HomeMy WebLinkAboutRotary Club of Fresno 2nd Amd to Rotary Amphitheater AgmtRESW
ril REPORT TO THE CITYCOUNCIL
July 29, 2008
AGENDA ITEM NO. ) J
COUNCIL MEETING TYi9/I)8
Afl EM nmE i�
C a
MOM: RANDALL L COOPER. Director
Parks, After -School, Recreation and Community Services Department
BY: JERRY HAYNES, Assistant Director p
PAUL MELIKIAN, Administrative M ge W
Parks. After -School, Recreation and Community Services Department
SU&IECT: 1) APPROVE SECOND AMENDMENT TO ROTARY AMPHITHEATER AGREEMENT
BETWEEN THE CITY OF FRESNO AND THE ROTARY CLUB OF FRESNO
2) APPROVE THE 472" AMENDMENT TO MASTER FEE SCHEDULE RESOLUTION
NO, 80-420 REVISING THE IMPROVEMENT FEE FOR THE WOODWARD ROTARY
AMPHITHEATER
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KEY RESULT AREA Customer Satisfaction pm_.on YL8_
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RECOMMENDATIONS
recommends that the City Council approve Ne 1) Second amendment to Rotary Amphithester Agreement
earn Ne City of Fresno (City) and Fresno Rotary Club (Rotary) and 2) the 4722'x Amendment to Master Fee
elution No. W-420 revising the restoration fee for the Woodward Rotary Amphitlreater, and Nat Ne new
become effective August 9, 2008.
e Parks, After School, Recreation and Community Services Department (PARCS) Is currency investing
,500,000 into improvements at Ne Woodward Rotary Amphitheater, made possible through Park Bond
seeds. These improvements have already begun to reposition the venue into a viable chctice for concerts
d other events. On August 25, 199$ the City and Rotary entered into a 50 -year agreement for the
reduction of the Amphitheater. On January 16,1996 Ne agreement was amended in order to complete the
nstructuan of the project The high demand and more frequent use of the facility require an amendment to
t current agreement. The purpose of the Second amendment is to terminate the provision regarding the
itai exclusive right to concessions. Under the proposed second amendment, all rights to concessions will
st exclusively In the City, including the fight to retain all profits,
consideration of Rotary's termination of its concession rights, the City agrees to Ne following',
•
lowest $1,000,000 for Amphitheater improvements consistent with consthutiona and local law
requirements. This has already taken place Through the Pal Brand proceeds.
REPORT TO THE CITY COUNCIL
Second Amendment to Agreement between City and Rotary
July 29, 2008
Page 2
• Assume the responsibility of promoting the Amphitheater's use.
• Complete Me east section of the second fief seating including Me constmolon of the east
stairway at the earliest possible time,
Factory agrees to the following:
• Contnbute a minimum of $50,000 for a mutually agreed upon capital improvement prgect(s)for
the Amphitheater.
• The Rotary seat option purchase for Me Amphitheater shall expire Leventhal 31, 2016. All seat
options sold by Rotary shall be honored for a period of 10 years fora minimum of 10 events In
any calendar year
• Seat options for free events will not be considered as part of the 10 events previously
mentioned.
• The Amphitheater per ticket improvement fee amount shop be phased in at $1 001licket after
January 1, 2008, $2.00lficket after January 1. 2009 and $300kticket after January 1, 2010.
Conecession Revenue
In section to the above contractual provisions, a new section has been added tette agreement which
identifies Me allocation of gross event concession revenue between the City and Rotary. According to Mis
section, all nonPartyevent permittees, licensees, promoters and/or other users shall pay Me City 10% of gross
event concession revenues net only of sales/excise fares, and pay the Rotary 10% of gram event concession
revenues net only of saleskexclse taxes.
On Me other hand, In Me event Rotary acts as a penalties, licensee, promoter ander other user the Rotary
shall pay Me CM 10%m the amount detem fined by gram event concession revenues net only of saleskexcise
taxes_ The City shell direct all proceeds received to support the continued operation and improvements to the
amphitheater
In the event the City acts as a penalties, licensee, promoter and/or other user, the City shall pay Me Rotary
10% of the amount determined by gross event concession revenues net only m saleskexclee tapas. The term
.gross event concession revenuer" refers to all revenues generated by booker arising from concession
adivdes.
The attached amendments to the contract and Master Fee Schedule revise ; the per icket Improvement fee.
The anginal agreement with Rotary had established a $2.00 per ticket improvement fee, however due to
seldom attributes of the facility before recent improvement; the demand for Me amphitheater was fairly low.
