478
Department: Economic Development
Prepared By: Jennifer Hiramoto
Staff Member Presenting:
Jennifer McLain Hiramoto, Economic
Development Director
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 38
SUBJECT:
MEMORANDUM OF UNDERSTANDING WITH RANCHO BASEBALL, LLC
CITY OF ONTARIO
Agenda Report
August 15, 2023
SECTION:
ADMINISTRATIVE
REPORTS/DISCUSSION/ACTION
RECOMMENDATION:
That the City Council Authorize the City Manager, or designee, to execute a binding Memorandum of Understanding Regarding Baseball Development and Proposed Lease with Rancho Baseball, LLC, and to negotiate a lease Agreement
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Invest in the Growth and Evolution of the City's Economy Focus Resources in Ontario's Commercial and Residential Neighborhoods Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT:
There is not a direct fiscal impact associated with this action.
BACKGROUND & ANALYSIS:
The City of Ontario is in the process of developing 200 acres of land generally at the Southeast corner of Vineyard Avenue and E. Riverside Drive ("Site") into the future Ontario Regional Sports Complex. At build out, it will be one of the largest of its kind in Southern California. While designs are still underway, the Regional Sports Complex is envisioned to contain the following:
Soccer fields
Football fields
Baseball and softball fields
Tennis courts
Basketball courts
Pickleball courts
An aquatics center
A youth sports training facility.
While this will provide much desired public athletic amenities, it is also anticipated that this will be an economic development catalyst. It is estimated that this facility will attract 1.2 million new visitors a year, and as such retail and hospitality will be required to support this development. 479
In addition to these public sports amenities and supporting retail facilities, the City is also designing a 5,000 seat Minor League Baseball Stadium (Stadium) on a 10-12 acres portion of the Site.
The proposed anchor tenant of the Stadium is Rancho Baseball, LLC (Tenant), who currently owns and operates a professional baseball club affiliated with Major League Baseball. The Tenant has expressed its desire to relocate its operations to the City of Ontario, and use the Stadium as its home stadium. The Tenant would activate the stadium for 86 days a year. The remaining days, the Stadium will be programmed by the City.
Staff is seeking City Council authorization to execute the attached Memorandum of Understanding Regarding Baseball Development and Proposed Lease ("MOU") with Rancho Baseball, LLC, and Authorization for the City Manager to Negotiate a Lease Agreement with the Tenant. 480
Memorandum of Understanding Regarding Baseball Development and Proposed Lease – Ontario Stadium
MEMORANDUM OF UNDERSTANDING REGARDING
BASEBALL DEVELOPMENT AND PROPOSED LEASE
For the mutual benefits provided for herein, this binding Memorandum of Understanding Regarding Baseball Development and Proposed Lease (“Agreement”) is made and entered into by and between the City of Ontario, (the “City”) a California municipal corporation, whose address is 303 E. B Street Ontario, CA 91764, and Rancho Baseball, LLC (the “Team”), whose address is 8408 Rochester Avenue Rancho Cucamonga, CA 91730, hereinafter together referenced as the “Parties”.
WHEREAS, the City desires to construct a Minor League Baseball stadium that will be home to a professional baseball club affiliated with Major League Baseball; and WHEREAS, the Team owns and operates a professional baseball club affiliated with Major League Baseball currently known as the Rancho Cucamonga Quakes (the “PDL Club”).
WHEREAS, the PDL Club is currently affiliated with the Los Angeles Dodgers; and WHEREAS, Minor League Baseball teams bring many benefits to host cities including positive economic impact, jobs, community pride, positive publicity throughout the region, and improved quality of life; and
WHEREAS, Minor League Baseball stadiums must meet certain facility standards in order to host a professional baseball club affiliated with Major League Baseball; and WHEREAS, the Team desires a home stadium that meets suchfacility standards; and WHEREAS, the Team has a record of running a successful Minor League Baseball team and providing affordable family fun for fans of all ages; and WHEREAS, the Team has helped to develop hundreds of future Major League Baseballplayers; NOW THEREFORE, the Parties hereto agree as follows:
1. Purpose. To agree on the funding, location, construction, and operation of a Minor League Baseball stadium that contains fan and player amenities including features necessary to be compliant with the facility standards that may from time to time be put in place by MLB Professional Development Leagues, LLC (“MLB PDL”). This stadium will feature a Minor League Baseball team owned and operated by the Team as the primary tenant. a. The City agrees to fund and construct a state-of-the-art stadium within the to-be-developed sports complex located generally south of East Riverside Drive and between South Vineyard Avenue and South Archibald Avenue in Ontario, California (the “Sports Complex”), with an estimated stadium construction cost up to $95 million with a completion date no later than March 1, 2026 (the “Required Completion Date”). 481
Memorandum of Understanding Regarding Baseball Development and Proposed Lease – Ontario Stadium
b. Subject to the Team obtaining all necessary approvals of MLB PDL, and the stadium actually being completed by the Required Completion Date, the Team shall relocate the PDL Club to the new stadium starting with the 2026 baseball season.
