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HomeMy WebLinkAbout0004_2_A - Agreement@BCL@3C05E885 - 1 - FOURTH AMENDMENT (2017-2018) TO STADIUM INTERIM MANAGEMENT AGREEMENT THIS FOURTH AMENDMENT (2017-2018) TO STADIUM INTERIM MANAGEMENT AGREEMENT (the “Fourth Amendment”), dated for identification as of September 27, 2016, is made by and between the SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE (“Successor Agency”), and the LAKE ELSINORE STORM LP, a California limited partnership (“Storm”). RECITALS The following recitals are a substantive part of this Amendment: A.The Successor Agency and the Storm entered into that certain Stadium Interim Management Agreement dated January 1, 2013 (the “Interim Agreement”) to provide for the performance by the Storm of certain maintenance, upkeep, and operations of the Premises (as defined in the Interim Agreement). Capitalized terms used herein which are not otherwise defined herein shall have the meaning ascribed to them in the Interim Agreement. B.The Interim Agreement was successfully implemented during calendar year 2013 to provide for efficient and cost effective management, maintenance and operation of the Premises. C.In order to provide for continued efficient and cost effective management, maintenance and operation of the Premises for calendar year 2014, the Successor Agency and the Storm entered into that certain First Amendment (2014) to Stadium Interim Management Agreement dated September 24, 2013 (the “First Amendment”). D.In order to provide for continued efficient and cost effective management, maintenance and operation of the Premises for calendar year 2015, the Successor Agency and the Storm entered into that certain Second Amendment (2015) to Stadium Interim Management Agreement dated September 23, 2014 (the “Second Amendment”). E.In order to provide for continued efficient and cost effective management, maintenance and operation of the Premises for calendar year 2016, the Successor Agency and the Storm entered into that certain Third Amendment (2016) to Stadium Interim Management Agreement dated September 22, 2016 (the “Third Amendment”). F.The obligations set forth in the Interim Agreement, First Amendment, Second Amendment and Third Amendment have been included in prior Recognized Obligation Payment Schedules (ROPS) approved by the Successor Agency, the Oversight Board of the Successor Agency (“Oversight Board”) and the Department of Finance (“DOF”). G.The Third Amendment will expire on December 31, 2016 and the parties desire to enter into this Fourth Amendment to provide for continued efficient and cost effective @BCL@3C05E885 - 2 - management, maintenance and operation of the Premises for calendar year 2017 and the first six (6) months of 2018, which period corresponds to the ROPS cycle. H.Capital repairs of approximately $3,268,180 for the 2017/2018 term of this Fourth Amendment reflect that the Stadium is twenty three (23) years old and in need of significant capital repairs, including, without limitation, capital repairs necessary to comply with ADA and energy and water efficiency requirements, roof repair/replacement, plumbing and drain repair and equipment replacement. It is anticipated that approximately $1,661,500 in capital repairs will be completed prior to the 2017 baseball season and that remaining $1,606,680 will be completed after the conclusion of the 2017 baseball season. I.In accordance with Health and Safety Code (“HSC”) Section 34177.7(o)(1)(E), an Amended Recognized Obligation Payment Schedule will be adopted for the period from January 1, 2017 through June 30, 2017 (herein referred to as the “ROPS 16-17B”). Annual ROPS for the twelve months ended each June 30 will be adopted for all subsequent Recognized Obligation Payment Schedule periods. AB 1484 sets forth the review period and authority of DOF to review and approve Recognized Obligation Payment Schedules. J.On September 29, 2016, the Oversight Board and the Successor Agency will consider approval and adoption of the Amended ROPS 16-17B, which includes the obligations set forth in this Amendment and lists, among other things, as enforceable obligations of the Successor Agency, the following obligations related to the Premises as more fully described and referenced therein: (i)Concession License Agreement, as amended (“Concession Agreement”); (ii)License Agreement, as amended (“License Agreement”); (iii)Stadium Field and Maintenance Agreement, as amended (“Maintenance Agreement”); (iv)Stadium operations and maintenance obligations; and (v)The Stadium Interim Management Agreement. K.Following approval of the Amended ROPS 16-17B by the Oversight Board and the Successor Agency, the Amended ROPS 16-17B will be transmitted to the DOF for its review and approval. L.Consistent with the legislative authorization contained in AB 1484 allowing successor agencies to enter into enforceable obligations for the purpose of maintaining the assets of the former Redevelopment Agency, the Successor Agency seeks