Request for Proposal (RFP) for the Lease of the Shenandoah Riding Center Complex The Galena Territory Association, Inc. (& its subsidiary) The Galena Trading Corporation, Inc. The Galena Territory Association (GTA), is located in Galena, Illinois and is the property owners organization that manages and preserves the 1,900+ acres of recreational amenities collectively owned by property owners in The Galena Territory. These common properties include: Lake Galena, a 225-acre fishing lake and an adjacent Marina Park complex, 26-mile nature trail system that meanders throughout the Territory buffering individual properties owned by GTA property owners and Eagle Ridge Resort & Spa, Owners Club Complex including indoor and outdoor pools, a game room, gymnasium and fitness center, and The Shenandoah Riding Center, an equestrian facility which is leased by a third party for daily operations. The GTA is an Illinois not-for-profit corporation. The day-to-day operations of the GTA are administered by a full-time, professional management team with oversight and policy and decisionmaking provided by a volunteer Board of Directors, elected from and by property owners. The Lessee of the Shenandoah Riding Center reports directly to GTA management staff to orchestrate the needs of the contractual lease for the complex. For more information regarding The Galena Territory please go to www.thegalenaterritory.com. The Shenandoah Riding Center is located at 200 North Brodrecht Road in Galena, Illinois. The facility includes many equestrian amenities such as 108+/- acres of pasture and hay ground, 70 X 160 indoor arena, 140 X 520 outdoor arena, 26 stable stalls, multiple tack rooms, large boarder tack room, activity and multi-purpose room, renovated office and sales area, feed and hay storage area, newly renovated bathrooms, indoor grooming area with wash stall, hitching posts, hot walker and miscellaneous equipment to assist with operating the facility. Also included with the facility is access to the 26-mile trail system located on the 1900 acres of natural common area of the Galena Territory commonly referred to as Greenspace. There is also ample room for horse trailer parking on the north side of the complex and the GTA provides 24 hour security for the entire Galena Territory. In the last several years the Shenandoah Riding Center had significant renovation including new roofing, siding, four wood fenced paddock areas (large and small), a new building for grooming, feed storage area, another building for the trail horses, a new electric system installed in the upper parking area that will accommodate electricity needs for events, a new water supply system that includes new hydrants and automatic heated waterers for the paddocks and pastures, and new pasture fencing. The GTA is tasked to select a Lessee that meets all the needs of the RFP requirements that will eventually be incorporated into a final lease agreement for the complex. The lease shall be for the period of August 26, 2018 through March 31, 2022, and extensions of said lease may be executed if both parties agree. The facility is currently leased to third party operator and the current lease expires August 26, 2018. The current operator is willing to turn-over the property sooner to a new lessee if the parties agree in the transition of the property to the new operator. At a minimum one of the requirements for leasing the facility is that trail rides shall be offered as part of daily operations to property owners and guests of the Galena Territory May through October annually. Eagle Ridge Resort and Spa (a separate entity located within the Galena Territory) provides a great avenue to the facility that helps draw riders to participate in the trail rides. A positive relationship with them and the Lessee of the Riding Center will help drive success to the trail ride operation. For more information, please continue Page 1 of 10
PLEASE PROVIDE A RESPONSE TO EACH OF THE POINTS BELOW. IF YOU HAVE NO COMMENTS FOR A SPECIFIC POINT AND ACCEPT THE TERM AS WRITTEN, PLEASE NOTE ITS ACCEPTANCE IN YOUR RESPONSE TO THE REQUEST FOR PROPOSAL. General Definitions: 1) The contract for lease shall be between the Galena Trading Corporation (a subsidiary of The Galena Territory Association) and the Lessee of the facility. The Galena Trading Corporation will be referenced as GTC throughout this document. 2) The Galena Territory Association, owned by the property owners of The Galena Territory, owns the Shenandoah Riding Center which is a common property of said Association. The Galena Territory Association (when applicable) will be referenced as GTA throughout this document. 3) For the purpose of this document, Shenandoah Riding Center may also be referenced as Riding Center. 4) For the purpose of this document, the term Lessee shall refer to the prospective lease candidate. Lease Cost: 5) The Lessee shall pay at least 15% of the annual gross revenues received by the facility operations to the GTC for lease of the facility. Payments shall be made monthly. Regular financial audits and payment terms will apply. Higher competitive percentages may be offered for the lease of the facility in answering this RFP. Page 2 of 10
