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HomeMy WebLinkAbout08-40FEBRUARY 12, 2008 08 -40 RESOLUTION (CARRIED 5 -2 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE TERM SHEET FOR OPERATIONS AGREEMENT CONVENTION CENTER / OSHKOSH HOTEL GROUP, LLC INITIATED BY: COMMUNITY DEVELOPMENT BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached Operations Agreement Term Sheet between the City of Oshkosh and Oshkosh Hotel Group, LLC for the operation of the Oshkosh Convention Center is hereby approved and the proper City officials are hereby authorized and directed to enter into an agreement in accordance with the terms set forth in the attached term sheet and to carry out all actions necessary to implement the City's obligations under the term sheet and agreement. OPERATIONS AGREEMENT BETWEEN THE CITY OF OSHKOSH AND OSHKOSH HOTEL GROUP, LLC FOR THE OSHKOSH CONVENTION CENTER 1. Parties (official names and addresses): "City ": City of Oshkosh 215 Church Avenue PO Box 1130 Oshkosh, WI 54903 -1130 "Operator ": Oshkosh Hotel Group, LLC 601 Oregon Street, Suite B Oshkosh, WI 54902 2. Management Paragraph. a. Operator shall have the exclusive right to manage, market, promote and operate the Oshkosh Convention Center (the "Convention Center"). b. The premises of the Convention Center shall consist of the Convention Center building and skywalk, appurtenant sunshine pergola and attached patio (the "Convention Center"). Alcohol license shall cover the entire Convention Center, including the patio. The patio shall be available for park related uses when not in use by the Operator. 3. Term of Agreement. a. The Agreement shall be for a term of twenty (20) years, subject to earlier termination as follows: By mutual agreement of the parties, at any time. By the City, if the Operator does not meet minimum revenue goals established by mutual agreement of the parties prior to the execution of the Agreement. By the City, if the Operator materially fails to perform any of the Operator's obligations under the Agreement and such failure is not cured within a reasonable time after the Operator's receipt of a written notice from the City. By the City, in the event of the bankruptcy and insolvency or receivership of the Operator. By the Operator, if the City fails to perform any of the City's obligations under the Agreement and such failure is not cured within a reasonable time after receipt of a written notice from the Operator. By the City, if the Operator no longer owns /operates the adjacent hotel and does not assign the agreement to the new owner /operator of the hotel. :convention center term sheet 1 1 -31 -08 clean b. In the event the Agreement is terminated for any reason, the Operator and the City shall each be obligated to take such actions as may be reasonably necessary to ensure a smooth transition to the new operator. 4. Rent. a. The Operator shall pay monthly four percent (4 %) of the gross revenue to the City as rent for the Convention Center. b. The Operator shall pay monthly one percent (1 %) of the gross food and beveragelcon cession revenue to Oshkosh Area Community Foundation ( "OACF ") to repay OACF's loan for the Convention Center improvements. C. The books of account and all other records relating to, or reflecting the operation of the Convention Center shall be kept at the adjacent hotel owned by the Operator and shall be available to the City, OACF and their representatives at all reasonable times for examination, audit, inspection and transcription. 5. General Duties and Obligations of the Operator. a. The Operator shall operate the Convention Center and pay all of Operator's expenses related to operation of the Convention Center. b. The Operator shall act as an independent contractor and not as an agent or representative of the City. C. The Operator shall provide all services necessary to operate the Convention Center as a first class convention and event facility. d. The Operator shall comply with applicable laws and secure required permits. e. The Operator shall provide food, beverages and logistical support for all events at the Convention Center. The Operator shall be responsible for operation of message sign (posting and changing messages). g. The Operator shall cooperate and coordinate with the City on messaging for civic announcements and events. h. The Operator shall be responsible for waste /rubbish removal. The Operator shall supervise the operation of the building security system j. The Operator shall provide for normal cleaning /care and upkeep of the Convention Center (including skywalk), which shall generally include: cleaning of floors, carpeting (shampooing on a regular basis, at least quarterly) and windows (interior and exterior); cleaning of other interior surfaces; replacing lights as needed; snow removal /shoveling of all exterior walks to the Convention Center; operation and care of audio /visual equipment/systems; maintenance of landscaping; and day -to -day operation of HVAC system (e.g. thermostat adjustments). :convention center term sheet 2 1 -31 -08 clean S. General Duties and Obligations of the City. a. The City shall upgrade the Convention Center in accordance with the proposed plans provided to the Operator. b. The City shall use its best efforts to ensure that the Operator obtains all licenses and permits necessary for the operation of the Convention Center. C. Except as otherwise expressly provided, the City shall be responsible for all maintenance and repairs of the Convention Center and the skywalk, including, without limitation: The maintenance, repair and replacement of the structures HVAC equipment and mechanical systems. The repair of floors; recarpeting (based on need relative to wear and tear); repair of broken windows; repair /replacement of wall coverings, repainting of walls (based on need relative to wear and tear, and general upgrades in long term); HVAC system care & maintenance (dealing with any problems of system, preventive maintenance); care and related maintenance of sprinkler /fire alarm system; fire extinguishers; repair and/ or replacement of hardware /fixtures attached to premises, plumbing and lighting fixtures; provision of light bulbs; maintenancelrepair /replacement of message sign; maintenance /repair /replacement of other exterior signage; replacement of dead landscaping /base materials. d. The City shall be responsible for all utility costs for the Convention Center. 