HomeMy WebLinkAbout21. 14-545
DECEMBER 9, 2014 14-545 RESOLUTION
(CARRIED___6-1P___LOST________LAID OVER________WITHDRAWN________)
AS AMENDED
PURPOSE: APPROVE AMENDMENT TO AGREEMENT WITH THE OSHKOSH
OPERA HOUSE FOUNDATION FOR LEASE AND OPERATION OF THE
GRAND OPERA HOUSE
INITIATED BY: GENERAL SERVICES DIVISION
WHEREAS, the City of Oshkosh and the Oshkosh Opera House Foundation, Inc.,
previously entered into a Lease Agreement for the use and operation of the Grand Opera House
dated December 15, 2004; and
WHEREAS, the City of Oshkosh previously provided the Oshkosh Opera House
Foundation with a written notice of termination which would terminate the Lease Agreement
effective December 31, 2014; and
WHEREAS, in the time after the City provided it’s notice of termination the parties have
entered into negotiations for a new Lease and Operations Agreement for the premises, but that
those negotiations are not yet complete; and
WHEREAS, the parties wish to enter into a one-time extension of the term of the current
Lease Agreement through June 30, 2015, unless an earlier date is mutually agreed upon, with
the elimination of the automatic renewal and six (6) month termination notification requirements
from the Lease Agreement, while further negotiations occur for a new Lease and Operations
Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh
that the proper City officials are hereby authorized to enter into and implement an Amendment
to the Lease Agreement with the Oshkosh Opera House Foundation, Inc. for the purpose of
providing a one-time extension of the current Lease Agreement term, through June 30, 2015,
unless an earlier date is mutually agreed upon, with the same terms and conditions of the
current Lease Agreement, with the exception of the automatic renewal and six (6) month
termination notification requirements which shall be deleted from the extended Lease
Agreement.
BE IT FURTHER RESOLVED that the proper City officials are hereby authorized to
execute and deliver the amendment 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 as amended.
BE IT FURTHER RESOLVED that staff is authorized to continue with further negotiations
with the goal of achieving a new Lease and Operations Agreement with the Oshkosh Opera
House Foundation, Inc.
AMENDMENT – 2(c) The amount of income from room tax dollars to be paid to the Grand
Opera House Foundation specified in paragraph 5.1 of the current agreement shall not
exceed $148,000 for the period from July 1, 2014 through June 30, 2015.
CITY HALL
215 Church Avenue
P.O.Box 1130
Oshkos 5 903-�1130 City of Oshkosh
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O1HKOlH
TO: Mayor and Members of the Common Council
FROM: Mark A Rohloff, City Manager,,,���
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DATE: December 4, 2014
RE: REQUEST TO EXTEND GRAND OPERA HOUSE LEASE FOR SIX MONTHS
As I previously reported to you, the Grand Opera House Foundation's lease with the city of Oshkosh
expires on December 31, 2014. In June 2014 I provided Grand Opera House Foundation Director Joe
Ferlo with a notice that the lease would not be automatically extended for the next five year period. Since
that time, I have had several discussions with Mr. Ferlo, members of the Grand Opera House Board, and
the Convention and Visitors Bureau(CVB)Board over the distribution of room tax dollars to support the
Grand Opera House Foundation's operations. Although the CVB is not involved in the lease of the Grand
Opera House,they do have a stake in the allocation of room tax dollars,and believe that the Grand should
not be reaping the benefits of increased efforts by the CVB to improve hotel occupancy.
Over the last couple of months, the Grand Opera House Foundation Board has listened to proposals to
temporarily extend the lease for a period anywhere from six months to two years. Please find attached a
request from Mr. Ferlo to extend the lease for six months at the same terms and conditions of the current
lease. This means that the Grand will continue to receive 19% of the first 7% of room t� dollars. I had
previously provided Council with the history of this amount. This amount totaled $148,000 in 2013, and
is projected to be approximately $160,000 in 2014. I have received feedback from several Council
members that the automatic allocation of a percentage of room t�dollars is not desirable given the lack
of connectivity between room tax dollazs and the Grand Opera House. I have heard several suggestions
that there should be a cap on this amount. The Grand Opera House Foundation had discussed this at their
last board meeting, and they felt that there should not be reduction in the allocation on a percent basis for
the coming year. At the same time, I have been made aware that the Grand Opera House Foundation 2014
—2015 budget projects $148,000 in revenue from the city's room t�allocation. With a projected revenue
of$50,000 through December 31, 2014, this would leave the Grand's budget $68,000 short of ineeting
their 2014—2015 budget target. The Council may wish to consider this information if they desire to have
some type of cap on the allocation to the Grand for the six-month period that is being requested.