Revenue Generation: 6) Approximate gross revenues from 2016 were: trail rides $230,000; boarding and boarding services $90,000, camps, lessons and events $55,000, and miscellaneous income $25,000, equaling approximately $400,000. GTA Commitments: 7) The GTC agrees to budget up to $10K for general expenses beyond Major Repair and Replacement items primarily for arena and paddock footing needs, road surface, pasture fence brush clearing, parking lot maintenance, and other high cost maintenance items. 8) The GTC shall pay the cost of all electricity, snow removal, lawn maintenance and landscaping. The Lessee shall be responsible for the cost of all water utilities and propane gas for heating. 9) Equipment belonging to the GTC that may be used by the Lessee during the terms of this lease includes a New Holland skid steer, New Holland tractor (including miscellaneous attachments), a Meyer box manure spreader and a Reveal 4 N 1 arena groomer. All GTC equipment will be maintained by the GTC at the Lessee s expense. If the Lessee does not need the equipment, it may be turned over to the GTC at the inception of this lease. 10) Miscellaneous personal property such as furniture and fixtures, bleachers, ice machine, two door refrigerator, etc. shall remain on site during the term of this lease. 11) The GTA/GTC will provide positive oversight that will encourage growth of the business for the betterment of property owners of the GTA and the surrounding horse community. Joe Mattingley, General Manager of the GTA, is an equestrian enthusiast and has been part of the horse industry for 30+ years. He is a current member of The United States Equestrian Federation Board of Directors and is a past United States Equestrian Team Athlete. Page 3 of 10
Programs and Events: 12) At a minimum, the Lessee shall provide pasture boarding, stall boarding, trail rides (at least from May through October) and a rider lesson program. 13) The Lessee shall provide a general equine health management program for all boarded horses and said program shall be articulated in the Lessee s Boarder Agreement. 14) All Lessee trail and lesson horses shall have a healthy look to them and general equine health measures (grooming, hoof trimming, vaccinations, etc.) shall be completed by Lessee or Lessee s designee. 15) Quarantine facilitation practices are strongly encouraged for new horses that come to the premises. For horses in transit, the Lessee must comply with all state and federal laws in regards to equine interstate health papers, negative coggins tests, etc. 16) The Lessee shall be granted access to the designated 26-mile nature trail system located on GTA Greenspace for patrons of the riding center. 17) Lessee shall, at least on an annual basis, contract with a Pro Rodeo Cowboy Association (PRCA) vendor (or other stock contractor approved by the GTC), to hold an annual 4 th of July Rodeo at the Riding Center on two consecutive evenings. A fireworks show will be required each evening of the Rodeo festivities. 18) The GTA shall reserve the right to hold property owner events (guests included) within the complex grounds; however, said events shall not have a detrimental effect on the Lessee s daily operations. The Lessee shall not withhold reasonable access for GTA events. Any excess costs generated by such an event will be reimbursed to the Lessee. Any general net revenues generated by such an event would be split by the GTA and Lessee as negotiated prior to the event. Page 4 of 10
19) Horse trailer storage for Lessee and/or boarders of horses may be allowed in a Lessee designated area. 20) Overnight RV camping will be permitted, no open fires will be allowed unless authorized by GTA Security. 21) The Lessee shall have the sole responsibility of marketing the Riding Center operations and the GTA/GTC will review content as necessary to assure proper messaging about The Galena Territory is being conveyed. Facility Maintenance: 22) Cleanliness of the facility must match the decorum of other GTA amenities. The office, sales, restrooms, and multi-purpose areas must be maintained at a temperature of 60-78 utilizing existing HVAC systems. In addition, hot water must be supplied to the restrooms. 23) Infrastructure maintenance will be the responsibility of the GTC. Infrastructure maintenance is defined as replacement and major repairs of roofing, siding, ingress and egress doorways, arena and paddock and pasture fence, septic field, stable stalls, indoor arena riding rail, hot walker, water systems, electrical systems and furnace and air conditioning systems. These systems may be replaced or repaired at the sole discretion of GTC/GTA. 24) The Lessee will be responsible for all costs of repairs and maintenance to all other systems at the premises during the term of the lease. The facility must remain in good general maintenance conditions throughout the term of the lease. General wear and tear will be accepted; however direct damage caused to facilities by the Lessee will be the responsibility of the Lessee to repair. Page 5 of 10
