00-547ORIGINAL
Council File # OQ � 5 � �
Green Sheet # � O` �3 �} �
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA
Presented By
Referred To
Committee: Date
RESOLUTION APPROVING MANAGEMENT AGREEMENT
FOR RIVERCENTRE WITH SAINT PAUL ARENA COMPANY, LLC
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WIIEREAS:
1. On May 31, 2000, the $oard of Commissioners of the Saint Paul RiverCentre
Authority ("Authority") approved an agreement between the Civic Center Authority, an agency of
the City of Saint Paul (also lrnown as RiverCentre Authority) and Saint Paul Aren� Company, LLC
("SPAC") for the management of RiverCentre (the "Agreement").
2. The Agreement provides that SPAC will manage the RiverCentre, including the
Convention Center (known as"Touchstone Energy Place"), the Roy Wilkins Auditorium and
RiverCentre parking ramp south of Kellogg Boulevard.
3. Pursuant to Laws of Minnesota, 1973, Chapter 538, the Authority may contract out
the management of the parking ramp and that any such contract must be approved by the Council
of the City of Saint Paul.
NOW, THEREFORE, BE IT RESOLVED:
20 1. The City CounciI hereby approves the Agreement in substantially the form submitted
21 and authorizes the Mayor and Director, Office of Financial Services to execute the Agreement. The
22 approval hereby given to the Agreement includes approval of such modifications thereof, deletions
23 therefrom and additions thereto that may be necessary and appropriate and approved by the Director,
24 Office of Financial Services and the City Attorney.
Aequested by Department of:
Adopted by Council: Date
Adoption Cer�tified by Cour�.'�Il Secretasy
By: �
Approved
By: _
a-a O II
By:
Form Appro d by ity Attorne
By:
Approve y ayor for Submission to Council
By:
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Agreement for RiverCentre
between
� Civic Center Authority, an Agency of the City af Saint Paul
(also known as RiverCentre Authority)
and
Saint Paul Arena Company, LLC
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TABLE OF CONTENTS
Section 1. Engagement of Manager; Services
1.1 Engagement ...................................
12 Scope of Services ..........................
13 Specific Services ...........................
1.4 Operating Standazds ......................
Section 2.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Termand Termination .................................................................................
Term............................................................................................................
**[intentionally deleted]** ................................
...............�-�----....................
Optional Termination .............�--..................................................................
Termination for Default ...............................................................................
Arena-Related Rights to Terminate .............................................................
Termination for Failure to Fund ..................................................................
Effect of Termination ..................................................................................
....................2
....................2
....................2
........6
........6
..............7
..............8
..............8
Section 3. Authority Oversight and Authority Representative; Use by Authority ...............................9
3.1 Oversight and Authority Representative .............................................................................9
3.2 Use by the Authority .........................................................................................................10
Section 4. Contracts Regarding RiverCentre .....................................................................................11
4.1 Extraordinary and Ordinary Contracts ..............................................................................11
4.2 Contract Administrator ......................................................................................................12
43 Contracts with Affiliates ...................................................................................................13
4.4 Mutually Advantageous Arrangements .......:.....................................................................13
Section 5.
5.1
5.2
53
5.4
5.5
5.6
5.7
Section 6.
6.1
62
63
6.4
6.5
6.6
6.7
6.8
6.9
Personnel ....................................................................................................................
Employment and Supervision; Appointment of Executive Director ..........................
Existing Employees ....................................................................................................
Collective-Bargaining Agreements ............................................................................
Offers Employment ................................................................................................
Employee Benefits ..............................�---...................................................................
Assumed Obligations .................................................................................................
NoSolicitation ............................................................................................................
dperating Year; Budgets; Reports ............................
Calendaz ...........................................................
Operating Budgets ....................................................
Accounting, Recording and Allocations ...................
Monthly and Annual Reports ...................................
Capitaa F,xpenditur�s ......................-............----------
Authority Administrative Budget .............................
City Counci! Approvai ...� .........................................
Modifications to Badgets .........................................
Ogerating Standazds ...................................•----.........
� Section 7. Receipts and Disbursements; Funding ...............
7.1 Receipts and Disbursements ...............................
.......14
.......14
.......14
.......15
.......I S
.......16
.......16
.......17
........................................... � I 8
............................................ � 18
................................................18
.............................................1-819
................................................20
................................................21
................................................22
............................................�23
....-• ..........................................23
................................................23
..........................23
..........................23
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72 Funding ..............................................................................................................................24
73 NoObligationofManagertoFund ...................................................................................24
Section 8. Management Fees; Commissions ..................................................................................�425
8 .1 Management Fees .....................°°---°-......................-°--..........................--°-°-°°°---....�
8.2 Base Amoants ......................................................................................�-----.......................25
83 QualityAmounts---- ......................................°-°-........°°----.......---°-..............................25
8 .4 Revenue Amounts .......-�---� ............................................................................................�
8 .5 Commissions .................................................................................................................�627
8.6 Limitation ..........................................................................................................................28
8 .7 Prorated Amounts ..............................................................................................................28
Section 9. Indemnification and Insurance ......................................................................................�130
9 .1 Indemnification .................................................................................................................�9
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Section 10. Ownership of Assets; Related Obligations; Audit Rights ................................................33
10.1 Ownership ........................................................................................................................33
10.2 Authority Obligations .......................................................................................................34
103 **[intentionallydeleted]r ............................................................................................3435
Section 1I . Representations and Warranties ....................................................................................3435
I I.1 Representations and Warranties of Manager .................................................................3435
11.2 Representations and Warranties of the Authority .............................................................36
Section 12.
12.1
122
123
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
12.13
12.t4
12.15
12.16
I2.37
Other Provisions ...............................................................................................................37
Relationship ......................................................................................................................3 7
Severability ....................................................................................................................3�3 8
Force Majeure; Certain Changes to RiverCentre ..........................................................3�38
Waiver ...........................................................................................................................3440
Headings; References Of Inclusion ...............................................................................3940
Entire Agreement ..........................................................................................................3940
Surviva1 .............................................................................................................................40
Third Party Beneficiaries ...................................................................................................40
Assignment ........................................................................................................................40
Goveming ..............................................................................................................4A41
Dispute Resolution ........................................................................................................4841
Jurisdiction Venue ...................................................................................................4�42
Negotiated ..........................................................................................................4�-42
Notices ...............................................................................................................................42
Amendment ...................................................................................................................4�43
Counterparts ......................................................................................................................43
Compliance I,aws..._� .......................................................................�-----....................43
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Exhibit A
Exl�ibit 13
E�ibit 32
E�thSbit 4.I
Eachibit 5.2
Exhibit 5.5
E�tibit 62
Diagam ofRiverCentre
RiverCentre Event Booking Policy
Recurring Events
Contracts Currently in Effect
Information Regazding Existing Employees
Employee Benefiu Provided by Manager
Format of Operating Budget
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Defined Term
50% Test
Administrative Budget
Ageement
Annual Report
Annual Report Date
Approved Capital Budget
Approved Operating Budget
Arena
Arena Lease
Authority
Authority Approval
Authority Representative
Base Amounts
City
Continuing Obligations
Dispute Notice Date
Executive Director
Existing Employee
Extended Contract
Extraordinary Contract
Force Majeure Event
Gross Revenue
Hired Employee
Indemnified Pac
Indemnifying Party
Losses
Manager
Manager Representative
Monthly Statement
Multi-Year Project
New Contract
Nevv Rea��nue
Offer
One Time Retirement Cost
Operating Accounts
List of Defined Terms
Section Reference
8.6
6.6
Introduction
6.4
6.4
6.5
62
Introduction
Introduction
Introduction
3.1
3.1
8.1
Introduction
2.7
12.11
5.1
52
8.5
4.1
123
8.4
5.6
9.1
9.1
9.1
Introduction
3.1
6.4
6.5
8.5
8.5
5.4
5.6
7.1
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Defined Term
Operating Standazds
Optional Termination Date
Ordinary Contract
Preliminary Report
Prorated Tazget
Quality Amounts
Revenue Amounts
RiverCentre
RiverCentre Authority
RiverCentre Contract
Signing Date
Start Date
Term
Section Reference
1.4
23
4.1
6.4
8.7
8.1
8.1
IntroducTion
Introduction
4.1
4.1
2.1
2.1
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AGREEMENT FOR RIVERCENTRE
THIS AGREEMEN'I' FOR RIVERCENTRE (this "AgeemenP') is made and entered into this
_ day of June, 2000, by and between the Civic Center Authority (also known as "RiverCentre
Authority"), an agency of the City of Saint Pau] (the "Authority"), and Saint Paul Arena Company, LLC,
a Minnesota limited liability company ("Manager").
WHEREAS, the City of Saint Paul (the "City") owns the facilities in downtown Saint Paul,
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Minnesota, known as RiverCentre, including the convention center known as "Touchstone Energy Place,"
the Roy Wilkins Auditorium, and the RiverCentre parking ramp south of Kellogg Boulevazd (plus any
pedestrian connection constructed linking RiverCentre to the City's skyway system) shown on E�ibit A
(collectively, "RiverCentre"), and the Authority has the authority and responsibility to provide for
management and oversight of RiverCenue; and
WHEREAS, Manager is engaged in the business of providing management services for public
assembly facilities, including the sports and enteRainment arena (owned by the City) cunently under
construction adjacent to RiverCentre (the "Arena"), which is subject to an Arena Lease dated January 15,
1998 {the "Arena Lease"), among the City, the Authoriry and Minnesota Hockey Ventures Group, LP, as
Tenant, which Arena Lease has been assigned by Tenant to Saint Paul Arena Company, LLC; and
WHEREAS, Manager desires to provide management services for RiverCentre and the Authority
desires to obtain such management services from Manager, on the terms and conditions stated herein;
NOW T'AE1tE�ORE, in considera�ion of the mutuad coavenants, terms, conditions, and
abli�ations stated herein, and intending themselves to be legally bound hereby, the Authority and
� Mana�er hereby agree as follows:
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Section 1. Engaeement of Manager; Services
1.1 En¢aeement. The Authority hereby engages Manager to manage, operate, maintain,
market and promote RiverCentre for public purposes (in accordance with Minnesota Laws 1967,
Chapter 459, as amended to date), and Manager hereby accepts such engagement under the terms and
conditions provided below. This Agreement shall be consistent with all ]aws governing RiverCentre,
including special legislation.
1.2 Scone of Services. Manager shall perform and provide such management services as are
needed to manage, operate, maintain, and promote RiverCentre in a manner consistent with this
Agreement. Subject to the limitations stated in this Agreement, Manager shall have general responsibility
� and authority to conduct operations of RiverCentre and activities therein on behalf of the Authority.
1.3 Soecific Services. In the course of managing RiverCentre hereunder:
(a) Manager shall, from time to time, hire, promote, supervise aad direct all
employees and other personnel at RiverCentre (including work assignments, compensation, benefits,
performance reviews, discipline and discharge) in a manner consistent with this Agreement.
(b) Manager shall supervise all contractors, subcontractors and other contracting
parties providing goods or services to RiverCentre (including food service, maintenance and security) and
shall negotiate renewals, extensions and replacements for the provision of such goods and services from
time to �e and repore such renewals, extension� �rea3 replacements to the Authority (all in accordance
with Section 4 ofthis Agreement).
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(c) Manager shall manage capital improvements of RiveiCentre, including the
bidding process for each improvement and supervision of the construction thereof, in each case subject to
the applicable Approved Capital Budget (as hereinafrer defined).
(d) Maaager shall arrange to rent, lease or purchase such equipment and supplies as
are needed from time to time for the operation and maintenance of RiverCentre, in each case subject to
the applicable Approved Operating Budget (as hereinafter defined).
(e) Manager shall arrange for payment on behalf of the Authority of all operating
expenses for RiverCentre as contemplated in each Approved Operating Budget.
(� Manager shall, on behalf of the Authority, take such actions as Manager shall
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deem necessary to collect charges, rents or other amounts due to RiverCentre, or to enforce or pursue
damages under any license or other agreement regarding RiverCentre (including such legal actions or
proceedings as Manager may deem necessary).
(g) Manager shall maintain complete records and schedules for booking events and
other uses of RiverCentre.
(h) Manager shali provide, on behalf of the Authority, day-to-day administrative
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services to suppoR operations of RiverCentre, including budgeting and accounting; payroll; billing,
collections and disbursements; obtaining insvrance (as provided hereinafter); and maintaining on the
Authority's behalf such permits and licenses as are required to operate RiverCentre under such laws and
rules of government agencies as are applicable to opera�aons of RiverCentre.
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(i) Manager shall book and schedule events to take place at RiverCentre (in each
case subject to the Authority's event-booking policy, a copy of which is set forth in E�ibit 13), shall
consult regu]azly with the Authority Representative on the scheduling of events to ensure that RiverCentre
benefits from all scheduling decisions, shall advertise and promote use of RiverCentre for purposes of
realizing its full potential, and, in connection therewith, may use the names "RiverCentre," "Touchstone
Energy Place," "Wilkins Auditorium," "RiverCentre Authority" and "Civic Center Authority of Saint
Paul" and related logos and other marks for each, as well as names, logos and other mazks of each part of
RiverCentre as in effect from time to time. Manager will masimize operations and bookings of
RiverCentre to a capacity that is consistent with the spirit of this Agreement.
(j) Manager shall solicit, promote and sell on the Authority's behalf advertising at
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RiverCentre and sponsorships of RiverCentre (in each case consistent with the terms of agreements then
in force) and shall pursue opportunities for advertising and sponsorship that include both RiverCentre and
the Arena (in each case subject to Section 4, re(ating to contracts). Manager shall consult with and obtain
approval from the Director, Office of Financial Services (City of Saint Paul), before signing any
agreement that results in "private business use" of RiverCentre (within the meaning of Section 141(b) of
the Intemal Revenue Code of 1986, as amended, and Treasury Regulations § 1.141-3 thereunder) or could
reasonably be intetpreted as resulting in such "private business use."
1.4 Ooeratine Standards
(a} The Autharity and Manager acknowledge and agree that a principal objective of
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this Agreement is to manage RiverCentre in a manner that is reasonably prudent, consistent with
operatio�s of other fir,t-class public faciiities and consistent wsth the public investment that has been
made in RiverCentre. In addition, Manager acknowledges that these are public facilities and, as such, the
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� public has a right to expect that such facilities are managed in a manner that is consistent with the public
investment that has been made.
(b) To that end, "consistent with" will refer to all azeas of operations, including, but
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not limited to:
(i) interior and exterior appearance of all facilities
(ii) employee performance
(iii) operation of aIl facilities
(iv) concessions and public facilities
(v) customer service
(vi) mazketing and promotion of all facilities
(vii) customer satisfaction of all facilities
(viii) ingress and egress for parking
(ix) load and unload times for loading docks
(x) cleanliness, responsiveness and quality of food and beverage service
(xil securiri
(c) Manager shall provide the services hereunder in such a manner not only to
achieve such standards in 2001, but also to commit to meeting or exceeding such standards for each year
as set forth in the Approved Operating Budget for such yeaz (the "Operating Standards").
(d) In addition to general guidelines developed by the Authority Representative, in
consultation with Manager and r�viewiva the practices and operatians of other similaz public facilities,
the Authority Representati�e will use the fo)lowing Ynols to determine if the Operating STandards have
been achieved:
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(iii) general public surveys
(iv) Convention and �sitors' Bureau interviews
(v) RiverCentre Authorety interviews
(i) customer surveys
(ii) vendor surveys
Section 2. Term and Termination
2.1 Term. The period during which Manager shall provide services hereunder and during
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which the Authoriry shall purchase and pay for such services in accordance with this Agreement (the
"Term") shall start on July 1, 2000 (the "Start Date"), and end on December 31, 2004, unless terminated
sooner as providsd in th4s Agreement.
2.2
**�intencionalty deletedl**
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Optional Termination. June 30, 2003, shall be the "Optional Termination Date." Each of
the Authority and Manager shall have the right to terminate this Agreement, effective on the Optional
Termination Date and without cause or penalty, by giving notice of such termination to the other at least
90 days before such Optiona] Termination Date.
2.4 Termination for Default
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(a) If either party shall fail to pay when due any acnount payable hereunder, then the
other party sha11 have {in addit'son to such party's rights to enforce this Agreement and receive
indemn�cazian for any breach hereof} the right To give notice of such default. If such amount is not paid
within ] 0 days following the giving of such notice, then the party giving such noTice may terminate this
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� Ageement by notice of termination given within 30 days following the end of such 10-day period. If this
Agreement is terminated under this paragraph (a), then the terminating party shall have no further
obligations under this Agreement after such termination (other than Continuing Obligations (as hereinafter
defined)), but the defaulting party shall continue to be liable for such defautt and for all damages caused by
the defaulting party's breach of this Agreement
(b) If either party shall fail to perform any of such party's material obligations under
this Agreement (other than a failure to pay when due any amount payable hereunder), then the other party
shall have (in addition to such party's rights to enforce this Agreement and receive indemnification for any
breach hereofl the right to give notice describing such failure with particulariry. Upon receipt of such
notice, the failing party (i) shall take all reasonable actions to promptly cure such failure or (ii) if such
failure cannot then be cured in all respects (whether due to expiration of a time period or otherwise), shall
take all reasonable actions to cure such failure to the e�ent possible and to prevent recurrence of such
� failure. If the failing pariy does not comply with its obligations under this pazagraph (b) within 60 days after
receipt of such notice of failure, then the party giving such notice of failure may terminate this Agreement
by notice of termination given within 30 days following the end of such 60-day period. If this Agreement is
terminated under this paragraph (b), then the terminating party shall have no further obligations under this
Agreement after such termination (other than Continuing Obligations), but the defaulting party shall
continue to be liable for such default and for ali damages caused by the defaulting party's breach of this
Agreement.
2.5 Arena-RelatedRishtstoTerminate. If
(a) the Arena Lease were terminated in accordance with its terms as a result of a
defauhbythetenantthereunderor
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(b)
Manager ceases to have a contractual ri�ht to manage the Arena or ceases in fact to
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manage the Arena,
then the Authority shall have the right to terminate this Agreement by notice of termination given to
Manager within 30 days following such termination of the Arena Lease or such cessation.
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2.6 Termination for Failure to ��:Approve_ With respect to each Approved Operating
Budget, if funds aze no'°-- `-� «'�° "..«'��-:�, ^^'' approved by the Authoritv and eiven
preliminarv approval bv ihe Mavor and City Council at least 60 days prior to the beginning of the year to
which such Approved Operating Budget applies (and made available in°- �m�..�` �..`��:°-' «,. r....,,
' accordance with Section ^°°'- "°-��� - a ^-°-°`�°° a° . then
Manager shall have the right to terminate this Agreement by notice of termination given to the Authority
at least 60 days prior to the termination date stated in such notice.
2.7 Effect of Termination
(a) Upon any termination, Manager shall deliver to the Authority any funds and
other property belonging to the Authority then in Manager's control, and the Authority shall reimburse
Manager for any expenses previously incurred by Manager on behalf of the Authority, plus any unpaid
amounts under Section 8(prorated as provided in Section 8), less any amounts then owed by Manager to
the Authority as a result of such termination or otherwise.
(b) Upon te�inatiun, the Aaathority shall cause any successor manager of
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RiverCentre (whether a private contractor or public body) to (i) employ following the date of termination
(but subject to dischazge for cause) each employee of Manager then employed at RiverCenve and
(ii) assume and pay all of the assumed obligations under Section 5 not previously satisfied.
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Norivithstanding the foregoing, however, if Manager has designated one senior manager for continued
employment by Manager, then the Authority would not solicit that manager or otherwise offer
employment to that Manager. The foregoing shall not, however, prohibit the Authority from empioying
such designated senior manager if such manager applied independently for such employment (for
example, in response to a general employment advertisement published by the Authority), without any
solicitation by the Authority.
(c) Notwithstandingany termination of this Agreement, the parties shal] continue to be
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bound by their respective obligations under Section 9.1 (relatingto indemnification), Section ] 0(relating to
ownership), Section 5(relating to personnel), Section 8(to the extent of any fees, commissions or other
amounts thereunder becoming payable after termination) and Section 12 (relating to the relationship of the
parties and other matters), which are the "Continuing Obligations," and such sections shall survive any
termination of this Agreement.
Section 3. Authoriri Oversiaht and Authoriri Renresentative: Use bv Authoritv
3.1 Oversi¢ht and Authoriri Renresentative. All assets, revenues, obligations and expenses
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of RiverCentre shall be held and incurred by Manager for the Authority's account, and the Authoriry shall
oversee operations of RiverCentre and its financial results through the budget and reporting process
specified in Section 6. Manager shall report to the Authority through an individual designated by the
Authority as "Authority Representative," who shall be an employee or consultant of the Authority.
Manager shall designate its highest ranking officer to report to the Authority Representative as the
"Manager Representative" described an this Ageement. The Authority shall designate the Authority
Representative by noYice io Manager within five days afrer tiae date of this Agreement and shall thereafter
from time to time redesignate, replace and otherwise take such action as necessary to cause there to be a
duly designated and authorized individual serving as Authority Representative at all times. The AuthoriTy
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� shall cause the Authority Representative to oversee performance of this Agreement, respond to Mana�er's
inquiries and consult with Manager at all times regazding the operations of RiverCentre and achievement
of its public-purpose objectives. The Authority shall authorize and cause the Authority Representative to
review actions proposed by Ma�ager that require approval by the Authority hereunder and, with respect to
such proposed action, receipt by Manager of written approval signed by the Authority Representative
shall be "Authority Approval" rovided however, that any approval of an Extraordinary Contract,
proposed operating budget or proposed capital budget shall also require the approval of the Authority's
Commissioners and signature of the Authority's chair). If at any time Manager submits to the Authority
or the Authority Representative notice of any proposed action and the Authority Representative does not
provide to Manager notice of approval or disapproval of such proposed action within 15 days following
the date on which Manager gives such notice, then Authority Approval for such action shall be deemed to
have been given by the Authority on the 16' day following such date.
� 32 Use bv the Authoritv. The Authority shall have the right to use RiverCentre for events of
the Authority or the City or their respective designees and for the benefit of the community (including, for
example, Authority meetings, training for Authority personnel and public events) on a rent-free or
reduced-rent basis, as the Authority may determine from time to time. Direct expenses related to such
rent-free or reduced-rent use (including, for example, utilities, heating and air conditioning, insurance,
and personnel for stage work, electrical work, tickets, cleaning, security and other services) would be paid
by the AuthoriTy or its designee. Such use by the Authority shall be subject to such terms as the Authority
and Manager may determine from time to time, shall not unreasonably compete or conflict with paying
events at RiverCentre, and sha31 be booked in advance (and may be moved from their respective
customary dates) with reasonable notice in accordance with RiverCentre policies having Authority
Approval, as in effect from time to time. E�ibit 3.2 is a list of recurring events that the parties expect to
accommodate under this section.
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� Section 4. Contracts Re¢ardine RiverCentre
4.1 Extraordinarv and Ordinarv Contracts.
(a) "RiverCentre Contract" shall mean at any time a use agreement, license, provider
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(i)
such in E�ibit 4.1,
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Exhibit 4.1,
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agreement, supply contract, service agreement and other contract or agreement of any kind (other than
any collective-bazgaining agreement) that is in effect at such time with respect to RiverCentre (and shall
include each Extraordinary Contract and each Ordinary Contract, as defined below). E�ibit 4.1 is a list,
provided by the Authority, of each RiverCentre Convact in effect as of the date of this Agreement. Each
use agreement shall contain a provision reserving to the Authority the right to receive 20 promotional
seats without charge (in each case in accordance with the Authority's most recent resolutions, of which
Manager shall have received copies by notice to Manager hereunder).
(b) "Extraordinary ContracY' means only
the primary parking-management contract for RiverCentre, designated as
the primary concessions contract for RiverCentre, designed as such in
the primary food-and-beverage catering contract RiverCentre, designated
as such in E�ibit 4.1,
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(iv)
any contract referred to in clause (i), (ii) or (iii),
any RiverCentre Contract that replaces, extends or substantially amends
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(v) any RiverCentre Contract for sponsorship or advertising that creates
signage rights at RiverCentre for more than 30 consecutive days,
(vi) any RiverCentre Contract that, on the date when signed (the "signing
date"), creates non-terminable obligations that bind RiverCentre or the Authority and extend
more than 90 days beyond the Term, and
(vii) any RiverCentre Contract that the Authority may from time to time
designate by notice to Manager as an Extraordinary Contract.
(c) "Ordinary ContracP' means any RiverCentre contract that is not an Extraordinary
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Contract (and, for example, shall include maintenance and repair contracts, service contracts, and event
and booking contracts, etc.).
4.2 Contract Administrator. Manager shall serve as contract administrator for each
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RiverCentre Contract, shall cause performance of the Authoriry's obligations thereunder on behalf of the
Authority, and shall represent the Authority and act on its behalf in monitoring each other party's
perfocmance thereof, col3ecting and disbursing funds, and dealing with each other party in all respects.
Manager shall obtain Authority Approval in connection with any action under an Extraordinary Contract
if the effect of such action is to extend, terminate, substantially amend or commence legal proceedings to
enforce such Extraordinary Contract. Manager shall have the responsibility and sole authority to enter
into any Ordinary Contract as the Authority's agent and on the AuthoriTy's behalf (subject to Section 43),
but Managee sha(I not enter into any Extraordinary ContracE witltaut Auf6oriTy Approval. If any
RiverCentre Contract were entered into with respect to both RiverCentre and the Arena, then Manager
shall cause the terms thereof to be such that neither RiverCentre nor the Arena receives benefits
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� thereunder (or incurs costs thereunder) that are disproportionate to its respective interest in such
RiverCentre Contract. In connection with Manager's providing the reports referred to in Section 6A(a),
Manaaer shall provide management reports regarding the status of RiverCentre Contracts and significant
developments related thereto.
43 Contracts with Affiliates. The Authority and Manager acknowledge that, from time to
time, an entiry in which Manager has an interest (or is otherwise affiliated) may be in the business of
providing goods or services necessary or desirable for operations of RiverCentre and may propose a
contract for that purpose. If Manager has (a) disclosed such interest or affiliation to the Authority,
(b) demonstrated to the Authority's satisfaction that the proposed terms are competitive with those
available from non-affiliated vendors and (c) received Authority Approval for such contract, then
Manager may enter into such contract with such affiliated entity. (Such showing of competitive terms
� may be through a request-for-proposal process, verification from a mutually acceptable third-party
consultant or other method satisfactory to the Authority.)
4.4 Mutuallv Advantaeeous Arran�ements. The Authority and Manager acknowledge that
each of them may from time to time have agreements or other arrangements with suppliers, vendors and
other providers of goods and services that include favorable terms, and each shall use its best efforts to
make such favorable terms available to the other. Manager will use its best efforts to use such terms to
reduce the costs and improve the efficiency of RiverCentre operations.
�
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� Sec6on 5. Personnel
5.1 Emolovment and Sunervision� Anpointment of Executive Director.
(a) During the Term, Manager shall select, employ, train, and provide, for work at
RiverCentre, qualified employees of Manager (in sufficient number to satisfy the performance standards
of this Agreement at all times).
(b) Manager shall train and provide all necessary qualified supervisors for employees
at RiverCentre and shall assign to RiverCentre a fully qualified facility manager (the "Executive
Director"). If at any time the Authority reasonably determines that performance of the Executive Director
is deficient, then the Authority may, by notice to Manager, report such determination and the specific
� deficiencies so determined, and Manager shall take atl reasonable actions to remedy any such deficiencies
and shall report the results of such remedial actions to the Authority within 30 days following receipt of
such notice. If ihe Authority reasonably determines that perfortnance of the Executive Director remains
unsatisfactory, then the Authority may, by notice to Manager given within 30 days afrer the Authority's
receipt of such report, inform Manager of such determination (inc]uding ihe reasons therefor), and
Manager shalI, within 30 days following receipt of that report, remove such Executive Director and
appoint a replacement Executive Director with Authority Approval (which shall not be unreasonably
withheld or delayed).
52 Existing Emplovees_ The Anthority has grovided to Manager the information stated in
�
Exhibit S.2 hereto, including the name, posit�on and coliective-bazgaining representation (if any) of each
person who Qs, as ofthe date of this Agreement, employecl at or in eonneetio�¢ wiih RiverCentre (each an
"Existing Employee"). The Authority will provide layoff notices to each Existing Employee stating that
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the last day of empioyment with the Authority/City will be June 30, 2000. Such notices will comply with
City ordinances and collective-bargaining agreements.
53 Collective-Bazeainino Aereements. Execution by Manager of collective-bazgaining
agreements covering each Existing Employee who is represented by a union or other collective-
bargaining representative is a condition precedent to Manager's obligations under this Agreement.
5.4 Offers of Emplovment.
(a) Commencing on the date of this Agreement, the Authoriry shall provide to
�
Manager access to each Existing Employee for purposes of interviewing, offering employment,
comp]eting pre-employment documents and explaining Manager's employment-related rules and benefits.
(b) Manager shall make a written offer of employment (each an"Offer") to each
Existing Employee, for employment by Manager, commencing on the Start Date. Manager shall make
such Offer within five days afrer the date of this Agreement and shatl keep such Offer open for at teast 10
days after it is received by such Existing Employee.
(c) For each Existing Employee, such Offer shall include (i) wages at a rate not less
than that now in effect for such Existing Employee, (ii) position and duties substantially the same as those
now assigned to such Existing Employee and (iii) if such Existing Employee is represented under a
collective-bargaining agreement, such terms and conditions as aze required thereby.
(d) Manager shat] hire each Existing Employee who accepts such Offer, and shall
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employ such Existing Employee, commencing on the Start Date.
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5.5 Emplovee Benefiu. Manager shall provide, to each Existing Employee who accepts such
Offer, health coverage and other empioyee benefits in accordance with Manager's employee-benefit pians
referred to in E�ibit 5.5.
5.6 Assumed Oblieations. For each Existing Employee hired by Manager (a "Hired
�
Employee"), the Authority shall provide to Manager within ten days following the Start Date an accurate
statement of all the Authority's obiigations to such Hired Employee for accrued vacation; compensatory
time; and sick time, severance pay and benefits in lieu of retiree health coverage. Manager shall assume
such obligations and satisfy them when due. Notwithstanding the foregoing, however, such assumed
obligations are limited as follows:
(a) For accrued vacation, (i) the total of all obligations so assumed shall not exceed
$76,000 payable in cash, and (ii) Manager shall allow each Hired Employee to carry forwazd up to ten
days of accrued vacation. To the extent thai Hired Employees do so, the total payable in cash shall be
reduced by the dollar amount attributable to all days so carried forward.
(b) For compensatory time, the total of ali obligations so assumed shall not exceed
$136,000 payablein cash.
(c) For sick time, severance pay and benefits in lieu of retiree health coverage, the
�
total of ail obligations so assumed shall not exceed
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(i) for each Hired Employee, a deposit to his or her 401(k) account, to be
made on December 31 of each of the yeazs 2000 through 2003 (which deposit shall be $ I50 in
2000 and $3Q0 in each of 20Q1, 2002 and 2003), Qovided. however, that such deposit shail be
paid for any year only if such Hired Employee remains employed by Manager on December 31 of
that yeaz; and
(ii) for each Hired Employee, another deposit to his or her 401(k) account on
�
February 1, 2001; February 1, 2002; and February 1, 2003 (which deposit shall be in the amount
stated as "One Time Retirement Cost" for such Hired Employee in the statement referred to
above), provided, however, that (A) the total of all such deposits in 2001 shall not exceed
$I50,000; the total of all such deposits in 2002 shall not exceed $50,000; and the total of all such
deposits in 2003 shall not exceed $30,000; and (B) Manager shall ailow each Hired Employee to
carry forwazd up to five days of sick time and, to the extent that such Hired Employee does so,
then such deposit for such Hired Employee shall be reduced by the dollar amount attributable to
all days so carried forward.
5.7 No Solicitation. The Authority shall not, during the Term or during the period of one
�
year afrer any termination of this Agreement, solicit for employment one senior manager then employed
by Manager and designated for continued employment by Manager, provided that the Authority is not
prohibited from employing such designated senior manager if such manager applied independently for
such employment without any solicitation by the Authority.
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Section 6. �erating Year; Budeets: Repocts
6.1 Calendar Year. Operations, accounting and reporting for RiverCentre shall be conducted
on the basis of the calendar year, commencing January 1 and ending December 31, and each reference
herein to a year means the calendar year (unless othenvise specifically stated).
6.2 Operatine Bud¢eu. For each yeaz, Manager and the Authority shall establish and
approve an operating budget for RiverCentre (each an "Approved Operating Budget") in accordance with
the following:
(a) For each year commencing with 2001, Manager shall submit to the Authority, by
��
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the immediately preceding September 1, a proposed operating budget stating all anticipated revenues and
expenses related to RiverCentre for such year, in the format set forth in E�ibit 6.2. Manager and the
Authority shall discuss such proposed operating budget and, if theyt�tua�}I3� approve in writing an
operating budget and such budget is also apg�es�-�iygiven ore)iminarv aporoval bv the Mavor and the
Saint Paul Ciry Council, in each case by the immediately preceding October 31, then the operating budget
so approved shall be the Approved Operating Budget for such veaz, uniess amended bv the Citv Council
with the aoaroval of the Mavor prior to final adoption of such operating budeet in accordance with
Minnesota law and Citv ordinance If the operatin¢ bud¢et is so amended then Manager and the
Authority shali discuss the amended bud�et If thev a¢ree to accept such amended bud¢et then it shall be
the Approved Operating Budeet for such v eaz. If °� '�••a��« _� _„ ...._,..,,a w.....,.ti :..........:..«,,,.
_ _ _
� thev do not n 1. 11 L, i. A r= _ _. ,.,t l� D..,l..es l_�.. 1. ..,...� ..i..,ll l.e :.7e.,r� ^1 t^
+-�„ _a?-__�, _--��°�;�^-,'--�°a�°�°'_! a^�=^* � ^__�eetoaccentsuchamended
budeet then Manager shall have the same rieht of termination as provided in Section 2 6
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(b) Any Approved Operating Budget may be amended at any time by a written
amendment that is approved by the City Council and executed by the Authority and Mana�er.
63 Accountine. Recordine and Allocations.
(a) Manager shall maintain complete accounting records relating to RiverCentre and
shall establish intemal-control policies and practices which are in accordance with generally accepted
standazds in the facilities-management industry and any additional requirements of the Minnesota State
Auditor.
(b) Manager shall cause all revenues from RiverCentre eamed and due afrer July I,
�
2000, to be sepazately recorded and reported (on a direct basis) to the greatest extent possible. If any
revenue shall be attributable to both RiverCentre and the Arena (including, for example, revenue from a
single event using RiverCentre for part of a day and the Arena for the balance of such day), Manager shall
allocate such revenues on the basis of the respective rate cards then in effect for RiverCentre and the
Arena (or, for any particular event, on such other basis as Manager may determine with Authoriry
Approva]).
(c) Manager shall cause all expenses for RiverCentre incurred afrer July 1, 2000, to
�
be separately recorded and reported (on a direct basis) to the greatest extent possible (including for
example, separate metering of utilities, separate recording of direct-labor hours, allocation of vacation,
retirement and other benefit costs in accordance with such direct-labor hours, separate invoicing or
itemizing of maintenance and repairs, and sepazate time recording of employees, including those
dedicated 100% to RiveiCentrc operations, such as a dedicated mazketing manager). For each year, if any
expense shall be incurred for the benefit of both RiverCentre and the Arena, such expense shall be
allocated between them on a basis determined with Authority Approval in connection with the Approved
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Operating Budget for that yeaz. The Authority and Manager acknowledge that from time to time an
opportunity for combined use of RiverCentre and the Arena for an event or other purpose may imolve
expenses not anticipated in the Approved Operating Budget. To realize the benefits of such an
opportunity, the Authority and Manager may determine to allocate such expenses so as to reflect the
respective costs and benefits of such event for RiverCentre and the Arena. The expenses of the Authority
and its staff will be accounted for sepazately by the Office of Financial Services within the Authority's
Administrative Budget (as herein defined).
6.4 Moathl and Annual Re orts.
(a) Within 20 days following the end of each month during the Term, Manager shall
�
submit to the Authority an unaudited written operating statement (the "Monthly Statement") showing, for
such month and for the yeaz to date, (i) all gross revenues and expenses from operations of RiverCentre,
in each case presented in the same manner as in the Approved Operating Budget for such year and (ii) for
each line item, a comparison of actual results to those stated in the Approved Operating Budget.
(b) Within 60 days following the end of each year, Manager shall submit to the
Authority a written operating statement for such year (the "Preliminary Report") stating for such yeaz all
revenues and actual expenses from operations of RiverCentre. Unless the Authoriry gives notice to
Manager of a good-faith objection to a material aspect of the Preliminary Report before the 30`� day
following the Authoriry's receipt thereof, the Preliminary Report shall then become binding upon
Manager and the Authority and shall be ihe "Annual Report" for such year, and such 30`" day shall be the
"Annual Report Date" for such year.
(c) If the Authority (by notice given to Manager before the close of business on such
�
30` day) objects in good faith to any material aspect of the Preliminary Report, then only those aspects as
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to which the good-faith objection was made shall �ot become binding, the Authority and Manager shall
discuss the objection and, if they sign a written agreement amending the Preliminary Report, then the
Preliminary Report, as amended by such written ageement, shall become binding and shall become the
Annual Report and the date of such written agreement shall be the Annual Report Date. If the Authority
and Manager do not sign a written agreement within 30 days afrer the Authority gives such notice of
objection, then the matter objected to (and only such matter) shall be submitted to a nationally recognized
firm of certified public accountants selected by the Authority and Manager (whose fees shall be divided
equally between the Authority and Manager), who shall resolve the dispute and submit a written
statement of such resolution, which statement, when delivered to the Authority and to Manager, shall
become binding. Such statement (combined with those aspects of the Preliminary Report as to which the
Authority did not timely provide notice of objection) shall be the Annual Report and the date on which
such accountants submit such statement to the Authority and Manager shall be the Annual Report Date.
(d) Each Annual Aeport shall remain subject to the Authority's audit rights under
Section 10.
6.5 Caoital Exoendiwres. For each year, Manager and the Authority shall establish and
approve a budget for capital expenditures at RiverCentre during such yeaz (each an "Approved Capital
BudgeP'), which shall state all capita] projects to be commenced at RiverCenVe during that year and the
financing sources to pay for those projects, including those anticipated to be started and completed in the
same yeaz and those anticipated to continue into subsequent years (each a"multi-yeaz projecP'), in
accordance with the following:
(a) For each year commencing with 2002, Manager sha11 submit to the Authority, by
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the immediately preceding September 1, a proposed capital budget stating all anticipated material capita]
expenditures related to RiverCentre for such year, in such format as the parties shall hereafrer agree.
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Manager and the Authority shall discuss such proposed capital budget and, if they�a� approve in
writing a capital budget for such yeaz and such capitai budget is aggFeve�—kyalso given vreliminarv
a�oroval bv the Mavor and the Ciry Council, in each case by the immediately preceding October 31, then
the capital budget so approved shall be the Approved Capital Budget for such year. unless amended bv
the Ci . ouncil with the aoocoval of the Mavor nrior to the final adootion of the canital bud¢et in
accordance with Minnesota law and Ciri ordinance. If no capital budget for such yeaz isse-agg�eve�-ky
st� �-�-�^�a�^� --°^°a�°° ^�'^''° adopted and aonroved bv the be¢innine of such veaz, then
the Approved Capital Budget for such year shall consist of each multi-yeaz project included in any
previous Approved Capital Budget that is not yet completed.
(b) Any Approved Capital Budget may be amended at any time by a written
�
amendment that is approved by the City Council and executed by the Authority and Manager.
(c) For each month during which Manager makes any material capital expenditures,
Manager shall provide to the Authority, in connection with the Monthly Statement for that month, a
written summary of such capital expenditures.
(d) Manager shall not make any material capital expenditures unless included in an
Approved Capital B�adget or otherwise approved by the Authoriry.
(e) All expenditures related to the project currently in process to repair and improve
the RiverCentre parktng raanp (glanned for completion during 2001 at an estimated project cost of
$9.5 million) shall be managed and paid for by the City.
6.6 Authoritv Administrative Bud¢et. The Authority wiU annually approve and manage an
�
administrative budget (the "Administrative BudgeP'). The Administrative Budget will include the
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expenses directly related to the operation of the Authority and other expenses it may approve, including
the management fee to be paid to Manager.
6.7 Citv Council Annroval. The Authority shall have no obligation to pay operating
expenses for a year unless and until the Authority shall have made an appropriation approved by the City
Council and the Mayor throueh the annual budset avoroval orocess to fund the operation of the Authority
and RiverCentre for such year. From and afrer such appropriation is annroved by the ""'�
and Ciri Council, the Authority shall pay the operating expenses for such year to the extent described
elsewhere in this Agreement.
6.8 Modifications to Budeets. All modifications to the Approved Capital Budget and
�
Approved Operating Budget during any year shall be subject to prior written approval by the Authority
and Manager. Any expenditures made by Manager which are not included in such budgets shal] be the
financial responsibility of Manager unless approved by the Authority.
6.9 Ouerating Standards. As part of each yearly budget process (commencing with that for
2001), the Authority and Manager shall establish the Operating Standards for that year and include such
Operating Standards as part of the Approved Operating Budget for that year.
Section 7. Receints and Disbursements; Fundina
7.1 Receipts and Disbursements.
(a) Manager shall establish and maintain for RiverCentre such fully insured bank
�J
accounTS as needed from time to time for receipu, disbursements, payroll and other operations of
RiverCentre, with signature authority in such employees of Manager as Manager shall determine and
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�rner.� e-�, 6 `�.� `oo
� report to the Authority (collectively, the "Operating Accounts"). All revenues collected from operations
of RiverCentre shall be deposited into the Operating Accounts and Manager shail cause all expenses and
disbursements related to RiverCentre to be paid from the Operating Accounts. Manager shall institute
and abide by a cost allocation and accounting system, subject to approval by the Authority (which
approval shall not be unreasonably withheld or delayed). Any changes to such system shall be subject to
approval by the Authority (which approval shall not be unreasonably withheld or delayed). 1� r � ws�'
er ra��Y..,.e.. a\\oc.��:o�. �ar� � ro�� ccv��. or c�vv�c�.a.e� b "hh�. ���
A�`t�r.�o,_ SY�c.�,\ 1de__� ^w � c. 1`�ct 0.v� �� �oyv�lc.. � �
r�.7. Cw Co m.v.e�.� w•r� -�:r..\ 4��.rttv^ a \ _
(b) All revenues collected from operat�ons of RiverCentre are the sole property of
the Authority and shall be held in trust by Manager for the Authority for application as provided in this
Agreement. Any amounts remaining in any Operating Accounts, upon termination of this Agreement and
afrer payment of expenses as provided herein, shall be paid to the Authority. If any of such revenues are
lost, stolen or otherwise unlawfully removed from the custody and control of Manager, then Manager
� shall continue to be responsible therefor and Manager shall indemnify the Authority from and against
such loss by maki�g payment to the Authority within 48 hours of discovery of such loss, thefr or unlawful
removal.
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72 Fundin¢. For each month, Manager shall ptovide to the Authority, at ]east seven days
prior to the first day of such month, a report of the funds balance projected to be available in the
Operating Accounis at the start of such month and projected cash receipts and projected cash expenditures
during such month. If and to the eartent that such pzojected expenditures exceed the sum of such projected
balance plus projected receipts, then the Authority will transfer to the Operating Accounts an amount
equal to such excess. If and to the extent that such projected expenditures are less than the sum of such
projected balance plus projected receipts, then Manager wiil tra�sfer to the Authority the amount by
which such projected expenditures are less.
73 No Obli�ation of Manaeer to Fund. Except as agreed to in Section 5 hereof, Manager
�
shal] have no obligation to fund any cost, expense, liabiliry or expenditure with respect to RiverCentre or
operations thereof.
Section 8. Mana¢ement Fees: Commissions
8.1 Management Fees. The Authority shall pay to Manager management fees, which shall
consist of
(a)
(b)
base amounts, determined as described below (the "Base Amounts"), plus
amounts based on the Operating Standards, determined as described below (the
"Quality Amounts"), plus
(c) amounts based on Gross Revenues {as hereinafrer defined), determined as
�
described &elaw (the "Revenue Amovnts"}.
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. 8.2 Base Amounts. The Base Amounts shall be $14,666 per month during 2000, $14,583 per
month during 2001, $15,416 per month during 2002, $16,666 per month during 2003, and such per-month
amount during 2004 as the parties shall hereafter agree. The Authority shall pay such Base Amounu for
each month on or before the first day of such month.
83 Oualiri Amounts. For each of the years 2001 through 2004, the Authority wi]] evaluate
Manager's performance in achieving the Operating Standards for that year and will assign to such
performance a percentage based on the Authority's reasonable determination of the extent to which such
Operating Standards were achieved during that yeac The Quality Amount for such yeaz shall be an
amount equal to $25,000 multiplied by such percentage (e�e., if the percentage so determined by the
Authority were 90% for 2002, then the Quality Amount for 2002 would be $22,500). For each year, the
� Authority shalE pay the Quality Amount by February 28 of the immediately following year.
8.4 Revenue Amounts.
(a) For each of the years 2001 through 2004, the Revenue Amount shall be
(i) $50,000 if Gross Revenue equals or exceeds the First Target for that year,
plus
(ii) an additional �-7-5,898 if Gross Revenue equals or exceeds the
Second Target for that yeaz.
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(b) For any year, "Gross Revenue" shall mean all revenue from (i) rentals,
(ii) service income, (iii) food and beverages, and (iv) novelties. Gross Revenue shall be calculated and
classified in a manner consistent with the practices reflected in the budgeu and operating statements of
RiverCentre for 1999 and 2000 heretofore received by Manager rovided, however that any revenue that
would cause any taz-exempt bonds to become taxable private activity bonds cannot be earned by the
Authority or counted as Gross Revenue).
(c) For each year referred to below, the First Target and Second Target shall be as set
�
forth below:
Year
2001
2002
2003
First TarQet Second Tareet
$3.75 million $4.00 million
$3.90 million $4.15 million
$4.00 million $4.25 million
For 2004, the First Target and Second Target shall be such amounts as the parties shall hereafrer agree.
8.5 Commissions
(a) For each New Contract (as defined below), the Authority shall pay to Manager a
commission for each year in which RiverCentre receives advertising payments, sponsorship fees, rights
fees or other revenues under or with respect to such New Contract ("New Revenue"). Notwithstanding
the foregoing, however,
(E1 "New Revenue" does not inclnde anv amount referred to in
Section 8.4(b)and
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ii in the case of any New Contract that is an Exte�ded Contract (as defined
below), "New Revenue" for any yeaz shall mean only such payments, fees and revenues as
exceed those that would have been received in such year had such Extended Contract continued
into such yeaz on the same terms as in effect on the Start Date. (For example, if a sponsor
contract in effect on the Start Date called for payments of $50,000 to RiverCentre in 2003 and
such sponsor contract were amended after the Start Date so as to call for payments of $60,000 in
2003, then $ I 0,000 of such $60,000 would be New Revenue for 2003.)
(b) The amount of such commission for each New Contract shall be �&%20% of all
►�J
New Revenue. Upon receipt of any amount of New Revenue, the Authority shall pay the applicable
commission to Manager e.¢., if amounts received under a New Contract consisted of $10,000 in January
2004 and $]0,000 in July 2004, then the Authority would pay to Manager a commission of $�-;988
in January 2004 and a commission of �098 $2.000 in July 2004).
(c) "New Contract" shall include (i) any conuact, agreement or other arrangement
for advertising, sponsorship, signage, publicity, promotion, marketing or similar rights at RiverCentre that
is entered into during the Term and (ii) any renewal, extension, amendment or other change to any
contract, agreement or arrangement existing before the Term that has the effect of extending such existing
contract, agreement or arrangement or increasing the amounts payable thereunder (an "Extended
ContracY').
8.6 Limitation. For each of 2001 through 2004, the Base Amounts payable to Manager for
�
such year shall be at least 50% of the total payable to Manager for such year under Section 8, and the
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requirement of this sentence shall be the "50% Test" If, for any of such years, the 50% Test would not be
satisfied in the absence of this sentence, then the Revenue Amount for such yeaz shall be reduced by the
smallest amount (if any) as is necessary to cause the 50% Test to be satisfied (and, if the Revenue Amount
were reduced to zero in accordance with this sentence and the 50% Test remained unsatisfied, then the
commissions payable for such year shall be reduced by the smallest amount as is necessary to cause the
50% Test to be satisfied).
8.7 Prorated Amounts. In the event of any termination of this Agreement that does not occur
�
at the end of a year, the Authority shail pay to Manager:
(a) for the month that includes the date of termination, an amount equal to the Base
Amount for such month, prorated through the date of termination (which amount shall be paid within ten
days after the end of such month); plus
(b) for the year that includes the date of termination, the Quality Amount for that
year, prorated through the date of termination, which shall be paid within ten days after the date of
termination; plus
(c) for the yeaz that includes the date of termination, a prorated portion of the
�
Revenue Amount for such year, which shall be paid within ten days after the date of termination and
determined by
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(i) multiplying the Second Target for such year by a fraction, of which the
numerator is the number of days in such year elapsed through the date of termination and the
denominator is 365 (which shall be the "Prorated TazgeP');
(ii) determining the percentage represented by (A) actual Gross Revenue
through the date of termination divided by (B) the Prorated Target; and
(iii) multiplying such percentage by $125,000; plus
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(d) all unpaid commissions on New Revenue received (whether received before or
afier the date of termination), which commissions shall be paid upon receipt of such New Revenue.
Section 9. Indemaification and Insurance
9.1 Indemnification
(a) Manager shall indemnify the Authority from, and defend and hold the Authority
�
harmless from and against, any damages, liabilities, claims, judgments and expenses, including
reasoaahle attorneys' fees ("Losses"), suffered, incurred or sustained by the Authority resulting from or
arising out of
(i) any breach of this Agreement by Manager;
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(ii) the inaccuracy, unwthfulness or breach oF any representation or
wartanty made by Manager in this Ageement; or
(iii) any claim for damages (whether for personal injury, property damage or
otherwise) resulting from any negligence, misconduct or other act or omission by Manager.
(b) The Authority shal] indemnify Manager from, and defend and hold Manager
harmless from and against, any Losses suffered, incurred or sustained by Manager resulting from or
azising out of
(i) any breach of this Agreement by the Authority;
.
(ii) the inaccuracy, untruthfulness or breach of any representation or
warranty made by the Authority under this Agreement; or
(iii) any claim for damages (whether for personal injury, property damage or
otherwise) resulting from any negligence, misconduct or other act or omission by the Authority.
Notwithstanding the foregoing, however, nothing in the Agreement shall cause (or be construed as) a
waiver by the AuthoriTy of any limitation on municipal liability under Minnesota Stamtes Section 466.01
et se�c . or as a waiver of any common-law immunity or limitation of liability, all of which are hereby
reserved by the Authority.
(c) If any third-party claim is asserted against a party entitled to indemnification
� hereunder (the "Indemnified Party"), then the Indemnified Party shall promptly give notice thereof to the
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party that is obligated to provide indemnification (the "Indemnifying Party"). Upon receipt of such
notice, the Indemnifying Party shal] immediately and fully investigate and defend such claim, at the
Indemnifying Parry's sole cost and expense. The Indemnified Party shal] cooperate in all reasonabie
respects with the Indemnifying Party and its attorneys in the investigation and defense of such claim and
any appeal arising therefrom, and the Indemnified Party may, at its own cost and expense, participate,
through its attorneys or otherwise, in such investigation, defense and appeal. No settlement that involves
a remedy other than payment of money by the Indemnifying Party shall be entered into without the
consent of the Indemnified Party. If the Indemnifying Party does not promptly defend such claim in
accordance herewith, then the Indemnified Party may defend such claim in such manner as it may deem
appropriate, at the cost and expense of the Indemnifying Party (but the Indemnified Party's doing so shall
not reduce to any extent the Indemnifying Pazty's obligations hereunder).
9.2 Insurance.
(a) Manager shall, on the Authoriry's behalf, keep in force throughout the Term
(i) one or more policies of commercial liability insurance, covering all
operations of RiverCentre and acts or omissions of RiverCentre personnel (including Manager's
employees and services under this Agreement), which insurance shall have limits not less than
$1 million for bodily injury and $ I million for property damage;
(ii) one or more policies of automobile insurance, covering vehicles operated
in connection with RiverCentre, having a combined single limit of not less than $1 million;
�
(iii) one or more policies of worker's compensation insurance, covering all of
Manager's employees providing services at RiverCentre;
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�
(iv) all-risks property and casualty insurance, covering RiverCentre, together
with a full replacement-cost endorsement and a vandalism and malicious-mischief endorsement;
(v) broad-form boiler and machinery insurance, with full repair and
replacement cost coverage;�
(vi) ]oss-of-income and business interruption insurance, covering risk of ]oss
due to the occurrence of any hazazds insured against under the insurance referred to in clauses (i)
and (ii), in an amount not less than one year's Soss of �ea�rincome; and
(vii) insurance aeainst theft and other financial crimes (includina those
� referred to in Section 71(b)l.
(b) Manager shall cause each of the Authority and Manager to be named as an
insured under each of such policies. Manager shall include the costs of all such insurance in each
proposed operating budget (subject to the Authority's approval by inclusion in the Approved Operating
Budget) and shall pursue opportunities to reduce insurance costs through policies covering both
RiverCentre and the Arena. At the Authority's request, Manager shall deliver to the Authority an original
or a certified copy of each of such policies confirming the existence of all such coverage, together with an
endorsement to the effect that such policy will not be canceled or materially changed without at least 30
days' advance written notice thereof to the Authority.
�
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� Section 10. Ownershin ofAssets• Related Obli¢ations• Audit Riehts
10.1 Ownershin.
(a) Each party acknowledges that the City owns all the buildings and real estate
comprising RiverCentre and all related equipment, furniture, displays, fixtures, vehicles and similar
property now used in operations of RiverCentre (other than any item that is held by the City under a lease,
in which case the City owns the lessee's rights therein), together with title to all intellectual property
rights now held in the Authority's name. Nothing in this Agreement shall affect the City's ownership.
(b) The City shall continue to own ali consumable items that are provided by the
Authority (such as office supplies and cleaning materials), but such items may be utilized and consumed
by Manager in the performance of services for RiverCentre under this Agreement. Manager may
� purchase consumable items for RiverCentre pursuant to this Agreement, and such items shall become the
property of the Authority, but may be used and consumed by Manager for operations of RiverCentre
under this Agreement. Manager may use RiverCentre property and related assets of the Authority for
operating RiverCentre and othenvise performing services under this Agreement. Manager and the
Authority acknowledge and agree that, in order to achieve efficiencies and avoid duplication of costs,
Manager may use equipment and other property of the Arena for maintena�ce, repairs and other
operations of RiverCentre (and may similarly use equipment and other property of RiverCentre for
operations of the Arena), but such use shatl not affect ownership of any equipment or other property, and
Manager shall provide for all property of RiverCentre the same care and custody as it provides for
property of the Arena. Manager shall not take or use, for purposes other than management or operations
of RiverCentre, any customer or ��ibicar Iists or similar materials developed by the Authority for the use
of RiverCentre unless Manager receives Authority Approval. If Manager purchases equipment,
i fumishings, materials, or other personal property at Authority expense for use at RiverCentre, then title
-34-
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�
thereof shall vest in the Authority, automatically and immediately upon purchase. Manager shall not
pledge, encumber or otherwise alienate or assign for any purpose any assets or property of the Ciry or the
Authority without Authority Approval.
(c) All operating reports provided to the Authority by Manager hereunder, together
�
with ali hooks and records of RiverCentre maintained by Manager on behaif of the Authority, and all
other information and documents now in existence at RiverCentre shall be (and shall remain) the property
of the Authority and shall be subject to such public disclosure and other requirements as may be imposed
by Minnesota law regarding data practices and related matters. (All financial statements of Manager and
books and records of Manager shall be, and shall remain, private financial records, not subject to such
disclosure.)
10.2 Authoriri Obligations. Throughout the Term, the AuthoriTy will maintain full legal and
beneficial ownership of RiverCentre and will pay, keep, observe and perform all payments, terms,
covenants, conditions and obligations under any bonds, debentures or other obligations, security
agreements or contracts to which the Authority may be bound.
]03 *�jintentio�ailvdeleted]**.
Section 11. Rearesentations and Warranties
i l.l Re�resentations and Warranties of Mana�er. Manager represents and warrants to the
Authoriiy as follows:
(a) Manager is a limited liability company dvly organized and validly existing under
�
the laws of the State of Minnesota.
-35-
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�
(b) Manager has all requisite power and authority to execute and deliver this
Agreement and perform all of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreement by Manager will not
breach or violate any provision of the organizational documents of Manager or of any indenture,
mortgage, lien, ]ease, material agreement, order, judgement or decree to which Manager is a party or by
which its assets or properties are bound.
(d) Execution, delivery and performance of this Agreement have been duly
�
authorized by Manager, and this Agreement constitutes a valid and binding agreement of Manager,
enforceable in accordance with its terms.
(e) Manager is in compliance in all material respects with all laws applicable to
Manager (except for any failure to comply that would not have any materiai adverse effect on Manager's
ability to fulFill its obligations under this Agreement).
(� There is no outstanding litigation or other legal dispute to which Manager is a
party which, if decided unfavorably to Manager, would reasonably be expected to have a material adverse
effect on Manager's ability to fulfill its obligations under this Agreement.
(g) All information provided by Manager that is included in this Agreement
\_ J
(inciuding any E�ibit hereLO} is accurate and complete in all materiat respects, does not contain any
untrue statement, and does not omit any staiement or information necessary to make such information
correct and complete in all material respects.
-36-
c�
�
l l.2 R�e resentations and Warranties of the Authority. The Authority represents and warrants
to Manager as follows:
(a) The Authority is organized as an agency of the City, validly existing and in good
standing under the laws of the State of Minnesota.
(b) The Authority has all requisite corporate power and authority to execute and
deliver this Agreement and perform alI of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreement by the Authority will not
�
breach or violate any provision of the organizational documents of the Authority or of any indenture,
mortgage, lien, lease, material agreement, order, judgement or decree to which the Authority is a party or
by which its assets or properties are bound.
(d) Execution, delivery and performance of this Agreement have been duly
authoriZed by the Authoriry, and this Agreement constitutes a valid and binding agreement of the
Authority, enforceable in accordance with its terms.
(e) The Authority is in compliance in all material respects with all laws applicable to
the Authority (except for any failure to comply that would not have any material adverse effect on the
Authority's abiliry to fulfill its obligations under this Agreement).
(� Tlaere as no autstanding litigation or other legal dispute to which the Authority is
�
a party wf�ich, if decided unfavorabiy to the Authority, would reasonab3y be expected to have any material
adverse effect on the Authoriry's ability to fulfill its obligations under this Agreement.
-37-
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�
�..�
(g) All information provided by the Authority that is included in fhis Agreement
(including any Exhibit hereto) is accurate and complete in all material respects, does not contain any
untrue statement, and does not omit any statement or information necessary to make such information
correct and complete in all material respects.
Section 12. Other Provisions
12.1 Relationshi�. The parties intend to create a relationship of independent contractors and
nothing in this Agreement shall be construed to make either party a partner, joint venture, principal, agent
or employee of the other.
12.2 Severabilitv. If any provision of this Agreement is held by a court of competent
�_I
jurisdiction to be unenforceable, then each remaining provision of this Agreement shall nonetheless
remain in full force and effect.
123 Force Maieure; Certain Chanees to RiverCentre.
(a) Neither party shall be obligated to perform hereunder and neither party shall be
deemed to be in default if performance is prevented by:
(i) fire not caused by negligence of either party, earthquake, flood, act of
God, civil commotion, w�az, hostitities or other event, matter or condition of like nature;
(ii) any law, ordinance, rule, regulation or order of any public or military
�
authority (including any based on economic or energy controls, hostilities, war or govemment
law or regulation); or
_38�
vo
�
(iii) any labor dispute which results in a strike, picket or boycott affecting
Rive�Centre or services hereunder (unless such dispute shall have been caused by illegal labor
practices or violations by such party of appiicable collective-bargaining aa eements and there has
been a final judicial determination of such illegal labor practices or violations),
(each a "Force Majeure EvenP').
(b) Neither party hereto shall be under any obligation to supply any service or
�
services, if and to the extent that doing so shall be prohibited or limited by any Federal, state or municipal
law, rules, regulation, order or directive.
(c) Except as otherwise expressly provided in this Agreement, no amount payable to
Manager for its services under this Agreement shall be increased for any inconvenience, interruption,
cessation, or loss of business or other loss caused, directly or indirectly, by any Force Majeure event, nor
shall any amount payable to Manager be reduced or withheld.
(d) If any part of RiverCentre were destroyed, replaced, repaired, upgraded or
otherwise changed, the Agreement would continue in effect for all of RiverCentre (including that part),
and Manager would have the right to continue providing the services during such change (subject to
adjusting the management fee as the Authority and Manager may agree, based on any actual reduction or
increase of services provided by Ivfanager as a result of such change).
(e) The parties acknowledge ihat the Authority has commenced preliminary
�
discussions regarding possible renovation or reconstruction of the Roy Wilkins Auditorium and that, if
such Auditorium is substantially renovated or reconstructed and the Authority enters into an operations
-39-
CX�- 5�f 7
� agreement with the Ordway Center for the Performing Arts regarding theatrical productions in such
renovated or reconstructed Auditorium, then the applicable terms of this Agreement will be amended.
(� The parties also acknowledge that the Authority and the City of Saint Paul are
currently considering a pedestrian connection between RiverCentre and the skyway system of downtown
S aint Paul. �°^'� ^^^^°^•;^^ :^ °-^-^°°a °-a ,.,......�..,.«,.., ,,.e_,,,.r :.. .............°a «we..Such connection is
exnected to be comnleted in late 2001 and, upon com�letion. the connection will be considered part of
RiverCentre and Manager will cause it to be maintained on behalf of the Authority (subjeM to Authority
approval of revenues and costs in the annual budget-approval process).
12.4 Waiver. No delay or omission by either party to exercise any right or power it has under
this Agreement shall impair or be construed as a waiver of such right or power (unless such right or
� power is limited by a time period, in which case such right or power shal] lapse oniy when such time
penod shall expire). A waiver by any party of any breach of this Agreement or any obligation hereunder
shall not be construed to be a waiver of any succeeding breach or any other obligation.
12.5 Headines; References Of Inclusion. The headings of sections, paragraphs and other
subdivisions of this Agreement are for convenience only and do not affect the construction or
interpretation of the Agreement. Each reference herein to "including" or "includes" shall be deemed to be
followed by the words "without limitation."
12.6 Entire Aereement. This Agreement is the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations, understandings or agreements
between the parties relateng to such subject matter.
•
.�
G� �
� 12.7 Survival. This Article l2 and each provision hereof shali survive the expiration or
termination of this Agreement and shall remain in full force and effect notwithstanding any such
expiration or termination.
12.8 Third Partv Beneficiaries. This Agreement shal] not inure to the benefit, or create any
right or cause of action in or on behalf of, any person or entity other than the parties.
12.9 Assienment. Neither parry may assign or transfer this Agreement or any rights hereunder
�
without the other party's advance written consent except that if Manager, by notice to the Authoriry,
proposes to assign this Agreement to an entity that (i) acquires or otherwise succeeds to all or substantially
all of Manager's business and assets, inctuding management of the Arena, and (ii) before or at the time of
�
assignment assumes alI of Manager's obligations hereunder and agrees to perform or cause performance of
all of such obligations when due, then the Authority shall not unreasonablywithhold or delay such approval.
12.10 Governine Law. This Agreement and the rights and obligations of the parties under this
Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota,
without giving effect to the principtes thereof relating to conflicts of law.
12.11 Dispute Resolution.
(a) For any dispute arising under this Agreement (including any disputed allegation
of default hereunder) that is not resoived informally, either parry may give to the other party notice of the
dispute, including reasonable detail concerning any alleged deficiency in performance of the other party.
The Authority and Manager, respectively, shall cause the Authority Representative and the Exewtive
Director to meet in person at RiverCentre and attempt in good faith to reach an agreement resolving the
� dispute. If they do not reach such an agreement within seven days afrer the date on which such notice is
-41-
�D"Sy7
� given (the "Dispute Notice Date'�, then each of them shal] produce a detailed report about the dispute for
his or her respective chief executive officer or chief operating officer, who shall meet in person at
RiverCentre and attempt in good faith to reach an agreement. If the parties have not signed a written
agreement to resolve the dispute within 30 days following the Dispute Notice Date, then either party may
request mediation as provided for in subsection (b) below.
(b) If any dispute between the parties under this Agreement is not resolved under
subsection (a), then, upon notice by either party, such dispute shall be submitted for non-binding
mediation before, and as a condition precedent to, the initiation of any legal action regazding such dispute.
Each party shall participate in up to four hours of inediation (in each case as requested by such party's
chief executive ofFicer or chief operating officer). The mediator shali be se3ected by the parties, or if the
parties fail to select a mediator within ]0 days afrer such notice is given, then either party may request
selection of a mediator by the administrator of the Ramsey Counry District Court Civil Alternative
. Dispute Resolution Program, from its list of qualified neutrals. All expenses related to the mediation
shall be borne by each par[y, including without limitation the costs of any experts or legal counsel.
12.12 Jurisdiction and Venue. Any lega] action, suit or proceeding brought by it in any way
related to or arising out of this Agreement sha11 be brought in the state courts of the State of Minnesota,
and each party hereby accepts and submits to the jurisdiction of such state courts with respect to any such
action, suet or proceeding brought by or against such party. Each party waives any objection to the venue
for any such action, suit or proceeding being in such state courts.
12.13 Ne¢otiated Terms. The garties acknowledge that the terms and conditions of this
Agreement are the results of negotiations between the parties and that no part of this Agreement shall be
construed in favor of or against any party by reason of the extent to which any party or its professional
� advisors paRicipated in the preparation of this Agreement.
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�
12.14 Notices. Each notice required or permitted under this Agreement shali be in writing and
shall be deemed given when delivered by mail, courier or facsimile to the address or facsimile number
specified below (and a paper copy of any notice by facsimile transmission shali be delivered within 24
hours afrer such transmissionto the address specified beiow).
If to the Authority: RiverCentre Authority
Attention: AuthorityRepresentative
Facsimile No.:
With a copy to: City Attorney's Office
City of Saint Paul
400 City Hall
Saint Paul, Minnesota 55102
Attention: RiverCentre Authority Attomey
Facsimile No.:
�
If to Manager: Saint Paul Arena Company, LLC
Facsimile No.: '6511222-1055
With a copy to: Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attention: Wiliiam R. Busch, Jr.
FacsimileNo.: (612)336-3026
Either party may change its address or facsimile number for notice purposes by giving the other party
15 days' notice of the new address or facsimile number and the date upon which it will become effective.
12.35 Amendment. No amendment to any provision of this Agreement is valid unless in
�
writing and signed by an authorized representative of each party.
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�-55� 7
R�..e�&,�.
6 �a 4 �po
12.16 Counteroarts. This Agreement may be executed in any number of counterparts, each of which will
be deemed an original, but all of which taken together shall constitute one single agreement.
12.17 Public Data. All of the data created, collected, received, stored, used. maintained or disseminated
� ManaQer with resoect to RiverCentre in nerformin¢ the funciions under this Aereement aze subiect to the
requirements of Chaoter 13, Minnesota Statutes and Manaeer aerees to comnlv with those reauirements as if it were
the Authoritv or the CiN.
