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HomeMy WebLinkAboutConvention Center Management agreement 2/2/09MANAGEMENT AGREEMENT QTrY CLE1 KS OFFICE This Agreement is made and entered into as of the day of February, 2009, by and between the City of Oshkosh, a Wisconsin municipal corporation with its principal offices at 215 Church Avenue, Oshkosh, Wisconsin 54903 -1130 (hereinafter "City "), and the Oshkosh Convention Center Management, Inc., a nonstock, not for profit corporation formed pursuant to the laws of Wisconsin with its principal office at 2401 West Waukau Avenue, Oshkosh, Wisconsin 54904 (hereinafter "Operator "). RECITALS WHEREAS, the City is the owner of certain property within its municipal boundaries identified as the Oshkosh Convention Center ( "Convention Center ") located at 2 North Main Street. WHEREAS, the City and the Operator have a mutual interest in holding meetings, gatherings, and other events at the Convention Center and in maximizing the number of such events at and overall use of this facility. WHEREAS, the Common Council for the City of Oshkosh via Resolution 08 -504 authorized City officials to enter into this. Agreement with the Operator provided it is in accordance with the provisions of a Term Sheet for Operation of Convention Center dated December 23, 2008, as submitted to and approved by the Council. WHEREAS, in exchange for the terms described herein and, in a manner which is materially consistent with the December 23, 2008 Term Sheet, the City herein makes the Oshkosh Convention Center available for the Operator to book gatherings and events at such facility during the term of this Agreement, as is more fully described in this Agreement. THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency whereof is acknowledged, the parties enter into the following agreement: AGREEMENT 1. Management Authority a. The City hereby grants to the Operator, and the Operator hereby accepts, the exclusive right and obligation to manage, market, promote and operate the Oshkosh Convention Center (the "Convention Center "). The Operator will undertake the management of this facility in its own name as an independent contractor and not as an agent of the City. In connection with these rights and obligations, the Operator shall perform or furnish, or cause to be performed or furnished, all of such direct management services, including but not limited to the supervision, direction, and control of the management and operation of 4- the facility, except for those rights and obligations which the City retains, under the term(s) of this Agreement. Additionally, the Operator shall provide, or cause to be provided such food and beverage, scheduling, custodial, and other required maintenance services needed in the normal operation for the Convention Center. The City and the Operator agree that they will cooperate with each other in every reasonable and proper way to permit and assist both the Operator and the City to carry out the duties hereunder. b. Subject to any limitations identified in this Agreement, the Operator shall have full discretion and control, free from interference, interruption and disturbance, in all matters relating to the management and operation of the Convention Center, including, without limitation: determining charges for bookings; credit policies; food and beverage services, employment policies; employee fringe benefits; receipt, holding and disbursement of funds; operating systems; personnel selection; maintenance of bank accounts; the procurement of inventories, supplies and services; promotion and publicity; the right to provide complimentary or discounted food, beverages, booking rates or other use of the Convention Center facilities for legitimate business purposes; and, generally, control of all activities necessary for or reasonably related to the operation of the Convention Center. The Operator is granted and accepts the authority to execute all contracts and agreements for the use of the Convention Center premises in a manner consistent with the authority its has been granted for the use of the facilities as described herein. C. The Operator has the right to delegate or subcontract any specific tasks and responsibilities identified in this Agreement which are related to the management of the Convention Center except as may otherwise be prohibited herein. 2. Premises The facilities subject to this Agreement consist of the Oshkosh Convention Center, 2 North Main Street, which is comprised of the Convention Center building, skywalk across Main Street, and adjacent outdoor patio (collectively, "Convention Center "). Any alcohol license available for use at the Convention Center shall cover the building, skywalk, and patio. The Operator agrees that the outdoor 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 an initial term of two (2) calendar years, commencing on January 1, 2009 and ending on December 31, 2010, plus any renewal term as described herein. b. This Agreement shall automatically renew for no more than two (2) successive two (2) year renewal terms, unless either party gives the other party written notice of its election, for any reason, not to renew this Agreement at least ninety (90) days before the initial or renewal term expires, or unless the Agreement is otherwise terminated as allowed herein. -2- C. This Agreement is subject to termination before the expiration of a term pursuant to the .following circumstances: i. By mutual agreement of the parties, at any time. ii. At the sole discretion of 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. iii. At the sole discretion of the City, in the event of the bankruptcy, insolvency, or receivership of the Operator. iv. At the sole discretion of the Operator, if the City materially 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. v. At the sole discretion of the Operator, in