to (a) provide for the continued efficient and cost effective management, maintenance and operation of the Premises for the period commencing on January 1, 2017 through June 30, 2018, and (b) retain the Storm, which possesses the experience and qualifications to carry out such continuing obligations on an interim basis. Engagement of the Storm is necessary to ensure that the “Lake Elsinore Storm,” a single “A” baseball team, and a member of the California League of the National Association of Professional Baseball, owned by Storm LP, continues to play its home baseball games at the Stadium. @BCL@3C05E885 - 3 - M.In furtherance of the purpose and intentions of the parties with respect to the Interim Agreement, the parties hereto agree to amend the Interim Agreement as provided herein. AGREEMENT NOW THEREFORE, in consideration of the foregoing Recitals and the terms contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: 1.Term of Agreement; Termination. Section 6 of the Interim Agreement, entitled “Term of Agreement; Termination,” is hereby deleted in its entirety and replaced with the following: 6.Term of Agreement; Termination 6.1.Term. The term of the Interim Agreement (hereinafter the “Term”) shall commence on the Effective Date and shall, unless earlier terminated in accordance with Sections 6.2, 19, or 20 hereof, automatically terminate on June 30, 2018. 6.2.Rights of Termination Prior to Commencement and Expiration of the Term (a)January 1, 2018 Termination. Successor Agency may terminate this Agreement effective as of January 1, 2018, by giving written notice thereof to the Storm no later than November 30, 2017. (b)June 30, 2018 Termination. Successor Agency may terminate this Agreement effective as of June 30, 2018, by giving written notice thereof to the Storm no later than May 30, 2018. (c)Default. The Successor Agency and Storm shall have the right to terminate this Interim Agreement as a result of an uncured Default hereunder. Any such termination shall be made in accordance with Sections 19 or 20. (d)Party’s Property and Offset. Upon termination of this Interim Agreement under this Section 6.2, all materials and equipment purchased by either party hereunder in connection with this Interim Agreement shall remain that party’s property. In addition, the Storm shall be entitled to payment for all of the Storm=s services rendered hereunder through the effective date of any such termination. (e)Effect of Termination. Notwithstanding the termination of this Interim Agreement pursuant to this Section 6.2, the provisions of Stadium Operations Contracts shall remain in full force and effect. 2.Stadium Use. Section 4.3 of the Interim Agreement, entitled “Stadium Use,” is hereby deleted in its entirety and replaced with the following: @BCL@3C05E885 - 4 - 4.3.Stadium Use. (a)Storm Games. During the Term, the Storm shall play its home baseball games at the Stadium, including pre-season, regular season and play-off games as scheduled by the League and shall have the right to use the Stadium for baseball practices and workouts. Upon receipt from the League, but in no event later than the 15th of November of each year during the Term, the Storm will provide the Executive Director of the Successor Agency with the written, proposed schedule for all professional baseball games involving the Storm for the coming baseball season including all pre- season games, a reasonable number of dates to be held for playoff games, as required by the League, and practices and workouts (collectively, the AStorm Games@). (b)Other Storm Events. In addition to the use of the Stadium for the Storm Games, the Storm shall have the right to use the Stadium for non-baseball related exhibitions, ceremonies or events (the AOther Storm Events@) on dates which the Stadium is not otherwise in use for Storm Games or other reserved uses, at its sole cost and expense, without any additional license fee or charge incurred, except for Storm’s obligation with respect to maintenance as provided herein and subject to the conditions set forth below. i.Special Event Permit. The Storm shall obtain a Special Event Permit for all Other Storm Events from the City of Lake Elsinore in accordance with Chapter 5.108 of the Lake Elsinore Municipal Code, as now exists or as may hereafter be amended, including submittal of an application not less than sixty (60) days prior to the event and compliance with applicable conditions of approval. Concurrent with the submittal of the special event application package to the City, the Storm shall notify the Executive Director of the Agency in writing of the proposed date and title of the Other Storm Event. ii.Governmental Regulations/Permits. The Storm shall comply with all applicable local, state, and federal laws, ordinances, rules, regulations and requirements (including without limitation land use and zoning, environmental, labor and prevailing wage, occupational Health & Safety, building and fire codes) in connection with the promotion and