hereto
and incorporated herein by this reference (the "Leased Property); and
WHEREAS, it is the desire of both Landlord and Tenant to memorialize the Lease
and set forth certain pertinent data with respect thereto.
NOW THEREFORE, with respect to the Lease, Landlord and Tenant hereby
acknowledge and agree as follows:
1. Demise. The Leased Property has been and is hereby demised, let and
leased, by Landlord to Tenant, and taken and accepted by Tenant from Landlord, all pursuant to
and in accordance with the Lease.
1pDC-026987/000001-1679524 v2
2. Term. The Term of the Lease is for fifty-two (52) years commencing on
January 1, 1985 (the "Commencement Date").
3. Possession. Landlord has delivered possession of the Leased Property to
Tenant and Tenant has accepted delivery and taken possession of the Leased Property from
Landlord in the "as is"condition of the Leased Property on the Commencement Date,
4. Inconsistent Provisions. The provisions of this Memorandum constitute
only a general description of the content of the Lease with respect to matters set forth herein.
Accordingly, third parties are advised that the provisions of the Lease itself shall be controlling
with respect to all matters set forth herein. In the event of any discrepancy between the
provisions of the Lease and this Memorandum, the provisions of the Lease shall take precedence
and prevail over the provisions of this Memorandum.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
\\\IX•028997/000002-2679524 v2
IN WITNESS WHEREOF, Landlord and Tenant have caused this Memorandum
to be duly executed on or as of the day and year first above written.
LANDLORD:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO,
a public body, corporate and politic
By:
Name: Emil A. Marzullo
Title: Interim Executive Director
Dated: Date:
ATTEST:
By
Agency Secretary
APPROVED AS TO FORM AND
CONTENT:
By:
Agen y Coun
TENANT:
SHANDIN HILLS GOLF CLUB,
a California corporation
By:
Name: Mark J. Friedman
Title: Secretary
WDC-0289871000002-2679524 v?
STATE OF CALIFORNIA
COUNTY OF SS.
On before me, ,Notary Public,
(here insert name and title of the officer)
personally appeared Mark J. Friedman, Secretary of Shandin Hills Golf Club, a California
corporation, who proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his authorized capacity, and that by his signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SEAL Notary Public
(Seal)
%X\DC•028997A)00002.2679524 v2
STATE OF CALIFORNIA
SS.
COUNTY OF
On , before me, , a Notary
Public in and for said County and State,personally appeared , who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s)on the instrument
the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SEAL Not Public
%DC-0289871006002-2679524 v2
EXHIBIT A
LEASE
1. Lease Agreement effective January 1, 1985 by and between the Redevelopment Agency
of the City of San Bernardino and Shandin Hills Golf Club.
2. First Amendment to Lease Agreement dated August 19, 1985 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
3. Second Amendment to Lease Agreement effective January 1, 1986 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
4. Third Amendment to Lease Agreement effective February 10, 1986 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
5. Revised Fourth Amendment to Lease Agreement, dated February 16, 1987, by and
between the Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
6. Fifth Amendment to Lease Agreement effective May 12, 1988 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
7. Sixth Amendment to Lease Agreement effective June 1989 by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
8. Seventh Amendment to Lease Agreement, dated March 5, 1990, by and between the
Redevelopment Agency of the City of San Bernardino and Shandin Hills Golf Club.
'AFDC-028987/000002-2679524 v2
Exhibit B
Leased Property
(see attached)
WDC-029997/000002-2679524 v2
DESCRIPTION OF THE PROI •1TY
PARCEL N0. la
THAT PORTION OF LOT "D", TRACT NO. 1741, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OP CALIFORNIA, AS PER PLAT REOORDBD N BOOK 27 OF NAPS,
PAGES 41, 42 AND 43, RECORDS Or SAID COUNTY, DESCRIBED AS FOLLOWSt
BEGINNING AT A POINT IN THE 30UTHEASTERLY LINE OF THAT CERTAIN PARCEL OF LAND
CONVEYED TO THE STATE OF CALIFORNIA, BY DEED FROM RALPH M. HUMS, ET AL, RECORDED
JANUARY 21, 1967, IN BOOK 4135, PAGE 158, OFFICIAL RECORDS OP SAN BERNARDYNO'
COUNTY, DISTANT ALONG SAID SOUTHEASTERLY LINE, SOUTH 51 DIM" 04' 41• WEST,
70.86 FEKT•FROM THE NORTHWESTERLY CORNEA OF THAT CERTAIN PARCEL OF LAND CONDEMNED
FOR STATE FRKKWAY PURPOSES AND SECONDLY DESCRIBED IN FINAL ORDER OF OONDKMNATION,
A CERTIFIED COPY OF WHICH APPEARS Or RECORD IN BOOK 4715, PAGE 80, OFFICIAL
RECORDS) THENCE SOUTH 23- DRORRES 16' 190 EAST, 103.58 FEET] THENCE SOUTH 21
DEGREES $9. 38" EAST, 1078.76 ►EETI THENCE SOUTH 17 DEGREES 45' 58" EAST, 854.17
FEET TO THE BEGINNING OF A TANGXRT CURVE CONCAVE WIrrzRLY AM HAVING A RADIUS OF
2050 FEETI THENICE SOUTHERLY ALONG SAID CURVE, THROUGH A CENTRAL ANGLB Or it
DEGREES 01' 42", A DISTANCE OF 394.S9 FEKTI THENCE SOUTH 19 DEGRKEB 41. 56" W981f,
522.78 FEET TO THE NORTHEASTERLY LINE OF THE ATCHISON# TOPUA AND SANTA FE RAILWAY
COMPANY'S RIGHT OF WAYI THENCK ALONG SAID NORTHEASTERLY LIRE, NORTH 39 DKQRBK8"55'
42" HEST, 2583.54 FEET.TO A POINT IN SAID SOUTHEASTERLY LINE OF THE ABOVE FIRST
xzmTIONED STATE OP CALIFORNIA PARCEL Or LAND) THENCE ALONG SAID SOUTKEASTZRLY
LINE, NORTH 51 DEGREES 04' 41''BAST, 1270.26 FEET TO THE POINT OF BEGINNING.
