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HomeMy WebLinkAbout28. 12-244 MAY 9, 2012 12-244 RESOLUTION (CARRIED__7-0____ LOST _______LAID OVER ______WITHDRAWN ______) PURPOSE: APPROVE OPERATONS AGREEMENT WITH OSHKOSH INVESTORS, LLC FOR OPERATION OF THE OSHKOSH CONVENTION CENTER INITIATED BY: CITY ADMINISTRATION BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached Agreement between the City of Oshkosh and Oshkosh Investors, LLC for management and operation of the Oshkosh Convention Center is hereby approved. BE IT FURTHER RESOLVED that the proper City officials are hereby authorized to execute and deliver the agreement in substantially the same form as attached hereto any changes in the execution copy being deemed approved by their respective signatures and said City officials are authorized and directed to take those steps necessary to implement the terms and conditions of the Agreement. MANAGEMENT AGREEMENT This Agreement is made and entered into as of the day of May, 2012, 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 Investors, LLC, a Wisconsin limited liability company formed pursuant to the laws of Wisconsin with its principal office at 1 North Main Street, Oshkosh, Wisconsin 54901 (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 12-244 authorized City officials to enter into this Agreement with the Operator. WHEREAS, the City and the Operator have agreed to enter into this Agreement setting forth the terms under which the Operator will have the exclusive right to book gatherings and events at the Convention Center during the term of 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 Operator will undertake the management of the Convention Center 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 the Convention Center, except for those rights and obligations which the City retains, under the terms of this Agreement. Additionally, the Operator shall provide, or cause to be provided such food and beverage, scheduling, custodial, and -1- 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 their respective 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 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 in a manner consistent with the authority it has been granted for the use of the facilities as described herein. Operator shall use the facilities and equipment at the Convention Center only as necessary for operation of the Convention Center. Operator may use the facilities and equipment for other uses, including hotel operation or catering,upon entering into a separate agreement with the City for the same. 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 outdoor 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. This Agreement shall be for an initial term commencing May 14, 2012 and ending December 31, 2020, unless sooner terminated or extended as provided in this Agreement. -2- b. Operator may renew this Agreement for one additional five (5) year term; provided that the Operator is not in default with respect to this Agreement. This renewal shall be initiated by the Operator providing written notice to the City of the intent to renew not less than one hundred eighty (180) days prior to the expiration of the then current term. c. After the initial term and first renewal period, the The City and Operator may, by mutual agreement, renew this agreement with such amendments and modifications that the parties may agree to in writing, for four (4) additional five (5) year periods. Each renewal shall be initiated by the Operator providing written notice to the City of the request to renew not less than one hundred eighty (180) days prior to the expiration of the then current term. d. This Agreement is subject to termination before the expiration of the original term or any extension term under 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. 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. 4. Payments to the City of Oshkosh. a. Except as otherwise expressly provided in this Agreement, the Operator shall be responsible for all expenses of any kind directly related to 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; the Operator's liability insurance premiums; premiums for insurance on the Operator's personal property; licenses and permit fees; sales and use taxes; attorney's fees; accountant's fees; consultant's fees; and other professional fees. -3- b. The Operator shall pay four percent (4%) of the annual gross revenue from the operation of the Convention Center to the City as rent for the Convention Center which shall include all food and beverages sold and served by the Operator at the Convention Center, whether prepared at the Convention Center or elsewhere. c. By the 15th of each month, the Operator shall provide a sales report to the City regarding gross revenues of the Convention Center for the previous month and make the payment due to the City for the previous month's operations.. By February 15 each year, the Operator and the City shall meet to complete a financial review of operations of the Convention Center for the previous year. The Operator shall initiate this annual financial review. 5. Payments to Oshkosh Area Community Foundation. a. The Operator shall pay one percent (1%) of the gross revenue from the Convention Center to the Oshkosh Area Community Foundation ("OACF") to repay OACF's loan for the Convention Center improvements which shall include all food and beverages sold and served by the Operator at the Convention Center, whether prepared at the Convention Center or elsewhere. b. The amount paid by the Operator to OACF to repay the City's loan from OACF may be increased by mutual agreement of the Operator and OACF from time to time without the consent of the City or amending this Agreement. c. The Operator shall pay any amount due to OACF under this Paragraph directly to OACF. 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, including all utility costs beginning on January 1, 2013 to the Convention Center. In consideration of the Operator's investment in the adjoining hotel property and the time required for the hotel/convention market reestablishment and stabilization, the City shall pay all utility costs for 2012; the City shall pay to the Operator $50,000 in 2013 to reimburse the Operator for a portion of the utility costs; the City shall pay to the Operator $35,000 in 2014 to reimburse the Operator for a portion of the utility costs; and the City shall pay to the Operator $20,000 in 2015 to reimburse the Operator for a portion of the utility costs. Payments under this paragraph shall be made on or before February 15th of each year. All payments by the City for utilities shall cease on January 1, 2016. -4- 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. 