Exhibit B to Ordinance No.
AGREEMENT
THIS AGREEMENT (this “Agreement”) entered into as of ______, 2008 by and between the UNITED STATES GOLF ASSOCIATION (the “Association”), a not-for-profit corporation organized under the laws of the State of Delaware, located at Golf House, 77 Liberty Corner Road, Far Hills, New Jersey 07931 and PIERCE COUNTY, a political subdivision of the State of Washington, located at 9850 64th Street West, University Place, Washington, 98467 (the “County”).
W I T N E S S E T H:
WHEREAS, the Association has accepted the gracious offer of the County to entertain the 2015 United States Open Championship (the “Championship”) on its Chambers Bay Course, located at 6320 Grandview Drive West, University Place, Washington 98467 (the “Course”) on the terms set forth herein; and
WHEREAS, the standards for the conduct of the Championship have evolved under the direction of the Association over a long period of years in a continuing effort to stage a competition of distinction appropriate for a national championship; and
WHEREAS, in keeping with the standards for the conduct of the Championship, the Association determines the conditions of play for the Championship.
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises, covenants and conditions hereinafter set forth and other good and valuable consideration, the parties hereto hereby agree as follows:
SECTION 1. LEASE OF PREMISES AND PROPERTY
A. The County hereby leases to the Association and the Association leases from the County, the Course and the other properties contiguous to the Course, the driving range, all other buildings, facilities and parking located on the grounds of the Course all as indicated in yellow on the Map attached hereto as Schedule A (the parties acknowledging that the attached Schedule A does not reflect permanent buildings and other facilities that will be developed on the Leased Property as set forth in Section 1.C, but agreeing that, once constructed, such buildings and structures shall be deemed part of the Leased Property as set forth herein regardless of whether such facilities are then owned by the County or are owned by a third party developer as set forth in Section 1.C below), any locker facilities located in the Clubhouse (as defined in Section 1.C below) and/or in such similar facilities and all equipment and supplies related to the operation of the Course, those areas of the Clubhouse which will be designated as office, hospitality and general public areas for use, or to be controlled by, the Association in accordance with Sections 11, 14.D and 17, and all personal property owned or controlled by the County, as well as utilities, used in connection with the operation of the Course (collectively, the “Leased Property”). The location of the Association office, Association hospitality, corporate hospitality, player hospitality, general public and/or County hospitality areas of the Clubhouse will be determined by the Association, in its sole discretion, after consultation with the County. The remainder of the Clubhouse, the Course golf shop, if applicable (other than when such facility constitutes Leased Property in accordance with Section 3) and the County’s golf maintenance facilities are not part of the Leased Property. The County and Association agree that portions of the County’s Environmental Services Building (the “ESB”) and adjacent property would be useful in conducting the Championship, but currently house County operations that are critical to daily operation of the County. The County agrees that normal operation of the ESB during the Championship would be difficult due to the nature of local traffic restrictions around the building during the event. As such, the County and Association agree to work together to move operations from the ESB to other County locations beginning Saturday, June 13, 2015 through the conclusion of the Championship. The Association recognizes that some operations may not be able to be moved to alternate locations and will work to insure those operations can continue to operate out of the building during the Championship. The County agrees to make available public meeting room space within the ESB; adjoining parking spaces to the extent they are not utilized by County staff operating at the ESB; and other adjoining playfields adjacent to the ESB to the Association for their use during the period beginning Saturday, June 13, 2015 through the conclusion of the Championship. The County and the Association acknowledge and agree that unless any real or personal property of the County which is located on or at its grounds is specifically excluded herein from the definition of Leased Property, such real and/or personal property shall be considered Leased Property.
B. The parties acknowledge and agree that certain portions of land and/or facilities in the general vicinity of Leased Property which are owned and/or controlled by the County such as county parks, parking lots, or similar facilities (the “Additional County Facilities”) will be required for Championship-related operational purposes (including, but not limited to, equipment staging and parking). Accordingly, the County agrees that such Additional County Facilities as identified by the Association as being required for such Championship-related operational purposes, and approved by the County in its reasonable discretion, shall be included in the “Leased Property” for no additional consideration other than that stated in Sections 4 and 17 herein. In addition, the County agrees to use its best efforts to assist the Association in negotiating agreements (the “Third Party Agreements”), acceptable in form and substance to the Association, with additional private, state and municipal entities relating to the use of portions of land and/or facilities which are in the vicinity of the Course and which are necessary for Championship-related operational purposes. Upon the occurrence of any circumstance, other than any circumstance caused primarily by the Association, that would lead to the inability of the Association to utilize the agreed-upon Additional County Facilities, the Association, in its sole discretion, may (i) terminate this Agreement, effective immediately, upon written notice to the County or (ii) cause the County to use its best efforts to assist the Association with entering into an Association-approved alternate agreement for (x) a similarly situated parcel of land and/or similar facility; and (y) the relevant and required period of time.