2. Expectations:
a. The stadium must comply with MLB PDL’s facility standards and all other applicable rules and regulations of MLB PDL and include:
i. Baseball capacity to not exceed 6,000 fans. This includes permanent seating for approximately 4,000-4,500 (including group areas and premium seating) plus grass berm seating for 500-1,500 fans.
ii. Group entertainment areas
iii. Premium seating suites
iv. Premium seating club area
v. Concessions sales, operations and storage facilities as well as concessions equipment.
vi. Merchandise sales, operations and storage facilities vii. Press box and media production space and equipment viii. Parking sufficient for the anticipated capacity of the stadium ix. Videoboard and other signage facilities suitable for a stadium of this type. x. Team offices for a minimum of 32 full-time front office staff members xi. Other features as appropriate for a stadium of this type. xii. The Team will be the only outdoor professional sports team to be based at a City owned or operated stadium within 3 miles of the Sports Complex. b. The parties shall work together to determine the design of a stadium that meets all requirements imposed by MLB PDL, is aesthetically pleasing, operationally and economically efficient, technologically friendly, and comfortable and fun for fans and baseball personnel. The Team and City will mutually agree on the specialists and consultants (e.g., planning, architectural, engineering, construction and interior design) to be engaged, and the time frames upon which each specialist and consultant must be engaged, in order to ensure the stadium is designed, constructed, completed and ready for occupancy by the Required Completion Date.
c. In the event that the stadium is not ready for occupancy by the Team by the Required Completion Date, the City acknowledges that the Team will suffer losses and damages which may be impossible or impracticable to calculate. Should the City fail to achieve completion of the stadium by the Required Completion Date, the City shall pay to the Team, as liquidated damages and not as a penalty, the stipulated sum of $ $20,000 per day starting with March 15, 2026. The City and the Team agree that the liquidated damages amount is not a penalty and is a reasonable estimation of actual damages, as of the date of this agreement, based upon the inherent uncertainty and difficulty in calculating and quantifying damages caused by delays in achieving final completion of the stadium. The liquidated damages amounts shall be the exclusive remedy for delay-related damages with respect to the delivery of the stadium, but are not intended to preclude the Team from pursuing claims and causes of action for other damages to the Team resulting from the failures or other defaults of the City under this agreement. d. Upon execution of the lease, which shall include substantially the terms set forth in subsection (f) below, the Parties agree that the City will have appropriate remedies for the 482
Memorandum of Understanding Regarding Baseball Development and Proposed Lease – Ontario Stadium
Team’s non-performance or otherwise breach of the lease, which remedies will be set forth in the lease.
e. The City will work with the Team to provide, at no cost to the Team, adequate office space for the business operations of the Team from March 2024 until offices at the new stadium are available for use.
f. The Team and City will sign a lease that will include the following provisions:
i. 20-year term with an additional two 5-year Team options. ii. The Team to have access to use the stadium with scheduling priority for all regular season and playoff baseball game days plus up to 20 non-game day events each year. Team will provide the schedule of games and possible play-off dates no later than December 31st of the prior year. For non-game day events, the team will be granted their desired date upon their request to the City unless that date has been previously scheduled for a City event.
iii. The Team to have 365-day exclusive access to Team offices, merchandise sales facilities and the home and visiting clubhouses.
iv. The City to pay for all routine maintenance, repair and capital replacement as part of the Team’s payment of base rent.