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 building security. i. The Operator shall provide for normal cleaning/care and upkeep of the Convention Center (including skywalk), which shall generally include: cleaning of floors, shampooing of carpet on a regular basis; window cleaning (interior and exterior); cleaning of other exterior surfaces (e.g. — powerwashing, spider treatment); cleaning of other interior surfaces; removal of interior waste, rubbish and recyclables from the Convention 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. The Operator shall be responsible for normal cleaning/care and upkeep of the designated collection area for dumpsters and recyclables and for removal and emptying of all dumpsters and recyclables. k. 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 copying. 7. General Duties and Obligations of the City. a. 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. -5- b. The City shall be responsible for the construction of a new dumpster enclosure for the Convention Center. c. The City shall be responsible for maintenance/replacement of all exterior landscaping base materials. d. 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 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. e. The City shall coordinate all activities related to the maintenance and repair of the Convention Center with the Operator. f The City shall coordinate key management for the building with the Operator. g. The City shall coordinate the removal of snow and ice from all exterior walkways, sidewalk, driveways, and the public parking lots to the east and north of the Convention Center with the Operator. h. The City shall give the Operator priority over other events for the use of the public parking lots to the east and north of the Convention Center. 8. Furniture, Fixtures and Equipment. a. The Operator shall have the use of 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 owned by the City and currently used for the operation of the Convention Center ("City Furniture, Fixtures and Equipment"). In addition, OCVB and the City of Oshkosh purchased certain plates, dishes, bowls, cups, glasses, glassware, silverware, serving items and other items necessary for the operation of the Convention Center (the "Serving Items"). An inventory of the City Furniture, Fixtures and Equipment, and Serving Items is attached as Attachment A of this Agreement. Attachment A shall be updated on a yearly basis as provided in Paragraph 10 of this Agreement. The -6- City Furniture, Fixtures and Equipment, and Serving Items shall not be removed from the Convention Center premises. b. All City Furniture, Fixtures and Equipment, and Serving Items 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. c. The Operator shall be responsible for routine maintenance of the City Furniture, Fixtures and Equipment and repairs to the City Furniture, Fixtures and Equipment, and Serving Items and replacement of Serving Items on an ongoing basis as necessary. d. 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 negligence or intentional acts of the Operator. e. The Operator shall supply the equipment necessary to properly equip the Operator's office at the Convention Center. f. The Operator shall retain ownership of all equipment provided by the Operator upon termination of the operation of the Convention Center by the Operator, except for any City Furniture, Fixtures and Equipment and Serving Items that the Operator is required to replace pursuant to Paragraphs 8.(c) or 8.(d). g. 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 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. -7- 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. 10. Reports to the City. a. The Operator shall provide an annual facilities inspection and inventory report to the City by the June 30th following the end of the previous calendar year for which the report is being provided. b. The Operator shall provide an annual activities report by the February 15th 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 notice, 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 held at the Convention Center by mutual agreement of the parties, except that the Operator shall have the right to charge the event sponsor the usual and customary amount for any food, beverages or 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. 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 -8- 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: 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. A breach of this covenant may be regarded as a material breach of this Agreement. d. 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. A breach of this covenant may be regarded as a material breach of this Agreement. -9- e. 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 this Agreement shall be construed as if the invalid, illegal or unenforceable provision was not contained herein. b. Non-waiver. The action or inaction of any party shall not constitute the waiver of any provision of this Agreement, except and unless the provision is expressly waived in writing and signed by an authorized representative of the party. c. Entire Agreement. This Agreement supersedes all other agreements or other understandings between the parties, whether verbal or written, and contains the entire understanding between the parties, and it shall inure to the benefit of and shall bind the parties hereto, their respective heirs, executors, successors or assigns. d. Third Party Beneficiaries. This Agreement shall not bestow any rights upon any third party. It is the sole intention of the City and of the Operator that the terms of this Agreement will bind and benefit only these two parties. 17. Notices. a. Any notice required or communication under this Agreement shall be given in writing, signed by the party giving notice, either by personal delivery, or mailed by first class delivery, to the parties representative as noted below. All such notices shall be addressed as follows: i. To City: City of Oshkosh do City Manager 215 Church Avenue PO Box 1130 Oshkosh, WI 54903-1130 ii. To Operator: Oshkosh Investors, LLC do Rich Batley 1 North Main Street Oshkosh, WI 54901 -10- b. Any party may change its address for purposes of this Paragraph by giving the other party written notice with a new address in the manner set forth above. IN WITNESS WHEREOF, the City and Operator have executed this Agreement as of the date set forth above. CITY OF OSHKOSH, WISCONSIN Date: By: Mark A. Rohloff, City Manager Date: By: Pamela R. Ubrig, City Clerk Approved as to form: Date: Lynn A. Lorenson, City Attorney OSHKOSH INVESTORS, LLC By UW-OSHKOSH FOUNDATION HOTEL PROJECT, LLC, Manager Date: By: Arthur H. Rathjen OSHKOSH HOTEL VENTURE, LLC, Manager Date: By: John Pfefferle -11-