The URL can be used to link to this page

Home My WebLink About09517 ORDINANCE NO. 9517 AN ORDINANCE APPROVING A THIRD AMENDMENT TO THE PRE-OPENING SERVICES AND MANAGEMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND GLOBAL SPECTRUM, L.P. D/B/A/ SPECTRA VENUE MANAGEMENT, A DELAWARE LIMITED PARTNERSHIP RELATING TO THE MANAGEMENT AND OPERATION OF MEMORIAL HALL AND AUTHORIZING THE MAYOR TO EXECUTE SAID THIRD AMENDMENT BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Third Amendment to the Pre-Opening Services and Management Agreement (“Third Amendment”), dated August 26, 2019, between the City of Pueblo, a Colorado municipal corporation and Global Spectrum, L.P. d/b/a Spectra Venue Management, a Delaware limited partnership, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. The Mayor is authorized to execute and deliver said Third Amendment in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 2. The officers and staff of the City are authorized and directed to perform any and all acts consistent this Ordinance and the attached Third Amendment which are necessary or desirable to implement the transactions described therein. SECTION 3. This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on August 12, 2019 . Final adoption of Ordinance by City Council on August 26, 2019 . President of City Council Action by the Mayor: ☒ Approved on August 28, 2019 . □ Disapproved on based on the following objections: Mayor Action by City Council After Disapproval by the Mayor: □ Council did not act to override the Mayor's veto. □ Ordinance re-adopted on a vote of , on □ Council action on _______ failed to override the Mayor’s veto. President of City Council ATTEST City Clerk City Clerk’s Office Item # R-12 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: August 12, 2019 TO: President Dennis E. Flores and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Brenda Armijo, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING A THIRD AMENDMENT TO THE PRE-OPENING SERVICES AND MANAGEMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND GLOBAL SPECTRUM, L.P. D/B/A/ SPECTRA VENUE MANAGEMENT, A DELAWARE LIMITED PARTNERSHIP RELATING TO THE MANAGEMENT AND OPERATION OF MEMORIAL HALL AND AUTHORIZING THE MAYOR TO EXECUTE SAID THIRD AMENDMENT SUMMARY: Attached is a proposed Ordinance approving and authorizing the Mayor to sign a third amendment to the management and operation agreement between the City and Global Spectrum, L.P. d/b/a Spectra Venue Management (“Spectra”) to manage and operate Memorial Hall. PREVIOUS COUNCIL ACTION: On May 14, 2012 the City entered into an agreement for Spectra to operate, lease and manage the City’s Memorial Hall. On June 29, 2012 City Council approved a first amendment to the agreement to change the effective date of the agreement from April 1, 2012 to June 1, 2012. On March 16, 2018 City Council approved a second amendment to the agreement to extend the term of the agreement until December 31, 2019. BACKGROUND: The proposed third amendment to the agreement with Spectra makes two changes. First, it removes the cap of $12,000 per year on the incentive fee to be paid to Spectra. City Staff recommends removing this incentive fee cap in order to give Spectra an incentive to increase food and beverage sales and merchandise sales. The second change to the agreement with Spectra extends the term of the management agreement. The Pueblo Urban Renewal Authority (“PURA”) recently extended the duration of PURA’s agreement with Spectra to manage the Pueblo Convention Center until December 31, 2028. PURA’s rationale for a long-term agreement is that it would make it easier for Spectra to recruit and hire long term employees to work and reside in Pueblo. City Staff recommends that the City likewise enter into a nine (9) year extension of the management agreement with Spectra so that both the PURA and City contracts would be on the same timeline. FINANCIAL IMPLICATIONS: The proposed third amendment does not change the financial framework of the management agreement with Spectra. Spectra will continue to provide the Mayor and City Council with annual proposed budgets for the management