Extension Agreement with PCMm MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
July 20, 2011
Johnny LaPonzina, President
Professional Course Management II, Ltd.
10500 Taft Street
Pembroke Pines, Florida 33026
RE: City's Extension of Agreement with Professional Course Management II, Ltd. (PCM),
dated September 5, 2007, for Operation and Management of the Miami Beach Golf
Club and the Normandy Shores Golf Club (the Agreement)
Dear Mr. LaPonzina:
I would like to first take this opportunity to commend and thank you, Alberto Pozzi and your PCM
team for your outstanding performance in managing the City's golf clubs. The Miami Beach and
Normandy Golf Clubs are recognized as two of the finest golf facilities not only in Miami -Dade
County, but also the entire State of Florida. This recognition can be attributed in no small part to
your organization's commitment to professionalism, attention to our customer, and excellent
service standards.
I also want to thank you for recognizing the financial challenge the City has faced, and your
agreement, as memorialized in this letter agreement, to reduce PCM's Incentive Fee (under
Section 11.02 of the above - referenced Agreement) by 20% for each of the next two Fiscal Years
(FY 2010 -11 and FY 2011 -12), to assist in alleviating this challenge.
Pursuant to Section 11.02.1 of the current Agreement, PCM (or Manager) will be paid the annual
Incentive Fee for each Fiscal Year of 10% of all gross revenues over $1,875,000 at each Golf
Course separately derived from each of the Golf Courses and Related Facilities operations. It
further requires that the Incentive Fee will be earned in full provided that the "net operating
income before debt service" as shown on the approved annual Operating Budget, equals or
exceeds $800,000 per year for the Miami Beach Golf Club, and $410,000 per year for the
Normandy Shores Golf Club. Should the "net operating income before debt service" be less
than the established debt service for each golf club, the Incentive Fee shall be reduced
proportionately.
As stated in your correspondence, which is attached and incorporated as Exhibit "A" hereto, you
estimate that PCM's agreement to a reduction of the Incentive Fee represents a projected
contribution by PCM, and a benefit to the City, of $75,000 to $100,000 over the next two Fiscal
Years.
In consideration for PCM's agreement to reduce the annual Incentive Fee, as set forth herein,
the City agrees to extend the Agreement, as provided in Section 5.02 thereof, for the two (2)
remaining successive one (1) yearterms (i.e. the Renewal Terms). Accordingly, theCity and
PCM hereby agree that Agreement shall be extended as follows: the first Renewal Term shall
be deemed to have commenced retroactively as of October 1, 2010, and shall end on
September 30, 2011; and the second Renewal Term shall commence on October 1, 2011, and
end on September 30, 2012.
Except as amended herein, all otherterms and conditions of the Agreement(s) shall remain the
same and in full force and effect.
If the aforestated meets with your approval, please acknowledge and execute same in the space
provided below. Upon execution by the City Manager (on behalf of the City), we will forward a
fully executed copy to you for your records.
Very truly yours,
Kevi m it h
Parks and Recreation Director
I have read this letter agreement and fully understanding same, agree to be bound by the terms
and conditions contained herein.
Professional Course Management II, Ltd
in
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Date
City of Miami Beach, Florida
By: ��. !�
J r 4 0. G nzalez
City Manager
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Date
We are committed to providing excellent public service and safety to all who live, work, and ploy in our vibrant, tropical, historic 2
community.
EXHIBIT — Q
Mr. Kevin Smith
Director, Parks and Recreation Department
City of Miami Beach
2100 Washington Ave.
Miami Beach Fl. 33139
Dear Kevin,
As you know, Professional Course Management initially entered into its first contract
with the City of Miami Beach in October 2001, the lease agreement for the operation of
the Normandy Shores Golf Club. In the years since, several other contracts have followed
covering the grow -in of the renovated golf courses and ultimately, the current agreement
for the management and operation of Miami Beach Golf Club and Normandy Shores
Golf Club.
Ever since the inception of the relationship, our company has not only governed .all its
actions according to the letter and spirit of the various contracts, but has also gone above
and beyond its contractual obligations to assist the City when necessary or requested, to
insure the success of its golf operations.
The financial crisis and ensuing recession the world has experienced over the last two
years has presented daunting challenges to the public and private sectors alike. Through
our involvement in the City of Miami Beach budget process,. it has become abundantly
clear that the City has been forced to make some very difficult decisions to balance its
budget, affecting City employees, residents and services.
As we finalize our own internal budget planning process for the upcoming year,
recognizing the concessions made by the numerous affected parties and in consideration
of the City extending our contract for the remaining two one year extensions, P.C.M. is
volunteering a 20% reduction of the incentive fee we project receiving as compensation
for the management of the City's golf courses for the next two fiscal years. The 20%
reduction of the incentive fee (which is based on revenues and meeting various
performance criteria) will represent a projected contribution by P.C.M. and a benefit to
the City of Miami Beach of $75,000 to $100,000 over the next two fiscal years.
10500 Taft Street Pembroke Pines, Florida 33026
(954) 433 -8800 - Fax (954) 433 -7357 Owned and Operated by PGA Professionals
I know that these sums will not resolve the budget deficit but hope that in these difficult
times, the contribution will demonstrate our commitment to the City and the spirit of
cooperation and partnership that has always characterized our relationship. We look
forward to continuing our long term association with the City of Miami Beach and the
continued success of the City's golf courses
We trust this proposal will express our appreciation and commitment to the City of
Miami Beach, our valued client.
ly,
An i n a,
Course Management