v. The Team to reimburse the City for any damages caused to the stadium and facilities by Team employees, associates, representatives. vi. The Team shall pay for all furniture, fixtures, and equipment (except for those affixed to the building such as lockers, showers, etc.) in its areas of 365 day access (office, team store and home clubhouse). Additionally, the team shall pay for other furniture, fixtures and equipment (FF&E) in non-365 day access areas if that FF&E is necessary for the Team’s events, not affixed to the building and exclusive for the team’s use. This section means that baseball equipment non-exclusive to the Team such as the rolling batting cage, baseball field screens, field tarp, etc. will be a City expense. All concessions and catering FF&E will be the responsibility of the City. vii. The City to pay for water servicing the stadium, stadium clean-up, and garbage removal within and around the stadium.
viii. The City to pay for all stadium utilities.
ix. The City to maintain the stadium, including the playing surface in a first-class condition, and ensure the stadium, playing surface, and equipment remains in compliance with MLB PDL’s facility standards.
x. The City will provide appropriate transportation infrastructure for fans to travel to the stadium including appropriate roadside identification and directional signs leading up to and into the stadium.
xi. The Team receives all ticket, merchandise, and advertising revenue generated (except noted below in xii, xiii, xiv and xvi) during and connected to its games and events. The Team will select and manage the ticketing vendor. xii. The City will operate the parking operation and be responsible for the collection of parking fees (except in some cases the team may sell parking as an “add-on” to a ticket purchase) and traffic direction. The Team will receive 60% of the parking revenue (Gross revenue minus the parking tax, which will be retained by the City) received from city-owned or operated lots within the vicinity of the stadium on game days starting 3 hours before game time until the end of the game. The City will receive 50% of any parking revenues collected by the team. The Team and 483
Memorandum of Understanding Regarding Baseball Development and Proposed Lease – Ontario Stadium
City will mutually agree upon the parking fee amount for Team events and agree upon the specific lots to be included.
1 The City’s existing Parking Tax shall be collected and remitted to the City, regardless of whether the Team (as an add-on to the ticket) or the City (at public parking facilities) collect parking fees.
xiii. The City and the Team shall collaborate on the sale and marketing of City-led sponsorships and advertising. A regular meeting of City and Team representatives shall occur not less than once per quarter in order to coordinate and leverage the City’s and Team’s effort.
1 The City shall have the right to sell the stadium title sponsorship, subject to the approval of the Team (such approval not to be unreasonably withheld, conditioned or delayed) and the receipt of all necessary approvals of MLB PDL. Any title sponsorship agreement shall be for a term of no less than 10 years. The City, or its assigned agent, and Team will coordinate on these efforts. The Team will receive 20% of the gross stadium title sponsorship amount (before sales commissions or other expenses, if any). In no case shall the team receive less than $200,000 in total annually. If the sponsor wishes to have access to additional Team advertising inventory or hospitality items, those items may be purchased from the Team at an additional cost to the sponsor. The City will facilitate coordination between the team and sponsors related to this additional Team inventory.
2 The City shall have the right to sell up to four (4) neighborhood/concourse sponsorships at locations that are mutually agreed upon between the Team and City. Sponsors shall be non-exclusive, and subject to the approval of the Team (such approval not to be unreasonably withheld, conditioned or delayed) and the receipt of all necessary approvals of MLB PDL. The Team will receive 50% of the gross neighborhood/concourse sponsorship amount (before sales commissions or other expenses, if any) for the Team to use the sponsored neighborhood names in its communications and game operations. If the sponsor wishes to have access to additional team advertising inventory or hospitality items, those items may be purchased from the team at an additional cost to the sponsor. The City will facilitate coordination between the team and sponsors related to this additional Team inventory.