and operation of Memorial Hall. As part of its budgetary process, City Council will continue to approve or amend the Memorial Hall operating budgets proposed by Spectra. BOARD/COMMISSION RECOMMENDATION: The governing board of PURA recommends approval of this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: If this Ordinance is not approved, the management agreement with Spectra for operation of Memorial Hall will expire on December 31, 2019. RECOMMENDATION: Approve the Ordinance. Attachments: Proposed Ordinance and proposed third amendment to the management agreement THIRD AMENDMENT TO PRE-OPENING SERVICES AND MANAGEMENT AGREEMENT 1.0 PARTIES. This Third Amendment to Pre-Opening Services and Management Agreement ("Third Amendment") is made and entered into as of August 26, 2019, by and among the CITY OF PUEBLO, a Colorado municipal corporation and a home-rule municipality (the "City") and Global Spectrum, L.P. d/b/a Spectra Venue Management, a Delaware limited partnership ("Spectra"). The parties are sometimes referred to herein collectively as the "Parties" and individually as a"Party". 2.0 RECITALS. The following recitals are incorporated in and made a part of this Third Amendment: 2.1 Pre-Opening Services and Management Agreement. The Parties entered into an agreement entitled Pre-Opening Services and Management Agreement dated May 14, 2012 (the "Agreement") for Spectra to operate, lease and manage the City's Memorial Hall, subject to a specific budget to be approved annually by the City. 2.2 First Amendment to Agreement. On June 29, 2012, the Parties are entered into a First Amendment to the Agreement (the "First Amendment") to change the Effective Date of the Agreement from April 1, 2012 to June 1, 2012. 2.3 Second Amendment to Agreement. On March 26, 2018, the Parties entered into a Second Amendment (the "Second Amendment") to the Agreement is to extend the term of the Agreement until December 31, 2019. 2.4 Third Amendment to Agreement. The purpose of this Third Amendment (the "Third Amendment") is to make revisions to the Agreement as set forth below. AGREEMENT In consideration of the mutual covenants,agreements, and promises in this Third Amendment and other good and valuable consideration,the receipt and adequacy of which is hereby acknowledged, the Parties agree as set forth in this Third Amendment. 3.0 COMPENSATION Section 3.2 of the Agreement shall be amended and restated as follows: "Section 3.2 Incentive Fee. In addition to the Fixed Management Fee, Manager shall be entitled to receive an Incentive Fee each full or partial Operating Year of the Term. The Incentive Fee shall be equal to seven- and one-half percent (7.5%) of gross food and beverage sales(net of taxes only)and net merchandising commissions from all events held at the Facility. The Incentive Fee shall be paid to Manager no later than ninety (90) days following the end of each Operating Year." 1 4.0 TERM AND TERMINATION Section 4.1(a) of the Agreement shall be amended and restated as follows: "(a) The term of this Agreement (the"Term") shall begin on the Effective Date, and,unless sooner terminated pursuant to the provisions of Section 4.2 below, shall expire on December 31, 2028. The parties may extend the Term of the Agreement for 5 additional Operating Years by agreeing to do so in writing no later than 75 days prior to the end of the Term." 5.0 EFFECT OF AMENDMENT. Except as modified by this Third Amendment, the provisions of the Agreement shall remain unchanged and in full force and effect and fully binding on the Parties, their successors and assigns, and the Agreement and this Third Amendment shall be construed together as a single integrated document. IN WITNESS WHEREOF,this Third Amendment is executed by the Parties hereto in their respective names as of the date first above written. CITY OF PUEBLO, a Colorado municipal corporation ATTEST: ��f�/ eiefe/WAer (cholas A. Gradisar ` fl Mayor Ct OtAimLe Brenda Armijo City Clerk Approved as toform by:e / ei0VAZCI Daniel C. Kogovsek City Attorney GLOBAL SPECTRUM, L.P., d/b/a Spectra Venue Management a Delaware limited partnership to 44.4) L xcss-.� By: s- Its: (.}Z=. 2