As a result, the current publishetl fee m $200/ficket has never been charged. Recent and continued
improvements to the Amphitheater have allowed FARCE to begin charging a reduced $1 00sadmi fee, whit a
threayear phased plan to reach a $3.00 per ticket. Identical to proceeds received from gram event
concession revenues, the ticket fee revenue will be used for Me operating and capital Improvement needs of
KEY OBJECTIVE BALANCE
The amendment to Me Rotary contract will provide more besides for Fresno's intrears to enjoy when visiting
Woodward Park, which will undoubtedly generate positive experiences for cozens. City employees will also
have another great option in leisure advifies. PARCS is leveraging City funds by padnedng with Rotary for
continued improvements to Me Wacdwam Amphitheater
REPORT TO THE CITY COUNCIL
Second Amendment to Agreement between City and Rotary
July 29, 2000
Page 3
SA KOROOND
On August 25. 1992, the City and Rotary, entered into a 50.year agreement (with an option to extend beyond
the 50 years) fm the construction of the Amphitheater. Rotary agreed to Provide an engineering firm to
develop plans and speclficatons for the project. On January 16, 1996 the Agreement was amerMed in order to
complete Me conshuction of Me project. Section 1, Grant of License for Construction was amended to include
an expiration date for final acceptance of project by City. A joint effort between City and Rotary has resulted In
the current structure. The Second amendment to the Rotary agreement can only result in a better facility for
the community at large to enjoy. Thus far, the community and City employees have had opportunities to enjoy
the Made structures recently developed in Me Amphitheater. The joint offer[ of the City and Rotary on this
project Is certainly a benefit to the community.
FISCAL IMPACT
Coupled with revised facility rental fees. Me per food improvement fee will allow Me Cry to generate sufficient
revenue to operate the Amphitheater and set aside funds for capital Improvements. The muni -year phased In
approach for the fee will allow customers to witness Improvements to Me venue over the nett several years
and see the valueIn the fees charged Based on a conservative estimate of 32 events per year with an
average of 1.500 attendees each, the ticket fee will generate $48 000 annually, which will be used to offset
facility operation costs and contribute lower& capital improvements. The 10% of gross event concession
revenue (City's portion) is somewhat more dificult to forecast as every event will offer varying levels of
concessions and be affected by attendance levels. At this point. the Department estimates the revenue from
10% of gross event concession revenue to be $10,00o annually.
The Department plans to return to Council in the next W days to revise Me rental rates for the Amphitheater,
The aggregate effect of the 10% of gross event concession revenue,'phasecl per ticket fee, and revised
rental rates will be that the Amphitheater will begin to operate as an enterprise: generating sufficient revenue to
cover all operational costs, fond further wpral Improvements, and place funds Into a reserve to repair and
replace aging assets.
Attachments: Amendment to Rotary Amphitheater Agreement
Master Fee Schetluo Amendment
SECOND AMENDMENT TO ROTARY AMPHITHEATER AGREEMENT
THIS SECOND AMENDMENT TO AGREEMENT ("Amendment") made and
entered Into as of this 1st day of February, 2008, amends Me Agreement heretofore
entered Into between the CITY OF FRESNO, a municipal corporation, hereinafter
refereed to as "CfTr, and the ROTARY CLUB OF FRESNO, a Califomla nonprofit
corporation, hereinafter retained to as "ROTARY'.
RECITALS
WHEREAS, CITY and ROTARY entered Into an Agreement, dated August 25,
1992 for the design and construction of an amphitheater, as once amended, hereinafter
collectively referred to as 'Agreement" and
WHEREAS, CITY and ROTARY desire to modify the Agreement in certain
regards, upon he terms and conditions herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants,
conditions, and premises hereinafter contained, to be kept and Performed by the
respective parties, the Parties agree that Me aforesaid Agreement be amended as
follows:
1. For purposes of this Agreement the term "CITY" shall Include as designee
thereof, in the discretion of the Ciys Director of Parks and Recreation, Fresno United
Neighborhood, (FUN) a California nonprofit corporation, subject to/consistent with
approval by FUN. The foregoing shall not however, relieve CITY of its obligations under
this Agreement.
2. All rights granted to ROTARY to operate Amphitheater cancession(s) are
hereby terminated as to ROTARY and concurrently vested exclusively In the CITY
Including the right to retain all profits, subject to Me remaining terms hereof. For
Purposes of this section the term °conwsslon(s)' means without timitation any and all
sales by any person or entity of fwd, beverages, and merchandise of every kind and
nature occurring on the Amphitheater premises, or adjacent thereto if sold to
Amphitheater event attendees.
