HomeMy WebLinkAbout0006_3_OB - Exhibit B Reso Approving Fifth Amendment Stadium Interim Mgmt AgtRESOLUTION NO. OB-2018-___
A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING THE RESTATED FIFTH
AMENDMENT TO THE STADIUM INTERIM MANAGEMENT AGREEMENT AND FINDING THE FIFTH AMENDMENT IN THE BEST INTERESTS OF THE TAXING ENTITIES
WHEREAS, the Oversight Board to the Successor Agency
of the Redevelopment Agency of the City of Lake Elsinore (“Oversight Board”) has been established to wind down the affairs of the former Redevelopment Agency of the City of Lake Elsinore
in accordance with the California Health and Safety Code; and,
WHEREAS, the former Redevelopment Agency constructed the Lake Elsinore Diamond Stadium (“Stadium”) as a redevelopment project
to stimulate redevelopment activities in the “Back Basin” area of the City consistent with the Redevelopment Plan for the Rancho Laguna Redevelopment Project No. III; and
WHEREAS, as
of the dissolution of the former Redevelopment Agency, the Stadium was owned by the former Redevelopment Agency and the operations, maintenance and management obligations relating to
the Stadium were controlled by certain enforceable obligations as defined by the Dissolution Law, including a License Agreement, a Stadium Field And Maintenance Agreement, and a Concession
License Agreement (collectively, the “Stadium Operations Contracts”); and
WHEREAS, in 2012 the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore (“Successor
Agency”) lacked the personnel and resources to perform its obligations under the Stadium Operations Contracts and the Successor Agency and the Oversight Board approved the Stadium Interim
Management Agreement dated January 1, 2013 between the Successor Agency and the Lake Elsinore Storm LP (the “Interim Agreement”) and following such approval by the Oversight Board and
the Successor Agency, the Interim Agreement was submitted to and reviewed by the State Department of Finance; and,
WHEREAS, in 2013, the Successor Agency and the Oversight Board approved
the First Amendment to Stadium Interim Management Agreement dated January 1, 2014 by and between the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore and the
Lake Elsinore Storm LP (the “First Amendment”) and following such approval by the Oversight Board and the Successor Agency, the Interim Agreement was submitted to and reviewed by the
State Department of Finance; and,
WHEREAS, in 2014, the Successor Agency and the Oversight Board approved the Second Amendment to Stadium Interim Management Agreement dated January 1,
2015 by and between the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore and the Lake Elsinore Storm LP (the “Second Amendment”) and following such approval
by the Oversight Board and the Successor Agency, the Interim Agreement was submitted to and reviewed by the State Department of Finance; and,
WHEREAS, in 2015, the Successor Agency and
the Oversight Board approved the Third Amendment to Stadium Interim Management Agreement dated January 1, 2016 by and between the Successor Agency of the Redevelopment Agency of the
City of Lake Elsinore and
the Lake Elsinore Storm LP (the “Third Amendment”) and following such approval by the Oversight Board and the Successor Agency, the Interim Agreement was submitted to and reviewed by
the State Department of Finance; and,
WHEREAS, in 2016, the Successor Agency and the Oversight Board approved the Fourth Amendment to Stadium Interim Management Agreement dated January
1, 2017 by and between the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore and the Lake Elsinore Storm LP (the “Fourth Amendment”) and following such approval
by the Oversight Board and the Successor Agency, the Interim Agreement was submitted to and reviewed by the State Department of Finance; and,
WHEREAS, the Interim Agreement and the amendments
thereto were in the best interests of the taxing entities because (i) the Storm possessed the institutional knowledge, familiarity, expertise, personnel and resources to provide the
most efficient and cost effective management, maintenance and operation of the Stadium, (i) the Interim Agreement and amendments provided a high level of certainty relating to the costs
of Stadium operations and maintenance compared to the uncertainty of negotiating and administering separate contracts with other vendors and contractors to fulfill the Agency obligations,
(iii) protected the public’s investment in the Stadium, and (iv) mitigated against damages and costs resulting from a potential default of the Agency’s enforceable obligations; and
WHEREAS,
the Interim Agreement and the First, Second, Third and Fourth Amendments have been successfully implemented to provide for efficient and cost effective management, maintenance and operation
of the Diamond Stadium but, absent a Fourth Amendment, the Interim Agreement will expire on June 30, 2018; and,
WHEREAS, consistent with the legislative authorization contained in Health
& Safety Code Section 34171(d)(1)(E) and (F) allowing successor agencies to perform under existing binding contracts and allowing successor agencies to enter into new contracts necessary
for the purpose of maintaining the assets of the former redevelopment agency, the Successor Agency seeks to provide for the continued, efficient and cost effective management, maintenance
and operation of the Stadium and to retain the Storm to carry out such continuing obligations on an interim basis for in accordance with the proposed Restated Fifth Amendment to the
Interim Agreement; and,
WHEREAS, pursuant to Health and Safety Code Section 34177(o)(1) a “Recognized Obligation Payment Schedule” that lists all obligations of the former redevelopment
agency that are enforceable within the meaning of subdivision (d) of Section 34167 for the period commencing July 1, 2018 – June 30, 2019 (the “ROPS 18-19”) which lists, among other
things, as enforceable obligations of the Successor Agency, the following obligations related to the Lake Elsinore Diamond Stadium (the “Stadium”): (i) License Agreement; (ii) Maintenance
Agreement; (iii) Concession Agreement; (iv) Stadium operations and maintenance obligations, and (v) the Interim Agreement (as amended by the proposed Restated Fifth Amendment) has been
approved by the Successor Agency and the Oversight Board.