' PARCEL NO. 2t
THAT PORTION OF SECTION 19, TOWNSHIP 1 NORTH, RANGE 4 WEST, RANCHO MUSCUPIABE, (IF
I THE LINE OF THE UNITED STATES GOVERIDaNT SURVEY MAY BE EXTENDED ACROSS SAID
RANCHO),.AS PER PLAT RECORDED IN BOOR 7 OF HAAS, PAGE 23, RECORDS OF SAN
BERNARDINO COMM, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWSt
BEGINNING AT THE HOST HORTHiKRLY CORNER OF THAT CERTAIN PARCEL OF LAND ACQUIRED BY
THE STATE OF CALIFORNIA BY FINAL ORDER Or CONDEMNATION RENDERED IN THE SUPERIOR
COURT CASE NO. 132795, A CEETinst; COPY Or SAID ORDER HAVING BEEN RZOORDKD
i SKPTEMBKR'15, 1966, IN BOOS 6697, PAGE 1, OFFICIAL RECORDS, ET-SEQ., SAID CORNER '
BRING A FO171T IN THE SOUTHWESTERLY LINK"Or LITTLE MOUNTAIN DR., 44 FEET wing, AS
SHOWN ON NAP OF TRACT 90. 6716,-RECORDED IN BOOK 65 Or-MAPS, PAGES 32 AND 33,
RECORDS OF SAID COONTYI THENCE ALONG THE NORTHEASTERLY LIRE Or SAID PARCEL. SOUTH "'.•
63 DEGREES 131 14" iTEB'1','27'1:11 FEKTI THENCE COME "A" 'SOUTH 35 DEGREES 491 36- ...
EAST, 244.59 FEET TO THE BEGINNING Or A 75O-FOCI RADIUS TANGENT CURVE TO THE LEr'1'I'
THENCE COURSE ABA -300THKASTERLY ALONG SAID CURVE, A DISTANCE•07 441.07 FEET TO THE :-
SOUT86i'88TBRLY LINE OF THE NORTHEASTERLY 44 FEET OP SAID PARCEL OF LAND 30 ACQUIRED
BY THE STATE OF CALIFORNIAI.THENCZ AT RIGHT ANGLES TO SAID SOUTH MSTERLY LINE•
NORTH 63 DEGREES 12* 06" EAST, 44.00 FEET TO THE NORTHEASTERLY LINE OF SAID. PARC6L
BEING ALSO SAID SOUTHR STERLY LINE OF LITTLE MOUNTAIN DR.; THENCE ALONG SAID
NORTHEASTERLY LINE NORTH 26 DEGREES 47' 34" WEST, 632.64 FEET TO THE POINT OF
BEGINNING. ;r
PARCEL NO. 3s
LOT 5, TRACT NO. 10518, IN THE CITY OF SAN BERNARDINO COUNTY OP SAN BERNARDINO-, `� • '
STATE Or CALIFORNIA, AS PER PLAT RECORDED IN BOOK 145 Or NAPS, PAGES 51-TO 57,
INCLUSIVE, RECORDS OF SAII) COMM.
ExAbit
f
WARNER W. HODGDON
HEART BAR RANCH, ARROWHEAD SPRINGS ErtPre(l into Record at '3
LM 405 EAST ARROWHEAD ROAD f( ;II,rill Cmy0evCms Mtg:
SCAN BERNARDINO, CALIFORNIA 92404
DIRECT LINE: (909) 881-1540
Y FAX LINE: (909) 886-9962
I
re Agle lda item
Monday, March 3, 2008
2
Economic Development Commission City Clerk1C0C Seey
City of San Bernardino City of San Bernardino
201 N. `B" Street, Suite 301
' San Bernardino, CA 92401
RE: Monday, March 3, 2008 — 1:30 p.m.