Should the Council approve the temporary extension of the lease, I will make it a priority to initiate
discussions with the Grand immediately after the first of the year so that this issue may be resolved well
in advance of the six-month deadline. I believe that the Grand Opera House Foundation's letter
adequately describes some of the issues, particularly the need to detach room tax from whatever
allocation the Grand Opera House Foundation receives for operating the Grand Opera House. In the
meantime,please contact me if you have any questions regarding the current lease and/or the allocation of
room tax dollars.
CC: Jon Urben, Director of General Services
Joseph Ferlo,Executive Director, Grand Opera House Foundation
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,I I����'�� � Mark Rohloff, City Manager
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¢ Oshkosh, WI 54901
Dear Mark,
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� � 4�+°�''��� Far 25 years, beginning with the original lease in 1989,and through subsequent
� " - '�� - renewals in 1993, 1999, 2004 and 2009,the City of Oshkosh has recognized the
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�� k� � need to provide support towards general operating expenses only, of its asset. In
������ ° �� , that original agreement and all subsequent renewals, city leadership has chosen to
� � ���.�������� provide this funding primarily through the allocation of 19%of the first 7%of
�� � ''� room tax funds, a formula that has remained consistent. When room tax revenues
�� �� �� �°� r ��`� went up, so did the OOHF funding. So too, did the cperating expenses. Like any
�� �-. other beneficiary of the room tax,the Foundation funding pool was reduced with
�F�� ������ the departure of the Pioneer Hotel and the bankruptcy of the Downtown Oshkosh
� ,,,� � - hotel, and our organization patiently awaited a more healthy room taa�allocation,
�� '° p which has begun with the revival of what is now the Best Western Premier
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���� �- � Waterfront.
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��� �����` �,� Of course,the most important consideration to the Foundation is that the City
P���� � ���� � ��� continues to acknowledge its responsibility to its asset. Whether that takes place
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� �,����, � � ,;�w in the form of room tax or some other funding source is not as important, as is the
�� ��� �������..�,�.� � fact that it needs to continue from somewhere. Since the discussions have begun
��� �"�� ����� � so close to the expiration of the lease on December 31 (which is in at the mid-
�� �� � point of the Foundation's fiscal year and programming seasori), it has become
� � � a.- � clear that there is not adequate time for thoughtful, productive discussion
� ,��;�� ���� y between the Council, City Management, and the Foundation,prior to the
� �� � ; expiration of the lease.
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� � y Our board has voted to request the City of Oshkosh provide a six-month
�� �� ���� ��� extension to the lease, at the current terms, in arder that the above discussions
��.��, � � �„����� ;� � � might happen without disruption to the programming of the member
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� � � '= organizations, schools,promoters, and the Foundation itself. We certainly pledge
to enter into good-faith discussion with representatives of the City of Oshkosh in
� �- ��° � �� ��4 � order that a funding solution and pian that is acceptable both to the City and to
� r ����'�� the Foundation is in place, well in advance of the end of that lease extension and
�` �����`�� the Foundation season on June 30, 2015.
C►s�z�CC�s�,�
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��� ������� ��m� � �� Thank you for your consideration. We 1 forward to your response and to
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; continuing the most successful and lon -stan 'ng public-private partnership in
�,� � our city, for another quarter-century a d beyon
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Sincerely,
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Oshk�'�3�,�x; f
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' �B�� ��� ' E. Alan Hartman J ep A. er
��� �� ����� ��� � Chairman of the Board Pr ident and CEO
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„��. � �� �� ��� Director, The Grand Opera House
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AMENDMENT TO LEASE AGREEMENT
The City of Oshkosh, hereinafter referred to as CITY, and the Oshkosh Opera
House Foundation, Inc., hereinafter referred to as the FOUNDATION, entered into a Lease
Agreement dated December 15, 2004, for the use and operation of the Grand Opera
House, 100 High Avenue, Oshkosh. The initial term of the Lease Agreement was for five
(5) years, with renewal terms of the same time period until a party provides a six (6) month
notice of termination.
After one renewal term of the Lease Agreement, the CITY provided the
FOUNDATION with a notice of termination of the Lease Agreement effective December
31, 2014.
