ADMINISTRATION- Robert Therres, Public Services Mgr./Asst. City Mgr.
Title
ADOPT RESOLUTION CHOOSING NOT TO EXECUTE RIGHT OF RENEWAL FOR NATIONAL SPORTS CENTER ICE ARENA MASTER AGREEMENT
Background
In 1997, the City entered into an Ice Arena Master Agreement with the National Sports Center, Ramsey County, and the City of Coon Rapids for the construction of the first four (4) rinks of the National Sports Center Super Rink. In the agreement, all parties guaranteed the sale of a minimum amount of ice time and if this ice time were not sold the parties would make up the difference. To date, no party to the agreement has had to contribute funds. The minimum amount of ice time has been sold.
The Master Agreement is set to expire January 1, 2024. In the agreement, a clause (pg. 13) allows the parties the ability to renew this agreement with a majority vote of the parties involved in five-year increments with no further financial obligations. To date, the National Sports Center and the City of Coon Rapids have indicated that they will not be renewing the current agreement.
The National Sports Center is requesting that all parties to the original master agreement pass the attached resolution indicating their intent not to execute the right of renewal in the Master Ice Agreement.
As the resolution states, this allows the NSC the necessary time to develop and work with other organizations and associations and develop new agreements to help them finance necessary upgrades to the existing rinks.
This item was discussed at a recent workshop with the consensus that the Council is not opposed to adopting this resolution, as it helps the National Sports Center in getting needed improvements done.
Recommendation
By motion, adopt the National Sports Center Master Ice Agreement Resolution.
Body
PREAMBLE, The Super Rink has met all expectations of the parties in providing quality ice time from October 1998 to present. The Super Rink has operated in the black for 22 years and has never asked the parties to pay for unused ice or capital improvements.
WHEREAS, the current Master Agreement will end December 31, 2023, we believe that now is the time to take three years to plan for the Super Rink’s future, beginning in January 2024 to 2049, and
WHEREAS, the current agreement sets forth terms by which the parties may choose to continue or end the agreement, and
WHEREAS, the Master Agreement states that the Minnesota Amateur Sports Commission (MASC) and the majority of the Super Rink’s Board of Directors must vote to determine whether to continue this agreement, and
WHEREAS, the Master Agreement terms and conditions for continuance (A to F below) pose significant problems for continuance of the Master Agreement. For example as per section XI of the Master Agreement (Note NSCF assessment is italicized):
XI. END OF TERM - RIGHT TO RENEWAL
A. No further guarantees of rental revenue are required from the parties.
By 2023 the facility will require a multi-million-dollar refrigeration system upgrade, as required by law, and additional multi-million-dollar capital improvements. Guarantees of rental revenues will be required for bond financing of the capital improvements. Compressor Room changeout of R-22, dasher boards, scoreboards, sound system, low-e-ceiling, ice resurfacers, signage, banners, paint, and FFE to common areas.
B. MASC with consultation with the parties will establish reasonable operation and capital reservices.
Operation policies are already established and there are no capital reserves.
C. “Profits” above those required for operating reserve purposes shall be distributed pro rata to the parties under such terms and conditions as are determined by the Joint Board.
There are no profits or capital reserve funds to be distributed.
D. Each party may renew its rights in five-year extensions for as long as the facility is operated as a sports facility.
It is untenable for parties to renew rights without financial guarantees and ice hour guarantees to fund required capital improvements. Also, any new agreement must be at least 20-25 years to cover capital improvement bonds and guarantees.
E. If a party elects not to renew its scheduling rights at the end of the original or extended term of this agreement that party will be paid its pro rata share of the operating and capital improvement reserve accounts and shall have no further rights or interest in the facility.
There are no operation profits or capital improvement reserve funds to distribute.
F. Other reasonable terms and conditions and procedures may be imposed by the Joint Board relating to renewal or non-renewal of scheduling rights.
The parties agree not to use this Master Agreement for future operations.
THEREFORE, BE IT RESOLVED that the City of Blaine hereby agrees to conclude its affiliation with the Master Agreement’s term end date of Dec. 31, 2023, and not exercise the Master Agreement End of Term Renewal.
THEREFORE, BE IT FURTHER RESOLVED that the MASC and Super Rink Staff will develop a new Master Agreement by mid 2020 that sets the terms and conditions for January 2024 and beyond, and
THEREFORE, BE IT FURTHER RESOLVED that the City of Blaine and the original parties of the Master Agreement will be given the first opportunity to be a party to the new Master Agreement.
PASSED by the City Council of the City of Blaine this 20th day of April, 2020.