25) Storing of excess material/debris on the grounds outside the buildings of the complex for extended periods of time for future use shall not be allowed. 26) The Lessee shall work with the GTC to define a Pasture Maintenance Program to control noxious and invasive plant species and to assure a pasture rotation program is utilized. Legal Items: 27) The contract lease shall include the entire Shenandoah Riding Center Complex including 108+/- acres of the designated pasture areas and facilities within the complex. 28) The Lease shall be for the period of August 26, 2018 through March 31, 2022. Extensions of the lease may be granted if terms can be agreed upon by both parties. 29) The Lessee shall pay a $5,000 security deposit and it will be held by the GTA until termination of the lease. The GTA shall not unreasonably withhold the security deposit at the end of the lease unless there are excessive damages that require repair beyond general wear and tear from daily operations. Lessee s exposure shall not be limited to the balance of the security deposit. 30) Lessee may only use the premises for lawful purposes related to the operation of the Riding Center. 31) The GTA will reserve the right to make alterations to the Riding Center or surrounding environs. If said alterations occur, no adjustments to the current lease payment terms will occur during the terms of the lease. 32) Lessee shall take all actions to assure the facility stays safe and secure for the use of patrons and employees of the Lessee. Page 6 of 10
33) Lessee shall comply with all laws, ordinances; requirements and regulations required for operations of the facility and include any necessary postings. The GTA shall be indemnified from all losses due to negligence of the lessee. 34) Prior to May 1, 2018 the Lessee shall draft and submit a draft Boarders Agreement related to the boarding of horses at the facility for GTC consideration and approval. 35) Any dispute between the Lessee and a GTA property owner/member that cannot be settled amicably shall be submitted to the GTA Dispute Resolution and Arbitration Procedures. A copy of the procedures are attached. Insurance Requirements: 36) Lessee shall be responsible for a portion of the hazard and property insurance for the Riding Center buildings and environs. This insurance is purchased through the GTA and currently costs $375 monthly. This rate could change subject to annual insurance premium adjustments for the facility by the GTA s insurance company. 37) Lessee shall be responsible to insure all of Lessee s assets located on the premises. The GTA will not carry any insurance to cover the Lessee s assets. 38) Lessee shall purchase and maintain liability insurance with personal liability of at least $2M for injury to any one person and $4M for any one accident with at least a limit of $500K for damage to property. The Lessee shall additionally insure the GTA. 39) Lessee shall insure the aforementioned equipment of the GTC (if they choose to use that equipment during the term of this lease). The GTC must be listed as a loss payee on the Lessee s property / inland marine policy. Page 7 of 10
Taxes: 40) Lessee shall be responsible for all real estate taxes; estimated annual expense is $2500 annually. 41) General federal, state, local, income and sales taxes generated from business operations shall be the responsibility of the Lessee. Direct Point of Contact from the GTA/GTC Organization: 42) The General Manager of the GTA/GTC is the direct point of contact for managing this contractual relationship with the Lessee. 43) The GTA shall be notified if the Lessee is going to be gone for an extended period of time (defined as more than 7 days). Additional Information: 44) Explain the expertise and strengths that you/your company can provide to produce a positive equestrian/horse culture for the Galena Territory and the local surrounding community if you were awarded the lease of the facility. 45) Please introduce to us the key members of your team. Include short bios and years of experience in the horse industry. All candidates and key team members are subject to a criminal background check. 46) Describe how you/your company can work with event organizers to help the GTA meet a strategic goal of expanded utilization of the facility for events for property owners, their guests and the surrounding communities to enjoy. We anticipate one equestrian or non- Page 8 of 10
equestrian event in the first year of the lease and up to five events annually by the third year. The GTC sees event planning and execution as a cooperative effort between the two organizations. 47) Describe how you/your company will be able to be fully prepared to lease/operate this $2.4M facility and meet the requirements of this RFP by the takeover date of August 26, 2018 i.e. event planning, labor needs, horse needs for trail rides, etc. 48) What do you see as opportunities for expansion and increased revenue generation for the next three years? 49) Please provide three professional equine industry references. The GTA/GTC will conduct equine industry background checks. Page 9 of 10
Reservation of Rights to the GTA Upon reward of the lease, performance for transition to the new lease will be monitored and reviewed after six months and again after ten months. The GTA reserves the right to cancel the lease contract if the transition is not progressing properly. Once the new lease takes effect starting August 26, 2018 or sooner, lease performance will be reviewed six and ten months after the new lease terms take effect. The GTA reserves the right to cancel the lease contract if the Lessee is not able to provide the level of services/facility maintenance required in the in the lease contract. GTA RESERVES THE RIGHT TO MODIFY THIS REQUEST FOR PROPOSAL AND RESERVES THE RIGHT TO REJECT ANY AND ALL PROPOSALS. Page 10 of 10