The parties subsequently entered into negotiations for the purpose of entering into a
new Lease and Operations Agreement for the Grand Opera House. While the negotiations
for this new Agreement are incomplete, the parties believe that the negotiations will be
successful if allowed additional time and that both receive a business benefit from this
extension.
The parties therefore, agree as follows:
1. The term of the Lease Agreement dated December 15, 2004 and scheduled to
expire on December 31, 3014, is hereby extended on a one-time basis an
additional six (6) months and will therefore expire on June 30, 2014 without
further action required by either party.
2. All other provisions of the December 15, 2004 Lease Agreement shall remain in
effect, EXCEPT the following:
a. All provisions related to renewal periods shall be deleted; and,
b. All provisions related to notification requirements for termination of the
Agreement, whether six (6) months or otherwise, shall be deleted.
3. A copy of the December 15, 2004 to be extended, subject to modifications in this
Amendment, is attached as Exhibit A.
In the Presence of: OSHKOSH OPERA HOUSE FOUNDATION,
INC.
By:
(Seal of Contractor if a Corporation.) (Specify Title)
By:
(Specify Title)
CITY OF OSHKOSH
By:
Mark A. Rohloff, City Manager
And:
Pamela R. Ubrig, City Clerk
Approved as to Form:
Lynn A. Lorenson, City Attorney
I hereby certify that the necessary provisions
have been made to pay the liability which will
accrue under this contract.
City Comptroller
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� � LEASE AGREEMENT 'I
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This is made fhis��� day of , 2Q04: befween the CfTY OF OSHKOSH, E
a municipaf corpora�ion focated in Winnebago County, 1Niscansin ("Cify") and the OSHKOSH � :
OPERA HOUSE FOUNDATI4N, (NC., a Wisconsin nof-for-proft carporatian ("Faundation°}, �
. as fallaws:
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1. Lease and Term: The Cify-sha!! lease ta the Foundafion the Grand Opera .House, ;
located at 100 High Aventie, Oshkosh, Wisconsin, for an initial term of five (5) years �
beginning at 12:01 a.m. on January 1, 2005, and ending at�14:59 p.rn. orr December 31,
20Q9, for a rsntai fee of Qne DoAar($'l,0�) per yearpayable an.or before t{�e�rsf day of each ;
year of fhe lease term ar subsequent renewal: This agreement shalt be automa#icafly I
renewabie far subsequent�five (5} year terms unless a written, six-month no�ice of intent nof '
to renew is given to the o�her party. � '
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2. General Ooerations, The Foundation shall ftire� a manager an a fuff fime basis to f
manager the Grand Opera House and such ofher suppor# stafF,�including janitoriaf or private r
cleaning services to maintain the facifi�y, as may�e necessary, i
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� 3. Op�rating S stems and. EQU�ament. All equipmenf, fr�rr�iture, �fvrnishings and �
apparatus presentty.located in#he Grand Opera House constitutes property of fihe Foundation �
except for the equipmenf which is owned by the Cify of Qshkosh an� is included under tf�is '
, Lease Agreement#o the Foundafion as described in Exhibit A. , i
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4. Grand Q era House Funds. A!I firnds received by fhe City frorn third par�ies for the �
beneft of the Grand ap�ra House operations or perFormances shall be fimely transferred�to �
#he Foundation. This provis�an shalf not apply to funds which are given to the City in trust far j
fhe bene�t of the Grancf Opera House building; but anty to funds which are recetved by the �
Cify for operations, performances, ordinary maintenance or o#her purposes which the �
Foundation is undertaking to provide as a resuIt of fhe Lease Agreemenf. � �i �
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5. Incorne. A(l incame des�gnated for apera�ion of the Grand Opera House shall b� j
disfri6utsd ta the Faundafion for operatlans. The sources of#he Foundation's ineome are as � 1
folfows:
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A. The Cify sha1l pay to the Founda�ion fhat porfiori af the room tax, equal to �
� nineteen. percent (19%) of t!-�e s�ven percent {7%) room fax imposed per Sec. '
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66.0615, Wis. Stats., paid to fhe city, except for the amount attribt►ted to roam tax ;
col)�ctions from #he hotel �ocated at ? N. Main St, Osi�kosh; prouid�d, however, thaf a i
the City shaf� have fhe right to adjus# the Foundation's share� of said room tax j j
coltections based upon any projecte� shorifafl in debf payment for fhe Oshkosh � � �
Conuentian Center TIF' District #4. The amount of th� deductifln af the room tax
payabie to the Foundation shali be propor#iorrafe to the room tax adjustment made to � j�
� the Oshkash ConventPon and Vis�fars Bureau under its Agreement with #he City dafed E '
in April 28, 2004, The amount payable �a the �aundation shalE be made on a monthly � E
basis nv� later than thirty-one (31)days aftsr the concl�sion .of the manth ir� which �he �
tax was paid to fhe ciiy, info an account designated in writing by the faundation. � �
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�� . B: AlJ perFormance and rehearsal income. �
C. Att concession income. '
� D. Equipmenf retttals.