12_18 Comnliance with Laws. Each party agrees to comply with all laws of the United States of
Amecica and the State of Minnesota (including the Minnesota Data Practices Act) and with all Saint Paul Ciry
ordinances and resolutions and will not do (or allow anyone under such party's control to do) anything during the
term of this Agreement in violation of any such laws, ordinances and resolutions.
IN WI7NESS WHEREOF, each party haz caused this Agreement to be signed and delivered by its duly -
authorized representative, effective as of the date first above written.
Approved as to Form:
By:
City Attomey of Saint Paul
MI: ^ 624341.09
CIVIC CENTER AUTHORITY
An Agency of the City of Saint Paul
(also known as RiverCentre Authority)
BY=
Richazd H. Zehring
Title: Chair
Norm Coleman
Title: Mayor of City of Saint Paul
By:
Joe Reid
Title: D'vector of Office of Financial Services
SAINT PAUL ARENA COMPANY, LLC
By:
Title:
�
Exhibit A �
to Agreement for RiverCentre
(page 1 of 1)
�
RIVERCENTRE"
�fldffIONEA7Zl'MA2 tQfA'OS1:+SA:DfiOltitM
175 iCe!logg Boulerard Saint Pavl, Mvmaota �5:92 P�or.e 6;I-265-�800 Fu 651-?bi-?859 www.riverr.za•s�otg
�
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**(RiverCentre Event Bookine Policv]**
�
M7: � 2d341 OS
Exhibit 13
to Agreement for RiverCentre
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�
**[Recurrin¢ Eventsl**
�
M1�43434}9§
E�ibit 32
to Agreement for RiverCentre
�
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Contracts Currentiv in Effect
Food Service (Volume Services)
Pazking Ramp (Standard Parking)
S�onsorships
Touchstone EnPower Services
Treasure Island
Pioneer Press
Minnesota Life
Coca Cola
Media One
Service Aereements
Minnesota Elevators and Eagle Elevators
Lagerquist Escalators
Adams Pest Control
Powell Communications
� MN Net Centrex, etc.
T:.. � - �c�i�ixixa�iv�"`�
Loomis Armored Service
American Security
ADT
Saint Paul Bank — Cash Machine
Ikon — Copier
Red Cross
Tennant — Sweeper
Sage Software — Accounting
AirTouch Cellular
U S WEST
Missabe Group — Sponsorships
Pitney $owes — Stamp Machine
Golden Gate Internet Services
Telecheck
T'��mTicketMaster
EmQlovment Services
Kelly Temporary Services
Industria] Staffing
Parking Ramp Consfiuction Contracts
SMMA Architects — Wilkins Design
� MI 33�P..S-B"24341 OS
E�ibit 4.1
to Agreement for RiverCentre
(page 1 of 1)
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�
MI `e-,�++,.P5�434798
E�ibit 5.2
to Agreement for RiverCentre
**[Information ReQardin�Existing Emolovees]**
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Exhibit 5.5
to Agreement for RiverCentre
(page 1 of3)
Emolovee Benefiu Provided bv Mana¢er
�
N
S
u
R
A
N
C
E
HealSh
Dertal
Sngie -100ye paid by empioyer
Family - 50% paid by employer / 50% paid by employee
50X paid by Employer / b0% paid by Employee
Life 1X Annual Salary Benef�t 1o0Y, paid by Employer
Acciderrta[ Oeath dc Distnemberme+�t 1X Annuai Sniary Benefit 100'/a po�d by Emplayer
Paid Time Off (PTO)
(covers all paid
absences - sick,
vacation,funernts,
etc. - used at emp�oyee
discretion)
Years
O�F
5-9
10-15
16-23
after 23
D o
20
26
29•
33
36
Larryover of 5 days of PTO at yearvend nl�owed
�
Disahi(Ity
Hotidays 7
Short term disability -100X pnid by Employer
2/3 of weekly earnings - maximum $50Q per week
I.ong term disability -100 °� pnid by Empioyer
2!3 of weekly earnings - tnoximum $6,000 per month
hlew Yenrs Dny �9�H�9 �'
Mcrrtoria4 Oay 4Say aftv Tt�m�ksgiving
Independenet Day Christmns DaY
lnber Day
Wtdiay Pay: L5 Timrs reguiar wmpensatio� and e9uiwaknt time eff
C� 7
�
�n�b�c s.s
to Agreement for RiverCentre
(page 2 of 3)
Em�lovee Benefits Provided bv Mana2er
Breolcs 2 25 min breaks ond 45 min Iweh bceak
Retiremertt P�an = 401(k) -
Emplayee can corttribute up to 15'k of salary (pro-tax�, plue
$3Q0 per yenr contributjon by tmployer to tht 401(k} plan
(for each employee on the payroli at and of the year)
tn liw of retiree heelth insurance
Flewble Sputding Atcourrts - Funded through e�nployee pre tax corrtributions
O
� P
T Safety Shaes �40 per calendar yenr - if requ+red by emptoyer
I
O
N Optiorta! Life Insurcnce
A
L Additional Life (Emp�oyee, Spouse d Chi�dren) - empioyees con purchnse additional
coverage, nt their cost (see attached chert)
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Exhibit 5.5
to Agreement for RiverCentre
(page 3 of 3)
Emolovee Benefits Provided bv Manaoer
Additionai Life (Empioyee, Spouu b Chiidren)
m� ciwce Additional covernge -$10,000 units - Maximum $300,000
(minimum #20,Q00) - 9uorantee issue cmoimt - �50,000
Employce Cost -100%> per rnte chart below (after tax)
O ousc Spoase (anty avaikble if employee r�ective tife is purchased)
Unita of $5,000 - Maxim�an L2 unployees elective life
P (minimum $10,000) - guaruntee issue omount - $25,000
Employte Cost - S00°� > per rate chart below (a{trr tax)
T
Elect�ve Life Insurance Rates we based on Smoker and Non Smoker status by age per
I $10,000 - Ranging from $.90 to �102.50 per month
O Employee/
� Spouse Age
N under 30
30-34
A 35-39
4Q1F4
L 45-49
50-54
55-59
L 60-64
65-69
I 70-74
75+
"tJon Smoker Rate
P¢r $ I0,000
$ 0.90
$ 1.00
$ 1.30
$ Z,SO
5 3_40
$ 5.50
$ 9.90
$ 14.70
$ 22.50
$ 44.80
$ 76.60
5moker Rate
Per $10,000
$ 1.20
� 1.60
$ 2.20
$ 3.50
$ 5.80
$ 9.30
$ 16.40
$ 22.50
$ 32.30
$ 59.90
$ lOZ.50
* Non-Smoker' means that you have not smaked� or used tobaccc products in the last 12 manths
E
Children
Gunra+rtee issue amo�mt $5,000 (one pretnium covers any number
of childrPn) - Do not need to purchose eledive Iife for self
Emp�oyrx Cost - lOQ%� $.90 cenis per month (after tcx deduction)
�
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Exhibit 6.2
to Agreement for RiverCentre
(page 1 of i)
�
�
�
[hrent incofti+�d E�
Ptea Ro2fic
Serva» Nmm�
Boz O(fo k�mmn
Tont Ew+� ��
7otat Evxrt F��
Net Evsn� m��
Mcipary m�onM
FmC 8 BeVraG�
Nevetios
Fadh Fws
Parknp
TMaI MclNarl inc°m�
Tohi Ev�nt ineoms
OMerOp��9
Park`q
qtivettlaing
so«�o�w
v,-�c:,a c.a,imart+arm.�ee
�nletesl
OIlke Spars Rant
Maxllnnews
Tobl ONrrincaM
Adjustad Grvss trwom'
In�ICCL �
oecenme^� �'°*
Eket:+l'Na
Mancels9
Finance
Operslione
Bax Of�ice
Overt�ee6
pan�iig RamD
Tclal Oeparv^a� F�W�s Belve 0.lootion
E�Renses ACncitetl tn Eve�+a
Net IndnU E��s�
pperatlny Gzt+ Rwt 9a[o�
DeDt Sarvfw. On►tlnr Chai90
��ss n e«+a o.ei s+u
Less Ped ConnWioNCRY 6"PbY� �
Less ES�'Onar! �eas� �U'j��1
Totaf DeMSa+i«
Lest Rebcalion an� SeWaR.� E�s+�
NNL EsPensas
Tatal On�� �IIK
ppec Ineom� VY�Mout Non-CUh Rems
Y000
A�lffi
f 7,�75.OS9
t,ast,es5
414,558
279�.i02
(t.�7.F68)
8fi8.906
Sggg t989
Ro�i+p �'PD�
E9m�it �
S 7.07{.848 S 1.370.773
13�0.� ���°�
t27�fig 1W,N1
Z�5p�3,55 I,97ZG+t
(1 596,514) (1.79t�619)
d53.g{z t.it7.972
RNERCENiRE
20ro OPERA7ING BUDGET
7498 7997
BRif76! B•••
3 1.1e4969 S 758.3�7
1.3�1.�90 t.153.�86
70B.Q7 153.73f1
2.638.896 2�065.563
(t.766.99n (1.BQ7.O6a)
a».eas asa.ass
1.1322b7 9T3.158
&5.7pp 67.812
30Z.+ 397,�7!
EOB.9:10 l64.760
zm.�ee uszss3
6ft�67 187p9 b53.8�7
51,3T2 �5.20� 35.57b
57.�5 W.7GA '15�b�
t.Ot0.u0 e38.OBa 997.�2
t.b03.3M ' 7.67lr'� 1.7I4472
z nqi�n uatrrz zsu.sa.
1.4348(!S t.X3�,43b 1.337,lQi
36.000 39.679 36.000
�3.5pp 276,25G 283.500
no.aao n�,sss iao.000
120,000 747.866 120.000
737.687 Bt.bb'1 et.687
76.972 108.357 1?5.�38
2,768.9W 2.050.862 2124.428
4,938,151
�.313.01{ 4.968.872
zsa,�as
164,476
7 84.005
2,SOt.716
169.Z6B
1,576,748
%1,836
6.101,786
(t.827.�i967
��7{.t90
3.199.385 7,S11.OSZ
1,29t.686 t,368.We
W,O70 109.538
11,000 -
7,5p0 30,000
2at.�ea ns,avi
q9.pW 15.�00
1@.1H7 113,226
�,m.z�o �.etz.osi
4,972,57t 4.323.1G3
zao,ese xti.sss
St2,046 5?7.928
762.�98 t62,3d6
2293.756 2.517.<61
760,016 761.2%
t.625.639 1.6Z2.392
883,209 916.b61
5.8t7.062 6.198.�
(7.596.511) (1.79/.679)
4,220.5�8 1.90A,309
2so.sss
495.560
1L5.668
2407,818
779�97
1.439.947
995,566
5,951,090
(1.766.99�
4,187.093
26a,49d
3na,sa2
734,152
2,t45,679
Y1B,3t6
7,925,474
9B8.T79
5,730,976
(1.e07,O6d)
3.323.852
664.964 13246b 560.563 �BF�,iBi �.n�
660.00C 660.00U 660.000 660.D00 �•�
�2030 ' 29.ppp 83.%1
121.97a t2&125 a3taA - -
924.001 788.725 89M1.457 fi88,000 743.%i
55.000 W� 25.900 3te.OW t96.000
194.072
SS.CW I�BC11 75.000 378.097 390.�22
5 (214,039) S (641.8'I8) S (351.894) S (220,fi76) S (�
�
Hon-casti items
WMecR d ihe remaininD baok rahx d Mw Auets
DeprecaGon
Net Opera6n91no� lL�)
3.6�9.460
504.2W 516.1l6 396,�61 529.057 S6d.3E6
: n,s.znst s t ,ea.00a7 s vae.ass� s ta.3ss.,a�i a tsss.,,�
�-5�7
�
**�Format of Operatine Budeetl**
u
M� �ea- bzaaai os
Exhibit 6.2
to Agreement for RiverCentre
(page I of 1)
�
C�
FA�GRE & BENSON LLr
2200 NORWFST CENTER� 90 SOUCH SEVENTH STREEt
'i�II3NEAPOLIS, MINNFSOTA SS402-3901
1'ELEPEIONE 612-3363000
FACSIMILE 672-336-3026
June 21, 2000
Peter McCall
City Attomey's Office
400 City Hall
St. Paul, Minnesota 55102
Re: Agreement for RiverCentre (F&B File No. 2205161
Dear Pete:
����
As requested, enclosed is a revised draft (dated June 21, 2000) of page 44 of the agreement
referred to above. The changes from the previons drafr are mazked for your reference.
I understand that Joe Reid would like copies deGvered to Nancy Anderson, and we have provided
those directly to her.
Pizase call with any questions.
{ ►�.Wn.iS �
Sincerely,
�`'�
William R. Busch, Jr.
WRB:zieal
Enclosures
M1:6355I9.01
cc: Joe Reid
Nancy Anderson
Martha Fuller
Chris Hansen
Mixneapolis Denver Des Moines London Frankfurt
IEPARTMINf/OFFICE/COUNCIL DATE WIMTEO � ^ �� `
City Council Offices 6-�-z000 GREEN SHEET No ��Y� �`��
XNZTACT P92S01S 8 PFtOPYc � WImuWN
Dan Bostrom, 266-8660 , q ,,.��
MUST BE ON COUNCILAGBmA BY (0.4'fE) `
AmIGN
�� June 6 20�00 �� arrsnoaar axe�vrz
Routtxc
oncoe ❑ wuwry�amucoort ❑ nuxtw.mevi�cera
�. ❑ wrdelw��sasrwnl ❑
TOTAL # OF SIGNATURE PAGES (CLJP ALL LOCATfOIdS FOR SIGNATURE)
Approving a Management Agreement for RiverCentre with Saint Paul Arena Company, LLC.
PLANNING CAMMISSKN7
CIB COMM(TfEE
CML SERViCE CAMMISSION
� tn� ae��� � wonrea u�. a�i� r« m� d�rt�me
YES NO
Has Mis P�eoNfirm ever heen a dry empbyee9
YES NO
Does this poreoNfiim possese a slall nd nonnallyposeassetl by any curteM ciry empbyeel
YES NO
Ie Mis P���m a tarpetetl wntloYt ' 1
YES NO
� •.
� ;�f
'� � � , �J'. �t�'
C�ur� €��s�;�r�h �en�r
� �;�� � 12000
SOUftCE
INWRMATION (IXPWN)
COSTrttEVQlUE Bl1D6ETm (qRCIE ON�
ACTNITY NUMBER
r
YES NO
00 «� S4�
5-31-00
r
00 -sy�
TABLE OF CONTENTS
Section 1. Engagement of Manager; Services
I.1 En�a�ement ...................................
12 Scope of Services ..........................
13 Specific Services ...........................
1.4 Operating Standards ......................
Section 2.
2.1
2.2
23
2.4
2.5
2.6
2.7
Tertn and Termination .....................
Tertn................................................
* * [intentionally deleted] ** ..............
Optional Termination ......................
Termination for Default ...................
Arena-Related Rights to Terminate.
Termination for Failure to Fund......
Effect of Termination ......................
Section 3. Authority Oversight and AuthoriTy eprese�
31 Oversight and Authority Represe ative ......
32 Use by the Authority ................ ..................
Section 4. Contracts Regarding RiverC tre ................
4.1 Extraordinary and Ordina Contracu .........
4.2 Contract Administrator ... .............................
43 Contracts with Affiliate ..............................
4.4 Mutually Advantageo s Arrangements........
Section 5. Personnel ...........
5.1 EmploymenYand
5.2 Existing Emplo
53 Collective-Bar a
5.4 Offers of E lo}
5.5 Employee enef
5.6 Assumed bligai
5.7 No Soli tation...
Use by Authority.....
.................................
.................................
.................................
.................................
.................................
.................................
.................................
.......................2
...---° °-° °---.....2
....--� °---°--°-�-..
.......................6
....................... 6
.......................6
....................... 6
....................... 6
.......................7
....................... 8
....................... 8
............9
............9
..........10
..........11
..........11
..........12
.......... I 3
..........13
..........................................................................................14
Appointment of Executive Director .................................14
ining Agreements
Section 6. Oper ing Year; Budgets; Reports............
6.1 Cale darYear ...........................................
6.2 Op rating Budgets ....................................
63 counting, Recording and Allocations...
6.4 onthly and Annual Reports ...................
6.5 Capitai Expenditures ................................
6.6 Authority Administrative Budget .............
6.7 City Council Approval .............................
6. Modifications to Budgets .........................
6 Operating Standards .................................
Sectio 7. Receipts and Disbursements; Funding.....
7.1 Receipts and Disbursements .....................
.....................................14
..................................... l 5
.....................................I S
.....................................16
.....................................1 ti
.....................................17
..........17
..........17
..........18
..........18
..........20
..........21
..........22
............23
............23
............23
............23
i
oa-s�f7
7.2 Fundina-°.°--°--°°° .........................
73 No Obliaation of Manager to Fund
Section 8.
8.1
8.2
83
8.4
8.5
8.6
8.7
Mana�ement Fees; Commissions
Management Fees ........................
Base Amounts .......--°°° ..............
Quality Amounu .°-°°°°°-°-.......
Revenue Amounts .......................
Commissions ...............................
Limitation ....................................
Prorated Amounts ........................
Section 9. Indemnificationand Insurance..........
9.1 Indemnification .................................
92 Insurance ...........................................
Section ] 0. Ownership of Assets; Related Obligations; Aud� Rights
10.1 Ownership ....................................................... ................
10.2 Authority Obligations ................................... ..................
103 **[intentionallydeleted]** ..............................................
Section I 1. Representations and Warranties ........... ..
1 I.1 Representations and Warranties of M ager ...............
I 12 Representations and Warranties of T e Authority........
fiection ? 2. Other Provisions .................
12.1 Relationship ........................
12.2 Severability .........................
123 Force Majeure; Certain Cha
12.4 Waiver ............................. ..
12.5 Headings; References O In
12.6 Entire Agreement ...... ........
12.7 Survival .................. ..........
12.8 Third Party Benefi iaries....
12.9 Assignment ........................
12.10 Governing La ...................
12.11 Dispute Reso tion .............
12.12 Jurisdiction nd Venue........
12.13 Negotiate Terms ...............
12.14 Notices ...............................
12.15 Amen ent ........................
12.16 Cou erparts .......................
22.17 Co pliance with Laws.......
...............................°--°----°--° --...24
°°-°---
....................... .
to RiverCentre
....................... .
.......................25
..................°---25
.......................26
... .................... 28
.......................28
..................29
..................29
.................31
...................................3 3
...................................3 3
...................................34
...................................34
...................... 3 4
...................... 3 4
...................... 3 6
..........................3 7
.............. ........... 3 7
......................... 3 7
......................... 3 7
......................... 3 9
......................... 3 9
..........................3 9
..........................40
..........................40
...... .................... 40
..........................40
..........................40
..........................41
..........................41
..........................42
..........................42
..........................43
..........................43
ii
ov- sy 7
Exhibit A
E�ibit I3
E�:hibit 32
E�chibit 4.1
E�ibit 52
Eshibit 5.5
Exhibit 6.2
Diagram of RiverCentre
RiverCentre Event Booking Policy
Recurring Events
Contracts Currently in Effect
Irtformation Regarding Existing Employees
Emplo��ee Benefits Provided by Manager
Format of Operating Budget
iii
�
cxs- 5�7
List of Defined �Cerms
Defined Term
50% Test
Administrative Budget
Agreement
Annual Report
Annua] Report Date
Approved Capital Budget
Approved Operating Budget
Arena
Arena Lease
Authority
Authoriry Approval
Authority RepresenYative
Base Amounts
City
Continuing Obligatiorts
Dispute Notice Date
Executive Director
Existing Employee
Extended Contract
Extraordinary Contract
Force Majeure Event
Gross Revenue
Hired Employee
Indemnified Party
Indemnifying Parry
Losses
Manager
Manager Representati e
Monthly Statement
Multi-Year Projec
New Contract
New Revenue
Qffer
One Tim etirement Cost
Accounts
Section Keference
..
.
/ 6.4
6.5
62
Introduction
Introduction
Introduction
3.1
3.1
8.1
Introduction
2.7
12.11
5.1
52
8.5
4.1
12.�
8.4
5.6
9.I
9.1
9.1
Introduction
3.1
6.4
6.5
8.5
8.5
5.4
5.6
7.1
iv
GL�-5y 7
Defined Term
Operating Standards
Optional TerminaTion Date
Ordinary Contract
Preliminary Report
Prorated Target
Quality Amovnts
Revenue Amounts
RiverCentre
RiverCentre Autharity
RiverCentre Contract
Signing Date
Start Date
Term
Section Reference
1.4
23
� 6.4
8.7
8.i
8.1
Introduction
Introduction
4.1
4.1
2.I
2.1
v
AGREEMENT FOR RIVERCENTRE
THIS AGREEMENT FOR RIVERCENTRE (this "AgreemenP') is made and
_ day of June, 2000, by and between the Civic Center Authority (also
Authority"), an agency of the City of Saint Paul (the "Authority"), and Saint
a Minnesota limited tiability company ("Manager").
WHEREAS, the City of Saint Paul (the "City") owns
Minnesota, known as RiverCentre, including the convention
the Roy Wilkins Auditorium, and the RiverCentre pazking
pedestrian connection constructed linking RiverCentre to t
(collectively, "RiverCentre"), and the Authority has e
management and oversight of RiverCentre; and
oo- 5Y 7
i
/
e ered into this
as "RiverCentre
Arena Company, LLC,
in downtown Saint Paul,
as "Touchstone Energy Place,"
south of Kellogg Boulevazd (plus any
City's skyway system) shown on Exhibit A
authority and responsibility to provide for
WHEREAS, Manager is engaged in �iie business of providing management services for public
assembly facilities, including the sports
construction adjacent to RiverCentre
entertainment arena (owned by the City) currently under
Arena"), which is subject to an Arena Lease dated January 15,
1998 (the "Arena Lease"), among th CiTy, the AuthoriTy and Minnesota Hockey Ventures Croup, LP, as
Tenant, which Arena Lease has b n assigned by Tenant to Saint Paul Arena Company, LLC; and
WHEREAS, Man ger desires to provide management services for RiverCentre and the Authority
desires to obtain such nagement services from Manager, on the terms and conditions stated herein;
NOW EREFORE, in consideration of the mutual covenants, terms, conditions, and
obligations s ted herein, and intending themselves to be legally bound hereby, the Autt�ority and
Manager;a'ereby agree as follows:
Oo-S�']
Section 1. Engagement of Manaeer; Services
1.1 ��ement. The Authority hereby en�ages
market and promote RiverCentre for public purposes (in
Chapter 459, as amended to date), and Manager hereby acc
conditions provided below. This Agreement shall be consj
including special legislation. /
1.2 Scope of Services. Manager shall
needed to manage, operate, maintain, and
Agreement. Subject to the limitations stated
anri authority to conduct operations of
to mana�e, operate, maintain,
with Minnesota Laws 1967,
such engagement under the terms and
with all laws governing RivecCentre,
and provide such management services as are
RiverCentre in a manner consistent with this
Agreement, Manager shall have general responsibility
and activities therein on behalf of the _4uthoi ity.
13 Specific Services. In e course of managing RiverCentre hereunder:
(a) Manage shall, from time to time, hire, promote, supervise and direct all
employees and other
performance reviews,
(b)
parties providing
shall negotiate r
Yime to time �
at RiverCentre (including work assignments, compensation, tenefits,
and discharge) in a manner consistent with this Agreement.
Manager shall supervise all contractors, subcontractors and other contracting
or services to RiverCentre (including food service, maintenance and security) and
extensions and replacements for the provision of such goods and services from
report snch renewals, extensions and replacements to the Authority (all en accordance
with Sectio�4 of this Agreement).
-2-
40-5 � 7
,,;
(c) Manager shall manage capitat improvements of RiverCentre,
bidding process for each improvement and supervision of the construcTion Thereof, in each
the applicable Approved Capital Budget (as hereinafter defined).
(d) Manager shall arrange to rent, lease or purchase such
are needed from time to tirae for the operation and maintenance of
the applicable Approved Operating Budget (as hereinafrer defined).
(e) Manager shal( anange for payment on
expenses for RiverCentre as contemplated in each Approved
To
and supplies as
in each case subject to
of the AuthoriTy of all operating
Budget.
( fl Manager shall, on. behalf of th Authority, take such actions as Manager shall
deem necescary to collect charges, rents or other a unts due to RiverCentre, or to enforce c>r pursue
damages under any license or other agreement
proceedings as Manager may deem
RiverCentre (including such legal 2ctions or
(g) Manager shall aintain complete records and schedules for booking events and
other uses of RiverCentre.
(h) Mana er shall provide, on behalf of the Authority, day-to-day administrative
services to support
collections and
Authority's
of RiverCentre, including budgeting and accounting; payroll; billing,
obtaining insurance (as provided hereinafter); and maintaining on the
permits and licenses as aze required to operate RiverCentre under such laws and
rules of govemment agencies as are applicable to operations of RiverCentre.
-3-
oa-55�7
(i) �Ianager shall book and schedule events to take place at
case subject to the Authority's event-booking policy, a copy of which is set forth
consult regularly with the Authority Representative on the scheduling of events
benefits from all scheduling decisions, shall advertise and promote use
realizin� iu full potential, and, in connection ffierewith, may use the
Energy Place," "Wilkins Auditorium," "RiverCentre Authority"
logos and other marks for each, as well as names, logos and
effect from time to time. Manager will maximize
that is consistent with the spirit of this Agreement.
(in each
1.3), shall
that RiverCentre
for purposes of
"RiverCentre," "Touchstone
of Saint Paul" and related
marks of each part of RiverCentre as in
and bookings of RiverCentre to a capacity
(j) Manager shail soticit, prop'iote and selt on the Authoriry's behalf adveRising at
RiverCentre and sponsorships of RiverCentre (yfi each case consistent with the terms of agreements then
in iorce} and shall pursue oppoRunities for
the Arena (in each case subject to
approval from the Director, Office
agreement that results in "private
the Intemal Revenue Code of
reasonably be interpreted as
1.4
sing and sponsorship that include both RiverCentre and
relating to contracts). Manager shall consult with and obtzin
Financial Services (City of Saint Paul), before signina any
use" of RiverCentre (withln the meaning of Section 141(b) of
as amended, and Treasury Regulations § 1.141-3 thereunder) or could
in such "private business use: '
The AuthoriTy and Manager acknowledge and agree that a principal objective of
this AgreegCent is to manage RiverCentre in a manner that is reasonably prudent, consistent with
operations of other first-class public facilities and consistent with the public investment that has been
made in RiverCentre. In addition, Manager acknowledges that these are public facilities and, as such, the
�
C)o- S Y7
public has a right to expect that such facilities are managed in a manner that is
investment that has been made.
the public
(b) To that end, "consistent with" will refer to all areA�s of operations, including, but
not iimited to:
(i) interior and exterior appearance qf all facilities
(ii) employee performance
(iii) operation of all facilities
(iv) concessions and publi acilities
(v) customer service
(vi) marketing and pr motion of all fzcilities
(vii) customer s<
(viii) ingress and
(ix) load and
(x) cleanli ss
(c) Manager
achieve such standards in 2001. 6
as set forth in the Approved
of all facilities
ss for parking
times for loading docks
responsiveness and quality of food and beverage service
provide the services hereunder in such a manner not only to
also to commit to meeting or exceeding such standards for each year
�g Budget for such year (the "Operating Standards").
(d) In ad ition to general guidelines developed by the Authority Representative, in
consultation with Mana�er d reviewing the practices and operations of other similar public facilities,
the Authority Representaf e will use the following tools to determine if the Operating Standazds have
been achieved:
(i) customer surveys
-5-
pp- 5�/7
Section 2.
(ii) vendor surveys
(iii) general public surveys
(iv) Convention and Visitors' Bureau interviews
(v) RiverCentre Authority interviews
Term and Terminarion /
2.1 Term. The period during which Manager
which the Authority shall purchase and pay for such serv
"Term") shall start on July 1, 2000 (the "Start Date"), and/
sooner as provided in this Agreement.
2:L **[intentionallvdeletedl*'`
23 Ootional Termination.
the .Authority and Manaaer shall have
Termination Date and without cause or
90 days before such Optional
2.4
services hereunder and during
in accordance with this Agreement (the
on December 31, 2004, unless terminated
2003, shall be the "Optional Termination Date." Each of
right to terminate this Agreement, effective on the Optional
alty, by giving notice of such termination to the other at least
Date.
(a) If e party shall fail to pay when due any amount payable hereunder, then the
other party shall have n addition to such party's rights to enforce this Agreement and receive
indemnification for any�breach hereofl the right to give notice of such default. If such amount is not paid
within 10 days follo in� the giving of such notice, then the party giving such notice may terminate this
Agreement by notice of termination given within 30 days following the end of such 10-day period. If this
�
c�-55�7
Agreement is terminated under this para�aph (a), then the tertninating party shall have no further
obiigarions under this Agreement after such termination (other than Continuing Obligations (as hereinafter
defined)), but the defaulting party shall continue to be liable for such default and for alt damages
the defaulting party's breach of this Agreement.
(b) If either party shall fail to perform any of such party's
this Agreement (other than a failure to pay when due any amount payable
shall have (in addition to such party's rights to enforce this Agreement and
breach hereofl the right to give notice describing such failure with parti
notice, the failing party (i) shall take all reasonable actions to promptly ;
by
under
then the other party
indemnification for any
Upon receipt of such
such failure or (ii) if such
failure cannot then be cured in all respects (whether due to expiration q#' a time period or otherwise), shall
take ali reasonable actions to cure such failure to the extent
failure. If the failing parry does not comply with its obligations
receipt of such notice of failure, then the party giving such
and to prevent recurrence of such
this pazagraph (b) within 60 days after
of failure may terminate this t�greement
by r,oti�e of termination niven within 30 days following t�fe end of such 60-day period. If this Agreement is
terminat�d under this paragraph (b), then the
Agreement after such termination (other than
party shall have no further obligations under this
Obligations), but the defaulting party shall
continue to be liable for such default and for Il damages caused by the defaulting party's breach of this
Agreement.
2.5 Arena-RelatedRi h toTerminate. If
(a) the A ena Lease were terminated in accordance with its terms as a result of a
default by the tenant thereu;fder or
-7-
c�o-5y7
(b) Manager ceases to have a contracmal right to manage the Arena or ceases in fact
mana�e the Arena,
then the AuthoriTy shall have the ri�ht to terminate this Agreement by notice of
Mana�er within 30 days following such termination of the Arena Lease or such
2.6 Termination for Failure to Fund. With respect to
funds are not appropriated by the Authority and approved by the
beginning of the year to which such Approved Operating
given to
Approved Operating Budget, if
Council at least 60 days prior to the
applies (and made available in an
amount sufficient to fund operations of RiverCentre iyl accordance with such Approved Operating
Budget), then Manager shall have the right to
the Authority at least 60 days prior to the
2.7 E ffect of Tem�ination
(a) Upon any
other property belonging to the
Manager for any expenses
amounts under Section 8
the Authority as a result of
(b)
RiverCentre
(but sub�ect to
this Agreement by notice of termination given to
date stated in such notice.
Manager shall deliver to the Authority any funds and
then in Manager's control, and the Authority shall reimburse
incurred by Manager on behalf of the Authoriry, plus any un�aid
as provided in Section 8), less any amounts then owed by Manager to
termination or otherwise.
Upon termination, the AuthoriTy shall cause any successor manager of
a private contractor or public body) to (i) employ following the date of termination
for cause) each employee of Manager then employed at RiverCentre and
(ii) assukne�and pay all of the assumed obligations under Section 5 not previously satisfied.
Notwithstanding the foregoing, however, if Manager has designated one senior manager for continued
�
oo- 5y7
employment by Mana�er, then the Authority wouid not solicit that manager or otherwise offer
employment to that Managec The foregoing shall not, however, prohibit the Authority from
such designated senior manager if such manager applied independently for such
example, in response to a generai employment advertisement published by the
solicitation by the Authority.
(c) NotwithstandinganyterminationofthisAgreement,
bound by their respective obligations under Section 9. I(relating to
(for
without any
shall continue to be
Section 10 (relating to
ownership), Section 5(relating to personnel), Section 8(to the extent f any fees, commissions or other
amounts thereunder becoming payable afrer termination) and Secti 12 (relating to the relationship of the
parties and other matters), which are the "Continuing
termination of this Agreement.
Section 3.
3.1
of RiverCentre shall be held and
oversee operations of RiverCentre
specified in Section 6. Manager s
Authority as "Authority Repre N
Manager shall designate its ighe:
"Manager Representative" escribe
Representative by
from time to time
" and such sections shall survive any
All assets, revenues, obligations and expenses
Manager for the Authority's account, and the Authority shall
�8 its financial results through the budget and repoRing process
I report to the Authority through an individual designated by the
ve," who shall be an employee or consultant of the Authority.
ranking officer to report to the Authority Representative as the
in this Agreement. The Authority shall designate the Authority
Manager within five days after the date of this Agreement and shalt thereafrer
replace and otherwise take such action as necessaryto cause there to be a
duly designated an�t authorized individual serving as Authority Representative at all times. The Authority
shall cause the�4uthority Representative to oversee performance of this Agreement, respond to Manager's
�
oo-5y7
inquiries and consult with Manager at all times regarding the operations of RiverCentre and j evement
of its public-purpose objectives. The Authority shall authorize and cause the Authority Repiesentative to
review actions proposed by Mana�er that require approval by the Authority hereundezand, with respect to
such proposed action, receipt by Manager of written approval signed by the uthority Representative
shall be "Authority Approvai" rovided, however that any approval o an Extraordinary Contract,
proposed operating budget or proposed capital budget shall also
Commissioners and signature of the Authority's chair). If at any
or the Authority Representative notice of any proposed action
provide to Manager notice of approval or disapproval of
the date on which Manager gives such notice, then
have been given by the Authority on the 16`" day
3.2 Use bv the Authoritv. The
The Authority or the City or their respective
example, Authority meetings, training
reduced-rent basis, as the AuthoriTy
rent-free or reduced-rent use
and personnel for stage work,
by the Authority or its
and Manager may
events at RiverCentre,
customary dates) with
Approval, as in effect
accommodate under
the approval of the Authority's
Manager submits to the Authority
the Authority Representative does not
proposed action within 15 days following
Approval for such action shall be deemed to
such date.
shall have the right to use RiverC�entre fcr events of
and for the bene£t of the community (including, for
Anthority personnel and public events) on a rent-free cr
determine from time to time. Direct expenses related to such
for example, utilities, heating and air conditioning, insurance,
work, tickets, cleaning, securiry and other services) would be paid
Such use by the Authority shall be subject to such terms as the Authority
time to time, shall not unreasonably compete or conflict with paying
shall be booked in advance (and may be moved from their respective
notice in accordance with RiverCentre policies having Authority
time to time. E�ibit 3.2 is a list of recurring events that the parties expect to
section.
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Section 4. Contracts Reeardinp RiverCentre
4.1 Extraordinarv and Ordinarv Contracts.
(a) "RiverCentre Contract" shall mean at any time a use agreemen icense, provider
agreement, supply contract, service agreement and other contract or agreement any kind (other than
any co]lective-bargaining agreement) that is in effect at such time with resp t to RiverCentre (and shall
include each Extraordinary Contract and each Ordinary Contract, as de ed below). E�ibit 41 is a list,
provided by the Authority, of each RiverCentre Contract in effect of the date of this Agreement. Each
use agreement shall contain a provision reserving to the Au ority the right to receive 20 promotiona(
seats without charge (in each case in accordance with
Manager shall have received copies by notice to
(bi "Extracrdinary
��)
such in Eachibit 4.1,
(ii)
E�tibit 4. ],
as such in E�ctfibit 4.1,
hereunder).
means only
most recent resolutions, of which
the prim�ry parking-management contract for RiverCentre, designated as
primary concessions contract for RiverCentre, designed as such in
the primary food-and-beverage catering contract RiverCentre, designated
(iv) any RiverCentre Contract that replaces, extends or substantially amends
referred to in clause (i), (ii) or (iii),
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(v) any RiverCentre Contract for sponsorship or advertising that �reates
/
signage ri�hts at RiverCentre for more than 30 consecutive days, '
(vi) any RiverCentre Contract that, on the date
date"), creates non-terminable obligations that bind RiverCentre
more than 90 days beyond the Term, and
signed (the "si�ing
Authority and extend
(vii) any RiverCentre Contract that j�t4e Authority may from time to Time
designate by notice to Manager as an Extraordinary C tract.
(c) "Ordiaary ContracY' means an RiverCentre contract that is not an Extraordinary
Cuntract (and, for example, shall include mainten ce and repair contracts, service contracts, and event
and booking contracts, etc.).
4.2
RiverCentre Contract, shall cause
Authority, and shall represent
performance thereof,
Manager shall obtain
if the effecc of such
enforce such
into any Ordinary
shall serve as contract administrator for each
of the Authority's obligations thereunder on behalf of the
Authority and act on its behalf in monitoring each other party's
disbursing funds, and dealing with each other party in all respects.
Approval in connection with any action under an Extraordinary Contract
to extend, terminate, substantially amend or commence legal proceedings to
Contract. Manager shall have the responsibiliTy and sole authority to enter
as the Authority's agent and on the Authority's behalf (subject to Section 43),
but Manager s�'all not enter into any Extraordinary Contract without Authority Approval. If any
were entered into with respect to both RiverCentre and the Arena,then Manager
shall cause the terms thereof to be such that neither RiverCentre nor the Arena receives benefits
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thereunder (or incurs costs thereunder) that are dispropoRionate to its respective interest in such
RiverCentre Contract. In co�nection with Manager's providing the reports referred to in Section 4(a),
Mana�er shall provide manaeement reports regarding the status of RiverCentre Contracts an significant
developments related thereto.� /
43 Contracts with Affiliates. The Authority and Manager
time, an entity in which Manager has an interest (or is otherwise
providing gocds or services necessary or desirable for
contract for that purpose. If Manager has (a) disciosed
(b) demonstrated to the Authority's satisfaction that
available from non-affiliated vendors and (c)
Manager may enter into such contract with
may be through a request-for-proposal
consultant or other method
. ,,
each of them may from time
other providers of goods
make such favorable
The Authority and Manager acknowledge that
have agreements or other arrangements with suppliers, vendors and
services that include favorable terms, and each shail use its best efforts to
available to the othec Manager wiil use its best efforts to use such terms to
reduce the costs and i�iprove the efficiency of RiverCentre operations.
that, from time to
may be in the business of
of RiverCentre and may propose a
interest or affiliation to the Authority,
proposed terms are competitive with those
Authoriry Approval for such contract, then
affiliated entity. (Such showing of competitive terms
verification from a mutually acceptable ?hird-party
Authority.)
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Section 5. Personnel
5.1 Emplovment and Suoervision: Aopointment of Esecutive Director. �
(a) During the Term, Manager shall select, employ, train, a provide, for work at
RiverCentre, qualified employees of Manager (in sufficient number to satis the performance standards
of this Agreement at all times).
(b) Manager shall train and provide all
at RiverCentre and shall assign to RiverCentre a
Director"). If at any time the Authority reasonably
is defcient, then the Authority may, by notice
qualified supervisors for employees
qualified faciliry ma�ager (the "Executive
that performance of the Executive Director
, report such determination and the specific
deficiencie; so de:ermined, and Manager shall e s:l reasonable actions to remedy any sueh deficiencies
an3 shall report the resnits of such remedi actions to the Authority within 30 days following receipt of
such notice. If the AuthoriTy
unsatisfactory, then the Authority
receipt of such report, inform
Manager shall, within 30
appoint a replacement
determines that performance of the Executive Director remains
by notice to Manager given �vithin 30 days after the Authority's
of such determination (including the reasons therefor), and
following receipt of that report remove such Executive Director and
Director with Authority Approval (which shall not be unreasonably
withheld or delayed).
5.2 Exi in Em lo ees. The Authority has provided to Manager the information stated in
E�ibit 5.2 heret , including the name, position and collective-bargaining representation (if any) of each
person who
"Existing
of the date of this Agreement, employed at or in connection with RiverCentre (each an
The Authority will provide layoff notices to each Existing Employee stating that
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the last day of employment cvith the Authoriry/City will be June 30, 2000. Such notices ill comply with
City ordinances and collective-bar�aining a�reements.
53 Collective-Bar2ainino Asreements. Execution by na�er of collective-bargaining
agreements covering each Existing Employee who is
bargaining representati��e is a condition precedent to Manager's
5.4 Offers of Emplovment.
(a) Commencing on the
Manager access te each Existing
by a union or other collective-
under this Agreement.
of this Agreement, the Authoriry shall provide to
for purposes of interviewing, offering employment,
completi.ig pre-employment documents and xplaining Manager's employment-related rules and benefits.
(b) Manager shal make a written offer of employment (each an "Uffer") to each
Existmg F.mployee for employme t by Manager, commencing on the StaR Date. Ivlanager shall make
such Offer sv�thin five davs
days after it is received by
(c)
than that now in
now assigned to
(d)
date of this Agreement and shalt keep such Offer open for at least 10
Existing Employee.
each Existing Employee, such Offer shall include (i) wages at a rate not less
such Existing Employee, (ii) position and duties substantially the same as those
Existing Employee and (iii) if such Existing Employee is represented under a
agreement, such terms and conditions as are required thereby.
Manager shall hire each Existing Employee who accepts such Offer, and shall
employ �ch Existing Employee, commencing on the Start Date.
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5.5 Emplovee Benefits. Manager shall provide, to each Existing Employee who accepts such
Offer, health coverage and other employee benefiu in accordance with Manaaer's emp}ayee-benefit plans
referred to in E�ibit 5.5.
5.6 Assumed Oblieations. For each Existing
Emptoyee"), the Authority shall provide to Manager within ten
statement of all the Authority's obligations to such Hired E p
time; and sick time, severance pay and benefits in lieu retire
such obligations and satisfy them when due. No rthstandin
obligations are limited as follows:
(a} Far accrued
$76,000 payable in cash, and (ii)
day; of accrued vacatior,. To
hired Ey Manager (a "Hired
following the Start Date an accurate
for accrued vacation; compensatory
heaith coverage. Manager shall assume
the foregoing, however, such assumed
(i) the total of all abligations so assumed ,hall not exceed
shall aliow each Hired Employee to carry ferward up to ten
that Hired Employees do so, the total payable in cash shall be
reduced by the dollar amount �,i4ributable to aIl days so carried forward.
(b) � For compensatory time, the total of all obligations so assumed shall not exceed
$136,000 payable i�cash.
(c) For sick time, severance pay and benefits in lieu of retiree health coverage, the
total of �il obligations so assumed shall not exceed
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(i) for each Hired Empioyee, a deposit to his or her 401(k) acc nt, to be
made on December 31 of each of the years 2000 through 2003 (which deposit all be $150 in
2000 and $300 in each of 2001, 2002 and 2003), provided, however that ch deposit shali be
paid for any year only if such Hired Employee remains empioyed by M ager on December 31 of
that year, and
(ii) for each Hired Employee, another deposit o his or her 401(k) account on
February 1, 2001; February 1, 2002; and February I, 2003 (which eposit shall be in the amount stated as
"One Time Retirement Cost" for such Hired Employee in statement referred to above), provided,
however, that (A) the total of all such deposits in 2001 �
deposiu in 2Q02 shall not exceed $5�,000; and the
$30,000; and (B) Manager shall allow each Hired
and, to ihe extent that such Hired Employee
reduced by the dollar amount attribufable to
5.7 No Solicitation
year after any termination of
solicit Yor employment one senior manager then employed
by Manager and designated fqf continued employment by l�lanager, provided that the AuthoriTy is not
prohibited from
such employment
Section
�
on the
not exceed $150,000; the total of all such
of all such deposits in 2003 shall not exceed
to carry forward up to five days of sick time
so, then such deposit for such Hired Emp{oyee shall be
days so carried forward.
Authority shall not, during the Term or during the period of one
designated senior manager if such manager applied independentty for
any solicitation by the Authority.
Operating Year; Budeets: Reaorts
Calendar Yeaz. Operations, accounting and reporting for RiverCentre shall be conducted
of the calendar year, commencing January I and ending December 31, arid each reference
to a year means the calendar year (uniess otherwise specifically stated).
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62 Operatin� Budeets. For each year, Manager and the Authority shall
approve an operating budget for RiverCentre (each an "Approved Operating Budget") in
the following:
with
(a) For each year commencing with 2001, Manager shall s mit to the Authority, by
the immediately preceding September 1, a proposed operating budget stati all anticipated revenues and
expenses related to RiverCentre for such year, in the format set forth�n E�ibit 6.2. Manager and the
Authority shall discuss such proposed operating budget and, if ey mutually approve in writing an
operating budget and such budget is also approved by the Sa' t Paul City Council, in each case by the
immediately preceding October 31, then the
Operacing Budget for such year. If no budget is so
so approved shall be the Approved
by such immediately preceding October 3l,
then the Approved Operating Budget for such ye shall be i�entical to that for the immediately preceding
year, including sll amendments theretu.
(b) Any Approv d Operating Budget may be amended at any time by a written
amendment that is approved by th�CiTy Council and executed by the Authority and Manaaer.
63 Ac
(a)
shail establish int¢
standards in
Auditor.
Manager shall maintain complete accounting records relating to RiverCEntre and
policies and practices which are in accordance with generally accepted
facilities-management industry and any additional requirements of the Minnesota State
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00-55�7
(b) Manager shall cause alI revenues from RiverCentre eamed and due a�er July I,
2000, to be separately recorded and reported (on a direct basis) to the greatest extent
revenue shall be amibutable to both RiverCentre and the Arena (including, for
single event using RiverCentre for part of a day and the Arena for the balance
allocate such revenues on the basis of the respective rate cards then
6ssible. If any
revenue from a
such day), Manage� shall
for RiverCentre and the
Arena (or, for any particular event, on such other basis as Mana r may determine with Authority
Approval).
(c) Manager shal] cause all expenses or RiverCentre incurred after July 1, 2000, to
be separately recorded and reported (on a direct
example, separate metering of utilities, separate
retirement and other benefit costs in
itemizing of maintenance and repairs,
dedicated 100% to RiverCentre
expense shall be incurred for the
ailocated betweer. them on a
Operating Budget for that
op�ortunity for
expenses not a
opportunity, the
respective costs
and its staff il
to the greatest extent possible (including, for
of direct-labor hours, ailocatien of vacation,
with such direct-labor hours, separate invoicing or
separate time recording of employees, including those
such as a dedicated marksting manager). For each year, if any
of both RiverCentre and thz Arena, such expense shall be
determined with Authnrity ApQraval in connection with the Approved
The Authority and Manager acknowledge that from time to time an
of RiverCentre and the Arena for an event or other purpose may involve
in the Approved Operating Budget. To realize the benefits of such an
and Manager may determine to allocate such expenses so as to reflect the
benefits of such event for RiverCentre and the Arena. The expenses of the Authority
be accounted for separately by the Office of Financial Services within the Authority's
Budget (as herein defined).
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6.4 Monthlv and Annual Reoorts.
(a) Within 20 days following the end of each month during the
submit to the Authority an unaudited written operating statement (the "'Monthly
such month and for the year to date, (i) all gross revenues and expenses from
shall
showing,for
of RiverCentre,
in each case presented in the same manner as in the Approved Operating B get for such year and (ii) for
each line item, a comparison of actual resuits to those stated in the Appr ved Operating Budget.
(b) Within 60 days foliowing the end o each yeaz, Manager shall submit to the
Authority a written operating statement for such year (the�reliminary Report") stating for such year all
revenues and actual expenses from operations of RylerCentre. Unless the Authority gives notice to
Manager of a geod-faith objection to a materiai pect of the Preliminary Report before the 30'� day
follov�ing .he Authority's receipt thereof, th Preliminary Report shal( then oecome binding upon
VIanager and the Authority and shall be the�Annual Report" for such year, and such 30`" day shall be the
"rinnuai Report Date" for such year.
(c) If the Aut ority (by notice given to Manager before the close of business on such
30` day) objects in good faith t any material aspect of the Preliminary Report, then only those aspects as
to which the good-faith
discuss the objection
Preliminary Report,
was made shall not become binding, the Authority and Manager shall
if they sign a written agreement amending the Pretiminary Report, then the
by such written agreement, shall become binding and shall become the
Annual Report and�Yhe date of such written agreement shall be the Annual Report Date. If the Authority
and Manager
objecrion,the
firm of cedif7
sign a written agreement within 30 days after the Authority gives such notice of
matter objected to (and only such matter) shall be submitted to a nationally recognized
public accountants selected by the Authority and Manager (whose fees shall be divided
the Authority and Manager), who shall resolve the dispute and submit a written
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statement of such resolution, which statement, when delivered to the Authority and to Manager, shall
become bindine. Such statement (combined with those aspects of the Preliminary Report as to
Authority did not timely provide notice of objection) shall be the Annual Report and
the
on which
such accountants submit such statement to the Authority and Manager shall be the �jrfnual Report Date.
(d) Each Annual Report shall remain subject to th Authority's audit rights under
Section ] 0.
6.5 Caoital Exoenditures. For each year, Ma ger and the Authority shall establish and
approve a budget for capital expenditures at
BudgeP'), which shall state aIl capital projects to
financing sources to pay for those projects,
same year and *.hose anticipated ±a
acc�rdance with the following:
(a) For each
during such year(each an "Approved Capital
at RiverCentre during that year and the
those anticipated to be started and completed in the
into subsequent years (each a"multi-year projecP'), in
commencing with 2002, Manager shall submit to ±he Authority, by
the immediately preceding
expenditures related to
Manager and the
writing a capital
case by the
1, a proposed capital budget stating all anticipated material capital
for such year, in such format as the parties shall hereafrer agree.
shall discuss such proposed capital budget and, if they mutualty approve in
for such year and such capital budget is approved by the City Council, in each
preceding October 31, then the capital budget so approved shalt be the Approved
Capital Budget f�r such year. If no capital budget for such year is so approved by such immediately
preceding
project
31, then the Approved Capital Budget for such year shall consist of each multi-yeaz
in any previous Approved Capital Budget that is not yet completed.
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(b) Any Approved Capital Budget may be amended at any time by a written
amendment that is approved by the City Council and executed by the Authority and nager.
(c) For each month durin� which Manager makes any aterial capital expenditures,
Manager shall provide to the Authority, in connection with the Mon y Statement for that month, a
written summary of such capital expenditures.
(d) Manager shall not make any matey�al capital expenditures unless included in an
Approved Capital Budget or otherwise approved by the uthority.
(e) All expenditures relate to the project currently in process to repair and improve
the Riv�rCentre parking ramp (planned f campletion during 2001 at an estimated project cost of
$9.5 million) sha[1 be managed and
�. .
administrative budget (the
expenses directly related to
by the City.
'I'he Authority will annually approve and manage an
BudgeP'). The Administrative Budget will include the
operation of the Authority and other expenses it may approve, including
the management fee to be aid to Manager.
6.7 Ci Council A roval. The Authority shall have no obligation to pay operating
expenses for a ye unless and until the Authority shall have made an appropriation approved by the City
Council and
after such
the
to fund the operation of the Authority and RiverCentre for such yeac From and
by the Authority, the Authority shall pay the operating expenses for such year to
elsewhere in this Agreement.
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oo-5y7
6.8 Modifications to Budeets. All modifications to the Approved Capital Budget and
Approved Operating Budget durina any yeaz shail be subject to prior written approval by
and Managec Any expenditures made by Manager which are not included in such
financiai responsibility of Manager unless approved by the Authority.
6.9 O�eratine Standards. As part of each yeazly budget
2001), the Authority and Manager shall establish ihe Operating
shall be the
(commencing with that for
for that year and include such
Operating Standards as part of the Approved Operating Budget�or that year.
Section 7.
7.1 Receipts and Disbursements.
(a} Manager shall es�i'ablish and maintain for KiczrCentre such fully insured bank
acco;ints as needed from time to
Rive:Cer.tre, with signature
report to the Authority (col
of RiverCentre shall be
disbursements related to
and abide by a cost
approval shall not be
for receipts, disbursements, payroll aad other operation� of
in such employees of Manager as Manager shall determine and
the "Operating Accounts"). All revenues collected from operations
into the Operating Accounts and Manager shail cause all expenses and
to be paid from the Operating Accounts. Manager shall institute
and accounting system, subject to approval by the Authority (which
withheld or delayed). Any changes to such system shall be subject to
approvai by the Au ority (which approval shall not be unreasonably withheld or delaqed).
(b) All revenues collected from operations of RiverCentre are the sole property of
the Author' and shall be held in trust by Manager for the Authority for appiication as provided in this
Any amounts remaining in any Operating Accounts, upon termination of this Agreement and
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after payment of espenses as provided herein, shall be paid to the Authority. If any of such revenues are
lost, stolen or otherwise unlawfully removed from the custody and control of
shall continue to be responsible therefor and Manager shali indemnify the
such loss by makin� payment to the Authority within 48 hours of
removal.
7.2 Fundin . For each month, Manager shal]
prior to the first day of such month, a report of the
Operating Accounts at the start of such month and
during such month. If and to the extent that such
balance plus projected receipts, then the
equal to such exczss. If and to the extent
projected balance plus projected
then Manager
from and against
such loss,theft orunlawful
to the Authority, at least seven days
balance projected to be available in the
cash receipts and projected cash expenditures
expenditures exceed the sum of such projected
will transfer to the Operating Accounts an amouot
such projected expenditures are less than the sum of such
Manager will transfer to the A�thority the amount by
which such projected expenditures are 1 ss.
7.; No Obli ation of ana er to Fund. F,xcept as agreed to in Section 5 hereof, vtanager
shall have no obligation to fun any cost, expense, liability or expenditure with respect to RiverCentre os
operationsthereof.
Section 8.
8.1 �
consist of
(a)
The Authority shal] pay to Manager management fees, which shall
base amounts, determined as described below (the "Base Amounts"), plus
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(b) amounts based on the Operating Standards, determined as described below
"Quality Amounts"), plus
(c) amounts based on Gross Revenues (as hereinafter define , determined as
described helow (the "Revenue Amounts").
8.2 Base Amounts. The Base Amounts shall be $14,666 er month during 2000, $14,583 per
month during 2001, $15,416 per month during 2002, $16,666
amount during 2004 as the parties shall hereafter agree.
each month on or before the first day of such month.
during 2003, and such per-month
Authority shall pay such Base Amounts for
83 Qualirv Amounts. For eac�of the years 2001 through 2004, the Authority will evaluate
Manager's performance in achievinn t}fe Operating Standazds for that year and will assign to such
performance a percentage based on t�fe Authority's reasonable determination of the extent to which such
Operating Standards were
amount equal to $25,000
Authority were 90% for 2(
Authority shall pay the �
8.4
during that year. "Che Quality Amount for such year shall be an
by such percentage (e.�.,if the percentage so determined by the
then the Quality Amount for 2002 wouid be $22,500). For each year, the
Amount by February 28 of the immediatety following year.
(a) For each of the yeazs 200] through 2004, the Revenue Amount shall be
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(i) $50,000 if Gross Revenue equals or exceeds the First Targ for that year,
plus
(ii) an additional $75,000 if Gross Revenue equa or exceeds the Second
(b) For any year, "Gross Revenue"
(ii) service income, (iii) food and beverages, and (iv) nov�1
I mean all revenue from (i) rentals,
Gross Revenue shall be calculated and
classified in a manner consistent with the practices r ected in the budgets and operating statements of
RiverCentre for 1999 and 2000 heretofore receiv by Manager (provided, however, that any revenue that
would cause any tas-exempt bonds to beco e tasable private activity bonds cannot be eamed by the
Authority or counted as Gross Revenue).
(c)
forth below:
For 2004, the
For
2001
2002
2003
Taraet for that year.
year refened to below, the First Target and Second Target shall be as seY
First Tazeet Second Tar¢et
$3.75 million $4.00 million ,
$3.90 million $4.15 million
$4.00 million $4.25 million
and Second Target shall be such amounts as the parties shall hereafter agree.
Commissions
(a) For each New Contract (as defined below), the Authority shall pay to Manager a
for each year in which RiverCentre receives advertising payments, sponsorship fees, rights
5T'�
oo- 5<17
fees or other revenues under or with respect to such New Contract ("New Revenue").
the foregoing, however, in the case of any New Contract that is an Extended Contract (as
"New Revenue' for any year shall mean only such payments, fees and revenues as
below),
those that
would have been received in such year had such Extended Contract continued into ch yeaz on the same
terms as in effect on the Start Date. (For example, if a sponsor contract in effe on the Start Date called
for payments of $50,000 to RiverCentre in 2003 and such sponsor
Date so as to call for payments of $60,000 in 2003, then $10,000 of
for 2003.)
(b) The amount of such commissi
R�venue. Upon receipt of any amount of
amended afrer the Start
would be New Revenue
each New Contract shall be 10% of all New
the Authority shatl pay the applicable
commission to Manager (eg, if amounts receive�fl under a New Contract consisted of $10,000 in January
2C04 and $10,000 in.July 2004, then the A hority would pay to 1�Ianager a commission �f $1,000 in
3anuary 2004 and a commission of $ I,OQO n 7uly 2004).
(c� New C ntract" shall include (i) any contract, agreeme�i or other arrangemenY
for advertising, sponsorship,
is entered into during
contract, agreement or
contract,
Contract").
publicity, promotion, marketing or similar rights at RiverCentre that
and (ii) any renewal, extension, amendment or other change to any
existing before the Term that has the effect of extending such existing
arrangement or increasing the amounts payable thereunder (an "Extended
_2'7_
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8.6 Limitation. For each of 2001 through 2004, the Base Amounu payable to Manager for
such year shall be at least 50% of the total payable to Manager for such year under Sec� 8, and the
requirement of this sentence shail be the "50% Test " If, for any of such years, the
satisfied in the absence of this sentence, then the Revenue Amount for such year
smallest amount (if any) as is necessary to cause the 50% Test to be satisfied (a d,
were reduced to zero in accordance with this sentence and the 50% Test main
would not be
be reduced by the
if the Revenue Amount
unsatisfied, then the
commissions payable for such year shall be reduced by the smallest unt as is necessary tu cause the
50% Test to be satisfied).
8.7 Prorated Amounts. In the event of'any rmination of this Agreement that does not occur
at the end of a year, the Authority shalt pay to
(a) for Yhe month
Amuunt for such month, prorated
days afterthe end ofsuch month);
(b)
year, prorated through
termination; plus
the date of terminatinn, an amount equal to the Base
the date of termination (which amount shall be paid within ten
year that includes the date of termination, the Quality Amount for tha4
date of termination, which shall be paid within ten days after the date of
�
cb-Sy7
(c) for the year that includes the date of termination, a prorated portion of the
Revenue Amount for such year, which shali be paid within ten days afrer the date of termin "on and
determined by
(i) multiplying the Second Tazget for such year y a fraction, of which the
numerator is the number of days in such year elapsed through e date of termination and the
denominator is 365 (�vhich shall be the "Prorated Tazget");
6
(ii) determining the percen e represented by (A) actual Gross Revenue
through the date of termination divided by (B he Prorated Target; and
(iii) multiplyin cuch percentage by $125,000; plus
(d) all unpai commissions on New Revenue received (whether received bePore or
afrer the date of termination), ich commissions shall be paid upon receipt of such New Revenue.
Section 9.
9.1
/ (a) Manager shall indemnify the Authoriry from, and defend and hold the Authority
from and against, any damages, liabilities, claims, judgments and expenses, including
-29-
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reasonable attomeys' fees ("Losses"), suffered, incurred or sustained by the Authoriry resulting from or
azising out of
(i) any breach of this Agreement by Manager;
(ii) the inaccuracy, untruthfulness or breach
warranty made by Manager in this Agreement; or
(iii) any claim for damages (whether for
representation or
injury, property damage or
otherwise) resu(ting from any negligence, misconduct or er act or omission by Manager.
(b) The Authority shall indemnify anager from, and defend and hold Manager
harmless from and against. any Losses suffered, ' curred or sustained by Manager resulting from or
arising out of
(i)
(ii)
any breagfi of this Agreement by the Authority;
inaccuracy, untruthfulness or breach of any representaiion or
warranty made by the uthority under this Agreement; or
ii) any claim for damages (whether for personal injury, property damage or
otherwise) re lting from any negligence, misconduct or other act or omission by the Authority.
the foregoing, however, nothing in the Agreement shall cause (or be construed as) a
waiver by�Cie Authority of any limitation on municipal liabiliry under Minnesota Statutes Section 466.01
��
oo- SY7
et seg. or as a waiver of any common-iaw immunity or limitation of liability, all of which are hereby
reserved by the Authority.
(c) If any third-party claim is asserted against a party entitled to ndemnification
hereunder (the "Indemnified Party"), then the Indemnified Party shall promptly giv notice thereof to the
party that is obligated to provide indemnification (the "I�demnifying
notice, the Indemnifying Party shall immediately and fully investigate
Indemnifying Party's sole cost and expense. The IndemniFied Party �?
/
respects with the Indemnifying Party and its attomeys iq the investi�dt�o
any appeal arising therefrom, and the Indemnified Party
through its attorneys or otherwise, in such investigation
a remedy other than payment of money by the
consent of the Indemnified Party. If the
accordance herewith, then the Indemnified
Upon receipt of such
defend such claim, at the
cooperate in all reasonable
and defense of such claim and
its own cost and expense, participate,
and appeal. No settlement that involves
Party shall be entered into �ithout the
Party does not promptly defend such claim in
may defend such claim in such manner as it may deem
appropriate, at the cost and expense of the ndemnifying Party (but the Indemnified Party's doina so shall
not reduce tc, any er.tent the In3etnr�ify' g Party's ob�igations hereunde: ).
9.2 Insurance.
(a) anager shall, on the Authority's behalf, keep in force throughout the Term
(i) one or more policies of commercial liability insurance, covering all
of RiverCentre and acts or omissions of RiverCentre personnel (including Manager's
and services under this Agreement), which insurance shall have limits not less than
for bodily in}ury and $1 million for property damage;
-31-
�- 5517
(ii) one or more policies of automobile insurance, covering vehicies
in connection with RiverCentre, having a combined single limit of not less than $i
(iii) one or more policies of worker's compensation insuran , covering all of
Mana�er's employees providing services at RiverCentre;
(iv) all-risks property and casualty insuranc , covering RiverCentre, together
with a full replacement-cost endorsement and a vandalism �r(d malicious-mischiefendorsement;
(v) broad-form boiler and achinery insurance, with full repair and
replacement cost coverage; and
tvi) loss-of-incom and business interrupt;on insurance, covering risk c3f Ioss
d��e tc the occursence cf any hazarffs insured against under the insurance referred to in clauses i i)
and (i:) ;n an amnunt not (ess tJ�fan one year's loss of income.
(b)
insured under each of
proposed operating
shali cause each of the Authority and Manager to be named as an
Manager shali include the costs of all such insurance in each
(subject to the Authority's approvat by inclusion in the Approved Operating
Budget) and shaIl p rsue opportunities to reduce insurance costs through poticies covering both
RiverCentre and t Arena. At the Authority's request, Manager shall deliver to the Authority an original
or a certified c y of each of such policies confirming the existence of all such coverage, together with an
the effect that such policy will not be canceled or materially changed without at least 30
days' ad�6ance written notice thereof to the Authority.
-32-
00-5�/7
Secrion 10. Ownershio of Assets; Related Obligations: Audit Rights
10.1 Ownershio.
(a) Each party acknowledges that the City owns all
and real estate
comprising RiverCentre and ali related equipment, furniture, displays, ixtures, vehicles and similar
property now used in operations of RiverCentre (other than any item t t is heid by the City under a lease,
in which case the City o�Y�s the lessee's rights therein), togethe with title to all intellectual property
rights now held in the Authority's name. Nothing in this Agree ent shall affect the CiTy's ownership.
(b) The City shall continue to ow all consumable items that are provided by the
Authority (such as o�ce supplies and cleaning
by Manager in the performance of services
purchase eonsumable items for RiverCentre
but such items may be utilized and consumed
RiverCeatre under this Agreement. Manager may
to this Agreement, and suc:� items shall become the
property of the Authority, but may he ed and consumed by Manager for operations of RiverCentre
unde: this Agreement. Manager ma use RiverCentre property and related assets of the Authority fo*
operating RiverCentre and
Authority acknowiedge and
Manager may use
operations of Rive
operations of the A
Manager shall p �
property of
of
performing services under this Agreement. Manager and the
that, in order to achieve efficiencies and avoid duplication of costs,
and other property of the Arena for maintenance, repairs and other
(and may similazly use equipment and other properiy of RiverCentre for
but such use shall not affect ownership of any equipment or other property, and
for all property of RiverCentre the same care and custody as it provides for
h� Arena. Manager shall not take or use, for purposes other than management or operations
/
tre, any customer or e�ibitor lists or similar materials developed by the Authority for the use
rtre unless Manager receives Authoriry Approval. If Manager purchases equipment,
materials, or other personal property at Authoriry expense for use at RiverCentre, then title
-33-
va-5y�
thereof shali vest in the Authority, automaticat(y and immediately upon purchase. Manager shall not
pledge, encumber or othenvise alienate or assign for any purpose any assets or property of the City or the
Authority without Authority Approval.
(c) All operatina reports provided to the Authority by Manager
with all books and records of RiverCentre maintained by Manager on behalf of
other information and documents now in existence at RiverCentre shall be (and
of the Authority and shall be subject to such public disclosure and other
together
Authority, and all
remain) the property
as may be imposed
by Minnesota law regarding data practices and related matters. (All fin�ficial statements of Manager and
books and records of Manager shall be, and shall remain, private nancial records, not subject to such
disclosure.)
102 Authoritv Oblieations. Througheut the T rm, the Authority will maintain fui! legal and
benefic�al ownership of RiverCentre and will pay,
cavenants, conditicns and obligatiens under
observe and perform all payments, terms,
bonds, debentures or otlier obligations, security
agreements or cor.tracts to which the AuthoriTy rg(ay be bound.
103
5ection 11.
11.1
Manager represents and warrants to the
Authority as follows:
a) Manager is a limited ]iability company duly organized and validly existing under
the laws of e State of Minnesota.
-34-
oo- 55/7
(b) Manager has all requisite power and authority to execute and del' er this
Agreement and perform all of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreem t by Manager will not
breach or violate any provision of the organizational documents of Iv�nager or of any indenture,
mortgage, lien, lease, material agreement, order, judgement or decree t�5 which Manager is a party or by
which its assets or properties are bound.
(d) Execution, delivery and
authorized by Manager, and this Agreement
enforceable in accordance with its terms.
(a) Manager is in
of this Agreement have been duly
a valid and binding agreement of Manager,
in all material respects with all laws applicable to
Manager (except for any failure to compty t�Sat would not have any material adverse effect on Manager's
abitiry to fult:ll its obiigations under
(fl
par[y which, if decided
effect on Manager's
(including
There is�io outstanding litigatior� or other legal dispute to which Manager is a
to Managec, would reasonably be expected to have a material adverse
fulfill its obligations under this Agreement.
All information provided by Manager that is included in this Agreement
hereto) is accurate and complete in all material respects, does not contain any
untrue staj€ment, and does not omit any statement or information necessary to make such information
complete in all material respects.
-35-
�-5y7
112 Representations and Warranties of the Authoritv. The Authority represents and
to Manager as follows:
(a) The Authority is organized as an agency of the Ci validly existing and in good
standing under the laws of the State of Minnesota.
(6) The Authority has all requisite co rate power and authority to execute and
deliver this Agreement and perform all of iu obligations der this Agreement.
(c) Execution, delivery and p rformance of this agreement by the 9uthority wilf not
breach or violate any provisien of the organi ational documents of the Autb.ority or of any indenture,
mortgage, lien, lease, material agreement, o der,�udgement or decree to which the Authority is a party or
by which its assets or properties aze bou .
