Term Sheet
The City of San Clemente, California (“City”) and Salty Turf, LLC (“Developer”) (collectively the “Parties”) intend to enter into a Development Agreement concerning the development of a certain parcel located in San Clemente, California that the City owns located at 987 Avenida Vista Hermosa for City use as leased public recreational activities, as described herein (“Project Site”).
This Preliminary Term Sheet (this “Term Sheet”) is an expression of interest only and is not meant to be binding on the parties now or in the future.
Project Name: Miniature Golf Facility at Vista Hermosa Sports Park Developer/Lessee: Salty Turf, LLC
Development Objective: Development of a 36-hole miniature golf facility on city-owned parkland that will be open to the public at a nominal fee.
Conditions:
1. Developer shall be duly registered and authorized to do business in the State of California.
2. Developer’s rights pertain to the development of the Project Site. Developer shall spend at least $2.3 million in capital improvements to construct a 36-hole miniature golf facility at the Project Site for City use and public recreation pursuant to a Development Agreement that will be the subject of further negotiations between the Parties. Project design shall be subject to City Council approval. Developer must apply for and obtain a conditional use permit.
3. Monthly Rent. Monthly rent payable to the City by Salty Turf will be equal to seven percent (7.0%) of the total gross revenues, but under no circumstances less than $8,500 per month (“Base Rent”). At Year Five (5) of the Agreement, the Base Rent shall increase based on the Consumer Price Index (“CPI”), not to exceed fivepercent (5%).
4. Lease Term. The Parties contemplate a twenty (20) year lease term with one (1) extension option of ten (10) year.
5. Restrictions on Private Events. The miniature golf facility shall be generally open to the public. The Developer cannot rent out the facility for private events more than four (4) times per month.
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6. Indemnity. The Development Agreement and Lease Agreement will require that Salty Turf defend and indemnify the City from and against all claims, lawsuits, administrative proceedings, damages, fines, penalties and costs, including attorney fees, in a form acceptable to both Parties.
7. As between the City and Developer, Developer will be responsible for managing the construction of and all costs of the development and operations. In addition, as between the City and Developer, Developer will be responsible for any cost overruns in connection with the Project. Development and construction costs will include any required survey work, including an environmental analysis of the project that conforms with the requirements of the California Environmental Quality Act (“CEQA”) and any updates to the environmental or master plan documents.
The City will have no obligation to pay for any portion of the development of the Project or any ancillary development, including any cost associated with the environmental remediation of the Leased Premises.
8. Following the completion of the CEQA process, the San Clemente City Council will consider in open session a Development Agreement and/or Lease Agreement consistent with the terms and conditions in this Term Sheet in form(s) to be negotiated between the Parties.
9. As this Term Sheet is an expression of intent of the Parties and an agreement to negotiate a final agreement(s) in good faith and, accordingly, neither Party shall be legally bound until the execution of a final Development Agreement and/or Lease Agreement, which shall be binding on the Parties.
10. The parties understand and agree that unless and until a definitive agreement(s) has been executed by City and Developer and delivered, no contract or agreement providing for a transaction between the Parties shall be deemed to exist, and neither Party will be under any legal obligation of any kind whatsoever with respect to a transaction, including any obligation to negotiate, by virtue of this non-binding Term Sheet or any written or oral expression thereof.
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In witness whereof, the Parties have signed this instrument this ____ day of ______, 2023.
CITY OF SAN CLEMENTE
By: __________________________
Andy Hall, City Manager
Dated: _______________________
APPROVED AS TO FORM:
By: ___________________________
Elizabeth Mitchell, City Attorney
SALTY TURF LLC,
a Delaware limited liability company
________________________________
By Jeff Moore, President
Dated: __________________________
________________________________
By Andrew Streett, Chief Financial
Officer
Dated: __________________________