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HomeMy WebLinkAboutItem 11 - Cowboys Golf Club Lease TransferMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: BRUNO RUMBELOW, MEETING DATE: AUGUST 5, 2014 SUBJECT: COWBOYS GOLF COURSE LEASE TRANSFER RECOMMENDATION: Consider the approval of a Waiver of Rights of First Refusal and Consents to Assignment of Lease and Sublease for the Cowboys Golf Club. BACKGROUND: The tenant, Grapevine Golf, L.P., a Delaware limited partnership (the Tenant), along with certain related entities, has entered into a purchase agreement dated June 12, 2014 (the Purchase Agreement) with CF Arcis X LLC, a Delaware limited liability company (the Purchaser). The Purchase Agreement contemplates the sale to Purchaser of 48 golf courses throughout the United States, including the Cowboys Golf Club. The total allocated purchase price for the Cowboys Golf Club is $18,000,000.00. Pursuant to the terms of the Purchase Agreement, Purchaser and the Tenant have agreed that, among other things, Tenant shall sell and assign, and Purchaser shall purchase and assume, Tenant's interests, rights, and obligations under the Amended and Restated Sublease Agreement dated September 21, 1999 and Lease Agreement dated August 2, 2000 (together, the Leases), which Leases are currently between the Tenant and City of Grapevine (the Assignment). At or prior to closing, Purchaser will partially assign its interest in the Purchase Agreement to acquire Tenant's interest in the Leases to CF Cowboys Arcis LLC, a Delaware limited liability company (the Assignee), which Assignee is a wholly-owned subsidiary of Purchaser. July 31, 2014 9:16AM 2014 To: GRAPEVINE GOLF, L.P. c/o CNL Lifestyle Properties, Inc. 450 South Orange Avenue, Suite 1200 Orlando, Florida 32801 Attention: Chief Financial Officer and General Counsel Telephone No.: (407) 650-1000 CF COWBOYS ARCIS LLC c/o CF Arcis X LLC 5221 N. O'Conner Blvd., Suite 700 Irving, Texas 75039 Attention: Blake S. Walker, James K. Noble and Randy Brown Telecopy No.: (972) 532-4301 Re: Cowboys Golf Club - Waiver of Rights of First Refusal and Consents to Assignment of Lease and Sublease The City of Grapevine, Texas, a Texas municipal corporation (the "Cill"), has been advised that Grapevine Golf Club, L.P., a Delaware limited partnership (the "Grapevine GC") desires to assign to CF Cowboys Arcis LLC, a Delaware limited liability company (the "Assignee") its interests, rights, and obligations in the following: (i) that certain Amended and Restated Sublease Agreement dated September 21, 1999 by and between the City and Grapevine GC (as amended and assigned the "Sublease"); and (ii) that certain Lease Agreement dated August 2, 2000 by and between the City and Grapevine GC (as amended and assigned "Lease"). The Sublease provides in Section 10.0 that the Sublease may not be transferred, subleased or assigned without the prior approval of the City and the District Engineer, U.S. Army Corps of Engineers, Fort Worth District (the "District Engineer") as the landlord under that certain Lease Agreement granted to the City by the Secretary of the Army related to the Property (the "ACOE Lease"). Furthermore, the Lease provides in Section 10.0 that the Lease may not be transferred, subleased or assigned without the prior approval of the City. The City hereby consents to the assignment of the Sublease and Lease to Assignee (the "Assignment") and agrees that it shall be bound to Assignee thereunder as if Assignee were the original Sublessee and Lessee under the Sublease and Lease, respectively. The City further fully releases Grapevine GC from any and all further liability under the Sublease and Lease, respectively, upon the effective date of the written Assignment, which Assignment shall provide that the Assignee agrees to be bound by terms of the Sublease and Lease for matters first accruing arising following the date of the Assignment. 1 0914625\161524\1591413x3 The City hereby acknowledges and agrees that Grapevine GC has, pursuant to the terms of the Sublease and Lease, respectively, provided notice to the City as required under the provisions of Section 10.0 of the Sublease and Section 10.0 of the Lease, and the City hereby waives any and all rights, titles and interests in and to those certain "Rights of First Refusal" to assume operations of the Property as provided for and described in Section 10.0 of each of the Sublease and Lease as to the current transaction only. Agreed to this day of , 2014 Com: CITY OF GRAPEVINE, TEXAS, a Texas municipal corporation By:_ Name: Title: STATE OF TEXAS COUNTY OF BEFORE ME, the undersigned authority, on this day personally appeared , as of the CITY OF GRAPEVINE, TEXAS, a Texas municipal corporation, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed, as the act and deed of said entity and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day .2014. Notary Public, State of (Typed or Printed Name of Notary) My Commission Expires: 2 0914625\161524\1591413x3 LO ,ride rosdC Duster Kantor Reed., PA... . A iT 0 R N E Y S A I' L A W FROM 0 Bill HIM -11=1 City Manager City of