Agenda Item: 10
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL:
DATE: September 22, 2026
SUBJECT: OPERATING AGREEMENT FOR THE CUBE ICE AND
ENTERTAINMENT CENTER
DEPARTMENT: Recreation and Community Services
PRESENTER: Kyle Lopez
RECOMMENDED ACTION
City Council:
1. Authorize the City Manager to execute the Amended and Restated Agreement with JV Ice at the Cube, LLC (JVI) for the operation and management of The Cube Ice and Entertainment Center, in a form approved by the City Attorney and substantially similar to the attached draft agreement, for a five-year term for a management fee not to exceed $1,207,337 and a potential incentive fee (if earned) based upon the formula set forth in the Agreement.
2. Authorize the City Manager to execute any amendment to the Agreement, in a form approved by the City Attorney, during the five-year term, including without limitation modifying the award over the course of the contract term based on revenue actuals.
3. Increase recreational facility revenue accounts by $102,370 for FY26-27, $132,090 for FY27-28, $136,020 for FY28-29, $140,100 for FY29-30 and $144,310 for FY30-31, and appropriate across recreational facility expenditure accounts per the attached Attachment A $197,684 for FY26-27, $67,519 for FY27-28, $69,293 for FY28-29, $71,090 for FY29-30 and $72,978 for FY30-31.
4. Authorize the City Manager or designee to execute up to two additional five-year renewal options, contingent upon the appropriation of funds by the City Council in the annual budget for such fiscal year.
BACKGROUND
On February 23, 2021, the City Council awarded a five-year agreement, with up to two optional five-year renewals, for the operation of the City of Santa Clarita (City) The Cube-Ice and
Entertainment Center (The Cube), with American Sports Entertainment Company and the Los Angeles Kings (ASEC/Kings). Pursuant to the agreement, operations are performed by JV Ice at the Cube, LLC (JVI), a California limited liability company established by ASEC/Kings and identified in the agreement as the Manager. Since opening in April, 2021, The Cube has served more than 2 million patrons and has established itself as a regional destination for recreational ice sports, tournaments, camps, public skating, and community programming.
ASEC/Kings was selected as the preferred operator through a Request for Proposals process conducted in September 2020. The original agreement was negotiated and implemented during a period of unprecedented operational uncertainty associated with the COVID-19 pandemic and included financial, operational, and service assumptions based on conditions known at that time.
Over the course of the initial agreement term, The Cube exceeded original operational and programming expectations. Based on operational experience gained during the first five years of service, City staff and JVI negotiated an Amended and Restated Agreement (agreement) to clarify operational roles and responsibilities, refine management and revenue-sharing provisions, and align budget assumptions with current facility performance and long-term operational objectives. A draft of the agreement is attached.
Roles and Responsibilities:
The agreement more clearly defines maintenance obligations, establishes responsibilities for repairs and replacement of facility assets, and refines oversight, reporting, and financial transparency requirements. In addition, the agreement clarifies contracting and procurement responsibilities to ensure consistency with the City’s purchasing policies and procedures.
Management Fee:
The agreement updates the base management fee and incentive management fee structures. The annual base management fee will increase to $232,000 in Fiscal Year 2026-27 and will increase by 2 percent annually thereafter. Costs associated with the management fee include general and administrative expenses, overhead, and travel and training.
The annual incentive management fee is revised so that JVI will be eligible to receive an annual incentive payment of $150,000 once gross revenue reaches the applicable annual gross revenue threshold, initially set at $4,300,000 for Fiscal Year 2026-27 and increasing by 2 percent annually. JVI will also receive 10 percent of gross revenue generated above the applicable annual threshold.
Because the amount of the annual incentive management fee is dependent on actual annual gross revenue, the City Manager or designee will be authorized to modify the contract award during the contract term to accommodate any increase in incentive compensation resulting from revenues exceeding the applicable threshold.
Budget Adjustments:
The first five years of this contract saw both expenditures and revenues exceeding initial
estimates related to facility performance and use. The adjusted Fiscal Year 2026-27 operating budget reflects lessons learned during the first five years of operations at The Cube. Budget adjustments include increased expenditures for repairs and maintenance, service contracts impacted by prevailing wage requirements, insurance premiums, and banking and credit card processing fees associated with higher transaction volumes. The five-year forecasted revenue and expenditure plan is attached.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
Upon approval of the recommended actions, and as outlined in Attachment A, budget for the Recreational Facility Expenditure Accounts will increase by $478,564 for all five years and Recreational Facility Revenue Accounts will increase by $654,890 for all five years.
ATTACHMENTS
Attachment A- Five Year Forecasted Revenue and Expenditure Plan Draft Cube Agreement