RIVER VIEW GOLF COMPANY - NOVATION OF LEASE 1974

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.~~ ~ .~ • developed to use as course. In charging the lessee currently for eighteen holes. • an additional nine holes to the golf customers for the use of the golf course, charges $2.50 for nine holes and $5.00 The lessee has apparently requested that he only be required to pay 2/ of his gross receipts. Since the percentage is set by the terms of the lease, however, it cannot be altered except by councilmanic action, by way of amendment or by a new lease. However, the real question presented by the lessee's request pertains not to the percentage rate but to the concept of "gross business." The question is whether this term ex- tends to income derived from that portion of the golf course which is not part of the land leased by the City. The questions of the proper measurement of rent is thus not a matter of altering the terms of the agreement but one of interpreting the agreement in view of changed conditions to determine what those terms require. As such it is an administrative matter within the powers of the City Manager. In the case of percentage lease, such as is involved here, the question of what constitutes "gross business" or "gross income" or "gross receipts" is not established by any rule of law or accounting practice but depends upon the intent of the parties as expressed in the agreement, and as such is a question of fact for a trial court. .Lawrence Barker, Inc., v. Briggs (1952) 39 Cal 2d 654, 248 P2d 897. Those few cases which deal with the question of whether income from activities occurring outside the leased premises is to be included in computation of rent are collected in 170 ALR at p. 1130, 38 ALR 2d at pp 1121-23. Examining the Riverview lease agreement, it appears that the "business" which is contemplated as forming the basis of the rent computation was the nine-hole golf course to which the use of the leased property was limited, in addition to such operations as the driving range and putting green. Any extension of the concept of "gross business" to cover the income derived from charges for the use of the additional nine holes in the non-leased property would result. in a "windfall" for the City. While it may be true that the actual transaction of purchasing the use of these additional nine holes occurs on the City-leased portion, the lease agreement does not contain any specific statement that the rent is to be based on gross sales "on, in, or from" or "obtained in'° the leased premises, such as served to sustain the landlord's interest in off- premise activities in Gambol-Skogmo, Inc. v. McNair Rea_Zty Co. (1951, D.C. Mont.) 98 F. Supp 440 and Mutual Life Ins. Co. v. 2