(d} Execution delivery and performance of this Agreement have been duly
authorized by the Acth�rity, �fid this Agreement constitutes a valid and binding agreement of the
Authority, enforceable in acc dance with its terms.
(e) e Authority is in compliance in all material respects with all laws applicable to
the Authority (excep for any failure to comp(y that would not have any material adverse effect on the
Authority's
a party
fulfill its obligations under this Agreement).
(fl There is no outstanding litigation or other legal dispute to which the AuthoriTy is
if decided unfavorably to the Authority, would reasonably be expected to have any'material
effect on the Authority's ability to fulfill its obligations under this Agreement.
-36-
c�-5Y7
(g) All information provided by the Authority that is included in this Agreement
(including any E�ibit hereto) is accurate and complete in all material respects, does not c tain any
untrue statement, and does not omit any statement or information necessary to make ch information
correct and complete in all material respects.
Section 12. Other Provisions
12.1 Relationshio. The parties intend to create a
nothing in this Agreement shall be construed to make either F
or employee of the other. �
of independent contractors and
a partner, joint venture, principal; agent
122 Severabilitv. If any provision of is Agreement is held by a court of' competent
jurisdiction to be unenforceable, then each re mmg orovision of this Agreement shalt nonetheless
remain in full force and effect.
123
(a}
deemed to be in default
God,
shall be obligated to perform hereunder and neither party shall be
is prevented by:
(i) fire not caused by negligence of either party, earthquake, flood, act of
iotion, war, hostilities or other event, matter or condition of like namre;
(ii) any law, ordinance, rule, regulation or order of any public or military
(including any based on economic or energy controls, hostilities, waz or government
law or regulation); or
-37-
oo-5y7
(iii) any labor dispute which results in a strike, picket
affecting
RiverCentre or services hereunder (unless such dispute shall have
practices or violations by such party of applicable
been a final judicia] determination of such illegal labor
(each a "Force Majeure EvenY').
(b) Neither party hereto shall be �l
i
services, if and to the extent that doing so shali be
law, rules, regulation, order or directive.
(c) Except as
by illegal labor
agreements and there has
violations),
any obligation to supply any service or
or limited by any Federai, state or municipal
provided in this Rgreettient, na amount payable to
Maaager for it; services under this Agr�ement shall be increased for any incorrvenience, interruptioq
cessation, or loss of busines; or other ss caused, directly or indirectly, by any Force Majeure event, nor
shall any amount payable to Mana r be reduced or withheld.
(d) If a part of RiverCentre were destroyed, replaced, repaired, upgraded or
otherwise changed,the
and Manager would
adjusting the
would continue in effect for all of RiverCentre (including that paR),
the right to continue providing the services during such change (subject to
fee as the AuthoriTy and Manager may agree, based on any actual reduction or
increase of service� provided by Manager as a result of such change).
(e) The parties acknowledge that the Authority has commenced preliminary
reaarding possible renovation or reconstruction of the Roy Wilkins Auditorium and that, if
Auditorium is substantially renovated or reconstructed and the Authority enters into an operations
�
o�o- 5y7
agreement with the Ordway Center for the Performing Arts regarding theatrical productions
renovated or reconstructed Auditorium, then the applicable terms of this Agreement will be
(� The parties also acknowledge that the Authority and the rty of Saint Paut are
currently considering a pedestrian connection between RiverCentre and the s ay system of downtown
Saint PauL If such connection is approved and construction thereof is co pleted, then the connection will
be considered part of RiverCentre and Manager will cause it to be aintained on behalf of the Authority
(subject to Authority approval of costs in the annual
12.4 Waiver. No delay or omission by
process).
party to exercise any right or power it has under
this Agreement shall impair or be construed as aiver of such right or power (unless such right or
power is li�nited by a time period, in which c se such right or power shall lapse only when such time
period shall exp;re). A waiver b,v any party of any breach of thts Agreement or any o6ligation heraunder
shali aot be consirued to be a waiver of a y succeeding breach ur any other obiigation.
12.5 Headin s Refere es Of Inclusion. The headings of sections, pazagraphs and other
subdivisions of this Agreeme are for convenience only and do not affect the construction or
interpretation of the Agreemeyft. Each reference herein to "inciuding" or "includes" shall be deemed to be
followed by the words "wit out (imitation."
12.6 Entir A eement. This Agreement is the entire agreement between the parties with
respect to the subje t matter hereof, and there are no other representations, understandings or agreements
between the part,(es relating to such subject matter.
�C '2
oo- 55/ 7
12.7 Survival. This Article 12 and each provision hereof shall survive the expiration or
termination of this Aareement and shall remain in full force and effect notwithstanding any such
expiration or termination.
12.8 Third Partv Beneficiazies. This Agreement sha(l not inure to the benefit,
right or cause of action in or on behalf of, any person or entity other than the parties.
12.9 AssienmenY. Neither party may assign or transfer this
without the other party's advance written consent except that if
any
or any rights hereunder
by notice to the Authority,
proposes to assign this Agreement to an entity that (i) acquires or erwise succeeds to all or substantially
all of Manager's business and assets, including management the Arena, and (ii) before or at the time of
assignment assumes all of Manager's obligations hereundgf and agrees to perfarm or cause performance of
all of such oblieations when due then the Authority sh 1 not unreaconablywithhald or delay such approval.
12.10 Governine Law. This Agree ent and the rights and obligations of the parties under this
Agreement shali be governed by and co rued in accordance with the laws of the State of Minnesota,
without giving effect to the principles tplereof relating to conflicts of law.
12.11 Di�
(a)
of default hereunde
dispute, includin
The Authoritv and
any dispute arising under this Agreement (including any disputed allegation
is not resolved informally, either party may give to the other party notice of the
detail conceming any alleged deficiency in performance of the other parry.
Manager, respectively, shall cause the Authority Representative and the Executive
Director to/meet in person at RiverCentre and attempt in good faith to reach an agreement resoiving the
If they do not reach such an agreement within seven days after the date on which such notice is
.�
oo- 5y7
given (the "Dispute Notice Date"), then each of them shall produce a detailed report about the dispute for
his or her respective chief executive officer or chief operating officer, who shall meet in
RiverCentre and attempt in good faith to reach an agreement. If the parties have not
at
written
agreement to resolve the dispute within 30 days following the Dispute Notice Date, then ei er party may
request mediation as provided for in subsection (b) below.
(b) If any dispute between the parties under this Agree nt is not resolved under
subsection (a), then, upon notice by either party, such dispute
mediation before, and as a condition precedent to, the initiation of
Each party shal( participate in up to four hours of
chief executive officer or chief operating officer). The
parties fail to select a mediator within 10 days
submitted for non-binding
action regarding such dispute.
each case as requested by such party's
shall be selected by the parties, or if the
notice is given, then either party may request
selectien of a mediatoz by the administrator � the Ramsey County District Court Civil Alternative
Bispute Resolution Pro�ram, from its list y1f qualified neutrals. All expenses related to the mediation
shall oe botve by each paiiy, including ithout limitation ffiE costs of any experts or legal counset.
12.:2 Jurisdiction an Venue. Any legal: action, suit or proceeding brought by it in any way
related to or arising out of is Agreement shall be brought in the state courts of the State of Minnesota,
and each party hereby
action, suit or
and submits to the jurisdiction of such state courts with respect to any such
brought by or against such party. Each party waives any objection to the venue
for any such acti9fi, suit or proceeding being in such state cour[s.
Neeotiated Terms. The parties acknowledge that the terms and conditions of this
are the results of negotiations between the parties and that no part of this Agreement shall be
in favor of or against any party by reason ofthe extentto which any party or its professional
advisors participated in the preparation of this Agreement.
-4I-
oo-5y7
12.14 Notices. Each notice required or permitted under this Agreement shall be in writing and
shall be deemed given when delivered by mail, courier or facsimile to the address or facsimile
specified below (and a paper copy of any notice by facsimile transmission shall be deliveye'd within 24
hours after such transmission to the address specified below).
If to the Authority: RiverCentre Authority
Attention: Authority
Facsimile No.:
With a copy to:
City Attomey's Office
CiTy of Saint Paul
400 Ciry Hall
Saint Paul, Minneso 55102
Attention: KiverC ntre Authority Attomey
Facsimile No.:
If to Manager: Saint Paul Ar�na Company, LLC
Chris Hansen
No.:
With a copy to: F egre & Benson LLP
200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attention: William R. Busch, Jr.
Facsimile?�Io.: (612) 336-3026
Either party may c ange its address or facsimile number for notica purposes by giving the other party
15 days' notice f the new address or facsimile number and the date upon which it will become effective.
.15 Amendment. No amendment to any provision of this Agreement is valid unless in
a�d signed by an authorized representative of each party.
-42-
0�- 5 y7
12.16 Countemarts. This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which taken together shall constitute one single agree nt.
12.17 Compliance with Laws. Each party agrees to comply with all laws of e United States
of America and the State of Minnesota and with all Saint Paul City ordinances a�8 resolutions and will
not do (or altow anyone under such party's control to do) anything
violation of any such laws, ordinances and resolurions.
term of this Agreement in
IN WITNESS WHEREOF, each party has caused is Agreement to be signed and delivered by
its duly -authorized representative, effective as of the d e first above written.
f:"iVIC CENTERAUT$(�RITX
An Agency of the City of Saint Paul
(also known as T2iverCentre Authorety)
Approved as to Form:
�
City Attorney of Saint
06
B Y '-- ----------
Richard H. Ze.hring
Title: Chair
Norm Coleman
Title: Mayor of City of 5aint Paul
Joe Reid
Title: Director of Office of Financial Services
SAINT PAUL ARENA COMPANY, LLC
By:_
Title:
-43-
Exhibit A �' J� �7
to Agreement for RiverCentre
(page 1 of 1)
RIVERCEI�'TRE�
IWC}SNNEEN'c�LYPId¢ FfJYXW�'ALDfiORfUN
175 iCetlogg Boulevatd Saint Paul, Minnesota SS'02 Pnone 651-Z65-�4800 Fax 651-265-5899
S
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�
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N �
�
a
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� �\
L
�
�
S ��
Sr.
The
Ordway
0
I�
u
RiverCentre
Ramp
�!
t
�
/
Ix
n
D
Z
�
m
�I
MN
a�b
�
Science
Museum of
Minnesota
a�- 5�/7
Eachibit 13
to Agreement for RiverCenire
M7:62434L06
oo- 5�7
Exhib 3.2
to Abreement for RiverCentre
c'�- 5s�7
E�ibit 4.1
to Ageement for RiverCentre
(page Vof I)
Food Service (Volume Services)
Parking Ramp (Standard Parking)
SAOnsoIShipS
Touchstone EnPower Services
TreasareIsland
Pioneer Press
Minnesota Life
Coca Cola
Media One
Contracu Currentiv in Effect
/�
/
i
Service Aereements
Minnesota Elevators and Eagle Elevators
Lagerquist Escalators
Adams Pest Control
Powell Communications
MN Net Centrex, etc.
Tickehnaster
Loomis Armored Service
American Security
ADT
5aint Paul Bank — Cash Machine
Ikon — Copier
Red Cross
Tennant — Sweeper
Sage Software — Accounting
AirTouch Cellular
U S WEST
Missabe Group — Spon
Pitney Bowes — Stamp
Golden Gate Internet S
Telecheck
Ticketmaster
Kelly Temporary
Industrial Staffin;
Parking Ramg�onstruction Contracts
SMMA Ar�hitects— Wilkins Design
Gb'S�J7
��;b�r s.z
to Agreement for I2iverCentre
**EInformation Re�arding Existina Emoloveesl� *
MI:624341,06
ao -5y7
Exhibit 5.5
to Agreement for RiverCentre
(page 1 of3)
Emolovee Benefits Provided bv Mana�er
Health
I
N
5
U Qcntal
R
A
N Life
C
E
Single -1007 paid by employer
Family - 50% paid by empioyer /50Yo paid by
5Q°6 paid by Fmployer / HOYo paid by
1X Annual Salary Benefit 100°!a paid by
Acciderttd death d� Dismemberment
Paid Time Off (PTO)
(covers all paid 0
absences - sick, -9
wcation, funerals, 0-15
etc. - used at empioy¢e 16-23
discretion) after 23
Salary Benef�t 300% paid by Employer
�a o
20
26
29
33
36
ot 5 days of PTO at year-end allowed
Disabillty
�t term disubility -100% paid by Employ¢r
of weekly earnings - moximum $50Q per week
'Long term disability - S00 °� paid by Employer
2/3 of weekly earnings - maximum $6,OD0 per month
Holidays
New Yea�s Oay
Aierttorial Day
Independenee Day
la6or Day
Thnnksgivin9 �OY
Uay a(ter l'hmcksgiving
chrutmns Oay
Hofdi Pay: 1.5 titnes regular compensation and equivul¢nt time off
oo-5N7
Exhibit 5.5
to Agreement for RiverCentre
(page 2 �)
Emnlovee 8enefiu Provided bv Mana�er
0
P
T
1
O
N
A
L
Brenks 2 25 tnin breaks and 45 min luneh break
Retiremeert Pion = 401(k) '
Employee can coritribute up to 15 of lary (pre-tax), plus
$300 per yeur contribution by empi er to the 4o1(k) plan
(for each employee on the payPOli end of the year)
in Iieu of retiree health insuranc
Ftex�ble Spending Accamts - Funded fhrougF� gtnployee pre tax contributions
Safety Shoes $40 per cnlenda� yegF - if required by emp{oyer
optional Life Insurnttce
Additionai Life (Employee, Spouse Children) - empiayees con purcfiase additional
coverage, at their tos (see attached chart)
oo-5'w7
to Agreement for
5.5
3 of3)
Emolovee Benefits Provided bv ManaQer
Additional Life (E�nployee, Spouse d� Ghildren)
Emp(ovee Additianai coverage -$I0,000 units - Maximum 300,000
(minimum $20,d00) - guararrtee iss amount - $50,000
Employee Cost - 100%> per rate chart belo (nfter tox)
O Soouse Spause (only available if employee electi life is purchased)
Units of $5,000 - Maximum 1/2 empl elective life
P (minimum $10,000) - g tee issue amount -$z5,o00
Employee Cost -100%> per rate c rt helow (after tax)
T
Elective Life Insurance Rates are based o�moker
$10,000 - Ranging from $.90 to $102.50 ¢r month
O
N
A
L
L
Empioyee/
Spouse Age
under 30
30-34
35-39
40-44
45�9
50-54
55-59
60.64
65-69
70-74
75*
�Non Smoker
Per $10,0(
�
$
$
$
$
$
$
$
�
5.50
9.90
14.70
22.50
44.80
76.60
and Non Smoker status by age per
Smoker Rate
Per $10,000
$ 1.20
$ 1,60
$ 2,24
$ 3.50
$ 5.80
$ 9.30
$ 16.00
$ 22.50
$ 32.30
$ 59.90
$ 102.50
F
* Non-Stnoker ns that you hme not smoked� or used to6acco products in the las{ 12 months
E
Children
G arantee issue amourrt $5,000 (one preinium cov¢rs any number
f chiidren) - Do not ne¢d to purchose elective Iife for setf
Employee Cost -100% �$.90 cents per tnonth (after tax deduction)
oo-Sy7
Exhibit 6.2
to Agreement for RiverCentre
(page 2 of 1)
Evmt I�come and Erye�se
qcea Rantak
Service Incbme
Bwc Office 4imme
Toal Event Income
Total Event Expense
Net Event M1�wrtle
Mtillary I�cama
Foad & Baverdge
�.Ipy¢iy'es
Fadfdy Faes
Parkng
rota! Mc;llary locome
ToW Eventinca�ro
Other Operafing �ncoma
Parking
qdvertising
sportaships
In-I(ind or Quldoar MerWee
I�teresl
O�ca Space RerN
Miscellaneas
Totai Olherineana
AdJusted Gross 1�am�
Indirect Expe�see
Qepattmenl Expenus
[�eculive
MarkNing
Finarwx
pperations
gox Office
Overtieatl
Parkng RamP
Talal Depxtmart �P� 8 � a��
F�cpenses ANOCateC to Erer�.s
Ne<IndireUFxPen`+
ppeiayn9 �sh Flaw BMorc
Debt Serviro.Ona-dme Chu4es
1999 t999
20W RoBug 1�PP�'�
Pdmled Fy�ST QN�E!
7DWOPEW�T GBUOGET
1998 1997
�
S 1,225.6i9 S 7.074.849 S 1,3/0773 S .188,969 S 75B.347
1.454,895 1,246.038 1.4?8.437 1.341.49U 1.153,486
714.558 127.469 103.441 108.d37 153.73f1
2.794�502 2.450,356 2.91Z.65t 2.638�&% 2,065.563
(t (1.596,514) f1.794.679 (1.766.99� (1.807.961]
955.gp5 853,842 1.1'1T.9 671.899 258.499
671.267 487,239
54�3M 45.291
67,2fi6 69.7M
1,010,440 �.�
1.8IXi,344 ' 1,'13H�33�
zno,zw zzs�,n�
7 430.b05
36,000
333.Sa0
40.Oa0
720,000
131,687
76.912
2,968,909
112,565
187,866
81,6b7
53�869 9�tF�2.263 923.158
35.526 G5.7pp 67.812
45�045 302,573 a97�423
p2.032 806�930 864.160
'26.472 2.327.468 2.252,553
2.844.444 3.i99�365 7,61t.052
1,337,803 9$91,686 1,3fi8,096
36.Opp 69,010 to9,53B
2e3,50o tl,aoo -
140.000 7.500 30.000
120.�W 203.783 175,&91
91�687 49.Od9 15�300
125,438 742.187 113,226
2,124.428 1.773.270 7.812.051
4,343.014 4.968,872 4.972,574 9.323.103
,736 240�898 3C6.365 29D,696 264,469
464,476 512.046 St7.928 496.560 344,682
t gq . pps �52.pgg 162,346 145.668 734.152
2.507.776 2,233.156 2.511,461 2,407,818 2.145.079
169.268 760,076 161.235 779247 228,346
�,576.74H 1.625,639 1.622.392 1,439.947 1,025,474
957 836 883.N79 9t6.661 944.160 98b.T1B
6.101,786 5,8t7,062 6.198.988 5.954,090 5.130,976
f�.82T,596) (1.596,514) (7,7s9,679) (1.766.99� (i 807,064)
4�74.190 4.220.598 4.404,309 4,iB7.043 3.323.852
55y,yyq 122,q65 564.563 785.481 999.251
icu n ea,a oan sv� sso.aoo sso.aaa sso.000 sso.000 sso.oao
�ess Ped ConnediuJCfly Empkyee 42030 - 1b,OW 93,9fit
LessE4��l�ease(Ik�esO 727,974 t28,125 237,457 - �
TotalDa6t5ervice 624.004 7H8.125 891.457 688,OOD 743.961
LessRebcalionandSettleme ExP��9 F+�+`�000 (23.641) 25.Q00 318.097 t96.W0
594,022
NHLExpenses �� �. � 318.097 390.022
Totei One�time Gharges
Oper. income Nlt6 Nort-Cash ttM�s $ (214,039) $ (641.8'IB) $ (357,84i) S I220,616) S (734.73�
Non•cash
of Arrna A+sets 3,609,4s0
504.204 546.186 396.461 529.057 564.388
NetOperetin9lnwcne(Lm) $ Oi8,243) S (1.7fi8.004) S 048,355) 3 f4.359.f331 S f�.798)
O5/25/00 10:54 FAX 651 265 4899 RIVERCENTRE
Saint Paul RiverCentre
Event Boolcing Gnidelines
Touchstoae Energy �'Zace and Roy Wilkins Auditorium
RiverCentre is a nxulti-use facility designed to host a variety of events. Every effort wil[
he made ro accommodate client date hold reguests based on the followzng guidelines.•
k'irst priority sche�3uling is fox conventions, meetings, tradeshows and events that utiliz�
a minimtun of 65,000+ gsf, 75% of faci2iry meeting/banquet space and a minimum of�
500+ hotel rooms peak night. Dates may be confirtned and the event contracted 3F�
months prior to ihe date of event.
Second priority scheduling is for conventions, meetings, tradeshows eveuts that
utilize 30,000+ gsf, 50% of facility meeting/banquet space and a mi ' ium of 250+ hotel
rooms peak night. Dates may be co�rmed and the event contracs 24 mouths prior to
the date of event.
Third priority scheduling is For all oiher evenis and/or
may be contracted at any time within 18 months of the e
size/revenue to faeiliry and/or first-come-first-serve bas�
RiverCentre data holds may be established as
Second Hoid Facilities and dates are
group and aze held on a
FirsY Hold Facilities and dates ri
opportLmity to sign a
36(24/18 month date'
n e day� events. These events
t daie (based on event
1-18 months.)
g second option pending any other larger
basis for the client.
fl first option for client. Client given
agreement or release first option hold (at
Booked Contracted and c rmed event. Signed lease a�reement on file at
RiverCentre an receipt of rentat do�vn payment fmm c(ient.
The responsibility for faci � y marketing of RiverCentre is jointly shared by the staff of
RiverCentre {short term} d the staff of the Saint Faut Convention and Visitors Bureau
(long term.) Final faci 'ty price and lease agreement will be confizmed by RiverCentre
staf£ RivetCentre a , the Saint Paul Convention and Visitors Bureau reserve the right to
issue, modify or te mate booking policies in order to operate the facility in a sound
business manner tch maximizes economic banefits to the facility and to the city of
Saint Paul. /
For addition�X information please contact:
Saint�aul CV$
Wild
b52-265-4800
w«tiv.rivercentre.or�
651-265-4900
wti�tiv.stpaulcvb.oro
651-222-6020
wzvw.wild.com
c3na�9�
MAY-25-2098 I1�18 651 265 4899 97i
C� 002/007
Oo-5V 7
� JJ
OS/25/00 10:54 FAX 651 265 4899
RIVERCEVTRE
Recurring Communitv Events
Hmong New Year
Festival ofNations
Rondo Days
f� 003/007
� 7
MRY-25-2000 11�18 651 265 4H99 97% P.03
OS/25/00 10:55 FAX 651 265 4899 RIVERCEVTRE f�005/007
Oo-5y7
MRY-25-2060 11�19 651 265 4899 97; P.05
OS/25/00 10:55 FAX 651 265 4899 RIVERCENTRE (�006/007
oa-5y7
MqY-25-2000 11�19 651 265 4899 97i P.06
OS/25/00 10:55 FAX 651 265 4899 AIVERCE?7TRE
C�oo7ioo�
oo-Sy7
MAY-25-2009 11�20 651 265 4899 97i P•07
RiverCentre Management Fee/Employee Separation Cost Analysis
31-May-2000
Fees
Fixed
(TO be Qualifying Agreement 50% of fee must be fixe�.
Quality Experience
Incentive (Max)
Revenues included in benchmark:
Rentals
Service Income
Food and Beverage
Novelties
Sponsorships
Tota! Value o£Sponsorship
Commission
Value of Commission
Totai Fee
Seoaration Costs
Vacation
Payout
Carry Forward (days)
Comp Time
Sick/Severance
Payout - (See Retiree Health)
Carry Forward (days)
Retiree Health
Payout - (Includes Sick/Severance)
Ongoing
Retirement
Total Separetion Costs
Net to SPAC
SPAC Total, Years 0-3
RiverCentre Costs
RiverCentre - Projected Benefit
Based on Year One Total Benefd of $480 pius
Sponsorships of $250, $350, $400 in Years 1-3
Minus management fee increases in Years 2& 3
RiverCentre Total, Years Q-3
First 6 Months
(inffiousands}
$88
�
I.�
D c —S y�
Y@ar Three
(in thousands)
g200
$25
$135
(�y4.00M-
$425M
revenue
benchmark)
$250 $250 $350 $400
10% 10% 10% 10%
$25 $25 $35 $40
$113 $350 $370 $400
$76 $0 $0 $0
10 0 0 0
$136 $0 $0 $0
$0 $0 $0 $0
5 0 0 0
$0 $150 $50 $30
$150/YEAR $300/YEAR $300/YEAR $300lYEAR
401k 401k 401k 401k
$212 $150 $50 $30
($99) $200 $320 $370
($99) $101 $421 �791
$0 $0 $0 $0
NA $705 $775 $790
$2,270
Year One
(in thousands)
$175
�25
$125
($3.75M-
$4.OM
revenue
benchmark)
YearTwo
(in fhousandsj
$185
$25
$125
($3.90M-
$4.15M
revenue
benchmark)
�
CITY OF SAINT PAUL
� Office of the City Council
�'� ` 310 Ci Hall
a_ .. __ t9
Saint Paul, Minnesota 55102
Voice: (651) 266-8577
Fax: (651) 266-8574
Gregory N. Blees
Fiscal Policy Director
DATE: June 13, 2000
Intemet: greg.blees@ci.stpaui.mn.us
MEMORANDUM
TO: Council President Dan Bostrom
Councilmember Jay Benanav
Councilmember Jerry Blakey
Councilmember Chris Coleman
Councilmember Michael Harris
Councilmember Kathy Lantry
Councilmember Jim Reiter
FROM: Greg Blees, CounciPs Fiscal Policy Director �
V
00- Sy�
SUBJECT: Proposed Contract with Saint Paul Arena Company to Manage the RiverCentre
At the June 7, 2000 City Council meeting I was directed to review the proposed RiverCentre
Management Contract attached to Council File 00-547. This memo transmits my questions,
concerns and comments regarding the proposed contract between the Saint Paul Arena Company,
Limited Liability Company (SPAC) and the RiverCenh�e Authority (Authority). First, I will identify
three issues that may be considered missing from the contract proposal, and then I will identify issues
that you may want to address with the specific contract language proposed, in the order of the
contract sections.
Missing - Data Privacv Act Reauirements:
State Statue 13.05, subdivision 11 states:
"Privatization. (a) If a government entity enters into a contract with a private person to perform any
of its functions, the government entity shall include in the contract terms that make it cleaz that all
of the data created, collected, received, stored, used, maintained, or disseminated by the private
person in performing those functions is subject to the requirements ofthis chapter and that the private
person must comply with those requirements as if it were a government entity. The remedies in
section13.08 apply to the private person under this subdivision."
Section 13.02, subdivision 10 defines a"person" to include a company such as the SPAC.
cx�-5�17
Missing - Performance Bond
It may be appropriate to require a performance bond to assure the successful change of facility
staf�ing from a City regulated governmental agency to a private business. In the event that
proposed staffing changes are not orderly, timely, adequate, efficient, or successful, it may result in
significant added costs to the RiverCentre operations. Those added costs could be recovered from
a performance bond during the staffing transition period.
Missing - Fideli , Bond
The City purchases a$500,000 fidelity bond to protect the City from financial loss from any dishonest
action by City employees. It may be appropriate to require a fidelity bond to protect the RiverCentre
Operating Fund from possible financial loss due to possible dishonesty by the contractor's employees.
It would be prudent to require the SPAC to purchase a fidelity bond to cover all of their employees;
as they will be responsible for collecting approximately $6 million in revenues, payment of eapenses
totaling a similaz amount, and the handling of valuable inventory and equipment.
Section 1.4 - Operating Standards
Pazagraph b, on page 5, makes no reference to quality standazds for "facility security." Perhaps the
contract should specifically recognize the need to address facility security for both users and
employees.
Section 2.6 - Termination for Failure to Fund
My understanding of the intent of this section is that it wouid be a requirement to have an approved
operating budget known at least two months in advance of the budget year. The approved budget
would specify estimated financing sources (projected revenues, transfers and use of retained
eamings) and appropriations (granting the authority to spend or transfer money, establish reserves
or increase retained earnings.)
First, I believe the ritle ofthe section would be more accurate if it read: Termination for Failure to
A� ron ve Operating Budget. The existing wording could possibly be incorrectly interpreted to
mean that cash money may need to be advanced / made available 60 days before the beginning ofthe
yeaz.
Second, I am not sure if the public hearing and budget approval requirements of the City Charter and
the State's Truth-In-Tasation Law would permit the City Council to adopt a final operating budget
for the RiverCentre by October 31 of each year. Normally the Ciry's entire budget is adopted by
the City Council in the middle of December, after the Truth-In-Ta�cation Public Hearing which is
specified by state law to be the 2" or 3rd Tuesday in December. I see no problem with the City
Council holding a budget review meeting in October to review, analyze and question the Operating
Budget and the Capital Improvement Budget approved by the RiverCentre Authority, and to make
known any Mayoral or City Council concerns or disagreements. But, I do not believe the City
Council can formally adopt the budget until after the Truth-In-Taxation Public Hearing. This budget
approval timing issue may require a legal analysis of the governing laws.
Section 6.2 - Operating Budgets
Who has the ultimate and final budget approval authority for the RiverCentre's annual operating
budget for ihe Convention Facility and for the Pazking Ramp is a very important issue for this
contract. I believe the City Council has to have the last say in formally adopting the operating
budget, and the Council's approval may not always be based on a mutual agreement of an operating
budget by the SPAC Manger and the Authoriry.
2
ca�-54�Z
The primary justification for entering into this proposed contract is that operating costs for both the
Arena and the Convention Facility and Parking Ramp can be lessened if management, financial,
maintenance and sales staffs can be shazed. This is a good concept, as keeping total operating costs
as low as possible will help maintain a competitive posture for booking Saint Paul's facilities. But,
this shared stafFmg concept will require that certain common operating expenses be allocated to the
Arena budget (which is operated by SPAC as a for-profit enterprise) and to the Convention Facility
and Parking Ramp budgets, which aze controlled by the RiverCentre Authority.
UltimateIy the City's General Fund must assist the RiverCentre Operating Fund if it enters into a
negarive financial position. Thus the Mayor and City Council must be prepared to adjust proposed
RiverCentre Budgets if their projected unplementation is expected to produce negative financial
results. (For your information, the RiverCentre Operating Fund experienced a net operating loss of
more than $1 million in 1999, and it was the fifth consecutive yeaz of significant losses. Retained
Eamings at 12-31-99 went into a negative position of $215,000, and it is the first time in more than
twenty yeazs that the RiverCenue (Civic Center) Fund has been in a negative retained eamings
position.)
Attached is a table which identifies the historical, current, and proposed operating / financial
structures for RiverCentre Complex. The proposed new structure displays that the management
contract will have to allocate shazed costs between a for-profit Arena operation and the River
RiverCenter Authority's Convention Facility and Parking Ramp budgets. The proposed contract
does not identify any specific formulas for allocating shazed or common expenses, but Section 7.1
does require "the Manger to institute and abide by a cost allocarion and accounting system, subject
to the approval by the Authority ..."
Because of the private sector profit motive, there will be a natural tendency to allocate as much
shared expense as possible to the RiverCenter Authoriry's budget, in order to keep expenses low for
the SPAC budget. I predict there will be many debatable methodologies for aliocating shazed
expenses.
For example, assume a combined-facility salesperson makes $50,000 per year in Contract Year One
and spends 60% of his time trying to book the Arena and 40% of his time trying to book the
Convention Facility. One might logically argue that 60% of his salary should be chazged to the
private sector's budget, and 40% ($20,000) to the RiverCentre Authority's budget based on
actual costs incurred. But what ifsomeone wanted to allocate the salesperson's salary expense based
on benefits received instead of costs incurred. If the salesperson booked four events, one at the
Arena and three at the Convention Facility, someone could logically azgue that 75% ($3'7,500)
of salary be allocated to the Authority's budget based on event bookings. Or if Gross Revenues for
the one Arena event was $100,000 while the three Convention Facility events grossed $900,000, then
maybe someone would azgue that 90% ($45,000) of the salary be allocated to the Authority's
budget based on gross receipts. Or what if Net Income after expenses for the one Arena event was
$10,000 while the net for the three Convention Facility events totaled $300,000 ... then someone
else could azgue that the Authority should pay 97% (�48,387) of the salespersons' salary based
on net revenues. And what happens if in Contract Yeaz Two, the salesperson books no events,
would you then change the allocation formula to relate to time spent attempring to book events?
Which allocation method is most correct? I don't know, perhaps a combination of formulas. But
for sure, I know which one of the above options would most benefit the bottom line of a for-profit
business.
Once the RiverCentre empioyees aze transferred to the SPAC, the Manger will have some significant
leverage in deciding discretionary allocations of shazed costs.
I think it is good for the SPAC Manger to annually propose an operating budget to the RiverCentre
Authority for the Convention Facility and the Pazking Ramp. And it is great to a have a goal of
having the Manger and the Authority mutually agree to budget appropriations. But in the event the
Manger and Authority cannot mutuaily agree on spending priorities, allocated costs or financing
sources, I think the Mayor and City Council should reserve their rights to step in and make
recommendations and fuial decisions on budget disagreements, rather than reverting to the prior
yeaz's budget authoriTy which may no longer be affordable, strategic, or realisuc.
Or what if the focus of a future Authority is to maximize downtown business benefits at the expense
of the citywide property taY payers (assume an Authority wants to spend discretionary money on
promoting downtown hotels and restaurants, instead of on the systematic maintenance of the City
owned parking ramp which was originally financed with tax levy g.o. bonds). Shouldn't the Mayor
and City Council reserve their right to debate and change RiverCentre budget appropriations to
protect investments made by citywide taxpayers?
Besides modifying the contract language to make it cieaz that the Mayor and City Council have final
budget approvai authority based on City Charter budget adoption requirements, this section of the
contract could also acknowledge the need for public heazings on the RiverCenter budgets.
Also, the Manager could be required to annually provide the Authority, Mayor and City Council with
a copy of SPAC's operating budget for the Arena, so that cost sharing methodologies, assumptions,
and projections can be clearly understood and verified.
Section 6.5 - Caaital Exnenditures
My comments on the issues of ultimate budget approval authoriry, timing of budget approvai, and
public heazings for the RiverCentre's Capital Improvement Budget are the same as just described for
the Authority's operating budget.
I do suggest that any proposed RiverCentre Complex capital expenditure that relates to buiiding
additions orreconstruction, land acquisition, or public access improvements be submittedto the Saint
PauPs Long Range Capital Improvement Budget Committee for coordination and integration with
the annual capital improvement budget and five-yeaz program.
Section 8.2 Base Amount for Management Fees
Are the fees referenced in this section meant to directly cover some of SPAC `s direct management
costs or are they meant to be pure profit to SPAC? Because no mention is made that the base
management fee amount is paying for specific salary costs of SPAC's management team, one could
assume that the salary costs of those mangers would also be allocated as shazed costs through the
cost aliocation system. Will the RiverCenter Operating fund be paying for management services twice,
once through a base management fee and once through a cost allocation system?
Section 8.4 - Revenue Amounts for Management Fees
I think it is most important to have incentives to rewazd mangers for exceptional service. My
preference would be to have management incentives based on operating profits produced, but this
Ck'�-;�*�7
0
option is not possible because it would jeopardize the tax-exempt status of the bonds issued for the
convention facility. Given the choice between management incentives based on revenue growth or
expenses incurred, this contract uses the method which would more likely generate a profit for the
KiverCentre Operating Fund ... revenue growth targets. The revenue growth being measured is just
from the operations ofthe Convention Facilities, and excludes Pazking Ramp revenues and other non-
operating income such as hotel-motel ta�c and investrnent eamings.
Please be awaze of this fact that just because there could be a significant growth in Convention
Facility revenues, there is no assurance that profits or net income will be generated. Every yeaz since
1989, the RiverCentre's building expenses have been greater than building revenues. Between 1989
and 1998, revenues for operating the old arena and both old and new convenrion facilities totaled
$31,469,627, while the operating expenses for those buildings (not including debt service) totaled
$38,527,220. (Please see the attached spreadsheet "RiverCentre Operations: 1987 to 1998") On
average there was $1.22 in building expenses for every one dollar in building revenue generated. To
implement a management incentive fee based on gross revenues, would not automatically result in
a profit if revenue targets were met and incentive fees awazded.
I believe the amounts proposed for the First and Second Gross Revenue Tazgets for the year 2001
may be on the low side if the incentive fee is truly meant to reward exceptional performance. My
opinion is based on the following facts. The actual convention facility fees collected in 1999 totaled
$2,980,793 and they were sorted as:
Building Rentals $1,121,456
Equipment Rentals
Building and Event Services
Concessions
SUBTOTAL-Gross Revenues
Commissions
TQTAL Building Revenues
190,050
1,057,285
612,002
2,980,793
732,203
$3,712,996
Used for Revenue Tazgets
Not used for Revenue Targets
The First Target proposed for the yeaz 2001 is $3,750,000, which is a 26% increase over 1999 actual
coIlections. But the RiverCentre staff estimates, that based on advanced bookings and traditional
business, the four revenue sources being measured for the gross revenue incentive should produce
$3,757,190 in the year 2001.
If one were to accept that $3,757,000 amount as a base line starting amount, and add to it an amount
of $175,000 to equal the base management fee, and then add an amount of $50,000 to equal the First
Tazget management incentive fee, the total First Tazget Gross Revenue Amount should equal at least
$3,982 just to get back to the staffprojection of Gross Revenue without any net revenue gain to the
Authority. If the First Tazget amount was set at $4,000,000, the projected better management
(higher revenues) would only produce a gain of $18,000 in gross revenues to the RiverCenter, over
what they aze currenfly proj ecting, after subtracting out base management fees of $175,000 and First
Tazget Incentive Fees of $50,000. If one wanted the RiverCentre to get added gross revenues equal
to the Base Amount and First Tazget Incentive management fees of $225,000, then the First Tazget
Gross Revenue Fee should be set at $4,20 7,000 for the yeaz 2001. If one than wanted the Second
Tazgei Amount to produce an equal share of gross revenue to the Manager and the RiverCentre, than
it should equal at least $4,357,000 for the yeat 2001.
�-�y
I would recommend against using Gross Revenue targets for management incentives unless the
Do-SS��
targets were increases significantly over the levels proposed in the contract. I would recommend a
management incentive program that tazgets specific revenue sources that have lower expense-to-
revenue ratios such as Concession revenues and Commission revenues. I wouid avoid measuring
gross revenues which have higher expense- to-revenue ratios, such as Building Rentals, Equipment
Rentals, and Building and Event Services. I would be willing to work with RiverCentre and SPAC
staff to develop equivalent incentive fees base on focused revenues with lower expense-to-revenue
ratios, if so directed or requested.
Section 8.5 - Commissions
Language should be added to cleazly idenrify that "New Revenue" in paragraph b does not include
Gross Revenues from Building Rentals, Equipment Rentals, Buiiding & Event Services, Concessions
or Pazking Ramps and Lots.
Section 12.3. Force Ma�ure: Certain Changes to RiverCentre
Pazagraph ( fl should be clarified to acknowiedge that the City is consh a Pedestrian tunnel to
the RiverCentre complex, and that the base management fee has been established to assume the
Manager will be responsible for future tunnel operations, subject to tunnel costs and revenues being
included in an approved future operating budget.
Respectfully submitted,
Greg Blees � ��
c: Mayor Coleman, Susan Kimberly, Joe Reid, Peter McCall
Dick Zehring, Chairman RiverCentre Authority,
Chris Hansen, President, Saint Paui Arena Company
Jac Sperling, CEO, Minnesota Wild
Scott Renstrom, Jane Prince, Gerry McInerney, John Lesch, Matt Reinartz, Bob Connor,
Janice Keran,
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FAEGRE & BENSON Lr,r
2200 NORWESf CENTER� 90 SOlTiB SEVENIH STREEt
�II3QEAPOLiS, 11'�R�NESOTeI 554 02 39 0 1
TELEPHONE 61233 63 0 0 0
FAG4MILE 6i2-33b3026
June 21, 2000
Peter McCall
Ciry Attomeys Office
400 Ciry Hall
St. Paul, Minnesota 55102
Re: A�reement for RiverCentre (F&B File No. 2205161
Dear Pete:
�o-3�t 7
coPY
S�b--v- -� 3 3
� t� � ��
. V
As requested, enclosed is a revised draft (dated June 21, 2000) of page 44 of the agreement
referred to above. The changes from the previous draft are marked for your reference.
I understand that Joe Reid would like copies delivered to Nancy Anderson, and we have provided
those directly to her.
P�ease call with any questions.
� 1 ► � .—
Sincerely,
` ` —�
William R. Busch, Jr.
WRB:zieal
Enclosures
MI:635519.01
cc: Joe Reid
Nancy Anderson
Martha Fuller
Chris Hansen
Minxeapo[is Dexver Des Moines London Frankfurt
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12.16 Counteroarts. This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which taken together shail constitute o single agreement.
12.17 Comuliance with Laws. Each party agrees to comply wit all iaws of the t3nited States
of America and the State of Minnesota includin the Minnesota Data ractices Act and with all Saint I
�
Paul City ordinances and resolutions and will not do (or allow any ne under such party's control to do)
anything during the term of this Agreement in violation of any s laws, ordinances and resolutions.
IN WITNESS WHEREOF, each party has cause this Agreement to be signed and delivered by
its duly -authorized representative, effective as of the d e first above written.
�
Approved as to Form:
City Attorney
C1VIC CENTER AUTHORITY
An Agency of the City of Saint Paul
(also known as RiverCentre Authority)
Title: Chair
H. Zehring
By:
Norm Coleman
Title: Mayor of City of Saint Paul
By:
7oe Reid
Title: Director of Office of Financial Services
SAIlVT PAUL ARENA COMPANY, LLC
�
� ..�,-.a_ -wMl'6�4347 08 .... �
=.'`3
�
00-547
Please note that the negt two pages - the
Interdeparhnental Memo from Peter J. McCall to the
Civic Center Commissioners is\
Privileged-Non Public Information
Do Not Give Out to the Public when
making copies of this resolution.
�' 5�f7
Interdepartmental Memorandum
CITY OF SAINT PAUL
ATTORNEY CLIENT COMMI.TNICATION
PRIVILEGED-NON PUBLIC
DATE: May 31, 2000
TO: Civic Center Commissioners and
City Council members
FROM: Peter J. McCall
Assistant City Attorney
RE: Executive Summary of Agreement with Saint Paul Arena Company to Manage
RiverCentre
The following is a brief suminary of the significant psbvisions of the proposed agreement with Saint
Paul Arena Company. This sumniary is not intencYed to be a complete suimnary of the agreement.
Operatine Standards (Section 1.4�. Th�Manager will manage the RiverCentre in a manner
that is reasonably prudent, consistenthvrth operations of other first-class public facilities and
consistent with the public invesrir�nt that has been made in the RiverCenire. All areas of
the RiverCentre's operations wikI be monitored including such items as the interior and
exterior appeazance of the facilfties, concessions and public facilities, customer service and
parking. Each yeaz these standazds will be identified as part of the process approving the
operating and capital bud�ets for the upcoming year. The Authority Representative will
evaluate the Manager's�5erformance by use of customer and vendar surveys and interviews
with the generai publi'c.
2. Authority Repre�ntative(Section 3.1�. The CCA will appoint a person to act as Authority
Representativeiwho shall oversee the operations at RiverCentre and its financial results
through abuRTget and reporting process. All e�traordinary contracts and aproposed operating
and capital' budget shall be approved by the Commissioners..
3. Termlof A2reement Section (21. The Agreement will start on July 1, 2000, and end on
Degember 31, 2004. Both the Authority and the Manager have a right to terminate the
A�reement within three (3) yeazs or on June 30, 2003. Further, the Authority has the right
ho terminate the Agreement for non performance by the Manager.
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4. Arena Related Ri�hts to Tenninate (Section 22. Since the Manager is also the tenant under
the Arena Lease, this Agreement ternunates if the Arena Lease terminates or Manager ceases
to have a contractual right to manage the Arena or ceases in fact to manage the Arena.
5. Use by the Authoritv (Secrion 3.21. The Authority shall have the right to use RiverCentre
on a rent free or reduced rent basis for events that benefit the community. A list of recun�ing
events that the parties eapect to take place is attached as an e�ibit.
6. Extraordinarv Contracts(Section 4.1�. The Authority's Commissionrers sha11 approve a11
extraordinary conlracts which include the primary pazking management contract for
RiverCentre, the concessions contract, the food and beverage catering contract, any contract
£or sponsorship or advertising that creates signage rights for more than 30 days and any other
agreement that the Authority may from time to time designate as an extraordinary contract.
All other contracts are deemed ordinary contracts which can be entered into by the Manager
without the Authority's consent.
7. Personnel (Section 51. The Authority will provide layoffnotices to each existing employee
stating that the last day of employment will be June 30, 2000. The Manager will extend
offers of employment to each existing employee and each offer shall include: (i) wages at a
rate not less than now in effect, (ii) position and duties substantially the same as now
assigned to such existing employees, and (iii) such terms and conditions are required under
each collective bargaining agreement. Manager shall further provide the health coverage and
other employee benefits in accardance with employee benefit plan which is attached as an
e�ibit. Each offer sha11 include a start date of July 1, 2000. Further, each employee will
be paid his or her accrued personal time, vacation time, compensatory time and other time
which they are entitled to receive payment on.
8. Budgets and Reports (Section 6�. Each year the Manager and Authority shall establish and
approve an operating and capital budget. Also, the Manager will be pxoviding operating
statements to the Authority within twenty (20) days following the end of each month and a
year end report within si�1y (60) days following the end of each yeaz.
9. Mana�ement Fees(Section 81. The Manager will be paid a base fee plus an annual incentive
fee. The base fee begins at $175,000 per year, increases to $185,000 for yeaz two and then
$200,000 per yeaz thereafter. Also, the Manager will have the right to earn an incentive fee
up to the fixed fee amount if it increases revenue for the RiverCentre above established
benchmarks and from outside sponsorships and based on a quality experience for the
customers. The Manager has agreed to pay all of the personnel separation costs described
in Secfion 7 above.
ORIGINAL
Council File # OQ � 5 � �
Green Sheet # � O` �3 �} �
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA
Presented By
Referred To
Committee: Date
RESOLUTION APPROVING MANAGEMENT AGREEMENT
FOR RIVERCENTRE WITH SAINT PAUL ARENA COMPANY, LLC
3
WIIEREAS:
1. On May 31, 2000, the $oard of Commissioners of the Saint Paul RiverCentre
Authority ("Authority") approved an agreement between the Civic Center Authority, an agency of
the City of Saint Paul (also lrnown as RiverCentre Authority) and Saint Paul Aren� Company, LLC
("SPAC") for the management of RiverCentre (the "Agreement").
2. The Agreement provides that SPAC will manage the RiverCentre, including the
Convention Center (known as"Touchstone Energy Place"), the Roy Wilkins Auditorium and
RiverCentre parking ramp south of Kellogg Boulevard.
3. Pursuant to Laws of Minnesota, 1973, Chapter 538, the Authority may contract out
the management of the parking ramp and that any such contract must be approved by the Council
of the City of Saint Paul.
NOW, THEREFORE, BE IT RESOLVED:
20 1. The City CounciI hereby approves the Agreement in substantially the form submitted
21 and authorizes the Mayor and Director, Office of Financial Services to execute the Agreement. The
22 approval hereby given to the Agreement includes approval of such modifications thereof, deletions
23 therefrom and additions thereto that may be necessary and appropriate and approved by the Director,
24 Office of Financial Services and the City Attorney.
Aequested by Department of:
Adopted by Council: Date
Adoption Cer�tified by Cour�.'�Il Secretasy
By: �
Approved
By: _
a-a O II
By:
Form Appro d by ity Attorne
By:
Approve y ayor for Submission to Council
By:
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Agreement for RiverCentre
between
� Civic Center Authority, an Agency of the City af Saint Paul
(also known as RiverCentre Authority)
and
Saint Paul Arena Company, LLC
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TABLE OF CONTENTS
Section 1. Engagement of Manager; Services
1.1 Engagement ...................................
12 Scope of Services ..........................
13 Specific Services ...........................
1.4 Operating Standazds ......................
Section 2.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Termand Termination .................................................................................
Term............................................................................................................
**[intentionally deleted]** ................................
...............�-�----....................
Optional Termination .............�--..................................................................
Termination for Default ...............................................................................
Arena-Related Rights to Terminate .............................................................
Termination for Failure to Fund ..................................................................
Effect of Termination ..................................................................................
....................2
....................2
....................2
........6
........6
..............7
..............8
..............8
Section 3. Authority Oversight and Authority Representative; Use by Authority ...............................9
3.1 Oversight and Authority Representative .............................................................................9
3.2 Use by the Authority .........................................................................................................10
Section 4. Contracts Regarding RiverCentre .....................................................................................11
4.1 Extraordinary and Ordinary Contracts ..............................................................................11
4.2 Contract Administrator ......................................................................................................12
43 Contracts with Affiliates ...................................................................................................13
4.4 Mutually Advantageous Arrangements .......:.....................................................................13
Section 5.
5.1
5.2
53
5.4
5.5
5.6
5.7
Section 6.
6.1
62
63
6.4
6.5
6.6
6.7
6.8
6.9
Personnel ....................................................................................................................
Employment and Supervision; Appointment of Executive Director ..........................
Existing Employees ....................................................................................................
Collective-Bargaining Agreements ............................................................................
Offers Employment ................................................................................................
Employee Benefits ..............................�---...................................................................
Assumed Obligations .................................................................................................
NoSolicitation ............................................................................................................
dperating Year; Budgets; Reports ............................
Calendaz ...........................................................
Operating Budgets ....................................................
Accounting, Recording and Allocations ...................
Monthly and Annual Reports ...................................
Capitaa F,xpenditur�s ......................-............----------
Authority Administrative Budget .............................
City Counci! Approvai ...� .........................................
Modifications to Badgets .........................................
Ogerating Standazds ...................................•----.........
� Section 7. Receipts and Disbursements; Funding ...............
7.1 Receipts and Disbursements ...............................
.......14
.......14
.......14
.......15
.......I S
.......16
.......16
.......17
........................................... � I 8
............................................ � 18
................................................18
.............................................1-819
................................................20
................................................21
................................................22
............................................�23
....-• ..........................................23
................................................23
..........................23
..........................23
cr�- 5 y 7
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72 Funding ..............................................................................................................................24
73 NoObligationofManagertoFund ...................................................................................24
Section 8. Management Fees; Commissions ..................................................................................�425
8 .1 Management Fees .....................°°---°-......................-°--..........................--°-°-°°°---....�
8.2 Base Amoants ......................................................................................�-----.......................25
83 QualityAmounts---- ......................................°-°-........°°----.......---°-..............................25
8 .4 Revenue Amounts .......-�---� ............................................................................................�
8 .5 Commissions .................................................................................................................�627
8.6 Limitation ..........................................................................................................................28
8 .7 Prorated Amounts ..............................................................................................................28
Section 9. Indemnification and Insurance ......................................................................................�130
9 .1 Indemnification .................................................................................................................�9
�
�
Section 10. Ownership of Assets; Related Obligations; Audit Rights ................................................33
10.1 Ownership ........................................................................................................................33
10.2 Authority Obligations .......................................................................................................34
103 **[intentionallydeleted]r ............................................................................................3435
Section 1I . Representations and Warranties ....................................................................................3435
I I.1 Representations and Warranties of Manager .................................................................3435
11.2 Representations and Warranties of the Authority .............................................................36
Section 12.
12.1
122
123
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
12.13
12.t4
12.15
12.16
I2.37
Other Provisions ...............................................................................................................37
Relationship ......................................................................................................................3 7
Severability ....................................................................................................................3�3 8
Force Majeure; Certain Changes to RiverCentre ..........................................................3�38
Waiver ...........................................................................................................................3440
Headings; References Of Inclusion ...............................................................................3940
Entire Agreement ..........................................................................................................3940
Surviva1 .............................................................................................................................40
Third Party Beneficiaries ...................................................................................................40
Assignment ........................................................................................................................40
Goveming ..............................................................................................................4A41
Dispute Resolution ........................................................................................................4841
Jurisdiction Venue ...................................................................................................4�42
Negotiated ..........................................................................................................4�-42
Notices ...............................................................................................................................42
Amendment ...................................................................................................................4�43
Counterparts ......................................................................................................................43
Compliance I,aws..._� .......................................................................�-----....................43
ii
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Exhibit A
Exl�ibit 13
E�ibit 32
E�thSbit 4.I
Eachibit 5.2
Exhibit 5.5
E�tibit 62
Diagam ofRiverCentre
RiverCentre Event Booking Policy
Recurring Events
Contracts Currently in Effect
Information Regazding Existing Employees
Employee Benefiu Provided by Manager
Format of Operating Budget
iii
G�7 5 S�7
�
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Defined Term
50% Test
Administrative Budget
Ageement
Annual Report
Annual Report Date
Approved Capital Budget
Approved Operating Budget
Arena
Arena Lease
Authority
Authority Approval
Authority Representative
Base Amounts
City
Continuing Obligations
Dispute Notice Date
Executive Director
Existing Employee
Extended Contract
Extraordinary Contract
Force Majeure Event
Gross Revenue
Hired Employee
Indemnified Pac
Indemnifying Party
Losses
Manager
Manager Representative
Monthly Statement
Multi-Year Project
New Contract
Nevv Rea��nue
Offer
One Time Retirement Cost
Operating Accounts
List of Defined Terms
Section Reference
8.6
6.6
Introduction
6.4
6.4
6.5
62
Introduction
Introduction
Introduction
3.1
3.1
8.1
Introduction
2.7
12.11
5.1
52
8.5
4.1
123
8.4
5.6
9.1
9.1
9.1
Introduction
3.1
6.4
6.5
8.5
8.5
5.4
5.6
7.1
iv
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.
i
Defined Term
Operating Standazds
Optional Termination Date
Ordinary Contract
Preliminary Report
Prorated Tazget
Quality Amounts
Revenue Amounts
RiverCentre
RiverCentre Authority
RiverCentre Contract
Signing Date
Start Date
Term
Section Reference
1.4
23
4.1
6.4
8.7
8.1
8.1
IntroducTion
Introduction
4.1
4.1
2.1
2.1
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c�o-S� 7
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AGREEMENT FOR RIVERCENTRE
THIS AGREEMEN'I' FOR RIVERCENTRE (this "AgeemenP') is made and entered into this
_ day of June, 2000, by and between the Civic Center Authority (also known as "RiverCentre
Authority"), an agency of the City of Saint Pau] (the "Authority"), and Saint Paul Arena Company, LLC,
a Minnesota limited liability company ("Manager").
WHEREAS, the City of Saint Paul (the "City") owns the facilities in downtown Saint Paul,
�
Minnesota, known as RiverCentre, including the convention center known as "Touchstone Energy Place,"
the Roy Wilkins Auditorium, and the RiverCentre parking ramp south of Kellogg Boulevazd (plus any
pedestrian connection constructed linking RiverCentre to the City's skyway system) shown on E�ibit A
(collectively, "RiverCentre"), and the Authority has the authority and responsibility to provide for
management and oversight of RiverCenue; and
WHEREAS, Manager is engaged in the business of providing management services for public
assembly facilities, including the sports and enteRainment arena (owned by the City) cunently under
construction adjacent to RiverCentre (the "Arena"), which is subject to an Arena Lease dated January 15,
1998 {the "Arena Lease"), among the City, the Authoriry and Minnesota Hockey Ventures Group, LP, as
Tenant, which Arena Lease has been assigned by Tenant to Saint Paul Arena Company, LLC; and
WHEREAS, Manager desires to provide management services for RiverCentre and the Authority
desires to obtain such management services from Manager, on the terms and conditions stated herein;
NOW T'AE1tE�ORE, in considera�ion of the mutuad coavenants, terms, conditions, and
abli�ations stated herein, and intending themselves to be legally bound hereby, the Authority and
� Mana�er hereby agree as follows:
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Section 1. Engaeement of Manager; Services
1.1 En¢aeement. The Authority hereby engages Manager to manage, operate, maintain,
market and promote RiverCentre for public purposes (in accordance with Minnesota Laws 1967,
Chapter 459, as amended to date), and Manager hereby accepts such engagement under the terms and
conditions provided below. This Agreement shall be consistent with all ]aws governing RiverCentre,
including special legislation.
1.2 Scone of Services. Manager shall perform and provide such management services as are
needed to manage, operate, maintain, and promote RiverCentre in a manner consistent with this
Agreement. Subject to the limitations stated in this Agreement, Manager shall have general responsibility
� and authority to conduct operations of RiverCentre and activities therein on behalf of the Authority.
1.3 Soecific Services. In the course of managing RiverCentre hereunder:
(a) Manager shall, from time to time, hire, promote, supervise aad direct all
employees and other personnel at RiverCentre (including work assignments, compensation, benefits,
performance reviews, discipline and discharge) in a manner consistent with this Agreement.
(b) Manager shall supervise all contractors, subcontractors and other contracting
parties providing goods or services to RiverCentre (including food service, maintenance and security) and
shall negotiate renewals, extensions and replacements for the provision of such goods and services from
time to �e and repore such renewals, extension� �rea3 replacements to the Authority (all in accordance
with Section 4 ofthis Agreement).
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(c) Manager shall manage capital improvements of RiveiCentre, including the
bidding process for each improvement and supervision of the construction thereof, in each case subject to
the applicable Approved Capital Budget (as hereinafrer defined).
(d) Maaager shall arrange to rent, lease or purchase such equipment and supplies as
are needed from time to time for the operation and maintenance of RiverCentre, in each case subject to
the applicable Approved Operating Budget (as hereinafter defined).
(e) Manager shall arrange for payment on behalf of the Authority of all operating
expenses for RiverCentre as contemplated in each Approved Operating Budget.
(� Manager shall, on behalf of the Authority, take such actions as Manager shall
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deem necessary to collect charges, rents or other amounts due to RiverCentre, or to enforce or pursue
damages under any license or other agreement regarding RiverCentre (including such legal actions or
proceedings as Manager may deem necessary).
(g) Manager shall maintain complete records and schedules for booking events and
other uses of RiverCentre.
(h) Manager shali provide, on behalf of the Authority, day-to-day administrative
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services to suppoR operations of RiverCentre, including budgeting and accounting; payroll; billing,
collections and disbursements; obtaining insvrance (as provided hereinafter); and maintaining on the
Authority's behalf such permits and licenses as are required to operate RiverCentre under such laws and
rules of government agencies as are applicable to opera�aons of RiverCentre.
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(i) Manager shall book and schedule events to take place at RiverCentre (in each
case subject to the Authority's event-booking policy, a copy of which is set forth in E�ibit 13), shall
consult regu]azly with the Authority Representative on the scheduling of events to ensure that RiverCentre
benefits from all scheduling decisions, shall advertise and promote use of RiverCentre for purposes of
realizing its full potential, and, in connection therewith, may use the names "RiverCentre," "Touchstone
Energy Place," "Wilkins Auditorium," "RiverCentre Authority" and "Civic Center Authority of Saint
Paul" and related logos and other marks for each, as well as names, logos and other mazks of each part of
RiverCentre as in effect from time to time. Manager will masimize operations and bookings of
RiverCentre to a capacity that is consistent with the spirit of this Agreement.
(j) Manager shall solicit, promote and sell on the Authority's behalf advertising at
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RiverCentre and sponsorships of RiverCentre (in each case consistent with the terms of agreements then
in force) and shall pursue opportunities for advertising and sponsorship that include both RiverCentre and
the Arena (in each case subject to Section 4, re(ating to contracts). Manager shall consult with and obtain
approval from the Director, Office of Financial Services (City of Saint Paul), before signing any
agreement that results in "private business use" of RiverCentre (within the meaning of Section 141(b) of
the Intemal Revenue Code of 1986, as amended, and Treasury Regulations § 1.141-3 thereunder) or could
reasonably be intetpreted as resulting in such "private business use."
1.4 Ooeratine Standards
(a} The Autharity and Manager acknowledge and agree that a principal objective of
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this Agreement is to manage RiverCentre in a manner that is reasonably prudent, consistent with
operatio�s of other fir,t-class public faciiities and consistent wsth the public investment that has been
made in RiverCentre. In addition, Manager acknowledges that these are public facilities and, as such, the
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� public has a right to expect that such facilities are managed in a manner that is consistent with the public
investment that has been made.
(b) To that end, "consistent with" will refer to all azeas of operations, including, but
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not limited to:
(i) interior and exterior appearance of all facilities
(ii) employee performance
(iii) operation of aIl facilities
(iv) concessions and public facilities
(v) customer service
(vi) mazketing and promotion of all facilities
(vii) customer satisfaction of all facilities
(viii) ingress and egress for parking
(ix) load and unload times for loading docks
(x) cleanliness, responsiveness and quality of food and beverage service
(xil securiri
(c) Manager shall provide the services hereunder in such a manner not only to
achieve such standards in 2001, but also to commit to meeting or exceeding such standards for each year
as set forth in the Approved Operating Budget for such yeaz (the "Operating Standards").
(d) In addition to general guidelines developed by the Authority Representative, in
consultation with Manager and r�viewiva the practices and operatians of other similaz public facilities,
the Authority Representati�e will use the fo)lowing Ynols to determine if the Operating STandards have
been achieved:
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(iii) general public surveys
(iv) Convention and �sitors' Bureau interviews
(v) RiverCentre Authorety interviews
(i) customer surveys
(ii) vendor surveys
Section 2. Term and Termination
2.1 Term. The period during which Manager shall provide services hereunder and during
s
which the Authoriry shall purchase and pay for such services in accordance with this Agreement (the
"Term") shall start on July 1, 2000 (the "Start Date"), and end on December 31, 2004, unless terminated
sooner as providsd in th4s Agreement.
2.2
**�intencionalty deletedl**
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Optional Termination. June 30, 2003, shall be the "Optional Termination Date." Each of
the Authority and Manager shall have the right to terminate this Agreement, effective on the Optional
Termination Date and without cause or penalty, by giving notice of such termination to the other at least
90 days before such Optiona] Termination Date.
2.4 Termination for Default
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(a) If either party shall fail to pay when due any acnount payable hereunder, then the
other party sha11 have {in addit'son to such party's rights to enforce this Agreement and receive
indemn�cazian for any breach hereof} the right To give notice of such default. If such amount is not paid
within ] 0 days following the giving of such notice, then the party giving such noTice may terminate this
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� Ageement by notice of termination given within 30 days following the end of such 10-day period. If this
Agreement is terminated under this paragraph (a), then the terminating party shall have no further
obligations under this Agreement after such termination (other than Continuing Obligations (as hereinafter
defined)), but the defaulting party shall continue to be liable for such defautt and for all damages caused by
the defaulting party's breach of this Agreement
(b) If either party shall fail to perform any of such party's material obligations under
this Agreement (other than a failure to pay when due any amount payable hereunder), then the other party
shall have (in addition to such party's rights to enforce this Agreement and receive indemnification for any
breach hereofl the right to give notice describing such failure with particulariry. Upon receipt of such
notice, the failing party (i) shall take all reasonable actions to promptly cure such failure or (ii) if such
failure cannot then be cured in all respects (whether due to expiration of a time period or otherwise), shall
take all reasonable actions to cure such failure to the e�ent possible and to prevent recurrence of such
� failure. If the failing pariy does not comply with its obligations under this pazagraph (b) within 60 days after
receipt of such notice of failure, then the party giving such notice of failure may terminate this Agreement
by notice of termination given within 30 days following the end of such 60-day period. If this Agreement is
terminated under this paragraph (b), then the terminating party shall have no further obligations under this
Agreement after such termination (other than Continuing Obligations), but the defaulting party shall
continue to be liable for such default and for ali damages caused by the defaulting party's breach of this
Agreement.
2.5 Arena-RelatedRishtstoTerminate. If
(a) the Arena Lease were terminated in accordance with its terms as a result of a
defauhbythetenantthereunderor
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(b)
Manager ceases to have a contractual ri�ht to manage the Arena or ceases in fact to
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manage the Arena,
then the Authority shall have the right to terminate this Agreement by notice of termination given to
Manager within 30 days following such termination of the Arena Lease or such cessation.
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2.6 Termination for Failure to ��:Approve_ With respect to each Approved Operating
Budget, if funds aze no'°-- `-� «'�° "..«'��-:�, ^^'' approved by the Authoritv and eiven
preliminarv approval bv ihe Mavor and City Council at least 60 days prior to the beginning of the year to
which such Approved Operating Budget applies (and made available in°- �m�..�` �..`��:°-' «,. r....,,
' accordance with Section ^°°'- "°-��� - a ^-°-°`�°° a° . then
Manager shall have the right to terminate this Agreement by notice of termination given to the Authority
at least 60 days prior to the termination date stated in such notice.
2.7 Effect of Termination
(a) Upon any termination, Manager shall deliver to the Authority any funds and
other property belonging to the Authority then in Manager's control, and the Authority shall reimburse
Manager for any expenses previously incurred by Manager on behalf of the Authority, plus any unpaid
amounts under Section 8(prorated as provided in Section 8), less any amounts then owed by Manager to
the Authority as a result of such termination or otherwise.
(b) Upon te�inatiun, the Aaathority shall cause any successor manager of
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RiverCentre (whether a private contractor or public body) to (i) employ following the date of termination
(but subject to dischazge for cause) each employee of Manager then employed at RiverCenve and
(ii) assume and pay all of the assumed obligations under Section 5 not previously satisfied.
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Norivithstanding the foregoing, however, if Manager has designated one senior manager for continued
employment by Manager, then the Authority would not solicit that manager or otherwise offer
employment to that Manager. The foregoing shall not, however, prohibit the Authority from empioying
such designated senior manager if such manager applied independently for such employment (for
example, in response to a general employment advertisement published by the Authority), without any
solicitation by the Authority.
(c) Notwithstandingany termination of this Agreement, the parties shal] continue to be
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bound by their respective obligations under Section 9.1 (relatingto indemnification), Section ] 0(relating to
ownership), Section 5(relating to personnel), Section 8(to the extent of any fees, commissions or other
amounts thereunder becoming payable after termination) and Section 12 (relating to the relationship of the
parties and other matters), which are the "Continuing Obligations," and such sections shall survive any
termination of this Agreement.
Section 3. Authoriri Oversiaht and Authoriri Renresentative: Use bv Authoritv
3.1 Oversi¢ht and Authoriri Renresentative. All assets, revenues, obligations and expenses
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of RiverCentre shall be held and incurred by Manager for the Authority's account, and the Authoriry shall
oversee operations of RiverCentre and its financial results through the budget and reporting process
specified in Section 6. Manager shall report to the Authority through an individual designated by the
Authority as "Authority Representative," who shall be an employee or consultant of the Authority.
Manager shall designate its highest ranking officer to report to the Authority Representative as the
"Manager Representative" described an this Ageement. The Authority shall designate the Authority
Representative by noYice io Manager within five days afrer tiae date of this Agreement and shall thereafter
from time to time redesignate, replace and otherwise take such action as necessary to cause there to be a
duly designated and authorized individual serving as Authority Representative at all times. The AuthoriTy
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� shall cause the Authority Representative to oversee performance of this Agreement, respond to Mana�er's
inquiries and consult with Manager at all times regazding the operations of RiverCentre and achievement
of its public-purpose objectives. The Authority shall authorize and cause the Authority Representative to
review actions proposed by Ma�ager that require approval by the Authority hereunder and, with respect to
such proposed action, receipt by Manager of written approval signed by the Authority Representative
shall be "Authority Approval" rovided however, that any approval of an Extraordinary Contract,
proposed operating budget or proposed capital budget shall also require the approval of the Authority's
Commissioners and signature of the Authority's chair). If at any time Manager submits to the Authority
or the Authority Representative notice of any proposed action and the Authority Representative does not
provide to Manager notice of approval or disapproval of such proposed action within 15 days following
the date on which Manager gives such notice, then Authority Approval for such action shall be deemed to
have been given by the Authority on the 16' day following such date.