Agenda Item R-19; i.e.:
Shandin Hills Golf Course—Consent to Assignment of Lease to
CNL Income EAGL Leasehold Golf, LLC (State College Project Area).
Staff Report documents not available at time of printing.
Dear Commission:
The fifty (50) plus page Agency Staff Report dated Wednesday, February 27,
2008 was not available at the Agency office and not available at the City Clerk's office
on Wednesday and Thursday; but was only available for the Public about 1:30 p.m. on
Friday, February 29, 2008.
As confirmed by the above subject Staff Report dated Wednesday, February 27,
2008 at the Thursday, January 24, 2008 Committee meeting, Members Estrada, Johnson
and Baxter unanimously voted to recommend (1) that the RDA Committee and Agency
Staff inspect the golf course and address issues of maintenance prior to moving this item
forward.
The Committee, as a body, did not review the fifty (50) or more pages of
documents incorporated with the February 27, 2008 Staff Report regarding the Shandin
Hills Golf Course Master Lease referenced above.
At the January 24 2008 meeting, Warner Hodgdon, recipient of the Community
Development Commission's recognition under its Resolution No. 4736 adopted January
21, 1985 for his family's contribution of$6,014,000 to the Community for allocation and
establishment of Shandin Hills Golf Course (Resolution Attached), brought up the need
for the Commission's "Oversight" as to and under the terms of the January 1, 1985
3/3/08 CM Pg. I of 5
' FAMILY HERITAGE OF THE MOUNTAINS • VALLEY BEGAN IN 1847
HEADQUARTERS: 405 EAST ARROWHEAD ROAD,ARROWHEAD SPRINGS,SAN BERNARDINO,CALIFORNIA 92406
A W ANIX s HODGDON G 1-1 GROUT�ttnun
Shandin Hills Golf Club "Master Lease", which includes full food and beverage service
for the Community area.
In addition the Hodgdons caused other area improvements
g of approximately
$32,660,000 which is an increase of$24,780,000 in excess of their obligation under the
Agencies' May 1, 1978 Participation Agreement. In addition, the Hodgdons contributed
$114,000 toward Blair Park improvements and Warner Hodgdon had previously caused
27 acres to be contributed for the park.
The Hodgdons also built in 1980 seven administration buildings of 88,000 square
feet, with a value of $4.7 million and contributed the facility to Campus Crusade For
Christ. Accordingly, on Wednesday, February 27, 2008 the Honorable Jerry Lewis
introduced his gratitude as part of the Congressional Record, i.e.: House of
Representatives......Warner Hodgdon—twenty one of the outstanding men of our Nation
(Figure 1).
"The Community Development Commission of the City of San Bernardino
further determined (under Resolution 4736) that the various monument signs on site at
the golf course provide a suitable form of recognition of the Hodgdon family contribution
and that such monuments signs are an integral part of the golf course and shall remain in
place in recognition of the Hodgdon family contribution."
"The Community Development Commission of the City of San Bernardino
further directed that a copy of Resolution No. 4736 be forwarded to Warner W. Hodgdon
and Sharon D. Hodgdon" (Resolution Attached).
On January 24, 2008, the Committee requested Warner Hodgdon to join them and
Agency staff at the Shandin Hills Golf Club for an Oversight review of existing
conditions to be held on Thursday, February 6, 2008. At the Oversight Review,
Committee member Baxter informed everyone that Members Estrada and Johnson could
not attend, as it would be a violation of the Brown Act.
Before the tour, Warner Hodgdon hand delivered to Brian Bode, Regional
Director, American Golf, his Friday, March 25, 2005 letter with five (5) 8X10 photologs
of the Shandin Hills Golf Club defaced monument signs, dead trees, etc.; and 11X17
colored documents of Shandin Hills Golf Club, Crusade buildings, Elks Club food,
beverage and golf cart building; including City Resolution No. 4736, as to the monument
signs (submitted herewith under separate cover).
Warner Hodgdon had previously spoken to Mr. Bode at Shandin Hills on
1 Wednesday, March 25, 2005 and hand delivered his Friday, March 27, 2005 letter and
documents described above to Shandin Hills on Friday, March 27, 2005 (See attached).
3/3/08 CM Pg.2 of 5
FAMILY HERITAGE OF THE MOUNTAINS • VALLEY BEGAN IN 1847 JJ
OHEADQUARTERS: 405 EAST ARROWHEAD ROAD,ARROWHEAD SPRINGS,SAN BERNARDINO,CALLFORNIA 92406
A QAKNER o HODGDON®1-1 Gltour Atsnten �'l�
onal Record
United States
of America PROCEEDINGS AND DEBATES OF THE 96`f
'CONGRESS, SECOND SESSION
Vol. 126 WASHINGTON, WEDNESDAY, FEBRUARY 27, 1980 No, 31
House of R-oliresentatives
1
WARNER HODGDON--TRULY ONE
OF THE T
®U SrI'ANI}INC;x MEN OF
OUR NATION
HON. JERRY LEWIS Campus Crusade was established in the perseverance to continue until
1951 on the campus of the University today his accomplishments are
OF CALIFORNIA of California at Los Angeles by Bill equaled by few. His quest has been
IN THE HOUSE OF REPRESENTATIVES and Vonette Bright. Bright was a suc- built on a solid foundation of his belief
Wednesday,February 27,1980 cessful businessman in the Los Ange- in God,country,and family.
