Item #03
Date: October 18, 2022
To: Mayor and City Council
From: Dan Flores, Community Development Director
Jim Schaad, City Manager
Subject: Agreement for the Off-Highway Vehicle Concession at Riverfront Park Recommendation:
Pass a Motion to approve an Agreement for the Off-Highway Concession at Riverfront Park with Armstrong Racing, LLC.
Background:
Armstrong Racing, LLC has been a long-standing concessionaire of the City of Marysville. They have held an agreement with the City for Off-Highway Vehicle Concessions since February 12, 2012.
Discussion and Analysis
The current agreement allows for a “Right of First Negotiation”. According to the agreement with the Concessionaire, “Before the expiration of the Additional Term, the City will negotiate with the Concessionaire for the execution of a new agreement on mutually acceptable terms. The right of first negotiations shall last no more than 60-days, beginning no more than 30-days before the expiration of the Additional Term.” The City Council granted two (2) 60-day extensions for these negotiations to occur.
The City and Armstrong Racing were able to reach an agreement with mutually beneficial terms.
Under the terms of this new agreement, the City hereby grants the Concessionaire the exclusive right to operate the off-highway vehicle facilities located within the area known as the Eugene Chappie OffHighway Vehicle Area as shown in the attached exhibit on the agreement. This facility is located in the Riverfront Park in Marysville, north of the 10th Street Bridge east of the Feather River, and West of Biz Johnson Drive.
This agreement shall be effective September 1, 2022, until termination on August 31, 2027. The term is five (5) years. Six (6) months before the expiration of the initial term the City shall determine whether the Concessionaire has complied with the terms and conditions of this agreement. If the Concessionaire has not materially breached this agreement under the terms specified in Section 14 of the agreement, the City shall extend with the Concessionaire’s consent the length of this agreement for an additional 5-year term, effective upon the expiration of the initial term. During the term of this extension, the lease rate will be increased by 3% each year starting on the first year of the extension. During the extended term, all provisions of this agreement will remain in full force and effect. The Concessionaire shall also have the right of first refusal six (6) months before the expiration of this initial term. The Concessionaire shall have access to the use of the facilities before the commencement date subject to all terms and conditions of the attached agreement. Additional terms are outlined in the attached agreement.
Item #03
Alignment with City Council Goals:
Goal #1: Increase Fiscal Sustainability, Goal #2: Expand Economic Development Opportunities, Goal #5:
Support Parks & Recreation.
Fiscal Analysis:
The revenue to the City will be $60,000 per year for the first five years. If Concessionaire extends the term of the agreement for an additional five years as outlined in sections 3B and 14 of the agreement, there will be a 3% annual increase from the previous year payable to the City. The annual use fee shall be paid in advance in quarterly installments as outlined in the agreement.
The Concessionaire will also reimburse the City a total of $70,000 for previously unreimbursed energy charges in accordance with the terms outlined in the attached agreement. In addition, the Concessionaire will also provide new LED lights at the facility no later than September 1, 2023. If the lights are not installed by that date, the Concessionaire will reimburse the City $60,000 according to the terms of the agreement for lighting. The Concessionaire will also perform in-kind work as outlined in the agreement.
If Concessionaire declines to perform the in-kind work, Concessionaire will compensate the City a total of $30,000 as outlined in the agreement.
Attachment:
1) Copy of Signed Agreement