operation of Other Storm Events and shall apply for, secure, maintain and comply with all required licenses and/or permits. The Storm shall use commercially reasonable efforts to cause any users of the Stadium to report and pay sales taxes as generated within the City in accordance with all applicable laws. iii.Quality Standards. The Storm shall conduct Other Storm Events in accordance with the highest standards for cleanliness and quality and shall comply with all applicable terms and conditions of this Agreement and the Stadium Operations Contracts. @BCL@3C05E885 - 5 - (c)City/Agency Use. The Successor Agency, for itself and on behalf of the City of Lake Elsinore, reserves the right to use the Stadium, including without limitation, the Agency Suite, the Diamond Club and conference room for meetings, conferences and other events provided the Successor Agency notifies the Storm in advance. Notwithstanding the foregoing, the Storm shall have the right to use the Stadium on the days set forth in the schedule for the Storm Games and for Other Storm Events approved in accordance with the provisions of Section 4.3 (b) and the Successor Agency will not schedule any other events at the Stadium on the day of a Storm Game or other Storm Event if such event would interfere with the Storm=s use of the Stadium. (d) Agency Suite. For all Storm Games and Other Storm Events, free of any charge to Successor Agency, the Storm shall (i) secure and deliver to the Successor Agency tickets and parking passes for use of the Agency Suite, or (ii) provide reasonable alternative methods of access to the Agency Suite and Agency Parking. In the event the Successor Agency elects not to use the Agency Suite for any Other Storm Event, the Storm, including its representatives and invitees, may use the Agency Suite. The Storm shall indemnify and hold the Successor Agency and the City harmless from any loss, cost or expense or damage to Successor Agency property associated or in connection with use of the Agency Suite by third parties. 3.Compensation. Section 7 of the Interim Agreement, entitled “Compensation,” is hereby deleted in its entirety and replaced with the following: 7.Compensation 7.1.Stadium Operations Contracts Compensation Recap. Pursuant to the Stadium Operations Contracts, the Storm and/or the Successor Agency are entitled to compensation during the Term as follows: (a)2017/2018 License Fee: Under the License Agreement, the Storm is required to pay to the Successor Agency a License Fee in the amount of $509,729 for calendar year 2017, and $261,237 for the period January 1, 2018 through June 30, 2018. (b)Percentage of Concessions: Under the Concession Agreement, the Storm’s affiliate, Golden State, is required to pay Successor Agency a percentage of the GRCS pursuant to Section 6 thereof (the “GRCS Concession Fee.”). (c)Annual Maintenance Fee: Under the Maintenance Agreement, Successor Agency is required to pay Storm an Annual Maintenance Fee of $237,963 for calendar year 2017, and $121,956 for the period January 1, 2018 through June 30, 2018. 7.2.Storm Compensation January 1, 2017 – June 30, 2018. Commencing upon the Commencement Date (January 1, 2017), and continuing through the expiration of the Term (June 30, 2018), as consideration for the performance of the services set forth herein, the Storm shall be compensated as follows: @BCL@3C05E885 - 6 - (a)Assignment of GRCS Concession Fee. Successor Agency hereby assigns Successor Agency’s right to payment of the GRCS Concession Fee under the Concession Agreement to the Storm during the Term, estimated at $34,000 annually; and (b)Waiver of License Fee. Successor Agency hereby waives Successor Agency’s right to payment of the License Fee under the License Agreement during the Term as an offset against the payments due by the Successor Agency to the Storm hereunder; and (c)Payment of Maintenance Fee. Successor Agency shall continue to pay the Annual Maintenance Fee as identified in Section 7.1(c) (i.e., $237,963 for calendar year 2017, and $121,956 for the period January 1, 2018 through June 30, 2018). (d)Payment of Additional Interim Management Fee. Successor Agency shall pay to Storm an “Additional Interim Management Fee” in the amount of $456,729 for calendar year 2017, and $243,074 for the six months ended June 30, 2018, which shall be payable in equal monthly installments. The Maintenance Fee along with the Additional Interim Management Fee will result total cash payment from the Successor Agency to the Storm of $694,692 for calendar year 2017 and $356,030 for the period January 1, 2018 through June 30, 2018 as consideration for services provided under the Stadium Operations Contracts and this Interim Agreement, which aggregate amount shall be payable in equal monthly installments of $57,891 for calendar year 2017 and $59,338 for the period January 1, 2018 through June 30, 2018. The Storm acknowledges and agrees that in no event will the Successor Agency be required to provide the Storm with any other form of payment for performance of the services as provided in this Interim Agreement. The parties acknowledge that the historic operating costs of the Stadium equal or exceed the compensation due to Storm hereunder and that it is in each of the party’s best interests to enter into this Agreement for the efficient use and operation of the Stadium. 