ies area for many years. He began his These virtues are extolled by his
o Mr. LEWIS. Mr. Speaker, it is not Christian work in the early 1950's and wife Sharon who has been at Warner's
often that one has the opportunity to later left the business world to devote
commend and express his gratitude to all of his time to the organization he side through thick and thin. She has
an individual who has committed his founded in 1951 at UCLA.He has stud- tied the family together and has
life to his community, to his God, and ied at Princeton and Fuller Theologi- brought joy to Warner's life. Their
to our free society. This man is my cal Seminaries but elected to remain a sons, Aaron and Justin have, beyond
friend Warner W. Hodgdon. His con- layman rather than seeking ordina- any doubt,a model in whose footsteps
tributions have been extensive and tion. they will be proud to follow.
have had an impact on everyone in the Campus Crusade is not a church but Warner Hodgdon's philanthropies
San Bernardino community. considers itself an extension of the do not end with the Campus Crusade.
Perhaps his greatest contribution church with expertise in particular He is the most generous giver I have
has been to the Campus Crusade for areas, and works closely with pastors known.Among the innumerable chari-
Christ- International. On March 4, and churches throughout the United ties to which he has contributed are
1980, the crusade will dedicate and States and the world.College work has the Lighthouse for the Blind, Santa
open their new administration center always been the major emphasis of Claus Inc.,the Jerry L.Pettis Memori-
in San Bernardino. This center has the campus crusade ministry. Lay al Veterans Hospital, Azusa Pacific
been the personal project of Warner training for church members is an. College, the YWCA—Redlands, the
and Sharon Hodgdon, who have fi- other major speciality.There are more YMCA/YWCA—San Bernardino, the
nanced and directed the completion of than 25 subministries in all. Among Riverside Community Hospital, the
this multimillion dollar complex. The the better known are Athletes in Heart Association, Goodwill Indus-
center is comprised of seven buildings Action, the Campus Ministry, and the tries, the Arrowhead United Way,
each of which are approximately AGAPE Movement. The Campus Cru- California State College at San Ber-
12,000 square feet. sade is basically aone-to•one type of nardino, the American Red Cross, the
Campus Crusade for Christ Interna- ministry and has become a major part Boy Scouts of America, Redlands
tional is an interdenominational Chris- of the life of Warner Hodgdon.
tian organization. There are more Warner Hodgdon is a man of re- Community Hospital,Saint Bernadine
than 11,000 regular and associate staff markable character whose life and Hospital, and Our Lady of Guadalupe
members of many nationalities who ideals exemplify Campus Crusade for Church.The list goes on and on.
^erve in more than 110 countries and Christ.His rise to success began at the Mr.Speaker,Warner W. Hodgdon is
otectorates of the world. The orga- early age of 9 and his first job working one of the truly outstanding men in
nization's emphasis is on discipleship— for Standard Brands in San Bernar- our Nation and it is my privilege to
building Christians in their faith—and dino. He has built an empire from the commend him to the House of Repre-
carrying the faith to others. ground, at times failing, but having sentatives.•
FIGURE I
f
A very brief tour was conducted on Friday, February 6, 2008 and Mr. Bode
addressed the removed and declining trees, the un-maintained southern parkway and
landscape area (now referred to as a drainage area) and gave his explanation of the
unilateral non-operating full service food and beverage dining facilities on the second
floor, etc. These facilities were required as part of the Master Lease and built thereunder.
These issues, but not limited to, are addressed in the Master Lease.
Enclosed herewith is a Thursday, February 6, 2008 1:30 p.m. Photolog of
existing conditions taken during the Shandin Hills Golf Club Oversight tour, show
missing parking lot trees, diseased trees, dead alder trees, etc..
The Shandin Hills Golf Club Master Lease incorporates the following, but not limited to:
OPERATIVE PROVISIONS
I....Pg.4 NOW, THEREFORE, inconsideration of the covenants and conditions
specified herein, the parties do mutually agree as follows:
Section 1. Section Headings. The section headings appearing herein shall not be
deemed to govern, limit, modify or in any manner affect the scope, meaning or intent of
the provisions of this LEASE AND OPERATING AGREEMENT.
A copy of the fully executed "OPERATING AGREEMENT" needs to be reviewed for
compliance.
�r
2. .....Pg.4 B. The parties recognize that various title problems and survey
difficulties must be resolved, "BUT ALL PARTIES AGREE THAT THIS LEASE IS
INTENDED TO COVER THE ENTIRE GOLF COURSE AREA PRESENTLY
BEING MAINTAINED INCLUDING ALL LANDSCAPING PRESENTLY
CONSTITUTING AN INTEGRAL PART OF THE GOLF COURSE..........TENANT
SHALL MAINTAIN ALL LANDSCAPED AREAS HERETOFORE MAINTAINED
BY THE FORMER OPERATOR (ALL AMERICAN CITYPUBLIC GOLF, INC.)
