HomeMy WebLinkAbout2016 - Agreement For Operating Downtown Facilities - LEPFA Lansing Entertainment and Public Facilities Authority Unsigned 2016 RECEIVED
20H OCT 12 PH 2-- 18
LAN SHNG CITY CLERK
AGREEMENT
FOR OPERATING DOWNTOWN
FACILITIES
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THIS AGREEMENT FOR OPERATING DOWNTOWN FACILITIES, made and T
Entered into as of the_ day of October, 2016, by and between the CITY OF
LANSING, Ingham County, Michigan, a municipal corporation organized and
existing under the Constitution and laws of the State of Michigan, (hereinafter
referred to as the "City"), and the LANSING ENTERTAINMENT AND PUBLIC
FACILITIES AUTHORITY, a public corporation organized and existing under Act
No. 31, Michigan Public Acts of 1948 (First Extra Session), as amended, (herein
after referred to as the"Authority');
WITNESSETH:
WHEREAS, the Authority has been incorporated by the City under and
pursuant to Act. No. 31, Michigan Public Acts of 1948 (First Extra Session), as
amended, for the purpose and with the power, among others, of operating and
maintaining the Lansing Center, the City Market, Cooley Law School Stadium (Lansing
Minor League stadium), Riverfront Amphitheater, and any ancillary facilities related
thereto (the "Downtown Facilities"), as provided in the Articles of Incorporation of the
Authority; and
WHEREAS, the City is the owner of the Downtown Facilities but recognizes that
in order to achieve maximum revenues and operating efficiencies
from the operations of the facilities using sound business principles, it is desirable to
transfer management of the facilities to a separately incorporated authority established
under state law; and
WHEREAS, based upon the aforesaid premises the City wishes to engage
the services of the Authority for operating and maintaining the Downtown Facilities and
the Authority is willing to accept such undertaking and has authority to do so pursuant to
its Articles of Incorporation;
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THEREFORE, in consideration of the premises hereinabove set forth and the
Mutual undertakings and agreements hereinafter set forth,
IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO,
as follows:
1. All undertakings in this agreement and in the fulfillment of this Agreement
are and shall be subject to the regulations and limitations contained in the
Constitution and Statutes of the State. of Michigan, the bond ordinances
and resolutions of the City and the Articles of Incorporation as to the
Authority,
2. To the extent necessary to carry out the intent and purposes of this
Agreement, and in exchange for good and valuable consideration as
contained in the parties' respective obligations hereunder, the City grants
the Authority an exclusive license to use all of the Downtown Facilities
during the continuation of this Agreement, subject to licenses granted to
others prior hereto; provided, the granting of this license and the utilization
thereof are subject to the regulations and restrictions contained in this
Agreement; and provided further-the Authority is hereby empowered to
grant licenses to others for the use of all or parts of that portion of the
Downtown Facilities that have been licensed to the Authority by this
Agreement. The Downtown Facilities are described, in Appendix A hereto.
3. The Authority accepts full responsibility of operating and maintaining
the Downtown Facilities, in all respects and in so doing, the Authority
will abide by all of the provisions of this Agreement, including, but not
limited to, the following:
A. The Authority shall have the exclusive right and authority to
negotiate and issue license agreements for use of the Downtown
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Facilities during the life of this Agreement and to schedule such licensed
events and to establish the fees for such licenses as it believes are
necessary to effectively manage the Downtown Facilities in the best
interests of the City and to preserve the integrity of the Act 99 financing
and bond issues that have heretofore been issued to finance the
construction of portions of the Downtown Facilities.