the event the Operator has sustained a cumulative loss of One Hundred Fifty Thousand and no /100 Dollars ($150,000.00) or more as a result of its operation of the Convention Center. d. In addition to all other termination rights as described elsewhere, the City shall have the right to terminate this Agreement at any time without cause, upon not less than sixty (60) days written notice to the Operator. In the event the City exercises the early termination right specified in this paragraph, the Operator shall continue to be entitled to all rental income that has been received for future events at the Convention Center booked by the Operator prior to the effective date of the termination, regardless of when the event occurs. e. In the event the Agreement is terminated, with or without cause, 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. The City agrees to consider any recommendations of the Operator related to the selection of successor operators. 4. Payments to the City of Oshkosh a. The Operator shall be entitled to receive one hundred percent (100 %) of all income from rent, food and beverage revenue and any other income received for the use of the Convention Center until such time as the cumulative rental income received by the Operator exceeds the cumulative direct expenses incurred by the Operator for the operation of the Convention Center ( "breakeven point "). "Direct expenses" shall -3- include all expenses of any kind directly related to the involvement of Operator in the operation of the Convention Center, including without limitation: salaries, wages and fringe benefits; management expenses; promotional expenses; cleaning and maintenance costs; customer service costs; insurance premiums; license and permit fees; taxes; attorneys fees; accountants fees; consultants fees; and other professional fees. b. After the Operator has reached its breakeven point , it shall pay to the City twenty -five percent (25 %) of the amount by which the income from rent, food and beverage revenue and any other income received exceeds the amount of the direct expenses incurred by the Operator for the operation of the Convention Center ( "net profit "). C. The Operator shall provide the City with copies its monthly or quarterly profit and loss statements, whichever is consistent with the Operator's usual and customary record keeping practices. Any payments due to the City shall be paid at the time Operator provides its annual activities report for the previous calendar year. 5. Payment to Oshkosh Area Community Foundation. The Operator shall ensure that any caterer that the Operator may contract with for the Convention Center shall be required by contract to pay one percent (1 %) of the gross food and beverage /concession revenue for each event to the OACF on behalf of the City of Oshkosh. This payment shall be made to the Operator and transmitted by the Operator to OACF. The Operator shall not, however, be responsible for the collection of any delinquent payments. The Operator shall notify the caterer that the City retains the right to enforce this obligation. 6. General Duties and Obligations of the Operator. a. The Operator shall operate the Convention Center and pay all of the 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 promote and 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 have exclusive booking rights for events during the term of the agreement. The Operator shall be responsible for marketing the Convention Center, booking events, working with caterers and other service providers, working with event sponsors, and providing other support for all events. M f. 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 specific announcements and events on the message sign. h. The Operator shall be responsible for the day to day operation of the building security system in accordance with the City's security plan for the Center. i. 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; removal of interior waste, rubbish and recyclables from center; replacing lights as needed; operation and care of audio /visual equipment /systems; and day to day operation of HVAC system (e.g. thermostat adjustments). j. All records relating to or reflecting the Operation of the Convention Center by the Operator shall be available to the City and OACF, and their representatives at all reasonable times for examination, audit, inspection and transcription. 7. 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, including without limitation, a liquor license. C. The City shall be responsible for the external removal and emptying of dumpsters and recyclables from a designated collection area. d. The City shall be responsible for snow and ice removal/shoveling of all exterior walks to the Convention Center and maintenance /replacement of all exterior landscaping base materials. e. 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: maintenance, repair and replacement of the structures, HVAC equipment and mechanical systems; repair of floors, recarpeting (based on need relative to wear and tear); repair of broken windows; repair /replacement of wall coverings and repainting of walls (based on -5- 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 and fire extinguishers; repair and /or replacement of hardware /fixtures attached to premises, plumbing and lighting fixtures; provision of light bulbs; maintenance/ repair/ replacement of message sign; and the maintenance /repair /replacement of other exterior signage. f. The City shall be responsible for all utility costs for the Convention Center. g. The City shall coordinate all activities related to the maintenance and repair of the Convention Center with the Operator. h. The City shall be responsible for Convention Center security and shall coordinate with the Operator for the implementation of a security plan for the building. 8. 