3/3/08 CM Pg.3 of 5
FAMILY HERITAGE OF THE MOUNTAINS • VALLEY BEGAN IN 1847
OHEADQUARTERS: 405 EAST ARROWHEAD ROAD,ARROWHEAD SPRINGS,SAN BERNARDINO,CALIFORNIA 92406
A WAAHER i HODGDOA FAMRY CROUP AFMIATE
ARROWHEAD COUNTY CLUB
3.....Pg.6 B. In addition to the foregoing, Tenant shall fully maintain the
Golf Course at all times during the term of this Lease in a condition substantially
equal to that maintained at the ARROWHEAD COUNTRY CLUB.
4..... Pg.8-9 Section 5. On-Site Improvements. Tenant shall commence a capital
improvement program to the end that THE EXISTING CLUB HOUSE SHALL BE
REMODELED WITHIN THREE YEARS FROM THE EFFECTIVE DATE HEREOF SO
AS TO PRO VIDE ADEQUATE FOOD AND BEVERAGE SERVICES INCLUDING
BANQUET FACILITIES AND A FULLY EQUIPPED KITCHEN ADEQUATE FOR
AT LEAST ISO PATRONS AT ANY ONE TIME....additionally storage facilities for
all golf carts....shall be constructed within three years.
5..... Pg. 16 Section 10. Use of Demised Premises.
A. Operations of a food and beverage service facility, etc.
B. As gross receipts is defined herein, a separate "OPERATING
AGREEMENT", to be executed into coincident with the Lease shall further expand
upon the agreements of the parties expand upon the agreements of the parties as to
operation of the facilities demised hereunder.
6..... Pg.21 Section 17. Inspection of Premises; Emergency Action. ...shall have
access at all reasonable times, in, to and upon the Demised Premises for the purpose of
inspecting the same and to post any notices which,
Agency shall at all times have the right to enter upon the premises for the
purpose of inspecting the grounds and the greens, and for this purpose is authorized
to brinIZ upon such property such advisers and experts as Alzency may designate
3/3/08 CM Pg.4 of 5
FAMILY HERITAGE OF THE MOUNTAINS • VALLEY BEGAN IN 1847
HEADQUARTERS: 405 EAST ARROWHEAD ROAD,ARROWHEAD SPRINGS,SAN BERNARDINO,CALIFORNIA 92406
A WA1tNEX i NODGDO\ FAMLY GKOVP AFMIATE
7.... Pg.24 Section 21. Taxes. Tenant shall promptly pay without default all taxes
whatever character that may be lawfully levied upon or charged against the Demised
Premises, in confonnance with Section 33673 of the California Health and Safety Code,
or the structures, improvements or other property thereon, or upon Tenant's operations
hereunder,POSSESSORY INTEREST TAXES.
8.... P .31 G. Maximum Individual Pla y. (The Operating Agreement)........«
The
Problem Resolution Committee" shall be charged with the responsibility of assuring
the actual hours.
Section 27. Problem Resolution Committee. A Problem Resolution
Committee" shall be established by the Agency. The committee shall be provided for
in the "Operating Agreement".
Who are the named members of the Problem Resolution Committee?
On about February 10,2008, Mike Trout, Project Manger, provided Warner
Hodgdon with the July 30, 2007 Shandin Hills Operating Statement under which the
Agency was paid $348,966 for lease payment and also received possessory interest Ad
Valorem taxes of $70,269. This total Shandin Hills Golf Club public Revenues
(excluding sales tax) of$419,235 (See attached 2 pages).
.. The above is also submitted to the City Clerk for the Public Record.
Respectfully,
Warner W. Hodgd
cc: Community Development Commission
3/3/08 CM Pg.5 of 5
FAMILY HERITAGE OF THE MOUNTAINS • VALLEY BEGAN IN 1847
HEADQUARTERS: 405 EAST ARROWHEAD ROAD,ARROWHEAD SPRINGS,SAN BERNARDINO,CALIFORNIA 92406
A.,J�.iER m HODGDOS r.wnr GROU ,Ms Tl PTO
1
No. 13?
kPt. 1983
io
I
,LCRETARY'S CERTIFICATE
OF
ADOPTION AND AUTHEtITICATION
I, Glctxla Saul Sc ctary of the Community
Dcvclopmc.nt Commisslon, DO HEREBY CERTIFY that the nttachcd Rcsolutlon E a
truc and corrcct Copy of Rcsolutlon No. 47]6
January 21 adopic6
- Y7' ,19 ES , by the Community Dcvclopmcnt Commission of the
Crty
Of Sarr I3unardino, by talc votc �c t forth bclow, and that said Rcsalution has
not bccn n'mcndcd oc rcpnalcd.