� 32 Use bv the Authoritv. The Authority shall have the right to use RiverCentre for events of
the Authority or the City or their respective designees and for the benefit of the community (including, for
example, Authority meetings, training for Authority personnel and public events) on a rent-free or
reduced-rent basis, as the Authority may determine from time to time. Direct expenses related to such
rent-free or reduced-rent use (including, for example, utilities, heating and air conditioning, insurance,
and personnel for stage work, electrical work, tickets, cleaning, security and other services) would be paid
by the AuthoriTy or its designee. Such use by the Authority shall be subject to such terms as the Authority
and Manager may determine from time to time, shall not unreasonably compete or conflict with paying
events at RiverCentre, and sha31 be booked in advance (and may be moved from their respective
customary dates) with reasonable notice in accordance with RiverCentre policies having Authority
Approval, as in effect from time to time. E�ibit 3.2 is a list of recurring events that the parties expect to
accommodate under this section.
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� Section 4. Contracts Re¢ardine RiverCentre
4.1 Extraordinarv and Ordinarv Contracts.
(a) "RiverCentre Contract" shall mean at any time a use agreement, license, provider
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(i)
such in E�ibit 4.1,
(��)
Exhibit 4.1,
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agreement, supply contract, service agreement and other contract or agreement of any kind (other than
any collective-bazgaining agreement) that is in effect at such time with respect to RiverCentre (and shall
include each Extraordinary Contract and each Ordinary Contract, as defined below). E�ibit 4.1 is a list,
provided by the Authority, of each RiverCentre Convact in effect as of the date of this Agreement. Each
use agreement shall contain a provision reserving to the Authority the right to receive 20 promotional
seats without charge (in each case in accordance with the Authority's most recent resolutions, of which
Manager shall have received copies by notice to Manager hereunder).
(b) "Extraordinary ContracY' means only
the primary parking-management contract for RiverCentre, designated as
the primary concessions contract for RiverCentre, designed as such in
the primary food-and-beverage catering contract RiverCentre, designated
as such in E�ibit 4.1,
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(iv)
any contract referred to in clause (i), (ii) or (iii),
any RiverCentre Contract that replaces, extends or substantially amends
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(v) any RiverCentre Contract for sponsorship or advertising that creates
signage rights at RiverCentre for more than 30 consecutive days,
(vi) any RiverCentre Contract that, on the date when signed (the "signing
date"), creates non-terminable obligations that bind RiverCentre or the Authority and extend
more than 90 days beyond the Term, and
(vii) any RiverCentre Contract that the Authority may from time to time
designate by notice to Manager as an Extraordinary Contract.
(c) "Ordinary ContracP' means any RiverCentre contract that is not an Extraordinary
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Contract (and, for example, shall include maintenance and repair contracts, service contracts, and event
and booking contracts, etc.).
4.2 Contract Administrator. Manager shall serve as contract administrator for each
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RiverCentre Contract, shall cause performance of the Authoriry's obligations thereunder on behalf of the
Authority, and shall represent the Authority and act on its behalf in monitoring each other party's
perfocmance thereof, col3ecting and disbursing funds, and dealing with each other party in all respects.
Manager shall obtain Authority Approval in connection with any action under an Extraordinary Contract
if the effect of such action is to extend, terminate, substantially amend or commence legal proceedings to
enforce such Extraordinary Contract. Manager shall have the responsibility and sole authority to enter
into any Ordinary Contract as the Authority's agent and on the AuthoriTy's behalf (subject to Section 43),
but Managee sha(I not enter into any Extraordinary ContracE witltaut Auf6oriTy Approval. If any
RiverCentre Contract were entered into with respect to both RiverCentre and the Arena, then Manager
shall cause the terms thereof to be such that neither RiverCentre nor the Arena receives benefits
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� thereunder (or incurs costs thereunder) that are disproportionate to its respective interest in such
RiverCentre Contract. In connection with Manager's providing the reports referred to in Section 6A(a),
Manaaer shall provide management reports regarding the status of RiverCentre Contracts and significant
developments related thereto.
43 Contracts with Affiliates. The Authority and Manager acknowledge that, from time to
time, an entiry in which Manager has an interest (or is otherwise affiliated) may be in the business of
providing goods or services necessary or desirable for operations of RiverCentre and may propose a
contract for that purpose. If Manager has (a) disclosed such interest or affiliation to the Authority,
(b) demonstrated to the Authority's satisfaction that the proposed terms are competitive with those
available from non-affiliated vendors and (c) received Authority Approval for such contract, then
Manager may enter into such contract with such affiliated entity. (Such showing of competitive terms
� may be through a request-for-proposal process, verification from a mutually acceptable third-party
consultant or other method satisfactory to the Authority.)
4.4 Mutuallv Advantaeeous Arran�ements. The Authority and Manager acknowledge that
each of them may from time to time have agreements or other arrangements with suppliers, vendors and
other providers of goods and services that include favorable terms, and each shall use its best efforts to
make such favorable terms available to the other. Manager will use its best efforts to use such terms to
reduce the costs and improve the efficiency of RiverCentre operations.
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� Sec6on 5. Personnel
5.1 Emolovment and Sunervision� Anpointment of Executive Director.
(a) During the Term, Manager shall select, employ, train, and provide, for work at
RiverCentre, qualified employees of Manager (in sufficient number to satisfy the performance standards
of this Agreement at all times).
(b) Manager shall train and provide all necessary qualified supervisors for employees
at RiverCentre and shall assign to RiverCentre a fully qualified facility manager (the "Executive
Director"). If at any time the Authority reasonably determines that performance of the Executive Director
is deficient, then the Authority may, by notice to Manager, report such determination and the specific
� deficiencies so determined, and Manager shall take atl reasonable actions to remedy any such deficiencies
and shall report the results of such remedial actions to the Authority within 30 days following receipt of
such notice. If ihe Authority reasonably determines that perfortnance of the Executive Director remains
unsatisfactory, then the Authority may, by notice to Manager given within 30 days afrer the Authority's
receipt of such report, inform Manager of such determination (inc]uding ihe reasons therefor), and
Manager shalI, within 30 days following receipt of that report, remove such Executive Director and
appoint a replacement Executive Director with Authority Approval (which shall not be unreasonably
withheld or delayed).
52 Existing Emplovees_ The Anthority has grovided to Manager the information stated in
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Exhibit S.2 hereto, including the name, posit�on and coliective-bazgaining representation (if any) of each
person who Qs, as ofthe date of this Agreement, employecl at or in eonneetio�¢ wiih RiverCentre (each an
"Existing Employee"). The Authority will provide layoff notices to each Existing Employee stating that
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the last day of empioyment with the Authority/City will be June 30, 2000. Such notices will comply with
City ordinances and collective-bargaining agreements.
53 Collective-Bazeainino Aereements. Execution by Manager of collective-bazgaining
agreements covering each Existing Employee who is represented by a union or other collective-
bargaining representative is a condition precedent to Manager's obligations under this Agreement.
5.4 Offers of Emplovment.
(a) Commencing on the date of this Agreement, the Authoriry shall provide to
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Manager access to each Existing Employee for purposes of interviewing, offering employment,
comp]eting pre-employment documents and explaining Manager's employment-related rules and benefits.
(b) Manager shall make a written offer of employment (each an"Offer") to each
Existing Employee, for employment by Manager, commencing on the Start Date. Manager shall make
such Offer within five days afrer the date of this Agreement and shatl keep such Offer open for at teast 10
days after it is received by such Existing Employee.
(c) For each Existing Employee, such Offer shall include (i) wages at a rate not less
than that now in effect for such Existing Employee, (ii) position and duties substantially the same as those
now assigned to such Existing Employee and (iii) if such Existing Employee is represented under a
collective-bargaining agreement, such terms and conditions as aze required thereby.
(d) Manager shat] hire each Existing Employee who accepts such Offer, and shall
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employ such Existing Employee, commencing on the Start Date.
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5.5 Emplovee Benefiu. Manager shall provide, to each Existing Employee who accepts such
Offer, health coverage and other empioyee benefits in accordance with Manager's employee-benefit pians
referred to in E�ibit 5.5.
5.6 Assumed Oblieations. For each Existing Employee hired by Manager (a "Hired
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Employee"), the Authority shall provide to Manager within ten days following the Start Date an accurate
statement of all the Authority's obiigations to such Hired Employee for accrued vacation; compensatory
time; and sick time, severance pay and benefits in lieu of retiree health coverage. Manager shall assume
such obligations and satisfy them when due. Notwithstanding the foregoing, however, such assumed
obligations are limited as follows:
(a) For accrued vacation, (i) the total of all obligations so assumed shall not exceed
$76,000 payable in cash, and (ii) Manager shall allow each Hired Employee to carry forwazd up to ten
days of accrued vacation. To the extent thai Hired Employees do so, the total payable in cash shall be
reduced by the dollar amount attributable to all days so carried forward.
(b) For compensatory time, the total of ali obligations so assumed shall not exceed
$136,000 payablein cash.
(c) For sick time, severance pay and benefits in lieu of retiree health coverage, the
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total of ail obligations so assumed shall not exceed
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(i) for each Hired Employee, a deposit to his or her 401(k) account, to be
made on December 31 of each of the yeazs 2000 through 2003 (which deposit shall be $ I50 in
2000 and $3Q0 in each of 20Q1, 2002 and 2003), Qovided. however, that such deposit shail be
paid for any year only if such Hired Employee remains employed by Manager on December 31 of
that yeaz; and
(ii) for each Hired Employee, another deposit to his or her 401(k) account on
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February 1, 2001; February 1, 2002; and February 1, 2003 (which deposit shall be in the amount
stated as "One Time Retirement Cost" for such Hired Employee in the statement referred to
above), provided, however, that (A) the total of all such deposits in 2001 shall not exceed
$I50,000; the total of all such deposits in 2002 shall not exceed $50,000; and the total of all such
deposits in 2003 shall not exceed $30,000; and (B) Manager shall ailow each Hired Employee to
carry forwazd up to five days of sick time and, to the extent that such Hired Employee does so,
then such deposit for such Hired Employee shall be reduced by the dollar amount attributable to
all days so carried forward.
5.7 No Solicitation. The Authority shall not, during the Term or during the period of one
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year afrer any termination of this Agreement, solicit for employment one senior manager then employed
by Manager and designated for continued employment by Manager, provided that the Authority is not
prohibited from employing such designated senior manager if such manager applied independently for
such employment without any solicitation by the Authority.
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Section 6. �erating Year; Budeets: Repocts
6.1 Calendar Year. Operations, accounting and reporting for RiverCentre shall be conducted
on the basis of the calendar year, commencing January 1 and ending December 31, and each reference
herein to a year means the calendar year (unless othenvise specifically stated).
6.2 Operatine Bud¢eu. For each yeaz, Manager and the Authority shall establish and
approve an operating budget for RiverCentre (each an "Approved Operating Budget") in accordance with
the following:
(a) For each year commencing with 2001, Manager shall submit to the Authority, by
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the immediately preceding September 1, a proposed operating budget stating all anticipated revenues and
expenses related to RiverCentre for such year, in the format set forth in E�ibit 6.2. Manager and the
Authority shall discuss such proposed operating budget and, if theyt�tua�}I3� approve in writing an
operating budget and such budget is also apg�es�-�iygiven ore)iminarv aporoval bv the Mavor and the
Saint Paul Ciry Council, in each case by the immediately preceding October 31, then the operating budget
so approved shall be the Approved Operating Budget for such veaz, uniess amended bv the Citv Council
with the aoaroval of the Mavor prior to final adoption of such operating budeet in accordance with
Minnesota law and Citv ordinance If the operatin¢ bud¢et is so amended then Manager and the
Authority shali discuss the amended bud�et If thev a¢ree to accept such amended bud¢et then it shall be
the Approved Operating Budeet for such v eaz. If °� '�••a��« _� _„ ...._,..,,a w.....,.ti :..........:..«,,,.
_ _ _
� thev do not n 1. 11 L, i. A r= _ _. ,.,t l� D..,l..es l_�.. 1. ..,...� ..i..,ll l.e :.7e.,r� ^1 t^
+-�„ _a?-__�, _--��°�;�^-,'--�°a�°�°'_! a^�=^* � ^__�eetoaccentsuchamended
budeet then Manager shall have the same rieht of termination as provided in Section 2 6
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(b) Any Approved Operating Budget may be amended at any time by a written
amendment that is approved by the City Council and executed by the Authority and Mana�er.
63 Accountine. Recordine and Allocations.
(a) Manager shall maintain complete accounting records relating to RiverCentre and
shall establish intemal-control policies and practices which are in accordance with generally accepted
standazds in the facilities-management industry and any additional requirements of the Minnesota State
Auditor.
(b) Manager shall cause all revenues from RiverCentre eamed and due afrer July I,
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2000, to be sepazately recorded and reported (on a direct basis) to the greatest extent possible. If any
revenue shall be attributable to both RiverCentre and the Arena (including, for example, revenue from a
single event using RiverCentre for part of a day and the Arena for the balance of such day), Manager shall
allocate such revenues on the basis of the respective rate cards then in effect for RiverCentre and the
Arena (or, for any particular event, on such other basis as Manager may determine with Authoriry
Approva]).
(c) Manager shall cause all expenses for RiverCentre incurred afrer July 1, 2000, to
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be separately recorded and reported (on a direct basis) to the greatest extent possible (including for
example, separate metering of utilities, separate recording of direct-labor hours, allocation of vacation,
retirement and other benefit costs in accordance with such direct-labor hours, separate invoicing or
itemizing of maintenance and repairs, and sepazate time recording of employees, including those
dedicated 100% to RiveiCentrc operations, such as a dedicated mazketing manager). For each year, if any
expense shall be incurred for the benefit of both RiverCentre and the Arena, such expense shall be
allocated between them on a basis determined with Authority Approval in connection with the Approved
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Operating Budget for that yeaz. The Authority and Manager acknowledge that from time to time an
opportunity for combined use of RiverCentre and the Arena for an event or other purpose may imolve
expenses not anticipated in the Approved Operating Budget. To realize the benefits of such an
opportunity, the Authority and Manager may determine to allocate such expenses so as to reflect the
respective costs and benefits of such event for RiverCentre and the Arena. The expenses of the Authority
and its staff will be accounted for sepazately by the Office of Financial Services within the Authority's
Administrative Budget (as herein defined).
6.4 Moathl and Annual Re orts.
(a) Within 20 days following the end of each month during the Term, Manager shall
�
submit to the Authority an unaudited written operating statement (the "Monthly Statement") showing, for
such month and for the yeaz to date, (i) all gross revenues and expenses from operations of RiverCentre,
in each case presented in the same manner as in the Approved Operating Budget for such year and (ii) for
each line item, a comparison of actual results to those stated in the Approved Operating Budget.
(b) Within 60 days following the end of each year, Manager shall submit to the
Authority a written operating statement for such year (the "Preliminary Report") stating for such yeaz all
revenues and actual expenses from operations of RiverCentre. Unless the Authoriry gives notice to
Manager of a good-faith objection to a material aspect of the Preliminary Report before the 30`� day
following the Authoriry's receipt thereof, the Preliminary Report shall then become binding upon
Manager and the Authority and shall be ihe "Annual Report" for such year, and such 30`" day shall be the
"Annual Report Date" for such year.
(c) If the Authority (by notice given to Manager before the close of business on such
�
30` day) objects in good faith to any material aspect of the Preliminary Report, then only those aspects as
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to which the good-faith objection was made shall �ot become binding, the Authority and Manager shall
discuss the objection and, if they sign a written agreement amending the Preliminary Report, then the
Preliminary Report, as amended by such written ageement, shall become binding and shall become the
Annual Report and the date of such written agreement shall be the Annual Report Date. If the Authority
and Manager do not sign a written agreement within 30 days afrer the Authority gives such notice of
objection, then the matter objected to (and only such matter) shall be submitted to a nationally recognized
firm of certified public accountants selected by the Authority and Manager (whose fees shall be divided
equally between the Authority and Manager), who shall resolve the dispute and submit a written
statement of such resolution, which statement, when delivered to the Authority and to Manager, shall
become binding. Such statement (combined with those aspects of the Preliminary Report as to which the
Authority did not timely provide notice of objection) shall be the Annual Report and the date on which
such accountants submit such statement to the Authority and Manager shall be the Annual Report Date.
(d) Each Annual Aeport shall remain subject to the Authority's audit rights under
Section 10.
6.5 Caoital Exoendiwres. For each year, Manager and the Authority shall establish and
approve a budget for capital expenditures at RiverCentre during such yeaz (each an "Approved Capital
BudgeP'), which shall state all capita] projects to be commenced at RiverCenVe during that year and the
financing sources to pay for those projects, including those anticipated to be started and completed in the
same yeaz and those anticipated to continue into subsequent years (each a"multi-yeaz projecP'), in
accordance with the following:
(a) For each year commencing with 2002, Manager sha11 submit to the Authority, by
�
the immediately preceding September 1, a proposed capital budget stating all anticipated material capita]
expenditures related to RiverCentre for such year, in such format as the parties shall hereafrer agree.
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Manager and the Authority shall discuss such proposed capital budget and, if they�a� approve in
writing a capital budget for such yeaz and such capitai budget is aggFeve�—kyalso given vreliminarv
a�oroval bv the Mavor and the Ciry Council, in each case by the immediately preceding October 31, then
the capital budget so approved shall be the Approved Capital Budget for such year. unless amended bv
the Ci . ouncil with the aoocoval of the Mavor nrior to the final adootion of the canital bud¢et in
accordance with Minnesota law and Ciri ordinance. If no capital budget for such yeaz isse-agg�eve�-ky
st� �-�-�^�a�^� --°^°a�°° ^�'^''° adopted and aonroved bv the be¢innine of such veaz, then
the Approved Capital Budget for such year shall consist of each multi-yeaz project included in any
previous Approved Capital Budget that is not yet completed.
(b) Any Approved Capital Budget may be amended at any time by a written
�
amendment that is approved by the City Council and executed by the Authority and Manager.
(c) For each month during which Manager makes any material capital expenditures,
Manager shall provide to the Authority, in connection with the Monthly Statement for that month, a
written summary of such capital expenditures.
(d) Manager shall not make any material capital expenditures unless included in an
Approved Capital B�adget or otherwise approved by the Authoriry.
(e) All expenditures related to the project currently in process to repair and improve
the RiverCentre parktng raanp (glanned for completion during 2001 at an estimated project cost of
$9.5 million) shall be managed and paid for by the City.
6.6 Authoritv Administrative Bud¢et. The Authority wiU annually approve and manage an
�
administrative budget (the "Administrative BudgeP'). The Administrative Budget will include the
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expenses directly related to the operation of the Authority and other expenses it may approve, including
the management fee to be paid to Manager.
6.7 Citv Council Annroval. The Authority shall have no obligation to pay operating
expenses for a year unless and until the Authority shall have made an appropriation approved by the City
Council and the Mayor throueh the annual budset avoroval orocess to fund the operation of the Authority
and RiverCentre for such year. From and afrer such appropriation is annroved by the ""'�
and Ciri Council, the Authority shall pay the operating expenses for such year to the extent described
elsewhere in this Agreement.
6.8 Modifications to Budeets. All modifications to the Approved Capital Budget and
�
Approved Operating Budget during any year shall be subject to prior written approval by the Authority
and Manager. Any expenditures made by Manager which are not included in such budgets shal] be the
financial responsibility of Manager unless approved by the Authority.
6.9 Ouerating Standards. As part of each yearly budget process (commencing with that for
2001), the Authority and Manager shall establish the Operating Standards for that year and include such
Operating Standards as part of the Approved Operating Budget for that year.
Section 7. Receints and Disbursements; Fundina
7.1 Receipts and Disbursements.
(a) Manager shall establish and maintain for RiverCentre such fully insured bank
�J
accounTS as needed from time to time for receipu, disbursements, payroll and other operations of
RiverCentre, with signature authority in such employees of Manager as Manager shall determine and
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� report to the Authority (collectively, the "Operating Accounts"). All revenues collected from operations
of RiverCentre shall be deposited into the Operating Accounts and Manager shail cause all expenses and
disbursements related to RiverCentre to be paid from the Operating Accounts. Manager shall institute
and abide by a cost allocation and accounting system, subject to approval by the Authority (which
approval shall not be unreasonably withheld or delayed). Any changes to such system shall be subject to
approval by the Authority (which approval shall not be unreasonably withheld or delayed). 1� r � ws�'
er ra��Y..,.e.. a\\oc.��:o�. �ar� � ro�� ccv��. or c�vv�c�.a.e� b "hh�. ���
A�`t�r.�o,_ SY�c.�,\ 1de__� ^w � c. 1`�ct 0.v� �� �oyv�lc.. � �
r�.7. Cw Co m.v.e�.� w•r� -�:r..\ 4��.rttv^ a \ _
(b) All revenues collected from operat�ons of RiverCentre are the sole property of
the Authority and shall be held in trust by Manager for the Authority for application as provided in this
Agreement. Any amounts remaining in any Operating Accounts, upon termination of this Agreement and
afrer payment of expenses as provided herein, shall be paid to the Authority. If any of such revenues are
lost, stolen or otherwise unlawfully removed from the custody and control of Manager, then Manager
� shall continue to be responsible therefor and Manager shall indemnify the Authority from and against
such loss by maki�g payment to the Authority within 48 hours of discovery of such loss, thefr or unlawful
removal.
�
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72 Fundin¢. For each month, Manager shall ptovide to the Authority, at ]east seven days
prior to the first day of such month, a report of the funds balance projected to be available in the
Operating Accounis at the start of such month and projected cash receipts and projected cash expenditures
during such month. If and to the eartent that such pzojected expenditures exceed the sum of such projected
balance plus projected receipts, then the Authority will transfer to the Operating Accounts an amount
equal to such excess. If and to the extent that such projected expenditures are less than the sum of such
projected balance plus projected receipts, then Manager wiil tra�sfer to the Authority the amount by
which such projected expenditures are less.
73 No Obli�ation of Manaeer to Fund. Except as agreed to in Section 5 hereof, Manager
�
shal] have no obligation to fund any cost, expense, liabiliry or expenditure with respect to RiverCentre or
operations thereof.
Section 8. Mana¢ement Fees: Commissions
8.1 Management Fees. The Authority shall pay to Manager management fees, which shall
consist of
(a)
(b)
base amounts, determined as described below (the "Base Amounts"), plus
amounts based on the Operating Standards, determined as described below (the
"Quality Amounts"), plus
(c) amounts based on Gross Revenues {as hereinafrer defined), determined as
�
described &elaw (the "Revenue Amovnts"}.
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. 8.2 Base Amounts. The Base Amounts shall be $14,666 per month during 2000, $14,583 per
month during 2001, $15,416 per month during 2002, $16,666 per month during 2003, and such per-month
amount during 2004 as the parties shall hereafter agree. The Authority shall pay such Base Amounu for
each month on or before the first day of such month.
83 Oualiri Amounts. For each of the years 2001 through 2004, the Authority wi]] evaluate
Manager's performance in achieving the Operating Standards for that year and will assign to such
performance a percentage based on the Authority's reasonable determination of the extent to which such
Operating Standards were achieved during that yeac The Quality Amount for such yeaz shall be an
amount equal to $25,000 multiplied by such percentage (e�e., if the percentage so determined by the
Authority were 90% for 2002, then the Quality Amount for 2002 would be $22,500). For each year, the
� Authority shalE pay the Quality Amount by February 28 of the immediately following year.
8.4 Revenue Amounts.
(a) For each of the years 2001 through 2004, the Revenue Amount shall be
(i) $50,000 if Gross Revenue equals or exceeds the First Target for that year,
plus
(ii) an additional �-7-5,898 if Gross Revenue equals or exceeds the
Second Target for that yeaz.
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(b) For any year, "Gross Revenue" shall mean all revenue from (i) rentals,
(ii) service income, (iii) food and beverages, and (iv) novelties. Gross Revenue shall be calculated and
classified in a manner consistent with the practices reflected in the budgeu and operating statements of
RiverCentre for 1999 and 2000 heretofore received by Manager rovided, however that any revenue that
would cause any taz-exempt bonds to become taxable private activity bonds cannot be earned by the
Authority or counted as Gross Revenue).
(c) For each year referred to below, the First Target and Second Target shall be as set
�
forth below:
Year
2001
2002
2003
First TarQet Second Tareet
$3.75 million $4.00 million
$3.90 million $4.15 million
$4.00 million $4.25 million
For 2004, the First Target and Second Target shall be such amounts as the parties shall hereafrer agree.
8.5 Commissions
(a) For each New Contract (as defined below), the Authority shall pay to Manager a
commission for each year in which RiverCentre receives advertising payments, sponsorship fees, rights
fees or other revenues under or with respect to such New Contract ("New Revenue"). Notwithstanding
the foregoing, however,
(E1 "New Revenue" does not inclnde anv amount referred to in
Section 8.4(b)and
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ii in the case of any New Contract that is an Exte�ded Contract (as defined
below), "New Revenue" for any yeaz shall mean only such payments, fees and revenues as
exceed those that would have been received in such year had such Extended Contract continued
into such yeaz on the same terms as in effect on the Start Date. (For example, if a sponsor
contract in effect on the Start Date called for payments of $50,000 to RiverCentre in 2003 and
such sponsor contract were amended after the Start Date so as to call for payments of $60,000 in
2003, then $ I 0,000 of such $60,000 would be New Revenue for 2003.)
(b) The amount of such commission for each New Contract shall be �&%20% of all
►�J
New Revenue. Upon receipt of any amount of New Revenue, the Authority shall pay the applicable
commission to Manager e.¢., if amounts received under a New Contract consisted of $10,000 in January
2004 and $]0,000 in July 2004, then the Authority would pay to Manager a commission of $�-;988
in January 2004 and a commission of �098 $2.000 in July 2004).
(c) "New Contract" shall include (i) any conuact, agreement or other arrangement
for advertising, sponsorship, signage, publicity, promotion, marketing or similar rights at RiverCentre that
is entered into during the Term and (ii) any renewal, extension, amendment or other change to any
contract, agreement or arrangement existing before the Term that has the effect of extending such existing
contract, agreement or arrangement or increasing the amounts payable thereunder (an "Extended
ContracY').
8.6 Limitation. For each of 2001 through 2004, the Base Amounts payable to Manager for
�
such year shall be at least 50% of the total payable to Manager for such year under Section 8, and the
�
po -S�f �
L_�
requirement of this sentence shall be the "50% Test" If, for any of such years, the 50% Test would not be
satisfied in the absence of this sentence, then the Revenue Amount for such yeaz shall be reduced by the
smallest amount (if any) as is necessary to cause the 50% Test to be satisfied (and, if the Revenue Amount
were reduced to zero in accordance with this sentence and the 50% Test remained unsatisfied, then the
commissions payable for such year shall be reduced by the smallest amount as is necessary to cause the
50% Test to be satisfied).
8.7 Prorated Amounts. In the event of any termination of this Agreement that does not occur
�
at the end of a year, the Authority shail pay to Manager:
(a) for the month that includes the date of termination, an amount equal to the Base
Amount for such month, prorated through the date of termination (which amount shall be paid within ten
days after the end of such month); plus
(b) for the year that includes the date of termination, the Quality Amount for that
year, prorated through the date of termination, which shall be paid within ten days after the date of
termination; plus
(c) for the yeaz that includes the date of termination, a prorated portion of the
�
Revenue Amount for such year, which shall be paid within ten days after the date of termination and
determined by
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(i) multiplying the Second Target for such year by a fraction, of which the
numerator is the number of days in such year elapsed through the date of termination and the
denominator is 365 (which shall be the "Prorated TazgeP');
(ii) determining the percentage represented by (A) actual Gross Revenue
through the date of termination divided by (B) the Prorated Target; and
(iii) multiplying such percentage by $125,000; plus
�
(d) all unpaid commissions on New Revenue received (whether received before or
afier the date of termination), which commissions shall be paid upon receipt of such New Revenue.
Section 9. Indemaification and Insurance
9.1 Indemnification
(a) Manager shall indemnify the Authority from, and defend and hold the Authority
�
harmless from and against, any damages, liabilities, claims, judgments and expenses, including
reasoaahle attorneys' fees ("Losses"), suffered, incurred or sustained by the Authority resulting from or
arising out of
(i) any breach of this Agreement by Manager;
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(ii) the inaccuracy, unwthfulness or breach oF any representation or
wartanty made by Manager in this Ageement; or
(iii) any claim for damages (whether for personal injury, property damage or
otherwise) resulting from any negligence, misconduct or other act or omission by Manager.
(b) The Authority shal] indemnify Manager from, and defend and hold Manager
harmless from and against, any Losses suffered, incurred or sustained by Manager resulting from or
azising out of
(i) any breach of this Agreement by the Authority;
.
(ii) the inaccuracy, untruthfulness or breach of any representation or
warranty made by the Authority under this Agreement; or
(iii) any claim for damages (whether for personal injury, property damage or
otherwise) resulting from any negligence, misconduct or other act or omission by the Authority.
Notwithstanding the foregoing, however, nothing in the Agreement shall cause (or be construed as) a
waiver by the AuthoriTy of any limitation on municipal liability under Minnesota Stamtes Section 466.01
et se�c . or as a waiver of any common-law immunity or limitation of liability, all of which are hereby
reserved by the Authority.
(c) If any third-party claim is asserted against a party entitled to indemnification
� hereunder (the "Indemnified Party"), then the Indemnified Party shall promptly give notice thereof to the
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party that is obligated to provide indemnification (the "Indemnifying Party"). Upon receipt of such
notice, the Indemnifying Party shal] immediately and fully investigate and defend such claim, at the
Indemnifying Parry's sole cost and expense. The Indemnified Party shal] cooperate in all reasonabie
respects with the Indemnifying Party and its attorneys in the investigation and defense of such claim and
any appeal arising therefrom, and the Indemnified Party may, at its own cost and expense, participate,
through its attorneys or otherwise, in such investigation, defense and appeal. No settlement that involves
a remedy other than payment of money by the Indemnifying Party shall be entered into without the
consent of the Indemnified Party. If the Indemnifying Party does not promptly defend such claim in
accordance herewith, then the Indemnified Party may defend such claim in such manner as it may deem
appropriate, at the cost and expense of the Indemnifying Party (but the Indemnified Party's doing so shall
not reduce to any extent the Indemnifying Pazty's obligations hereunder).
9.2 Insurance.
(a) Manager shall, on the Authoriry's behalf, keep in force throughout the Term
(i) one or more policies of commercial liability insurance, covering all
operations of RiverCentre and acts or omissions of RiverCentre personnel (including Manager's
employees and services under this Agreement), which insurance shall have limits not less than
$1 million for bodily injury and $ I million for property damage;
(ii) one or more policies of automobile insurance, covering vehicles operated
in connection with RiverCentre, having a combined single limit of not less than $1 million;
�
(iii) one or more policies of worker's compensation insurance, covering all of
Manager's employees providing services at RiverCentre;
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(iv) all-risks property and casualty insurance, covering RiverCentre, together
with a full replacement-cost endorsement and a vandalism and malicious-mischief endorsement;
(v) broad-form boiler and machinery insurance, with full repair and
replacement cost coverage;�
(vi) ]oss-of-income and business interruption insurance, covering risk of ]oss
due to the occurrence of any hazazds insured against under the insurance referred to in clauses (i)
and (ii), in an amount not less than one year's Soss of �ea�rincome; and
(vii) insurance aeainst theft and other financial crimes (includina those
� referred to in Section 71(b)l.
(b) Manager shall cause each of the Authority and Manager to be named as an
insured under each of such policies. Manager shall include the costs of all such insurance in each
proposed operating budget (subject to the Authority's approval by inclusion in the Approved Operating
Budget) and shall pursue opportunities to reduce insurance costs through policies covering both
RiverCentre and the Arena. At the Authority's request, Manager shall deliver to the Authority an original
or a certified copy of each of such policies confirming the existence of all such coverage, together with an
endorsement to the effect that such policy will not be canceled or materially changed without at least 30
days' advance written notice thereof to the Authority.
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� Section 10. Ownershin ofAssets• Related Obli¢ations• Audit Riehts
10.1 Ownershin.
(a) Each party acknowledges that the City owns all the buildings and real estate
comprising RiverCentre and all related equipment, furniture, displays, fixtures, vehicles and similar
property now used in operations of RiverCentre (other than any item that is held by the City under a lease,
in which case the City owns the lessee's rights therein), together with title to all intellectual property
rights now held in the Authority's name. Nothing in this Agreement shall affect the City's ownership.
(b) The City shall continue to own ali consumable items that are provided by the
Authority (such as office supplies and cleaning materials), but such items may be utilized and consumed
by Manager in the performance of services for RiverCentre under this Agreement. Manager may
� purchase consumable items for RiverCentre pursuant to this Agreement, and such items shall become the
property of the Authority, but may be used and consumed by Manager for operations of RiverCentre
under this Agreement. Manager may use RiverCentre property and related assets of the Authority for
operating RiverCentre and othenvise performing services under this Agreement. Manager and the
Authority acknowledge and agree that, in order to achieve efficiencies and avoid duplication of costs,
Manager may use equipment and other property of the Arena for maintena�ce, repairs and other
operations of RiverCentre (and may similarly use equipment and other property of RiverCentre for
operations of the Arena), but such use shatl not affect ownership of any equipment or other property, and
Manager shall provide for all property of RiverCentre the same care and custody as it provides for
property of the Arena. Manager shall not take or use, for purposes other than management or operations
of RiverCentre, any customer or ��ibicar Iists or similar materials developed by the Authority for the use
of RiverCentre unless Manager receives Authority Approval. If Manager purchases equipment,
i fumishings, materials, or other personal property at Authority expense for use at RiverCentre, then title
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thereof shall vest in the Authority, automatically and immediately upon purchase. Manager shall not
pledge, encumber or otherwise alienate or assign for any purpose any assets or property of the Ciry or the
Authority without Authority Approval.
(c) All operating reports provided to the Authority by Manager hereunder, together
�
with ali hooks and records of RiverCentre maintained by Manager on behaif of the Authority, and all
other information and documents now in existence at RiverCentre shall be (and shall remain) the property
of the Authority and shall be subject to such public disclosure and other requirements as may be imposed
by Minnesota law regarding data practices and related matters. (All financial statements of Manager and
books and records of Manager shall be, and shall remain, private financial records, not subject to such
disclosure.)
10.2 Authoriri Obligations. Throughout the Term, the AuthoriTy will maintain full legal and
beneficial ownership of RiverCentre and will pay, keep, observe and perform all payments, terms,
covenants, conditions and obligations under any bonds, debentures or other obligations, security
agreements or contracts to which the Authority may be bound.
]03 *�jintentio�ailvdeleted]**.
Section 11. Rearesentations and Warranties
i l.l Re�resentations and Warranties of Mana�er. Manager represents and warrants to the
Authoriiy as follows:
(a) Manager is a limited liability company dvly organized and validly existing under
�
the laws of the State of Minnesota.
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(b) Manager has all requisite power and authority to execute and deliver this
Agreement and perform all of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreement by Manager will not
breach or violate any provision of the organizational documents of Manager or of any indenture,
mortgage, lien, ]ease, material agreement, order, judgement or decree to which Manager is a party or by
which its assets or properties are bound.
(d) Execution, delivery and performance of this Agreement have been duly
�
authorized by Manager, and this Agreement constitutes a valid and binding agreement of Manager,
enforceable in accordance with its terms.
(e) Manager is in compliance in all material respects with all laws applicable to
Manager (except for any failure to comply that would not have any materiai adverse effect on Manager's
ability to fulFill its obligations under this Agreement).
(� There is no outstanding litigation or other legal dispute to which Manager is a
party which, if decided unfavorably to Manager, would reasonably be expected to have a material adverse
effect on Manager's ability to fulfill its obligations under this Agreement.
(g) All information provided by Manager that is included in this Agreement
\_ J
(inciuding any E�ibit hereLO} is accurate and complete in all materiat respects, does not contain any
untrue statement, and does not omit any staiement or information necessary to make such information
correct and complete in all material respects.
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l l.2 R�e resentations and Warranties of the Authority. The Authority represents and warrants
to Manager as follows:
(a) The Authority is organized as an agency of the City, validly existing and in good
standing under the laws of the State of Minnesota.
(b) The Authority has all requisite corporate power and authority to execute and
deliver this Agreement and perform alI of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreement by the Authority will not
�
breach or violate any provision of the organizational documents of the Authority or of any indenture,
mortgage, lien, lease, material agreement, order, judgement or decree to which the Authority is a party or
by which its assets or properties are bound.
(d) Execution, delivery and performance of this Agreement have been duly
authoriZed by the Authoriry, and this Agreement constitutes a valid and binding agreement of the
Authority, enforceable in accordance with its terms.
(e) The Authority is in compliance in all material respects with all laws applicable to
the Authority (except for any failure to comply that would not have any material adverse effect on the
Authority's abiliry to fulfill its obligations under this Agreement).
(� Tlaere as no autstanding litigation or other legal dispute to which the Authority is
�
a party wf�ich, if decided unfavorabiy to the Authority, would reasonab3y be expected to have any material
adverse effect on the Authoriry's ability to fulfill its obligations under this Agreement.
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(g) All information provided by the Authority that is included in fhis Agreement
(including any Exhibit hereto) is accurate and complete in all material respects, does not contain any
untrue statement, and does not omit any statement or information necessary to make such information
correct and complete in all material respects.
Section 12. Other Provisions
12.1 Relationshi�. The parties intend to create a relationship of independent contractors and
nothing in this Agreement shall be construed to make either party a partner, joint venture, principal, agent
or employee of the other.
12.2 Severabilitv. If any provision of this Agreement is held by a court of competent
�_I
jurisdiction to be unenforceable, then each remaining provision of this Agreement shall nonetheless
remain in full force and effect.
123 Force Maieure; Certain Chanees to RiverCentre.
(a) Neither party shall be obligated to perform hereunder and neither party shall be
deemed to be in default if performance is prevented by:
(i) fire not caused by negligence of either party, earthquake, flood, act of
God, civil commotion, w�az, hostitities or other event, matter or condition of like nature;
(ii) any law, ordinance, rule, regulation or order of any public or military
�
authority (including any based on economic or energy controls, hostilities, war or govemment
law or regulation); or
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(iii) any labor dispute which results in a strike, picket or boycott affecting
Rive�Centre or services hereunder (unless such dispute shall have been caused by illegal labor
practices or violations by such party of appiicable collective-bargaining aa eements and there has
been a final judicial determination of such illegal labor practices or violations),
(each a "Force Majeure EvenP').
(b) Neither party hereto shall be under any obligation to supply any service or
�
services, if and to the extent that doing so shall be prohibited or limited by any Federal, state or municipal
law, rules, regulation, order or directive.
(c) Except as otherwise expressly provided in this Agreement, no amount payable to
Manager for its services under this Agreement shall be increased for any inconvenience, interruption,
cessation, or loss of business or other loss caused, directly or indirectly, by any Force Majeure event, nor
shall any amount payable to Manager be reduced or withheld.
(d) If any part of RiverCentre were destroyed, replaced, repaired, upgraded or
otherwise changed, the Agreement would continue in effect for all of RiverCentre (including that part),
and Manager would have the right to continue providing the services during such change (subject to
adjusting the management fee as the Authority and Manager may agree, based on any actual reduction or
increase of services provided by Ivfanager as a result of such change).
(e) The parties acknowledge ihat the Authority has commenced preliminary
�
discussions regarding possible renovation or reconstruction of the Roy Wilkins Auditorium and that, if
such Auditorium is substantially renovated or reconstructed and the Authority enters into an operations
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� agreement with the Ordway Center for the Performing Arts regarding theatrical productions in such
renovated or reconstructed Auditorium, then the applicable terms of this Agreement will be amended.
(� The parties also acknowledge that the Authority and the City of Saint Paul are
currently considering a pedestrian connection between RiverCentre and the skyway system of downtown
S aint Paul. �°^'� ^^^^°^•;^^ :^ °-^-^°°a °-a ,.,......�..,.«,.., ,,.e_,,,.r :.. .............°a «we..Such connection is
exnected to be comnleted in late 2001 and, upon com�letion. the connection will be considered part of
RiverCentre and Manager will cause it to be maintained on behalf of the Authority (subjeM to Authority
approval of revenues and costs in the annual budget-approval process).
12.4 Waiver. No delay or omission by either party to exercise any right or power it has under
this Agreement shall impair or be construed as a waiver of such right or power (unless such right or
� power is limited by a time period, in which case such right or power shal] lapse oniy when such time
penod shall expire). A waiver by any party of any breach of this Agreement or any obligation hereunder
shall not be construed to be a waiver of any succeeding breach or any other obligation.
12.5 Headines; References Of Inclusion. The headings of sections, paragraphs and other
subdivisions of this Agreement are for convenience only and do not affect the construction or
interpretation of the Agreement. Each reference herein to "including" or "includes" shall be deemed to be
followed by the words "without limitation."
12.6 Entire Aereement. This Agreement is the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations, understandings or agreements
between the parties relateng to such subject matter.
•
.�
G� �
� 12.7 Survival. This Article l2 and each provision hereof shali survive the expiration or
termination of this Agreement and shall remain in full force and effect notwithstanding any such
expiration or termination.
12.8 Third Partv Beneficiaries. This Agreement shal] not inure to the benefit, or create any
right or cause of action in or on behalf of, any person or entity other than the parties.
12.9 Assienment. Neither parry may assign or transfer this Agreement or any rights hereunder
�
without the other party's advance written consent except that if Manager, by notice to the Authoriry,
proposes to assign this Agreement to an entity that (i) acquires or otherwise succeeds to all or substantially
all of Manager's business and assets, inctuding management of the Arena, and (ii) before or at the time of
�
assignment assumes alI of Manager's obligations hereunder and agrees to perform or cause performance of
all of such obligations when due, then the Authority shall not unreasonablywithhold or delay such approval.
12.10 Governine Law. This Agreement and the rights and obligations of the parties under this
Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota,
without giving effect to the principtes thereof relating to conflicts of law.
12.11 Dispute Resolution.
(a) For any dispute arising under this Agreement (including any disputed allegation
of default hereunder) that is not resoived informally, either parry may give to the other party notice of the
dispute, including reasonable detail concerning any alleged deficiency in performance of the other party.
The Authority and Manager, respectively, shall cause the Authority Representative and the Exewtive
Director to meet in person at RiverCentre and attempt in good faith to reach an agreement resolving the
� dispute. If they do not reach such an agreement within seven days afrer the date on which such notice is
-41-
�D"Sy7
� given (the "Dispute Notice Date'�, then each of them shal] produce a detailed report about the dispute for
his or her respective chief executive officer or chief operating officer, who shall meet in person at
RiverCentre and attempt in good faith to reach an agreement. If the parties have not signed a written
agreement to resolve the dispute within 30 days following the Dispute Notice Date, then either party may
request mediation as provided for in subsection (b) below.
(b) If any dispute between the parties under this Agreement is not resolved under
subsection (a), then, upon notice by either party, such dispute shall be submitted for non-binding
mediation before, and as a condition precedent to, the initiation of any legal action regazding such dispute.
Each party shall participate in up to four hours of inediation (in each case as requested by such party's
chief executive ofFicer or chief operating officer). The mediator shali be se3ected by the parties, or if the
parties fail to select a mediator within ]0 days afrer such notice is given, then either party may request
selection of a mediator by the administrator of the Ramsey Counry District Court Civil Alternative
. Dispute Resolution Program, from its list of qualified neutrals. All expenses related to the mediation
shall be borne by each par[y, including without limitation the costs of any experts or legal counsel.
12.12 Jurisdiction and Venue. Any lega] action, suit or proceeding brought by it in any way
related to or arising out of this Agreement sha11 be brought in the state courts of the State of Minnesota,
and each party hereby accepts and submits to the jurisdiction of such state courts with respect to any such
action, suet or proceeding brought by or against such party. Each party waives any objection to the venue
for any such action, suit or proceeding being in such state courts.
12.13 Ne¢otiated Terms. The garties acknowledge that the terms and conditions of this
Agreement are the results of negotiations between the parties and that no part of this Agreement shall be
construed in favor of or against any party by reason of the extent to which any party or its professional
� advisors paRicipated in the preparation of this Agreement.
-42-
�3� Z
�
12.14 Notices. Each notice required or permitted under this Agreement shali be in writing and
shall be deemed given when delivered by mail, courier or facsimile to the address or facsimile number
specified below (and a paper copy of any notice by facsimile transmission shali be delivered within 24
hours afrer such transmissionto the address specified beiow).
If to the Authority: RiverCentre Authority
Attention: AuthorityRepresentative
Facsimile No.:
With a copy to: City Attorney's Office
City of Saint Paul
400 City Hall
Saint Paul, Minnesota 55102
Attention: RiverCentre Authority Attomey
Facsimile No.:
�
If to Manager: Saint Paul Arena Company, LLC
Facsimile No.: '6511222-1055
With a copy to: Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attention: Wiliiam R. Busch, Jr.
FacsimileNo.: (612)336-3026
Either party may change its address or facsimile number for notice purposes by giving the other party
15 days' notice of the new address or facsimile number and the date upon which it will become effective.
12.35 Amendment. No amendment to any provision of this Agreement is valid unless in
�
writing and signed by an authorized representative of each party.
-43-
�-55� 7
R�..e�&,�.
6 �a 4 �po
12.16 Counteroarts. This Agreement may be executed in any number of counterparts, each of which will
be deemed an original, but all of which taken together shall constitute one single agreement.
12.17 Public Data. All of the data created, collected, received, stored, used. maintained or disseminated
� ManaQer with resoect to RiverCentre in nerformin¢ the funciions under this Aereement aze subiect to the
requirements of Chaoter 13, Minnesota Statutes and Manaeer aerees to comnlv with those reauirements as if it were
the Authoritv or the CiN.
12_18 Comnliance with Laws. Each party agrees to comply with all laws of the United States of
Amecica and the State of Minnesota (including the Minnesota Data Practices Act) and with all Saint Paul Ciry
ordinances and resolutions and will not do (or allow anyone under such party's control to do) anything during the
term of this Agreement in violation of any such laws, ordinances and resolutions.
IN WI7NESS WHEREOF, each party haz caused this Agreement to be signed and delivered by its duly -
authorized representative, effective as of the date first above written.
Approved as to Form:
By:
City Attomey of Saint Paul
MI: ^ 624341.09
CIVIC CENTER AUTHORITY
An Agency of the City of Saint Paul
(also known as RiverCentre Authority)
BY=
Richazd H. Zehring
Title: Chair
Norm Coleman
Title: Mayor of City of Saint Paul
By:
Joe Reid
Title: D'vector of Office of Financial Services
SAINT PAUL ARENA COMPANY, LLC
By:
Title:
�
Exhibit A �
to Agreement for RiverCentre
(page 1 of 1)
�
RIVERCENTRE"
�fldffIONEA7Zl'MA2 tQfA'OS1:+SA:DfiOltitM
175 iCe!logg Boulerard Saint Pavl, Mvmaota �5:92 P�or.e 6;I-265-�800 Fu 651-?bi-?859 www.riverr.za•s�otg
�
� _�
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�
**(RiverCentre Event Bookine Policv]**
�
M7: � 2d341 OS
Exhibit 13
to Agreement for RiverCentre
u
Oa
�
**[Recurrin¢ Eventsl**
�
M1�43434}9§
E�ibit 32
to Agreement for RiverCentre
�
oo
�
Contracts Currentiv in Effect
Food Service (Volume Services)
Pazking Ramp (Standard Parking)
S�onsorships
Touchstone EnPower Services
Treasure Island
Pioneer Press
Minnesota Life
Coca Cola
Media One
Service Aereements
Minnesota Elevators and Eagle Elevators
Lagerquist Escalators
Adams Pest Control
Powell Communications
� MN Net Centrex, etc.
T:.. � - �c�i�ixixa�iv�"`�
Loomis Armored Service
American Security
ADT
Saint Paul Bank — Cash Machine
Ikon — Copier
Red Cross
Tennant — Sweeper
Sage Software — Accounting
AirTouch Cellular
U S WEST
Missabe Group — Sponsorships
Pitney $owes — Stamp Machine
Golden Gate Internet Services
Telecheck
T'��mTicketMaster
EmQlovment Services
Kelly Temporary Services
Industria] Staffing
Parking Ramp Consfiuction Contracts
SMMA Architects — Wilkins Design
� MI 33�P..S-B"24341 OS
E�ibit 4.1
to Agreement for RiverCentre
(page 1 of 1)
C�-5y7
�
�
MI `e-,�++,.P5�434798
E�ibit 5.2
to Agreement for RiverCentre
**[Information ReQardin�Existing Emolovees]**
�
Cb-5Y7
�
Exhibit 5.5
to Agreement for RiverCentre
(page 1 of3)
Emolovee Benefiu Provided bv Mana¢er
�
N
S
u
R
A
N
C
E
HealSh
Dertal
Sngie -100ye paid by empioyer
Family - 50% paid by employer / 50% paid by employee
50X paid by Employer / b0% paid by Employee
Life 1X Annual Salary Benef�t 1o0Y, paid by Employer
Acciderrta[ Oeath dc Distnemberme+�t 1X Annuai Sniary Benefit 100'/a po�d by Emplayer
Paid Time Off (PTO)
(covers all paid
absences - sick,
vacation,funernts,
etc. - used at emp�oyee
discretion)
Years
O�F
5-9
10-15
16-23
after 23
D o
20
26
29•
33
36
Larryover of 5 days of PTO at yearvend nl�owed
�
Disahi(Ity
Hotidays 7
Short term disability -100X pnid by Employer
2/3 of weekly earnings - maximum $50Q per week
I.ong term disability -100 °� pnid by Empioyer
2!3 of weekly earnings - tnoximum $6,000 per month
hlew Yenrs Dny �9�H�9 �'
Mcrrtoria4 Oay 4Say aftv Tt�m�ksgiving
Independenet Day Christmns DaY
lnber Day
Wtdiay Pay: L5 Timrs reguiar wmpensatio� and e9uiwaknt time eff
C� 7
�
�n�b�c s.s
to Agreement for RiverCentre
(page 2 of 3)
Em�lovee Benefits Provided bv Mana2er
Breolcs 2 25 min breaks ond 45 min Iweh bceak
Retiremertt P�an = 401(k) -
Emplayee can corttribute up to 15'k of salary (pro-tax�, plue
$3Q0 per yenr contributjon by tmployer to tht 401(k} plan
(for each employee on the payroli at and of the year)
tn liw of retiree heelth insurance
Flewble Sputding Atcourrts - Funded through e�nployee pre tax corrtributions
O
� P
T Safety Shaes �40 per calendar yenr - if requ+red by emptoyer
I
O
N Optiorta! Life Insurcnce
A
L Additional Life (Emp�oyee, Spouse d Chi�dren) - empioyees con purchnse additional
coverage, nt their cost (see attached chert)
u
c�-5�7
�
Exhibit 5.5
to Agreement for RiverCentre
(page 3 of 3)
Emolovee Benefits Provided bv Manaoer
Additionai Life (Empioyee, Spouu b Chiidren)
m� ciwce Additional covernge -$10,000 units - Maximum $300,000
(minimum #20,Q00) - 9uorantee issue cmoimt - �50,000
Employce Cost -100%> per rnte chart below (after tax)
O ousc Spoase (anty avaikble if employee r�ective tife is purchased)
Unita of $5,000 - Maxim�an L2 unployees elective life
P (minimum $10,000) - guaruntee issue omount - $25,000
Employte Cost - S00°� > per rate chart below (a{trr tax)
T
Elect�ve Life Insurance Rates we based on Smoker and Non Smoker status by age per
I $10,000 - Ranging from $.90 to �102.50 per month
O Employee/
� Spouse Age
N under 30
30-34
A 35-39
4Q1F4
L 45-49
50-54
55-59
L 60-64
65-69
I 70-74
75+
"tJon Smoker Rate
P¢r $ I0,000
$ 0.90
$ 1.00
$ 1.30
$ Z,SO
5 3_40
$ 5.50
$ 9.90
$ 14.70
$ 22.50
$ 44.80
$ 76.60
5moker Rate
Per $10,000
$ 1.20
� 1.60
$ 2.20
$ 3.50
$ 5.80
$ 9.30
$ 16.40
$ 22.50
$ 32.30
$ 59.90
$ lOZ.50
* Non-Smoker' means that you have not smaked� or used tobaccc products in the last 12 manths
E
Children
Gunra+rtee issue amo�mt $5,000 (one pretnium covers any number
of childrPn) - Do not need to purchose eledive Iife for self
Emp�oyrx Cost - lOQ%� $.90 cenis per month (after tcx deduction)
�
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Exhibit 6.2
to Agreement for RiverCentre
(page 1 of i)
�
�
�
[hrent incofti+�d E�
Ptea Ro2fic
Serva» Nmm�
Boz O(fo k�mmn
Tont Ew+� ��
7otat Evxrt F��
Net Evsn� m��
Mcipary m�onM
FmC 8 BeVraG�
Nevetios
Fadh Fws
Parknp
TMaI MclNarl inc°m�
Tohi Ev�nt ineoms
OMerOp��9
Park`q
qtivettlaing
so«�o�w
v,-�c:,a c.a,imart+arm.�ee
�nletesl
OIlke Spars Rant
Maxllnnews
Tobl ONrrincaM
Adjustad Grvss trwom'
In�ICCL �
oecenme^� �'°*
Eket:+l'Na
Mancels9
Finance
Operslione
Bax Of�ice
Overt�ee6
pan�iig RamD
Tclal Oeparv^a� F�W�s Belve 0.lootion
E�Renses ACncitetl tn Eve�+a
Net IndnU E��s�
pperatlny Gzt+ Rwt 9a[o�
DeDt Sarvfw. On►tlnr Chai90
��ss n e«+a o.ei s+u
Less Ped ConnWioNCRY 6"PbY� �
Less ES�'Onar! �eas� �U'j��1
Totaf DeMSa+i«
Lest Rebcalion an� SeWaR.� E�s+�
NNL EsPensas
Tatal On�� �IIK
ppec Ineom� VY�Mout Non-CUh Rems
Y000
A�lffi
f 7,�75.OS9
t,ast,es5
414,558
279�.i02
(t.�7.F68)
8fi8.906
Sggg t989
Ro�i+p �'PD�
E9m�it �
S 7.07{.848 S 1.370.773
13�0.� ���°�
t27�fig 1W,N1
Z�5p�3,55 I,97ZG+t
(1 596,514) (1.79t�619)
d53.g{z t.it7.972
RNERCENiRE
20ro OPERA7ING BUDGET
7498 7997
BRif76! B•••
3 1.1e4969 S 758.3�7
1.3�1.�90 t.153.�86
70B.Q7 153.73f1
2.638.896 2�065.563
(t.766.99n (1.BQ7.O6a)
a».eas asa.ass
1.1322b7 9T3.158
&5.7pp 67.812
30Z.+ 397,�7!
EOB.9:10 l64.760
zm.�ee uszss3
6ft�67 187p9 b53.8�7
51,3T2 �5.20� 35.57b
57.�5 W.7GA '15�b�
t.Ot0.u0 e38.OBa 997.�2
t.b03.3M ' 7.67lr'� 1.7I4472
z nqi�n uatrrz zsu.sa.
1.4348(!S t.X3�,43b 1.337,lQi
36.000 39.679 36.000
�3.5pp 276,25G 283.500
no.aao n�,sss iao.000
120,000 747.866 120.000
737.687 Bt.bb'1 et.687
76.972 108.357 1?5.�38
2,768.9W 2.050.862 2124.428
4,938,151
�.313.01{ 4.968.872
zsa,�as
164,476
7 84.005
2,SOt.716
169.Z6B
1,576,748
%1,836
6.101,786
(t.827.�i967
��7{.t90
3.199.385 7,S11.OSZ
1,29t.686 t,368.We
W,O70 109.538
11,000 -
7,5p0 30,000
2at.�ea ns,avi
q9.pW 15.�00
1@.1H7 113,226
�,m.z�o �.etz.osi
4,972,57t 4.323.1G3
zao,ese xti.sss
St2,046 5?7.928
762.�98 t62,3d6
2293.756 2.517.<61
760,016 761.2%
t.625.639 1.6Z2.392
883,209 916.b61
5.8t7.062 6.198.�
(7.596.511) (1.79/.679)
4,220.5�8 1.90A,309
2so.sss
495.560
1L5.668
2407,818
779�97
1.439.947
995,566
5,951,090
(1.766.99�
4,187.093
26a,49d
3na,sa2
734,152
2,t45,679
Y1B,3t6
7,925,474
9B8.T79
5,730,976
(1.e07,O6d)
3.323.852
664.964 13246b 560.563 �BF�,iBi �.n�
660.00C 660.00U 660.000 660.D00 �•�
�2030 ' 29.ppp 83.%1
121.97a t2&125 a3taA - -
924.001 788.725 89M1.457 fi88,000 743.%i
55.000 W� 25.900 3te.OW t96.000
194.072
SS.CW I�BC11 75.000 378.097 390.�22
5 (214,039) S (641.8'I8) S (351.894) S (220,fi76) S (�
�
Hon-casti items
WMecR d ihe remaininD baok rahx d Mw Auets
DeprecaGon
Net Opera6n91no� lL�)
3.6�9.460
504.2W 516.1l6 396,�61 529.057 S6d.3E6
: n,s.znst s t ,ea.00a7 s vae.ass� s ta.3ss.,a�i a tsss.,,�
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**�Format of Operatine Budeetl**
u
M� �ea- bzaaai os
Exhibit 6.2
to Agreement for RiverCentre
(page I of 1)
�
C�
FA�GRE & BENSON LLr
2200 NORWFST CENTER� 90 SOUCH SEVENTH STREEt
'i�II3NEAPOLIS, MINNFSOTA SS402-3901
1'ELEPEIONE 612-3363000
FACSIMILE 672-336-3026
June 21, 2000
Peter McCall
City Attomey's Office
400 City Hall
St. Paul, Minnesota 55102
Re: Agreement for RiverCentre (F&B File No. 2205161
Dear Pete:
����
As requested, enclosed is a revised draft (dated June 21, 2000) of page 44 of the agreement
referred to above. The changes from the previons drafr are mazked for your reference.
I understand that Joe Reid would like copies deGvered to Nancy Anderson, and we have provided
those directly to her.
Pizase call with any questions.
{ ►�.Wn.iS �
Sincerely,
�`'�
William R. Busch, Jr.
WRB:zieal
Enclosures
M1:6355I9.01
cc: Joe Reid
Nancy Anderson
Martha Fuller
Chris Hansen
Mixneapolis Denver Des Moines London Frankfurt
IEPARTMINf/OFFICE/COUNCIL DATE WIMTEO � ^ �� `
City Council Offices 6-�-z000 GREEN SHEET No ��Y� �`��
XNZTACT P92S01S 8 PFtOPYc � WImuWN
Dan Bostrom, 266-8660 , q ,,.��
MUST BE ON COUNCILAGBmA BY (0.4'fE) `
AmIGN
�� June 6 20�00 �� arrsnoaar axe�vrz
Routtxc
oncoe ❑ wuwry�amucoort ❑ nuxtw.mevi�cera
�. ❑ wrdelw��sasrwnl ❑
TOTAL # OF SIGNATURE PAGES (CLJP ALL LOCATfOIdS FOR SIGNATURE)
Approving a Management Agreement for RiverCentre with Saint Paul Arena Company, LLC.
PLANNING CAMMISSKN7
CIB COMM(TfEE
CML SERViCE CAMMISSION
� tn� ae��� � wonrea u�. a�i� r« m� d�rt�me
YES NO
Has Mis P�eoNfirm ever heen a dry empbyee9
YES NO
Does this poreoNfiim possese a slall nd nonnallyposeassetl by any curteM ciry empbyeel
YES NO
Ie Mis P���m a tarpetetl wntloYt ' 1
YES NO
� •.
� ;�f
'� � � , �J'. �t�'
C�ur� €��s�;�r�h �en�r
� �;�� � 12000
SOUftCE
INWRMATION (IXPWN)
COSTrttEVQlUE Bl1D6ETm (qRCIE ON�
ACTNITY NUMBER
r
YES NO
00 «� S4�
5-31-00
r
00 -sy�
TABLE OF CONTENTS
Section 1. Engagement of Manager; Services
I.1 En�a�ement ...................................
12 Scope of Services ..........................
13 Specific Services ...........................
1.4 Operating Standards ......................
Section 2.
2.1
2.2
23
2.4
2.5
2.6
2.7
Tertn and Termination .....................
Tertn................................................
* * [intentionally deleted] ** ..............
Optional Termination ......................
Termination for Default ...................
Arena-Related Rights to Terminate.
Termination for Failure to Fund......
Effect of Termination ......................
Section 3. Authority Oversight and AuthoriTy eprese�
31 Oversight and Authority Represe ative ......
32 Use by the Authority ................ ..................
Section 4. Contracts Regarding RiverC tre ................
4.1 Extraordinary and Ordina Contracu .........
4.2 Contract Administrator ... .............................
43 Contracts with Affiliate ..............................
4.4 Mutually Advantageo s Arrangements........
Section 5. Personnel ...........
5.1 EmploymenYand
5.2 Existing Emplo
53 Collective-Bar a
5.4 Offers of E lo}
5.5 Employee enef
5.6 Assumed bligai
5.7 No Soli tation...
Use by Authority.....
.................................
.................................
.................................
.................................
.................................
.................................
.................................
.......................2
...---° °-° °---.....2
....--� °---°--°-�-..
.......................6
....................... 6
.......................6
....................... 6
....................... 6
.......................7
....................... 8
....................... 8
............9
............9
..........10
..........11
..........11
..........12
.......... I 3
..........13
..........................................................................................14
Appointment of Executive Director .................................14
ining Agreements
Section 6. Oper ing Year; Budgets; Reports............
6.1 Cale darYear ...........................................
6.2 Op rating Budgets ....................................
63 counting, Recording and Allocations...
6.4 onthly and Annual Reports ...................
6.5 Capitai Expenditures ................................
6.6 Authority Administrative Budget .............
6.7 City Council Approval .............................
6. Modifications to Budgets .........................
6 Operating Standards .................................
Sectio 7. Receipts and Disbursements; Funding.....
7.1 Receipts and Disbursements .....................
.....................................14
..................................... l 5
.....................................I S
.....................................16
.....................................1 ti
.....................................17
..........17
..........17
..........18
..........18
..........20
..........21
..........22
............23
............23
............23
............23
i
oa-s�f7
7.2 Fundina-°.°--°--°°° .........................
73 No Obliaation of Manager to Fund
Section 8.
8.1
8.2
83
8.4
8.5
8.6
8.7
Mana�ement Fees; Commissions
Management Fees ........................
Base Amounts .......--°°° ..............
Quality Amounu .°-°°°°°-°-.......
Revenue Amounts .......................
Commissions ...............................
Limitation ....................................
Prorated Amounts ........................
Section 9. Indemnificationand Insurance..........
9.1 Indemnification .................................
92 Insurance ...........................................
Section ] 0. Ownership of Assets; Related Obligations; Aud� Rights
10.1 Ownership ....................................................... ................
10.2 Authority Obligations ................................... ..................
103 **[intentionallydeleted]** ..............................................
Section I 1. Representations and Warranties ........... ..
1 I.1 Representations and Warranties of M ager ...............
I 12 Representations and Warranties of T e Authority........
fiection ? 2. Other Provisions .................
12.1 Relationship ........................
12.2 Severability .........................
123 Force Majeure; Certain Cha
12.4 Waiver ............................. ..
12.5 Headings; References O In
12.6 Entire Agreement ...... ........
12.7 Survival .................. ..........
12.8 Third Party Benefi iaries....
12.9 Assignment ........................
12.10 Governing La ...................
12.11 Dispute Reso tion .............
12.12 Jurisdiction nd Venue........
12.13 Negotiate Terms ...............
12.14 Notices ...............................
12.15 Amen ent ........................
12.16 Cou erparts .......................
22.17 Co pliance with Laws.......
...............................°--°----°--° --...24
°°-°---
....................... .
to RiverCentre
....................... .
.......................25
..................°---25
.......................26
... .................... 28
.......................28
..................29
..................29
.................31
...................................3 3
...................................3 3
...................................34
...................................34
...................... 3 4
...................... 3 4
...................... 3 6
..........................3 7
.............. ........... 3 7
......................... 3 7
......................... 3 7
......................... 3 9
......................... 3 9
..........................3 9
..........................40
..........................40
...... .................... 40
..........................40
..........................40
..........................41
..........................41
..........................42
..........................42
..........................43
..........................43
ii
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Exhibit A
E�ibit I3
E�:hibit 32
E�chibit 4.1
E�ibit 52
Eshibit 5.5
Exhibit 6.2
Diagram of RiverCentre
RiverCentre Event Booking Policy
Recurring Events
Contracts Currently in Effect
Irtformation Regarding Existing Employees
Emplo��ee Benefits Provided by Manager
Format of Operating Budget
iii
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cxs- 5�7
List of Defined �Cerms
Defined Term
50% Test
Administrative Budget
Agreement
Annual Report
Annua] Report Date
Approved Capital Budget
Approved Operating Budget
Arena
Arena Lease
Authority
Authoriry Approval
Authority RepresenYative
Base Amounts
City
Continuing Obligatiorts
Dispute Notice Date
Executive Director
Existing Employee
Extended Contract
Extraordinary Contract
Force Majeure Event
Gross Revenue
Hired Employee
Indemnified Party
Indemnifying Parry
Losses
Manager
Manager Representati e
Monthly Statement
Multi-Year Projec
New Contract
New Revenue
Qffer
One Tim etirement Cost
Accounts
Section Keference
..
.
/ 6.4
6.5
62
Introduction
Introduction
Introduction
3.1
3.1
8.1
Introduction
2.7
12.11
5.1
52
8.5
4.1
12.�
8.4
5.6
9.I
9.1
9.1
Introduction
3.1
6.4
6.5
8.5
8.5
5.4
5.6
7.1
iv
GL�-5y 7
Defined Term
Operating Standards
Optional TerminaTion Date
Ordinary Contract
Preliminary Report
Prorated Target
Quality Amovnts
Revenue Amounts
RiverCentre
RiverCentre Autharity
RiverCentre Contract
Signing Date
Start Date
Term
Section Reference
1.4
23
� 6.4
8.7
8.i
8.1
Introduction
Introduction
4.1
4.1
2.I
2.1
v
AGREEMENT FOR RIVERCENTRE
THIS AGREEMENT FOR RIVERCENTRE (this "AgreemenP') is made and
_ day of June, 2000, by and between the Civic Center Authority (also
Authority"), an agency of the City of Saint Paul (the "Authority"), and Saint
a Minnesota limited tiability company ("Manager").
WHEREAS, the City of Saint Paul (the "City") owns
Minnesota, known as RiverCentre, including the convention
the Roy Wilkins Auditorium, and the RiverCentre pazking
pedestrian connection constructed linking RiverCentre to t
(collectively, "RiverCentre"), and the Authority has e
management and oversight of RiverCentre; and
oo- 5Y 7
i
/
e ered into this
as "RiverCentre
Arena Company, LLC,
in downtown Saint Paul,
as "Touchstone Energy Place,"
south of Kellogg Boulevazd (plus any
City's skyway system) shown on Exhibit A
authority and responsibility to provide for
WHEREAS, Manager is engaged in �iie business of providing management services for public
assembly facilities, including the sports
construction adjacent to RiverCentre
entertainment arena (owned by the City) currently under
Arena"), which is subject to an Arena Lease dated January 15,
1998 (the "Arena Lease"), among th CiTy, the AuthoriTy and Minnesota Hockey Ventures Croup, LP, as
Tenant, which Arena Lease has b n assigned by Tenant to Saint Paul Arena Company, LLC; and
WHEREAS, Man ger desires to provide management services for RiverCentre and the Authority
desires to obtain such nagement services from Manager, on the terms and conditions stated herein;
NOW EREFORE, in consideration of the mutual covenants, terms, conditions, and
obligations s ted herein, and intending themselves to be legally bound hereby, the Autt�ority and
Manager;a'ereby agree as follows:
Oo-S�']
Section 1. Engagement of Manaeer; Services
1.1 ��ement. The Authority hereby en�ages
market and promote RiverCentre for public purposes (in
Chapter 459, as amended to date), and Manager hereby acc
conditions provided below. This Agreement shall be consj
including special legislation. /
1.2 Scope of Services. Manager shall
needed to manage, operate, maintain, and
Agreement. Subject to the limitations stated
anri authority to conduct operations of
to mana�e, operate, maintain,
with Minnesota Laws 1967,
such engagement under the terms and
with all laws governing RivecCentre,
and provide such management services as are
RiverCentre in a manner consistent with this
Agreement, Manager shall have general responsibility
and activities therein on behalf of the _4uthoi ity.
