RIVER VIEW GOLF COMPANY - NOVATION OF LEASE 1974

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,~ • ~ • Tailored Woman, Inc. (1953) 283 App. Div. 173, 126 NY 5 2d 573. Likewise, there is apparently no question here of the tenant diverting the business from the leased portion to the unleased portion such as occurred in Cissna Loan Co. v Baron (1928) 149 Wash. 386, 270 P 1022. The City can protect itself against any such possible diversion of business by requiring that total receipts from all customers who pay for only nine holes of golf are included within the "gross business" accounts irrespective of where on the golf course the nine holes are actually played. It therefore appears that the equitable measure of rent due to the City, and the one which a court would be most likely to declare if the lessee were to bring an action for declaratory relief, is as follows: the City is entitled to 4/ of the "gross business" of the lessee on the understanding that "gross business" includes all receipts, other than for food or merchandise, for all activities, such as the driving range and putting green, conducted entirely within the leased premises, and, as to the use of the golf course itself, an amount equal to the number of customers multiplied by the price charged for nine holes of golf. It is therefore re- commended that the City accept any tender of rent which con- forms to this computation. In view of the obiigation imposed by the lease agree- ment upon the lessee to furnish an audit of his operations, the burden would also rest upon him to establish through such audit that the "gross business'° as interpreted above is less than the total gross receipts of the entire golf course operation. If he fails to do so the City would be entitled to demand rent based upon total receipts. In the event that the City and the Lessee desire any other method of computing the rent, this should be accomplished by amendment of the lease. In this respect, it may be noted the City is not legally limited in its ability to reduce the percentage rate by such amendment, provided it receives at least some benef it in the amended version which it does not currently have. Although it might be argued that an amend- ment which does nothing more than lower the interest rate constitutes~f gift of public funds or property, this would not be the case if the amendment also served to extend the "gross business" upon which the rent is computed to cover total receipts from the entire golf course. Any amendment which served to simplify or render more definite tYie accounting procedure by which the City verifies the amount of rent due would constitute legal consideration for the City's agreement to reduce the percentage rate. Furthermore, even a unilateral reduction of the percen- tage rate would not necessarily be void, since Chartered ca.ties such as Santa Ana are not under the strict Constitutional pro- hibition against gifts of public fur_ds which applies to state