& In wnsidsration of ROTARY'S termination of its concession right as
provided for herein, CITY as lead and awarding agency agrees to Invest $1,000,000 of
allocated and available Parks funs, consistent with constitutional and local law
requirements, on Amphitheater improvements to n commenced on or about January 1,
2008, and to responsibly promote its use. CITY agrees to Proceed win the completion
of the east section of the second tier seating including the wnstructlon of the east
stairway at the earliest possible time. ROTARY will contribute a minimum of $50,000 for
a mutually agreed upon capital improvement project(s).
4. All rights granted to ROTARY to establish and sell seat options for events
at the Amphitheater shall expire on December 31, 2016. It is understood and agreed
that all seat options cold by Rotary shall be honored for a period of ten (10) years
commencing with the year that the seat option holders may exercise the option to
purchase tickets for their specific seatsfora minimum of ten (10) events in any calendar
year. CITY will require users of the Amphitheater for free concerts or similar events to
notify seat option holders of such events, but such events will not constihne one of the
minimum ten (10) events.
S Concurrent with the effective date of this Second Amendment, the
Amphitheater Ticket Surcharge amount referenced in Section 7 of the Agreement shall
be $ VRckot after January 1, 2008, $2/Ticket after January t, 2009, and $3/Tlcket after
January 2010.
6. The fell is added to the Agreement as new Section 17:
017. Allocation of Revenue and Expenses. Unless otherwise expressly
provided herein:
A. All non-party event permittees, licensees, promoters and/or
other users shall (i) pay the CITY tan percent (10%) of the amount
determined by gross event revenues net only of sales/exclse taxes, and
(ii) pay the ROTARY len percent (100k) of the amount determined by
gross event revenues net only of aales/excise taxes. In the event
ROTARY acts as a nominee, licensee, promoter and/or other user the
ROTARY shall pay me CITY ten percent (10%) of the amount determined
by gross event revenues net only of sales/excise taxes. In the event the
CITY acts as a permittee, licensee, promoter and/or other user (other than
as to concessions) activities as defined herein) the CITY shall pay the
ROTARY ten percent (10%) of the amount determined by gross event
revenues net only of sales/axisse taxes. For purposes of this section the
term 'gross event revenues' means all revenues generated by and/or
arising from concessions) activities.
B. All such remittance to the CITY antl ROTARY shall be
made not later than the antl of the next business day following the earlier
of invoice for payment or the day in which such revenues are realized and
shall be accompanied by an appropriate accounting to CITY and
ROTARY, such accounting shall W sufficient under generally accepted
accounting principles.
C. Unless otherwise expressly agreed in writing by the parties
hereto and any/all such event permittees, licensees, promoters and/or
other users, all costs and expenses arising out of or related to such
I ..
event(s) shall be borne solely by the event permttlees, licensees,
promoters anther other users."
7. All capitalized terms used In the Amendment, unless otherwise defined
herein, shall have the meanings assigned to such terms In the Agreement.
8. Except as otherwise provided herein, the Agreement remains in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Amendment at Fresno,
Califomla, the day and year first above written,
CITY OF FRESNO ROTARY CLUB OF FRESNO,
a municipal corporation a Califomi fit ration
By Randall L Cooper By Don E es
Title Director Title President
ATTEST:
REBECCA E. KITSCH
City Clerk
By:
Deputy
APPROVED AS TO FORM:
JAMES C. SANCHEZ
City Attorney
By: g 6.19-a6
Deputy 4%wAlk
cmor�suo
aya.iv:amnloigm.0
COND AMENDMENT TO ROTARY AMPHITHEATER AGREEMENT
THIS SECOND AMENDMENT TO AGREEMENT (-Amendment") made and
entered Into as of this tat day of February, 2008, amends the Agreement heretofore
entered into between Me CITY OF FRESNO, a municipal corporation, hereinafter
referred to as "CITY', and the ROTARY CLUB OF FRESNO, a California nonprofit
corporation, hereinafter referred to as "ROTARY".
