Butterfield Trail Golf Club Reopens for El Paso
Highlights • Responded to the concerns of the community •
Maintains an important Quality of Life amenity
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Economic Development
• New management & concession agreement •
Profit potential for both parties
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10-year term with option to extend
• Opening as early as this Fall 2
Concession Agreement
Lessee: Spirit Golf Management Southwest Properties: Picacho Hills Country Club – Las Cruces Sierra del Rio Championship Golf – Elephant Butte
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Elements of future success • • • • •
Course has shown historical losses of approx. $1M/ Yr. Concession model emphasizes profitability Concession model projects profit of $125K first year Course ready for play this fall Expanded banquet / conference facilities planned
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Rental Rate: Year 1 Rental payment will be percentage of gross receipts from the following: • 10% of Gross Receipts for food and non-alcoholic beverages • 15% of Gross Receipts for beer, wine and alcoholic beverages • 12% of Gross Receipts for green fees, driving range fees and golf cart rentals • 10% of Gross Receipts for pro shop sales
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Year 2 through the end of Year 3 Rental is the Minimum Annual Guarantee or Percentage Rental, whichever is greater. • The Minimum Annual Guarantee is $125,000.00 (FMV) which is paid monthly in the amount of $10,416.67 • If Percentage Rental exceeds the Minimum Annual Guarantee Rental, Concessionaire pays the difference to EPIA. • The Minimum Annual Guarantee rate is based on the market rent conclusion from the appraisal of the golf course dated July 7, 2020
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Year 4 Rental is the Minimum Annual Guarantee or Percentage Rental, whichever is greater. • The Minimum Annual Guarantee is $191,000.00 (FMV) which is paid monthly in the amount of $15,916.67 • If Percentage Rental exceeds the Minimum Annual Guarantee Rental, Concessionaire pays the difference to EPIA. • The Minimum Annual Guarantee rate increase is due to the stabilization of the golf course and is based on the market rent conclusion from the appraisal of the golf course dated July 7, 2020
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Adjustment after Year 4 Minimum Annual Guarantee shall be equal to eighty percent (80%) of the immediately preceding Lease Year’s Percentage Rental but not less than the Minimum Annual Guarantee set in the fourth lease year. EPIA will have access to portions of the property 4 times per year. EPIA will be responsible for the structural elements of the building and the HVAC system 8
In Closing... This strategic and innovative concession agreement will maintain a key quality of life amenity and an economic driver for El Paso and its citizens. • Returns an award winning golf course for public play • Enhances future development of all EPIA properties
• Becomes a profit center for EPIA 9