B. The Authority shall have the responsibility, exclusive right and
authority to hire, contract for, or otherwise secure the services of
appropriate management staff, supporting clerical staff, maintenance, and
operating personnel necessary to efficiently and effectively carry out its
responsibilities as set forth in this Agreement and in so doing the
Authority shall establish the salaries and wages, fringe benefits,job
descriptions, conditions of employment and all other personnel
administration rules and procedures therefore. To the extent legally
permissible, and financially prudent, the Authority shall encourage the
procurement of services from entities that are physically located within the
City of Lansing and employ personnel who reside within the City of
Lansing wherever such procurement will fulfill the service and
employment needs of the Authority in this Agreement as least as well as
non-resident entities or personnel. The Authority shall operate, manage,'
employ and provide services under this Agreement in a manner so as not
to discriminate on the basis of race, sex, age, height, weight, marital
status, religion, handicap, sexual orientation or any other basis prohibited
by State or Federal law and shall not enter into any contract, lease,
license or agreement that does not similarly provide.
C. Subject to the provisions of the current Stadium License, Lease and
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Service Agreement between the City and Take Me Out to the Ballgame,
L.L.C. (the "TMO Agreement'), the Authority shall have the exclusive right
and authority to contract for, or otherwise secure the services of all
concessionaires, security personnel, and other vendors necessary to
efficiently and effectively carry out the responsibilities for the operations of
the Downtown Facilities and to establish or negotiate such fees, license
charges, or division of receipts as required to effectively manage the
facilities. When feasible, the Authority shall practice competitive bidding in
the procurement of goods and services as well as, to the extent legally
permissible, encourage contracts with local and minority vendors. A
record of all sole source purchases, including the necessity thereof, shall
be maintained by the Authority and available for inspection by City
officials.
D. City retains the right to control and schedule the City Hosts Suite and
Promotion Tickets granted City pursuant to the TMO Agreement subject
to the City of Lansing Promotion Ticket Policy as the same has been
adopted by the City as amended from time to time.
E. The Authority shall be the City's designee for the purpose of admin-
istering the TMO Agreement on behalf of the City in its sole discretion.
Any legal interpretation of the TMO Agreement by the Authority will be
made in consultation with the City Attorney, acting as legal counsel for the
Authority in this regard. Amendments to the TMO may only be made by
the City.
F. The Authority shall develop and adopt a written policy that encour-
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ages and facilitates the use of the Downtown Facilities by community
based groups for community functions.
G. The Authority will solicit input from the City Market Vendor's Association
regarding policies and procedures applicable to the City Market.
4. The Authority shall maintain or cause to be maintained complete liability
insurance coverage naming both the City and the Authority as insureds so as
to protect the City and the Authority in all undertakings pursuant to this
Agreement provided, such insurance coverage may be included within other
coverage obtained by the City or the Authority, in which event it will not be
necessary to duplicate coverage through the acquisition of additional
coverage under this Agreement, however, it is the responsibility of the
Authority to see to it that such insurance coverage does exist. The dollar
limits of such liability coverage shall be as set forth in Appendix C or in such
amounts and types of coverage as are determined jointly by the City and
Authority from time to time.
5. A. In managing and operating the Downtown Facilities pursuant to
this Agreement, the Authority shall, prior to the beginning of each
fiscal year, adopt an Authority Budget for such fiscal year;
provided, however, Authority shall review the proposed Budget
with the Mayor and City Council prior to its adoption. The Authority
shall present to the City Council expected revenues and
expenditures contained in the Budget shall include, but not be
limited to those items as set forth in Appendix D. The City agrees
in good faith, based upon City Council's agreement with the
Budget presented by Authority, to appropriate a lump sum
operating contribution to Authority. To the extent legally
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permissible, such lump sum contribution, once established in any
fiscal year, shall be paid on a mutually agreed upon schedule and
shall not be reduced by City during that same fiscal year, unless mutually
agreed to by City and Authority and approved by Authority Board.
The Authority shall make every effort to
maintain a balanced budget and shall not exceed the total
expenditure limitations set forth in the Budget without approval of
the City. In developing and administering the Authority Budget
and for carrying out its obligations under this Agreement, except
as otherwise provided in this paragraph 5, and subject to the
TMO Agreement, the Authority shall be entitled to receive and
retain all revenues, and shall pay all expenses attributable to the
Operation and maintenance of the Downtown Facilities
C. B. The City shall provide funds annually for capital improvements to
Downtown Facilities as agreed to in the adopted budget for each fiscal
year. The minimum shall be $50,000 annually, unless otherwise stated
in the lease with TMO, for the Lansing Center and additional dollars as
needed for other facilities revenues from the TMO agreement shall be
paid directly to the Authority. The Authority shall pass through such
revenues to the City within seven (7) days of their receipt. It is
understood that revenues collected by the Municipal Parking system,
the Lansing Building Authority, or related to the stadium naming rights
agreement will be paid directly to and retained by the City.