Chcck Appropriatc Box
V
COMMISSION MEMBERS YEAS NAYS ABSENT ABSTAIN
Ch STANEDR f( ❑ ❑ ❑
REILL7 L�J ❑ ❑ ❑
1��1�»D>� o D ❑ ❑
MARKS a D D ❑
QUIEL a D D ❑
FRI,ZIFR _ l� 1 ❑ ❑ ❑
STRICKLER _ ❑ ❑ ❑ ❑
DATED: January 21 198 5.
mw
Sccrctary of the Community Dcvclopmcnt
COmmissIOn 01 the City of San Bernardino
OW A,t
NINE-
1
RESOLUTION NO. 4716
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
3 CITY OF SAN BERNARDINO RECOGNIZED CONTRIBUTION OF WARNER W.
HODGDON AND SHARON D. HODGDON TO THE COMMUNITY FOR CREATION AND
4 ESTABLISHMENT OF SHA27DIN HILLS GOLF COURSE AND DETERMINING
5 MONUMENT SIGNS TO BE INTEGRAL PART OF GOLF COURSE.
BE IT RESOLVED BY THE COMMUNITY DEVELOPMENT COMMISSION OF
6 THE CITY OF SAN BERNARDINO AS FOLLOWS :
7 WHEREAS, on May 1, 1978, the Redevelopment Agency of the
6 City of San Bernardino, hereafter "Agency° and Warner W. Hodqdon
9 and Sharon D. Hodqdon entered into a private Property Owners
10 Participation Agreement for the development of property in the
11 Agency' s State College Project No. 4 and as agreed to therein
12 have contributed and conveyed to the Agency 60 plus or minus
i
13 acres of land for the construction of an 18-hole chain ionshi
14 public golf course at an MIA appraised value of $1, 500, 000 .00;
15 and,
16 WHEREAS, Hodgdons agreed to construct total improvements of
17 a value of $7, 880, 000 .00. However, Hodgdons have caused to be
16 developed on said property construction of improvements of
19 administrative facilities, residences, condominiums and other
20 improvements of value of approximately $32, 660, 000 . 00, which is
21 an increase of $24 ,780, 000. 00 in excess of their obligation under
22 their Agreement• and
23 WHEREAS, Hodgdons have contributed the Bum of $100 000 00 to
24 the Agency for the development of Blair Part- and paid our an
25 additional $14 000.00 for imported fill dirt which was needed
26 after construction had commenced and which was not originally
27 contemplated; and,
- 1�/N�rlfll IIMM�f��l�,
I WHEREAS, Hodgdons constructed administrative facilities at
2 27th Street and Little Mountain Drive consisting of seven
3 buildings containing 88, 000 square feet, with a value of
4 $4, 700, 000. 00, and contributed same to Campus Crusade for Christ,
5 Inc . These administrative facilities are currently occupied by
6 Campus Crusade for Christ as their world headquarters, consisting
7 of approximately 600 amployeep_1 and
8 WHEREAS, under that certain Agreement of Compromise entered
9 into on July 23 1981 by the Agency,- the City of San Bernardino
10 Warner W. 3iodgdon and Sharon D Hodgdon, and All-America City
11 Public Golf Inc . , Hodqdons have completed construction of an
12 underground drainage system needed to collect surface runoff
13 water which previously caused extensive soil erosion damage to
14 the golf course, repair of all sandtraps that would not drain as
i' 15 a result of improper drainage installation, installation of
16 needed fencing of portions of golf course, construction of
17 fencing and major landscaping of pro-shop parking lot, and all
18 other necessary construction of the public golf course at a total
19 expenditure for which documentation has been provided of
20 approximately $4, 400, 000 . 00 with additional expenses incurred in
21 planning development and staff work; and
22 WHEREAS the Hodqdons have cooperated greatly with the
23 Agency in arranging for a permitting the operation of the golf
24 course to be taken over by another operator who has caused the
25 golf course to open and enabled the public to sense the quality
26 of the course development by the_Hodq-dons;
err
27 NOW, THEREFORE, the Community Development Commission of the
28 City of San Bernardino does hereby gratefully recognize the
I
u
w
ow contrutions of W rner_ W,
� ib Hod_g�on_and-_S:laron D_, _tiodc�-don_ lo_t1e
betterment of. the li — - — c_o_unit-Y through_their Civic and charitable
- —
I� contribUtj,on__and_ throush_their_c_ommitment to-deyeloriment -o.f_.area:;
S I' previ—°uA. underutilized.
5 I! The_ Communi t
1 _.}' Devclonment_Commisoion of the Ci_ty_of San
6 1 Bert:arding does further detezmine that the variou_monurlen.t signs
- -- n s
on site at t}ic_ yolf course provide a suitable forn_of _re_cognition
A of the Hodgdon fam ly contxibution and t}iat such mop ^
5
are—__ sal
inte
s_.__-.__.part of the golf_ course and shall remain__ in
C ?-n._=ecogn_ition of the Hodgdo:� tamilY_contributiot=
The Community Development Commission of the City of San
i
2 Bernardino does further direct that a copy of r_his resolution be
3 forwarded to Warner W.