RECITALS
WHEREAS, CITY and ROTARY entered into an Agreement, dated August 25,
1992 for the design and construction of an amphitheater, as once amended, hereinafter
cnllectivaly referred to as "Agreement' and
WHEREAS, CITY and ROTARY desire to all the Agreement In certain
regards, upon the terms and conditions herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants,
conditions, and premises hereinafter contained. to be kept and Performed by the
respective parties, the parties agree Mat the aforesaid Agreement be amended as
follows:
1. For purposes of this Agreement the term "CITY" shall Include as designs,
thereof, in Me discretion of Me City's Director of Parks and Recreation, Fresno United
Neighborhood, (FUN) a California nonprofit corporation, subject to/consistent with
approval by FUN. The foregoing shall not however, relieve CITY of Its obligations under
this Agreement.
2. All rights granted to ROTARY to operate Amphitheater coxession(s) are
hereby terminated as to ROTARY and concurrently vested exclusively in the CITY
Including the right to retain all profits, subject to the remaining terms hereof. For
purposes of this section the term "concessions) means without limitation any and all
sales by any person or entity of food beverages, and merchandise of every kind and
nature occurring on the Amphitheater premises, or adjacent thereto if sold to
Amphitheater event attendees,
3. In consideration of ROTARY'S termination of its concession right as
Provided for herein, CITY as lead and awarding agency agrees to invest $1,000,000 of
allocated and available Parks funds, consistent with constitutional and local law
requirements, on Amphitheater improvements to be commenced on or about January 1,
2008, and to responsibly promote Its use. CITY agrees to proceed with Me completion
of the east section of Me second tier seating Including the construction of the east
stairway at the earliest possible time. ROTARY will contribute a minimum of $50,000 for
a mutually agreed upon capital Improvement pro(ect(s).
4. All rights granted to ROTARY to establish and sell seat options for events
at the Amphitheater shall expire on December 31, 2016. It Is understood and agreed
that all seat options sold by Rotary shall be ho oned for a period of ten (10) years
commencing with the year that the seat option holders may exercise the option to
purchase tickets for their specific seats for a minimum of ten (10) events in any calendar
year. CITY will require user's of the Amphitheater for free concerts or similar events to
nobly seat option holders of such events, but such events will not constitute one of the
minimum ton (10) events.
5. Concurrent with the effective date of this Second Amendment, the
Amphitheater Ticket Surcharge amount referenced in Section 7 of the Agreement shall
be $1/Thed after January 1, 2008, $2/Tickst after January 1, 2009, and $3/Ticket after
January 2010.
e. The following is added to the Agreement as new Section 17:
"17. Allocation of Revenue and Expenses. Unless otherwise expressly
provided herein:
A. All non-party event permittees, licensees, promoters and/or
other users shall (I) pay the CITY ten percent (10%) of Me amount
determined by gross event revenues net only of salesnexcse taxes, and
00 pay the ROTARY ten percent (10%) of the amount determined by
gross event revenues net only of sales/excies taxes. In Me event
ROTARY acts as a permittee, licensee, promoter and/or other user Me
ROTARY shall pay Me CITY tan percent (10%) of Me amount determined
by gross event revenues net only of salesexcise taxes. In the event the
CITY acts as a permittee, licensee, promoter and/or other user (other than
as to concession(s) activities as defined herein) the CITY shall pay the
ROTARY ten percent (10%) of the amount determined by gross event
revenues net only of sales/excise taxes. For purposes of this section the
term "gross event revenues' means all revenues generated by and/or
arising from concession(s) activities.
B. All such remittance to the CITY and/or ROTARY shall be
made not later than the end of the next business day following the earlier
of invoice for payment or the day in which such revenues are realized and
shall be accompanied by an appropriate accounting to CITY and
ROTARY, such accounting shall be sufficient under generally accepted
accounting principles.
C. Unless otherwise expressly agreed in writing by Me parties
hereto and any/all such event funniness, licensees, promoters and/or
other users, all costs and expenses ansing out of or related to such
events) shall be home solety by Me event permittees, licensees,
promoters and/or other users'
7. All capitalized terms used in the Amendment. unless otherwise defined
herein, shall have Me meanings assigned to such terms in the Agreement.
S. Except as otherwise provided herein, Me Agreement remains in full force and
affect.
IN WITNESS WHEREOF, the parties have executed this Amendment at Fresno,
California, the day and year first above written.
CITY OF FRESNO
a municipal it
By andail LL C
Title Director
ROTARY CLUB OF FRESNO,
a Caliform ffl rattan
By Don E es
Title President
ATTEST:
REBECCA E. KIJSCH
City Clerk "
By: naJ pitww.uRlci
Depth'
APPROVED AS TO FORM:
JAMES C. SANCHEZ
City Attorney
By:_[�. ISA
Deputy 41`A-'