D. Other net revenue related to non-baseball, non-TMO events that
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are held at Cooley Law School Stadium shall be received by the
Authority and passed through to the City. For future years, the City and
the Authority shall negotiate an amount subject to City approval to be
reserved for the Cooley Law School Stadium event development fund
prior to distributing net revenues to the City. The amount capped for this
fund shall be approved by the City.
E. For future years, the City and the Authority shall work collectively
toward a resolution of parking facilities management as It relates to
parking facilities surrounding the Downtown Facilities.
6. In the event the City shall desire to transfer additional facilities or
assign additional duties or responsibilities to the Authority, such transfer or
assignment will occur only upon the mutual agreement of the parties, in which
case the Authority's budget and City contribution shall be amended to reflect
such transfer or assignment.
7. All officers and employees of the Authority, involved in any way in ful-
filiing the undertakings of this Agreement, and who have any responsibilities
pertaining to the granting of licenses, the hiring of personnel, the contracting
for services, the contracting for concessions, the establishment and
maintenance of accounts relative to the receipt of revenues and the
disbursements of funds, the handling and/or safeguarding of the funds
derived pursuant to this Agreement and the disbursement thereof, or the
bookkeeping and accounting systems pertaining thereto, shall have their
honesty and correctness of performance covered by one or more Public
Employee Blanket Bonds, including Faithful Performance of Duty Coverage,
or as may be from time to time mutually agreed upon by the City and the
Authority, said bonds to be secured by the Authority. The beneficiary of said
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bonds shall be the Authority. Copies thereof shall be placed on file with the
Clerk of the City of Lansing.
8. The Authority, in exercising its responsibilities and authority to grant
licenses and enter into concession agreements or other types of
contracts in fulfilling its undertakings under this Agreement, is hereby
empowered to enter into such license agreements, concession
agreements and contracts for terms that may extend beyond the term-
ination point of this Agreement between the City and the Authority, in
accord with the following restrictions:
A. The grant of all license agreements for competitive sporting
events, including but not limited to license agreements for private boxes,
shall be for a term not to exceed five (5) years, unless prior approval is
obtained from the City Council for a greater term of years.
B. All agreements for the hiring of services by the Authority shall be
for an initial term not to exceed five (5) years with no renewals totaling
more years than were stated in the initial term unless prior approval
from the City Council is obtained to allow for a greater period of time.
9. All of the accounts of the Authority shall be subject to audit annually by
an independent auditing firm mutually selected by the City and Authority. The
cost of such audit shall be borne on the Authority. Copies of such audit shall
be furnished to both the Authority and the City. The City's Internal Auditor and
Finance Director shall have reasonable access to all records maintained by
the Authority in the accomplishment of the provisions of the Agreement upon
a written request to the Authority and shall be permitted to make such
reviews as are deemed necessary to verify adequate internal control.
The Authority shall furnish to the Mayor and City Council a financial operating
statement covering the Downtown Facilities operations no less than quarterly.
Such report shall be delivered within thirty (30) days of the end of the
calendar quarter. The Authority, through its authorized representatives shall
make a presentation of each quarterly operating statement to the City Council
Ways and Means Committee at their request.