E. Advertis�ng revenue.
F. Donafions and grants.
G. Miscellaneo�ts income as previous(y designated for Grand Opera House use,
6. Wrif�en Re ort. The Faundation sfi�ali �provide to the City �an a�nual written �
repart that details the programs and activ�ies for the Grand Opera House as we!! as for local ;
theatrtcal groups, busirtess ctses and for tourism for the precedEng year, and may incfude ;
simiiar informatian fdr the next s�cceeding year. �
, � 7. Maintenance. The mairttenance responsibilit�es of the Grand Op�ra House shafl
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be affo�ated as folfows: .
� A. The �o�ndation shafl be responsible for al1 ros�tine maintenance and minor� '
repairs, defned ,as a repair that does nof exceed On� Thousand Dollars i
�,� {$3,Q00.00}; and, for payrnent of al� utit�ty ex�ens�s to the extent not � i
reimbursed by the City fF��ough the Grand Opera Hause budget. �
. B. The CifY shall be respansib�e for repairf replacement or capital improvemenfs �
of afl building structura! pr mecf�anical systems, and any major repairs defned . �
as a repair that exceeds which ex��ed One Thousand and 01/100 DolJars .
{$1,000.01);and,for snow removal and sidewaIk ri3aintenance. ;
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C. The Foundation shall not mafce str�t�fura! changes or'altera#iQns to fihe exfer+ar I
of the bui€ding or to th� interior designs, fumistrings, fixfures and/or decorating ; �
. . . withou# �rst obtaining ths writfen consent of�he City, whose conser�t�s#�alf not '
be u�reasonabfy wi�hheld. . j
8. [nsurance. The City shalf provide and pay far a!1 gen�rai fiabi(ify coverage, fire, and �
ex#ended insurance coverage rela#ed to i�s ownership of the facitiiy, and fhe operating. '
syst�ms and equipment as tisted on Exhibit A. A copy of such insurance shail be provided �
upon written request, it shall be the Foundation's sole responsibili#y fo provide a!1 necessary .
� insurance coverages for i#s activities related to this agreement, such liabifiiy insurance from �
promaters andlor sponsors af events scheduted or he(d at the Grand Opera House or fo ,
provRde .at its ov�n expense s�ich insurance for a promoter_ ar sponsor, and such ather `
caverage as is neeessary fv insure o�her personat prap�rty�aca#ed on the premises. '
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, 9. Oaerations. Tha Foundation shail aperate the Grand Opera House as provided in this � i
� Agreement, subj�ct to the fallowing: . ;
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A. The renfal rates far the Grand Opera Hause sha}f be s�t fort� in a rate schedule
_ to be periodicat�y adopfed by the Fourtdation, and reported#o and filed with the
�Qmmon Covnci!which shall have sixty �60)days to reject fhe rate sc�edufe.
B. The Foundation shall have the sole responsibifity far booking performances and �
. other ever�ts at the Grand Opera House during the ferm of this Agreement, or
�any renewal thereof: The Founda�ion sttall make the Grand Opera House
avaE(able on a first come, first served basis ar�d sha11 naf discriminate �efween
presenters. When the Foundation Ps a presenter, it shall be subject to the same
rules as any other presenfer. Any dates booked by fhe Founda#ion during ttie
lease terms shai� be honored by #f�e ci�y even in th� event this Agreement is
terminated prior ta the normal terminat�an date af the fease.
C. The Fot�rtdation shall provide the Cify, upor� request, copies of aif financial
review reports as the Foundation re�eives. The �oundation shal( make
avaPiable to tt�e Grand Opera Hause Advisory Board accounting reports on a
quar�erly basis cancerning fhe Foundation's opera�ion of the Grand Opera
House.
