City of Reno
Nevada

Staff Report
6860

Staff Report (For Possible Action): Update regarding Rosewood Lakes Golf Course, consideration and potential approval of Amendment No. 1 to the Long Term Lease Agreement (Rosewood Lakes Golf Course) with The First Tee of Northern Nevada regarding an updated equipment list, amended termination provision, additional utilities and services provisions, and amended condition of the property upon termination provision.

Information

Department:Parks, Recreation and Community ServicesSponsors:
Category:Agreement

Recommendation and Proposed Motion

Recommendation:  Staff recommends Council approve Amendment #1 to the Long-Term Lease Agreement.

 

Proposed Motion:  I move to approve staff recommendation.

Staff Report Formal Body

Summary: Rosewood Lakes Golf Course (the “Golf Course”) is owned by the City of Reno.  On February 11, 2015, the City of Reno entered into a long-term lease agreement with The First Tee of Northern Nevada (“TFT”) to manage, operate and redevelop the Golf Course. Circumstances with construction of the Southeast Connector through the Golf Course have necessitated the need to alter the agreement. The amendment will allow for all other obligations of the TFT under the lease to be suspended to avoid further losses. Staff is requesting Council approval of Amendment #1 to the Long-Term Lease Agreement.

 

Previous Council Action:

February 11, 2015 – Council approved a long-term lease agreement with TFT to manage, operate and redevelop the Golf Course.

 

April 16, 2014 – Council approved agreements with The First Tee of Northern Nevada for (i) Services of Independent Contractor; (ii) Short-Term Lease Agreement (Rosewood Lakes Golf Course); (iii) Golf Course Reconstruction Option Agreement (Rosewood Lakes Golf Course); and, (iv) a City Council resolution directing the defeasance of the City of Reno, Nevada, General Obligation (Limited Tax) Golf Course Refunding Bonds Series 2004A.

 

March 12, 2014 – Council directed staff to negotiate a lease with The First Tee of Northern Nevada for future use of the Rosewood Lakes Golf Course to provide public golf services.

 

January 15, 2014 – James Keegan of Golf Convergence, Inc. presented a market analysis of the Golf Course to City Council. 

 

December 4, 2013 – Council upheld the Planning Commission decision and approved a Special Use Permit to RTC for the construction of the Southeast Connector. 

 

January 16, 2013 – Council approved a five year, medium-term lease-purchase agreement with EZ-GO for 60 golf carts. 

 

February 3, 2012 – Council approved that certain Agreement Permitting Construction of Southeast Connector on Rosewood Lakes Golf Course dated February 3, 2012 by and between the City and RTC (“SE Connector Agreement”), which provides for the construction of a public arterial street through the Golf Course.  The City received $7.5 million from RTC for that Agreement.  Refer to Attachment 1. 

 

Background:  The Long-Term Lease Agreement allows for TFT to lease and operate Rosewood Lakes Golf Course. TFT provides youth development programs at area golf courses and schools. TFT does not own or operate golf facilities, instead partnering with Duncan Golf management (DGM) to operate Rosewood. Rosewood has been closed since June 1, 2015 for construction of the Southeast Connector.

 

Discussion:  When the City of Reno and TFT entered into agreement, both parties were aware that construction of the Southeast Connector was going to have a significant impact on the Golf Course; however, TFT saw the proposed changes at the Golf Course as an opportunity for TFT to provide a teaching and training facility suitable for children and seniors, as well as beginners of all ages and access to the general public would be provided at affordable prices. Consulting with TFT, DGM redesigned the Golf Course to provide a nine-hole executive course, practice areas and a first-class driving range for public use and for TFT programs. TFT entered into an operating agreement with DGM. The goal of a lease agreement with TFT was to allow the continued use of the Rosewood Lakes property for golf services, while reducing the City’s financial liabilities for course operation and maintenance.

 

Construction of the Southeast Connector through the Golf Course has created circumstances in which TFT can no longer continue to operate the Golf Course. Attached is a memo from TFT regarding the status of the long-term lease of the Golf Course.  TFT has asked that the terms of the lease agreement be amended, and their memo explains the reasons behind their request.

 

The amendment will allow for all other obligations of the TFT under the lease to be suspended avoiding further losses. At that time the situation can be assessed and each party can determine if it is appropriate to continue the lease. The amendment also includes an updated equipment list.

 

Currently, it is critical to remain focused on irrigation for any future option to be considered. Staff is working with TFT to facilitate repairs of portions of the irrigation system in order to save and protect as much of the turf as possible, through October 31 at an approximate cost of $49,000.  This cost will be covered by existing funds allocated and paid in the Fiscal Year (FY)15/16 budget during Council’s regular budget adoption process, as well as from a capital improvements account set aside for Rosewood Lakes Golf Course.

 

The amendment was presented to the Recreation and Parks Commission on June 7, 2016.  The Commission recommended Council approval.

 

Financial Implications:  From the FY 15/16 budget, $49,000 was spent to be used to facilitate repairs to the irrigation system.  For FY 16/17, there is $209,000 set aside in a capital improvements account and $66,000 was allocated toward the Golf Course and approved in the budget process from the General Fund, for a total of $275,000.

 

Legal Implications:  Legal review completed for compliance with City procedures and Nevada Law.

Meeting History

Aug 10, 2016 10:00 AM Video Reno City Council Regular

COUNCIL MEMBER BREKHUS ABSENT AT 11:52 A.M.

Jaime Schroeder, Recreation Manager, presented an overview of the Staff Report.

COUNCIL MEMBER BREKHUS PRESENT AT 11:54 A.M.

Council Member Delgado stated that he would like to go back to his community and reassure them that they will not be left with a dead golf course.

Ms. Schroeder stated that the reassurance to the community is that the property is deed restricted so it will either be golf or open space. What we are focused on now is irrigating to preserve what we can. We will be working on applying for a grant to the National Park Service to assist with a master plan for that area. If we are awarded the grant it will be brought forward to the Council for acceptance.

Council Member Delgado discussed the need to continue conversations with the Regional Transportation Commission (RTC) and other partners in the community so that if this grant does not come through we still have some funding mechanisms.

Ms. Schroeder stated that when this was presented to the Recreation and Parks Commission their recommendation was that the Council approve this amendment and set aside roughly $50,000 of the budget in the capital projects account for master planning.

Council Member McKenzie stated that there was a promise made to the community when the Southeast Connector started that we would not lose Rosewood Lakes Golf Course. If our planning intent right now is to get rid of it we need to re-look at our direction and do what we can to save this golf course.

Andy Bass, Director of Parks, Recreation and Community Services, confirmed that a golf course is still an option for this site.

Council Member Jardon stated that she was not aware that they were contemplating a complete elimination of the golf course and that she would not support that.

The Council upheld the staff recommendation.

RESULT:APPROVED [UNANIMOUS]
MOVER:Paul McKenzie, Councilmember
SECONDER:Naomi Duerr, Councilmember
AYES:Hillary Schieve, Jenny Brekhus, Naomi Duerr, Oscar Delgado, Paul McKenzie, Neoma Jardon, David Bobzien