10. The City and Authority mutually agree that they shall not commence
suit against any officer, Commissioner, Councilperson, Mayor or
employee of the City or of the Board of the Authority, under or upon
act, omission, obligation, covenant, or clause of the City Charter or the
Authority's Articles of Incorporation or Bylaws except that recourse
may be sought for those acts or omissions that involve known
violations of the governing documents, fraud, embezzlement,
dishonesty, gross negligence, self-dealing which constitutes a violation
of law, or willful violations of civil rights by the individual involved, if any
such recourse is permitted bylaw. In any case, where recourse is
sought, all defenses or counterclaims available may be asserted not-
withstanding the provisions of this section. This limitation shall apply
whether the officer, Commissioner, Councilperson, Mayor or employee
of the City or of the Board of the Authority is a past, present or future
officer, Commissioner, Councilperson, Mayor or employee of the City
or Authority. The employees, designees, and officers of the Authority
shall not be deemed employees, designees and officers of the City.
Further, termination of this Agreement shall in no way impair the
continuation of any liability insurance coverage for directors and
officers of the Authority. The City agrees that in the event of
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termination of this Agreement, the obligations of paragraph 4 shall
continue to the extent necessary to secure such liability insurance as is
necessary to reasonably protect the directors and officers of the
Authority.
11. In the event of damage to or destruction of any of the Downtown
Facilities or Downtown Facilities Parking Areas by fire or other casualty, the
Authority will give the City immediate notice thereof and will, if the damage is
to an extent that is less than 25% of the fair market value of the premises
damaged and if insurance proceeds are sufficient for the purpose, repair,
restore, or rebuild the same so that upon completion of such repairs,
restoration or rebuilding, the fair market value of the premises shall be equal
to or more than the fair market value immediately prior to the occurrence of
such fire or other casualty. If the damage or destruction is to an extent that is
equal to or more than 25% of the fair market value of the premises damaged,
the Authority and the City shall repair, restore or rebuild the damaged
premises to the extent of their mutual agreement. All insurance proceeds
received by the City and Authority shall be applied to any reconstruction,
repair, or restoration as required or agreed upon. If the insurance proceeds
are insufficient to repair, restore or rebuild any premises damaged or
destroyed by fire or other casualty, or if the City and Authority shall not agree
to such repairs, restoration or rebuilding, then the insurance proceeds shall
first be applied to such repair, restoration or rebuilding as is agreed to by the
parties or if not agreed to, to pay off any indebtedness of the City for such
premises and thereafter any indebtedness of the Authority or its Board and
then to the parties as their interests appear.
12. The City warrants that there are no suits, actions, demands, or claims
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presently pending related to the Downtown Facilities. The Authority shall not
be deemed a successor or alter ego to the City. The City shall be responsible
for any defense and any obligation, expense, cost or damage that may be
imposed upon it or the Authority due to the suits, actions, demands and
claims.
13. The term of this Agreement for operating the Downtown Facilities
and Downtown Facilities Parking Areas shall be irrevocable for a period of ten
(10) years from the date first above written, unless just cause for termination
of this Agreement shall be established, in which case either party may
terminate this Agreement by giving the other party eighteen (18) months
written notice of its intent to terminate this Agreement at the end of such time.
This Agreement may also be terminated at an earlier time by mutual consent.
If the Authority or City shall default in complying with any of the terms of this
Agreement and such default shall continue for thirty (30) days after written
notice thereof by the other party, the other party may terminate this
Agreement or obtain enforcement in an appropriate court. In the alternative,
the City or Authority may take such action as is necessary to cure the default,
either with or without process of law, and the cost thereof shall be paid by the
defaulting party through addition or subtraction of funds to be paid by or to
the Authority. Upon termination by either party an audit of all accounts and
assets of the Authority, which pertain to the fulfillment of this Agreement, shall
be made by the same auditors that audit the accounts of the Authority,
following which all funds and assets to which the City shall be entitled as
determined by the audit shall be forthwith transferred and delivered to the
City, including but not limited to, monies, furnishings and fixtures, contracts,
concession agreements, and license agreements.
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14. The Authority will adopt a code of ethics relative to its business
operation.
15. The Authority and City agree that the Authority Board and City Council
may conduct a joint meeting each calendar year to mutually discuss Authority
operations, pursuant to this Agreement as requested.
16. Any warranties inuring to the benefit of either party under any contract
or other agreement related to the Downtown Facilities or Downtown Facilities
Parking Areas shall be enforceable by either party to the extent permitted.