Hodgdon and Sharon D. Hodgdon .
I ADOPTED: _._>nuaa?1, I9M 4
r � t
i
Approved as to fob:
AGENCY COUNSEL
d I
9 II :3y
1.
2 �I
3 iI
II
1
;i
:i
.I
7 i
s
9
GI'L'T OF SAIN BERNARDINO C0M'%tt)-Nrl'1' DEVIJ,OPMENT COI+iM SSION'S .IANUARY 21, 1985 t
RESOLUTION NO. 4716 RFCOGNIZING "T'IfF, IIODGDON FAMI1,y' CONTRTRUTIONS; Pi'lz THE
MAY 1, 1978 CITY REDEVF1,0l, jL,,Nf AGF=N(:1' .IOCti"r PARTICIPATION AGREEMENT: �
$frANr)IN f{11_LS (:nLSLtJ13 "FXCI,USI�'I ' PI.1F31 TS;__ I
Resolution No. 4716:
1. Land Contribution to Ci()/I;DA (60 Acres)
S1,SOO,f,OU
2. Blair Park Contribution to Cih•/EI)A
114,000
3. Golf Course/Club "First Class" Improvement(s) Contribution to City/EDA
4,400,f.00
TOTAL HODGDON' FAMILY "CASH" CONTRIBUTIONS TO CITY/EDA �b 014,000
"I E- CAPITAL
S32,600,t10o
Resolution No. 4716:
4. Ilodgdon Required Private Construction under the 1Vtay 1, 1978
City/F.DA Shandin 1"ll.s South Joint (honer Participation Agreement
S. TOTAL HODCDON f'RIVAl'E CAPITAL, INYESTMEN`f'
Exccedin� the C'(3-/F D,1 'Toint 0µ110r P,rryicipatiori Agreement Requirements 24,720�t)O0
S}i,�NDiN HILi,S CLOLh CLC:B Af�tiUAl._PIiBLIC R1VI;Nifi "!'O CI'1'Y�rnA
_ U0t1,i)00
Footnote:
Excludes Shan<lUi I1111,s North Residential and Stater Tiros. Centel' Gty/FDA Public Revenues
NATIONAL EQUITY ENGINEERING
rINANCIAI.CUNSULrANIS- PRO.JECT r:OORnINATORS
GOVERNMENTS • PRIVATE AND PUBLIC: ENTERPRISE
7 ERRA RESOURCES MULTI -SPORTS PARTICIPATION
M7 FAX(909)886-996>
Zk
zn
4�'Xe
ovrt
' NA'I IONAL EQUI II LNGINE[RING,HEADQUARI ERS IN-1 ERN.ATIONALE
UNI I ED S1'AIFS POST OFFICF BOX:11 i(.SAN BERNARDINO.(ALIPURNIA 1)2 pub,t'S.A
--- NATIONAL EQUITY ENGINEERING,IIEADQUARIERS INTERNAlIONALE --_ _-
UNITEI)S"EATES POSTOEEI(:E BOX 21 W SAN BERNARDINO.CALIFORNIA')'M6,U.S.A _-
vim
— -- NSIAFES I Lc)i11T1 C fjoX )I I,,,SAN AI ARDI (:),(AiIFORNIOiJALL'
I �VI1fDClATGSf)tiTUPII(1'BOX 1-ib,SANC fGRNA}2DIN(7,CAlIP(1Ri�lA�r�iu6L;-Sik.
cz
00
O �
U �
E
u
W
{ A
o
W Q
O
CC
3
a
'.
t �
.ti
� Fr
r ;
� o
� � N
O 00
r U
co
c
$ � O
mw u
m d
Aw
� W
Q
W �
o �
QQ
a, �
a � x
°
I o
� 9L4Cd
°
� QU
a� 44
cN
o
t o �
U �
i o �
U
•.V•� yam.,,
O Q
W �
W y
O
p
WQ
r
4
x �
c
G 0 a i�
0
c o
C) u
r _
to
ac n;�y cd
O
rU
O Q
HN
i n
5
1 �
r � Q
xo
W
r
o �
QQ
� z
t O
¢�.♦ '�. ° � ��mow.
o
U �
0
Ij
s
O
r � t f PV f1 4i 71 �
G-i
N
rin
rA +
i
bn
o
00
o �
O �
U �
PON �` Q
� � o
rtk
y I HI
WQ
o �
a, a
� on
0
U
00
al
N � r
03
E-� Cl U
cn
U
i f c3
i
O
x o
a
to
` � o
� U
x
O �
4 0
O
4—i
I
4 +••I h�l ti
k` r Ge,
� r:� U
' f �
' � o
µi O 00
cn
o �
o
U �
0
s
Q U
O •�
a � v
W Q
w
uu➢III��M �•� r.+
c
_ b
0
00 a
C)
0
H Q U
lM
r.