3 The City shall have 25% of advertising time on the stadium electronic signs (i.e. scoreboard, ribbons) which will run intermittently between the time the gates open until 15 minutes before the scheduled start of the game. xiv. The City will have the right to manage the stadium concessions in accordance with the provisions of this section. Concessions will mean the serving of food, beverage (including beer, wine & spirits), catering and picnic food packages. The City will ensure that the concessions operation is managed at the highest levels of quality and customer service consistent with the best of minor league baseball. The Team will have the right to approve concessions pricing, and menus used during Team events, and have the right to approve the on-site Concessions Director (such approval not to be unreasonably withheld, conditioned or delayed). The Team will have the right to create concessions related promotions and sell group/company picnic packages at Team approved pricing and consistent with the Minor League Baseball industry. The City will cooperate on such concessions promotions and 484
Memorandum of Understanding Regarding Baseball Development and Proposed Lease – Ontario Stadium
packages. The City will pay the Team on a monthly basis an amount equal to 35% of the total net concessions and catering revenue. Net concessions and catering revenue is defined as total concessions revenue minus applicable state and local sales tax. The City will select a concessionaire to run the stadium concessions for three-year periods throughout the lease starting with the first year of the lease. The Team must approve the selection of the concessionaire before the concessionaire is finalized for each three-year period (such approval not to be unreasonably withheld, conditioned or delayed). The Team agrees to approve ASM Global as the concessionaire for the first three-year period of the lease if the City designates ASM Global as their preferred choice as the concessionaire. This automatic pre- approval of ASM Global as the initial concessionaire does not apply if ASM Global sells a controlling interest or is sold in its entirety to another entity. xv. The City, or its assignee, will have the right to sell non-exclusive pouring or serving rights agreements to in-stadium concessions related sponsors. In-stadium concessions related sponsors is defined as any company that their product will be sold in the stadium as a part of the food and beverage menu. Examples would be beer, soda or hot dog companies. The Team will receive 50% of all gross revenues amount (before sales commissions or other expenses, if any) from in-stadium concessions related sponsorship and pouring/serving rights to be applied toward a mutually agreed upon advertising and hospitality package. If a concessions related sponsor purchases a neighborhood/concourse sponsorship that will count as one of the City’s four (4) neighborhood/concourse sponsorships and be subject to the same stipulations.
xvi. Except for the specific items listed above, the team controls the rights to sell and receive all revenue from all other signage as well as digital and stadium advertising inventory.
xvii.The Team to provide and pay for ushers, ticket takers, and box office personnel consistent with Minor League Baseball industry standards. The City will provide and pay for appropriate police, EMT, and security personnel at all events. xviii. The Team will pay an annual base lease payment of $400,000 per year payable with five equal monthly payments April – August. The annual base rent will increase by $25,000 every five years, including during the team options. In addition, the Team will pay the City $1 for every ticket sold over 225,000 tickets for its baseball events each year. A “sold” ticket will be any sold, traded or comped game ticket.
xix. If at any time the City, county or state imposes a ticket tax or facility charge that the team is required to pay, that tax or facility charge will be credited against the Base Rent.
xx. The City shall have the right to schedule non-Ontario Professional Baseball events at the stadium. If those events are to be held during the baseball season, MLB PDL approval is required and the Team agrees to work with the City in an effort to obtain MLB PDL approval for each event. The City will ensure that the baseball playing field is restored to compliance prior to any Team games. The City will retain concessions rights for all non-Ontario Professional Baseball events. The Team will receive 10% of all net concessions revenue for any non-Ontario Professional Baseball events that occur during the baseball season. xxi. The Team will be responsible for paying all personnel it employs and other expenses related to its games and events. The City is responsible for paying for all event-related staff for City sponsored events.
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Memorandum of Understanding Regarding Baseball Development and Proposed Lease – Ontario Stadium
xxii. Team will pay all other required taxes and fees, other than concessions, related to the operation of the team’s games and events at the stadium. xxiii. City to consult with Team regarding commercial (retail, restaurant, multi- family housing and other development) at or adjacent to the ballpark site. xxiv. Team and stadium name to be featured with permanent signage on the City’s existing sport complex digital sign on the 60 freeway. Team to receive reader board inventory to promote its events. The amount of inventory to be determined.
xxv. Subject to the prior receipt of all necessary approvals of MLB PDL, the official team name will have “Ontario” included.
3. MLB Approval. All agreements and stadium plans related to this project must be reviewed and approved by MLB PDL.
4. Assignment and successors. Subject to the prior receipt of all necessary approvals of MLB PDL, either party may assign their interest in this agreement to a successor organization or other entity.
5. Preparation of Lease Agreements . This binding agreement states the terms for a lease agreement. Within 60 days of the signing of this agreement, a draft of a full lease document based on the terms in this agreement will be prepared by counsel for the City and submitted to the Team’s counsel.
IN WITNESS WHEREOF, the Parties have executed and delivered this Development and Lease Terms Agreement to be effective as of the date the last of the Parties sign this Agreement below.