The parties mutually agree that they shall cooperate with each other in any
respect necessary to enforce any such warranties.
A. Any notice necessary or proper to be given to either of the parties
hereto shall be deemed to have been given when mailed by first
class mail, postage prepaid to the following individuals:
1. If to the Authority, by delivering the same to the Chairman
thereof at such address as the Authority shall have furnished in
writing to the City and to the Chief Executive Officer of the
Authority at the Authority general office.
2. If to the City, by delivering the same to the Mayor and the
City Attorney of the City, 9"' Floor, City Hall, 124 W. Michigan
Avenue, Lansing, Michigan, 48933.
17. This Agreement contains all the terms and conditions of the Agreement
between the parties and any representatives, warranties, or statements,
whether oral or in writing, not contained herein shall not be binding on either
party.
18. The terms, conditions or provisions of this Agreement shall not be
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changed, waived, modified, altered, discharged or terminated unless in
writing and signed by the party against which enforcement of such change,
waiver, discharge, or termination is sought. Whenever the consent by either
party is required under this Agreement, it shall be in writing signed by the
executive officer of the party consent.
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IN WITNESS WHEREOF, the City of Lansing, Michigan, by its City
Council, and the Lansing Entertainment and Public Facilities Authority, by its
Commission, have respectively caused this Agreement for Operating
Downtown Facilities to be executed in their names by their duly authorized
officers and their corporate seals to be affixed hereto as of the date and year
first-above-written.
WITNESSES: CITY OF LANSING
By:
Virg Bernero, Mayor
By:
Chris Swope, City Clerk
(Seal of City)
WITNESSES: LANSING ENTERTAINMENT
AND PUBLIC FACILITIES
r AUTHORITY
By:
Tim Kaltenbach
Chairperson of its Commission
By:
Cynthia Bowen
Secretary/Treasurer of its
Commission
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(Seal of Authority)
Approved as to form:
I hereby certify that funds have been
James D. Sm iertka appropriated for the performance of
City Attorney this Agreement in Account No.
40epnnettkinance
Director
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APPENDIX A
DOWNTOWN FACILITIES
Lansing Center
City Market
Cooley Law School Stadium
Riverfront Amphitheater
(See attached illustrations for boundary descriptions.)
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APPENDIX C
INSURANCE COVERAGES
The insurance coverage for the Lansing Center(including Riverfront Amphitheater), Cooley Law
School Stadium, and the Lansing City Market are carried by the Lansing Entertainment and Public
Facilities Authority. The current levels of insurance maintained are stated below:
Each Facility:
Property Replacement Cost*
General Liability
General Aggregate $3 Mil
Each Occurrence $1 Mil
Products/Completed Operations $3 Mil
Personal and Advertising Injury $1 Mil
Medical Expense (Each Occurrence) Excluded
General (covers all facilities):
Differences in Conditions (Earthquake/Flood) $242,000
Umbrella (applies to General & Liquor Liability)
General Aggregate $6 Mil
Liquor Liability $1 Mil
Public Officials E & O $1 Mil
*Replacement costs are:
Lansing Center $62,957,671
Cooley Law School Stadium $31,980,866
Lansing City Market $ 1,679,073
The Lansing Center is the only facility which owns automobiles. The Lansing Center has Auto
Liability at $ 1 Mil. limit (umbrella coverage goes over the underlying coverage) For Cooley Law
School Stadium and the City Market, hired and non-owned autos are covered under the General
Liability for each of these facilities.
