RIVER VIEW GOLF COMPANY - STAFF REPORTS 1985-1986

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rW1EM'~~AIVDUM ~ ~ _ { o To: City Manager _ + D~tE,:. September 6, 1985 _ Executive Director/ From: Economic Development Ac,Lency Subject: RIVERVIEW GOLF COURSE/PROPOSED SANTA ANA GREENBELT Statement of the Issue History. For the past year staff has been exploring the possibility of the City assuming responsibility for the operation of the Riverview Golf Course. The course is currently operated by Mr. Novel James. It sits on 126 acres, with 82 acres leased from the Orange County Flood Control District and 44 acres leased from the City (see Exhibit A, Site Map). The original nine hole course was constructed on the City owned land in the early sixties and expanded to an eighteen hole course in 1971. Because the additional nine holes were constructed in the river channel, they experienced flooding an average of 11 to 31 days per year, reducing the course once again to nine holes. Even with heavy flow, however, no erosion occurred and play on the entire 18 holes would resume within 48 hours. In mid 1977, the County awarded a contract for river channel improvements downstream of the golf course. In December, 1977 heavy damage to the stream-bed of the golf course occurred, restricting play to nine holes. It has remained so to this day because of subsequent litigation. In a lawsuit filed against the County in 1978, Mr. James attributed the cause of the damage to the contractor hired by the County. This year the courts concurred, and damages were awarded to Mr. James. He is now ready to see the course restored to full operation. However, for reasons outlined in his letter to the Agency dated July 3, 1985 (see Exhibit B), he feels the City should control the course and staff agrees. Land Leases. The original lease with the City is dated August, 1961. The present leasehold operates under "Novation of Lease" dated March 11, 1974, which was entered into after Mr. James obtained the leasehold interest from the County and expanded his operation to an 18-hole golf course using the combined property. Both the leases expire August 20, 1986 and both have a twenty-five year renewal option, with the lessee required to give written notice of his intent to renew by February 20, 1986. The lease payment to the City is 5 percent of one-half the gross receipts of the total 18 holes, plus 2 percent of beer and wine sales. If the option is renewed, payment would increase to six percent through 1996, seven percent from 1992 to 2006, and eight percent from 2006 to 2011. The payment for the County flood control lease is 40 of gross receipts on the entire 18 holes, plus 20 of food and beverages and 1-1/2g of pro-shop goods and merchandise. Total rent payment to the City for June, 1984 through May, 1985 was $7,300. Should the options be exercised, and Mr. James reconstruct the golf course, we project annual receipts of approximately $40,000. ~ ~A