ORDINANCE No. 176694

* Authorize a replacement lease agreement with RedTail Inc. for construction, operation, and maintenance of a clubhouse and related facilities at RedTail Golf Course (Ordinance)

The City of Portland ordains:

Section 1. The Council finds:

1.  Since 1972, RedTail Inc. (formerly known as Double Eagle Golf Inc.) and its predecessor, Par 4 Inc., have done business with the City under Agreement 13306, a lease agreement under which Par 4 Inc. constructed and RedTail Inc. now operates a golf clubhouse, restaurant, driving range, and related facilities at what is now known as RedTail Golf Course (formerly Progress Downs Golf Course).

2.  Agreement 13306 has been amended many times over the past thirty years.

3.  In June 1999, the City and RedTail Inc. entered into a lease addendum that extended the lease term, revised the compensation, resolved past disputes, and required each party to make significant capital improvements to its facilities. The City has since made its required capital improvements; RedTail Inc. has not yet made its required capital improvements.

4.  The June 1999 lease addendum called for both parties to enter into a replacement agreement, in order to clearly compile in a single document the currently relevant sections of the original agreement and its long trail of amendments. That is the primary purpose of this replacement agreement.

5.  This replacement agreement is also an opportune time to make other changes, mutually agreed upon, in order to facilitate the capital improvements required of the lessee under the 1999 lease addendum.

6.  Among the changes that will facilitate the lessee’s required capital improvements is the addition of new financial partners to the lessee. Accordingly, this replacement agreement authorizes the assignment of the lease to a new limited liability company, RedTail LLC, which will be 50% owned by the current owners of RedTail Inc. and 50% owned by additional investors consisting of Gregory W. Daniels and/or Realvest Corporation. This assignment will be effective when RedTail LLC is legally created; until that time, the provisions of this lease are binding upon RedTail Inc.

7.  The Golf Advisory Committee has reviewed the terms of this proposed replacement agreement and recommends that it be authorized by the City Council. Similarly, the Director of Parks & Recreation recommends that this agreement be authorized by the City Council.

NOW, THEREFORE, the Council directs:

a.  That the Commissioner-in-Charge of Portland Parks & Recreation and the City Auditor are hereby authorized to sign a lease agreement substantially in the form of the attached agreement, subject to approval by the City Attorney’s Office.

b.  Pursuant to its authority under ORS 279.03, to the extent bid or performance bonds would otherwise be required by statute on Lessee’s contracts with its private contractors for Lessee’s improvements under the Lease, the Council exempts those contracts from any requirement for bid security bonds or payment or performance bonds. Nothwithstanding this exemption, the Lessee may, in its sole discretion, require its contractors, or any of them, to secure bid security or payment or performance bonds.

Section 2:  The Council declares that an emergency exists in order to avoid further delay to the construction of the lessee’s capital improvements; therefore, this Ordinance shall be in force and effect from and after its passage by the Council.

Passed by the Council JUL 10 2002            Gary Blackmer

     Auditor of the City of Portland

           By /S/ Susan Parsons

Commissioner Jim Francesconi                Deputy

Prepared by: Gordon Wilson

June 28, 2002

BACKING SHEET INFORMATION

AGENDA NO. 833-2002

ORDINANCE/RESOLUTION/COUNCIL DOCUMENT NO. 176694