Grapevine, Texas P.O. Box 95104 Grapevine, TX 76099 Bruno Rumbelow City Manager City of Grapevine, Texas 200 S. Main Street Grapevine, TX 76051 817-410-3000 .., richard.englebright@lowndes-law.com 215 North Eola Drive, Orlando, Florida 32801 T: 407-418-6228 F: 407-843-4444 'TT 111 MERITAS LAW FIRMS WORLDWIDE June 16, 2014 John F. Boyle, Jr., Esq. Boyle & Lowry, L.L.P. 4201 Wingren, Suite 108 Irving, TX 75062-2763 972-650-7100 John McGrane Director Administrative Services City Manager City of Grapevine, Texas 200 S. Main Street Grapevine, TX 76051 Email: jmcgranc@grqpevinetexas.gov Re: Cowboys Golf Club Amended and Restated Sublease Agreement dated September 21, 1999 by and between City of Grapevine, Texas, a Texas municipal corporation (the "City") and Grapevine Golf, L.P., a Delaware limited partnership ("Grapevine GC") (as amended and assigned the "Sublease"); and Lease Agreement dated August 2, 2000 by and between the City and Grapevine GC (as amended and assigned "Lease") Dear Sir or Madame: This firm represents Grapevine GC, the lessee and sublessee under the above -referenced Lease and Sublease, respectively, pursuant to which the Grapevine GC leases and subleases from the City that certain golf course commonly known as Cowboys Golf Club located at 1600 Fairway Drive, Grapevine, Texas. www.lowndes-law.com June 16, 2014 Page 2 The purpose of this letter is to request the consent of the City and the Fort Worth District Engineer, Army Core of Engineers (the "District Engineer"), to Grapevine GC's assignment of its interest in the Lease and Sublease. Furthermore, Grapevine GC requests that the City waive its rights of first refusal set forth in Section 10.0 of the Lease and Section 10.0 of the Sublease (together, the "Rights of First Refusal"). Specifically, Grapevine GC has entered into that certain Purchase and Sale Agreement and Joint Escrow Instructions dated on or about June 12, 2014 by and between CF Arcis X LLC, a Delaware limited liability company (the "Purchaser"), Grapevine GC, and certain affiliates of Grapevine GC (the "Purchase Agreement"). Pursuant to the terms of the Purchase Agreement, Purchaser and Grapevine GC have agreed that, among other things, Grapevine GC shall sell and assign, and Purchaser shall purchase and assume, Grapevine GC's interests, rights, and obligations under the Lease and Sublease (the "Assignment"). At or prior to closing, Purchaser will partially assign its interest in the Purchase Agreement to acquire Grapevine GC's interest in the Lease and Sublease to CF Cowboys Arcis LLC, a Delaware limited liability company (the "Assignee"), which Assignee is a wholly-owned subsidiary of Purchaser. As indicated above, the City has certain Rights of First Refusal under the Lease and Sublease in the event Grapevine GC desires to assign its interests in the Lease and Sublease. Furthermore pursuant to Section 10.0 the Sublease, prior to the sale and assignment by Grapevine GC of its interests in the Sublease, Grapevine GC is required to obtain the prior written consent of the City and District Engineer, which consent shall not be unreasonably withheld or delayed. Moreover, pursuant to Section 10.0 the Lease, prior to the sale and assignment by Grapevine GC of its interests in the Lease, Grapevine GC is required to obtain the prior written consent of the City, which consent shall not be unreasonably withheld or delayed. Additionally, Section 10.0 of each of the Lease and Sublease requires that: (i) Grapevine GC provide the City with all legal and financial information reasonably deemed necessary by City concerning the Assignee; and (ii) the Assignee must agree in writing to be bound by terms of the Lease and Sublease (the "Consent Requirements"). In satisfaction of the foregoing requirements, enclosed herewith please find an informational package regarding the Purchaser, Assignee and the Assignment, which package includes, among other things, information satisfying the Consent Requirements. Upon the City's approval of the Assignee and the Assignment, Grapevine GC would kindly request that the City provide its written waiver of the Rights of First Refusal and written consent to the Assignment. In that regard, enclosed herewith please find for the City's review and approval that certain draft Waiver of Rights of First Refusal and Consents to Assignment of Lease and Sublease which is set up for execution by the City (the "Consent") and the certain draft Estoppel Certificate (the "Estoppel" or together with the Consent, the "Assignment Documents"). If the enclosed Assignment Documents meet with the City's approval, Grapevine GC would request that the City execute and have notarized four (4) originals of the Consent and executed three (3) 0914625\161524\1592285v2 June 16, 2014 Paae 3 original of the Estoppel and return the original executed and notarized Assignment Documents to our offices at 215 North Eola Drive, Orlando, Florida 32801. Thereafter, once Grapevine GC and the Assignee close on the Assignment, a fully executed copy of the assignment between Grapevine GC and Assignee, pursuant to which Assignee will agree