7. Furniture, Fixtures and Equipment. a. The City shall supply all tables; chairs; furniture; audio /visual equipment; stoves, refrigerators, freezers and other major appliances; major kitchen equipment and other furniture, fixtures and equipment of a similar nature ( "City Furniture, Fixtures and Equipment ") necessary to equip the Convention Center. The items to be supplied by the City shall be agreed upon by the parties prior to the execution of the Agreement. b. An inventory of the City Furniture, Fixtures and Equipment shall be prepared and agreed upon by the parties prior to the Operator taking possession of the Convention Center. C. All City Furniture, Fixtures and Equipment shall remain the property of the City and shall be returned to the City upon the termination of the operation of the Convention Center by the Operator in the same condition as at the commencement of operations except for reasonable wear and tear and other loss or damage beyond the reasonable control of the Operator. d. The Operator shall be responsible for routine maintenance of the City Furniture, Fixtures and Equipment and repairs to the City Furniture, Fixtures and Equipment whose reasonable cost does not exceed $1,000 per occurrence. e. The Operator shall also be responsible for the repair or replacement of any City Furniture, Fixtures or Equipment that is lost, stolen or damaged as a result of the negligent or intentional acts or omissions of the Operator. :convention center term sheet 3 1 -31 -08 clean f. The City shall be responsible for the replacement of any City Furniture, Fixtures or Equipment requiring replacement during the term of the Agreement, unless the replacement is required as a result of the negligent or intentional acts or omissions of the Operator. g. The Operator shall supply all plates, dishes, silverware, linens, serving equipment, kitchen tools, small appliances and other items of a similar nature ( "Operator Supplies and Equipment ") necessary to equip the Convention Center. h. All Operator Supplies and Equipment shall remain the property of the Operator and shall be retained by the Operator upon the termination of the operation of the Convention Center by the Operator. The Operator shall be responsible for the replacement of any Operator Supplies and Equipment requiring replacement during the term of the Agreement, unless the replacement is required as a result of the negligent or intentional acts or omissions of the City. 8. Insurance. a. The City shall provide casualty and liability insurance for the Convention Center and the skywalk. b. The Operator shall carry the following limited liability insurance coverages: general liability (occurrence form); personal injury & advertising injury general aggregate; product/completed operations aggregate, liquor liability; umbrella; business and automobile; statutory workers compensation; and employer liability coverage. C. The City and its council members, employees and agents shall be designated as additional insureds on the liability insurance coverage carried by the Operator. d. Certificates of insurance for all insurance coverage required to be carried by the Operator shall be provided to the City. e. The Operator shall indemnify and hold the City harmless from any liability arising out of the failure of the Operator to perform its obligations under this Agreement or the negligent or intentional acts or omissions of the Operator or of its employees, contractors or agents. f. The City shall indemnify and hold the Operator harmless from any liability arising out of the failure of the City to perform its obligations under the Agreement or the negligent or intentional acts or omissions of the City or its employees, contractors or agents. 9. Reports to the City. a. The Operator shall provide an annual facilities inspection and inventory report to the City by the June 30 following the end of the previous calendar year for which the report is provided. :convention center term sheet 4 1 -31 -08 clean b. The Operator shall provide an annual activities report by February 15 following the end of the previous calendar year for which the report is provided. C. The Operator shall provide monthly reconciliation of revenues for the required monthly payments including food and beverage, other concession, room rental, equipment rental and all other revenue. 10. Use and Access by the City. a. The Convention Center shall be available for use by the City and for mutually agreed upon civic activities when it is not booked for other events. b. No rent shall be charged for City or mutually acceptable civic activities, but the Operator shall have the right to charge the event sponsor for the reasonable cost of set -up, take down, cleaning and other services provided by the Operator. C. The City shall have access to the Convention Center for use as the emergency shelter for the Leach Amphitheater and Riverside Park area. d. The City shall have access to the Convention Center at reasonable times upon reasonable notice for inspections and other legitimate purposes. 11. Assignment. a. The Operator shall have the right to assign the Agreement to its lender for collateral purposes. b. The Operator shall have the right to assign the Agreement to a new owner of the adjacent hotel facility with the consent of the City, which consent shall not be unreasonably withheld or delayed. 12. Contingencies. The Agreement shall be subject to the following contingencies: a. The successful completion of the proposed renovations to the Convention Center. b. The performance by the City of all other obligations to be performed by the City prior to the commencement of the operation of the Convention Center. C. The ability of the Operator to secure all licenses and permits necessary for the operation of the Convention Center, including without limitation, the liquor license. d. The successful closing of the purchase of the adjacent hotel by the Operator. 13. Damage or Destruction. In the event the Convention Center is damaged or destroyed by fire or other casualty, the City shall be obligated to repair or rebuild the Convention Center in its current location as soon as reasonably possible. 14. Miscellaneous Provisions. The Agreement shall contain the following miscellaneous provisions: a. The Operator shall not have the authority to bind the City without the prior written consent of the City. :convention center term sheet 1 -31 -08 clean b. The Operator shall not make any structural changes to the Convention Center or skywalk without the prior written consent of the City. C. The Operator shall not place any liens or encumbrances of any kind on the Convention Center or the Furniture, Fixtures and Equipment furnished by the City. d. Any notice authorized or required to be given to a party shall be given to the party at the current address of the party. e. The Agreement shall include the City's standard nondiscrimination provisions. f. The forum for all disputes related to the Agreement shall be Winnebago County, Wisconsin. 16. Standard Provisions. The Agreement shall contain the following standard provisions: a. Enforcement b. Severability C. Non - waiver d. Entire agreement :convention center term sheet 6 1 -31 -08 clean