CITY OF ONTARIO:
City of Ontario, a California municipal corporation
By:
Name: Scott Ochoa
Its: City Manager
Date:
RANCHO BASEBALL, LLC:
Rancho Baseball, LLC, a WA Limited Liability Company
By:
Name: Robert Brett
Its: Chairman
Date:
486
Department: Public Works
Prepared By: Bonnie Tam
Staff Member Presenting:
Tito Haes, Executive Director Public Works
Reviewed By: Bonnie Tam, Daniel P Beers
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 39
SUBJECT:
A DESIGN SERVICES AGREEMENT FOR THE ARCHITECTURAL AND ENGINEERING SERVICES WITH POPULOUS, INC. AND AN AMENDMENT TO THE ON-CALL PROJECT MANAGEMENT SERVICES WITH TILDEN-COIL CONSTRUCTORS, INC. FOR
CONSTRUCTION MANAGEMENT MULTI-PRIME SERVICES FOR THE ONTARIO
MINOR LEAGUE BASEBALL STADIUM AND PARKING STRUCTURE PROJECT
CITY OF ONTARIO
Agenda Report
August 15, 2023
SECTION:
ADMINISTRATIVE
REPORTS/DISCUSSION/ACTION
RECOMMENDATION:
That the City Council take the following actions:
A
.
Approve and authorize the City Manager or his designee to execute the Design Services Agreement (on file in the Records Management Department) with Populous Inc., of Los Angeles, California, to provide architectural and engineering services for the Ontario Minor League Baseball Stadium and Parking Structure Project for a total not-to-exceed contract amount of $6,787,635; and
B
.
Approve and authorize the City Manager or his designee to execute Amendment No. 1 to the Professional Services Agreement (on file in the Records Management Department) with Tilden-Coil Constructors, Inc., of Riverside, California, to provide construction management multi-prime services for the Ontario Minor League Baseball Stadium and Parking Structure Project for a total not-to-exceed contract amount of $3,539,000.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
FISCAL IMPACT:
The recommended contract award to Populous, Inc. is for a total not-to-exceed contract amount of $6,787,635. The recommended Amendment for Tilden-Coil Constructors increases the authorized contract amount by $3,189,000, for a new total not-to-exceed contract amount of $3,539,000. The combined total cost of all recommended actions is $10,326,635.
The
recommended actions would require an increase in appropriations in the Capital Projects Fund that will be included in the next quarterly budget update.
487
BACKGROUND & ANALYSIS:
On June 14, 2023, three (3) proposals were received from the Request for Proposal No. 1665 for D&C23-011 Ontario Minor League Stadium and Parking Structure. The proposals ranged from a low proposal amount of $6,692,000 to a high proposal amount of $6,933,750.
The proposals are summarized below:
Bidder
Location
Amount
MEIS Architects
Santa
Monica
,
CA
$6,692,000
Populous, Inc.
Los Angeles, CA
$6,787,635
DAIQ Architects
Somerville, MA
$6,933,750
A selection team which consisted of City Staff and outside consultants interviewed the proposing firms. Based on credentials, pricing, experience, and favorable reference checks, the interviewers deemed Populous, Inc. located in Los Angeles, California, with a base cost of $6,787,635 as the most responsive. Staff recommends awarding the Design Services Agreement for D&C23-011 Ontario Minor League Stadium and Parking Structure to Populous, Inc.
Additionally, support services will be required during design and construction of the Ontario Minor League Stadium and Parking Structure Project. Tilden-Coil Constructors, Inc. will provide construction management services. The City first contracted with Tilden-Coil Constructors, Inc. in April of 2023 after an extensive Request for Proposal selection process for on-call Project Management Services. On April 4, 2023, the City Council entered into a three-year Professional Services Agreement, with up to two additional consecutive one-year extensions, with five qualified firms for On-Call Project Management Services. Tilden-Coil Constructors, Inc. is one of the five qualified firms that has a total not-to-exceed contract amount of $350,000.
The proposal for construction management multi-prime services from Tilden-Coil Constructors, Inc. for the Ontario Minor League Baseball Stadium and Parking Structure Project is in the not-to- exceed contract amount of $3,539,000. The construction management services will include schematic planning, construction plans, specifications, cost estimates, bidding support, and management oversight for a new stadium and parking structure at the Ontario Sports Complex. 488