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D. The City Manger ar designee and the designee of the Founda�ion may conduct �
monthfy inspections of the Grand Opera Hause faeility fo monitor its concfi#ion. �
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�10:S#andard �.ease Provisions. ;
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�� A. The Faundation shall comply wi�h alf rufes and regulations for operatior� of a
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pub(ic facili�y. Provid�d thaf either�he City or�oundation shaft have fhe right ffl �
cQntesf the appficabili#y af such rules and regufatians.
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B. Ali records of fhs Grand Opera House sha1l be rnaintained at the office locafed '
in that hall. �
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11.Earlv Tertrninatfon. The Fo�nda#ion and the City shall have the r[ght to termina#e this i
agreement without cause upon six (fi) monfh prior.written notice to the v�her parly. In the �
event either party shaws good cause for termina#ion, fhe termination shafl be after ei�her ;
- party has fhe opportunif�r to correct any defciency wi�hin fif�een (1�}calendar day� of wrii�en i i
notice thereof. If such defrciency is not cured withiri thase �fteen (�5) days, fhis Agreement l °
may be terminafed on fifteen (15) day written nofice by either parEy to�he other. � ! I
12.Successors Bound. The Agreemenf sha11 be binding upon and inure fo fhe bsnefrt ot r '
the City, Its successors and assigns, and sha11 be binding upon and inure to the benefit of the '
Foundafion, its successors and assigns; provided, however, any assignment by the �
�oundation shal! be subjec� #Q the written consent af #he Cify, which shall not be � i
unreasonabiy withheld. Any sa(e or transfer of the Grand Opera Hause by fihe Cit�+ sha(I be ;
made subjecf to the terms ofithis agreement. ;
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� ;� 13.Misr.,�fianeous Provisions. . � .
A, Notl�ting canfained ir► this Agreement sha[f cortstiftEte or be construed fo be or
� create a partnershi� or�aint venture arnang the parties.
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B. `fi��s agreement cannat be changed or modified except fn wri#ing and signed by �
. fi�e duly authorfzed agents of fhe parties. �
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C. Headings contained in #his Agreernent are for convenience of reference only �
and are not interided to de�ne, iimit or describe the scope or intent of any �
provisians of i�his Agreemen� �
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D. No�inrithstanding any provision #o the contrary., it is agreed that none of the `
� ob(igafians con#ained in tha Agreement shall run to or be enforceable by any i
other party fhan the partPes to this AgreemenP, �
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� E. This Agreement cons�itutes all of the agreemenfs and understandings of '
whatsoever natt�re or kind existing betw�en t(�a parties with respecf fo fhe t
- subject matter hereofi j
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F, !f any term, r�ovenant, condi�ion or provisions of this Agreem�nt shaEl be invafid '
or unenforceable, the remainder of �his Agreement shaN not be affected � ?
��� theraby, and each term, cavenant, condition and provision sha(I f�e vafid and be i
� enforced to the fuffest exten#permiited by{aw. �
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�G. Fai�ure of either party to insist upon the strict performar�ce of.the terms and �
pCQVfStOttS Of ff3fS agreement, or any of them, shall not constit�te or be ;
construed as a _waiver or relinquish of that par�y's right fo ther�after enfarce i
. such term or provision, and thaf term or provision shalt continus in fu(f farce and '
effect. I
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� H. Any disp�fe b�tween- the parties shall be sei�fed by arbifration �nder fhe I �
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Commercia] Arbitration Ru�es af the Arr�erican �rbitration Associafior� at a �
hearing to be held in Oshkosh,Wisconsin. . t
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fN 1NlTNESS WHEREOF, '
the parties hereto have executed or caused th�s Agreement to be
�J execufied by their officers #hereunta duly au�horized, afl as of the day and year firsf writt�n ;
above. �
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CfTY OF OSHKOSH OSHKOSH 4PERA HOUSE �
F�UNDATION, tNC. ;
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By. �/!�� �
By: !
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Richard A. Woilartgk, Ci Manager Ronald,Q; Nei(mann ,residsnt
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By: �y; ,
Pa a R. U�rig, Ci�y erk Randy Hed ecreta �
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Warren P. Kraft, ty om � _ '
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This insfrument Draffed By: . i �
Aftorney Gary R. Yakes . �
?4'i Narth Sawyer Stree# ' �
P.O. Box 9 338 ;
; Oshkosh, Wi 54902 , �
� �20-�3�-9 54Q i
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