in writing to be bound by terms of the Lease and Sublease, will be provided to the City. Furthermore, Grapevine GC would kindly request that the City forward this request on to the District Engineer for its similar review and approval of the Assignment pursuant to Section 10.0 of the Sublease. Alternatively, if the City prefers, Grapevine GC can coordinate with the District Engineer directly to facilitate its review and approval of the Assignment. In that regard, upon receipt of this correspondence, please contact the undersigned regarding coordinating the District Engineer's approval of the Assignment. The undersigned can be reached regarding coordinating the District Engineer's approval or to provide any further information regarding the Assignment, Purchaser, or Assignee, at (407) 418-6228 or by email at richard.en lebrightclowndes-law.com. Alternatively, if you cannot reach me, please feel free to contact my colleagues, Ormend Yeilding at (407) 418-6471 or by email at ormend. Bei g_0jowndes-law.com or Allison Ramirez at (407) 418-6311 or by email at all ison.ramirez(c-Lowndes-law.com. Sincer ly, G Richard E. En g , r. REE/jr Enclosures 0914625\161524\1592285v2 Key Leaders Blake S. Walker Mr. Walker is the CEO and Managing Partner of Arcis Equity Partners, LLC. He has been involved in all phases of the firm's development since its founding in April 2013. In his current role, Mr. Walker is primarily responsible for overseeing the strategic development and execution of daily operations. Prior to founding Arcis, Mr. Walker was the Chief Investment and Development Officer at ClubCorp. He was responsible for all domestic and international business development including club mergers, acquisitions and real estate development. Mr. Walker returned to ClubCorp in 2010 after serving as a Co -Founder and CEO of Pegasus Golf Partners, LLC (a large multi -course owner and operator of golf assets). Prior to his time at Pegasus, Mr. Walker served as ClubCorp's Senior Vice President of Acquisitions, where his responsibilities included golf and resort acquisitions, strategic planning and the raising of equity capital. Mr. Walker's past experience in the industry also includes serving as Director of Acquisitions at KSL Fairways, making leveraged investments in under- performing, mismanaged and under -capitalized situations within the golf and resort sector. Mr. Walker holds a B.A. from Southern Methodist University in Dallas and currently serves as an advisory board member at the SMU Cox School of Business, and is a member of the Young Presidents' Organization. Andrew R. Crosson Mr. Crosson is a Senior Vice President of Acquisitions at Arcis. His role within the investment team is predominantly focused on sourcing and negotiating acquisition opportunities. Prior to joining Arcis, Mr. Crosson spent 25 years as a Founding Partner and Executive Vice President at both Cobblestone and Heritage Golf Group. During this time period, he completed over $70OM of golf investments. Mr. Crosson has a B.S. from the University of Utah. David H. Lampe Mr. Lampe is a Vice President of Acquisitions at Arcis. He is responsible for underwriting potential debt and equity investments, asset management, and sourcing. Prior to joining Arcis, Mr. Lampe was a Vice President with ClubCorp. While there, he specialized in underwriting new acquisition opportunities and capital projects. Previously, Mr. Lampe served as a Vice President with Pegasus Golf Partners, Director at Intrawest Corporation's Golf and Lodging Group, and Senior Consultant within Ernst and Young's Real Estate Advisory Group. Mr. Lampe holds both a B.B.A. and a B.A. from Southern Methodist University. Robert J. Larkin Mr. Larkin is a Vice President of Asset Management at Arcis. He has extensive experience in multi - course operations and asset management. Since joining Arcis, Mr. Larkin has been involved in the daily oversight and asset management of Arcis' existing golf portfolio. Prior to his current role, Mr. Larkin served as a Senior Regional Manager at ClubCorp and Vice President at Pegasus. In both roles, he was responsible for the repositioning, integration, and asset management of golf and country clubs. Charles D. Howe Mr. Howe is a Vice President of Operations at Arcis. His role within the operations team is to ensure the effective operational integration of new acquisitions. Mr. Howe has a broad operational and asset management background. In his over 20 -year career, he has served in a variety of leadership roles operationally both at KSL Resorts (collectively, 12 years at La Costa Resort and Spa, Doral Golf Resort and Spa, and La Quinta Resort and Club) and ClubCorp (6 years in multi -site operations). Mr. Howe holds a B.A. from Heidelberg University. Patrick M. Damer Mr. Damer is a Director of Membership and Sales at Arcis. Mr. Darner's current role includes the creation and implementation of all sales and membership programming. Prior to joining Arcis, he served in both a multi -course operations and sales capacity at ClubCorp and Pegasus, respectively. Mr. Damer has a B.S. from Michigan State University.