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CR 09-023 Overpass Skate Park Operational Agreement with Action Sports of Minnesota, Inc dba The Third LairDate 3/16/09 G ITY OF C2 NOPKINS Council Report 2009 -023 Overpass Skate Park Operational Agreement With Action Sports of Minnesota, Inc dba The Third Lair Proposed Action Staff recommends adoption of the following motion: Move to approve the Operators Agreement between Action Sports of Minnesota Inc dba The Third Lair and the City of Hopkins for the operation of the Hopkins Overpass Skate Park for the 2009 - 2011 seasons. Overview As a part of the budget reduction efforts in 2004 the City Council instructed staff to find a means of operating the Overpass Skate Park that would reduce the operating cost to the City. This resulted in the park being operated contractually under an Operators Agreement. This model has worked well since 2005 with The Third Lair as the operator. The agreement presented in this report has The Third Lair operating the park under essentially the same operators agreement as the previous years The Third Lair is proposing to operate the park with the same public hours, with no increase in equipment investment, and at the same admission rates for 2009. Primary Issues to Consider • How does the 2009 Operators Agreement differ for the 2006 Operators Agreement? • How will this agreement impact Hopkins residents and park users? • Does the Operations Agreement meet the needs of the City? Supporting Information Hopkins Overpass Skate Park Operating Agreement �l�;Il�w Facilities Director Financial Impact: $ 7,000 1year Budgeted: Y/N Yes Source: Park Dedication Fund Notes: Council Report 2009 -023 Page 2 How does the 2006 Operators Agreement differ from the 2005 agreement? There are no substantive changes in the agreement except for the term (dates) of the agreement. How will this agreement impact Hopkins residents and park users? The park will be open once again as a service to resident skaters & BMX bikers, giving them a suitable place to practice their sport. The park provides a safe location in the community for skaters & bikers, and creates a safe separation between skaters, pedestrians, and motor vehicles. The addition of the new and redesigned equipment each year creates a new experience for those who have used the park regularly in the past. Does the Operations Agreement meet the needs of the City? In past Overpass Skate Park meetings the City Council has impressed upon staff that the Council would like to see a few key objectives met - the skate park is open to the public as much as possible, that the price is affordable, and the park is safe. The Third Lair is committed to staffing the park on the same schedule as previous years and opening more hours there is demand for it. The park admission rate will be as affordable as in years past. The Third Lair will carry the appropriate insurance as recommended to the City by the League of Minnesota Cities Insurance Trust. The Third Lair's insurance provider will require the use of liability waiver forms to be completed by all participants and require helmets and encourage additional safety equipment by all participants. With regards to the budget The Third Lair will pay all operating expenses associated with the park and retain all the revenues generated from the park. The Operators Agreement will eliminate the City's direct expenses associated with the daily operations of the Overpass Skate Park. The last sentence of Section 4, EXPENSES sums this up by stating "It is specifically contemplated and understood by the parties that by the terms of this section, the Owner shall not incur any financial responsibility relative to the Premises during the term of this Agreement." For these reasons staff feels this agreement meets the needs of the City of Hopkins in the operations of the Overpass Skate Park. Hopkins Overpass Skate Park Operating Agreement THIS AGREEMENT ( "Agreement ") is made and entered into effective March 16, 2009, by and between the City of Hopkins, a municipal corporation under the laws of Minnesota ( "City ") and Action Sports of Minnesota, Inc., a Minnesota corporation doing business as The Third Lair, ( "Operator "). The City operates a skate park facility, including the equipment, building, parking lot and other related improvements, all located at 100 Washington Avenue South, Hopkins, Minnesota, known as the Overpass Skate Park (the "Facility "). The City owns the equipment located at the Facility and leases the Facility site ( "Premises ") from the Minnesota Department of Transportation ( "MNDOT "). The City and the Operator desire to enter into an Agreement setting forth the terms and conditions under which the Operator will operate the Facility for and on behalf of the City. The City and the Operator agree as follows: 1. The City hereby hires the Operator and the Operator hereby agrees to operate the Facility pursuant to the terms of the Agreement. 2. Term. The term of this Agreement shall begin April 1, 2009, and shall continue until October 31, 2011, unless earlier terminated by the City. The Operator acknowledges that the City has made no representations or promises to the Operator regarding any renewal or extension of this Agreement. 3. Compensation. Neither the City nor the Operator shall make any direct payment to the other as consideration for the Agreement. As sole compensation for all services to be performed hereunder, the Operator shall receive and retain all revenues of the Facility, including rental or other charges for use of the facility, admission charges, concessions, and income of any kind, subject to payment of expenses of the Facility as herein provided. 4. Expenses. The Operator shall pay all costs and expenses of any nature or kind whatsoever attributable to the Facility or Premises during the term of this Agreement. These costs and expenses shall include, but are not limited to the following: wages and insurance for all employees; utilities, including electricity, telephone, etc: maintenance of the Facility and Premises, including but not limited to sweeping sidewalks and Premises; repair, maintenance and upkeep of the building; repair, maintenance, and upkeep of all equipment and improvements to the Facility and the Premises, either currently placed or to be placed on the Facility or Premises by either the City or Operator, and; all insurance premiums relative to the Premises. It is specifically contemplated and understood by the parties that by the terms of this section, the Owner shall not incur any financial responsibility relative to the Premises during the term of this Agreement. 