NOW, THEREFORE, THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The Recitals set forth above are true and correct and incorporated herein by reference.
SECTION 2. Based on the information presented in the staff report and testimony received,
the Oversight Board finds (i) that the proposed Restated Fifth Amendment to the Interim Agreement is reasonable and necessary to satisfy the Successor Agency’s contractual obligations
under the Stadium Operations Contracts and to protect and maintain the assets of the former Redevelopment Agency, (ii) that Real Property Tax Trust Fund (RPTTF) revenues requested by
the Successor Agency in the ROPS 18-19 includes funds necessary to meet the Successor Agency’s enforceable obligations, and (iii) that the Restated Fifth Amendment to the Interim Agreement
is in the best interests of the taxing entities because the Storm’s skills, knowledge and resources will provide continued, efficient and cost effective management, maintenance and operation
of the Stadium which will protect the public’s investment in the Stadium, minimize costs and mitigate against potential breach of contract and related damages.
SECTION 4. Based on
the information presented in the staff report and testimony received, the Oversight Board also finds that conveyance of the Stadium to another governmental entity is impractical and
not in the best interests of the taxing entities since any disposition must be subject to the obligations of the Stadium Operations Contracts and the use restrictions of the land donation
agreement that no governmental agency will take on those financial obligations without a guaranteed revenue source to cover the costs.
SECTION 5. Based on the information presented
in the staff report and testimony received, the Oversight Board also finds that conveyance of the Stadium to a private entity must also be subject to the Stadium Operations Contracts
and the financial obligations thereunder and would additionally trigger financial penalties under the land donation agreement such that disposition of the Stadium is impractical and
not in the best interests of the taxing entities.
SECTION 5. Based on the information presented in the staff report and testimony received, the Oversight Board also finds that termination
of the Stadium Operations Contracts is not in the best interests of the taxing entities because it would trigger significant damages, financial penalties and other liabilities that exceed
the costs of retaining the Stadium and performing the enforceable obligations under the Stadium Operations Contracts. Contract renegotiations are infeasible and not in the best interests
of the taxing entities since the payment schedule under the Interim Stadium Management Agreement and each of the Amendments have been based on the formula required under the Stadium
Operations Contracts and negotiated each year based on prior year’s actual costs and costs budgeted for the agreement term. The Storm’s actual costs have exceeded the compensation paid
by the Successor Agency every year.
SECTION 6. Based on the above findings and all of the information presented in the staff report and testimony received, the Oversight Board finds
that extending the existing payment and performance obligations of the Successor Agency and the Storm pursuant to the Restated Fifth Amendment to the Interim Stadium Management Agreement
is in the best interests of the taxing entities and approves the Restated Fifth Amendment to the Stadium Interim Management Agreement in the form attached and submitted to DOF.
SECTION
7. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of
this Resolution which can be given effect without the invalid provision or application, and to this
end the provisions of this resolution are severable. The Successor Agency hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular
portion thereof.
SECTION 8. This Resolution shall take effect from and after the date of its passage and adoption in accordance with, and subject to, all applicable requirements of
the Health & Safety Code.
PASSED, APPROVED AND ADOPTED by the Oversight Board to the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore, California, this 16th
day of May, 2018.
Genie Kelley, Chair
ATTEST:
Susan M. Domen, MMC
Oversight Board Secretary
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I,
Susan M. Domen, MMC, Secretary of the Oversight Board to the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore, California, hereby certify that Resolution No.
OB-2018- was adopted by the Oversight Board to the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore at a Regular meeting held on the 16th day of May,
2018 by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Susan M. Domen, MMC
Oversight Board Secretary