Agenda Item Name:
Title
Sports Event Center Resolution for Amendment of Development and Operations Agreements
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Presenter:
Tommy Crosby 337-6205, Dave Forziano
Description:
The Developer and Operator have requested amendments to the Development Agreement and the Operations Agreement to allow for the Sports Event Center to Temporarily Operate in January 2023 and February 2023 for track season before final construction is completed.
Recommended Action:
Recommended Action
Adopt the resolution authorizing the County Manager and the County Attorney to prepare the necessary contract amendments to the Development Agreement and the Operations Agreement to accommodate the Operator’s request to Temporarily Operate the Sports Center.
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Prior Board Motions:
July 13, 2021 - Final agreements approved and attached
Fiscal Consideration:
Fiscal Consideration
There is no direct budgetary impact to the County. The gross revenue from the events during the temporary operations will flow into, and operating expenses will be paid out of, the Sports Center Operating Account. Pursuant to the terms of the Operations Agreement, the Operator is required to fund operating budget shortfalls.
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Strategic Guide:
Strategic Guide
Social and Economic Opportunity
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Background:
On July 13, 2021, the Board entered into the Development Agreement with Viking Companies, LLC (the Developer) for the design and construction of the Sports Center at Celebration Pointe. On July 23, 2021, the Board also entered into the Operations and Maintenance Agreement for the Sports Center (the “Operations Agreement”) with the Developer’s subsidiary, CP Event Center Operations, LLC (“Operator”).
Pursuant to the Development Agreement, the Developer was to complete construction in late December 2022, prior to the start of track season. Upon completing construction, the project was to transition from the development phase to the operating phase, at which time the terms of the Operating Agreement were to commence (approximately late December 2022 or early January 2023). Completion of construction cannot be completed in December 2022 due to unavoidably supply-chain issues that has delayed the delivery of flooring materials.
The Developer and Operator (hereinafter, collectively referred to as “Viking”) have requested authorization to apply for a temporary certificate of occupancy so that the Operator may host track events at the Sports Center in January 2023 and February 2023, and then recommence construction activities on February 17, 2023. Attached is the Operator’s current schedule of events. Viking’s now estimates that construction will be completed on May 12, 2023.
In order for Viking to temporarily operate the Sports Center during the development phase of the project, Viking has requested amendments to the Development Agreement and the Operating Agreement that will apply only to the temporary operating period, with one exception. The one exception is an extension of the Development Project Schedule to reflect the new estimated completion date in May 2023. All of the proposed amendments are described in the attached Resolution. The Resolution provides that certain provisions of the Operating Agreement will be suspended or modified during the temporary operating period; however, those provisions shall become fully effective again when the Sports Center reopens after completion of construction, which is estimated to occur in May 2023.
During the temporary operating period, all other terms and conditions of the Operating Agreement shall be in full force and effect. All gross operating revenue during the temporary operating period shall be deposited into the Operating Account that is required to be established and maintained by the Operating Agreement. Those funds will be used by the Operator to pay all monthly operating expenses during the temporary operating period and any funds remaining at the end of the temporary operating period shall remain in the Operating Account until the Sports Center reopens, at which time those funds will flow through the “waterfall” in accordance with the Operating Agreement.