4.Capital Repairs. Section 8 of the Interim Agreement, entitled “Capital Repairs,” is hereby deleted in its entirety and replaced with the following: 8.Capital Repairs. Capital Repairs shall be governed by the applicable provisions of the Stadium Operations Contracts. A Capital Repair Schedule with estimated costs budgeted for the Term is set forth in Exhibit “C” attached hereto and incorporated by reference herein. The Successor Agency’s Executive Director or designee (“Executive Director”) will designate certain Capital Projects that shall be subject to the Department of Public Works’ direct administration of the bid process and award of contract consistent with the applicable legal requirements. The Storm will undertake and complete such other Capital Repairs as set forth in Exhibit “C” as are mutually agreed. @BCL@3C05E885 - 7 - To the extent that The Storm undertakes such other Capital Repairs not undertaken by the Successor Agency, The Storm shall obtain not less than three (3) bids from qualified contractors unless otherwise excused by the Executive Director. Without limiting the Executive Director’s discretion, the bidding requirement herein may be excused in situations involving emergencies and sole source contractors. In addition, The Storm acknowledges the general requirement that certain Capital Repairs are subject to the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., (“Prevailing Wage Laws”), which require the payment of prevailing wage rates with respect to certain capital improvements, repairs and maintenance work paid for in whole or in part out of public funds. Accordingly, The Storm agrees to, in the administrative of the bidding and contractor selection process, inform prospective bidders of the requirement to comply with the Prevailing Wage Laws. The Storm may confer with the Executive Director and seek direction with respect to whether or not a certain Capital Repair is subject to the Prevailing Wage Law. Prior to The Storm awarding a contract for a Capital Repair to a qualified contractor, the Executive Director shall: (i) confirm that The Storm has followed the proper bidding procedures for selection of a contractor; and (ii) approve the selection of the contractor and the form of any agreement between The Storm and the contractor. Upon completion of the Capital Repair (or a component thereof supporting a deposit or in-progress reimbursement), The Storm shall deliver to the Executive Director a written reimbursement request and supporting documentation (such as third party invoices, lien releases and cancelled checks). To the extent that the reimbursement request is for a completed Capital Repair, The Storm shall, if applicable, submit as-built drawings or similar plans and specifications for the items to be reimbursed. 5.Accuracy of Recitals. The Parties acknowledge the accuracy of the foregoing Recitals, which are incorporated herein by this reference. 6.Authority; Priority of Amendment. This Amendment is executed by the Parties’ authorized representatives. Except as expressly modified herein, all of the terms of the Interim Agreement shall remain unchanged and in full force and effect, and the Parties shall continue to fulfill their respective obligations under the Interim Agreement as amended by this Amendment. To the extent of any conflict between the terms of the Interim Agreement and the terms of this Amendment, the terms of this Amendment shall control. 7.Captions. The captions appearing in this Amendment are for convenience only and are not a part of this Amendment and do not in any way limit, amplify, define, construe, or describe the scope or intent of the terms or provisions of this Amendment. @BCL@3C05E885 - 8 - 8.Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute but one and the same document. 9.Commencement Date. The provisions of this Amendment shall commence on January 1, 2017 (the “Commencement Date”). @BCL@3C05E885 - 9 - IN WITNESS WHEREOF, the parties have executed this Amendment on the respective dates set forth below. “SUCCESSOR AGENCY” SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE Dated:By:___________________________ Grant Yates, Executive Director ATTEST: SUCCESSOR AGENCY SECRETARY By: __________________________ Susan M. Domen, MMC APPROVED AS TO FORM: LEIBOLD McCLENDON & MANN, P.C. Successor Agency Counsel By: ___________________________ Barbara Leibold “STORM” LAKE ELSINORE STORM LP, a California limited partnership By:GJJ STORM MANAGEMENT, LLC, a California limited liability company Its:General Partner Dated:By: ______________________________ Gary E. Jacobs, Manager EXHIBIT “C” EXHIBIT “C” CAPITAL REPAIR SCHEDULE See Attached