CR 06-046 Overpass Skate Pk Operationals Agreement with 3rd Lair
CITY OF
-
Date 4/18/06
HOPKINS
Council Report 2006-046
Overpass Skate Park Operational Agreement With
The Third Lair
Proposed Action
Staff recommends adoption of the following motion: Move to approve the Operators
Aqreement between The Third Lair and the City of Hopkins for the operation of the
Hopkins Overpass Skate Park for the 2006 - 2008 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 worked well in 2005 with The Third Lair as the operator under a
one-year agreement. At a season concluding work session in September of 2005
council and staff discussed and agreed that an agreement with a longer term than one-
year would add stability to the operation and allow the operator to create a long-term
plan for bringing skaters to the facility. The agreement presented in this report has The
Third Lair operating the park under essentially the same Operators Agreement as the
previous year with the exception of the term being 3 years and the improvements
investment by the City reduced from $10,000 per year to $7,000 per year. The Third
Lair is proposing to operate the park with public hours similar to the hours of operation
in previous years and at per skater admissions rates similar to previous years
Primarv Issues to Consider
. How does the 2006 Operators Agreement differ for the 2005 Operators
Agreement?
. How will this agreement impact Hopkins residents and park users?
· Does the Operations Agreement meet the needs of the City?
Supportina Information
. Hopkins Overpass Skate Park Operating Agreement
y trachota
acilities Director
Financial Impact: $ 7.000lvear Budgeted: Y/N No Source: 2006 unforeseen
event 2007-2008 budaet item
Notes:
Council Report 2006-046
Page 2
How does the 2006 Operators Aareement differ from the 2005 aQreement?
The only substantive change in the agreement from the previous agreement is in
section 2. Terms., and Section 10, Improvements and Alterations.
Section 2. Terms., Changes the term of the agreement from a one-year agreement to a
three- year agreement. Note that this section gives the City full right to terminate the
agreement.
Section 10. Improvements and Alterations. This section addresses a $7,000 investment
by the City into equipment that the Operator will build ~ach year of the agreement. As of
the signing and approval of this agreement the Operator has not yet submitted a new
equipment plan. Staff is working with The Third Lair to receive this document and not
concerned that it is yet to be received. Constructing new equipment at the park each
year is a condition that is in the agreement at The Third Lairs request so staff is
confident they will submit a plan, and complete the construction by the May 31 date
specified in the agreement. No compensation is owed, or will be directed too, The Third
Lair until the new equipment plan is approved by staff, and construction of the
equipment is complete.
How will this aQreement impact Hopkins residents and park users?
The park will be open once again as a service to resident skaters, giving them a place
to practice their sport. The park provides a safe place in the community for skaters, and
creates a safe separation between skaters, pedestrians, and motor vehicles. The
Third Lair has stepped up efforts to attract resident skaters by teaming up with
HopkinslMinnetonka Recreation Services in advertising programs of the Overpass in
this summer's recreation brochure. The addition of the new equipment will create a new
experience for those who have used the park regularly in the past.
Does the Operations Aareement 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 making a commitment that the park be open as much as previous
years and more if successful. 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 City Attorneys office reviewed and
made the necessary revisions to the Operators Agreement to address the City's
concerns. 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
Council Report 2006-046
Page 3
Agreement will eliminate the City's direct expenses associated with the 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
31, 2006, 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 1 00 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
ofthe 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, 2006, and shall
continue until October 31, 2008, 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 oftms 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 ofthis 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 payor 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 oftime 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, th~ 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
in Exhibit B 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,
2006, not less than $14,000 of the New Equipment by May 31, 2007, and the
balance of the New Equipment by May 31, 2008. 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 15,2006,
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, 2007, 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 15,2008, 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 ofImprovements 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
10 10 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 ofthe
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.
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