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 properly 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 and shall be attached to this agreement as Attachment "A ". Attachment "A" shall be updated on a yearly basis as provided in Paragraph 10 of this agreement. Inventory shall not be removed from the Convention Center premises without the written consent of the City of Oshkosh. 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 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 gross negligence or intentional acts of the Operator. Ell f. The Operator shall supply the equipment necessary to properly equip the Operator's office at the Convention Center. g. The Operator purchased certain plates, dishes, bowls, cups, glasses, glassware, silverware, serving items and other items necessary for the operation of the Convention Center ( "Purchased Equipment ") at a cost of approximately Forty -four Thousand and no /100 Dollars ($44,000.00). The City shall require any subsequent operator of the Convention Center to purchase the "Purchased Equipment" as a condition of entering into an Operator's Agreement with the City. The purchase price shall be a price equal to the original price paid by the Operator, but may be adjusted by agreement based upon reduction of the inventory, damage or wear and tear. h. The Operator shall be responsible for the replacement of any equipment provided by the Operator, unless the replacement is required as the result of the negligence or intentional acts of the City. 9. 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. The Operator shall provide certificates of insurance for all insurance coverage required to be carried by the Operator. 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. Subject to any limitations contained in Sec. 893.80 and any similar statute, of the Wisconsin Statutes, 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 while acting within the scope of their employment. -7- 10. Reports to the City. a. The Operator shall provide an annual inventory report to the City by the June 30''' following the end of the previous calendar year for which the report is being provided. b. The Operator shall provide quarterly a facilities inspection report to the City. C. The Operator shall provide an annual activities report by the February 15"' following the end of the previous calendar year for which the report is being provided. 11. Use and Access by the City. a. The Convention Center shall be available for use by the City for mutually agreed upon civic activities when it is not booked for other events. In the event the City has requested the use of the Convention Center with reasonable advance notices, such request shall not be unreasonably denied by the Operator. b. No rent shall be charged for any City sponsored activity held at the Convention Center premises, or for other civic activities upon the mutual agreement of both parties, except that the Operator shall have the right to charge the event sponsor for the reasonable cost of any services provided by the Operator for a specific event. C. The City shall have the right to immediate access of the Convention Center premises for its use as the emergency shelter for those persons in the Leach Amphitheater and Riverside Park area. d.. The City shall have the right to access the Convention Center premises at reasonable times upon .reasonable notice for inspections and other legitimate purposes. The City shall have the right to immediate access to the Convention Center premises if such access is reasonably believed to be necessary to protect life and/or property from damage. 12. Assignment. a. The Operator shall not have the right to assign this Agreement without the written prior consent of the City. b. The City shall not have the right to assign this Agreement without the prior written consent of the Operator. 13. Contingencies. The commencement of the terms of this Agreement shall be subject to the following contingencies: a. The successful completion of the proposed renovations to the Convention Center. in 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. 14. Damage or Destruction. In the event the Convention Center premises 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. The term of this agreement shall not be extended by any period of time the Convention Center premises is damaged, destroyed, or otherwise unavailable for use by the Operator though no fault of the City. 15. Miscellaneous Provisions. a. Authority. The Operator shall not have the authority to contractually bind the City without the prior written consent of the City, except to the extent that the Operator schedules or books events upon the Convention Center premises pursuant to the authority granted herein. b. Alterations. The Operator shall not have any authority to install any fixtures, to make any material alterations, or to make any structural changes to the Convention Center premises, including the buildings, skywalk, and patio, without the prior written consent of the City, and such consent shall not be unreasonably withheld. C. Encumbrances. The Operator shall not allow any liens or encumbrances of any kind on the Convention Center premises, or the City Furniture, Fixtures and Equipment. Breach of this covenant may be regarded as a material breach of this Agreement. e. Non Discrimination. The Operator agrees not to discriminate in its operations under this Agreement on the basis of race, color, creed, age, and gender, or as otherwise prohibited by law. Breach of this covenant may be regarded as a material breach of this Agreement. f. Governing Law. The laws of the State of Wisconsin shall govern the interpretation and construction of this Agreement. Winnebago County shall be the venue for all disputes arising under this Agreement. 16. Standard Provisions. a. Severability. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and In