13 Specific Services. In e course of managing RiverCentre hereunder:
(a) Manage shall, from time to time, hire, promote, supervise and direct all
employees and other
performance reviews,
(b)
parties providing
shall negotiate r
Yime to time �
at RiverCentre (including work assignments, compensation, tenefits,
and discharge) in a manner consistent with this Agreement.
Manager shall supervise all contractors, subcontractors and other contracting
or services to RiverCentre (including food service, maintenance and security) and
extensions and replacements for the provision of such goods and services from
report snch renewals, extensions and replacements to the Authority (all en accordance
with Sectio�4 of this Agreement).
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40-5 � 7
,,;
(c) Manager shall manage capitat improvements of RiverCentre,
bidding process for each improvement and supervision of the construcTion Thereof, in each
the applicable Approved Capital Budget (as hereinafter defined).
(d) Manager shall arrange to rent, lease or purchase such
are needed from time to tirae for the operation and maintenance of
the applicable Approved Operating Budget (as hereinafrer defined).
(e) Manager shal( anange for payment on
expenses for RiverCentre as contemplated in each Approved
To
and supplies as
in each case subject to
of the AuthoriTy of all operating
Budget.
( fl Manager shall, on. behalf of th Authority, take such actions as Manager shall
deem necescary to collect charges, rents or other a unts due to RiverCentre, or to enforce c>r pursue
damages under any license or other agreement
proceedings as Manager may deem
RiverCentre (including such legal 2ctions or
(g) Manager shall aintain complete records and schedules for booking events and
other uses of RiverCentre.
(h) Mana er shall provide, on behalf of the Authority, day-to-day administrative
services to support
collections and
Authority's
of RiverCentre, including budgeting and accounting; payroll; billing,
obtaining insurance (as provided hereinafter); and maintaining on the
permits and licenses as aze required to operate RiverCentre under such laws and
rules of govemment agencies as are applicable to operations of RiverCentre.
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(i) �Ianager shall book and schedule events to take place at
case subject to the Authority's event-booking policy, a copy of which is set forth
consult regularly with the Authority Representative on the scheduling of events
benefits from all scheduling decisions, shall advertise and promote use
realizin� iu full potential, and, in connection ffierewith, may use the
Energy Place," "Wilkins Auditorium," "RiverCentre Authority"
logos and other marks for each, as well as names, logos and
effect from time to time. Manager will maximize
that is consistent with the spirit of this Agreement.
(in each
1.3), shall
that RiverCentre
for purposes of
"RiverCentre," "Touchstone
of Saint Paul" and related
marks of each part of RiverCentre as in
and bookings of RiverCentre to a capacity
(j) Manager shail soticit, prop'iote and selt on the Authoriry's behalf adveRising at
RiverCentre and sponsorships of RiverCentre (yfi each case consistent with the terms of agreements then
in iorce} and shall pursue oppoRunities for
the Arena (in each case subject to
approval from the Director, Office
agreement that results in "private
the Intemal Revenue Code of
reasonably be interpreted as
1.4
sing and sponsorship that include both RiverCentre and
relating to contracts). Manager shall consult with and obtzin
Financial Services (City of Saint Paul), before signina any
use" of RiverCentre (withln the meaning of Section 141(b) of
as amended, and Treasury Regulations § 1.141-3 thereunder) or could
in such "private business use: '
The AuthoriTy and Manager acknowledge and agree that a principal objective of
this AgreegCent is to manage RiverCentre in a manner that is reasonably prudent, consistent with
operations of other first-class public facilities and consistent with the public investment that has been
made in RiverCentre. In addition, Manager acknowledges that these are public facilities and, as such, the
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public has a right to expect that such facilities are managed in a manner that is
investment that has been made.
the public
(b) To that end, "consistent with" will refer to all areA�s of operations, including, but
not iimited to:
(i) interior and exterior appearance qf all facilities
(ii) employee performance
(iii) operation of all facilities
(iv) concessions and publi acilities
(v) customer service
(vi) marketing and pr motion of all fzcilities
(vii) customer s<
(viii) ingress and
(ix) load and
(x) cleanli ss
(c) Manager
achieve such standards in 2001. 6
as set forth in the Approved
of all facilities
ss for parking
times for loading docks
responsiveness and quality of food and beverage service
provide the services hereunder in such a manner not only to
also to commit to meeting or exceeding such standards for each year
�g Budget for such year (the "Operating Standards").
(d) In ad ition to general guidelines developed by the Authority Representative, in
consultation with Mana�er d reviewing the practices and operations of other similar public facilities,
the Authority Representaf e will use the following tools to determine if the Operating Standazds have
been achieved:
(i) customer surveys
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Section 2.
(ii) vendor surveys
(iii) general public surveys
(iv) Convention and Visitors' Bureau interviews
(v) RiverCentre Authority interviews
Term and Terminarion /
2.1 Term. The period during which Manager
which the Authority shall purchase and pay for such serv
"Term") shall start on July 1, 2000 (the "Start Date"), and/
sooner as provided in this Agreement.
2:L **[intentionallvdeletedl*'`
23 Ootional Termination.
the .Authority and Manaaer shall have
Termination Date and without cause or
90 days before such Optional
2.4
services hereunder and during
in accordance with this Agreement (the
on December 31, 2004, unless terminated
2003, shall be the "Optional Termination Date." Each of
right to terminate this Agreement, effective on the Optional
alty, by giving notice of such termination to the other at least
Date.
(a) If e party shall fail to pay when due any amount payable hereunder, then the
other party shall have n addition to such party's rights to enforce this Agreement and receive
indemnification for any�breach hereofl the right to give notice of such default. If such amount is not paid
within 10 days follo in� the giving of such notice, then the party giving such notice may terminate this
Agreement by notice of termination given within 30 days following the end of such 10-day period. If this
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c�-55�7
Agreement is terminated under this para�aph (a), then the tertninating party shall have no further
obiigarions under this Agreement after such termination (other than Continuing Obligations (as hereinafter
defined)), but the defaulting party shall continue to be liable for such default and for alt damages
the defaulting party's breach of this Agreement.
(b) If either party shall fail to perform any of such party's
this Agreement (other than a failure to pay when due any amount payable
shall have (in addition to such party's rights to enforce this Agreement and
breach hereofl the right to give notice describing such failure with parti
notice, the failing party (i) shall take all reasonable actions to promptly ;
by
under
then the other party
indemnification for any
Upon receipt of such
such failure or (ii) if such
failure cannot then be cured in all respects (whether due to expiration q#' a time period or otherwise), shall
take ali reasonable actions to cure such failure to the extent
failure. If the failing parry does not comply with its obligations
receipt of such notice of failure, then the party giving such
and to prevent recurrence of such
this pazagraph (b) within 60 days after
of failure may terminate this t�greement
by r,oti�e of termination niven within 30 days following t�fe end of such 60-day period. If this Agreement is
terminat�d under this paragraph (b), then the
Agreement after such termination (other than
party shall have no further obligations under this
Obligations), but the defaulting party shall
continue to be liable for such default and for Il damages caused by the defaulting party's breach of this
Agreement.
2.5 Arena-RelatedRi h toTerminate. If
(a) the A ena Lease were terminated in accordance with its terms as a result of a
default by the tenant thereu;fder or
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(b) Manager ceases to have a contracmal right to manage the Arena or ceases in fact
mana�e the Arena,
then the AuthoriTy shall have the ri�ht to terminate this Agreement by notice of
Mana�er within 30 days following such termination of the Arena Lease or such
2.6 Termination for Failure to Fund. With respect to
funds are not appropriated by the Authority and approved by the
beginning of the year to which such Approved Operating
given to
Approved Operating Budget, if
Council at least 60 days prior to the
applies (and made available in an
amount sufficient to fund operations of RiverCentre iyl accordance with such Approved Operating
Budget), then Manager shall have the right to
the Authority at least 60 days prior to the
2.7 E ffect of Tem�ination
(a) Upon any
other property belonging to the
Manager for any expenses
amounts under Section 8
the Authority as a result of
(b)
RiverCentre
(but sub�ect to
this Agreement by notice of termination given to
date stated in such notice.
Manager shall deliver to the Authority any funds and
then in Manager's control, and the Authority shall reimburse
incurred by Manager on behalf of the Authoriry, plus any un�aid
as provided in Section 8), less any amounts then owed by Manager to
termination or otherwise.
Upon termination, the AuthoriTy shall cause any successor manager of
a private contractor or public body) to (i) employ following the date of termination
for cause) each employee of Manager then employed at RiverCentre and
(ii) assukne�and pay all of the assumed obligations under Section 5 not previously satisfied.
Notwithstanding the foregoing, however, if Manager has designated one senior manager for continued
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employment by Mana�er, then the Authority wouid not solicit that manager or otherwise offer
employment to that Managec The foregoing shall not, however, prohibit the Authority from
such designated senior manager if such manager applied independently for such
example, in response to a generai employment advertisement published by the
solicitation by the Authority.
(c) NotwithstandinganyterminationofthisAgreement,
bound by their respective obligations under Section 9. I(relating to
(for
without any
shall continue to be
Section 10 (relating to
ownership), Section 5(relating to personnel), Section 8(to the extent f any fees, commissions or other
amounts thereunder becoming payable afrer termination) and Secti 12 (relating to the relationship of the
parties and other matters), which are the "Continuing
termination of this Agreement.
Section 3.
3.1
of RiverCentre shall be held and
oversee operations of RiverCentre
specified in Section 6. Manager s
Authority as "Authority Repre N
Manager shall designate its ighe:
"Manager Representative" escribe
Representative by
from time to time
" and such sections shall survive any
All assets, revenues, obligations and expenses
Manager for the Authority's account, and the Authority shall
�8 its financial results through the budget and repoRing process
I report to the Authority through an individual designated by the
ve," who shall be an employee or consultant of the Authority.
ranking officer to report to the Authority Representative as the
in this Agreement. The Authority shall designate the Authority
Manager within five days after the date of this Agreement and shalt thereafrer
replace and otherwise take such action as necessaryto cause there to be a
duly designated an�t authorized individual serving as Authority Representative at all times. The Authority
shall cause the�4uthority Representative to oversee performance of this Agreement, respond to Manager's
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inquiries and consult with Manager at all times regarding the operations of RiverCentre and j evement
of its public-purpose objectives. The Authority shall authorize and cause the Authority Repiesentative to
review actions proposed by Mana�er that require approval by the Authority hereundezand, with respect to
such proposed action, receipt by Manager of written approval signed by the uthority Representative
shall be "Authority Approvai" rovided, however that any approval o an Extraordinary Contract,
proposed operating budget or proposed capital budget shall also
Commissioners and signature of the Authority's chair). If at any
or the Authority Representative notice of any proposed action
provide to Manager notice of approval or disapproval of
the date on which Manager gives such notice, then
have been given by the Authority on the 16`" day
3.2 Use bv the Authoritv. The
The Authority or the City or their respective
example, Authority meetings, training
reduced-rent basis, as the AuthoriTy
rent-free or reduced-rent use
and personnel for stage work,
by the Authority or its
and Manager may
events at RiverCentre,
customary dates) with
Approval, as in effect
accommodate under
the approval of the Authority's
Manager submits to the Authority
the Authority Representative does not
proposed action within 15 days following
Approval for such action shall be deemed to
such date.
shall have the right to use RiverC�entre fcr events of
and for the bene£t of the community (including, for
Anthority personnel and public events) on a rent-free cr
determine from time to time. Direct expenses related to such
for example, utilities, heating and air conditioning, insurance,
work, tickets, cleaning, securiry and other services) would be paid
Such use by the Authority shall be subject to such terms as the Authority
time to time, shall not unreasonably compete or conflict with paying
shall be booked in advance (and may be moved from their respective
notice in accordance with RiverCentre policies having Authority
time to time. E�ibit 3.2 is a list of recurring events that the parties expect to
section.
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Section 4. Contracts Reeardinp RiverCentre
4.1 Extraordinarv and Ordinarv Contracts.
(a) "RiverCentre Contract" shall mean at any time a use agreemen icense, provider
agreement, supply contract, service agreement and other contract or agreement any kind (other than
any co]lective-bargaining agreement) that is in effect at such time with resp t to RiverCentre (and shall
include each Extraordinary Contract and each Ordinary Contract, as de ed below). E�ibit 41 is a list,
provided by the Authority, of each RiverCentre Contract in effect of the date of this Agreement. Each
use agreement shall contain a provision reserving to the Au ority the right to receive 20 promotiona(
seats without charge (in each case in accordance with
Manager shall have received copies by notice to
(bi "Extracrdinary
��)
such in Eachibit 4.1,
(ii)
E�tibit 4. ],
as such in E�ctfibit 4.1,
hereunder).
means only
most recent resolutions, of which
the prim�ry parking-management contract for RiverCentre, designated as
primary concessions contract for RiverCentre, designed as such in
the primary food-and-beverage catering contract RiverCentre, designated
(iv) any RiverCentre Contract that replaces, extends or substantially amends
referred to in clause (i), (ii) or (iii),
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(v) any RiverCentre Contract for sponsorship or advertising that �reates
/
signage ri�hts at RiverCentre for more than 30 consecutive days, '
(vi) any RiverCentre Contract that, on the date
date"), creates non-terminable obligations that bind RiverCentre
more than 90 days beyond the Term, and
signed (the "si�ing
Authority and extend
(vii) any RiverCentre Contract that j�t4e Authority may from time to Time
designate by notice to Manager as an Extraordinary C tract.
(c) "Ordiaary ContracY' means an RiverCentre contract that is not an Extraordinary
Cuntract (and, for example, shall include mainten ce and repair contracts, service contracts, and event
and booking contracts, etc.).
4.2
RiverCentre Contract, shall cause
Authority, and shall represent
performance thereof,
Manager shall obtain
if the effecc of such
enforce such
into any Ordinary
shall serve as contract administrator for each
of the Authority's obligations thereunder on behalf of the
Authority and act on its behalf in monitoring each other party's
disbursing funds, and dealing with each other party in all respects.
Approval in connection with any action under an Extraordinary Contract
to extend, terminate, substantially amend or commence legal proceedings to
Contract. Manager shall have the responsibiliTy and sole authority to enter
as the Authority's agent and on the Authority's behalf (subject to Section 43),
but Manager s�'all not enter into any Extraordinary Contract without Authority Approval. If any
were entered into with respect to both RiverCentre and the Arena,then Manager
shall cause the terms thereof to be such that neither RiverCentre nor the Arena receives benefits
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00-5 Y7
thereunder (or incurs costs thereunder) that are dispropoRionate to its respective interest in such
RiverCentre Contract. In co�nection with Manager's providing the reports referred to in Section 4(a),
Mana�er shall provide manaeement reports regarding the status of RiverCentre Contracts an significant
developments related thereto.� /
43 Contracts with Affiliates. The Authority and Manager
time, an entity in which Manager has an interest (or is otherwise
providing gocds or services necessary or desirable for
contract for that purpose. If Manager has (a) disciosed
(b) demonstrated to the Authority's satisfaction that
available from non-affiliated vendors and (c)
Manager may enter into such contract with
may be through a request-for-proposal
consultant or other method
. ,,
each of them may from time
other providers of goods
make such favorable
The Authority and Manager acknowledge that
have agreements or other arrangements with suppliers, vendors and
services that include favorable terms, and each shail use its best efforts to
available to the othec Manager wiil use its best efforts to use such terms to
reduce the costs and i�iprove the efficiency of RiverCentre operations.
that, from time to
may be in the business of
of RiverCentre and may propose a
interest or affiliation to the Authority,
proposed terms are competitive with those
Authoriry Approval for such contract, then
affiliated entity. (Such showing of competitive terms
verification from a mutually acceptable ?hird-party
Authority.)
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Section 5. Personnel
5.1 Emplovment and Suoervision: Aopointment of Esecutive Director. �
(a) During the Term, Manager shall select, employ, train, a provide, for work at
RiverCentre, qualified employees of Manager (in sufficient number to satis the performance standards
of this Agreement at all times).
(b) Manager shall train and provide all
at RiverCentre and shall assign to RiverCentre a
Director"). If at any time the Authority reasonably
is defcient, then the Authority may, by notice
qualified supervisors for employees
qualified faciliry ma�ager (the "Executive
that performance of the Executive Director
, report such determination and the specific
deficiencie; so de:ermined, and Manager shall e s:l reasonable actions to remedy any sueh deficiencies
an3 shall report the resnits of such remedi actions to the Authority within 30 days following receipt of
such notice. If the AuthoriTy
unsatisfactory, then the Authority
receipt of such report, inform
Manager shall, within 30
appoint a replacement
determines that performance of the Executive Director remains
by notice to Manager given �vithin 30 days after the Authority's
of such determination (including the reasons therefor), and
following receipt of that report remove such Executive Director and
Director with Authority Approval (which shall not be unreasonably
withheld or delayed).
5.2 Exi in Em lo ees. The Authority has provided to Manager the information stated in
E�ibit 5.2 heret , including the name, position and collective-bargaining representation (if any) of each
person who
"Existing
of the date of this Agreement, employed at or in connection with RiverCentre (each an
The Authority will provide layoff notices to each Existing Employee stating that
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the last day of employment cvith the Authoriry/City will be June 30, 2000. Such notices ill comply with
City ordinances and collective-bar�aining a�reements.
53 Collective-Bar2ainino Asreements. Execution by na�er of collective-bargaining
agreements covering each Existing Employee who is
bargaining representati��e is a condition precedent to Manager's
5.4 Offers of Emplovment.
(a) Commencing on the
Manager access te each Existing
by a union or other collective-
under this Agreement.
of this Agreement, the Authoriry shall provide to
for purposes of interviewing, offering employment,
completi.ig pre-employment documents and xplaining Manager's employment-related rules and benefits.
(b) Manager shal make a written offer of employment (each an "Uffer") to each
Existmg F.mployee for employme t by Manager, commencing on the StaR Date. Ivlanager shall make
such Offer sv�thin five davs
days after it is received by
(c)
than that now in
now assigned to
(d)
date of this Agreement and shalt keep such Offer open for at least 10
Existing Employee.
each Existing Employee, such Offer shall include (i) wages at a rate not less
such Existing Employee, (ii) position and duties substantially the same as those
Existing Employee and (iii) if such Existing Employee is represented under a
agreement, such terms and conditions as are required thereby.
Manager shall hire each Existing Employee who accepts such Offer, and shall
employ �ch Existing Employee, commencing on the Start Date.
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5.5 Emplovee Benefits. Manager shall provide, to each Existing Employee who accepts such
Offer, health coverage and other employee benefiu in accordance with Manaaer's emp}ayee-benefit plans
referred to in E�ibit 5.5.
5.6 Assumed Oblieations. For each Existing
Emptoyee"), the Authority shall provide to Manager within ten
statement of all the Authority's obligations to such Hired E p
time; and sick time, severance pay and benefits in lieu retire
such obligations and satisfy them when due. No rthstandin
obligations are limited as follows:
(a} Far accrued
$76,000 payable in cash, and (ii)
day; of accrued vacatior,. To
hired Ey Manager (a "Hired
following the Start Date an accurate
for accrued vacation; compensatory
heaith coverage. Manager shall assume
the foregoing, however, such assumed
(i) the total of all abligations so assumed ,hall not exceed
shall aliow each Hired Employee to carry ferward up to ten
that Hired Employees do so, the total payable in cash shall be
reduced by the dollar amount �,i4ributable to aIl days so carried forward.
(b) � For compensatory time, the total of all obligations so assumed shall not exceed
$136,000 payable i�cash.
(c) For sick time, severance pay and benefits in lieu of retiree health coverage, the
total of �il obligations so assumed shall not exceed
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(i) for each Hired Empioyee, a deposit to his or her 401(k) acc nt, to be
made on December 31 of each of the years 2000 through 2003 (which deposit all be $150 in
2000 and $300 in each of 2001, 2002 and 2003), provided, however that ch deposit shali be
paid for any year only if such Hired Employee remains empioyed by M ager on December 31 of
that year, and
(ii) for each Hired Employee, another deposit o his or her 401(k) account on
February 1, 2001; February 1, 2002; and February I, 2003 (which eposit shall be in the amount stated as
"One Time Retirement Cost" for such Hired Employee in statement referred to above), provided,
however, that (A) the total of all such deposits in 2001 �
deposiu in 2Q02 shall not exceed $5�,000; and the
$30,000; and (B) Manager shall allow each Hired
and, to ihe extent that such Hired Employee
reduced by the dollar amount attribufable to
5.7 No Solicitation
year after any termination of
solicit Yor employment one senior manager then employed
by Manager and designated fqf continued employment by l�lanager, provided that the AuthoriTy is not
prohibited from
such employment
Section
�
on the
not exceed $150,000; the total of all such
of all such deposits in 2003 shall not exceed
to carry forward up to five days of sick time
so, then such deposit for such Hired Emp{oyee shall be
days so carried forward.
Authority shall not, during the Term or during the period of one
designated senior manager if such manager applied independentty for
any solicitation by the Authority.
Operating Year; Budeets: Reaorts
Calendar Yeaz. Operations, accounting and reporting for RiverCentre shall be conducted
of the calendar year, commencing January I and ending December 31, arid each reference
to a year means the calendar year (uniess otherwise specifically stated).
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62 Operatin� Budeets. For each year, Manager and the Authority shall
approve an operating budget for RiverCentre (each an "Approved Operating Budget") in
the following:
with
(a) For each year commencing with 2001, Manager shall s mit to the Authority, by
the immediately preceding September 1, a proposed operating budget stati all anticipated revenues and
expenses related to RiverCentre for such year, in the format set forth�n E�ibit 6.2. Manager and the
Authority shall discuss such proposed operating budget and, if ey mutually approve in writing an
operating budget and such budget is also approved by the Sa' t Paul City Council, in each case by the
immediately preceding October 31, then the
Operacing Budget for such year. If no budget is so
so approved shall be the Approved
by such immediately preceding October 3l,
then the Approved Operating Budget for such ye shall be i�entical to that for the immediately preceding
year, including sll amendments theretu.
(b) Any Approv d Operating Budget may be amended at any time by a written
amendment that is approved by th�CiTy Council and executed by the Authority and Manaaer.
63 Ac
(a)
shail establish int¢
standards in
Auditor.
Manager shall maintain complete accounting records relating to RiverCEntre and
policies and practices which are in accordance with generally accepted
facilities-management industry and any additional requirements of the Minnesota State
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00-55�7
(b) Manager shall cause alI revenues from RiverCentre eamed and due a�er July I,
2000, to be separately recorded and reported (on a direct basis) to the greatest extent
revenue shall be amibutable to both RiverCentre and the Arena (including, for
single event using RiverCentre for part of a day and the Arena for the balance
allocate such revenues on the basis of the respective rate cards then
6ssible. If any
revenue from a
such day), Manage� shall
for RiverCentre and the
Arena (or, for any particular event, on such other basis as Mana r may determine with Authority
Approval).
(c) Manager shal] cause all expenses or RiverCentre incurred after July 1, 2000, to
be separately recorded and reported (on a direct
example, separate metering of utilities, separate
retirement and other benefit costs in
itemizing of maintenance and repairs,
dedicated 100% to RiverCentre
expense shall be incurred for the
ailocated betweer. them on a
Operating Budget for that
op�ortunity for
expenses not a
opportunity, the
respective costs
and its staff il
to the greatest extent possible (including, for
of direct-labor hours, ailocatien of vacation,
with such direct-labor hours, separate invoicing or
separate time recording of employees, including those
such as a dedicated marksting manager). For each year, if any
of both RiverCentre and thz Arena, such expense shall be
determined with Authnrity ApQraval in connection with the Approved
The Authority and Manager acknowledge that from time to time an
of RiverCentre and the Arena for an event or other purpose may involve
in the Approved Operating Budget. To realize the benefits of such an
and Manager may determine to allocate such expenses so as to reflect the
benefits of such event for RiverCentre and the Arena. The expenses of the Authority
be accounted for separately by the Office of Financial Services within the Authority's
Budget (as herein defined).
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6.4 Monthlv and Annual Reoorts.
(a) Within 20 days following the end of each month during the
submit to the Authority an unaudited written operating statement (the "'Monthly
such month and for the year to date, (i) all gross revenues and expenses from
shall
showing,for
of RiverCentre,
in each case presented in the same manner as in the Approved Operating B get for such year and (ii) for
each line item, a comparison of actual resuits to those stated in the Appr ved Operating Budget.
(b) Within 60 days foliowing the end o each yeaz, Manager shall submit to the
Authority a written operating statement for such year (the�reliminary Report") stating for such year all
revenues and actual expenses from operations of RylerCentre. Unless the Authority gives notice to
Manager of a geod-faith objection to a materiai pect of the Preliminary Report before the 30'� day
follov�ing .he Authority's receipt thereof, th Preliminary Report shal( then oecome binding upon
VIanager and the Authority and shall be the�Annual Report" for such year, and such 30`" day shall be the
"rinnuai Report Date" for such year.
(c) If the Aut ority (by notice given to Manager before the close of business on such
30` day) objects in good faith t any material aspect of the Preliminary Report, then only those aspects as
to which the good-faith
discuss the objection
Preliminary Report,
was made shall not become binding, the Authority and Manager shall
if they sign a written agreement amending the Pretiminary Report, then the
by such written agreement, shall become binding and shall become the
Annual Report and�Yhe date of such written agreement shall be the Annual Report Date. If the Authority
and Manager
objecrion,the
firm of cedif7
sign a written agreement within 30 days after the Authority gives such notice of
matter objected to (and only such matter) shall be submitted to a nationally recognized
public accountants selected by the Authority and Manager (whose fees shall be divided
the Authority and Manager), who shall resolve the dispute and submit a written
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statement of such resolution, which statement, when delivered to the Authority and to Manager, shall
become bindine. Such statement (combined with those aspects of the Preliminary Report as to
Authority did not timely provide notice of objection) shall be the Annual Report and
the
on which
such accountants submit such statement to the Authority and Manager shall be the �jrfnual Report Date.
(d) Each Annual Report shall remain subject to th Authority's audit rights under
Section ] 0.
6.5 Caoital Exoenditures. For each year, Ma ger and the Authority shall establish and
approve a budget for capital expenditures at
BudgeP'), which shall state aIl capital projects to
financing sources to pay for those projects,
same year and *.hose anticipated ±a
acc�rdance with the following:
(a) For each
during such year(each an "Approved Capital
at RiverCentre during that year and the
those anticipated to be started and completed in the
into subsequent years (each a"multi-year projecP'), in
commencing with 2002, Manager shall submit to ±he Authority, by
the immediately preceding
expenditures related to
Manager and the
writing a capital
case by the
1, a proposed capital budget stating all anticipated material capital
for such year, in such format as the parties shall hereafrer agree.
shall discuss such proposed capital budget and, if they mutualty approve in
for such year and such capital budget is approved by the City Council, in each
preceding October 31, then the capital budget so approved shalt be the Approved
Capital Budget f�r such year. If no capital budget for such year is so approved by such immediately
preceding
project
31, then the Approved Capital Budget for such year shall consist of each multi-yeaz
in any previous Approved Capital Budget that is not yet completed.
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(b) Any Approved Capital Budget may be amended at any time by a written
amendment that is approved by the City Council and executed by the Authority and nager.
(c) For each month durin� which Manager makes any aterial capital expenditures,
Manager shall provide to the Authority, in connection with the Mon y Statement for that month, a
written summary of such capital expenditures.
(d) Manager shall not make any matey�al capital expenditures unless included in an
Approved Capital Budget or otherwise approved by the uthority.
(e) All expenditures relate to the project currently in process to repair and improve
the Riv�rCentre parking ramp (planned f campletion during 2001 at an estimated project cost of
$9.5 million) sha[1 be managed and
�. .
administrative budget (the
expenses directly related to
by the City.
'I'he Authority will annually approve and manage an
BudgeP'). The Administrative Budget will include the
operation of the Authority and other expenses it may approve, including
the management fee to be aid to Manager.
6.7 Ci Council A roval. The Authority shall have no obligation to pay operating
expenses for a ye unless and until the Authority shall have made an appropriation approved by the City
Council and
after such
the
to fund the operation of the Authority and RiverCentre for such yeac From and
by the Authority, the Authority shall pay the operating expenses for such year to
elsewhere in this Agreement.
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oo-5y7
6.8 Modifications to Budeets. All modifications to the Approved Capital Budget and
Approved Operating Budget durina any yeaz shail be subject to prior written approval by
and Managec Any expenditures made by Manager which are not included in such
financiai responsibility of Manager unless approved by the Authority.
6.9 O�eratine Standards. As part of each yeazly budget
2001), the Authority and Manager shall establish ihe Operating
shall be the
(commencing with that for
for that year and include such
Operating Standards as part of the Approved Operating Budget�or that year.
Section 7.
7.1 Receipts and Disbursements.
(a} Manager shall es�i'ablish and maintain for KiczrCentre such fully insured bank
acco;ints as needed from time to
Rive:Cer.tre, with signature
report to the Authority (col
of RiverCentre shall be
disbursements related to
and abide by a cost
approval shall not be
for receipts, disbursements, payroll aad other operation� of
in such employees of Manager as Manager shall determine and
the "Operating Accounts"). All revenues collected from operations
into the Operating Accounts and Manager shail cause all expenses and
to be paid from the Operating Accounts. Manager shall institute
and accounting system, subject to approval by the Authority (which
withheld or delayed). Any changes to such system shall be subject to
approvai by the Au ority (which approval shall not be unreasonably withheld or delaqed).
(b) All revenues collected from operations of RiverCentre are the sole property of
the Author' and shall be held in trust by Manager for the Authority for appiication as provided in this
Any amounts remaining in any Operating Accounts, upon termination of this Agreement and
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after payment of espenses as provided herein, shall be paid to the Authority. If any of such revenues are
lost, stolen or otherwise unlawfully removed from the custody and control of
shall continue to be responsible therefor and Manager shali indemnify the
such loss by makin� payment to the Authority within 48 hours of
removal.
7.2 Fundin . For each month, Manager shal]
prior to the first day of such month, a report of the
Operating Accounts at the start of such month and
during such month. If and to the extent that such
balance plus projected receipts, then the
equal to such exczss. If and to the extent
projected balance plus projected
then Manager
from and against
such loss,theft orunlawful
to the Authority, at least seven days
balance projected to be available in the
cash receipts and projected cash expenditures
expenditures exceed the sum of such projected
will transfer to the Operating Accounts an amouot
such projected expenditures are less than the sum of such
Manager will transfer to the A�thority the amount by
which such projected expenditures are 1 ss.
7.; No Obli ation of ana er to Fund. F,xcept as agreed to in Section 5 hereof, vtanager
shall have no obligation to fun any cost, expense, liability or expenditure with respect to RiverCentre os
operationsthereof.
Section 8.
8.1 �
consist of
(a)
The Authority shal] pay to Manager management fees, which shall
base amounts, determined as described below (the "Base Amounts"), plus
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(b) amounts based on the Operating Standards, determined as described below
"Quality Amounts"), plus
(c) amounts based on Gross Revenues (as hereinafter define , determined as
described helow (the "Revenue Amounts").
8.2 Base Amounts. The Base Amounts shall be $14,666 er month during 2000, $14,583 per
month during 2001, $15,416 per month during 2002, $16,666
amount during 2004 as the parties shall hereafter agree.
each month on or before the first day of such month.
during 2003, and such per-month
Authority shall pay such Base Amounts for
83 Qualirv Amounts. For eac�of the years 2001 through 2004, the Authority will evaluate
Manager's performance in achievinn t}fe Operating Standazds for that year and will assign to such
performance a percentage based on t�fe Authority's reasonable determination of the extent to which such
Operating Standards were
amount equal to $25,000
Authority were 90% for 2(
Authority shall pay the �
8.4
during that year. "Che Quality Amount for such year shall be an
by such percentage (e.�.,if the percentage so determined by the
then the Quality Amount for 2002 wouid be $22,500). For each year, the
Amount by February 28 of the immediatety following year.
(a) For each of the yeazs 200] through 2004, the Revenue Amount shall be
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(i) $50,000 if Gross Revenue equals or exceeds the First Targ for that year,
plus
(ii) an additional $75,000 if Gross Revenue equa or exceeds the Second
(b) For any year, "Gross Revenue"
(ii) service income, (iii) food and beverages, and (iv) nov�1
I mean all revenue from (i) rentals,
Gross Revenue shall be calculated and
classified in a manner consistent with the practices r ected in the budgets and operating statements of
RiverCentre for 1999 and 2000 heretofore receiv by Manager (provided, however, that any revenue that
would cause any tas-exempt bonds to beco e tasable private activity bonds cannot be eamed by the
Authority or counted as Gross Revenue).
(c)
forth below:
For 2004, the
For
2001
2002
2003
Taraet for that year.
year refened to below, the First Target and Second Target shall be as seY
First Tazeet Second Tar¢et
$3.75 million $4.00 million ,
$3.90 million $4.15 million
$4.00 million $4.25 million
and Second Target shall be such amounts as the parties shall hereafter agree.
Commissions
(a) For each New Contract (as defined below), the Authority shall pay to Manager a
for each year in which RiverCentre receives advertising payments, sponsorship fees, rights
5T'�
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fees or other revenues under or with respect to such New Contract ("New Revenue").
the foregoing, however, in the case of any New Contract that is an Extended Contract (as
"New Revenue' for any year shall mean only such payments, fees and revenues as
below),
those that
would have been received in such year had such Extended Contract continued into ch yeaz on the same
terms as in effect on the Start Date. (For example, if a sponsor contract in effe on the Start Date called
for payments of $50,000 to RiverCentre in 2003 and such sponsor
Date so as to call for payments of $60,000 in 2003, then $10,000 of
for 2003.)
(b) The amount of such commissi
R�venue. Upon receipt of any amount of
amended afrer the Start
would be New Revenue
each New Contract shall be 10% of all New
the Authority shatl pay the applicable
commission to Manager (eg, if amounts receive�fl under a New Contract consisted of $10,000 in January
2C04 and $10,000 in.July 2004, then the A hority would pay to 1�Ianager a commission �f $1,000 in
3anuary 2004 and a commission of $ I,OQO n 7uly 2004).
(c� New C ntract" shall include (i) any contract, agreeme�i or other arrangemenY
for advertising, sponsorship,
is entered into during
contract, agreement or
contract,
Contract").
publicity, promotion, marketing or similar rights at RiverCentre that
and (ii) any renewal, extension, amendment or other change to any
existing before the Term that has the effect of extending such existing
arrangement or increasing the amounts payable thereunder (an "Extended
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8.6 Limitation. For each of 2001 through 2004, the Base Amounu payable to Manager for
such year shall be at least 50% of the total payable to Manager for such year under Sec� 8, and the
requirement of this sentence shail be the "50% Test " If, for any of such years, the
satisfied in the absence of this sentence, then the Revenue Amount for such year
smallest amount (if any) as is necessary to cause the 50% Test to be satisfied (a d,
were reduced to zero in accordance with this sentence and the 50% Test main
would not be
be reduced by the
if the Revenue Amount
unsatisfied, then the
commissions payable for such year shall be reduced by the smallest unt as is necessary tu cause the
50% Test to be satisfied).
8.7 Prorated Amounts. In the event of'any rmination of this Agreement that does not occur
at the end of a year, the Authority shalt pay to
(a) for Yhe month
Amuunt for such month, prorated
days afterthe end ofsuch month);
(b)
year, prorated through
termination; plus
the date of terminatinn, an amount equal to the Base
the date of termination (which amount shall be paid within ten
year that includes the date of termination, the Quality Amount for tha4
date of termination, which shall be paid within ten days after the date of
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cb-Sy7
(c) for the year that includes the date of termination, a prorated portion of the
Revenue Amount for such year, which shali be paid within ten days afrer the date of termin "on and
determined by
(i) multiplying the Second Tazget for such year y a fraction, of which the
numerator is the number of days in such year elapsed through e date of termination and the
denominator is 365 (�vhich shall be the "Prorated Tazget");
6
(ii) determining the percen e represented by (A) actual Gross Revenue
through the date of termination divided by (B he Prorated Target; and
(iii) multiplyin cuch percentage by $125,000; plus
(d) all unpai commissions on New Revenue received (whether received bePore or
afrer the date of termination), ich commissions shall be paid upon receipt of such New Revenue.
Section 9.
9.1
/ (a) Manager shall indemnify the Authoriry from, and defend and hold the Authority
from and against, any damages, liabilities, claims, judgments and expenses, including
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reasonable attomeys' fees ("Losses"), suffered, incurred or sustained by the Authoriry resulting from or
azising out of
(i) any breach of this Agreement by Manager;
(ii) the inaccuracy, untruthfulness or breach
warranty made by Manager in this Agreement; or
(iii) any claim for damages (whether for
representation or
injury, property damage or
otherwise) resu(ting from any negligence, misconduct or er act or omission by Manager.
(b) The Authority shall indemnify anager from, and defend and hold Manager
harmless from and against. any Losses suffered, ' curred or sustained by Manager resulting from or
arising out of
(i)
(ii)
any breagfi of this Agreement by the Authority;
inaccuracy, untruthfulness or breach of any representaiion or
warranty made by the uthority under this Agreement; or
ii) any claim for damages (whether for personal injury, property damage or
otherwise) re lting from any negligence, misconduct or other act or omission by the Authority.
the foregoing, however, nothing in the Agreement shall cause (or be construed as) a
waiver by�Cie Authority of any limitation on municipal liabiliry under Minnesota Statutes Section 466.01
��
oo- SY7
et seg. or as a waiver of any common-iaw immunity or limitation of liability, all of which are hereby
reserved by the Authority.
(c) If any third-party claim is asserted against a party entitled to ndemnification
hereunder (the "Indemnified Party"), then the Indemnified Party shall promptly giv notice thereof to the
party that is obligated to provide indemnification (the "I�demnifying
notice, the Indemnifying Party shall immediately and fully investigate
Indemnifying Party's sole cost and expense. The IndemniFied Party �?
/
respects with the Indemnifying Party and its attomeys iq the investi�dt�o
any appeal arising therefrom, and the Indemnified Party
through its attorneys or otherwise, in such investigation
a remedy other than payment of money by the
consent of the Indemnified Party. If the
accordance herewith, then the Indemnified
Upon receipt of such
defend such claim, at the
cooperate in all reasonable
and defense of such claim and
its own cost and expense, participate,
and appeal. No settlement that involves
Party shall be entered into �ithout the
Party does not promptly defend such claim in
may defend such claim in such manner as it may deem
appropriate, at the cost and expense of the ndemnifying Party (but the Indemnified Party's doina so shall
not reduce tc, any er.tent the In3etnr�ify' g Party's ob�igations hereunde: ).
9.2 Insurance.
(a) anager shall, on the Authority's behalf, keep in force throughout the Term
(i) one or more policies of commercial liability insurance, covering all
of RiverCentre and acts or omissions of RiverCentre personnel (including Manager's
and services under this Agreement), which insurance shall have limits not less than
for bodily in}ury and $1 million for property damage;
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�- 5517
(ii) one or more policies of automobile insurance, covering vehicies
in connection with RiverCentre, having a combined single limit of not less than $i
(iii) one or more policies of worker's compensation insuran , covering all of
Mana�er's employees providing services at RiverCentre;
(iv) all-risks property and casualty insuranc , covering RiverCentre, together
with a full replacement-cost endorsement and a vandalism �r(d malicious-mischiefendorsement;
(v) broad-form boiler and achinery insurance, with full repair and
replacement cost coverage; and
tvi) loss-of-incom and business interrupt;on insurance, covering risk c3f Ioss
d��e tc the occursence cf any hazarffs insured against under the insurance referred to in clauses i i)
and (i:) ;n an amnunt not (ess tJ�fan one year's loss of income.
(b)
insured under each of
proposed operating
shali cause each of the Authority and Manager to be named as an
Manager shali include the costs of all such insurance in each
(subject to the Authority's approvat by inclusion in the Approved Operating
Budget) and shaIl p rsue opportunities to reduce insurance costs through poticies covering both
RiverCentre and t Arena. At the Authority's request, Manager shall deliver to the Authority an original
or a certified c y of each of such policies confirming the existence of all such coverage, together with an
the effect that such policy will not be canceled or materially changed without at least 30
days' ad�6ance written notice thereof to the Authority.
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Secrion 10. Ownershio of Assets; Related Obligations: Audit Rights
10.1 Ownershio.
(a) Each party acknowledges that the City owns all
and real estate
comprising RiverCentre and ali related equipment, furniture, displays, ixtures, vehicles and similar
property now used in operations of RiverCentre (other than any item t t is heid by the City under a lease,
in which case the City o�Y�s the lessee's rights therein), togethe with title to all intellectual property
rights now held in the Authority's name. Nothing in this Agree ent shall affect the CiTy's ownership.
(b) The City shall continue to ow all consumable items that are provided by the
Authority (such as o�ce supplies and cleaning
by Manager in the performance of services
purchase eonsumable items for RiverCentre
but such items may be utilized and consumed
RiverCeatre under this Agreement. Manager may
to this Agreement, and suc:� items shall become the
property of the Authority, but may he ed and consumed by Manager for operations of RiverCentre
unde: this Agreement. Manager ma use RiverCentre property and related assets of the Authority fo*
operating RiverCentre and
Authority acknowiedge and
Manager may use
operations of Rive
operations of the A
Manager shall p �
property of
of
performing services under this Agreement. Manager and the
that, in order to achieve efficiencies and avoid duplication of costs,
and other property of the Arena for maintenance, repairs and other
(and may similazly use equipment and other properiy of RiverCentre for
but such use shall not affect ownership of any equipment or other property, and
for all property of RiverCentre the same care and custody as it provides for
h� Arena. Manager shall not take or use, for purposes other than management or operations
/
tre, any customer or e�ibitor lists or similar materials developed by the Authority for the use
rtre unless Manager receives Authoriry Approval. If Manager purchases equipment,
materials, or other personal property at Authoriry expense for use at RiverCentre, then title
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va-5y�
thereof shali vest in the Authority, automaticat(y and immediately upon purchase. Manager shall not
pledge, encumber or othenvise alienate or assign for any purpose any assets or property of the City or the
Authority without Authority Approval.
(c) All operatina reports provided to the Authority by Manager
with all books and records of RiverCentre maintained by Manager on behalf of
other information and documents now in existence at RiverCentre shall be (and
of the Authority and shall be subject to such public disclosure and other
together
Authority, and all
remain) the property
as may be imposed
by Minnesota law regarding data practices and related matters. (All fin�ficial statements of Manager and
books and records of Manager shall be, and shall remain, private nancial records, not subject to such
disclosure.)
102 Authoritv Oblieations. Througheut the T rm, the Authority will maintain fui! legal and
benefic�al ownership of RiverCentre and will pay,
cavenants, conditicns and obligatiens under
observe and perform all payments, terms,
bonds, debentures or otlier obligations, security
agreements or cor.tracts to which the AuthoriTy rg(ay be bound.
103
5ection 11.
11.1
Manager represents and warrants to the
Authority as follows:
a) Manager is a limited ]iability company duly organized and validly existing under
the laws of e State of Minnesota.
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(b) Manager has all requisite power and authority to execute and del' er this
Agreement and perform all of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreem t by Manager will not
breach or violate any provision of the organizational documents of Iv�nager or of any indenture,
mortgage, lien, lease, material agreement, order, judgement or decree t�5 which Manager is a party or by
which its assets or properties are bound.
(d) Execution, delivery and
authorized by Manager, and this Agreement
enforceable in accordance with its terms.
(a) Manager is in
of this Agreement have been duly
a valid and binding agreement of Manager,
in all material respects with all laws applicable to
Manager (except for any failure to compty t�Sat would not have any material adverse effect on Manager's
abitiry to fult:ll its obiigations under
(fl
par[y which, if decided
effect on Manager's
(including
There is�io outstanding litigatior� or other legal dispute to which Manager is a
to Managec, would reasonably be expected to have a material adverse
fulfill its obligations under this Agreement.
All information provided by Manager that is included in this Agreement
hereto) is accurate and complete in all material respects, does not contain any
untrue staj€ment, and does not omit any statement or information necessary to make such information
complete in all material respects.
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112 Representations and Warranties of the Authoritv. The Authority represents and
to Manager as follows:
(a) The Authority is organized as an agency of the Ci validly existing and in good
standing under the laws of the State of Minnesota.
(6) The Authority has all requisite co rate power and authority to execute and
deliver this Agreement and perform all of iu obligations der this Agreement.
(c) Execution, delivery and p rformance of this agreement by the 9uthority wilf not
breach or violate any provisien of the organi ational documents of the Autb.ority or of any indenture,
mortgage, lien, lease, material agreement, o der,�udgement or decree to which the Authority is a party or
by which its assets or properties aze bou .
(d} Execution delivery and performance of this Agreement have been duly
authorized by the Acth�rity, �fid this Agreement constitutes a valid and binding agreement of the
Authority, enforceable in acc dance with its terms.
(e) e Authority is in compliance in all material respects with all laws applicable to
the Authority (excep for any failure to comp(y that would not have any material adverse effect on the
Authority's
a party
fulfill its obligations under this Agreement).
(fl There is no outstanding litigation or other legal dispute to which the AuthoriTy is
if decided unfavorably to the Authority, would reasonably be expected to have any'material
effect on the Authority's ability to fulfill its obligations under this Agreement.
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(g) All information provided by the Authority that is included in this Agreement
(including any E�ibit hereto) is accurate and complete in all material respects, does not c tain any
untrue statement, and does not omit any statement or information necessary to make ch information
correct and complete in all material respects.
Section 12. Other Provisions
12.1 Relationshio. The parties intend to create a
nothing in this Agreement shall be construed to make either F
or employee of the other. �
of independent contractors and
a partner, joint venture, principal; agent
122 Severabilitv. If any provision of is Agreement is held by a court of' competent
jurisdiction to be unenforceable, then each re mmg orovision of this Agreement shalt nonetheless
remain in full force and effect.
123
(a}
deemed to be in default
God,
shall be obligated to perform hereunder and neither party shall be
is prevented by:
(i) fire not caused by negligence of either party, earthquake, flood, act of
iotion, war, hostilities or other event, matter or condition of like namre;
(ii) any law, ordinance, rule, regulation or order of any public or military
(including any based on economic or energy controls, hostilities, waz or government
law or regulation); or
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(iii) any labor dispute which results in a strike, picket
affecting
RiverCentre or services hereunder (unless such dispute shall have
practices or violations by such party of applicable
been a final judicia] determination of such illegal labor
(each a "Force Majeure EvenY').
(b) Neither party hereto shall be �l
i
services, if and to the extent that doing so shali be
law, rules, regulation, order or directive.
(c) Except as
by illegal labor
agreements and there has
violations),
any obligation to supply any service or
or limited by any Federai, state or municipal
provided in this Rgreettient, na amount payable to
Maaager for it; services under this Agr�ement shall be increased for any incorrvenience, interruptioq
cessation, or loss of busines; or other ss caused, directly or indirectly, by any Force Majeure event, nor
shall any amount payable to Mana r be reduced or withheld.
(d) If a part of RiverCentre were destroyed, replaced, repaired, upgraded or
otherwise changed,the
and Manager would
adjusting the
would continue in effect for all of RiverCentre (including that paR),
the right to continue providing the services during such change (subject to
fee as the AuthoriTy and Manager may agree, based on any actual reduction or
increase of service� provided by Manager as a result of such change).
(e) The parties acknowledge that the Authority has commenced preliminary
reaarding possible renovation or reconstruction of the Roy Wilkins Auditorium and that, if
Auditorium is substantially renovated or reconstructed and the Authority enters into an operations
�
o�o- 5y7
agreement with the Ordway Center for the Performing Arts regarding theatrical productions
renovated or reconstructed Auditorium, then the applicable terms of this Agreement will be
(� The parties also acknowledge that the Authority and the rty of Saint Paut are
currently considering a pedestrian connection between RiverCentre and the s ay system of downtown
Saint PauL If such connection is approved and construction thereof is co pleted, then the connection will
be considered part of RiverCentre and Manager will cause it to be aintained on behalf of the Authority
(subject to Authority approval of costs in the annual
12.4 Waiver. No delay or omission by
process).
party to exercise any right or power it has under
this Agreement shall impair or be construed as aiver of such right or power (unless such right or
power is li�nited by a time period, in which c se such right or power shall lapse only when such time
period shall exp;re). A waiver b,v any party of any breach of thts Agreement or any o6ligation heraunder
shali aot be consirued to be a waiver of a y succeeding breach ur any other obiigation.
12.5 Headin s Refere es Of Inclusion. The headings of sections, pazagraphs and other
subdivisions of this Agreeme are for convenience only and do not affect the construction or
interpretation of the Agreemeyft. Each reference herein to "inciuding" or "includes" shall be deemed to be
followed by the words "wit out (imitation."
12.6 Entir A eement. This Agreement is the entire agreement between the parties with
respect to the subje t matter hereof, and there are no other representations, understandings or agreements
between the part,(es relating to such subject matter.
�C '2
oo- 55/ 7
12.7 Survival. This Article 12 and each provision hereof shall survive the expiration or
termination of this Aareement and shall remain in full force and effect notwithstanding any such
expiration or termination.
12.8 Third Partv Beneficiazies. This Agreement sha(l not inure to the benefit,
right or cause of action in or on behalf of, any person or entity other than the parties.
12.9 AssienmenY. Neither party may assign or transfer this
without the other party's advance written consent except that if
any
or any rights hereunder
by notice to the Authority,
proposes to assign this Agreement to an entity that (i) acquires or erwise succeeds to all or substantially
all of Manager's business and assets, including management the Arena, and (ii) before or at the time of
assignment assumes all of Manager's obligations hereundgf and agrees to perfarm or cause performance of
all of such oblieations when due then the Authority sh 1 not unreaconablywithhald or delay such approval.
12.10 Governine Law. This Agree ent and the rights and obligations of the parties under this
Agreement shali be governed by and co rued in accordance with the laws of the State of Minnesota,
without giving effect to the principles tplereof relating to conflicts of law.
12.11 Di�
(a)
of default hereunde
dispute, includin
The Authoritv and
any dispute arising under this Agreement (including any disputed allegation
is not resolved informally, either party may give to the other party notice of the
detail conceming any alleged deficiency in performance of the other parry.
Manager, respectively, shall cause the Authority Representative and the Executive
Director to/meet in person at RiverCentre and attempt in good faith to reach an agreement resoiving the
If they do not reach such an agreement within seven days after the date on which such notice is
.�
oo- 5y7
given (the "Dispute Notice Date"), then each of them shall produce a detailed report about the dispute for
his or her respective chief executive officer or chief operating officer, who shall meet in
RiverCentre and attempt in good faith to reach an agreement. If the parties have not
at
written
agreement to resolve the dispute within 30 days following the Dispute Notice Date, then ei er party may
request mediation as provided for in subsection (b) below.
(b) If any dispute between the parties under this Agree nt is not resolved under
subsection (a), then, upon notice by either party, such dispute
mediation before, and as a condition precedent to, the initiation of
Each party shal( participate in up to four hours of
chief executive officer or chief operating officer). The
parties fail to select a mediator within 10 days
submitted for non-binding
action regarding such dispute.
each case as requested by such party's
shall be selected by the parties, or if the
notice is given, then either party may request
selectien of a mediatoz by the administrator � the Ramsey County District Court Civil Alternative
Bispute Resolution Pro�ram, from its list y1f qualified neutrals. All expenses related to the mediation
shall oe botve by each paiiy, including ithout limitation ffiE costs of any experts or legal counset.
12.:2 Jurisdiction an Venue. Any legal: action, suit or proceeding brought by it in any way
related to or arising out of is Agreement shall be brought in the state courts of the State of Minnesota,
and each party hereby
action, suit or
and submits to the jurisdiction of such state courts with respect to any such
brought by or against such party. Each party waives any objection to the venue
for any such acti9fi, suit or proceeding being in such state cour[s.
Neeotiated Terms. The parties acknowledge that the terms and conditions of this
are the results of negotiations between the parties and that no part of this Agreement shall be
in favor of or against any party by reason ofthe extentto which any party or its professional
advisors participated in the preparation of this Agreement.
-4I-
oo-5y7
12.14 Notices. Each notice required or permitted under this Agreement shall be in writing and
shall be deemed given when delivered by mail, courier or facsimile to the address or facsimile
specified below (and a paper copy of any notice by facsimile transmission shall be deliveye'd within 24
hours after such transmission to the address specified below).
If to the Authority: RiverCentre Authority
Attention: Authority
Facsimile No.:
With a copy to:
City Attomey's Office
CiTy of Saint Paul
400 Ciry Hall
Saint Paul, Minneso 55102
Attention: KiverC ntre Authority Attomey
Facsimile No.:
If to Manager: Saint Paul Ar�na Company, LLC
Chris Hansen
No.:
With a copy to: F egre & Benson LLP
200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attention: William R. Busch, Jr.
Facsimile?�Io.: (612) 336-3026
Either party may c ange its address or facsimile number for notica purposes by giving the other party
15 days' notice f the new address or facsimile number and the date upon which it will become effective.
.15 Amendment. No amendment to any provision of this Agreement is valid unless in
a�d signed by an authorized representative of each party.
-42-
0�- 5 y7
12.16 Countemarts. This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which taken together shall constitute one single agree nt.
12.17 Compliance with Laws. Each party agrees to comply with all laws of e United States
of America and the State of Minnesota and with all Saint Paul City ordinances a�8 resolutions and will
not do (or altow anyone under such party's control to do) anything
violation of any such laws, ordinances and resolurions.
term of this Agreement in
IN WITNESS WHEREOF, each party has caused is Agreement to be signed and delivered by
its duly -authorized representative, effective as of the d e first above written.
f:"iVIC CENTERAUT$(�RITX
An Agency of the City of Saint Paul
(also known as T2iverCentre Authorety)
Approved as to Form:
�
City Attorney of Saint
06
B Y '-- ----------
Richard H. Ze.hring
Title: Chair
Norm Coleman
Title: Mayor of City of 5aint Paul
Joe Reid
Title: Director of Office of Financial Services
SAINT PAUL ARENA COMPANY, LLC
By:_
Title:
-43-
Exhibit A �' J� �7
to Agreement for RiverCentre
(page 1 of 1)
RIVERCEI�'TRE�
IWC}SNNEEN'c�LYPId¢ FfJYXW�'ALDfiORfUN
175 iCetlogg Boulevatd Saint Paul, Minnesota SS'02 Pnone 651-Z65-�4800 Fax 651-265-5899
S
���/ �
� �
`
° �D
�
� G
N
z
N �
�
a
�/
� �\
L
�
�
S ��
Sr.
The
Ordway
0
I�
u
RiverCentre
Ramp
�!
t
�
/
Ix
n
D
Z
�
m
�I
MN
a�b
�
Science
Museum of
Minnesota
a�- 5�/7
Eachibit 13
to Agreement for RiverCenire
M7:62434L06
oo- 5�7
Exhib 3.2
to Abreement for RiverCentre
c'�- 5s�7
E�ibit 4.1
to Ageement for RiverCentre
(page Vof I)
Food Service (Volume Services)
Parking Ramp (Standard Parking)
SAOnsoIShipS
Touchstone EnPower Services
TreasareIsland
Pioneer Press
Minnesota Life
Coca Cola
Media One
Contracu Currentiv in Effect
/�
/
i
Service Aereements
Minnesota Elevators and Eagle Elevators
Lagerquist Escalators
Adams Pest Control
Powell Communications
MN Net Centrex, etc.
Tickehnaster
Loomis Armored Service
American Security
ADT
5aint Paul Bank — Cash Machine
Ikon — Copier
Red Cross
Tennant — Sweeper
Sage Software — Accounting
AirTouch Cellular
U S WEST
Missabe Group — Spon
Pitney Bowes — Stamp
Golden Gate Internet S
Telecheck
Ticketmaster
Kelly Temporary
Industrial Staffin;
Parking Ramg�onstruction Contracts
SMMA Ar�hitects— Wilkins Design
Gb'S�J7
��;b�r s.z
to Agreement for I2iverCentre
**EInformation Re�arding Existina Emoloveesl� *
MI:624341,06
ao -5y7
Exhibit 5.5
to Agreement for RiverCentre
(page 1 of3)
Emolovee Benefits Provided bv Mana�er
Health
I
N
5
U Qcntal
R
A
N Life
C
E
Single -1007 paid by employer
Family - 50% paid by empioyer /50Yo paid by
5Q°6 paid by Fmployer / HOYo paid by
1X Annual Salary Benefit 100°!a paid by
Acciderttd death d� Dismemberment
Paid Time Off (PTO)
(covers all paid 0
absences - sick, -9
wcation, funerals, 0-15
etc. - used at empioy¢e 16-23
discretion) after 23
Salary Benef�t 300% paid by Employer
�a o
20
26
29
33
36
ot 5 days of PTO at year-end allowed
Disabillty
�t term disubility -100% paid by Employ¢r
of weekly earnings - moximum $50Q per week
'Long term disability - S00 °� paid by Employer
2/3 of weekly earnings - maximum $6,OD0 per month
Holidays
New Yea�s Oay
Aierttorial Day
Independenee Day
la6or Day
Thnnksgivin9 �OY
Uay a(ter l'hmcksgiving
chrutmns Oay
Hofdi Pay: 1.5 titnes regular compensation and equivul¢nt time off
oo-5N7
Exhibit 5.5
to Agreement for RiverCentre
(page 2 �)
Emnlovee 8enefiu Provided bv Mana�er
0
P
T
1
O
N
A
L
Brenks 2 25 tnin breaks and 45 min luneh break
Retiremeert Pion = 401(k) '
Employee can coritribute up to 15 of lary (pre-tax), plus
$300 per yeur contribution by empi er to the 4o1(k) plan
(for each employee on the payPOli end of the year)
in Iieu of retiree health insuranc
Ftex�ble Spending Accamts - Funded fhrougF� gtnployee pre tax contributions
Safety Shoes $40 per cnlenda� yegF - if required by emp{oyer
optional Life Insurnttce
Additionai Life (Employee, Spouse Children) - empiayees con purcfiase additional
coverage, at their tos (see attached chart)
oo-5'w7
to Agreement for
5.5
3 of3)
Emolovee Benefits Provided bv ManaQer
Additional Life (E�nployee, Spouse d� Ghildren)
Emp(ovee Additianai coverage -$I0,000 units - Maximum 300,000
(minimum $20,d00) - guararrtee iss amount - $50,000
Employee Cost - 100%> per rate chart belo (nfter tox)
O Soouse Spause (only available if employee electi life is purchased)
Units of $5,000 - Maximum 1/2 empl elective life
P (minimum $10,000) - g tee issue amount -$z5,o00
Employee Cost -100%> per rate c rt helow (after tax)
T
Elective Life Insurance Rates are based o�moker
$10,000 - Ranging from $.90 to $102.50 ¢r month
O
N
A
L
L
Empioyee/
Spouse Age
under 30
30-34
35-39
40-44
45�9
50-54
55-59
60.64
65-69
70-74
75*
�Non Smoker
Per $10,0(
�
$
$
$
$
$
$
$
�
5.50
9.90
14.70
22.50
44.80
76.60
and Non Smoker status by age per
Smoker Rate
Per $10,000
$ 1.20
$ 1,60
$ 2,24
$ 3.50
$ 5.80
$ 9.30
$ 16.00
$ 22.50
$ 32.30
$ 59.90
$ 102.50
F
* Non-Stnoker ns that you hme not smoked� or used to6acco products in the las{ 12 months
E
Children
G arantee issue amourrt $5,000 (one preinium cov¢rs any number
f chiidren) - Do not ne¢d to purchose elective Iife for setf
Employee Cost -100% �$.90 cents per tnonth (after tax deduction)
oo-Sy7
Exhibit 6.2
to Agreement for RiverCentre
(page 2 of 1)
Evmt I�come and Erye�se
qcea Rantak
Service Incbme
Bwc Office 4imme
Toal Event Income
Total Event Expense
Net Event M1�wrtle
Mtillary I�cama
Foad & Baverdge
�.Ipy¢iy'es
Fadfdy Faes
Parkng
rota! Mc;llary locome
ToW Eventinca�ro
Other Operafing �ncoma
Parking
qdvertising
sportaships
In-I(ind or Quldoar MerWee
I�teresl
O�ca Space RerN
Miscellaneas
Totai Olherineana
AdJusted Gross 1�am�
Indirect Expe�see
Qepattmenl Expenus
[�eculive
MarkNing
Finarwx
pperations
gox Office
Overtieatl
Parkng RamP
Talal Depxtmart �P� 8 � a��
F�cpenses ANOCateC to Erer�.s
Ne<IndireUFxPen`+
ppeiayn9 �sh Flaw BMorc
Debt Serviro.Ona-dme Chu4es
1999 t999
20W RoBug 1�PP�'�
Pdmled Fy�ST QN�E!
7DWOPEW�T GBUOGET
1998 1997
�
S 1,225.6i9 S 7.074.849 S 1,3/0773 S .188,969 S 75B.347
1.454,895 1,246.038 1.4?8.437 1.341.49U 1.153,486
714.558 127.469 103.441 108.d37 153.73f1
2.794�502 2.450,356 2.91Z.65t 2.638�&% 2,065.563
(t (1.596,514) f1.794.679 (1.766.99� (1.807.961]
955.gp5 853,842 1.1'1T.9 671.899 258.499
671.267 487,239
54�3M 45.291
67,2fi6 69.7M
1,010,440 �.�
1.8IXi,344 ' 1,'13H�33�
zno,zw zzs�,n�
7 430.b05
36,000
333.Sa0
40.Oa0
720,000
131,687
76.912
2,968,909
112,565
187,866
81,6b7
53�869 9�tF�2.263 923.158
35.526 G5.7pp 67.812
45�045 302,573 a97�423
p2.032 806�930 864.160
'26.472 2.327.468 2.252,553
2.844.444 3.i99�365 7,61t.052
1,337,803 9$91,686 1,3fi8,096
36.Opp 69,010 to9,53B
2e3,50o tl,aoo -
140.000 7.500 30.000
120.�W 203.783 175,&91
91�687 49.Od9 15�300
125,438 742.187 113,226
2,124.428 1.773.270 7.812.051
4,343.014 4.968,872 4.972,574 9.323.103
,736 240�898 3C6.365 29D,696 264,469
464,476 512.046 St7.928 496.560 344,682
t gq . pps �52.pgg 162,346 145.668 734.152
2.507.776 2,233.156 2.511,461 2,407,818 2.145.079
169.268 760,076 161.235 779247 228,346
�,576.74H 1.625,639 1.622.392 1,439.947 1,025,474
957 836 883.N79 9t6.661 944.160 98b.T1B
6.101,786 5,8t7,062 6.198.988 5.954,090 5.130,976
f�.82T,596) (1.596,514) (7,7s9,679) (1.766.99� (i 807,064)
4�74.190 4.220.598 4.404,309 4,iB7.043 3.323.852
55y,yyq 122,q65 564.563 785.481 999.251
icu n ea,a oan sv� sso.aoo sso.aaa sso.000 sso.000 sso.oao
�ess Ped ConnediuJCfly Empkyee 42030 - 1b,OW 93,9fit
LessE4��l�ease(Ik�esO 727,974 t28,125 237,457 - �
TotalDa6t5ervice 624.004 7H8.125 891.457 688,OOD 743.961
LessRebcalionandSettleme ExP��9 F+�+`�000 (23.641) 25.Q00 318.097 t96.W0
594,022
NHLExpenses �� �. � 318.097 390.022
Totei One�time Gharges
Oper. income Nlt6 Nort-Cash ttM�s $ (214,039) $ (641.8'IB) $ (357,84i) S I220,616) S (734.73�
Non•cash
of Arrna A+sets 3,609,4s0
504.204 546.186 396.461 529.057 564.388
NetOperetin9lnwcne(Lm) $ Oi8,243) S (1.7fi8.004) S 048,355) 3 f4.359.f331 S f�.798)
O5/25/00 10:54 FAX 651 265 4899 RIVERCENTRE
Saint Paul RiverCentre
Event Boolcing Gnidelines
Touchstoae Energy �'Zace and Roy Wilkins Auditorium
RiverCentre is a nxulti-use facility designed to host a variety of events. Every effort wil[
he made ro accommodate client date hold reguests based on the followzng guidelines.•
k'irst priority sche�3uling is fox conventions, meetings, tradeshows and events that utiliz�
a minimtun of 65,000+ gsf, 75% of faci2iry meeting/banquet space and a minimum of�
500+ hotel rooms peak night. Dates may be confirtned and the event contracted 3F�
months prior to ihe date of event.
Second priority scheduling is for conventions, meetings, tradeshows eveuts that
utilize 30,000+ gsf, 50% of facility meeting/banquet space and a mi ' ium of 250+ hotel
rooms peak night. Dates may be co�rmed and the event contracs 24 mouths prior to
the date of event.
Third priority scheduling is For all oiher evenis and/or
may be contracted at any time within 18 months of the e
size/revenue to faeiliry and/or first-come-first-serve bas�
RiverCentre data holds may be established as
Second Hoid Facilities and dates are
group and aze held on a
FirsY Hold Facilities and dates ri
opportLmity to sign a
36(24/18 month date'
n e day� events. These events
t daie (based on event
1-18 months.)
g second option pending any other larger
basis for the client.
fl first option for client. Client given
agreement or release first option hold (at
Booked Contracted and c rmed event. Signed lease a�reement on file at
RiverCentre an receipt of rentat do�vn payment fmm c(ient.
The responsibility for faci � y marketing of RiverCentre is jointly shared by the staff of
RiverCentre {short term} d the staff of the Saint Faut Convention and Visitors Bureau
(long term.) Final faci 'ty price and lease agreement will be confizmed by RiverCentre
staf£ RivetCentre a , the Saint Paul Convention and Visitors Bureau reserve the right to
issue, modify or te mate booking policies in order to operate the facility in a sound
business manner tch maximizes economic banefits to the facility and to the city of
Saint Paul. /
For addition�X information please contact:
Saint�aul CV$
Wild
b52-265-4800
w«tiv.rivercentre.or�
651-265-4900
wti�tiv.stpaulcvb.oro
651-222-6020
wzvw.wild.com
c3na�9�
MAY-25-2098 I1�18 651 265 4899 97i
C� 002/007
Oo-5V 7
� JJ
OS/25/00 10:54 FAX 651 265 4899
RIVERCEVTRE
Recurring Communitv Events
Hmong New Year
Festival ofNations
Rondo Days
f� 003/007
� 7
MRY-25-2000 11�18 651 265 4H99 97% P.03
OS/25/00 10:55 FAX 651 265 4899 RIVERCEVTRE f�005/007
Oo-5y7
MRY-25-2060 11�19 651 265 4899 97; P.05
OS/25/00 10:55 FAX 651 265 4899 RIVERCENTRE (�006/007
oa-5y7
MqY-25-2000 11�19 651 265 4899 97i P.06
OS/25/00 10:55 FAX 651 265 4899 AIVERCE?7TRE
C�oo7ioo�
oo-Sy7
MAY-25-2009 11�20 651 265 4899 97i P•07
RiverCentre Management Fee/Employee Separation Cost Analysis
31-May-2000
Fees
Fixed
(TO be Qualifying Agreement 50% of fee must be fixe�.