Blanket Bonds:
Employee bondslinsurance
(theft and dishonesty) $ 300,000
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APPENDIX D
AUTHORITY BUDGET
The Authority Budget shall include, but not be limited to, the following funds, accounts and
line items:
1. OPERATING REVENUES shall include any and all monies derived from the Downtown
Facilities and Downtown Facilities Parking Areas, including but not limited to:
* Rental Revenues
* Concessions Revenues
' Merchandise
* Sales Revenues
* Advertising Sales Revenues
* Equipment Rental Fees
* Utility Income
* Box Office Income
* Miscellaneous Operating Income
* Interest Income
* Reimbursable Event Expenses
* Parking Revenues
* Video Broadcast Revenue
* Cooley Law School Stadium Logo Revenues
* Ticket Revenues
2. Operating expenses shall consist of any and all expenses deemed necessary by the
Authority to operate and manage the Downtown Facilities and Downtown Facilities
Parking Areas, including but not limited to:
* Payroll, Authority employee benefits, (including any approved Authority employee
bonus, payable only upon completion of the annual audit) and related costs.
' Purchase of operating supplies
* Advertising costs
* Cleaning expenses
* Data processing costs
* Business related dues, subscriptions and membership costs
* Insurance costs and performance bond
* Professional fees
* Printing and stationery costs
* Postage and freight costs
* Equipment rental
* Repairs and maintenance costs
* Security expenses
* Cost of office supplies
* Utility and telephone charges
* Travel expenses
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Entertainment expenses
* Cost of employee uniforms
* Exterminator and trash removal costs
* Concessionaire expense and profit
* Relocation expenses
* Principal shopping district assessment
Operating expenses shall not include deductions for depreciation, interest or debt service, real
estate taxes or capital expenditures, in excess of the amounts provided within this agreement. In
the event the Authority requests a capital expenditure,
the City will give reasonable consideration to such request in the Authority's Budget in light
of competing municipal considerations.
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INDEX
Page(s)
Additional Facilities (¶ 6)................................................................................................7
Amendment(¶ 19)........................................................................................................4
Audit (¶ 9, 14)........................................................................................................8, 11
Authority Budget (¶ 5.A, Appendix D)............................................................ ................6
Blanket Bonds (1( 7, Appendix C).....................................................................................7
CityContribution (¶ 5.A, 6)............................................................................................7
City Council (¶ 5.A, 5.D, 8.A-C, 10, 16)..............................................................5, 8-9,12,14
CityMarket (¶ 3.G)............................................................................................1,5,16,19
Codeof Ethics (¶ 15)..................................................................................................11
Community Use of Facilities (¶ 3.F)..............................................................................4-5
Damage or Destruction of Facilities (¶ 12).......................................................................10
DebtService (¶ 3.A)..................................................................................................2-3
Default (¶ 14)............................................................................................................11
EffectiveDate..............................................................................................................1
Enforcement of Warranties (¶ 17)..................................................................................12
Entrepreneurial Fund (¶ 5.D).......................................................................................6-7
EqualOpportunity (¶ 3.B)..............................................................................................3
Liability Insurance (¶ 4, 12, Appendix C).......................................................................5 10
Licenseto Operate (¶ 2)................................................................ ..............................2
Litigation (¶ 13, Appendix E).........................................................................................13
Major Maintenance Reserve (¶ 4, 5.B)...........................................................................5-6
Notices (¶ 17.A).........................................................................................................12
OperatingStatement (¶ 10)........................................................................................9-10
Parking Areas/Facilities (% 3, 5.C, 12 , 13, 14, 17, Appendix B).................................2, 6, 10-12 .
Procurement of Services (¶ 3.B, 8.B, 8.C).......................................................................3,8
Property Licensed to Authority (¶ 2, 6, Appendix A)..........................................................2 .7
Retention of Staff by Authority (¶ 3.B)..............................................................................3
Stadium Boxes (¶ 3.D, 8.A). .......................................................................................4 8
Stadium Funding (¶ 3.A, 5.A, 5.C, 5.D)......................................................................2, 5-7
Sublicense (¶ 2, 3.A, 3.D, 8)..................................................................................2-3, 4,8
Termof Agreement(¶ 14).............................................................................................11
Termination (¶ 11, 14).............................................................................................10-11
TMOAgreement (¶ 3.E, 5.C)......................................................................................4 6
Vendors (¶ 3.C, 8.B)...........................................................................................I......3 8
Waiverof Suit (¶ 11)...................................................................................................10
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