5. Taxes. Except as specifically provided herein, the Operator shall pay and discharge as they become due all governmental charges on or against the Premises, or on or against the City by reason of its lease of the Premises. The parties contemplate and intend that the Premises shall be and remain during the term of this agreement exempt from general real estate taxes. If such taxes become payable upon the Premises during the term hereof, the Operator shall pay or reimburse the City for the amount thereof, less that part of such taxes payable to or levied by the City of Hopkins or any instrumentality thereof. 6. Use of Premises. Subject to other terms and provisions contained herein, and for the period of time beginning each year of this Agreement on April 1 and continuing through October 31, the Operator shall cause the Premises to be used for the following purposes and subject to the following restrictions: A skate park facility and any use incidental thereto or any other use agreed upon in writing between the parties hereto. During the terms of the Agreement or any renewal thereof, the Operator shall comply with all applicable laws affecting the Premises, whether federal, state, or local. The Operator shall not commit or allow to be committed any waste on, destruction or damage to, or nuisance on the Premises. Should the Operator commit or allow to be committed any waste on or damage or destruction to the Premises, the Operator shall immediately restore the Premises to the original condition of the Premises at the inception of this Agreement or as the Premises have been improved by either the City or Operator, subject to ordinary wear and tear. The Operator must operate the Facility and Premises in strict compliance with the terms of the MNDOT lease, a copy of which is attached hereto as Exhibit A. 7. Care of Premises. All care, maintenance, and repair of the Premises and all improvements currently placed thereon or to be placed thereon shall be the sole responsibility of the Operator and shall be performed at the Operator's expense. 8. City's Right to Enter. The Operator shall permit the City and the agents and employees of the City to enter into and on the Premises at all reasonable times for any proper purpose. 9. Assignment and Subletting. The Operator shall not assign this Agreement or let the Premises or any part thereof, whether by voluntary act, operation of law, or otherwise, without the prior written consent of the City in each instance, except that the Operator may permit use of the Facility, for rental, admission or other charges, in the normal course of business, without such consent. Consent by the City to any assignment of this Agreement or to any letting of the Premises or part thereof shall not be a waiver of the City's rights under this Agreement as to any subsequent assignment or letting. The City's right to assign this Agreement is and shall remain unqualified and no assignment by the City shall release the Operator of any of its obligations under this Agreement. If the Operator is a corporation, any transfer of this Agreement through merger, consolidation, corporate reorganization, or liquidation or any transfer, or hypothecation, shall constitute an assignment of this Agreement requiring the prior written consent of the City. 10. Improvements and Alterations. Except as otherwise provided in Paragraph 10.A below, the Operator shall not be permitted to make any improvements or alterations to the Premises without the prior written consent of the City, except, however, the Operator shall, at its expense, make any repairs to the premises which are needed to maintain the Premises in the same condition they were in at the inception of this Agreement or as improved, subject to ordinary wear and tear. A. The Operator shall acquire and install at the Facility the equipment described annuallyin Exhibit B Improvements & New Equipment attached hereto (the "New Equipment "). The New Equipment shall not exceed a total price, installed, of $21,000. The Operator must acquire and install not less than $7,000 of the New Equipment by May 31, 2009, not less than $14,000 of the New Equipment by May 31, 2010, and the balance of the New Equipment by May 31, 2011. Failure to meet this condition is cause for the City to terminate this Agreement. Prior to April 1 of each year of this Agreement, the Operator shall provide the City with a Construction Plan detailing the New Equipment to be acquired and installed by May 31 of that year. The City will reimburse the Operator for the New Equipment on the following schedule: $7,000 on or before June 15, 2009, upon receipt from the Operator of written proof of acquisition and installation of New Equipment equal to or exceeding $7,000; an additional $7,000 on June 15, 2010, upon receipt from the Operator of written proof of acquisition and installation of New Equipment equal to or exceeding at least $14,000; the final $7,000 on June 15, 2011, upon receipt from the Operator of written proof of acquisition and installation of New Equipment equal to or exceeding at least $21,000. The Operator warrants that the New Equipment will be free from defects in material and workmanship for a period of one year from the date the New Equipment is installed. 11. Mechanic's Lien The Operator shall not permit any mechanic's lien, judgment or other lien of any type to encumber the Premises. 12. Covenants to Hold Harmless. The Operator shall indemnify, defend, and hold harmless the City and its agents and its employees from and against all claims, damages, losses, and expenses, including attorney's fees, arising out of or resulting from the maintenance or use of the Premises, provided that any such claim, damage, loss, expenses is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than said property itself) including the loss of use resulting therefrom. The Operator also shall indemnify, defend and hold harmless the City and its agents and its employees from and against any claims for costs or expenses incurred to operate the Facility during this Agreement, said obligation to indemnify to include any attorney's fees incurred by the City as a result of such a claim. 