Quality Experience
Incentive (Max)
Revenues included in benchmark:
Rentals
Service Income
Food and Beverage
Novelties
Sponsorships
Tota! Value o£Sponsorship
Commission
Value of Commission
Totai Fee
Seoaration Costs
Vacation
Payout
Carry Forward (days)
Comp Time
Sick/Severance
Payout - (See Retiree Health)
Carry Forward (days)
Retiree Health
Payout - (Includes Sick/Severance)
Ongoing
Retirement
Total Separetion Costs
Net to SPAC
SPAC Total, Years 0-3
RiverCentre Costs
RiverCentre - Projected Benefit
Based on Year One Total Benefd of $480 pius
Sponsorships of $250, $350, $400 in Years 1-3
Minus management fee increases in Years 2& 3
RiverCentre Total, Years Q-3
First 6 Months
(inffiousands}
$88
�
I.�
D c —S y�
Y@ar Three
(in thousands)
g200
$25
$135
(�y4.00M-
$425M
revenue
benchmark)
$250 $250 $350 $400
10% 10% 10% 10%
$25 $25 $35 $40
$113 $350 $370 $400
$76 $0 $0 $0
10 0 0 0
$136 $0 $0 $0
$0 $0 $0 $0
5 0 0 0
$0 $150 $50 $30
$150/YEAR $300/YEAR $300/YEAR $300lYEAR
401k 401k 401k 401k
$212 $150 $50 $30
($99) $200 $320 $370
($99) $101 $421 �791
$0 $0 $0 $0
NA $705 $775 $790
$2,270
Year One
(in thousands)
$175
�25
$125
($3.75M-
$4.OM
revenue
benchmark)
YearTwo
(in fhousandsj
$185
$25
$125
($3.90M-
$4.15M
revenue
benchmark)
�
CITY OF SAINT PAUL
� Office of the City Council
�'� ` 310 Ci Hall
a_ .. __ t9
Saint Paul, Minnesota 55102
Voice: (651) 266-8577
Fax: (651) 266-8574
Gregory N. Blees
Fiscal Policy Director
DATE: June 13, 2000
Intemet: greg.blees@ci.stpaui.mn.us
MEMORANDUM
TO: Council President Dan Bostrom
Councilmember Jay Benanav
Councilmember Jerry Blakey
Councilmember Chris Coleman
Councilmember Michael Harris
Councilmember Kathy Lantry
Councilmember Jim Reiter
FROM: Greg Blees, CounciPs Fiscal Policy Director �
V
00- Sy�
SUBJECT: Proposed Contract with Saint Paul Arena Company to Manage the RiverCentre
At the June 7, 2000 City Council meeting I was directed to review the proposed RiverCentre
Management Contract attached to Council File 00-547. This memo transmits my questions,
concerns and comments regarding the proposed contract between the Saint Paul Arena Company,
Limited Liability Company (SPAC) and the RiverCenh�e Authority (Authority). First, I will identify
three issues that may be considered missing from the contract proposal, and then I will identify issues
that you may want to address with the specific contract language proposed, in the order of the
contract sections.
Missing - Data Privacv Act Reauirements:
State Statue 13.05, subdivision 11 states:
"Privatization. (a) If a government entity enters into a contract with a private person to perform any
of its functions, the government entity shall include in the contract terms that make it cleaz that all
of the data created, collected, received, stored, used, maintained, or disseminated by the private
person in performing those functions is subject to the requirements ofthis chapter and that the private
person must comply with those requirements as if it were a government entity. The remedies in
section13.08 apply to the private person under this subdivision."
Section 13.02, subdivision 10 defines a"person" to include a company such as the SPAC.
cx�-5�17
Missing - Performance Bond
It may be appropriate to require a performance bond to assure the successful change of facility
staf�ing from a City regulated governmental agency to a private business. In the event that
proposed staffing changes are not orderly, timely, adequate, efficient, or successful, it may result in
significant added costs to the RiverCentre operations. Those added costs could be recovered from
a performance bond during the staffing transition period.
Missing - Fideli , Bond
The City purchases a$500,000 fidelity bond to protect the City from financial loss from any dishonest
action by City employees. It may be appropriate to require a fidelity bond to protect the RiverCentre
Operating Fund from possible financial loss due to possible dishonesty by the contractor's employees.
It would be prudent to require the SPAC to purchase a fidelity bond to cover all of their employees;
as they will be responsible for collecting approximately $6 million in revenues, payment of eapenses
totaling a similaz amount, and the handling of valuable inventory and equipment.
Section 1.4 - Operating Standards
Pazagraph b, on page 5, makes no reference to quality standazds for "facility security." Perhaps the
contract should specifically recognize the need to address facility security for both users and
employees.
Section 2.6 - Termination for Failure to Fund
My understanding of the intent of this section is that it wouid be a requirement to have an approved
operating budget known at least two months in advance of the budget year. The approved budget
would specify estimated financing sources (projected revenues, transfers and use of retained
eamings) and appropriations (granting the authority to spend or transfer money, establish reserves
or increase retained earnings.)
First, I believe the ritle ofthe section would be more accurate if it read: Termination for Failure to
A� ron ve Operating Budget. The existing wording could possibly be incorrectly interpreted to
mean that cash money may need to be advanced / made available 60 days before the beginning ofthe
yeaz.
Second, I am not sure if the public hearing and budget approval requirements of the City Charter and
the State's Truth-In-Tasation Law would permit the City Council to adopt a final operating budget
for the RiverCentre by October 31 of each year. Normally the Ciry's entire budget is adopted by
the City Council in the middle of December, after the Truth-In-Ta�cation Public Hearing which is
specified by state law to be the 2" or 3rd Tuesday in December. I see no problem with the City
Council holding a budget review meeting in October to review, analyze and question the Operating
Budget and the Capital Improvement Budget approved by the RiverCentre Authority, and to make
known any Mayoral or City Council concerns or disagreements. But, I do not believe the City
Council can formally adopt the budget until after the Truth-In-Taxation Public Hearing. This budget
approval timing issue may require a legal analysis of the governing laws.
Section 6.2 - Operating Budgets
Who has the ultimate and final budget approval authority for the RiverCentre's annual operating
budget for ihe Convention Facility and for the Pazking Ramp is a very important issue for this
contract. I believe the City Council has to have the last say in formally adopting the operating
budget, and the Council's approval may not always be based on a mutual agreement of an operating
budget by the SPAC Manger and the Authoriry.
2
ca�-54�Z
The primary justification for entering into this proposed contract is that operating costs for both the
Arena and the Convention Facility and Parking Ramp can be lessened if management, financial,
maintenance and sales staffs can be shazed. This is a good concept, as keeping total operating costs
as low as possible will help maintain a competitive posture for booking Saint Paul's facilities. But,
this shared stafFmg concept will require that certain common operating expenses be allocated to the
Arena budget (which is operated by SPAC as a for-profit enterprise) and to the Convention Facility
and Parking Ramp budgets, which aze controlled by the RiverCentre Authority.
UltimateIy the City's General Fund must assist the RiverCentre Operating Fund if it enters into a
negarive financial position. Thus the Mayor and City Council must be prepared to adjust proposed
RiverCentre Budgets if their projected unplementation is expected to produce negative financial
results. (For your information, the RiverCentre Operating Fund experienced a net operating loss of
more than $1 million in 1999, and it was the fifth consecutive yeaz of significant losses. Retained
Eamings at 12-31-99 went into a negative position of $215,000, and it is the first time in more than
twenty yeazs that the RiverCenue (Civic Center) Fund has been in a negative retained eamings
position.)
Attached is a table which identifies the historical, current, and proposed operating / financial
structures for RiverCentre Complex. The proposed new structure displays that the management
contract will have to allocate shazed costs between a for-profit Arena operation and the River
RiverCenter Authority's Convention Facility and Parking Ramp budgets. The proposed contract
does not identify any specific formulas for allocating shazed or common expenses, but Section 7.1
does require "the Manger to institute and abide by a cost allocarion and accounting system, subject
to the approval by the Authority ..."
Because of the private sector profit motive, there will be a natural tendency to allocate as much
shared expense as possible to the RiverCenter Authoriry's budget, in order to keep expenses low for
the SPAC budget. I predict there will be many debatable methodologies for aliocating shazed
expenses.
For example, assume a combined-facility salesperson makes $50,000 per year in Contract Year One
and spends 60% of his time trying to book the Arena and 40% of his time trying to book the
Convention Facility. One might logically argue that 60% of his salary should be chazged to the
private sector's budget, and 40% ($20,000) to the RiverCentre Authority's budget based on
actual costs incurred. But what ifsomeone wanted to allocate the salesperson's salary expense based
on benefits received instead of costs incurred. If the salesperson booked four events, one at the
Arena and three at the Convention Facility, someone could logically azgue that 75% ($3'7,500)
of salary be allocated to the Authority's budget based on event bookings. Or if Gross Revenues for
the one Arena event was $100,000 while the three Convention Facility events grossed $900,000, then
maybe someone would azgue that 90% ($45,000) of the salary be allocated to the Authority's
budget based on gross receipts. Or what if Net Income after expenses for the one Arena event was
$10,000 while the net for the three Convention Facility events totaled $300,000 ... then someone
else could azgue that the Authority should pay 97% (�48,387) of the salespersons' salary based
on net revenues. And what happens if in Contract Yeaz Two, the salesperson books no events,
would you then change the allocation formula to relate to time spent attempring to book events?
Which allocation method is most correct? I don't know, perhaps a combination of formulas. But
for sure, I know which one of the above options would most benefit the bottom line of a for-profit
business.
Once the RiverCentre empioyees aze transferred to the SPAC, the Manger will have some significant
leverage in deciding discretionary allocations of shazed costs.
I think it is good for the SPAC Manger to annually propose an operating budget to the RiverCentre
Authority for the Convention Facility and the Pazking Ramp. And it is great to a have a goal of
having the Manger and the Authority mutually agree to budget appropriations. But in the event the
Manger and Authority cannot mutuaily agree on spending priorities, allocated costs or financing
sources, I think the Mayor and City Council should reserve their rights to step in and make
recommendations and fuial decisions on budget disagreements, rather than reverting to the prior
yeaz's budget authoriTy which may no longer be affordable, strategic, or realisuc.
Or what if the focus of a future Authority is to maximize downtown business benefits at the expense
of the citywide property taY payers (assume an Authority wants to spend discretionary money on
promoting downtown hotels and restaurants, instead of on the systematic maintenance of the City
owned parking ramp which was originally financed with tax levy g.o. bonds). Shouldn't the Mayor
and City Council reserve their right to debate and change RiverCentre budget appropriations to
protect investments made by citywide taxpayers?
Besides modifying the contract language to make it cieaz that the Mayor and City Council have final
budget approvai authority based on City Charter budget adoption requirements, this section of the
contract could also acknowledge the need for public heazings on the RiverCenter budgets.
Also, the Manager could be required to annually provide the Authority, Mayor and City Council with
a copy of SPAC's operating budget for the Arena, so that cost sharing methodologies, assumptions,
and projections can be clearly understood and verified.
Section 6.5 - Caaital Exnenditures
My comments on the issues of ultimate budget approval authoriry, timing of budget approvai, and
public heazings for the RiverCentre's Capital Improvement Budget are the same as just described for
the Authority's operating budget.
I do suggest that any proposed RiverCentre Complex capital expenditure that relates to buiiding
additions orreconstruction, land acquisition, or public access improvements be submittedto the Saint
PauPs Long Range Capital Improvement Budget Committee for coordination and integration with
the annual capital improvement budget and five-yeaz program.
Section 8.2 Base Amount for Management Fees
Are the fees referenced in this section meant to directly cover some of SPAC `s direct management
costs or are they meant to be pure profit to SPAC? Because no mention is made that the base
management fee amount is paying for specific salary costs of SPAC's management team, one could
assume that the salary costs of those mangers would also be allocated as shazed costs through the
cost aliocation system. Will the RiverCenter Operating fund be paying for management services twice,
once through a base management fee and once through a cost allocation system?
Section 8.4 - Revenue Amounts for Management Fees
I think it is most important to have incentives to rewazd mangers for exceptional service. My
preference would be to have management incentives based on operating profits produced, but this
Ck'�-;�*�7
0
option is not possible because it would jeopardize the tax-exempt status of the bonds issued for the
convention facility. Given the choice between management incentives based on revenue growth or
expenses incurred, this contract uses the method which would more likely generate a profit for the
KiverCentre Operating Fund ... revenue growth targets. The revenue growth being measured is just
from the operations ofthe Convention Facilities, and excludes Pazking Ramp revenues and other non-
operating income such as hotel-motel ta�c and investrnent eamings.
Please be awaze of this fact that just because there could be a significant growth in Convention
Facility revenues, there is no assurance that profits or net income will be generated. Every yeaz since
1989, the RiverCentre's building expenses have been greater than building revenues. Between 1989
and 1998, revenues for operating the old arena and both old and new convenrion facilities totaled
$31,469,627, while the operating expenses for those buildings (not including debt service) totaled
$38,527,220. (Please see the attached spreadsheet "RiverCentre Operations: 1987 to 1998") On
average there was $1.22 in building expenses for every one dollar in building revenue generated. To
implement a management incentive fee based on gross revenues, would not automatically result in
a profit if revenue targets were met and incentive fees awazded.
I believe the amounts proposed for the First and Second Gross Revenue Tazgets for the year 2001
may be on the low side if the incentive fee is truly meant to reward exceptional performance. My
opinion is based on the following facts. The actual convention facility fees collected in 1999 totaled
$2,980,793 and they were sorted as:
Building Rentals $1,121,456
Equipment Rentals
Building and Event Services
Concessions
SUBTOTAL-Gross Revenues
Commissions
TQTAL Building Revenues
190,050
1,057,285
612,002
2,980,793
732,203
$3,712,996
Used for Revenue Tazgets
Not used for Revenue Targets
The First Target proposed for the yeaz 2001 is $3,750,000, which is a 26% increase over 1999 actual
coIlections. But the RiverCentre staff estimates, that based on advanced bookings and traditional
business, the four revenue sources being measured for the gross revenue incentive should produce
$3,757,190 in the year 2001.
If one were to accept that $3,757,000 amount as a base line starting amount, and add to it an amount
of $175,000 to equal the base management fee, and then add an amount of $50,000 to equal the First
Tazget management incentive fee, the total First Tazget Gross Revenue Amount should equal at least
$3,982 just to get back to the staffprojection of Gross Revenue without any net revenue gain to the
Authority. If the First Tazget amount was set at $4,000,000, the projected better management
(higher revenues) would only produce a gain of $18,000 in gross revenues to the RiverCenter, over
what they aze currenfly proj ecting, after subtracting out base management fees of $175,000 and First
Tazget Incentive Fees of $50,000. If one wanted the RiverCentre to get added gross revenues equal
to the Base Amount and First Tazget Incentive management fees of $225,000, then the First Tazget
Gross Revenue Fee should be set at $4,20 7,000 for the yeaz 2001. If one than wanted the Second
Tazgei Amount to produce an equal share of gross revenue to the Manager and the RiverCentre, than
it should equal at least $4,357,000 for the yeat 2001.
�-�y
I would recommend against using Gross Revenue targets for management incentives unless the
Do-SS��
targets were increases significantly over the levels proposed in the contract. I would recommend a
management incentive program that tazgets specific revenue sources that have lower expense-to-
revenue ratios such as Concession revenues and Commission revenues. I wouid avoid measuring
gross revenues which have higher expense- to-revenue ratios, such as Building Rentals, Equipment
Rentals, and Building and Event Services. I would be willing to work with RiverCentre and SPAC
staff to develop equivalent incentive fees base on focused revenues with lower expense-to-revenue
ratios, if so directed or requested.
Section 8.5 - Commissions
Language should be added to cleazly idenrify that "New Revenue" in paragraph b does not include
Gross Revenues from Building Rentals, Equipment Rentals, Buiiding & Event Services, Concessions
or Pazking Ramps and Lots.
Section 12.3. Force Ma�ure: Certain Changes to RiverCentre
Pazagraph ( fl should be clarified to acknowiedge that the City is consh a Pedestrian tunnel to
the RiverCentre complex, and that the base management fee has been established to assume the
Manager will be responsible for future tunnel operations, subject to tunnel costs and revenues being
included in an approved future operating budget.
Respectfully submitted,
Greg Blees � ��
c: Mayor Coleman, Susan Kimberly, Joe Reid, Peter McCall
Dick Zehring, Chairman RiverCentre Authority,
Chris Hansen, President, Saint Paui Arena Company
Jac Sperling, CEO, Minnesota Wild
Scott Renstrom, Jane Prince, Gerry McInerney, John Lesch, Matt Reinartz, Bob Connor,
Janice Keran,
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�II3QEAPOLiS, 11'�R�NESOTeI 554 02 39 0 1
TELEPHONE 61233 63 0 0 0
FAG4MILE 6i2-33b3026
June 21, 2000
Peter McCall
Ciry Attomeys Office
400 Ciry Hall
St. Paul, Minnesota 55102
Re: A�reement for RiverCentre (F&B File No. 2205161
Dear Pete:
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As requested, enclosed is a revised draft (dated June 21, 2000) of page 44 of the agreement
referred to above. The changes from the previous draft are marked for your reference.
I understand that Joe Reid would like copies delivered to Nancy Anderson, and we have provided
those directly to her.
P�ease call with any questions.
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Sincerely,
` ` —�
William R. Busch, Jr.
WRB:zieal
Enclosures
MI:635519.01
cc: Joe Reid
Nancy Anderson
Martha Fuller
Chris Hansen
Minxeapo[is Dexver Des Moines London Frankfurt
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12.16 Counteroarts. This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which taken together shail constitute o single agreement.
12.17 Comuliance with Laws. Each party agrees to comply wit all iaws of the t3nited States
of America and the State of Minnesota includin the Minnesota Data ractices Act and with all Saint I
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Paul City ordinances and resolutions and will not do (or allow any ne under such party's control to do)
anything during the term of this Agreement in violation of any s laws, ordinances and resolutions.
IN WITNESS WHEREOF, each party has cause this Agreement to be signed and delivered by
its duly -authorized representative, effective as of the d e first above written.
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Approved as to Form:
City Attorney
C1VIC CENTER AUTHORITY
An Agency of the City of Saint Paul
(also known as RiverCentre Authority)
Title: Chair
H. Zehring
By:
Norm Coleman
Title: Mayor of City of Saint Paul
By:
7oe Reid
Title: Director of Office of Financial Services
SAIlVT PAUL ARENA COMPANY, LLC
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00-547
Please note that the negt two pages - the
Interdeparhnental Memo from Peter J. McCall to the
Civic Center Commissioners is\
Privileged-Non Public Information
Do Not Give Out to the Public when
making copies of this resolution.
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Interdepartmental Memorandum
CITY OF SAINT PAUL
ATTORNEY CLIENT COMMI.TNICATION
PRIVILEGED-NON PUBLIC
DATE: May 31, 2000
TO: Civic Center Commissioners and
City Council members
FROM: Peter J. McCall
Assistant City Attorney
RE: Executive Summary of Agreement with Saint Paul Arena Company to Manage
RiverCentre
The following is a brief suminary of the significant psbvisions of the proposed agreement with Saint
Paul Arena Company. This sumniary is not intencYed to be a complete suimnary of the agreement.
Operatine Standards (Section 1.4�. Th�Manager will manage the RiverCentre in a manner
that is reasonably prudent, consistenthvrth operations of other first-class public facilities and
consistent with the public invesrir�nt that has been made in the RiverCenire. All areas of
the RiverCentre's operations wikI be monitored including such items as the interior and
exterior appeazance of the facilfties, concessions and public facilities, customer service and
parking. Each yeaz these standazds will be identified as part of the process approving the
operating and capital bud�ets for the upcoming year. The Authority Representative will
evaluate the Manager's�5erformance by use of customer and vendar surveys and interviews
with the generai publi'c.
2. Authority Repre�ntative(Section 3.1�. The CCA will appoint a person to act as Authority
Representativeiwho shall oversee the operations at RiverCentre and its financial results
through abuRTget and reporting process. All e�traordinary contracts and aproposed operating
and capital' budget shall be approved by the Commissioners..
3. Termlof A2reement Section (21. The Agreement will start on July 1, 2000, and end on
Degember 31, 2004. Both the Authority and the Manager have a right to terminate the
A�reement within three (3) yeazs or on June 30, 2003. Further, the Authority has the right
ho terminate the Agreement for non performance by the Manager.
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4. Arena Related Ri�hts to Tenninate (Section 22. Since the Manager is also the tenant under
the Arena Lease, this Agreement ternunates if the Arena Lease terminates or Manager ceases
to have a contractual right to manage the Arena or ceases in fact to manage the Arena.
5. Use by the Authoritv (Secrion 3.21. The Authority shall have the right to use RiverCentre
on a rent free or reduced rent basis for events that benefit the community. A list of recun�ing
events that the parties eapect to take place is attached as an e�ibit.
6. Extraordinarv Contracts(Section 4.1�. The Authority's Commissionrers sha11 approve a11
extraordinary conlracts which include the primary pazking management contract for
RiverCentre, the concessions contract, the food and beverage catering contract, any contract
£or sponsorship or advertising that creates signage rights for more than 30 days and any other
agreement that the Authority may from time to time designate as an extraordinary contract.
All other contracts are deemed ordinary contracts which can be entered into by the Manager
without the Authority's consent.
7. Personnel (Section 51. The Authority will provide layoffnotices to each existing employee
stating that the last day of employment will be June 30, 2000. The Manager will extend
offers of employment to each existing employee and each offer shall include: (i) wages at a
rate not less than now in effect, (ii) position and duties substantially the same as now
assigned to such existing employees, and (iii) such terms and conditions are required under
each collective bargaining agreement. Manager shall further provide the health coverage and
other employee benefits in accardance with employee benefit plan which is attached as an
e�ibit. Each offer sha11 include a start date of July 1, 2000. Further, each employee will
be paid his or her accrued personal time, vacation time, compensatory time and other time
which they are entitled to receive payment on.
8. Budgets and Reports (Section 6�. Each year the Manager and Authority shall establish and
approve an operating and capital budget. Also, the Manager will be pxoviding operating
statements to the Authority within twenty (20) days following the end of each month and a
year end report within si�1y (60) days following the end of each yeaz.
9. Mana�ement Fees(Section 81. The Manager will be paid a base fee plus an annual incentive
fee. The base fee begins at $175,000 per year, increases to $185,000 for yeaz two and then
$200,000 per yeaz thereafter. Also, the Manager will have the right to earn an incentive fee
up to the fixed fee amount if it increases revenue for the RiverCentre above established
benchmarks and from outside sponsorships and based on a quality experience for the
customers. The Manager has agreed to pay all of the personnel separation costs described
in Secfion 7 above.
ORIGINAL
Council File # OQ � 5 � �
Green Sheet # � O` �3 �} �
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA
Presented By
Referred To
Committee: Date
RESOLUTION APPROVING MANAGEMENT AGREEMENT
FOR RIVERCENTRE WITH SAINT PAUL ARENA COMPANY, LLC
3
WIIEREAS:
1. On May 31, 2000, the $oard of Commissioners of the Saint Paul RiverCentre
Authority ("Authority") approved an agreement between the Civic Center Authority, an agency of
the City of Saint Paul (also lrnown as RiverCentre Authority) and Saint Paul Aren� Company, LLC
("SPAC") for the management of RiverCentre (the "Agreement").
2. The Agreement provides that SPAC will manage the RiverCentre, including the
Convention Center (known as"Touchstone Energy Place"), the Roy Wilkins Auditorium and
RiverCentre parking ramp south of Kellogg Boulevard.
3. Pursuant to Laws of Minnesota, 1973, Chapter 538, the Authority may contract out
the management of the parking ramp and that any such contract must be approved by the Council
of the City of Saint Paul.
NOW, THEREFORE, BE IT RESOLVED:
20 1. The City CounciI hereby approves the Agreement in substantially the form submitted
21 and authorizes the Mayor and Director, Office of Financial Services to execute the Agreement. The
22 approval hereby given to the Agreement includes approval of such modifications thereof, deletions
23 therefrom and additions thereto that may be necessary and appropriate and approved by the Director,
24 Office of Financial Services and the City Attorney.
Aequested by Department of:
Adopted by Council: Date
Adoption Cer�tified by Cour�.'�Il Secretasy
By: �
Approved
By: _
a-a O II
By:
Form Appro d by ity Attorne
By:
Approve y ayor for Submission to Council
By:
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Agreement for RiverCentre
between
� Civic Center Authority, an Agency of the City af Saint Paul
(also known as RiverCentre Authority)
and
Saint Paul Arena Company, LLC
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TABLE OF CONTENTS
Section 1. Engagement of Manager; Services
1.1 Engagement ...................................
12 Scope of Services ..........................
13 Specific Services ...........................
1.4 Operating Standazds ......................
Section 2.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Termand Termination .................................................................................
Term............................................................................................................
**[intentionally deleted]** ................................
...............�-�----....................
Optional Termination .............�--..................................................................
Termination for Default ...............................................................................
Arena-Related Rights to Terminate .............................................................
Termination for Failure to Fund ..................................................................
Effect of Termination ..................................................................................
....................2
....................2
....................2
........6
........6
..............7
..............8
..............8
Section 3. Authority Oversight and Authority Representative; Use by Authority ...............................9
3.1 Oversight and Authority Representative .............................................................................9
3.2 Use by the Authority .........................................................................................................10
Section 4. Contracts Regarding RiverCentre .....................................................................................11
4.1 Extraordinary and Ordinary Contracts ..............................................................................11
4.2 Contract Administrator ......................................................................................................12
43 Contracts with Affiliates ...................................................................................................13
4.4 Mutually Advantageous Arrangements .......:.....................................................................13
Section 5.
5.1
5.2
53
5.4
5.5
5.6
5.7
Section 6.
6.1
62
63
6.4
6.5
6.6
6.7
6.8
6.9
Personnel ....................................................................................................................
Employment and Supervision; Appointment of Executive Director ..........................
Existing Employees ....................................................................................................
Collective-Bargaining Agreements ............................................................................
Offers Employment ................................................................................................
Employee Benefits ..............................�---...................................................................
Assumed Obligations .................................................................................................
NoSolicitation ............................................................................................................
dperating Year; Budgets; Reports ............................
Calendaz ...........................................................
Operating Budgets ....................................................
Accounting, Recording and Allocations ...................
Monthly and Annual Reports ...................................
Capitaa F,xpenditur�s ......................-............----------
Authority Administrative Budget .............................
City Counci! Approvai ...� .........................................
Modifications to Badgets .........................................
Ogerating Standazds ...................................•----.........
� Section 7. Receipts and Disbursements; Funding ...............
7.1 Receipts and Disbursements ...............................
.......14
.......14
.......14
.......15
.......I S
.......16
.......16
.......17
........................................... � I 8
............................................ � 18
................................................18
.............................................1-819
................................................20
................................................21
................................................22
............................................�23
....-• ..........................................23
................................................23
..........................23
..........................23
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72 Funding ..............................................................................................................................24
73 NoObligationofManagertoFund ...................................................................................24
Section 8. Management Fees; Commissions ..................................................................................�425
8 .1 Management Fees .....................°°---°-......................-°--..........................--°-°-°°°---....�
8.2 Base Amoants ......................................................................................�-----.......................25
83 QualityAmounts---- ......................................°-°-........°°----.......---°-..............................25
8 .4 Revenue Amounts .......-�---� ............................................................................................�
8 .5 Commissions .................................................................................................................�627
8.6 Limitation ..........................................................................................................................28
8 .7 Prorated Amounts ..............................................................................................................28
Section 9. Indemnification and Insurance ......................................................................................�130
9 .1 Indemnification .................................................................................................................�9
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Section 10. Ownership of Assets; Related Obligations; Audit Rights ................................................33
10.1 Ownership ........................................................................................................................33
10.2 Authority Obligations .......................................................................................................34
103 **[intentionallydeleted]r ............................................................................................3435
Section 1I . Representations and Warranties ....................................................................................3435
I I.1 Representations and Warranties of Manager .................................................................3435
11.2 Representations and Warranties of the Authority .............................................................36
Section 12.
12.1
122
123
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
12.13
12.t4
12.15
12.16
I2.37
Other Provisions ...............................................................................................................37
Relationship ......................................................................................................................3 7
Severability ....................................................................................................................3�3 8
Force Majeure; Certain Changes to RiverCentre ..........................................................3�38
Waiver ...........................................................................................................................3440
Headings; References Of Inclusion ...............................................................................3940
Entire Agreement ..........................................................................................................3940
Surviva1 .............................................................................................................................40
Third Party Beneficiaries ...................................................................................................40
Assignment ........................................................................................................................40
Goveming ..............................................................................................................4A41
Dispute Resolution ........................................................................................................4841
Jurisdiction Venue ...................................................................................................4�42
Negotiated ..........................................................................................................4�-42
Notices ...............................................................................................................................42
Amendment ...................................................................................................................4�43
Counterparts ......................................................................................................................43
Compliance I,aws..._� .......................................................................�-----....................43
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Exhibit A
Exl�ibit 13
E�ibit 32
E�thSbit 4.I
Eachibit 5.2
Exhibit 5.5
E�tibit 62
Diagam ofRiverCentre
RiverCentre Event Booking Policy
Recurring Events
Contracts Currently in Effect
Information Regazding Existing Employees
Employee Benefiu Provided by Manager
Format of Operating Budget
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Defined Term
50% Test
Administrative Budget
Ageement
Annual Report
Annual Report Date
Approved Capital Budget
Approved Operating Budget
Arena
Arena Lease
Authority
Authority Approval
Authority Representative
Base Amounts
City
Continuing Obligations
Dispute Notice Date
Executive Director
Existing Employee
Extended Contract
Extraordinary Contract
Force Majeure Event
Gross Revenue
Hired Employee
Indemnified Pac
Indemnifying Party
Losses
Manager
Manager Representative
Monthly Statement
Multi-Year Project
New Contract
Nevv Rea��nue
Offer
One Time Retirement Cost
Operating Accounts
List of Defined Terms
Section Reference
8.6
6.6
Introduction
6.4
6.4
6.5
62
Introduction
Introduction
Introduction
3.1
3.1
8.1
Introduction
2.7
12.11
5.1
52
8.5
4.1
123
8.4
5.6
9.1
9.1
9.1
Introduction
3.1
6.4
6.5
8.5
8.5
5.4
5.6
7.1
iv
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Defined Term
Operating Standazds
Optional Termination Date
Ordinary Contract
Preliminary Report
Prorated Tazget
Quality Amounts
Revenue Amounts
RiverCentre
RiverCentre Authority
RiverCentre Contract
Signing Date
Start Date
Term
Section Reference
1.4
23
4.1
6.4
8.7
8.1
8.1
IntroducTion
Introduction
4.1
4.1
2.1
2.1
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AGREEMENT FOR RIVERCENTRE
THIS AGREEMEN'I' FOR RIVERCENTRE (this "AgeemenP') is made and entered into this
_ day of June, 2000, by and between the Civic Center Authority (also known as "RiverCentre
Authority"), an agency of the City of Saint Pau] (the "Authority"), and Saint Paul Arena Company, LLC,
a Minnesota limited liability company ("Manager").
WHEREAS, the City of Saint Paul (the "City") owns the facilities in downtown Saint Paul,
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Minnesota, known as RiverCentre, including the convention center known as "Touchstone Energy Place,"
the Roy Wilkins Auditorium, and the RiverCentre parking ramp south of Kellogg Boulevazd (plus any
pedestrian connection constructed linking RiverCentre to the City's skyway system) shown on E�ibit A
(collectively, "RiverCentre"), and the Authority has the authority and responsibility to provide for
management and oversight of RiverCenue; and
WHEREAS, Manager is engaged in the business of providing management services for public
assembly facilities, including the sports and enteRainment arena (owned by the City) cunently under
construction adjacent to RiverCentre (the "Arena"), which is subject to an Arena Lease dated January 15,
1998 {the "Arena Lease"), among the City, the Authoriry and Minnesota Hockey Ventures Group, LP, as
Tenant, which Arena Lease has been assigned by Tenant to Saint Paul Arena Company, LLC; and
WHEREAS, Manager desires to provide management services for RiverCentre and the Authority
desires to obtain such management services from Manager, on the terms and conditions stated herein;
NOW T'AE1tE�ORE, in considera�ion of the mutuad coavenants, terms, conditions, and
abli�ations stated herein, and intending themselves to be legally bound hereby, the Authority and
� Mana�er hereby agree as follows:
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Section 1. Engaeement of Manager; Services
1.1 En¢aeement. The Authority hereby engages Manager to manage, operate, maintain,
market and promote RiverCentre for public purposes (in accordance with Minnesota Laws 1967,
Chapter 459, as amended to date), and Manager hereby accepts such engagement under the terms and
conditions provided below. This Agreement shall be consistent with all ]aws governing RiverCentre,
including special legislation.
1.2 Scone of Services. Manager shall perform and provide such management services as are
needed to manage, operate, maintain, and promote RiverCentre in a manner consistent with this
Agreement. Subject to the limitations stated in this Agreement, Manager shall have general responsibility
� and authority to conduct operations of RiverCentre and activities therein on behalf of the Authority.
1.3 Soecific Services. In the course of managing RiverCentre hereunder:
(a) Manager shall, from time to time, hire, promote, supervise aad direct all
employees and other personnel at RiverCentre (including work assignments, compensation, benefits,
performance reviews, discipline and discharge) in a manner consistent with this Agreement.
(b) Manager shall supervise all contractors, subcontractors and other contracting
parties providing goods or services to RiverCentre (including food service, maintenance and security) and
shall negotiate renewals, extensions and replacements for the provision of such goods and services from
time to �e and repore such renewals, extension� �rea3 replacements to the Authority (all in accordance
with Section 4 ofthis Agreement).
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(c) Manager shall manage capital improvements of RiveiCentre, including the
bidding process for each improvement and supervision of the construction thereof, in each case subject to
the applicable Approved Capital Budget (as hereinafrer defined).
(d) Maaager shall arrange to rent, lease or purchase such equipment and supplies as
are needed from time to time for the operation and maintenance of RiverCentre, in each case subject to
the applicable Approved Operating Budget (as hereinafter defined).
(e) Manager shall arrange for payment on behalf of the Authority of all operating
expenses for RiverCentre as contemplated in each Approved Operating Budget.
(� Manager shall, on behalf of the Authority, take such actions as Manager shall
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deem necessary to collect charges, rents or other amounts due to RiverCentre, or to enforce or pursue
damages under any license or other agreement regarding RiverCentre (including such legal actions or
proceedings as Manager may deem necessary).
(g) Manager shall maintain complete records and schedules for booking events and
other uses of RiverCentre.
(h) Manager shali provide, on behalf of the Authority, day-to-day administrative
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services to suppoR operations of RiverCentre, including budgeting and accounting; payroll; billing,
collections and disbursements; obtaining insvrance (as provided hereinafter); and maintaining on the
Authority's behalf such permits and licenses as are required to operate RiverCentre under such laws and
rules of government agencies as are applicable to opera�aons of RiverCentre.
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(i) Manager shall book and schedule events to take place at RiverCentre (in each
case subject to the Authority's event-booking policy, a copy of which is set forth in E�ibit 13), shall
consult regu]azly with the Authority Representative on the scheduling of events to ensure that RiverCentre
benefits from all scheduling decisions, shall advertise and promote use of RiverCentre for purposes of
realizing its full potential, and, in connection therewith, may use the names "RiverCentre," "Touchstone
Energy Place," "Wilkins Auditorium," "RiverCentre Authority" and "Civic Center Authority of Saint
Paul" and related logos and other marks for each, as well as names, logos and other mazks of each part of
RiverCentre as in effect from time to time. Manager will masimize operations and bookings of
RiverCentre to a capacity that is consistent with the spirit of this Agreement.
(j) Manager shall solicit, promote and sell on the Authority's behalf advertising at
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RiverCentre and sponsorships of RiverCentre (in each case consistent with the terms of agreements then
in force) and shall pursue opportunities for advertising and sponsorship that include both RiverCentre and
the Arena (in each case subject to Section 4, re(ating to contracts). Manager shall consult with and obtain
approval from the Director, Office of Financial Services (City of Saint Paul), before signing any
agreement that results in "private business use" of RiverCentre (within the meaning of Section 141(b) of
the Intemal Revenue Code of 1986, as amended, and Treasury Regulations § 1.141-3 thereunder) or could
reasonably be intetpreted as resulting in such "private business use."
1.4 Ooeratine Standards
(a} The Autharity and Manager acknowledge and agree that a principal objective of
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this Agreement is to manage RiverCentre in a manner that is reasonably prudent, consistent with
operatio�s of other fir,t-class public faciiities and consistent wsth the public investment that has been
made in RiverCentre. In addition, Manager acknowledges that these are public facilities and, as such, the
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� public has a right to expect that such facilities are managed in a manner that is consistent with the public
investment that has been made.
(b) To that end, "consistent with" will refer to all azeas of operations, including, but
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not limited to:
(i) interior and exterior appearance of all facilities
(ii) employee performance
(iii) operation of aIl facilities
(iv) concessions and public facilities
(v) customer service
(vi) mazketing and promotion of all facilities
(vii) customer satisfaction of all facilities
(viii) ingress and egress for parking
(ix) load and unload times for loading docks
(x) cleanliness, responsiveness and quality of food and beverage service
(xil securiri
(c) Manager shall provide the services hereunder in such a manner not only to
achieve such standards in 2001, but also to commit to meeting or exceeding such standards for each year
as set forth in the Approved Operating Budget for such yeaz (the "Operating Standards").
(d) In addition to general guidelines developed by the Authority Representative, in
consultation with Manager and r�viewiva the practices and operatians of other similaz public facilities,
the Authority Representati�e will use the fo)lowing Ynols to determine if the Operating STandards have
been achieved:
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(iii) general public surveys
(iv) Convention and �sitors' Bureau interviews
(v) RiverCentre Authorety interviews
(i) customer surveys
(ii) vendor surveys
Section 2. Term and Termination
2.1 Term. The period during which Manager shall provide services hereunder and during
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which the Authoriry shall purchase and pay for such services in accordance with this Agreement (the
"Term") shall start on July 1, 2000 (the "Start Date"), and end on December 31, 2004, unless terminated
sooner as providsd in th4s Agreement.
2.2
**�intencionalty deletedl**
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Optional Termination. June 30, 2003, shall be the "Optional Termination Date." Each of
the Authority and Manager shall have the right to terminate this Agreement, effective on the Optional
Termination Date and without cause or penalty, by giving notice of such termination to the other at least
90 days before such Optiona] Termination Date.
2.4 Termination for Default
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(a) If either party shall fail to pay when due any acnount payable hereunder, then the
other party sha11 have {in addit'son to such party's rights to enforce this Agreement and receive
indemn�cazian for any breach hereof} the right To give notice of such default. If such amount is not paid
within ] 0 days following the giving of such notice, then the party giving such noTice may terminate this
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� Ageement by notice of termination given within 30 days following the end of such 10-day period. If this
Agreement is terminated under this paragraph (a), then the terminating party shall have no further
obligations under this Agreement after such termination (other than Continuing Obligations (as hereinafter
defined)), but the defaulting party shall continue to be liable for such defautt and for all damages caused by
the defaulting party's breach of this Agreement
(b) If either party shall fail to perform any of such party's material obligations under
this Agreement (other than a failure to pay when due any amount payable hereunder), then the other party
shall have (in addition to such party's rights to enforce this Agreement and receive indemnification for any
breach hereofl the right to give notice describing such failure with particulariry. Upon receipt of such
notice, the failing party (i) shall take all reasonable actions to promptly cure such failure or (ii) if such
failure cannot then be cured in all respects (whether due to expiration of a time period or otherwise), shall
take all reasonable actions to cure such failure to the e�ent possible and to prevent recurrence of such
� failure. If the failing pariy does not comply with its obligations under this pazagraph (b) within 60 days after
receipt of such notice of failure, then the party giving such notice of failure may terminate this Agreement
by notice of termination given within 30 days following the end of such 60-day period. If this Agreement is
terminated under this paragraph (b), then the terminating party shall have no further obligations under this
Agreement after such termination (other than Continuing Obligations), but the defaulting party shall
continue to be liable for such default and for ali damages caused by the defaulting party's breach of this
Agreement.
2.5 Arena-RelatedRishtstoTerminate. If
(a) the Arena Lease were terminated in accordance with its terms as a result of a
defauhbythetenantthereunderor
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(b)
Manager ceases to have a contractual ri�ht to manage the Arena or ceases in fact to
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manage the Arena,
then the Authority shall have the right to terminate this Agreement by notice of termination given to
Manager within 30 days following such termination of the Arena Lease or such cessation.
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2.6 Termination for Failure to ��:Approve_ With respect to each Approved Operating
Budget, if funds aze no'°-- `-� «'�° "..«'��-:�, ^^'' approved by the Authoritv and eiven
preliminarv approval bv ihe Mavor and City Council at least 60 days prior to the beginning of the year to
which such Approved Operating Budget applies (and made available in°- �m�..�` �..`��:°-' «,. r....,,
' accordance with Section ^°°'- "°-��� - a ^-°-°`�°° a° . then
Manager shall have the right to terminate this Agreement by notice of termination given to the Authority
at least 60 days prior to the termination date stated in such notice.
2.7 Effect of Termination
(a) Upon any termination, Manager shall deliver to the Authority any funds and
other property belonging to the Authority then in Manager's control, and the Authority shall reimburse
Manager for any expenses previously incurred by Manager on behalf of the Authority, plus any unpaid
amounts under Section 8(prorated as provided in Section 8), less any amounts then owed by Manager to
the Authority as a result of such termination or otherwise.
(b) Upon te�inatiun, the Aaathority shall cause any successor manager of
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RiverCentre (whether a private contractor or public body) to (i) employ following the date of termination
(but subject to dischazge for cause) each employee of Manager then employed at RiverCenve and
(ii) assume and pay all of the assumed obligations under Section 5 not previously satisfied.
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Norivithstanding the foregoing, however, if Manager has designated one senior manager for continued
employment by Manager, then the Authority would not solicit that manager or otherwise offer
employment to that Manager. The foregoing shall not, however, prohibit the Authority from empioying
such designated senior manager if such manager applied independently for such employment (for
example, in response to a general employment advertisement published by the Authority), without any
solicitation by the Authority.
(c) Notwithstandingany termination of this Agreement, the parties shal] continue to be
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bound by their respective obligations under Section 9.1 (relatingto indemnification), Section ] 0(relating to
ownership), Section 5(relating to personnel), Section 8(to the extent of any fees, commissions or other
amounts thereunder becoming payable after termination) and Section 12 (relating to the relationship of the
parties and other matters), which are the "Continuing Obligations," and such sections shall survive any
termination of this Agreement.
Section 3. Authoriri Oversiaht and Authoriri Renresentative: Use bv Authoritv
3.1 Oversi¢ht and Authoriri Renresentative. All assets, revenues, obligations and expenses
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of RiverCentre shall be held and incurred by Manager for the Authority's account, and the Authoriry shall
oversee operations of RiverCentre and its financial results through the budget and reporting process
specified in Section 6. Manager shall report to the Authority through an individual designated by the
Authority as "Authority Representative," who shall be an employee or consultant of the Authority.
Manager shall designate its highest ranking officer to report to the Authority Representative as the
"Manager Representative" described an this Ageement. The Authority shall designate the Authority
Representative by noYice io Manager within five days afrer tiae date of this Agreement and shall thereafter
from time to time redesignate, replace and otherwise take such action as necessary to cause there to be a
duly designated and authorized individual serving as Authority Representative at all times. The AuthoriTy
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� shall cause the Authority Representative to oversee performance of this Agreement, respond to Mana�er's
inquiries and consult with Manager at all times regazding the operations of RiverCentre and achievement
of its public-purpose objectives. The Authority shall authorize and cause the Authority Representative to
review actions proposed by Ma�ager that require approval by the Authority hereunder and, with respect to
such proposed action, receipt by Manager of written approval signed by the Authority Representative
shall be "Authority Approval" rovided however, that any approval of an Extraordinary Contract,
proposed operating budget or proposed capital budget shall also require the approval of the Authority's
Commissioners and signature of the Authority's chair). If at any time Manager submits to the Authority
or the Authority Representative notice of any proposed action and the Authority Representative does not
provide to Manager notice of approval or disapproval of such proposed action within 15 days following
the date on which Manager gives such notice, then Authority Approval for such action shall be deemed to
have been given by the Authority on the 16' day following such date.
� 32 Use bv the Authoritv. The Authority shall have the right to use RiverCentre for events of
the Authority or the City or their respective designees and for the benefit of the community (including, for
example, Authority meetings, training for Authority personnel and public events) on a rent-free or
reduced-rent basis, as the Authority may determine from time to time. Direct expenses related to such
rent-free or reduced-rent use (including, for example, utilities, heating and air conditioning, insurance,
and personnel for stage work, electrical work, tickets, cleaning, security and other services) would be paid
by the AuthoriTy or its designee. Such use by the Authority shall be subject to such terms as the Authority
and Manager may determine from time to time, shall not unreasonably compete or conflict with paying
events at RiverCentre, and sha31 be booked in advance (and may be moved from their respective
customary dates) with reasonable notice in accordance with RiverCentre policies having Authority
Approval, as in effect from time to time. E�ibit 3.2 is a list of recurring events that the parties expect to
accommodate under this section.
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� Section 4. Contracts Re¢ardine RiverCentre
4.1 Extraordinarv and Ordinarv Contracts.
(a) "RiverCentre Contract" shall mean at any time a use agreement, license, provider
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(i)
such in E�ibit 4.1,
(��)
Exhibit 4.1,
�FiE�
agreement, supply contract, service agreement and other contract or agreement of any kind (other than
any collective-bazgaining agreement) that is in effect at such time with respect to RiverCentre (and shall
include each Extraordinary Contract and each Ordinary Contract, as defined below). E�ibit 4.1 is a list,
provided by the Authority, of each RiverCentre Convact in effect as of the date of this Agreement. Each
use agreement shall contain a provision reserving to the Authority the right to receive 20 promotional
seats without charge (in each case in accordance with the Authority's most recent resolutions, of which
Manager shall have received copies by notice to Manager hereunder).
(b) "Extraordinary ContracY' means only
the primary parking-management contract for RiverCentre, designated as
the primary concessions contract for RiverCentre, designed as such in
the primary food-and-beverage catering contract RiverCentre, designated
as such in E�ibit 4.1,
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(iv)
any contract referred to in clause (i), (ii) or (iii),
any RiverCentre Contract that replaces, extends or substantially amends
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(v) any RiverCentre Contract for sponsorship or advertising that creates
signage rights at RiverCentre for more than 30 consecutive days,
(vi) any RiverCentre Contract that, on the date when signed (the "signing
date"), creates non-terminable obligations that bind RiverCentre or the Authority and extend
more than 90 days beyond the Term, and
(vii) any RiverCentre Contract that the Authority may from time to time
designate by notice to Manager as an Extraordinary Contract.
(c) "Ordinary ContracP' means any RiverCentre contract that is not an Extraordinary
i
Contract (and, for example, shall include maintenance and repair contracts, service contracts, and event
and booking contracts, etc.).
4.2 Contract Administrator. Manager shall serve as contract administrator for each
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RiverCentre Contract, shall cause performance of the Authoriry's obligations thereunder on behalf of the
Authority, and shall represent the Authority and act on its behalf in monitoring each other party's
perfocmance thereof, col3ecting and disbursing funds, and dealing with each other party in all respects.
Manager shall obtain Authority Approval in connection with any action under an Extraordinary Contract
if the effect of such action is to extend, terminate, substantially amend or commence legal proceedings to
enforce such Extraordinary Contract. Manager shall have the responsibility and sole authority to enter
into any Ordinary Contract as the Authority's agent and on the AuthoriTy's behalf (subject to Section 43),
but Managee sha(I not enter into any Extraordinary ContracE witltaut Auf6oriTy Approval. If any
RiverCentre Contract were entered into with respect to both RiverCentre and the Arena, then Manager
shall cause the terms thereof to be such that neither RiverCentre nor the Arena receives benefits
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� thereunder (or incurs costs thereunder) that are disproportionate to its respective interest in such
RiverCentre Contract. In connection with Manager's providing the reports referred to in Section 6A(a),
Manaaer shall provide management reports regarding the status of RiverCentre Contracts and significant
developments related thereto.
43 Contracts with Affiliates. The Authority and Manager acknowledge that, from time to
time, an entiry in which Manager has an interest (or is otherwise affiliated) may be in the business of
providing goods or services necessary or desirable for operations of RiverCentre and may propose a
contract for that purpose. If Manager has (a) disclosed such interest or affiliation to the Authority,
(b) demonstrated to the Authority's satisfaction that the proposed terms are competitive with those
available from non-affiliated vendors and (c) received Authority Approval for such contract, then
Manager may enter into such contract with such affiliated entity. (Such showing of competitive terms
� may be through a request-for-proposal process, verification from a mutually acceptable third-party
consultant or other method satisfactory to the Authority.)
4.4 Mutuallv Advantaeeous Arran�ements. The Authority and Manager acknowledge that
each of them may from time to time have agreements or other arrangements with suppliers, vendors and
other providers of goods and services that include favorable terms, and each shall use its best efforts to
make such favorable terms available to the other. Manager will use its best efforts to use such terms to
reduce the costs and improve the efficiency of RiverCentre operations.
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� Sec6on 5. Personnel
5.1 Emolovment and Sunervision� Anpointment of Executive Director.
(a) During the Term, Manager shall select, employ, train, and provide, for work at
RiverCentre, qualified employees of Manager (in sufficient number to satisfy the performance standards
of this Agreement at all times).
(b) Manager shall train and provide all necessary qualified supervisors for employees
at RiverCentre and shall assign to RiverCentre a fully qualified facility manager (the "Executive
Director"). If at any time the Authority reasonably determines that performance of the Executive Director
is deficient, then the Authority may, by notice to Manager, report such determination and the specific
� deficiencies so determined, and Manager shall take atl reasonable actions to remedy any such deficiencies
and shall report the results of such remedial actions to the Authority within 30 days following receipt of
such notice. If ihe Authority reasonably determines that perfortnance of the Executive Director remains
unsatisfactory, then the Authority may, by notice to Manager given within 30 days afrer the Authority's
receipt of such report, inform Manager of such determination (inc]uding ihe reasons therefor), and
Manager shalI, within 30 days following receipt of that report, remove such Executive Director and
appoint a replacement Executive Director with Authority Approval (which shall not be unreasonably
withheld or delayed).
52 Existing Emplovees_ The Anthority has grovided to Manager the information stated in
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Exhibit S.2 hereto, including the name, posit�on and coliective-bazgaining representation (if any) of each
person who Qs, as ofthe date of this Agreement, employecl at or in eonneetio�¢ wiih RiverCentre (each an
"Existing Employee"). The Authority will provide layoff notices to each Existing Employee stating that
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the last day of empioyment with the Authority/City will be June 30, 2000. Such notices will comply with
City ordinances and collective-bargaining agreements.
53 Collective-Bazeainino Aereements. Execution by Manager of collective-bazgaining
agreements covering each Existing Employee who is represented by a union or other collective-
bargaining representative is a condition precedent to Manager's obligations under this Agreement.
5.4 Offers of Emplovment.
(a) Commencing on the date of this Agreement, the Authoriry shall provide to
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Manager access to each Existing Employee for purposes of interviewing, offering employment,
comp]eting pre-employment documents and explaining Manager's employment-related rules and benefits.
(b) Manager shall make a written offer of employment (each an"Offer") to each
Existing Employee, for employment by Manager, commencing on the Start Date. Manager shall make
such Offer within five days afrer the date of this Agreement and shatl keep such Offer open for at teast 10
days after it is received by such Existing Employee.
(c) For each Existing Employee, such Offer shall include (i) wages at a rate not less
than that now in effect for such Existing Employee, (ii) position and duties substantially the same as those
now assigned to such Existing Employee and (iii) if such Existing Employee is represented under a
collective-bargaining agreement, such terms and conditions as aze required thereby.
(d) Manager shat] hire each Existing Employee who accepts such Offer, and shall
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employ such Existing Employee, commencing on the Start Date.
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5.5 Emplovee Benefiu. Manager shall provide, to each Existing Employee who accepts such
Offer, health coverage and other empioyee benefits in accordance with Manager's employee-benefit pians
referred to in E�ibit 5.5.
5.6 Assumed Oblieations. For each Existing Employee hired by Manager (a "Hired
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Employee"), the Authority shall provide to Manager within ten days following the Start Date an accurate
statement of all the Authority's obiigations to such Hired Employee for accrued vacation; compensatory
time; and sick time, severance pay and benefits in lieu of retiree health coverage. Manager shall assume
such obligations and satisfy them when due. Notwithstanding the foregoing, however, such assumed
obligations are limited as follows:
(a) For accrued vacation, (i) the total of all obligations so assumed shall not exceed
$76,000 payable in cash, and (ii) Manager shall allow each Hired Employee to carry forwazd up to ten
days of accrued vacation. To the extent thai Hired Employees do so, the total payable in cash shall be
reduced by the dollar amount attributable to all days so carried forward.
(b) For compensatory time, the total of ali obligations so assumed shall not exceed
$136,000 payablein cash.
(c) For sick time, severance pay and benefits in lieu of retiree health coverage, the
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total of ail obligations so assumed shall not exceed
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(i) for each Hired Employee, a deposit to his or her 401(k) account, to be
made on December 31 of each of the yeazs 2000 through 2003 (which deposit shall be $ I50 in
2000 and $3Q0 in each of 20Q1, 2002 and 2003), Qovided. however, that such deposit shail be
paid for any year only if such Hired Employee remains employed by Manager on December 31 of
that yeaz; and
(ii) for each Hired Employee, another deposit to his or her 401(k) account on
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February 1, 2001; February 1, 2002; and February 1, 2003 (which deposit shall be in the amount
stated as "One Time Retirement Cost" for such Hired Employee in the statement referred to
above), provided, however, that (A) the total of all such deposits in 2001 shall not exceed
$I50,000; the total of all such deposits in 2002 shall not exceed $50,000; and the total of all such
deposits in 2003 shall not exceed $30,000; and (B) Manager shall ailow each Hired Employee to
carry forwazd up to five days of sick time and, to the extent that such Hired Employee does so,
then such deposit for such Hired Employee shall be reduced by the dollar amount attributable to
all days so carried forward.
5.7 No Solicitation. The Authority shall not, during the Term or during the period of one
�
year afrer any termination of this Agreement, solicit for employment one senior manager then employed
by Manager and designated for continued employment by Manager, provided that the Authority is not
prohibited from employing such designated senior manager if such manager applied independently for
such employment without any solicitation by the Authority.
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Section 6. �erating Year; Budeets: Repocts
6.1 Calendar Year. Operations, accounting and reporting for RiverCentre shall be conducted
on the basis of the calendar year, commencing January 1 and ending December 31, and each reference
herein to a year means the calendar year (unless othenvise specifically stated).
6.2 Operatine Bud¢eu. For each yeaz, Manager and the Authority shall establish and
approve an operating budget for RiverCentre (each an "Approved Operating Budget") in accordance with
the following:
(a) For each year commencing with 2001, Manager shall submit to the Authority, by
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the immediately preceding September 1, a proposed operating budget stating all anticipated revenues and
expenses related to RiverCentre for such year, in the format set forth in E�ibit 6.2. Manager and the
Authority shall discuss such proposed operating budget and, if theyt�tua�}I3� approve in writing an
operating budget and such budget is also apg�es�-�iygiven ore)iminarv aporoval bv the Mavor and the
Saint Paul Ciry Council, in each case by the immediately preceding October 31, then the operating budget
so approved shall be the Approved Operating Budget for such veaz, uniess amended bv the Citv Council
with the aoaroval of the Mavor prior to final adoption of such operating budeet in accordance with
Minnesota law and Citv ordinance If the operatin¢ bud¢et is so amended then Manager and the
Authority shali discuss the amended bud�et If thev a¢ree to accept such amended bud¢et then it shall be
the Approved Operating Budeet for such v eaz. If °� '�••a��« _� _„ ...._,..,,a w.....,.ti :..........:..«,,,.
_ _ _
� thev do not n 1. 11 L, i. A r= _ _. ,.,t l� D..,l..es l_�.. 1. ..,...� ..i..,ll l.e :.7e.,r� ^1 t^
+-�„ _a?-__�, _--��°�;�^-,'--�°a�°�°'_! a^�=^* � ^__�eetoaccentsuchamended
budeet then Manager shall have the same rieht of termination as provided in Section 2 6
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(b) Any Approved Operating Budget may be amended at any time by a written
amendment that is approved by the City Council and executed by the Authority and Mana�er.
63 Accountine. Recordine and Allocations.
(a) Manager shall maintain complete accounting records relating to RiverCentre and
shall establish intemal-control policies and practices which are in accordance with generally accepted
standazds in the facilities-management industry and any additional requirements of the Minnesota State
Auditor.
(b) Manager shall cause all revenues from RiverCentre eamed and due afrer July I,
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2000, to be sepazately recorded and reported (on a direct basis) to the greatest extent possible. If any
revenue shall be attributable to both RiverCentre and the Arena (including, for example, revenue from a
single event using RiverCentre for part of a day and the Arena for the balance of such day), Manager shall
allocate such revenues on the basis of the respective rate cards then in effect for RiverCentre and the
Arena (or, for any particular event, on such other basis as Manager may determine with Authoriry
Approva]).
(c) Manager shall cause all expenses for RiverCentre incurred afrer July 1, 2000, to
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be separately recorded and reported (on a direct basis) to the greatest extent possible (including for
example, separate metering of utilities, separate recording of direct-labor hours, allocation of vacation,
retirement and other benefit costs in accordance with such direct-labor hours, separate invoicing or
itemizing of maintenance and repairs, and sepazate time recording of employees, including those
dedicated 100% to RiveiCentrc operations, such as a dedicated mazketing manager). For each year, if any
expense shall be incurred for the benefit of both RiverCentre and the Arena, such expense shall be
allocated between them on a basis determined with Authority Approval in connection with the Approved
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Operating Budget for that yeaz. The Authority and Manager acknowledge that from time to time an
opportunity for combined use of RiverCentre and the Arena for an event or other purpose may imolve
expenses not anticipated in the Approved Operating Budget. To realize the benefits of such an
opportunity, the Authority and Manager may determine to allocate such expenses so as to reflect the
respective costs and benefits of such event for RiverCentre and the Arena. The expenses of the Authority
and its staff will be accounted for sepazately by the Office of Financial Services within the Authority's
Administrative Budget (as herein defined).
6.4 Moathl and Annual Re orts.
(a) Within 20 days following the end of each month during the Term, Manager shall
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submit to the Authority an unaudited written operating statement (the "Monthly Statement") showing, for
such month and for the yeaz to date, (i) all gross revenues and expenses from operations of RiverCentre,
in each case presented in the same manner as in the Approved Operating Budget for such year and (ii) for
each line item, a comparison of actual results to those stated in the Approved Operating Budget.
(b) Within 60 days following the end of each year, Manager shall submit to the
Authority a written operating statement for such year (the "Preliminary Report") stating for such yeaz all
revenues and actual expenses from operations of RiverCentre. Unless the Authoriry gives notice to
Manager of a good-faith objection to a material aspect of the Preliminary Report before the 30`� day
following the Authoriry's receipt thereof, the Preliminary Report shall then become binding upon
Manager and the Authority and shall be ihe "Annual Report" for such year, and such 30`" day shall be the
"Annual Report Date" for such year.
(c) If the Authority (by notice given to Manager before the close of business on such
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30` day) objects in good faith to any material aspect of the Preliminary Report, then only those aspects as
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to which the good-faith objection was made shall �ot become binding, the Authority and Manager shall
discuss the objection and, if they sign a written agreement amending the Preliminary Report, then the
Preliminary Report, as amended by such written ageement, shall become binding and shall become the
Annual Report and the date of such written agreement shall be the Annual Report Date. If the Authority
and Manager do not sign a written agreement within 30 days afrer the Authority gives such notice of
objection, then the matter objected to (and only such matter) shall be submitted to a nationally recognized
firm of certified public accountants selected by the Authority and Manager (whose fees shall be divided
equally between the Authority and Manager), who shall resolve the dispute and submit a written
statement of such resolution, which statement, when delivered to the Authority and to Manager, shall
become binding. Such statement (combined with those aspects of the Preliminary Report as to which the
Authority did not timely provide notice of objection) shall be the Annual Report and the date on which
such accountants submit such statement to the Authority and Manager shall be the Annual Report Date.
(d) Each Annual Aeport shall remain subject to the Authority's audit rights under
Section 10.
6.5 Caoital Exoendiwres. For each year, Manager and the Authority shall establish and
approve a budget for capital expenditures at RiverCentre during such yeaz (each an "Approved Capital
BudgeP'), which shall state all capita] projects to be commenced at RiverCenVe during that year and the
financing sources to pay for those projects, including those anticipated to be started and completed in the
same yeaz and those anticipated to continue into subsequent years (each a"multi-yeaz projecP'), in
accordance with the following:
(a) For each year commencing with 2002, Manager sha11 submit to the Authority, by
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the immediately preceding September 1, a proposed capital budget stating all anticipated material capita]
expenditures related to RiverCentre for such year, in such format as the parties shall hereafrer agree.
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Manager and the Authority shall discuss such proposed capital budget and, if they�a� approve in
writing a capital budget for such yeaz and such capitai budget is aggFeve�—kyalso given vreliminarv
a�oroval bv the Mavor and the Ciry Council, in each case by the immediately preceding October 31, then
the capital budget so approved shall be the Approved Capital Budget for such year. unless amended bv
the Ci . ouncil with the aoocoval of the Mavor nrior to the final adootion of the canital bud¢et in
accordance with Minnesota law and Ciri ordinance. If no capital budget for such yeaz isse-agg�eve�-ky
st� �-�-�^�a�^� --°^°a�°° ^�'^''° adopted and aonroved bv the be¢innine of such veaz, then
the Approved Capital Budget for such year shall consist of each multi-yeaz project included in any
previous Approved Capital Budget that is not yet completed.
(b) Any Approved Capital Budget may be amended at any time by a written
�
amendment that is approved by the City Council and executed by the Authority and Manager.
(c) For each month during which Manager makes any material capital expenditures,
Manager shall provide to the Authority, in connection with the Monthly Statement for that month, a
written summary of such capital expenditures.
(d) Manager shall not make any material capital expenditures unless included in an
Approved Capital B�adget or otherwise approved by the Authoriry.
(e) All expenditures related to the project currently in process to repair and improve
the RiverCentre parktng raanp (glanned for completion during 2001 at an estimated project cost of
$9.5 million) shall be managed and paid for by the City.
6.6 Authoritv Administrative Bud¢et. The Authority wiU annually approve and manage an
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administrative budget (the "Administrative BudgeP'). The Administrative Budget will include the
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expenses directly related to the operation of the Authority and other expenses it may approve, including
the management fee to be paid to Manager.
6.7 Citv Council Annroval. The Authority shall have no obligation to pay operating
expenses for a year unless and until the Authority shall have made an appropriation approved by the City
Council and the Mayor throueh the annual budset avoroval orocess to fund the operation of the Authority
and RiverCentre for such year. From and afrer such appropriation is annroved by the ""'�
and Ciri Council, the Authority shall pay the operating expenses for such year to the extent described
elsewhere in this Agreement.
6.8 Modifications to Budeets. All modifications to the Approved Capital Budget and
�
Approved Operating Budget during any year shall be subject to prior written approval by the Authority
and Manager. Any expenditures made by Manager which are not included in such budgets shal] be the
financial responsibility of Manager unless approved by the Authority.
6.9 Ouerating Standards. As part of each yearly budget process (commencing with that for
2001), the Authority and Manager shall establish the Operating Standards for that year and include such
Operating Standards as part of the Approved Operating Budget for that year.
Section 7. Receints and Disbursements; Fundina
7.1 Receipts and Disbursements.
(a) Manager shall establish and maintain for RiverCentre such fully insured bank
�J
accounTS as needed from time to time for receipu, disbursements, payroll and other operations of
RiverCentre, with signature authority in such employees of Manager as Manager shall determine and
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�rner.� e-�, 6 `�.� `oo
� report to the Authority (collectively, the "Operating Accounts"). All revenues collected from operations
of RiverCentre shall be deposited into the Operating Accounts and Manager shail cause all expenses and
disbursements related to RiverCentre to be paid from the Operating Accounts. Manager shall institute
and abide by a cost allocation and accounting system, subject to approval by the Authority (which
approval shall not be unreasonably withheld or delayed). Any changes to such system shall be subject to
approval by the Authority (which approval shall not be unreasonably withheld or delayed). 1� r � ws�'
er ra��Y..,.e.. a\\oc.��:o�. �ar� � ro�� ccv��. or c�vv�c�.a.e� b "hh�. ���
A�`t�r.�o,_ SY�c.�,\ 1de__� ^w � c. 1`�ct 0.v� �� �oyv�lc.. � �
r�.7. Cw Co m.v.e�.� w•r� -�:r..\ 4��.rttv^ a \ _
(b) All revenues collected from operat�ons of RiverCentre are the sole property of
the Authority and shall be held in trust by Manager for the Authority for application as provided in this
Agreement. Any amounts remaining in any Operating Accounts, upon termination of this Agreement and
afrer payment of expenses as provided herein, shall be paid to the Authority. If any of such revenues are
lost, stolen or otherwise unlawfully removed from the custody and control of Manager, then Manager
� shall continue to be responsible therefor and Manager shall indemnify the Authority from and against
such loss by maki�g payment to the Authority within 48 hours of discovery of such loss, thefr or unlawful
removal.
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72 Fundin¢. For each month, Manager shall ptovide to the Authority, at ]east seven days
prior to the first day of such month, a report of the funds balance projected to be available in the
Operating Accounis at the start of such month and projected cash receipts and projected cash expenditures
during such month. If and to the eartent that such pzojected expenditures exceed the sum of such projected
balance plus projected receipts, then the Authority will transfer to the Operating Accounts an amount
equal to such excess. If and to the extent that such projected expenditures are less than the sum of such
projected balance plus projected receipts, then Manager wiil tra�sfer to the Authority the amount by
which such projected expenditures are less.
73 No Obli�ation of Manaeer to Fund. Except as agreed to in Section 5 hereof, Manager
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shal] have no obligation to fund any cost, expense, liabiliry or expenditure with respect to RiverCentre or
operations thereof.
Section 8. Mana¢ement Fees: Commissions
8.1 Management Fees. The Authority shall pay to Manager management fees, which shall
consist of
(a)
(b)
base amounts, determined as described below (the "Base Amounts"), plus
amounts based on the Operating Standards, determined as described below (the
"Quality Amounts"), plus
(c) amounts based on Gross Revenues {as hereinafrer defined), determined as
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described &elaw (the "Revenue Amovnts"}.
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. 8.2 Base Amounts. The Base Amounts shall be $14,666 per month during 2000, $14,583 per
month during 2001, $15,416 per month during 2002, $16,666 per month during 2003, and such per-month
amount during 2004 as the parties shall hereafter agree. The Authority shall pay such Base Amounu for
each month on or before the first day of such month.
83 Oualiri Amounts. For each of the years 2001 through 2004, the Authority wi]] evaluate
Manager's performance in achieving the Operating Standards for that year and will assign to such
performance a percentage based on the Authority's reasonable determination of the extent to which such
Operating Standards were achieved during that yeac The Quality Amount for such yeaz shall be an
amount equal to $25,000 multiplied by such percentage (e�e., if the percentage so determined by the
Authority were 90% for 2002, then the Quality Amount for 2002 would be $22,500). For each year, the
� Authority shalE pay the Quality Amount by February 28 of the immediately following year.