C. The parties further acknowledge and agree that the County has informed the Association that it intends to solicit bids relating to the development by a third party of certain buildings, structures and facilities (including Practice Facilities as such term is defined herein) relating to the Course and the property which constitutes the Leased Property, including, a permanent structure which will house the facilities traditionally housed within a golf course clubhouse (the “Clubhouse”). The County acknowledges that the Association has a material interest in the nature and scope of the development of the Clubhouse and any other related buildings and structures on the Leased Property (excluding for the purpose of this Section 1.C only, Leased Property and that as a condition precedent to the Association’s decision to enter into this Agreement and conduct the Championship at the Course, the County agrees to consult with the Association on all material development plans relating to the Clubhouse and other structures on the Leased Property, provide the Association with the “Request for Proposal” and related submissions, provide the Association with a reasonable opportunity to review and comment thereon, and keep the Association apprised of all material changes to such development plans once such development has begun. In connection therewith, in the event the Association determines, in its sole discretion, that the development plans for the Clubhouse or other structures on the Leased Property (or any subsequent development of the relevant properties) could have a material adverse effect on the ability of the Association to conduct the Championship in accordance with the standards of the 2012 through 2014 Championships, it shall have the right to terminate this Agreement immediately, upon written notice to the County, if after such notice, the County has not cured the defect to the Association’s satisfaction within sixty (60) days, unless another period is agreed upon in writing. In addition, the Parties acknowledge and agree that the cooperation of any third party developer and/or management company involved in the development and management of the Clubhouse and other facilities on the Leased Property (potentially including, without limitation, lodging and restaurant facilities), will be of crucial importance for the operation of the Championship. Accordingly, as a further condition precedent to the Association’s decision to enter into this Agreement and conduct the Championship at the Course, the County agrees that, at the Association’s election, it shall require that any developer and/or third party management company operating facilities on the Leased Property shall execute an agreement with the Association confirming that such third party developer and/or management company shall cooperate with the Association and be subject to the terms of this Agreement as it relates to the Leased Property for no additional consideration (other than agreed upon lodging and catering rates, if applicable, as set forth in this Agreement). In the event such third party developer and/or management company does not enter into an acknowledgement agreement acceptable to the Association in its sole discretion, or in the event such third party developer and/or management company subsequently breaches the terms of such agreement or otherwise materially fails to cooperate with the Association in connection with the conduct of the Championship, the Association shall have the right to terminate this Agreement immediately, upon written notice to the County, if after such notice, the County has not cured the defect to the Association’s satisfaction within sixty (60) days, unless another period is agreed upon in writing.
SECTION 2. PURPOSE
The Leased Property shall be used for the preparation, conduct and tear down of the Championship and all related activities and for no other purpose without the prior consent of the County, which consent shall not be unreasonably withheld.
SECTION 3. LEASE TERM
A. The term of the lease for the Leased Property, other than the Course’s pro shop facility, the lease term of which is addressed separately below in Section 3.C, shall be as follows: the Association and all third parties involved in the conduct of the Championship and/or events and activities associated with the Championship, shall have non-exclusive access to and/or use of the Leased Property during the periods commencing (i) upon execution of this Agreement by both parties, up to but not including the date on which the exclusive lease period begins, as set forth more particularly in this Section 3.B and (ii) 12:01 a.m. on the second day following the conclusion of the Championship through the date which is seventy-five (75) days after the conclusion of the Championship. During the non-exclusive period and upon reasonable notice to the County, the Association’s right to utilize the Leased Property shall be limited in use for the purpose of planning, coordinating and implementing plans for the conduct of the Championship and all activities related thereto or being conducted in conjunction therewith, and for dismantling and removing all temporary structures erected for the Championship and other Championship related items. During the non-exclusive lease period and to the extent practicable, the Association shall coordinate its use of the Leased Property to minimize any impact on day-to-day operations of the Course, provided, however, the County acknowledges and agrees that the Association will require portions of the Leased Property and the Course for periods prior to the exclusive period described below for purposes of constructing structures and facilities for the operational requirements of the Championship in a manner consistent with the Association’s operational plan for the 2012 through 2014 Championships. The Association further agrees to develop an operational plan relating to the use of Leased Property in accordance with Section 11.FF below.
B. The Association shall have the exclusive use of the Leased Property, other than the Course’s golf shop facility, the lease term of which is addressed separately below in Section 3.C, during the period beginning at 7:00 a.m. on Saturday, June 13, 2015 and ending at 11:59 p.m. on the second day following the conclusion of the Championship Period. The Association shall also have exclusive use of the Course up to six (6) days in the aggregate during the calendar years 2013, 2014 and/or 2015 for the purpose of holding golf outings for advertisers, corporate clients, the press and other special guests of the Association for no additional consideration other than that stated in Sections 4 and 17 herein (the Parties acknowledging that, at the Association’s election, at least three such outings shall be in Spring 2015). The exact dates of the exclusive use and the number of players for such outings shall be mutually determined by the Association and the County. The Association shall have free use of the Course on such dates and, consequently, will not be charged any green fees (or cart fees to the extent the County permits general public golf cart traffic at such time) for individuals participating in the golf outings. Subject to Section 17.D, the Association will, however, pay the County, at its most favorable rate, for other non-golf course related County services used in connection with the outings, including but not limited to, fees for food and beverages.