1�1 c�) r -
ZZ. CD
c:
rn DTI t77
American Golf Corporation,.,, A -'
5handin Hills W �
Summary Operating Statement p F` n
' For the Period July 2006 through June 2007 "C
Annual
Income
Greens 1,011,080
' Carts 425,641
Range 40,993
Merch Sale 88,480
Food 650,996
' Beverage 175,998
Other 152,983
Total Income 2,546,171
' Costs of Sales
Merchandise 59,401
Food&Bev 228,917
Total Cost of Sales 288,318
' Gross Profit 2,257,853
Total Payroll 775,700
' Operating Expenses
Golf 2,422
Carts&Range 13,504
Membership _
Course Maintenance 128,945
Food&Beverage 37,226
General&Administrative 69,914
Facilities 22,582
Utilities 122,061
Leases&Rentals 99,813
Property Tax 70,269
Insurance 30,216
Non-Recurring
Total Operating Expenses 596,952
NFO Before Repair 885,201
Rent 348,966
Earnings Before Interest,Taxes, �/TY 70 Zb c
Depreciation,Amortization 536,235
The above financial information is correct in all 0,10( /,It,,/ 7x44
material respect:
William Finn
Assistant Controller
ti N t0 M N O G' M O O
Q z O O O M (0 (V O O O(0
U1 r- V O O (D O O r-O M O (D
Mco ONO)m .-- NCO t O Q)
O O)NMONMtO (o V r (D
~ 0 0 M O M co u) O M co V V co 00 O V co
(V N M N N N"N N M M M
W 00
C) J L') r N V M (D V (() W
J O N O)N V V t0 V O «) d) (D M �
Q W N N M t` (D to N CO O r- M M
F- W (O N M N tO 1- 00(D 0 Lc) (D Q Q
NO)N r- 01 W O
M1-- D) .- M F-
O W M V (D N r- O)M(D O s- 0)
Oo V N N--NM ON (2 ONM- (—fl O-)M N NMW N O M Q W W Z
F-
U N W Q
' o�Nm NNr'- OM, m W V OMO O W
Z 0 O O n Nr O V CD O
N co
U-) W (D m 00 (DM W ni-- (D (D m
W r-- U) OW V NWOr-- to MM
(D V to M M tO .-(M N M M u) ao
W
W
C2S2 r r(vCO) O N ol M(D t!) O W O r
N O co 1- (D I�m tf
Q O W 0 V (,Oj V to to N N V ti
0xSQN(fl ONMh(D V V c)C\! 0)
' W > �� � 0 (D0Ol0M to -a;�L d1
W to
CD
F- NO N(DMV V hNh(D M
o ZOMf�tT ONr-rl- O r-(D (T
t0Wi V(O N C; cli It O(DV toN M
W M (o(D CD (o W N O Or n�- V
a
O�d' ONOQ1tf) OM V V O r
W V D) N V N to I- CD Cl) M
J O Ln V c0 Cl) M V V to O M M M
QMOto Ct` c0M�0O to
OU) NtON
d0)r-0)r-- r tci V u-i 00 co r- OD
o H 0 0 0 0 0 0 0)0) O) O 00 O `o
Z V N(D(fl O C O M O r s V V O
_ _ M
�WCOr V M(N V m 0 r- O r-- m
tL) tO l�M tO to(D(D r` M 00 r- M
O W U)
00(0D W0 0 0 0 V to to to 0 0
W O O O O MOO O to O D)O V O 0
N
Co VMI-N M ZO co O(D(D(4
O
QG�U)NN(M MNN Cl) M(M V''t
V
C)(.0 O O to Lo 000(0(00
F-IM Ott)oJO O V r,MOO
Z W r`u7(O M
OW CO Vn(D NN r,- _N
N cr Q)M CO(D h oo t0 N(D cc V
n (D r O(D to V (n r co co O
co
W O N O O t o u 7 0 0 0 f1(0 O N
W(n(00O tO0Nr- tO - 1�N0 �
W W •-V N V (0 O 6 N W M O.11 O
� JNNr-N 1- N tO O)MN W(D
Q co f`W M(D CD O0ONMOO
Q L0 CD V C14 00 V r ([) t9i
U MMMMMNNNM'7 V V � N
(6
000 V (D U) to 000 r.-(7)M cu `
F- to M 'It(D N(O .-M CO Co(o O O E
c cZIr(fl 6 �- (76lA CD tTN0O tb M
W O (O(oO TOn to O r--(0(D N (6
N W O r- N V V V O to V O r,O C
�2�2 ON NO 3
N N N N U
N
op to r- r °v
Z Z (n(0O D)WONN(0O V OHO O N
U W W W r� t OD(D 0O to � 6 ENO W C
p W WJM('7 CDO rm6W V' MO V 0
Q W LL QIO CO NON V'M .0 ;
D O 0000r- W ONO r-:- D(D(D co 000 O a W
J t- 0 (�
Q o D Q
U N
m
JZ c 0 (D(D
3 0 O O
2 N� 0
N N 0 O t w Z
Z Z 0 O N N N N N N 00 t�t` a) z
z 9 N N 7 N � N a @ � � O O