13. Insurance. A) Liability: The Operator shall maintain comprehensive general liability insurance with a limit of not less than $1,000,000 per each occurrence and shall provide a certificate of insurance showing evidence of such insurance before operating the Facility in any manner. This insurance shall cover liability arising from premises operations, independent contractors, personal injury and advertising injury, and contractually assumed liability. The City shall be named as an additional insured under the comprehensive liability insurance. B) Workers' Compensation Insurance: The Operator shall provide a certificate of insurance showing evidence of workers' compensation coverage or provide evidence of qualification as a self - insurer of workers' compensation. 14. Default. In the event of any default of this Agreement by either party, which remains unremedied after ten (10) days written notice specifying the default, the aggrieved party may, in addition to any other rights or remedies it may have, by written notice declare this Agreement to be terminated, in which case all rights and liabilities hereunder shall cease, and the Operator shall forthwith surrender the Premises to the City. 15. Ownership of Improvements on Termination of Agreement. The City is and shall be the absolute owner of any structures or other improvements of any nature or kind situated on the Premises at the beginning of the Agreement or installed after the beginning of the Agreement, regardless of who placed such structures or other improvements thereon, and specifically including but not limited to the New Equipment, and the Operator shall not have any interest whatsoever therein. The City shall have no obligation to compensate the Operator for any monies expended by the Operator for construction of structures or other improvements on the Premises other than for those specifically requested in writing by the City. 16. Amendments, Modification, and Waiver. No amendment, modification, or waiver of any condition, provision, or term of this agreement shall be valid or of any effect unless made in writing, signed by the party or parties to be bound or it's duly authorized representative, and specifying with particularity the extent and nature of such amendment, modification, or waiver. Any waiver by any party of any default of another party shall not affect or impair any right arising from any subsequent default. 17. Notices. Any notice, demand, or other communication required or permitted to be given hereunder shall be deemed delivered and effectively given when delivered personally to the representatives of the City and Operator identified below or one (1) business day after being mailed by registered or certified mail, return receipt requested, addressed as follows: To City: City of Hopkins Attention: City Manager 1010 First Street South Hopkins, MN 55343 To Operator: The Third Lair Attention: Mark Muller 850 Florida Ave. S. Golden Valley, MN 55426 Copy to: Wynn Curtiss Miller, Steiner & Curtiss, P.A. 1011 First St. S. #400 Hopkins, MN 55343 Either party may change its address or the identity of its designated representative named above by written notice to the other party in the manner stated in this paragraph. 18. Miscellaneous Provisions: a. The captions and headings used in this Agreement are used for convenience only and shall not be used in construing or interpreting of this Agreement. b. The Operator is an independent contractor of the City, and shall act only pursuant to and in accordance with the terms of this Agreement. No provision of the Agreement, or any acts of the parties hereto, shall be deemed to create a partnership or joint venture between the City and Operator. C. This Agreement represents the entire Agreement between the City and the Operator with respect to its subject matter, and supersedes all prior agreements between the parties related to the subject matter of this agreement. Any amendment to this Agreement must be in writing and signed by both parties. d. The Operator agrees that it shall comply with all state and federal codes, statutes, rules, regulations and ordinances applicable to the performance of its duties and responsibilities under this Agreement. e. Each and every provision of this Agreement is intended to be severable. If any term or provision hereof is determined to be illegal or unenforceable for any reason whatsoever, such term or provision shall be severed from this Agreement, and shall affect the validity of enforceability of the remaining terms and provisions of this Agreement. f. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, the parties hereto have executed and entered into this Agreement effective as of the date first above written. CITY OF HOPKINS ACTION SPORTS OF MINNESOTA, INC. Its Its By By Its Its Exhibit B — Improvements & New Equipment To: Jay Strachota, City of Hopkins From: Mark Muller, 3rd Lair SkatePark Re: 2009 New Equipment / Construction Plan Below is The Third Lair's plan for improvements and maintenance at the Overpass Skatepark for the 2009 season: • General cleaning, sweeping, pressure washing ramps and grounds o The first initial spring cleaning of the facility is fairly large • Painting — all the surfaces that have been painted already: all ramps, sides of ramps and the attendants shack o Essentially the entire facility will be painted. There is salt damage & a sand - blasting effect that happens over the winter; thus all surfaces must be re- painted each year. • Puckering seams will be cut out and replaced with new Skatelite o This is the most cost - effective way to handle this ongoing maintenance issue • Our new obstacle that we are building this year will be a combination of a quarter -pipe and a spine ramp in the main street area. We are going to re- arrange the small skateboarder spine that is on the east side of the street course and bring it over to the west side. Then we are going to move the medium size spine over to the east and build a bigger spine right next to it that is more BMX friendly. The east side of the park is slowly transforming into the preferred BMX zone. The BMX'ers enjoy these larger sized ramps. 2009 Budget: $7,000 in materials and labor.