8.4 Revenue Amounts.
(a) For each of the years 2001 through 2004, the Revenue Amount shall be
(i) $50,000 if Gross Revenue equals or exceeds the First Target for that year,
plus
(ii) an additional �-7-5,898 if Gross Revenue equals or exceeds the
Second Target for that yeaz.
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(b) For any year, "Gross Revenue" shall mean all revenue from (i) rentals,
(ii) service income, (iii) food and beverages, and (iv) novelties. Gross Revenue shall be calculated and
classified in a manner consistent with the practices reflected in the budgeu and operating statements of
RiverCentre for 1999 and 2000 heretofore received by Manager rovided, however that any revenue that
would cause any taz-exempt bonds to become taxable private activity bonds cannot be earned by the
Authority or counted as Gross Revenue).
(c) For each year referred to below, the First Target and Second Target shall be as set
�
forth below:
Year
2001
2002
2003
First TarQet Second Tareet
$3.75 million $4.00 million
$3.90 million $4.15 million
$4.00 million $4.25 million
For 2004, the First Target and Second Target shall be such amounts as the parties shall hereafrer agree.
8.5 Commissions
(a) For each New Contract (as defined below), the Authority shall pay to Manager a
commission for each year in which RiverCentre receives advertising payments, sponsorship fees, rights
fees or other revenues under or with respect to such New Contract ("New Revenue"). Notwithstanding
the foregoing, however,
(E1 "New Revenue" does not inclnde anv amount referred to in
Section 8.4(b)and
�
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ii in the case of any New Contract that is an Exte�ded Contract (as defined
below), "New Revenue" for any yeaz shall mean only such payments, fees and revenues as
exceed those that would have been received in such year had such Extended Contract continued
into such yeaz on the same terms as in effect on the Start Date. (For example, if a sponsor
contract in effect on the Start Date called for payments of $50,000 to RiverCentre in 2003 and
such sponsor contract were amended after the Start Date so as to call for payments of $60,000 in
2003, then $ I 0,000 of such $60,000 would be New Revenue for 2003.)
(b) The amount of such commission for each New Contract shall be �&%20% of all
►�J
New Revenue. Upon receipt of any amount of New Revenue, the Authority shall pay the applicable
commission to Manager e.¢., if amounts received under a New Contract consisted of $10,000 in January
2004 and $]0,000 in July 2004, then the Authority would pay to Manager a commission of $�-;988
in January 2004 and a commission of �098 $2.000 in July 2004).
(c) "New Contract" shall include (i) any conuact, agreement or other arrangement
for advertising, sponsorship, signage, publicity, promotion, marketing or similar rights at RiverCentre that
is entered into during the Term and (ii) any renewal, extension, amendment or other change to any
contract, agreement or arrangement existing before the Term that has the effect of extending such existing
contract, agreement or arrangement or increasing the amounts payable thereunder (an "Extended
ContracY').
8.6 Limitation. For each of 2001 through 2004, the Base Amounts payable to Manager for
�
such year shall be at least 50% of the total payable to Manager for such year under Section 8, and the
�
po -S�f �
L_�
requirement of this sentence shall be the "50% Test" If, for any of such years, the 50% Test would not be
satisfied in the absence of this sentence, then the Revenue Amount for such yeaz shall be reduced by the
smallest amount (if any) as is necessary to cause the 50% Test to be satisfied (and, if the Revenue Amount
were reduced to zero in accordance with this sentence and the 50% Test remained unsatisfied, then the
commissions payable for such year shall be reduced by the smallest amount as is necessary to cause the
50% Test to be satisfied).
8.7 Prorated Amounts. In the event of any termination of this Agreement that does not occur
�
at the end of a year, the Authority shail pay to Manager:
(a) for the month that includes the date of termination, an amount equal to the Base
Amount for such month, prorated through the date of termination (which amount shall be paid within ten
days after the end of such month); plus
(b) for the year that includes the date of termination, the Quality Amount for that
year, prorated through the date of termination, which shall be paid within ten days after the date of
termination; plus
(c) for the yeaz that includes the date of termination, a prorated portion of the
�
Revenue Amount for such year, which shall be paid within ten days after the date of termination and
determined by
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(i) multiplying the Second Target for such year by a fraction, of which the
numerator is the number of days in such year elapsed through the date of termination and the
denominator is 365 (which shall be the "Prorated TazgeP');
(ii) determining the percentage represented by (A) actual Gross Revenue
through the date of termination divided by (B) the Prorated Target; and
(iii) multiplying such percentage by $125,000; plus
�
(d) all unpaid commissions on New Revenue received (whether received before or
afier the date of termination), which commissions shall be paid upon receipt of such New Revenue.
Section 9. Indemaification and Insurance
9.1 Indemnification
(a) Manager shall indemnify the Authority from, and defend and hold the Authority
�
harmless from and against, any damages, liabilities, claims, judgments and expenses, including
reasoaahle attorneys' fees ("Losses"), suffered, incurred or sustained by the Authority resulting from or
arising out of
(i) any breach of this Agreement by Manager;
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(ii) the inaccuracy, unwthfulness or breach oF any representation or
wartanty made by Manager in this Ageement; or
(iii) any claim for damages (whether for personal injury, property damage or
otherwise) resulting from any negligence, misconduct or other act or omission by Manager.
(b) The Authority shal] indemnify Manager from, and defend and hold Manager
harmless from and against, any Losses suffered, incurred or sustained by Manager resulting from or
azising out of
(i) any breach of this Agreement by the Authority;
.
(ii) the inaccuracy, untruthfulness or breach of any representation or
warranty made by the Authority under this Agreement; or
(iii) any claim for damages (whether for personal injury, property damage or
otherwise) resulting from any negligence, misconduct or other act or omission by the Authority.
Notwithstanding the foregoing, however, nothing in the Agreement shall cause (or be construed as) a
waiver by the AuthoriTy of any limitation on municipal liability under Minnesota Stamtes Section 466.01
et se�c . or as a waiver of any common-law immunity or limitation of liability, all of which are hereby
reserved by the Authority.
(c) If any third-party claim is asserted against a party entitled to indemnification
� hereunder (the "Indemnified Party"), then the Indemnified Party shall promptly give notice thereof to the
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party that is obligated to provide indemnification (the "Indemnifying Party"). Upon receipt of such
notice, the Indemnifying Party shal] immediately and fully investigate and defend such claim, at the
Indemnifying Parry's sole cost and expense. The Indemnified Party shal] cooperate in all reasonabie
respects with the Indemnifying Party and its attorneys in the investigation and defense of such claim and
any appeal arising therefrom, and the Indemnified Party may, at its own cost and expense, participate,
through its attorneys or otherwise, in such investigation, defense and appeal. No settlement that involves
a remedy other than payment of money by the Indemnifying Party shall be entered into without the
consent of the Indemnified Party. If the Indemnifying Party does not promptly defend such claim in
accordance herewith, then the Indemnified Party may defend such claim in such manner as it may deem
appropriate, at the cost and expense of the Indemnifying Party (but the Indemnified Party's doing so shall
not reduce to any extent the Indemnifying Pazty's obligations hereunder).
9.2 Insurance.
(a) Manager shall, on the Authoriry's behalf, keep in force throughout the Term
(i) one or more policies of commercial liability insurance, covering all
operations of RiverCentre and acts or omissions of RiverCentre personnel (including Manager's
employees and services under this Agreement), which insurance shall have limits not less than
$1 million for bodily injury and $ I million for property damage;
(ii) one or more policies of automobile insurance, covering vehicles operated
in connection with RiverCentre, having a combined single limit of not less than $1 million;
�
(iii) one or more policies of worker's compensation insurance, covering all of
Manager's employees providing services at RiverCentre;
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(iv) all-risks property and casualty insurance, covering RiverCentre, together
with a full replacement-cost endorsement and a vandalism and malicious-mischief endorsement;
(v) broad-form boiler and machinery insurance, with full repair and
replacement cost coverage;�
(vi) ]oss-of-income and business interruption insurance, covering risk of ]oss
due to the occurrence of any hazazds insured against under the insurance referred to in clauses (i)
and (ii), in an amount not less than one year's Soss of �ea�rincome; and
(vii) insurance aeainst theft and other financial crimes (includina those
� referred to in Section 71(b)l.
(b) Manager shall cause each of the Authority and Manager to be named as an
insured under each of such policies. Manager shall include the costs of all such insurance in each
proposed operating budget (subject to the Authority's approval by inclusion in the Approved Operating
Budget) and shall pursue opportunities to reduce insurance costs through policies covering both
RiverCentre and the Arena. At the Authority's request, Manager shall deliver to the Authority an original
or a certified copy of each of such policies confirming the existence of all such coverage, together with an
endorsement to the effect that such policy will not be canceled or materially changed without at least 30
days' advance written notice thereof to the Authority.
�
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� Section 10. Ownershin ofAssets• Related Obli¢ations• Audit Riehts
10.1 Ownershin.
(a) Each party acknowledges that the City owns all the buildings and real estate
comprising RiverCentre and all related equipment, furniture, displays, fixtures, vehicles and similar
property now used in operations of RiverCentre (other than any item that is held by the City under a lease,
in which case the City owns the lessee's rights therein), together with title to all intellectual property
rights now held in the Authority's name. Nothing in this Agreement shall affect the City's ownership.
(b) The City shall continue to own ali consumable items that are provided by the
Authority (such as office supplies and cleaning materials), but such items may be utilized and consumed
by Manager in the performance of services for RiverCentre under this Agreement. Manager may
� purchase consumable items for RiverCentre pursuant to this Agreement, and such items shall become the
property of the Authority, but may be used and consumed by Manager for operations of RiverCentre
under this Agreement. Manager may use RiverCentre property and related assets of the Authority for
operating RiverCentre and othenvise performing services under this Agreement. Manager and the
Authority acknowledge and agree that, in order to achieve efficiencies and avoid duplication of costs,
Manager may use equipment and other property of the Arena for maintena�ce, repairs and other
operations of RiverCentre (and may similarly use equipment and other property of RiverCentre for
operations of the Arena), but such use shatl not affect ownership of any equipment or other property, and
Manager shall provide for all property of RiverCentre the same care and custody as it provides for
property of the Arena. Manager shall not take or use, for purposes other than management or operations
of RiverCentre, any customer or ��ibicar Iists or similar materials developed by the Authority for the use
of RiverCentre unless Manager receives Authority Approval. If Manager purchases equipment,
i fumishings, materials, or other personal property at Authority expense for use at RiverCentre, then title
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thereof shall vest in the Authority, automatically and immediately upon purchase. Manager shall not
pledge, encumber or otherwise alienate or assign for any purpose any assets or property of the Ciry or the
Authority without Authority Approval.
(c) All operating reports provided to the Authority by Manager hereunder, together
�
with ali hooks and records of RiverCentre maintained by Manager on behaif of the Authority, and all
other information and documents now in existence at RiverCentre shall be (and shall remain) the property
of the Authority and shall be subject to such public disclosure and other requirements as may be imposed
by Minnesota law regarding data practices and related matters. (All financial statements of Manager and
books and records of Manager shall be, and shall remain, private financial records, not subject to such
disclosure.)
10.2 Authoriri Obligations. Throughout the Term, the AuthoriTy will maintain full legal and
beneficial ownership of RiverCentre and will pay, keep, observe and perform all payments, terms,
covenants, conditions and obligations under any bonds, debentures or other obligations, security
agreements or contracts to which the Authority may be bound.
]03 *�jintentio�ailvdeleted]**.
Section 11. Rearesentations and Warranties
i l.l Re�resentations and Warranties of Mana�er. Manager represents and warrants to the
Authoriiy as follows:
(a) Manager is a limited liability company dvly organized and validly existing under
�
the laws of the State of Minnesota.
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�
(b) Manager has all requisite power and authority to execute and deliver this
Agreement and perform all of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreement by Manager will not
breach or violate any provision of the organizational documents of Manager or of any indenture,
mortgage, lien, ]ease, material agreement, order, judgement or decree to which Manager is a party or by
which its assets or properties are bound.
(d) Execution, delivery and performance of this Agreement have been duly
�
authorized by Manager, and this Agreement constitutes a valid and binding agreement of Manager,
enforceable in accordance with its terms.
(e) Manager is in compliance in all material respects with all laws applicable to
Manager (except for any failure to comply that would not have any materiai adverse effect on Manager's
ability to fulFill its obligations under this Agreement).
(� There is no outstanding litigation or other legal dispute to which Manager is a
party which, if decided unfavorably to Manager, would reasonably be expected to have a material adverse
effect on Manager's ability to fulfill its obligations under this Agreement.
(g) All information provided by Manager that is included in this Agreement
\_ J
(inciuding any E�ibit hereLO} is accurate and complete in all materiat respects, does not contain any
untrue statement, and does not omit any staiement or information necessary to make such information
correct and complete in all material respects.
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l l.2 R�e resentations and Warranties of the Authority. The Authority represents and warrants
to Manager as follows:
(a) The Authority is organized as an agency of the City, validly existing and in good
standing under the laws of the State of Minnesota.
(b) The Authority has all requisite corporate power and authority to execute and
deliver this Agreement and perform alI of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreement by the Authority will not
�
breach or violate any provision of the organizational documents of the Authority or of any indenture,
mortgage, lien, lease, material agreement, order, judgement or decree to which the Authority is a party or
by which its assets or properties are bound.
(d) Execution, delivery and performance of this Agreement have been duly
authoriZed by the Authoriry, and this Agreement constitutes a valid and binding agreement of the
Authority, enforceable in accordance with its terms.
(e) The Authority is in compliance in all material respects with all laws applicable to
the Authority (except for any failure to comply that would not have any material adverse effect on the
Authority's abiliry to fulfill its obligations under this Agreement).
(� Tlaere as no autstanding litigation or other legal dispute to which the Authority is
�
a party wf�ich, if decided unfavorabiy to the Authority, would reasonab3y be expected to have any material
adverse effect on the Authoriry's ability to fulfill its obligations under this Agreement.
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(g) All information provided by the Authority that is included in fhis Agreement
(including any Exhibit hereto) is accurate and complete in all material respects, does not contain any
untrue statement, and does not omit any statement or information necessary to make such information
correct and complete in all material respects.
Section 12. Other Provisions
12.1 Relationshi�. The parties intend to create a relationship of independent contractors and
nothing in this Agreement shall be construed to make either party a partner, joint venture, principal, agent
or employee of the other.
12.2 Severabilitv. If any provision of this Agreement is held by a court of competent
�_I
jurisdiction to be unenforceable, then each remaining provision of this Agreement shall nonetheless
remain in full force and effect.
123 Force Maieure; Certain Chanees to RiverCentre.
(a) Neither party shall be obligated to perform hereunder and neither party shall be
deemed to be in default if performance is prevented by:
(i) fire not caused by negligence of either party, earthquake, flood, act of
God, civil commotion, w�az, hostitities or other event, matter or condition of like nature;
(ii) any law, ordinance, rule, regulation or order of any public or military
�
authority (including any based on economic or energy controls, hostilities, war or govemment
law or regulation); or
_38�
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(iii) any labor dispute which results in a strike, picket or boycott affecting
Rive�Centre or services hereunder (unless such dispute shall have been caused by illegal labor
practices or violations by such party of appiicable collective-bargaining aa eements and there has
been a final judicial determination of such illegal labor practices or violations),
(each a "Force Majeure EvenP').
(b) Neither party hereto shall be under any obligation to supply any service or
�
services, if and to the extent that doing so shall be prohibited or limited by any Federal, state or municipal
law, rules, regulation, order or directive.
(c) Except as otherwise expressly provided in this Agreement, no amount payable to
Manager for its services under this Agreement shall be increased for any inconvenience, interruption,
cessation, or loss of business or other loss caused, directly or indirectly, by any Force Majeure event, nor
shall any amount payable to Manager be reduced or withheld.
(d) If any part of RiverCentre were destroyed, replaced, repaired, upgraded or
otherwise changed, the Agreement would continue in effect for all of RiverCentre (including that part),
and Manager would have the right to continue providing the services during such change (subject to
adjusting the management fee as the Authority and Manager may agree, based on any actual reduction or
increase of services provided by Ivfanager as a result of such change).
(e) The parties acknowledge ihat the Authority has commenced preliminary
�
discussions regarding possible renovation or reconstruction of the Roy Wilkins Auditorium and that, if
such Auditorium is substantially renovated or reconstructed and the Authority enters into an operations
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� agreement with the Ordway Center for the Performing Arts regarding theatrical productions in such
renovated or reconstructed Auditorium, then the applicable terms of this Agreement will be amended.
(� The parties also acknowledge that the Authority and the City of Saint Paul are
currently considering a pedestrian connection between RiverCentre and the skyway system of downtown
S aint Paul. �°^'� ^^^^°^•;^^ :^ °-^-^°°a °-a ,.,......�..,.«,.., ,,.e_,,,.r :.. .............°a «we..Such connection is
exnected to be comnleted in late 2001 and, upon com�letion. the connection will be considered part of
RiverCentre and Manager will cause it to be maintained on behalf of the Authority (subjeM to Authority
approval of revenues and costs in the annual budget-approval process).
12.4 Waiver. No delay or omission by either party to exercise any right or power it has under
this Agreement shall impair or be construed as a waiver of such right or power (unless such right or
� power is limited by a time period, in which case such right or power shal] lapse oniy when such time
penod shall expire). A waiver by any party of any breach of this Agreement or any obligation hereunder
shall not be construed to be a waiver of any succeeding breach or any other obligation.
12.5 Headines; References Of Inclusion. The headings of sections, paragraphs and other
subdivisions of this Agreement are for convenience only and do not affect the construction or
interpretation of the Agreement. Each reference herein to "including" or "includes" shall be deemed to be
followed by the words "without limitation."
12.6 Entire Aereement. This Agreement is the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations, understandings or agreements
between the parties relateng to such subject matter.
•
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G� �
� 12.7 Survival. This Article l2 and each provision hereof shali survive the expiration or
termination of this Agreement and shall remain in full force and effect notwithstanding any such
expiration or termination.
12.8 Third Partv Beneficiaries. This Agreement shal] not inure to the benefit, or create any
right or cause of action in or on behalf of, any person or entity other than the parties.
12.9 Assienment. Neither parry may assign or transfer this Agreement or any rights hereunder
�
without the other party's advance written consent except that if Manager, by notice to the Authoriry,
proposes to assign this Agreement to an entity that (i) acquires or otherwise succeeds to all or substantially
all of Manager's business and assets, inctuding management of the Arena, and (ii) before or at the time of
�
assignment assumes alI of Manager's obligations hereunder and agrees to perform or cause performance of
all of such obligations when due, then the Authority shall not unreasonablywithhold or delay such approval.
12.10 Governine Law. This Agreement and the rights and obligations of the parties under this
Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota,
without giving effect to the principtes thereof relating to conflicts of law.
12.11 Dispute Resolution.
(a) For any dispute arising under this Agreement (including any disputed allegation
of default hereunder) that is not resoived informally, either parry may give to the other party notice of the
dispute, including reasonable detail concerning any alleged deficiency in performance of the other party.
The Authority and Manager, respectively, shall cause the Authority Representative and the Exewtive
Director to meet in person at RiverCentre and attempt in good faith to reach an agreement resolving the
� dispute. If they do not reach such an agreement within seven days afrer the date on which such notice is
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� given (the "Dispute Notice Date'�, then each of them shal] produce a detailed report about the dispute for
his or her respective chief executive officer or chief operating officer, who shall meet in person at
RiverCentre and attempt in good faith to reach an agreement. If the parties have not signed a written
agreement to resolve the dispute within 30 days following the Dispute Notice Date, then either party may
request mediation as provided for in subsection (b) below.
(b) If any dispute between the parties under this Agreement is not resolved under
subsection (a), then, upon notice by either party, such dispute shall be submitted for non-binding
mediation before, and as a condition precedent to, the initiation of any legal action regazding such dispute.
Each party shall participate in up to four hours of inediation (in each case as requested by such party's
chief executive ofFicer or chief operating officer). The mediator shali be se3ected by the parties, or if the
parties fail to select a mediator within ]0 days afrer such notice is given, then either party may request
selection of a mediator by the administrator of the Ramsey Counry District Court Civil Alternative
. Dispute Resolution Program, from its list of qualified neutrals. All expenses related to the mediation
shall be borne by each par[y, including without limitation the costs of any experts or legal counsel.
12.12 Jurisdiction and Venue. Any lega] action, suit or proceeding brought by it in any way
related to or arising out of this Agreement sha11 be brought in the state courts of the State of Minnesota,
and each party hereby accepts and submits to the jurisdiction of such state courts with respect to any such
action, suet or proceeding brought by or against such party. Each party waives any objection to the venue
for any such action, suit or proceeding being in such state courts.
12.13 Ne¢otiated Terms. The garties acknowledge that the terms and conditions of this
Agreement are the results of negotiations between the parties and that no part of this Agreement shall be
construed in favor of or against any party by reason of the extent to which any party or its professional
� advisors paRicipated in the preparation of this Agreement.
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12.14 Notices. Each notice required or permitted under this Agreement shali be in writing and
shall be deemed given when delivered by mail, courier or facsimile to the address or facsimile number
specified below (and a paper copy of any notice by facsimile transmission shali be delivered within 24
hours afrer such transmissionto the address specified beiow).
If to the Authority: RiverCentre Authority
Attention: AuthorityRepresentative
Facsimile No.:
With a copy to: City Attorney's Office
City of Saint Paul
400 City Hall
Saint Paul, Minnesota 55102
Attention: RiverCentre Authority Attomey
Facsimile No.:
�
If to Manager: Saint Paul Arena Company, LLC
Facsimile No.: '6511222-1055
With a copy to: Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attention: Wiliiam R. Busch, Jr.
FacsimileNo.: (612)336-3026
Either party may change its address or facsimile number for notice purposes by giving the other party
15 days' notice of the new address or facsimile number and the date upon which it will become effective.
12.35 Amendment. No amendment to any provision of this Agreement is valid unless in
�
writing and signed by an authorized representative of each party.
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R�..e�&,�.
6 �a 4 �po
12.16 Counteroarts. This Agreement may be executed in any number of counterparts, each of which will
be deemed an original, but all of which taken together shall constitute one single agreement.
12.17 Public Data. All of the data created, collected, received, stored, used. maintained or disseminated
� ManaQer with resoect to RiverCentre in nerformin¢ the funciions under this Aereement aze subiect to the
requirements of Chaoter 13, Minnesota Statutes and Manaeer aerees to comnlv with those reauirements as if it were
the Authoritv or the CiN.
12_18 Comnliance with Laws. Each party agrees to comply with all laws of the United States of
Amecica and the State of Minnesota (including the Minnesota Data Practices Act) and with all Saint Paul Ciry
ordinances and resolutions and will not do (or allow anyone under such party's control to do) anything during the
term of this Agreement in violation of any such laws, ordinances and resolutions.
IN WI7NESS WHEREOF, each party haz caused this Agreement to be signed and delivered by its duly -
authorized representative, effective as of the date first above written.
Approved as to Form:
By:
City Attomey of Saint Paul
MI: ^ 624341.09
CIVIC CENTER AUTHORITY
An Agency of the City of Saint Paul
(also known as RiverCentre Authority)
BY=
Richazd H. Zehring
Title: Chair
Norm Coleman
Title: Mayor of City of Saint Paul
By:
Joe Reid
Title: D'vector of Office of Financial Services
SAINT PAUL ARENA COMPANY, LLC
By:
Title:
�
Exhibit A �
to Agreement for RiverCentre
(page 1 of 1)
�
RIVERCENTRE"
�fldffIONEA7Zl'MA2 tQfA'OS1:+SA:DfiOltitM
175 iCe!logg Boulerard Saint Pavl, Mvmaota �5:92 P�or.e 6;I-265-�800 Fu 651-?bi-?859 www.riverr.za•s�otg
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**(RiverCentre Event Bookine Policv]**
�
M7: � 2d341 OS
Exhibit 13
to Agreement for RiverCentre
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**[Recurrin¢ Eventsl**
�
M1�43434}9§
E�ibit 32
to Agreement for RiverCentre
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Contracts Currentiv in Effect
Food Service (Volume Services)
Pazking Ramp (Standard Parking)
S�onsorships
Touchstone EnPower Services
Treasure Island
Pioneer Press
Minnesota Life
Coca Cola
Media One
Service Aereements
Minnesota Elevators and Eagle Elevators
Lagerquist Escalators
Adams Pest Control
Powell Communications
� MN Net Centrex, etc.
T:.. � - �c�i�ixixa�iv�"`�
Loomis Armored Service
American Security
ADT
Saint Paul Bank — Cash Machine
Ikon — Copier
Red Cross
Tennant — Sweeper
Sage Software — Accounting
AirTouch Cellular
U S WEST
Missabe Group — Sponsorships
Pitney $owes — Stamp Machine
Golden Gate Internet Services
Telecheck
T'��mTicketMaster
EmQlovment Services
Kelly Temporary Services
Industria] Staffing
Parking Ramp Consfiuction Contracts
SMMA Architects — Wilkins Design
� MI 33�P..S-B"24341 OS
E�ibit 4.1
to Agreement for RiverCentre
(page 1 of 1)
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MI `e-,�++,.P5�434798
E�ibit 5.2
to Agreement for RiverCentre
**[Information ReQardin�Existing Emolovees]**
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Exhibit 5.5
to Agreement for RiverCentre
(page 1 of3)
Emolovee Benefiu Provided bv Mana¢er
�
N
S
u
R
A
N
C
E
HealSh
Dertal
Sngie -100ye paid by empioyer
Family - 50% paid by employer / 50% paid by employee
50X paid by Employer / b0% paid by Employee
Life 1X Annual Salary Benef�t 1o0Y, paid by Employer
Acciderrta[ Oeath dc Distnemberme+�t 1X Annuai Sniary Benefit 100'/a po�d by Emplayer
Paid Time Off (PTO)
(covers all paid
absences - sick,
vacation,funernts,
etc. - used at emp�oyee
discretion)
Years
O�F
5-9
10-15
16-23
after 23
D o
20
26
29•
33
36
Larryover of 5 days of PTO at yearvend nl�owed
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Disahi(Ity
Hotidays 7
Short term disability -100X pnid by Employer
2/3 of weekly earnings - maximum $50Q per week
I.ong term disability -100 °� pnid by Empioyer
2!3 of weekly earnings - tnoximum $6,000 per month
hlew Yenrs Dny �9�H�9 �'
Mcrrtoria4 Oay 4Say aftv Tt�m�ksgiving
Independenet Day Christmns DaY
lnber Day
Wtdiay Pay: L5 Timrs reguiar wmpensatio� and e9uiwaknt time eff
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�
�n�b�c s.s
to Agreement for RiverCentre
(page 2 of 3)
Em�lovee Benefits Provided bv Mana2er
Breolcs 2 25 min breaks ond 45 min Iweh bceak
Retiremertt P�an = 401(k) -
Emplayee can corttribute up to 15'k of salary (pro-tax�, plue
$3Q0 per yenr contributjon by tmployer to tht 401(k} plan
(for each employee on the payroli at and of the year)
tn liw of retiree heelth insurance
Flewble Sputding Atcourrts - Funded through e�nployee pre tax corrtributions
O
� P
T Safety Shaes �40 per calendar yenr - if requ+red by emptoyer
I
O
N Optiorta! Life Insurcnce
A
L Additional Life (Emp�oyee, Spouse d Chi�dren) - empioyees con purchnse additional
coverage, nt their cost (see attached chert)
u
c�-5�7
�
Exhibit 5.5
to Agreement for RiverCentre
(page 3 of 3)
Emolovee Benefits Provided bv Manaoer
Additionai Life (Empioyee, Spouu b Chiidren)
m� ciwce Additional covernge -$10,000 units - Maximum $300,000
(minimum #20,Q00) - 9uorantee issue cmoimt - �50,000
Employce Cost -100%> per rnte chart below (after tax)
O ousc Spoase (anty avaikble if employee r�ective tife is purchased)
Unita of $5,000 - Maxim�an L2 unployees elective life
P (minimum $10,000) - guaruntee issue omount - $25,000
Employte Cost - S00°� > per rate chart below (a{trr tax)
T
Elect�ve Life Insurance Rates we based on Smoker and Non Smoker status by age per
I $10,000 - Ranging from $.90 to �102.50 per month
O Employee/
� Spouse Age
N under 30
30-34
A 35-39
4Q1F4
L 45-49
50-54
55-59
L 60-64
65-69
I 70-74
75+
"tJon Smoker Rate
P¢r $ I0,000
$ 0.90
$ 1.00
$ 1.30
$ Z,SO
5 3_40
$ 5.50
$ 9.90
$ 14.70
$ 22.50
$ 44.80
$ 76.60
5moker Rate
Per $10,000
$ 1.20
� 1.60
$ 2.20
$ 3.50
$ 5.80
$ 9.30
$ 16.40
$ 22.50
$ 32.30
$ 59.90
$ lOZ.50
* Non-Smoker' means that you have not smaked� or used tobaccc products in the last 12 manths
E
Children
Gunra+rtee issue amo�mt $5,000 (one pretnium covers any number
of childrPn) - Do not need to purchose eledive Iife for self
Emp�oyrx Cost - lOQ%� $.90 cenis per month (after tcx deduction)
�
c.x�-5y�
Exhibit 6.2
to Agreement for RiverCentre
(page 1 of i)
�
�
�
[hrent incofti+�d E�
Ptea Ro2fic
Serva» Nmm�
Boz O(fo k�mmn
Tont Ew+� ��
7otat Evxrt F��
Net Evsn� m��
Mcipary m�onM
FmC 8 BeVraG�
Nevetios
Fadh Fws
Parknp
TMaI MclNarl inc°m�
Tohi Ev�nt ineoms
OMerOp��9
Park`q
qtivettlaing
so«�o�w
v,-�c:,a c.a,imart+arm.�ee
�nletesl
OIlke Spars Rant
Maxllnnews
Tobl ONrrincaM
Adjustad Grvss trwom'
In�ICCL �
oecenme^� �'°*
Eket:+l'Na
Mancels9
Finance
Operslione
Bax Of�ice
Overt�ee6
pan�iig RamD
Tclal Oeparv^a� F�W�s Belve 0.lootion
E�Renses ACncitetl tn Eve�+a
Net IndnU E��s�
pperatlny Gzt+ Rwt 9a[o�
DeDt Sarvfw. On►tlnr Chai90
��ss n e«+a o.ei s+u
Less Ped ConnWioNCRY 6"PbY� �
Less ES�'Onar! �eas� �U'j��1
Totaf DeMSa+i«
Lest Rebcalion an� SeWaR.� E�s+�
NNL EsPensas
Tatal On�� �IIK
ppec Ineom� VY�Mout Non-CUh Rems
Y000
A�lffi
f 7,�75.OS9
t,ast,es5
414,558
279�.i02
(t.�7.F68)
8fi8.906
Sggg t989
Ro�i+p �'PD�
E9m�it �
S 7.07{.848 S 1.370.773
13�0.� ���°�
t27�fig 1W,N1
Z�5p�3,55 I,97ZG+t
(1 596,514) (1.79t�619)
d53.g{z t.it7.972
RNERCENiRE
20ro OPERA7ING BUDGET
7498 7997
BRif76! B•••
3 1.1e4969 S 758.3�7
1.3�1.�90 t.153.�86
70B.Q7 153.73f1
2.638.896 2�065.563
(t.766.99n (1.BQ7.O6a)
a».eas asa.ass
1.1322b7 9T3.158
&5.7pp 67.812
30Z.+ 397,�7!
EOB.9:10 l64.760
zm.�ee uszss3
6ft�67 187p9 b53.8�7
51,3T2 �5.20� 35.57b
57.�5 W.7GA '15�b�
t.Ot0.u0 e38.OBa 997.�2
t.b03.3M ' 7.67lr'� 1.7I4472
z nqi�n uatrrz zsu.sa.
1.4348(!S t.X3�,43b 1.337,lQi
36.000 39.679 36.000
�3.5pp 276,25G 283.500
no.aao n�,sss iao.000
120,000 747.866 120.000
737.687 Bt.bb'1 et.687
76.972 108.357 1?5.�38
2,768.9W 2.050.862 2124.428
4,938,151
�.313.01{ 4.968.872
zsa,�as
164,476
7 84.005
2,SOt.716
169.Z6B
1,576,748
%1,836
6.101,786
(t.827.�i967
��7{.t90
3.199.385 7,S11.OSZ
1,29t.686 t,368.We
W,O70 109.538
11,000 -
7,5p0 30,000
2at.�ea ns,avi
q9.pW 15.�00
1@.1H7 113,226
�,m.z�o �.etz.osi
4,972,57t 4.323.1G3
zao,ese xti.sss
St2,046 5?7.928
762.�98 t62,3d6
2293.756 2.517.<61
760,016 761.2%
t.625.639 1.6Z2.392
883,209 916.b61
5.8t7.062 6.198.�
(7.596.511) (1.79/.679)
4,220.5�8 1.90A,309
2so.sss
495.560
1L5.668
2407,818
779�97
1.439.947
995,566
5,951,090
(1.766.99�
4,187.093
26a,49d
3na,sa2
734,152
2,t45,679
Y1B,3t6
7,925,474
9B8.T79
5,730,976
(1.e07,O6d)
3.323.852
664.964 13246b 560.563 �BF�,iBi �.n�
660.00C 660.00U 660.000 660.D00 �•�
�2030 ' 29.ppp 83.%1
121.97a t2&125 a3taA - -
924.001 788.725 89M1.457 fi88,000 743.%i
55.000 W� 25.900 3te.OW t96.000
194.072
SS.CW I�BC11 75.000 378.097 390.�22
5 (214,039) S (641.8'I8) S (351.894) S (220,fi76) S (�
�
Hon-casti items
WMecR d ihe remaininD baok rahx d Mw Auets
DeprecaGon
Net Opera6n91no� lL�)
3.6�9.460
504.2W 516.1l6 396,�61 529.057 S6d.3E6
: n,s.znst s t ,ea.00a7 s vae.ass� s ta.3ss.,a�i a tsss.,,�
�-5�7
�
**�Format of Operatine Budeetl**
u
M� �ea- bzaaai os
Exhibit 6.2
to Agreement for RiverCentre
(page I of 1)
�
C�
FA�GRE & BENSON LLr
2200 NORWFST CENTER� 90 SOUCH SEVENTH STREEt
'i�II3NEAPOLIS, MINNFSOTA SS402-3901
1'ELEPEIONE 612-3363000
FACSIMILE 672-336-3026
June 21, 2000
Peter McCall
City Attomey's Office
400 City Hall
St. Paul, Minnesota 55102
Re: Agreement for RiverCentre (F&B File No. 2205161
Dear Pete:
����
As requested, enclosed is a revised draft (dated June 21, 2000) of page 44 of the agreement
referred to above. The changes from the previons drafr are mazked for your reference.
I understand that Joe Reid would like copies deGvered to Nancy Anderson, and we have provided
those directly to her.
Pizase call with any questions.
{ ►�.Wn.iS �
Sincerely,
�`'�
William R. Busch, Jr.
WRB:zieal
Enclosures
M1:6355I9.01
cc: Joe Reid
Nancy Anderson
Martha Fuller
Chris Hansen
Mixneapolis Denver Des Moines London Frankfurt
IEPARTMINf/OFFICE/COUNCIL DATE WIMTEO � ^ �� `
City Council Offices 6-�-z000 GREEN SHEET No ��Y� �`��
XNZTACT P92S01S 8 PFtOPYc � WImuWN
Dan Bostrom, 266-8660 , q ,,.��
MUST BE ON COUNCILAGBmA BY (0.4'fE) `
AmIGN
�� June 6 20�00 �� arrsnoaar axe�vrz
Routtxc
oncoe ❑ wuwry�amucoort ❑ nuxtw.mevi�cera
�. ❑ wrdelw��sasrwnl ❑
TOTAL # OF SIGNATURE PAGES (CLJP ALL LOCATfOIdS FOR SIGNATURE)
Approving a Management Agreement for RiverCentre with Saint Paul Arena Company, LLC.
PLANNING CAMMISSKN7
CIB COMM(TfEE
CML SERViCE CAMMISSION
� tn� ae��� � wonrea u�. a�i� r« m� d�rt�me
YES NO
Has Mis P�eoNfirm ever heen a dry empbyee9
YES NO
Does this poreoNfiim possese a slall nd nonnallyposeassetl by any curteM ciry empbyeel
YES NO
Ie Mis P���m a tarpetetl wntloYt ' 1
YES NO
� •.
� ;�f
'� � � , �J'. �t�'
C�ur� €��s�;�r�h �en�r
� �;�� � 12000
SOUftCE
INWRMATION (IXPWN)
COSTrttEVQlUE Bl1D6ETm (qRCIE ON�
ACTNITY NUMBER
r
YES NO
00 «� S4�
5-31-00
r
00 -sy�
TABLE OF CONTENTS
Section 1. Engagement of Manager; Services
I.1 En�a�ement ...................................
12 Scope of Services ..........................
13 Specific Services ...........................
1.4 Operating Standards ......................
Section 2.
2.1
2.2
23
2.4
2.5
2.6
2.7
Tertn and Termination .....................
Tertn................................................
* * [intentionally deleted] ** ..............
Optional Termination ......................
Termination for Default ...................
Arena-Related Rights to Terminate.
Termination for Failure to Fund......
Effect of Termination ......................
Section 3. Authority Oversight and AuthoriTy eprese�
31 Oversight and Authority Represe ative ......
32 Use by the Authority ................ ..................
Section 4. Contracts Regarding RiverC tre ................
4.1 Extraordinary and Ordina Contracu .........
4.2 Contract Administrator ... .............................
43 Contracts with Affiliate ..............................
4.4 Mutually Advantageo s Arrangements........
Section 5. Personnel ...........
5.1 EmploymenYand
5.2 Existing Emplo
53 Collective-Bar a
5.4 Offers of E lo}
5.5 Employee enef
5.6 Assumed bligai
5.7 No Soli tation...
Use by Authority.....
.................................
.................................
.................................
.................................
.................................
.................................
.................................
.......................2
...---° °-° °---.....2
....--� °---°--°-�-..
.......................6
....................... 6
.......................6
....................... 6
....................... 6
.......................7
....................... 8
....................... 8
............9
............9
..........10
..........11
..........11
..........12
.......... I 3
..........13
..........................................................................................14
Appointment of Executive Director .................................14
ining Agreements
Section 6. Oper ing Year; Budgets; Reports............
6.1 Cale darYear ...........................................
6.2 Op rating Budgets ....................................
63 counting, Recording and Allocations...
6.4 onthly and Annual Reports ...................
6.5 Capitai Expenditures ................................
6.6 Authority Administrative Budget .............
6.7 City Council Approval .............................
6. Modifications to Budgets .........................
6 Operating Standards .................................
Sectio 7. Receipts and Disbursements; Funding.....
7.1 Receipts and Disbursements .....................
.....................................14
..................................... l 5
.....................................I S
.....................................16
.....................................1 ti
.....................................17
..........17
..........17
..........18
..........18
..........20
..........21
..........22
............23
............23
............23
............23
i
oa-s�f7
7.2 Fundina-°.°--°--°°° .........................
73 No Obliaation of Manager to Fund
Section 8.
8.1
8.2
83
8.4
8.5
8.6
8.7
Mana�ement Fees; Commissions
Management Fees ........................
Base Amounts .......--°°° ..............
Quality Amounu .°-°°°°°-°-.......
Revenue Amounts .......................
Commissions ...............................
Limitation ....................................
Prorated Amounts ........................
Section 9. Indemnificationand Insurance..........
9.1 Indemnification .................................
92 Insurance ...........................................
Section ] 0. Ownership of Assets; Related Obligations; Aud� Rights
10.1 Ownership ....................................................... ................
10.2 Authority Obligations ................................... ..................
103 **[intentionallydeleted]** ..............................................
Section I 1. Representations and Warranties ........... ..
1 I.1 Representations and Warranties of M ager ...............
I 12 Representations and Warranties of T e Authority........
fiection ? 2. Other Provisions .................
12.1 Relationship ........................
12.2 Severability .........................
123 Force Majeure; Certain Cha
12.4 Waiver ............................. ..
12.5 Headings; References O In
12.6 Entire Agreement ...... ........
12.7 Survival .................. ..........
12.8 Third Party Benefi iaries....
12.9 Assignment ........................
12.10 Governing La ...................
12.11 Dispute Reso tion .............
12.12 Jurisdiction nd Venue........
12.13 Negotiate Terms ...............
12.14 Notices ...............................
12.15 Amen ent ........................
12.16 Cou erparts .......................
22.17 Co pliance with Laws.......
...............................°--°----°--° --...24
°°-°---
....................... .
to RiverCentre
....................... .
.......................25
..................°---25
.......................26
... .................... 28
.......................28
..................29
..................29
.................31
...................................3 3
...................................3 3
...................................34
...................................34
...................... 3 4
...................... 3 4
...................... 3 6
..........................3 7
.............. ........... 3 7
......................... 3 7
......................... 3 7
......................... 3 9
......................... 3 9
..........................3 9
..........................40
..........................40
...... .................... 40
..........................40
..........................40
..........................41
..........................41
..........................42
..........................42
..........................43
..........................43
ii
ov- sy 7
Exhibit A
E�ibit I3
E�:hibit 32
E�chibit 4.1
E�ibit 52
Eshibit 5.5
Exhibit 6.2
Diagram of RiverCentre
RiverCentre Event Booking Policy
Recurring Events
Contracts Currently in Effect
Irtformation Regarding Existing Employees
Emplo��ee Benefits Provided by Manager
Format of Operating Budget
iii
�
cxs- 5�7
List of Defined �Cerms
Defined Term
50% Test
Administrative Budget
Agreement
Annual Report
Annua] Report Date
Approved Capital Budget
Approved Operating Budget
Arena
Arena Lease
Authority
Authoriry Approval
Authority RepresenYative
Base Amounts
City
Continuing Obligatiorts
Dispute Notice Date
Executive Director
Existing Employee
Extended Contract
Extraordinary Contract
Force Majeure Event
Gross Revenue
Hired Employee
Indemnified Party
Indemnifying Parry
Losses
Manager
Manager Representati e
Monthly Statement
Multi-Year Projec
New Contract
New Revenue
Qffer
One Tim etirement Cost
Accounts
Section Keference
..
.
/ 6.4
6.5
62
Introduction
Introduction
Introduction
3.1
3.1
8.1
Introduction
2.7
12.11
5.1
52
8.5
4.1
12.�
8.4
5.6
9.I
9.1
9.1
Introduction
3.1
6.4
6.5
8.5
8.5
5.4
5.6
7.1
iv
GL�-5y 7
Defined Term
Operating Standards
Optional TerminaTion Date
Ordinary Contract
Preliminary Report
Prorated Target
Quality Amovnts
Revenue Amounts
RiverCentre
RiverCentre Autharity
RiverCentre Contract
Signing Date
Start Date
Term
Section Reference
1.4
23
� 6.4
8.7
8.i
8.1
Introduction
Introduction
4.1
4.1
2.I
2.1
v
AGREEMENT FOR RIVERCENTRE
THIS AGREEMENT FOR RIVERCENTRE (this "AgreemenP') is made and
_ day of June, 2000, by and between the Civic Center Authority (also
Authority"), an agency of the City of Saint Paul (the "Authority"), and Saint
a Minnesota limited tiability company ("Manager").
WHEREAS, the City of Saint Paul (the "City") owns
Minnesota, known as RiverCentre, including the convention
the Roy Wilkins Auditorium, and the RiverCentre pazking
pedestrian connection constructed linking RiverCentre to t
(collectively, "RiverCentre"), and the Authority has e
management and oversight of RiverCentre; and
oo- 5Y 7
i
/
e ered into this
as "RiverCentre
Arena Company, LLC,
in downtown Saint Paul,
as "Touchstone Energy Place,"
south of Kellogg Boulevazd (plus any
City's skyway system) shown on Exhibit A
authority and responsibility to provide for
WHEREAS, Manager is engaged in �iie business of providing management services for public
assembly facilities, including the sports
construction adjacent to RiverCentre
entertainment arena (owned by the City) currently under
Arena"), which is subject to an Arena Lease dated January 15,
1998 (the "Arena Lease"), among th CiTy, the AuthoriTy and Minnesota Hockey Ventures Croup, LP, as
Tenant, which Arena Lease has b n assigned by Tenant to Saint Paul Arena Company, LLC; and
WHEREAS, Man ger desires to provide management services for RiverCentre and the Authority
desires to obtain such nagement services from Manager, on the terms and conditions stated herein;
NOW EREFORE, in consideration of the mutual covenants, terms, conditions, and
obligations s ted herein, and intending themselves to be legally bound hereby, the Autt�ority and
Manager;a'ereby agree as follows:
Oo-S�']
Section 1. Engagement of Manaeer; Services
1.1 ��ement. The Authority hereby en�ages
market and promote RiverCentre for public purposes (in
Chapter 459, as amended to date), and Manager hereby acc
conditions provided below. This Agreement shall be consj
including special legislation. /
1.2 Scope of Services. Manager shall
needed to manage, operate, maintain, and
Agreement. Subject to the limitations stated
anri authority to conduct operations of
to mana�e, operate, maintain,
with Minnesota Laws 1967,
such engagement under the terms and
with all laws governing RivecCentre,
and provide such management services as are
RiverCentre in a manner consistent with this
Agreement, Manager shall have general responsibility
and activities therein on behalf of the _4uthoi ity.
13 Specific Services. In e course of managing RiverCentre hereunder:
(a) Manage shall, from time to time, hire, promote, supervise and direct all
employees and other
performance reviews,
(b)
parties providing
shall negotiate r
Yime to time �
at RiverCentre (including work assignments, compensation, tenefits,
and discharge) in a manner consistent with this Agreement.
Manager shall supervise all contractors, subcontractors and other contracting
or services to RiverCentre (including food service, maintenance and security) and
extensions and replacements for the provision of such goods and services from
report snch renewals, extensions and replacements to the Authority (all en accordance
with Sectio�4 of this Agreement).
-2-
40-5 � 7
,,;
(c) Manager shall manage capitat improvements of RiverCentre,
bidding process for each improvement and supervision of the construcTion Thereof, in each
the applicable Approved Capital Budget (as hereinafter defined).
(d) Manager shall arrange to rent, lease or purchase such
are needed from time to tirae for the operation and maintenance of
the applicable Approved Operating Budget (as hereinafrer defined).
(e) Manager shal( anange for payment on
expenses for RiverCentre as contemplated in each Approved
To
and supplies as
in each case subject to
of the AuthoriTy of all operating
Budget.
( fl Manager shall, on. behalf of th Authority, take such actions as Manager shall
deem necescary to collect charges, rents or other a unts due to RiverCentre, or to enforce c>r pursue
damages under any license or other agreement
proceedings as Manager may deem
RiverCentre (including such legal 2ctions or
(g) Manager shall aintain complete records and schedules for booking events and
other uses of RiverCentre.
(h) Mana er shall provide, on behalf of the Authority, day-to-day administrative
services to support
collections and
Authority's
of RiverCentre, including budgeting and accounting; payroll; billing,
obtaining insurance (as provided hereinafter); and maintaining on the
permits and licenses as aze required to operate RiverCentre under such laws and
rules of govemment agencies as are applicable to operations of RiverCentre.
-3-
oa-55�7
(i) �Ianager shall book and schedule events to take place at
case subject to the Authority's event-booking policy, a copy of which is set forth
consult regularly with the Authority Representative on the scheduling of events
benefits from all scheduling decisions, shall advertise and promote use
realizin� iu full potential, and, in connection ffierewith, may use the
Energy Place," "Wilkins Auditorium," "RiverCentre Authority"
logos and other marks for each, as well as names, logos and
effect from time to time. Manager will maximize
that is consistent with the spirit of this Agreement.
(in each
1.3), shall
that RiverCentre
for purposes of
"RiverCentre," "Touchstone
of Saint Paul" and related
marks of each part of RiverCentre as in
and bookings of RiverCentre to a capacity
(j) Manager shail soticit, prop'iote and selt on the Authoriry's behalf adveRising at
RiverCentre and sponsorships of RiverCentre (yfi each case consistent with the terms of agreements then
in iorce} and shall pursue oppoRunities for
the Arena (in each case subject to
approval from the Director, Office
agreement that results in "private
the Intemal Revenue Code of
reasonably be interpreted as
1.4
sing and sponsorship that include both RiverCentre and
relating to contracts). Manager shall consult with and obtzin
Financial Services (City of Saint Paul), before signina any
use" of RiverCentre (withln the meaning of Section 141(b) of
as amended, and Treasury Regulations § 1.141-3 thereunder) or could
in such "private business use: '
The AuthoriTy and Manager acknowledge and agree that a principal objective of
this AgreegCent is to manage RiverCentre in a manner that is reasonably prudent, consistent with
operations of other first-class public facilities and consistent with the public investment that has been
made in RiverCentre. In addition, Manager acknowledges that these are public facilities and, as such, the
�
C)o- S Y7
public has a right to expect that such facilities are managed in a manner that is
investment that has been made.
the public
(b) To that end, "consistent with" will refer to all areA�s of operations, including, but
not iimited to:
(i) interior and exterior appearance qf all facilities
(ii) employee performance
(iii) operation of all facilities
(iv) concessions and publi acilities
(v) customer service
(vi) marketing and pr motion of all fzcilities
(vii) customer s<
(viii) ingress and
(ix) load and
(x) cleanli ss
(c) Manager
achieve such standards in 2001. 6
as set forth in the Approved
of all facilities
ss for parking
times for loading docks
responsiveness and quality of food and beverage service
provide the services hereunder in such a manner not only to
also to commit to meeting or exceeding such standards for each year
�g Budget for such year (the "Operating Standards").
(d) In ad ition to general guidelines developed by the Authority Representative, in
consultation with Mana�er d reviewing the practices and operations of other similar public facilities,
the Authority Representaf e will use the following tools to determine if the Operating Standazds have
been achieved:
(i) customer surveys
-5-
pp- 5�/7
Section 2.
(ii) vendor surveys
(iii) general public surveys
(iv) Convention and Visitors' Bureau interviews
(v) RiverCentre Authority interviews
Term and Terminarion /
2.1 Term. The period during which Manager
which the Authority shall purchase and pay for such serv
"Term") shall start on July 1, 2000 (the "Start Date"), and/
sooner as provided in this Agreement.
2:L **[intentionallvdeletedl*'`
23 Ootional Termination.
the .Authority and Manaaer shall have
Termination Date and without cause or
90 days before such Optional
2.4
services hereunder and during
in accordance with this Agreement (the
on December 31, 2004, unless terminated
2003, shall be the "Optional Termination Date." Each of
right to terminate this Agreement, effective on the Optional
alty, by giving notice of such termination to the other at least
Date.
(a) If e party shall fail to pay when due any amount payable hereunder, then the
other party shall have n addition to such party's rights to enforce this Agreement and receive
indemnification for any�breach hereofl the right to give notice of such default. If such amount is not paid
within 10 days follo in� the giving of such notice, then the party giving such notice may terminate this
Agreement by notice of termination given within 30 days following the end of such 10-day period. If this
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Agreement is terminated under this para�aph (a), then the tertninating party shall have no further
obiigarions under this Agreement after such termination (other than Continuing Obligations (as hereinafter
defined)), but the defaulting party shall continue to be liable for such default and for alt damages
the defaulting party's breach of this Agreement.
(b) If either party shall fail to perform any of such party's
this Agreement (other than a failure to pay when due any amount payable
shall have (in addition to such party's rights to enforce this Agreement and
breach hereofl the right to give notice describing such failure with parti
notice, the failing party (i) shall take all reasonable actions to promptly ;
by
under
then the other party
indemnification for any
Upon receipt of such
such failure or (ii) if such
failure cannot then be cured in all respects (whether due to expiration q#' a time period or otherwise), shall
take ali reasonable actions to cure such failure to the extent
failure. If the failing parry does not comply with its obligations
receipt of such notice of failure, then the party giving such
and to prevent recurrence of such
this pazagraph (b) within 60 days after
of failure may terminate this t�greement
by r,oti�e of termination niven within 30 days following t�fe end of such 60-day period. If this Agreement is
terminat�d under this paragraph (b), then the
Agreement after such termination (other than
party shall have no further obligations under this
Obligations), but the defaulting party shall
continue to be liable for such default and for Il damages caused by the defaulting party's breach of this
Agreement.
2.5 Arena-RelatedRi h toTerminate. If
(a) the A ena Lease were terminated in accordance with its terms as a result of a
default by the tenant thereu;fder or
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(b) Manager ceases to have a contracmal right to manage the Arena or ceases in fact
mana�e the Arena,
then the AuthoriTy shall have the ri�ht to terminate this Agreement by notice of
Mana�er within 30 days following such termination of the Arena Lease or such
2.6 Termination for Failure to Fund. With respect to
funds are not appropriated by the Authority and approved by the
beginning of the year to which such Approved Operating
given to
Approved Operating Budget, if
Council at least 60 days prior to the
applies (and made available in an
amount sufficient to fund operations of RiverCentre iyl accordance with such Approved Operating
Budget), then Manager shall have the right to
the Authority at least 60 days prior to the
2.7 E ffect of Tem�ination
(a) Upon any
other property belonging to the
Manager for any expenses
amounts under Section 8
the Authority as a result of
(b)
RiverCentre
(but sub�ect to
this Agreement by notice of termination given to
date stated in such notice.
Manager shall deliver to the Authority any funds and
then in Manager's control, and the Authority shall reimburse
incurred by Manager on behalf of the Authoriry, plus any un�aid
as provided in Section 8), less any amounts then owed by Manager to
termination or otherwise.
Upon termination, the AuthoriTy shall cause any successor manager of
a private contractor or public body) to (i) employ following the date of termination
for cause) each employee of Manager then employed at RiverCentre and
(ii) assukne�and pay all of the assumed obligations under Section 5 not previously satisfied.
Notwithstanding the foregoing, however, if Manager has designated one senior manager for continued
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employment by Mana�er, then the Authority wouid not solicit that manager or otherwise offer
employment to that Managec The foregoing shall not, however, prohibit the Authority from
such designated senior manager if such manager applied independently for such
example, in response to a generai employment advertisement published by the
solicitation by the Authority.
(c) NotwithstandinganyterminationofthisAgreement,
bound by their respective obligations under Section 9. I(relating to
(for
without any
shall continue to be
Section 10 (relating to
ownership), Section 5(relating to personnel), Section 8(to the extent f any fees, commissions or other
amounts thereunder becoming payable afrer termination) and Secti 12 (relating to the relationship of the
parties and other matters), which are the "Continuing
termination of this Agreement.
Section 3.
3.1
of RiverCentre shall be held and
oversee operations of RiverCentre
specified in Section 6. Manager s
Authority as "Authority Repre N
Manager shall designate its ighe:
"Manager Representative" escribe
Representative by
from time to time
" and such sections shall survive any
All assets, revenues, obligations and expenses
Manager for the Authority's account, and the Authority shall
�8 its financial results through the budget and repoRing process
I report to the Authority through an individual designated by the
ve," who shall be an employee or consultant of the Authority.
ranking officer to report to the Authority Representative as the
in this Agreement. The Authority shall designate the Authority
Manager within five days after the date of this Agreement and shalt thereafrer
replace and otherwise take such action as necessaryto cause there to be a
duly designated an�t authorized individual serving as Authority Representative at all times. The Authority
shall cause the�4uthority Representative to oversee performance of this Agreement, respond to Manager's
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inquiries and consult with Manager at all times regarding the operations of RiverCentre and j evement
of its public-purpose objectives. The Authority shall authorize and cause the Authority Repiesentative to
review actions proposed by Mana�er that require approval by the Authority hereundezand, with respect to
such proposed action, receipt by Manager of written approval signed by the uthority Representative
shall be "Authority Approvai" rovided, however that any approval o an Extraordinary Contract,
proposed operating budget or proposed capital budget shall also
Commissioners and signature of the Authority's chair). If at any
or the Authority Representative notice of any proposed action
provide to Manager notice of approval or disapproval of
the date on which Manager gives such notice, then
have been given by the Authority on the 16`" day
3.2 Use bv the Authoritv. The
The Authority or the City or their respective
example, Authority meetings, training
reduced-rent basis, as the AuthoriTy
rent-free or reduced-rent use
and personnel for stage work,
by the Authority or its
and Manager may
events at RiverCentre,
customary dates) with
Approval, as in effect
accommodate under
the approval of the Authority's
Manager submits to the Authority
the Authority Representative does not
proposed action within 15 days following
Approval for such action shall be deemed to
such date.
shall have the right to use RiverC�entre fcr events of
and for the bene£t of the community (including, for
Anthority personnel and public events) on a rent-free cr
determine from time to time. Direct expenses related to such
for example, utilities, heating and air conditioning, insurance,
work, tickets, cleaning, securiry and other services) would be paid
Such use by the Authority shall be subject to such terms as the Authority
time to time, shall not unreasonably compete or conflict with paying
shall be booked in advance (and may be moved from their respective
notice in accordance with RiverCentre policies having Authority
time to time. E�ibit 3.2 is a list of recurring events that the parties expect to
section.
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Section 4. Contracts Reeardinp RiverCentre
4.1 Extraordinarv and Ordinarv Contracts.
(a) "RiverCentre Contract" shall mean at any time a use agreemen icense, provider
agreement, supply contract, service agreement and other contract or agreement any kind (other than
any co]lective-bargaining agreement) that is in effect at such time with resp t to RiverCentre (and shall
include each Extraordinary Contract and each Ordinary Contract, as de ed below). E�ibit 41 is a list,
provided by the Authority, of each RiverCentre Contract in effect of the date of this Agreement. Each
use agreement shall contain a provision reserving to the Au ority the right to receive 20 promotiona(
seats without charge (in each case in accordance with
Manager shall have received copies by notice to
(bi "Extracrdinary
��)
such in Eachibit 4.1,
(ii)
E�tibit 4. ],
as such in E�ctfibit 4.1,
hereunder).
means only
most recent resolutions, of which
the prim�ry parking-management contract for RiverCentre, designated as
primary concessions contract for RiverCentre, designed as such in
the primary food-and-beverage catering contract RiverCentre, designated
(iv) any RiverCentre Contract that replaces, extends or substantially amends
referred to in clause (i), (ii) or (iii),
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(v) any RiverCentre Contract for sponsorship or advertising that �reates
/
signage ri�hts at RiverCentre for more than 30 consecutive days, '
(vi) any RiverCentre Contract that, on the date
date"), creates non-terminable obligations that bind RiverCentre
more than 90 days beyond the Term, and
signed (the "si�ing
Authority and extend
(vii) any RiverCentre Contract that j�t4e Authority may from time to Time
designate by notice to Manager as an Extraordinary C tract.
(c) "Ordiaary ContracY' means an RiverCentre contract that is not an Extraordinary
Cuntract (and, for example, shall include mainten ce and repair contracts, service contracts, and event
and booking contracts, etc.).
4.2
RiverCentre Contract, shall cause
Authority, and shall represent
performance thereof,
Manager shall obtain
if the effecc of such
enforce such
into any Ordinary
shall serve as contract administrator for each
of the Authority's obligations thereunder on behalf of the
Authority and act on its behalf in monitoring each other party's
disbursing funds, and dealing with each other party in all respects.
Approval in connection with any action under an Extraordinary Contract
to extend, terminate, substantially amend or commence legal proceedings to
Contract. Manager shall have the responsibiliTy and sole authority to enter
as the Authority's agent and on the Authority's behalf (subject to Section 43),
but Manager s�'all not enter into any Extraordinary Contract without Authority Approval. If any
were entered into with respect to both RiverCentre and the Arena,then Manager
shall cause the terms thereof to be such that neither RiverCentre nor the Arena receives benefits
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thereunder (or incurs costs thereunder) that are dispropoRionate to its respective interest in such
RiverCentre Contract. In co�nection with Manager's providing the reports referred to in Section 4(a),
Mana�er shall provide manaeement reports regarding the status of RiverCentre Contracts an significant
developments related thereto.� /
43 Contracts with Affiliates. The Authority and Manager
time, an entity in which Manager has an interest (or is otherwise
providing gocds or services necessary or desirable for
contract for that purpose. If Manager has (a) disciosed
(b) demonstrated to the Authority's satisfaction that
available from non-affiliated vendors and (c)
Manager may enter into such contract with
may be through a request-for-proposal
consultant or other method
. ,,
each of them may from time
other providers of goods
make such favorable
The Authority and Manager acknowledge that
have agreements or other arrangements with suppliers, vendors and
services that include favorable terms, and each shail use its best efforts to
available to the othec Manager wiil use its best efforts to use such terms to
reduce the costs and i�iprove the efficiency of RiverCentre operations.
that, from time to
may be in the business of
of RiverCentre and may propose a
interest or affiliation to the Authority,
proposed terms are competitive with those
Authoriry Approval for such contract, then
affiliated entity. (Such showing of competitive terms
verification from a mutually acceptable ?hird-party
Authority.)
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Section 5. Personnel
5.1 Emplovment and Suoervision: Aopointment of Esecutive Director. �
(a) During the Term, Manager shall select, employ, train, a provide, for work at
RiverCentre, qualified employees of Manager (in sufficient number to satis the performance standards
of this Agreement at all times).
(b) Manager shall train and provide all
at RiverCentre and shall assign to RiverCentre a
Director"). If at any time the Authority reasonably
is defcient, then the Authority may, by notice
qualified supervisors for employees
qualified faciliry ma�ager (the "Executive
that performance of the Executive Director
, report such determination and the specific
deficiencie; so de:ermined, and Manager shall e s:l reasonable actions to remedy any sueh deficiencies
an3 shall report the resnits of such remedi actions to the Authority within 30 days following receipt of
such notice. If the AuthoriTy
unsatisfactory, then the Authority
receipt of such report, inform
Manager shall, within 30
appoint a replacement
determines that performance of the Executive Director remains
by notice to Manager given �vithin 30 days after the Authority's
of such determination (including the reasons therefor), and
following receipt of that report remove such Executive Director and
Director with Authority Approval (which shall not be unreasonably
withheld or delayed).
5.2 Exi in Em lo ees. The Authority has provided to Manager the information stated in
E�ibit 5.2 heret , including the name, position and collective-bargaining representation (if any) of each
person who
"Existing
of the date of this Agreement, employed at or in connection with RiverCentre (each an
The Authority will provide layoff notices to each Existing Employee stating that
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the last day of employment cvith the Authoriry/City will be June 30, 2000. Such notices ill comply with
City ordinances and collective-bar�aining a�reements.
53 Collective-Bar2ainino Asreements. Execution by na�er of collective-bargaining
agreements covering each Existing Employee who is
bargaining representati��e is a condition precedent to Manager's
5.4 Offers of Emplovment.
(a) Commencing on the
Manager access te each Existing
by a union or other collective-
under this Agreement.
of this Agreement, the Authoriry shall provide to
for purposes of interviewing, offering employment,
completi.ig pre-employment documents and xplaining Manager's employment-related rules and benefits.
(b) Manager shal make a written offer of employment (each an "Uffer") to each
Existmg F.mployee for employme t by Manager, commencing on the StaR Date. Ivlanager shall make
such Offer sv�thin five davs
days after it is received by
(c)
than that now in
now assigned to
(d)
date of this Agreement and shalt keep such Offer open for at least 10
Existing Employee.
each Existing Employee, such Offer shall include (i) wages at a rate not less
such Existing Employee, (ii) position and duties substantially the same as those
Existing Employee and (iii) if such Existing Employee is represented under a
agreement, such terms and conditions as are required thereby.
Manager shall hire each Existing Employee who accepts such Offer, and shall
employ �ch Existing Employee, commencing on the Start Date.
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5.5 Emplovee Benefits. Manager shall provide, to each Existing Employee who accepts such
Offer, health coverage and other employee benefiu in accordance with Manaaer's emp}ayee-benefit plans
referred to in E�ibit 5.5.
5.6 Assumed Oblieations. For each Existing
Emptoyee"), the Authority shall provide to Manager within ten
statement of all the Authority's obligations to such Hired E p
time; and sick time, severance pay and benefits in lieu retire
such obligations and satisfy them when due. No rthstandin
obligations are limited as follows:
(a} Far accrued
$76,000 payable in cash, and (ii)
day; of accrued vacatior,. To
hired Ey Manager (a "Hired
following the Start Date an accurate
for accrued vacation; compensatory
heaith coverage. Manager shall assume
the foregoing, however, such assumed
(i) the total of all abligations so assumed ,hall not exceed
shall aliow each Hired Employee to carry ferward up to ten
that Hired Employees do so, the total payable in cash shall be
reduced by the dollar amount �,i4ributable to aIl days so carried forward.
(b) � For compensatory time, the total of all obligations so assumed shall not exceed
$136,000 payable i�cash.
(c) For sick time, severance pay and benefits in lieu of retiree health coverage, the
total of �il obligations so assumed shall not exceed
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(i) for each Hired Empioyee, a deposit to his or her 401(k) acc nt, to be
made on December 31 of each of the years 2000 through 2003 (which deposit all be $150 in
2000 and $300 in each of 2001, 2002 and 2003), provided, however that ch deposit shali be
paid for any year only if such Hired Employee remains empioyed by M ager on December 31 of
that year, and
(ii) for each Hired Employee, another deposit o his or her 401(k) account on
February 1, 2001; February 1, 2002; and February I, 2003 (which eposit shall be in the amount stated as
"One Time Retirement Cost" for such Hired Employee in statement referred to above), provided,
however, that (A) the total of all such deposits in 2001 �
deposiu in 2Q02 shall not exceed $5�,000; and the
$30,000; and (B) Manager shall allow each Hired
and, to ihe extent that such Hired Employee
reduced by the dollar amount attribufable to
5.7 No Solicitation
year after any termination of
solicit Yor employment one senior manager then employed
by Manager and designated fqf continued employment by l�lanager, provided that the AuthoriTy is not
prohibited from
such employment
Section
�
on the
not exceed $150,000; the total of all such
of all such deposits in 2003 shall not exceed
to carry forward up to five days of sick time
so, then such deposit for such Hired Emp{oyee shall be
days so carried forward.
Authority shall not, during the Term or during the period of one
designated senior manager if such manager applied independentty for
any solicitation by the Authority.
Operating Year; Budeets: Reaorts
Calendar Yeaz. Operations, accounting and reporting for RiverCentre shall be conducted
of the calendar year, commencing January I and ending December 31, arid each reference
to a year means the calendar year (uniess otherwise specifically stated).
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62 Operatin� Budeets. For each year, Manager and the Authority shall
approve an operating budget for RiverCentre (each an "Approved Operating Budget") in
the following:
with
(a) For each year commencing with 2001, Manager shall s mit to the Authority, by
the immediately preceding September 1, a proposed operating budget stati all anticipated revenues and
expenses related to RiverCentre for such year, in the format set forth�n E�ibit 6.2. Manager and the
Authority shall discuss such proposed operating budget and, if ey mutually approve in writing an
operating budget and such budget is also approved by the Sa' t Paul City Council, in each case by the
immediately preceding October 31, then the
Operacing Budget for such year. If no budget is so
so approved shall be the Approved
by such immediately preceding October 3l,
then the Approved Operating Budget for such ye shall be i�entical to that for the immediately preceding
year, including sll amendments theretu.
(b) Any Approv d Operating Budget may be amended at any time by a written
amendment that is approved by th�CiTy Council and executed by the Authority and Manaaer.
63 Ac
(a)
shail establish int¢
standards in
Auditor.
Manager shall maintain complete accounting records relating to RiverCEntre and
policies and practices which are in accordance with generally accepted
facilities-management industry and any additional requirements of the Minnesota State
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00-55�7
(b) Manager shall cause alI revenues from RiverCentre eamed and due a�er July I,
2000, to be separately recorded and reported (on a direct basis) to the greatest extent
revenue shall be amibutable to both RiverCentre and the Arena (including, for
single event using RiverCentre for part of a day and the Arena for the balance
allocate such revenues on the basis of the respective rate cards then
6ssible. If any
revenue from a
such day), Manage� shall
for RiverCentre and the
Arena (or, for any particular event, on such other basis as Mana r may determine with Authority
Approval).
(c) Manager shal] cause all expenses or RiverCentre incurred after July 1, 2000, to
be separately recorded and reported (on a direct
example, separate metering of utilities, separate
retirement and other benefit costs in
itemizing of maintenance and repairs,
dedicated 100% to RiverCentre
expense shall be incurred for the
ailocated betweer. them on a
Operating Budget for that
op�ortunity for
expenses not a
opportunity, the
respective costs
and its staff il
to the greatest extent possible (including, for
of direct-labor hours, ailocatien of vacation,
with such direct-labor hours, separate invoicing or
separate time recording of employees, including those
such as a dedicated marksting manager). For each year, if any
of both RiverCentre and thz Arena, such expense shall be
determined with Authnrity ApQraval in connection with the Approved
The Authority and Manager acknowledge that from time to time an
of RiverCentre and the Arena for an event or other purpose may involve
in the Approved Operating Budget. To realize the benefits of such an
and Manager may determine to allocate such expenses so as to reflect the
benefits of such event for RiverCentre and the Arena. The expenses of the Authority
be accounted for separately by the Office of Financial Services within the Authority's
Budget (as herein defined).
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6.4 Monthlv and Annual Reoorts.
(a) Within 20 days following the end of each month during the
submit to the Authority an unaudited written operating statement (the "'Monthly
such month and for the year to date, (i) all gross revenues and expenses from
shall
showing,for
of RiverCentre,
in each case presented in the same manner as in the Approved Operating B get for such year and (ii) for
each line item, a comparison of actual resuits to those stated in the Appr ved Operating Budget.
(b) Within 60 days foliowing the end o each yeaz, Manager shall submit to the
Authority a written operating statement for such year (the�reliminary Report") stating for such year all
revenues and actual expenses from operations of RylerCentre. Unless the Authority gives notice to
Manager of a geod-faith objection to a materiai pect of the Preliminary Report before the 30'� day
follov�ing .he Authority's receipt thereof, th Preliminary Report shal( then oecome binding upon
VIanager and the Authority and shall be the�Annual Report" for such year, and such 30`" day shall be the
"rinnuai Report Date" for such year.
(c) If the Aut ority (by notice given to Manager before the close of business on such
30` day) objects in good faith t any material aspect of the Preliminary Report, then only those aspects as
to which the good-faith
discuss the objection
Preliminary Report,
was made shall not become binding, the Authority and Manager shall
if they sign a written agreement amending the Pretiminary Report, then the
by such written agreement, shall become binding and shall become the
Annual Report and�Yhe date of such written agreement shall be the Annual Report Date. If the Authority
and Manager
objecrion,the
firm of cedif7
sign a written agreement within 30 days after the Authority gives such notice of
matter objected to (and only such matter) shall be submitted to a nationally recognized
public accountants selected by the Authority and Manager (whose fees shall be divided
the Authority and Manager), who shall resolve the dispute and submit a written
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statement of such resolution, which statement, when delivered to the Authority and to Manager, shall
become bindine. Such statement (combined with those aspects of the Preliminary Report as to
Authority did not timely provide notice of objection) shall be the Annual Report and
the
on which
such accountants submit such statement to the Authority and Manager shall be the �jrfnual Report Date.
(d) Each Annual Report shall remain subject to th Authority's audit rights under
Section ] 0.
6.5 Caoital Exoenditures. For each year, Ma ger and the Authority shall establish and
approve a budget for capital expenditures at
BudgeP'), which shall state aIl capital projects to
financing sources to pay for those projects,
same year and *.hose anticipated ±a
acc�rdance with the following:
(a) For each
during such year(each an "Approved Capital
at RiverCentre during that year and the
those anticipated to be started and completed in the
into subsequent years (each a"multi-year projecP'), in
commencing with 2002, Manager shall submit to ±he Authority, by
the immediately preceding
expenditures related to
Manager and the
writing a capital
case by the
1, a proposed capital budget stating all anticipated material capital
for such year, in such format as the parties shall hereafrer agree.
shall discuss such proposed capital budget and, if they mutualty approve in
for such year and such capital budget is approved by the City Council, in each
preceding October 31, then the capital budget so approved shalt be the Approved
Capital Budget f�r such year. If no capital budget for such year is so approved by such immediately
preceding
project
31, then the Approved Capital Budget for such year shall consist of each multi-yeaz
in any previous Approved Capital Budget that is not yet completed.
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(b) Any Approved Capital Budget may be amended at any time by a written
amendment that is approved by the City Council and executed by the Authority and nager.
(c) For each month durin� which Manager makes any aterial capital expenditures,
Manager shall provide to the Authority, in connection with the Mon y Statement for that month, a
written summary of such capital expenditures.
(d) Manager shall not make any matey�al capital expenditures unless included in an
Approved Capital Budget or otherwise approved by the uthority.
(e) All expenditures relate to the project currently in process to repair and improve
the Riv�rCentre parking ramp (planned f campletion during 2001 at an estimated project cost of
$9.5 million) sha[1 be managed and
�. .
administrative budget (the
expenses directly related to
by the City.
'I'he Authority will annually approve and manage an
BudgeP'). The Administrative Budget will include the
operation of the Authority and other expenses it may approve, including
the management fee to be aid to Manager.
6.7 Ci Council A roval. The Authority shall have no obligation to pay operating
expenses for a ye unless and until the Authority shall have made an appropriation approved by the City
Council and
after such
the
to fund the operation of the Authority and RiverCentre for such yeac From and
by the Authority, the Authority shall pay the operating expenses for such year to
elsewhere in this Agreement.
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6.8 Modifications to Budeets. All modifications to the Approved Capital Budget and
Approved Operating Budget durina any yeaz shail be subject to prior written approval by
and Managec Any expenditures made by Manager which are not included in such
financiai responsibility of Manager unless approved by the Authority.
6.9 O�eratine Standards. As part of each yeazly budget
2001), the Authority and Manager shall establish ihe Operating
shall be the
(commencing with that for
for that year and include such
Operating Standards as part of the Approved Operating Budget�or that year.
Section 7.
7.1 Receipts and Disbursements.
(a} Manager shall es�i'ablish and maintain for KiczrCentre such fully insured bank
acco;ints as needed from time to
Rive:Cer.tre, with signature
report to the Authority (col
of RiverCentre shall be
disbursements related to
and abide by a cost
approval shall not be
for receipts, disbursements, payroll aad other operation� of
in such employees of Manager as Manager shall determine and
the "Operating Accounts"). All revenues collected from operations
into the Operating Accounts and Manager shail cause all expenses and
to be paid from the Operating Accounts. Manager shall institute
and accounting system, subject to approval by the Authority (which
withheld or delayed). Any changes to such system shall be subject to
approvai by the Au ority (which approval shall not be unreasonably withheld or delaqed).
(b) All revenues collected from operations of RiverCentre are the sole property of
the Author' and shall be held in trust by Manager for the Authority for appiication as provided in this
Any amounts remaining in any Operating Accounts, upon termination of this Agreement and
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after payment of espenses as provided herein, shall be paid to the Authority. If any of such revenues are
lost, stolen or otherwise unlawfully removed from the custody and control of
shall continue to be responsible therefor and Manager shali indemnify the
such loss by makin� payment to the Authority within 48 hours of
removal.
7.2 Fundin . For each month, Manager shal]
prior to the first day of such month, a report of the
Operating Accounts at the start of such month and
during such month. If and to the extent that such
balance plus projected receipts, then the
equal to such exczss. If and to the extent
projected balance plus projected
then Manager
from and against
such loss,theft orunlawful
to the Authority, at least seven days
balance projected to be available in the
cash receipts and projected cash expenditures
expenditures exceed the sum of such projected
will transfer to the Operating Accounts an amouot
such projected expenditures are less than the sum of such
Manager will transfer to the A�thority the amount by
which such projected expenditures are 1 ss.
7.; No Obli ation of ana er to Fund. F,xcept as agreed to in Section 5 hereof, vtanager
shall have no obligation to fun any cost, expense, liability or expenditure with respect to RiverCentre os
operationsthereof.
Section 8.
8.1 �
consist of
(a)
The Authority shal] pay to Manager management fees, which shall
base amounts, determined as described below (the "Base Amounts"), plus
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(b) amounts based on the Operating Standards, determined as described below
"Quality Amounts"), plus
(c) amounts based on Gross Revenues (as hereinafter define , determined as
described helow (the "Revenue Amounts").
8.2 Base Amounts. The Base Amounts shall be $14,666 er month during 2000, $14,583 per
month during 2001, $15,416 per month during 2002, $16,666
amount during 2004 as the parties shall hereafter agree.
each month on or before the first day of such month.
during 2003, and such per-month
Authority shall pay such Base Amounts for
83 Qualirv Amounts. For eac�of the years 2001 through 2004, the Authority will evaluate
Manager's performance in achievinn t}fe Operating Standazds for that year and will assign to such
performance a percentage based on t�fe Authority's reasonable determination of the extent to which such
Operating Standards were
amount equal to $25,000
Authority were 90% for 2(
Authority shall pay the �
8.4
during that year. "Che Quality Amount for such year shall be an
by such percentage (e.�.,if the percentage so determined by the
then the Quality Amount for 2002 wouid be $22,500). For each year, the
Amount by February 28 of the immediatety following year.
(a) For each of the yeazs 200] through 2004, the Revenue Amount shall be
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(i) $50,000 if Gross Revenue equals or exceeds the First Targ for that year,
plus
(ii) an additional $75,000 if Gross Revenue equa or exceeds the Second
(b) For any year, "Gross Revenue"
(ii) service income, (iii) food and beverages, and (iv) nov�1
I mean all revenue from (i) rentals,
Gross Revenue shall be calculated and
classified in a manner consistent with the practices r ected in the budgets and operating statements of
RiverCentre for 1999 and 2000 heretofore receiv by Manager (provided, however, that any revenue that
would cause any tas-exempt bonds to beco e tasable private activity bonds cannot be eamed by the
Authority or counted as Gross Revenue).
(c)
forth below:
For 2004, the
For
2001
2002
2003
Taraet for that year.
year refened to below, the First Target and Second Target shall be as seY
First Tazeet Second Tar¢et
$3.75 million $4.00 million ,
$3.90 million $4.15 million
$4.00 million $4.25 million
and Second Target shall be such amounts as the parties shall hereafter agree.
Commissions
(a) For each New Contract (as defined below), the Authority shall pay to Manager a
for each year in which RiverCentre receives advertising payments, sponsorship fees, rights
5T'�
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fees or other revenues under or with respect to such New Contract ("New Revenue").
the foregoing, however, in the case of any New Contract that is an Extended Contract (as
"New Revenue' for any year shall mean only such payments, fees and revenues as
below),
those that
would have been received in such year had such Extended Contract continued into ch yeaz on the same
terms as in effect on the Start Date. (For example, if a sponsor contract in effe on the Start Date called
for payments of $50,000 to RiverCentre in 2003 and such sponsor
Date so as to call for payments of $60,000 in 2003, then $10,000 of
for 2003.)
(b) The amount of such commissi
R�venue. Upon receipt of any amount of
amended afrer the Start
would be New Revenue
each New Contract shall be 10% of all New
the Authority shatl pay the applicable
commission to Manager (eg, if amounts receive�fl under a New Contract consisted of $10,000 in January
2C04 and $10,000 in.July 2004, then the A hority would pay to 1�Ianager a commission �f $1,000 in
3anuary 2004 and a commission of $ I,OQO n 7uly 2004).
(c� New C ntract" shall include (i) any contract, agreeme�i or other arrangemenY
for advertising, sponsorship,
is entered into during
contract, agreement or
contract,
Contract").
publicity, promotion, marketing or similar rights at RiverCentre that
and (ii) any renewal, extension, amendment or other change to any
existing before the Term that has the effect of extending such existing
arrangement or increasing the amounts payable thereunder (an "Extended
_2'7_
oo- 5 y7
8.6 Limitation. For each of 2001 through 2004, the Base Amounu payable to Manager for
such year shall be at least 50% of the total payable to Manager for such year under Sec� 8, and the
requirement of this sentence shail be the "50% Test " If, for any of such years, the
satisfied in the absence of this sentence, then the Revenue Amount for such year
smallest amount (if any) as is necessary to cause the 50% Test to be satisfied (a d,
were reduced to zero in accordance with this sentence and the 50% Test main
would not be
be reduced by the
if the Revenue Amount
unsatisfied, then the
commissions payable for such year shall be reduced by the smallest unt as is necessary tu cause the
50% Test to be satisfied).
8.7 Prorated Amounts. In the event of'any rmination of this Agreement that does not occur
at the end of a year, the Authority shalt pay to
(a) for Yhe month
Amuunt for such month, prorated
days afterthe end ofsuch month);
(b)
year, prorated through
termination; plus
the date of terminatinn, an amount equal to the Base
the date of termination (which amount shall be paid within ten
year that includes the date of termination, the Quality Amount for tha4
date of termination, which shall be paid within ten days after the date of
�
cb-Sy7
(c) for the year that includes the date of termination, a prorated portion of the
Revenue Amount for such year, which shali be paid within ten days afrer the date of termin "on and
determined by
(i) multiplying the Second Tazget for such year y a fraction, of which the
numerator is the number of days in such year elapsed through e date of termination and the
denominator is 365 (�vhich shall be the "Prorated Tazget");
6
(ii) determining the percen e represented by (A) actual Gross Revenue
through the date of termination divided by (B he Prorated Target; and
(iii) multiplyin cuch percentage by $125,000; plus
(d) all unpai commissions on New Revenue received (whether received bePore or
afrer the date of termination), ich commissions shall be paid upon receipt of such New Revenue.
Section 9.
9.1
/ (a) Manager shall indemnify the Authoriry from, and defend and hold the Authority
from and against, any damages, liabilities, claims, judgments and expenses, including
-29-
c�- 5y7
reasonable attomeys' fees ("Losses"), suffered, incurred or sustained by the Authoriry resulting from or
azising out of
(i) any breach of this Agreement by Manager;
(ii) the inaccuracy, untruthfulness or breach
warranty made by Manager in this Agreement; or
(iii) any claim for damages (whether for
representation or
injury, property damage or
otherwise) resu(ting from any negligence, misconduct or er act or omission by Manager.
(b) The Authority shall indemnify anager from, and defend and hold Manager
harmless from and against. any Losses suffered, ' curred or sustained by Manager resulting from or
arising out of
(i)
(ii)
any breagfi of this Agreement by the Authority;
inaccuracy, untruthfulness or breach of any representaiion or
warranty made by the uthority under this Agreement; or
ii) any claim for damages (whether for personal injury, property damage or
otherwise) re lting from any negligence, misconduct or other act or omission by the Authority.
the foregoing, however, nothing in the Agreement shall cause (or be construed as) a
waiver by�Cie Authority of any limitation on municipal liabiliry under Minnesota Statutes Section 466.01
��
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et seg. or as a waiver of any common-iaw immunity or limitation of liability, all of which are hereby
reserved by the Authority.
(c) If any third-party claim is asserted against a party entitled to ndemnification
hereunder (the "Indemnified Party"), then the Indemnified Party shall promptly giv notice thereof to the
party that is obligated to provide indemnification (the "I�demnifying
notice, the Indemnifying Party shall immediately and fully investigate
Indemnifying Party's sole cost and expense. The IndemniFied Party �?
/
respects with the Indemnifying Party and its attomeys iq the investi�dt�o
any appeal arising therefrom, and the Indemnified Party
through its attorneys or otherwise, in such investigation
a remedy other than payment of money by the
consent of the Indemnified Party. If the
accordance herewith, then the Indemnified
Upon receipt of such
defend such claim, at the
cooperate in all reasonable
and defense of such claim and
its own cost and expense, participate,
and appeal. No settlement that involves
Party shall be entered into �ithout the
Party does not promptly defend such claim in
may defend such claim in such manner as it may deem
appropriate, at the cost and expense of the ndemnifying Party (but the Indemnified Party's doina so shall
not reduce tc, any er.tent the In3etnr�ify' g Party's ob�igations hereunde: ).
9.2 Insurance.
(a) anager shall, on the Authority's behalf, keep in force throughout the Term
(i) one or more policies of commercial liability insurance, covering all
of RiverCentre and acts or omissions of RiverCentre personnel (including Manager's
and services under this Agreement), which insurance shall have limits not less than
for bodily in}ury and $1 million for property damage;
-31-
�- 5517
(ii) one or more policies of automobile insurance, covering vehicies
in connection with RiverCentre, having a combined single limit of not less than $i
(iii) one or more policies of worker's compensation insuran , covering all of
Mana�er's employees providing services at RiverCentre;
(iv) all-risks property and casualty insuranc , covering RiverCentre, together
with a full replacement-cost endorsement and a vandalism �r(d malicious-mischiefendorsement;
(v) broad-form boiler and achinery insurance, with full repair and
replacement cost coverage; and
tvi) loss-of-incom and business interrupt;on insurance, covering risk c3f Ioss
d��e tc the occursence cf any hazarffs insured against under the insurance referred to in clauses i i)
and (i:) ;n an amnunt not (ess tJ�fan one year's loss of income.
(b)
insured under each of
proposed operating
shali cause each of the Authority and Manager to be named as an
Manager shali include the costs of all such insurance in each
(subject to the Authority's approvat by inclusion in the Approved Operating
Budget) and shaIl p rsue opportunities to reduce insurance costs through poticies covering both
RiverCentre and t Arena. At the Authority's request, Manager shall deliver to the Authority an original
or a certified c y of each of such policies confirming the existence of all such coverage, together with an
the effect that such policy will not be canceled or materially changed without at least 30
days' ad�6ance written notice thereof to the Authority.
-32-
00-5�/7
Secrion 10. Ownershio of Assets; Related Obligations: Audit Rights
10.1 Ownershio.
(a) Each party acknowledges that the City owns all
and real estate
comprising RiverCentre and ali related equipment, furniture, displays, ixtures, vehicles and similar
property now used in operations of RiverCentre (other than any item t t is heid by the City under a lease,
in which case the City o�Y�s the lessee's rights therein), togethe with title to all intellectual property
rights now held in the Authority's name. Nothing in this Agree ent shall affect the CiTy's ownership.
(b) The City shall continue to ow all consumable items that are provided by the
Authority (such as o�ce supplies and cleaning
by Manager in the performance of services
purchase eonsumable items for RiverCentre
but such items may be utilized and consumed
RiverCeatre under this Agreement. Manager may
to this Agreement, and suc:� items shall become the
property of the Authority, but may he ed and consumed by Manager for operations of RiverCentre
unde: this Agreement. Manager ma use RiverCentre property and related assets of the Authority fo*
operating RiverCentre and
Authority acknowiedge and
Manager may use
operations of Rive
operations of the A
Manager shall p �
property of
of
performing services under this Agreement. Manager and the
that, in order to achieve efficiencies and avoid duplication of costs,
and other property of the Arena for maintenance, repairs and other
(and may similazly use equipment and other properiy of RiverCentre for
but such use shall not affect ownership of any equipment or other property, and
for all property of RiverCentre the same care and custody as it provides for
h� Arena. Manager shall not take or use, for purposes other than management or operations
/
tre, any customer or e�ibitor lists or similar materials developed by the Authority for the use
rtre unless Manager receives Authoriry Approval. If Manager purchases equipment,
materials, or other personal property at Authoriry expense for use at RiverCentre, then title
-33-
va-5y�
thereof shali vest in the Authority, automaticat(y and immediately upon purchase. Manager shall not
pledge, encumber or othenvise alienate or assign for any purpose any assets or property of the City or the
Authority without Authority Approval.
(c) All operatina reports provided to the Authority by Manager
with all books and records of RiverCentre maintained by Manager on behalf of
other information and documents now in existence at RiverCentre shall be (and
of the Authority and shall be subject to such public disclosure and other
together
Authority, and all
remain) the property
as may be imposed
by Minnesota law regarding data practices and related matters. (All fin�ficial statements of Manager and
books and records of Manager shall be, and shall remain, private nancial records, not subject to such
disclosure.)
102 Authoritv Oblieations. Througheut the T rm, the Authority will maintain fui! legal and
benefic�al ownership of RiverCentre and will pay,
cavenants, conditicns and obligatiens under
observe and perform all payments, terms,
bonds, debentures or otlier obligations, security
agreements or cor.tracts to which the AuthoriTy rg(ay be bound.
103
5ection 11.
11.1
Manager represents and warrants to the
Authority as follows:
a) Manager is a limited ]iability company duly organized and validly existing under
the laws of e State of Minnesota.
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oo- 55/7
(b) Manager has all requisite power and authority to execute and del' er this
Agreement and perform all of its obligations under this Agreement.
(c) Execution, delivery and performance of this agreem t by Manager will not
breach or violate any provision of the organizational documents of Iv�nager or of any indenture,
mortgage, lien, lease, material agreement, order, judgement or decree t�5 which Manager is a party or by
which its assets or properties are bound.
(d) Execution, delivery and
authorized by Manager, and this Agreement
enforceable in accordance with its terms.
(a) Manager is in
of this Agreement have been duly
a valid and binding agreement of Manager,
in all material respects with all laws applicable to
Manager (except for any failure to compty t�Sat would not have any material adverse effect on Manager's
abitiry to fult:ll its obiigations under
(fl
par[y which, if decided
effect on Manager's
(including
There is�io outstanding litigatior� or other legal dispute to which Manager is a
to Managec, would reasonably be expected to have a material adverse
fulfill its obligations under this Agreement.
All information provided by Manager that is included in this Agreement
hereto) is accurate and complete in all material respects, does not contain any
untrue staj€ment, and does not omit any statement or information necessary to make such information
complete in all material respects.
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112 Representations and Warranties of the Authoritv. The Authority represents and
to Manager as follows:
(a) The Authority is organized as an agency of the Ci validly existing and in good
standing under the laws of the State of Minnesota.
(6) The Authority has all requisite co rate power and authority to execute and
deliver this Agreement and perform all of iu obligations der this Agreement.
(c) Execution, delivery and p rformance of this agreement by the 9uthority wilf not
breach or violate any provisien of the organi ational documents of the Autb.ority or of any indenture,
mortgage, lien, lease, material agreement, o der,�udgement or decree to which the Authority is a party or
by which its assets or properties aze bou .
(d} Execution delivery and performance of this Agreement have been duly
authorized by the Acth�rity, �fid this Agreement constitutes a valid and binding agreement of the
Authority, enforceable in acc dance with its terms.
(e) e Authority is in compliance in all material respects with all laws applicable to
the Authority (excep for any failure to comp(y that would not have any material adverse effect on the
Authority's
a party
fulfill its obligations under this Agreement).
(fl There is no outstanding litigation or other legal dispute to which the AuthoriTy is
if decided unfavorably to the Authority, would reasonably be expected to have any'material
effect on the Authority's ability to fulfill its obligations under this Agreement.
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c�-5Y7
(g) All information provided by the Authority that is included in this Agreement
(including any E�ibit hereto) is accurate and complete in all material respects, does not c tain any
untrue statement, and does not omit any statement or information necessary to make ch information
correct and complete in all material respects.
Section 12. Other Provisions
12.1 Relationshio. The parties intend to create a
nothing in this Agreement shall be construed to make either F
or employee of the other. �
of independent contractors and
a partner, joint venture, principal; agent
122 Severabilitv. If any provision of is Agreement is held by a court of' competent
jurisdiction to be unenforceable, then each re mmg orovision of this Agreement shalt nonetheless
remain in full force and effect.
123
(a}
deemed to be in default
God,
shall be obligated to perform hereunder and neither party shall be
is prevented by:
(i) fire not caused by negligence of either party, earthquake, flood, act of
iotion, war, hostilities or other event, matter or condition of like namre;
(ii) any law, ordinance, rule, regulation or order of any public or military
(including any based on economic or energy controls, hostilities, waz or government
law or regulation); or
-37-
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(iii) any labor dispute which results in a strike, picket
affecting
RiverCentre or services hereunder (unless such dispute shall have
practices or violations by such party of applicable
been a final judicia] determination of such illegal labor
(each a "Force Majeure EvenY').
(b) Neither party hereto shall be �l
i
services, if and to the extent that doing so shali be
law, rules, regulation, order or directive.
(c) Except as
by illegal labor
agreements and there has
violations),
any obligation to supply any service or
or limited by any Federai, state or municipal
provided in this Rgreettient, na amount payable to
Maaager for it; services under this Agr�ement shall be increased for any incorrvenience, interruptioq
cessation, or loss of busines; or other ss caused, directly or indirectly, by any Force Majeure event, nor
shall any amount payable to Mana r be reduced or withheld.
(d) If a part of RiverCentre were destroyed, replaced, repaired, upgraded or
otherwise changed,the
and Manager would
adjusting the
would continue in effect for all of RiverCentre (including that paR),
the right to continue providing the services during such change (subject to
fee as the AuthoriTy and Manager may agree, based on any actual reduction or
increase of service� provided by Manager as a result of such change).
(e) The parties acknowledge that the Authority has commenced preliminary
reaarding possible renovation or reconstruction of the Roy Wilkins Auditorium and that, if
Auditorium is substantially renovated or reconstructed and the Authority enters into an operations
�
o�o- 5y7
agreement with the Ordway Center for the Performing Arts regarding theatrical productions
renovated or reconstructed Auditorium, then the applicable terms of this Agreement will be
(� The parties also acknowledge that the Authority and the rty of Saint Paut are
currently considering a pedestrian connection between RiverCentre and the s ay system of downtown
Saint PauL If such connection is approved and construction thereof is co pleted, then the connection will
be considered part of RiverCentre and Manager will cause it to be aintained on behalf of the Authority
(subject to Authority approval of costs in the annual
12.4 Waiver. No delay or omission by
process).
party to exercise any right or power it has under
this Agreement shall impair or be construed as aiver of such right or power (unless such right or
power is li�nited by a time period, in which c se such right or power shall lapse only when such time
period shall exp;re). A waiver b,v any party of any breach of thts Agreement or any o6ligation heraunder
shali aot be consirued to be a waiver of a y succeeding breach ur any other obiigation.
12.5 Headin s Refere es Of Inclusion. The headings of sections, pazagraphs and other
subdivisions of this Agreeme are for convenience only and do not affect the construction or
interpretation of the Agreemeyft. Each reference herein to "inciuding" or "includes" shall be deemed to be
followed by the words "wit out (imitation."
12.6 Entir A eement. This Agreement is the entire agreement between the parties with
respect to the subje t matter hereof, and there are no other representations, understandings or agreements
between the part,(es relating to such subject matter.
�C '2
oo- 55/ 7
12.7 Survival. This Article 12 and each provision hereof shall survive the expiration or
termination of this Aareement and shall remain in full force and effect notwithstanding any such
expiration or termination.
12.8 Third Partv Beneficiazies. This Agreement sha(l not inure to the benefit,
right or cause of action in or on behalf of, any person or entity other than the parties.
12.9 AssienmenY. Neither party may assign or transfer this
without the other party's advance written consent except that if
any
or any rights hereunder
by notice to the Authority,
proposes to assign this Agreement to an entity that (i) acquires or erwise succeeds to all or substantially
all of Manager's business and assets, including management the Arena, and (ii) before or at the time of
assignment assumes all of Manager's obligations hereundgf and agrees to perfarm or cause performance of
all of such oblieations when due then the Authority sh 1 not unreaconablywithhald or delay such approval.
12.10 Governine Law. This Agree ent and the rights and obligations of the parties under this
Agreement shali be governed by and co rued in accordance with the laws of the State of Minnesota,
without giving effect to the principles tplereof relating to conflicts of law.
12.11 Di�
(a)
of default hereunde
dispute, includin
The Authoritv and
any dispute arising under this Agreement (including any disputed allegation
is not resolved informally, either party may give to the other party notice of the
detail conceming any alleged deficiency in performance of the other parry.
Manager, respectively, shall cause the Authority Representative and the Executive
Director to/meet in person at RiverCentre and attempt in good faith to reach an agreement resoiving the
If they do not reach such an agreement within seven days after the date on which such notice is
.�
oo- 5y7
given (the "Dispute Notice Date"), then each of them shall produce a detailed report about the dispute for
his or her respective chief executive officer or chief operating officer, who shall meet in
RiverCentre and attempt in good faith to reach an agreement. If the parties have not
at
written
agreement to resolve the dispute within 30 days following the Dispute Notice Date, then ei er party may
request mediation as provided for in subsection (b) below.
(b) If any dispute between the parties under this Agree nt is not resolved under
subsection (a), then, upon notice by either party, such dispute
mediation before, and as a condition precedent to, the initiation of
Each party shal( participate in up to four hours of
chief executive officer or chief operating officer). The
parties fail to select a mediator within 10 days
submitted for non-binding
action regarding such dispute.
each case as requested by such party's
shall be selected by the parties, or if the
notice is given, then either party may request
selectien of a mediatoz by the administrator � the Ramsey County District Court Civil Alternative
Bispute Resolution Pro�ram, from its list y1f qualified neutrals. All expenses related to the mediation
shall oe botve by each paiiy, including ithout limitation ffiE costs of any experts or legal counset.
12.:2 Jurisdiction an Venue. Any legal: action, suit or proceeding brought by it in any way
related to or arising out of is Agreement shall be brought in the state courts of the State of Minnesota,
and each party hereby
action, suit or
and submits to the jurisdiction of such state courts with respect to any such
brought by or against such party. Each party waives any objection to the venue
for any such acti9fi, suit or proceeding being in such state cour[s.
Neeotiated Terms. The parties acknowledge that the terms and conditions of this
are the results of negotiations between the parties and that no part of this Agreement shall be
in favor of or against any party by reason ofthe extentto which any party or its professional
advisors participated in the preparation of this Agreement.
-4I-
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12.14 Notices. Each notice required or permitted under this Agreement shall be in writing and
shall be deemed given when delivered by mail, courier or facsimile to the address or facsimile
specified below (and a paper copy of any notice by facsimile transmission shall be deliveye'd within 24
hours after such transmission to the address specified below).
If to the Authority: RiverCentre Authority
Attention: Authority
Facsimile No.:
With a copy to:
City Attomey's Office
CiTy of Saint Paul
400 Ciry Hall
Saint Paul, Minneso 55102
Attention: KiverC ntre Authority Attomey
Facsimile No.:
If to Manager: Saint Paul Ar�na Company, LLC
Chris Hansen
No.:
With a copy to: F egre & Benson LLP
200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Attention: William R. Busch, Jr.
Facsimile?�Io.: (612) 336-3026
Either party may c ange its address or facsimile number for notica purposes by giving the other party
15 days' notice f the new address or facsimile number and the date upon which it will become effective.
.15 Amendment. No amendment to any provision of this Agreement is valid unless in
a�d signed by an authorized representative of each party.
-42-
0�- 5 y7
12.16 Countemarts. This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which taken together shall constitute one single agree nt.
12.17 Compliance with Laws. Each party agrees to comply with all laws of e United States
of America and the State of Minnesota and with all Saint Paul City ordinances a�8 resolutions and will
not do (or altow anyone under such party's control to do) anything
violation of any such laws, ordinances and resolurions.
term of this Agreement in
IN WITNESS WHEREOF, each party has caused is Agreement to be signed and delivered by
its duly -authorized representative, effective as of the d e first above written.
f:"iVIC CENTERAUT$(�RITX
An Agency of the City of Saint Paul
(also known as T2iverCentre Authorety)
Approved as to Form:
�
City Attorney of Saint
06
B Y '-- ----------
Richard H. Ze.hring
Title: Chair
Norm Coleman
Title: Mayor of City of 5aint Paul
Joe Reid
Title: Director of Office of Financial Services
SAINT PAUL ARENA COMPANY, LLC
By:_
Title:
-43-
Exhibit A �' J� �7
to Agreement for RiverCentre
(page 1 of 1)
RIVERCEI�'TRE�
IWC}SNNEEN'c�LYPId¢ FfJYXW�'ALDfiORfUN
175 iCetlogg Boulevatd Saint Paul, Minnesota SS'02 Pnone 651-Z65-�4800 Fax 651-265-5899
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RiverCentre
Ramp
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Science
Museum of
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a�- 5�/7
Eachibit 13
to Agreement for RiverCenire
M7:62434L06
oo- 5�7
Exhib 3.2
to Abreement for RiverCentre
c'�- 5s�7
E�ibit 4.1
to Ageement for RiverCentre
(page Vof I)
Food Service (Volume Services)
Parking Ramp (Standard Parking)
SAOnsoIShipS
Touchstone EnPower Services
TreasareIsland
Pioneer Press
Minnesota Life
Coca Cola
Media One
Contracu Currentiv in Effect
/�
/
i
Service Aereements
Minnesota Elevators and Eagle Elevators
Lagerquist Escalators
Adams Pest Control
Powell Communications
MN Net Centrex, etc.
Tickehnaster
Loomis Armored Service
American Security
ADT
5aint Paul Bank — Cash Machine
Ikon — Copier
Red Cross
Tennant — Sweeper
Sage Software — Accounting
AirTouch Cellular
U S WEST
Missabe Group — Spon
Pitney Bowes — Stamp
Golden Gate Internet S
Telecheck
Ticketmaster
Kelly Temporary
Industrial Staffin;
Parking Ramg�onstruction Contracts
SMMA Ar�hitects— Wilkins Design
Gb'S�J7
��;b�r s.z
to Agreement for I2iverCentre
**EInformation Re�arding Existina Emoloveesl� *
MI:624341,06
ao -5y7
Exhibit 5.5
to Agreement for RiverCentre
(page 1 of3)
Emolovee Benefits Provided bv Mana�er
Health
I
N
5
U Qcntal
R
A
N Life
C
E
Single -1007 paid by employer
Family - 50% paid by empioyer /50Yo paid by
5Q°6 paid by Fmployer / HOYo paid by
1X Annual Salary Benefit 100°!a paid by
Acciderttd death d� Dismemberment
Paid Time Off (PTO)
(covers all paid 0
absences - sick, -9
wcation, funerals, 0-15
etc. - used at empioy¢e 16-23
discretion) after 23
Salary Benef�t 300% paid by Employer
�a o
20
26
29
33
36
ot 5 days of PTO at year-end allowed
Disabillty
�t term disubility -100% paid by Employ¢r
of weekly earnings - moximum $50Q per week
'Long term disability - S00 °� paid by Employer
2/3 of weekly earnings - maximum $6,OD0 per month
Holidays
New Yea�s Oay
Aierttorial Day
Independenee Day
la6or Day
Thnnksgivin9 �OY
Uay a(ter l'hmcksgiving
chrutmns Oay
Hofdi Pay: 1.5 titnes regular compensation and equivul¢nt time off
oo-5N7
Exhibit 5.5
to Agreement for RiverCentre
(page 2 �)
Emnlovee 8enefiu Provided bv Mana�er
0
P
T
1
O
N
A
L
Brenks 2 25 tnin breaks and 45 min luneh break
Retiremeert Pion = 401(k) '
Employee can coritribute up to 15 of lary (pre-tax), plus
$300 per yeur contribution by empi er to the 4o1(k) plan
(for each employee on the payPOli end of the year)
in Iieu of retiree health insuranc
Ftex�ble Spending Accamts - Funded fhrougF� gtnployee pre tax contributions
Safety Shoes $40 per cnlenda� yegF - if required by emp{oyer
optional Life Insurnttce
Additionai Life (Employee, Spouse Children) - empiayees con purcfiase additional
coverage, at their tos (see attached chart)
oo-5'w7
to Agreement for
5.5
3 of3)
Emolovee Benefits Provided bv ManaQer
Additional Life (E�nployee, Spouse d� Ghildren)
Emp(ovee Additianai coverage -$I0,000 units - Maximum 300,000
(minimum $20,d00) - guararrtee iss amount - $50,000
Employee Cost - 100%> per rate chart belo (nfter tox)
O Soouse Spause (only available if employee electi life is purchased)
Units of $5,000 - Maximum 1/2 empl elective life
P (minimum $10,000) - g tee issue amount -$z5,o00
Employee Cost -100%> per rate c rt helow (after tax)
T
Elective Life Insurance Rates are based o�moker
$10,000 - Ranging from $.90 to $102.50 ¢r month
O
N
A
L
L
Empioyee/
Spouse Age
under 30
30-34
35-39
40-44
45�9
50-54
55-59
60.64
65-69
70-74
75*
�Non Smoker
Per $10,0(
�
$
$
$
$
$
$
$
�
5.50
9.90
14.70
22.50
44.80
76.60
and Non Smoker status by age per
Smoker Rate
Per $10,000
$ 1.20
$ 1,60
$ 2,24
$ 3.50
$ 5.80
$ 9.30
$ 16.00
$ 22.50
$ 32.30
$ 59.90
$ 102.50
F
* Non-Stnoker ns that you hme not smoked� or used to6acco products in the las{ 12 months
E
Children
G arantee issue amourrt $5,000 (one preinium cov¢rs any number
f chiidren) - Do not ne¢d to purchose elective Iife for setf
Employee Cost -100% �$.90 cents per tnonth (after tax deduction)
oo-Sy7
Exhibit 6.2
to Agreement for RiverCentre
(page 2 of 1)
Evmt I�come and Erye�se
qcea Rantak
Service Incbme
Bwc Office 4imme
Toal Event Income
Total Event Expense
Net Event M1�wrtle
Mtillary I�cama
Foad & Baverdge
�.Ipy¢iy'es
Fadfdy Faes
Parkng
rota! Mc;llary locome
ToW Eventinca�ro
Other Operafing �ncoma
Parking
qdvertising
sportaships
In-I(ind or Quldoar MerWee
I�teresl
O�ca Space RerN
Miscellaneas
Totai Olherineana
AdJusted Gross 1�am�
Indirect Expe�see
Qepattmenl Expenus
[�eculive
MarkNing
Finarwx
pperations
gox Office
Overtieatl
Parkng RamP
Talal Depxtmart �P� 8 � a��
F�cpenses ANOCateC to Erer�.s
Ne<IndireUFxPen`+
ppeiayn9 �sh Flaw BMorc
Debt Serviro.Ona-dme Chu4es
1999 t999
20W RoBug 1�PP�'�
Pdmled Fy�ST QN�E!
7DWOPEW�T GBUOGET
1998 1997
�
S 1,225.6i9 S 7.074.849 S 1,3/0773 S .188,969 S 75B.347
1.454,895 1,246.038 1.4?8.437 1.341.49U 1.153,486
714.558 127.469 103.441 108.d37 153.73f1
2.794�502 2.450,356 2.91Z.65t 2.638�&% 2,065.563
(t (1.596,514) f1.794.679 (1.766.99� (1.807.961]
955.gp5 853,842 1.1'1T.9 671.899 258.499
671.267 487,239
54�3M 45.291
67,2fi6 69.7M
1,010,440 �.�
1.8IXi,344 ' 1,'13H�33�
zno,zw zzs�,n�
7 430.b05
36,000
333.Sa0
40.Oa0
720,000
131,687
76.912
2,968,909
112,565
187,866
81,6b7
53�869 9�tF�2.263 923.158
35.526 G5.7pp 67.812
45�045 302,573 a97�423
p2.032 806�930 864.160
'26.472 2.327.468 2.252,553
2.844.444 3.i99�365 7,61t.052
1,337,803 9$91,686 1,3fi8,096
36.Opp 69,010 to9,53B
2e3,50o tl,aoo -
140.000 7.500 30.000
120.�W 203.783 175,&91
91�687 49.Od9 15�300
125,438 742.187 113,226
2,124.428 1.773.270 7.812.051
4,343.014 4.968,872 4.972,574 9.323.103
,736 240�898 3C6.365 29D,696 264,469
464,476 512.046 St7.928 496.560 344,682
t gq . pps �52.pgg 162,346 145.668 734.152
2.507.776 2,233.156 2.511,461 2,407,818 2.145.079
169.268 760,076 161.235 779247 228,346
�,576.74H 1.625,639 1.622.392 1,439.947 1,025,474
957 836 883.N79 9t6.661 944.160 98b.T1B
6.101,786 5,8t7,062 6.198.988 5.954,090 5.130,976
f�.82T,596) (1.596,514) (7,7s9,679) (1.766.99� (i 807,064)
4�74.190 4.220.598 4.404,309 4,iB7.043 3.323.852
55y,yyq 122,q65 564.563 785.481 999.251
icu n ea,a oan sv� sso.aoo sso.aaa sso.000 sso.000 sso.oao
�ess Ped ConnediuJCfly Empkyee 42030 - 1b,OW 93,9fit
LessE4��l�ease(Ik�esO 727,974 t28,125 237,457 - �
TotalDa6t5ervice 624.004 7H8.125 891.457 688,OOD 743.961
LessRebcalionandSettleme ExP��9 F+�+`�000 (23.641) 25.Q00 318.097 t96.W0
594,022
NHLExpenses �� �. � 318.097 390.022
Totei One�time Gharges
Oper. income Nlt6 Nort-Cash ttM�s $ (214,039) $ (641.8'IB) $ (357,84i) S I220,616) S (734.73�
Non•cash
of Arrna A+sets 3,609,4s0
504.204 546.186 396.461 529.057 564.388
NetOperetin9lnwcne(Lm) $ Oi8,243) S (1.7fi8.004) S 048,355) 3 f4.359.f331 S f�.798)
O5/25/00 10:54 FAX 651 265 4899 RIVERCENTRE
Saint Paul RiverCentre
Event Boolcing Gnidelines
Touchstoae Energy �'Zace and Roy Wilkins Auditorium
RiverCentre is a nxulti-use facility designed to host a variety of events. Every effort wil[
he made ro accommodate client date hold reguests based on the followzng guidelines.•
k'irst priority sche�3uling is fox conventions, meetings, tradeshows and events that utiliz�
a minimtun of 65,000+ gsf, 75% of faci2iry meeting/banquet space and a minimum of�
500+ hotel rooms peak night. Dates may be confirtned and the event contracted 3F�
months prior to ihe date of event.
Second priority scheduling is for conventions, meetings, tradeshows eveuts that
utilize 30,000+ gsf, 50% of facility meeting/banquet space and a mi ' ium of 250+ hotel
rooms peak night. Dates may be co�rmed and the event contracs 24 mouths prior to
the date of event.
Third priority scheduling is For all oiher evenis and/or
may be contracted at any time within 18 months of the e
size/revenue to faeiliry and/or first-come-first-serve bas�
RiverCentre data holds may be established as
Second Hoid Facilities and dates are
group and aze held on a
FirsY Hold Facilities and dates ri
opportLmity to sign a
36(24/18 month date'
n e day� events. These events
t daie (based on event
1-18 months.)
g second option pending any other larger
basis for the client.
fl first option for client. Client given
agreement or release first option hold (at
Booked Contracted and c rmed event. Signed lease a�reement on file at
RiverCentre an receipt of rentat do�vn payment fmm c(ient.
The responsibility for faci � y marketing of RiverCentre is jointly shared by the staff of
RiverCentre {short term} d the staff of the Saint Faut Convention and Visitors Bureau
(long term.) Final faci 'ty price and lease agreement will be confizmed by RiverCentre
staf£ RivetCentre a , the Saint Paul Convention and Visitors Bureau reserve the right to
issue, modify or te mate booking policies in order to operate the facility in a sound
business manner tch maximizes economic banefits to the facility and to the city of
Saint Paul. /
For addition�X information please contact:
Saint�aul CV$
Wild
b52-265-4800
w«tiv.rivercentre.or�
651-265-4900
wti�tiv.stpaulcvb.oro
651-222-6020
wzvw.wild.com
c3na�9�
MAY-25-2098 I1�18 651 265 4899 97i
C� 002/007
Oo-5V 7
� JJ
OS/25/00 10:54 FAX 651 265 4899
RIVERCEVTRE
Recurring Communitv Events
Hmong New Year
Festival ofNations
Rondo Days
f� 003/007
� 7
MRY-25-2000 11�18 651 265 4H99 97% P.03
OS/25/00 10:55 FAX 651 265 4899 RIVERCEVTRE f�005/007
Oo-5y7
MRY-25-2060 11�19 651 265 4899 97; P.05
OS/25/00 10:55 FAX 651 265 4899 RIVERCENTRE (�006/007
oa-5y7
MqY-25-2000 11�19 651 265 4899 97i P.06
OS/25/00 10:55 FAX 651 265 4899 AIVERCE?7TRE
C�oo7ioo�
oo-Sy7
MAY-25-2009 11�20 651 265 4899 97i P•07
RiverCentre Management Fee/Employee Separation Cost Analysis
31-May-2000
Fees
Fixed
(TO be Qualifying Agreement 50% of fee must be fixe�.
Quality Experience
Incentive (Max)
Revenues included in benchmark:
Rentals
Service Income
Food and Beverage
Novelties
Sponsorships
Tota! Value o£Sponsorship
Commission
Value of Commission
Totai Fee
Seoaration Costs
Vacation
Payout
Carry Forward (days)
Comp Time
Sick/Severance
Payout - (See Retiree Health)
Carry Forward (days)
Retiree Health
Payout - (Includes Sick/Severance)
Ongoing
Retirement
Total Separetion Costs
Net to SPAC
SPAC Total, Years 0-3
RiverCentre Costs
RiverCentre - Projected Benefit
Based on Year One Total Benefd of $480 pius
Sponsorships of $250, $350, $400 in Years 1-3
Minus management fee increases in Years 2& 3
RiverCentre Total, Years Q-3
First 6 Months
(inffiousands}
$88
�
I.�
D c —S y�
Y@ar Three
(in thousands)
g200
$25
$135
(�y4.00M-
$425M
revenue
benchmark)
$250 $250 $350 $400
10% 10% 10% 10%
$25 $25 $35 $40
$113 $350 $370 $400
$76 $0 $0 $0
10 0 0 0
$136 $0 $0 $0
$0 $0 $0 $0
5 0 0 0
$0 $150 $50 $30
$150/YEAR $300/YEAR $300/YEAR $300lYEAR
401k 401k 401k 401k
$212 $150 $50 $30
($99) $200 $320 $370
($99) $101 $421 �791
$0 $0 $0 $0
NA $705 $775 $790
$2,270
Year One
(in thousands)
$175
�25
$125
($3.75M-
$4.OM
revenue
benchmark)
YearTwo
(in fhousandsj
$185
$25
$125
($3.90M-
$4.15M
revenue
benchmark)
�
CITY OF SAINT PAUL
� Office of the City Council
�'� ` 310 Ci Hall
a_ .. __ t9
Saint Paul, Minnesota 55102
Voice: (651) 266-8577
Fax: (651) 266-8574
Gregory N. Blees
Fiscal Policy Director
DATE: June 13, 2000
Intemet: greg.blees@ci.stpaui.mn.us
MEMORANDUM
TO: Council President Dan Bostrom
Councilmember Jay Benanav
Councilmember Jerry Blakey
Councilmember Chris Coleman
Councilmember Michael Harris
Councilmember Kathy Lantry
Councilmember Jim Reiter
FROM: Greg Blees, CounciPs Fiscal Policy Director �
V
00- Sy�
SUBJECT: Proposed Contract with Saint Paul Arena Company to Manage the RiverCentre
At the June 7, 2000 City Council meeting I was directed to review the proposed RiverCentre
Management Contract attached to Council File 00-547. This memo transmits my questions,
concerns and comments regarding the proposed contract between the Saint Paul Arena Company,
Limited Liability Company (SPAC) and the RiverCenh�e Authority (Authority). First, I will identify
three issues that may be considered missing from the contract proposal, and then I will identify issues
that you may want to address with the specific contract language proposed, in the order of the
contract sections.
Missing - Data Privacv Act Reauirements:
State Statue 13.05, subdivision 11 states:
"Privatization. (a) If a government entity enters into a contract with a private person to perform any
of its functions, the government entity shall include in the contract terms that make it cleaz that all
of the data created, collected, received, stored, used, maintained, or disseminated by the private
person in performing those functions is subject to the requirements ofthis chapter and that the private
person must comply with those requirements as if it were a government entity. The remedies in
section13.08 apply to the private person under this subdivision."
Section 13.02, subdivision 10 defines a"person" to include a company such as the SPAC.
cx�-5�17
Missing - Performance Bond
It may be appropriate to require a performance bond to assure the successful change of facility
staf�ing from a City regulated governmental agency to a private business. In the event that
proposed staffing changes are not orderly, timely, adequate, efficient, or successful, it may result in
significant added costs to the RiverCentre operations. Those added costs could be recovered from
a performance bond during the staffing transition period.
Missing - Fideli , Bond
The City purchases a$500,000 fidelity bond to protect the City from financial loss from any dishonest
action by City employees. It may be appropriate to require a fidelity bond to protect the RiverCentre
Operating Fund from possible financial loss due to possible dishonesty by the contractor's employees.
It would be prudent to require the SPAC to purchase a fidelity bond to cover all of their employees;
as they will be responsible for collecting approximately $6 million in revenues, payment of eapenses
totaling a similaz amount, and the handling of valuable inventory and equipment.
Section 1.4 - Operating Standards
Pazagraph b, on page 5, makes no reference to quality standazds for "facility security." Perhaps the
contract should specifically recognize the need to address facility security for both users and
employees.
Section 2.6 - Termination for Failure to Fund
My understanding of the intent of this section is that it wouid be a requirement to have an approved
operating budget known at least two months in advance of the budget year. The approved budget
would specify estimated financing sources (projected revenues, transfers and use of retained
eamings) and appropriations (granting the authority to spend or transfer money, establish reserves
or increase retained earnings.)
First, I believe the ritle ofthe section would be more accurate if it read: Termination for Failure to
A� ron ve Operating Budget. The existing wording could possibly be incorrectly interpreted to
mean that cash money may need to be advanced / made available 60 days before the beginning ofthe
yeaz.
Second, I am not sure if the public hearing and budget approval requirements of the City Charter and
the State's Truth-In-Tasation Law would permit the City Council to adopt a final operating budget
for the RiverCentre by October 31 of each year. Normally the Ciry's entire budget is adopted by
the City Council in the middle of December, after the Truth-In-Ta�cation Public Hearing which is
specified by state law to be the 2" or 3rd Tuesday in December. I see no problem with the City
Council holding a budget review meeting in October to review, analyze and question the Operating
Budget and the Capital Improvement Budget approved by the RiverCentre Authority, and to make
known any Mayoral or City Council concerns or disagreements. But, I do not believe the City
Council can formally adopt the budget until after the Truth-In-Taxation Public Hearing. This budget
approval timing issue may require a legal analysis of the governing laws.
Section 6.2 - Operating Budgets
Who has the ultimate and final budget approval authority for the RiverCentre's annual operating
budget for ihe Convention Facility and for the Pazking Ramp is a very important issue for this
contract. I believe the City Council has to have the last say in formally adopting the operating
budget, and the Council's approval may not always be based on a mutual agreement of an operating
budget by the SPAC Manger and the Authoriry.
2
ca�-54�Z
The primary justification for entering into this proposed contract is that operating costs for both the
Arena and the Convention Facility and Parking Ramp can be lessened if management, financial,
maintenance and sales staffs can be shazed. This is a good concept, as keeping total operating costs
as low as possible will help maintain a competitive posture for booking Saint Paul's facilities. But,
this shared stafFmg concept will require that certain common operating expenses be allocated to the
Arena budget (which is operated by SPAC as a for-profit enterprise) and to the Convention Facility
and Parking Ramp budgets, which aze controlled by the RiverCentre Authority.
UltimateIy the City's General Fund must assist the RiverCentre Operating Fund if it enters into a
negarive financial position. Thus the Mayor and City Council must be prepared to adjust proposed
RiverCentre Budgets if their projected unplementation is expected to produce negative financial
results. (For your information, the RiverCentre Operating Fund experienced a net operating loss of
more than $1 million in 1999, and it was the fifth consecutive yeaz of significant losses. Retained
Eamings at 12-31-99 went into a negative position of $215,000, and it is the first time in more than
twenty yeazs that the RiverCenue (Civic Center) Fund has been in a negative retained eamings
position.)
Attached is a table which identifies the historical, current, and proposed operating / financial
structures for RiverCentre Complex. The proposed new structure displays that the management
contract will have to allocate shazed costs between a for-profit Arena operation and the River
RiverCenter Authority's Convention Facility and Parking Ramp budgets. The proposed contract
does not identify any specific formulas for allocating shazed or common expenses, but Section 7.1
does require "the Manger to institute and abide by a cost allocarion and accounting system, subject
to the approval by the Authority ..."
Because of the private sector profit motive, there will be a natural tendency to allocate as much
shared expense as possible to the RiverCenter Authoriry's budget, in order to keep expenses low for
the SPAC budget. I predict there will be many debatable methodologies for aliocating shazed
expenses.
For example, assume a combined-facility salesperson makes $50,000 per year in Contract Year One
and spends 60% of his time trying to book the Arena and 40% of his time trying to book the
Convention Facility. One might logically argue that 60% of his salary should be chazged to the
private sector's budget, and 40% ($20,000) to the RiverCentre Authority's budget based on
actual costs incurred. But what ifsomeone wanted to allocate the salesperson's salary expense based
on benefits received instead of costs incurred. If the salesperson booked four events, one at the
Arena and three at the Convention Facility, someone could logically azgue that 75% ($3'7,500)
of salary be allocated to the Authority's budget based on event bookings. Or if Gross Revenues for
the one Arena event was $100,000 while the three Convention Facility events grossed $900,000, then
maybe someone would azgue that 90% ($45,000) of the salary be allocated to the Authority's
budget based on gross receipts. Or what if Net Income after expenses for the one Arena event was
$10,000 while the net for the three Convention Facility events totaled $300,000 ... then someone
else could azgue that the Authority should pay 97% (�48,387) of the salespersons' salary based
on net revenues. And what happens if in Contract Yeaz Two, the salesperson books no events,
would you then change the allocation formula to relate to time spent attempring to book events?
Which allocation method is most correct? I don't know, perhaps a combination of formulas. But
for sure, I know which one of the above options would most benefit the bottom line of a for-profit
business.
Once the RiverCentre empioyees aze transferred to the SPAC, the Manger will have some significant
leverage in deciding discretionary allocations of shazed costs.
I think it is good for the SPAC Manger to annually propose an operating budget to the RiverCentre
Authority for the Convention Facility and the Pazking Ramp. And it is great to a have a goal of
having the Manger and the Authority mutually agree to budget appropriations. But in the event the
Manger and Authority cannot mutuaily agree on spending priorities, allocated costs or financing
sources, I think the Mayor and City Council should reserve their rights to step in and make
recommendations and fuial decisions on budget disagreements, rather than reverting to the prior
yeaz's budget authoriTy which may no longer be affordable, strategic, or realisuc.
Or what if the focus of a future Authority is to maximize downtown business benefits at the expense
of the citywide property taY payers (assume an Authority wants to spend discretionary money on
promoting downtown hotels and restaurants, instead of on the systematic maintenance of the City
owned parking ramp which was originally financed with tax levy g.o. bonds). Shouldn't the Mayor
and City Council reserve their right to debate and change RiverCentre budget appropriations to
protect investments made by citywide taxpayers?
Besides modifying the contract language to make it cieaz that the Mayor and City Council have final
budget approvai authority based on City Charter budget adoption requirements, this section of the
contract could also acknowledge the need for public heazings on the RiverCenter budgets.
Also, the Manager could be required to annually provide the Authority, Mayor and City Council with
a copy of SPAC's operating budget for the Arena, so that cost sharing methodologies, assumptions,
and projections can be clearly understood and verified.
Section 6.5 - Caaital Exnenditures
My comments on the issues of ultimate budget approval authoriry, timing of budget approvai, and
public heazings for the RiverCentre's Capital Improvement Budget are the same as just described for
the Authority's operating budget.
I do suggest that any proposed RiverCentre Complex capital expenditure that relates to buiiding
additions orreconstruction, land acquisition, or public access improvements be submittedto the Saint
PauPs Long Range Capital Improvement Budget Committee for coordination and integration with
the annual capital improvement budget and five-yeaz program.
Section 8.2 Base Amount for Management Fees
Are the fees referenced in this section meant to directly cover some of SPAC `s direct management
costs or are they meant to be pure profit to SPAC? Because no mention is made that the base
management fee amount is paying for specific salary costs of SPAC's management team, one could
assume that the salary costs of those mangers would also be allocated as shazed costs through the
cost aliocation system. Will the RiverCenter Operating fund be paying for management services twice,
once through a base management fee and once through a cost allocation system?
Section 8.4 - Revenue Amounts for Management Fees
I think it is most important to have incentives to rewazd mangers for exceptional service. My
preference would be to have management incentives based on operating profits produced, but this
Ck'�-;�*�7
0
option is not possible because it would jeopardize the tax-exempt status of the bonds issued for the
convention facility. Given the choice between management incentives based on revenue growth or
expenses incurred, this contract uses the method which would more likely generate a profit for the
KiverCentre Operating Fund ... revenue growth targets. The revenue growth being measured is just
from the operations ofthe Convention Facilities, and excludes Pazking Ramp revenues and other non-
operating income such as hotel-motel ta�c and investrnent eamings.
Please be awaze of this fact that just because there could be a significant growth in Convention
Facility revenues, there is no assurance that profits or net income will be generated. Every yeaz since
1989, the RiverCentre's building expenses have been greater than building revenues. Between 1989
and 1998, revenues for operating the old arena and both old and new convenrion facilities totaled
$31,469,627, while the operating expenses for those buildings (not including debt service) totaled
$38,527,220. (Please see the attached spreadsheet "RiverCentre Operations: 1987 to 1998") On
average there was $1.22 in building expenses for every one dollar in building revenue generated. To
implement a management incentive fee based on gross revenues, would not automatically result in
a profit if revenue targets were met and incentive fees awazded.
I believe the amounts proposed for the First and Second Gross Revenue Tazgets for the year 2001
may be on the low side if the incentive fee is truly meant to reward exceptional performance. My
opinion is based on the following facts. The actual convention facility fees collected in 1999 totaled
$2,980,793 and they were sorted as:
Building Rentals $1,121,456
Equipment Rentals
Building and Event Services
Concessions
SUBTOTAL-Gross Revenues
Commissions
TQTAL Building Revenues
190,050
1,057,285
612,002
2,980,793
732,203
$3,712,996
Used for Revenue Tazgets
Not used for Revenue Targets
The First Target proposed for the yeaz 2001 is $3,750,000, which is a 26% increase over 1999 actual
coIlections. But the RiverCentre staff estimates, that based on advanced bookings and traditional
business, the four revenue sources being measured for the gross revenue incentive should produce
$3,757,190 in the year 2001.
If one were to accept that $3,757,000 amount as a base line starting amount, and add to it an amount
of $175,000 to equal the base management fee, and then add an amount of $50,000 to equal the First
Tazget management incentive fee, the total First Tazget Gross Revenue Amount should equal at least
$3,982 just to get back to the staffprojection of Gross Revenue without any net revenue gain to the
Authority. If the First Tazget amount was set at $4,000,000, the projected better management
(higher revenues) would only produce a gain of $18,000 in gross revenues to the RiverCenter, over
what they aze currenfly proj ecting, after subtracting out base management fees of $175,000 and First
Tazget Incentive Fees of $50,000. If one wanted the RiverCentre to get added gross revenues equal
to the Base Amount and First Tazget Incentive management fees of $225,000, then the First Tazget
Gross Revenue Fee should be set at $4,20 7,000 for the yeaz 2001. If one than wanted the Second
Tazgei Amount to produce an equal share of gross revenue to the Manager and the RiverCentre, than
it should equal at least $4,357,000 for the yeat 2001.
�-�y
I would recommend against using Gross Revenue targets for management incentives unless the
Do-SS��
targets were increases significantly over the levels proposed in the contract. I would recommend a
management incentive program that tazgets specific revenue sources that have lower expense-to-
revenue ratios such as Concession revenues and Commission revenues. I wouid avoid measuring
gross revenues which have higher expense- to-revenue ratios, such as Building Rentals, Equipment
Rentals, and Building and Event Services. I would be willing to work with RiverCentre and SPAC
staff to develop equivalent incentive fees base on focused revenues with lower expense-to-revenue
ratios, if so directed or requested.
Section 8.5 - Commissions
Language should be added to cleazly idenrify that "New Revenue" in paragraph b does not include
Gross Revenues from Building Rentals, Equipment Rentals, Buiiding & Event Services, Concessions
or Pazking Ramps and Lots.
Section 12.3. Force Ma�ure: Certain Changes to RiverCentre
Pazagraph ( fl should be clarified to acknowiedge that the City is consh a Pedestrian tunnel to
the RiverCentre complex, and that the base management fee has been established to assume the
Manager will be responsible for future tunnel operations, subject to tunnel costs and revenues being
included in an approved future operating budget.
Respectfully submitted,
Greg Blees � ��
c: Mayor Coleman, Susan Kimberly, Joe Reid, Peter McCall
Dick Zehring, Chairman RiverCentre Authority,
Chris Hansen, President, Saint Paui Arena Company
Jac Sperling, CEO, Minnesota Wild
Scott Renstrom, Jane Prince, Gerry McInerney, John Lesch, Matt Reinartz, Bob Connor,
Janice Keran,
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FAEGRE & BENSON Lr,r
2200 NORWESf CENTER� 90 SOlTiB SEVENIH STREEt
�II3QEAPOLiS, 11'�R�NESOTeI 554 02 39 0 1
TELEPHONE 61233 63 0 0 0
FAG4MILE 6i2-33b3026
June 21, 2000
Peter McCall
Ciry Attomeys Office
400 Ciry Hall
St. Paul, Minnesota 55102
Re: A�reement for RiverCentre (F&B File No. 2205161
Dear Pete:
�o-3�t 7
coPY
S�b--v- -� 3 3
� t� � ��
. V
As requested, enclosed is a revised draft (dated June 21, 2000) of page 44 of the agreement
referred to above. The changes from the previous draft are marked for your reference.
I understand that Joe Reid would like copies delivered to Nancy Anderson, and we have provided
those directly to her.
P�ease call with any questions.
� 1 ► � .—
Sincerely,
` ` —�
William R. Busch, Jr.
WRB:zieal
Enclosures
MI:635519.01
cc: Joe Reid
Nancy Anderson
Martha Fuller
Chris Hansen
Minxeapo[is Dexver Des Moines London Frankfurt
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�
12.16 Counteroarts. This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which taken together shail constitute o single agreement.
12.17 Comuliance with Laws. Each party agrees to comply wit all iaws of the t3nited States
of America and the State of Minnesota includin the Minnesota Data ractices Act and with all Saint I
�
Paul City ordinances and resolutions and will not do (or allow any ne under such party's control to do)
anything during the term of this Agreement in violation of any s laws, ordinances and resolutions.
IN WITNESS WHEREOF, each party has cause this Agreement to be signed and delivered by
its duly -authorized representative, effective as of the d e first above written.
�
Approved as to Form:
City Attorney
C1VIC CENTER AUTHORITY
An Agency of the City of Saint Paul
(also known as RiverCentre Authority)
Title: Chair
H. Zehring
By:
Norm Coleman
Title: Mayor of City of Saint Paul
By:
7oe Reid
Title: Director of Office of Financial Services
SAIlVT PAUL ARENA COMPANY, LLC
�
� ..�,-.a_ -wMl'6�4347 08 .... �
=.'`3
�
00-547
Please note that the negt two pages - the
Interdeparhnental Memo from Peter J. McCall to the
Civic Center Commissioners is\
Privileged-Non Public Information
Do Not Give Out to the Public when
making copies of this resolution.
�' 5�f7
Interdepartmental Memorandum
CITY OF SAINT PAUL
ATTORNEY CLIENT COMMI.TNICATION
PRIVILEGED-NON PUBLIC
DATE: May 31, 2000
TO: Civic Center Commissioners and
City Council members
FROM: Peter J. McCall
Assistant City Attorney
RE: Executive Summary of Agreement with Saint Paul Arena Company to Manage
RiverCentre
The following is a brief suminary of the significant psbvisions of the proposed agreement with Saint
Paul Arena Company. This sumniary is not intencYed to be a complete suimnary of the agreement.
Operatine Standards (Section 1.4�. Th�Manager will manage the RiverCentre in a manner
that is reasonably prudent, consistenthvrth operations of other first-class public facilities and
consistent with the public invesrir�nt that has been made in the RiverCenire. All areas of
the RiverCentre's operations wikI be monitored including such items as the interior and
exterior appeazance of the facilfties, concessions and public facilities, customer service and
parking. Each yeaz these standazds will be identified as part of the process approving the
operating and capital bud�ets for the upcoming year. The Authority Representative will
evaluate the Manager's�5erformance by use of customer and vendar surveys and interviews
with the generai publi'c.
2. Authority Repre�ntative(Section 3.1�. The CCA will appoint a person to act as Authority
Representativeiwho shall oversee the operations at RiverCentre and its financial results
through abuRTget and reporting process. All e�traordinary contracts and aproposed operating
and capital' budget shall be approved by the Commissioners..
3. Termlof A2reement Section (21. The Agreement will start on July 1, 2000, and end on
Degember 31, 2004. Both the Authority and the Manager have a right to terminate the
A�reement within three (3) yeazs or on June 30, 2003. Further, the Authority has the right
ho terminate the Agreement for non performance by the Manager.
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4. Arena Related Ri�hts to Tenninate (Section 22. Since the Manager is also the tenant under
the Arena Lease, this Agreement ternunates if the Arena Lease terminates or Manager ceases
to have a contractual right to manage the Arena or ceases in fact to manage the Arena.
5. Use by the Authoritv (Secrion 3.21. The Authority shall have the right to use RiverCentre
on a rent free or reduced rent basis for events that benefit the community. A list of recun�ing
events that the parties eapect to take place is attached as an e�ibit.
6. Extraordinarv Contracts(Section 4.1�. The Authority's Commissionrers sha11 approve a11
extraordinary conlracts which include the primary pazking management contract for
RiverCentre, the concessions contract, the food and beverage catering contract, any contract
£or sponsorship or advertising that creates signage rights for more than 30 days and any other
agreement that the Authority may from time to time designate as an extraordinary contract.
All other contracts are deemed ordinary contracts which can be entered into by the Manager
without the Authority's consent.
7. Personnel (Section 51. The Authority will provide layoffnotices to each existing employee
stating that the last day of employment will be June 30, 2000. The Manager will extend
offers of employment to each existing employee and each offer shall include: (i) wages at a
rate not less than now in effect, (ii) position and duties substantially the same as now
assigned to such existing employees, and (iii) such terms and conditions are required under
each collective bargaining agreement. Manager shall further provide the health coverage and
other employee benefits in accardance with employee benefit plan which is attached as an
e�ibit. Each offer sha11 include a start date of July 1, 2000. Further, each employee will
be paid his or her accrued personal time, vacation time, compensatory time and other time
which they are entitled to receive payment on.
8. Budgets and Reports (Section 6�. Each year the Manager and Authority shall establish and
approve an operating and capital budget. Also, the Manager will be pxoviding operating
statements to the Authority within twenty (20) days following the end of each month and a
year end report within si�1y (60) days following the end of each yeaz.
9. Mana�ement Fees(Section 81. The Manager will be paid a base fee plus an annual incentive
fee. The base fee begins at $175,000 per year, increases to $185,000 for yeaz two and then
$200,000 per yeaz thereafter. Also, the Manager will have the right to earn an incentive fee
up to the fixed fee amount if it increases revenue for the RiverCentre above established
benchmarks and from outside sponsorships and based on a quality experience for the
customers. The Manager has agreed to pay all of the personnel separation costs described
in Secfion 7 above.