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Home My WebLink About15 City AdministratorCITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION F� .,: Fred Wilson, City Administrator subject: Resolution authorizing the execution of an agreement with Big Red Apple for the marketing Dept: City Administrator's Office ORIGINAL and management of the San Bernardino Stadium Date: December 15, 1998 Synopsis of Previous Council action: June 1, 1998 — Mayor and Council approve issuance of a Request for Qualifications for a Stadium marketing and /or facility operations manager. October 5, 1998 -Mayor and Council direct staff to negotiate with Big Red Apple for management and marketing services for both the San Bernardino Stadium and the California Theater. November 2, 1998 — Mayor and Council refer the matter to the Ways and Means Committee. December 9, 1998 — Ways and Means Committee recommends approval. Recommended motion: Adopt resolution, reject all other bids, and authorize the Director of Finance to amend the FY 1998 -99 b, ' ,let to reflect an increase of $50,000 in Account Number 133 - 461 -5505 (Other Professional Services). Contact person: Fred Wilson/ Lori Sassoon Phone: 5122 Supporting data attached: Yes Ward 3 *�Z_, Signature FUNDING REQUIREMENTS: Amount: $50,000 ($35,000 for agreement for remainder of the fiscal year; $15,000 for marketing plan) Source: (Acct No) 133 - 461 -5505 (Acct. Description) Baseball Stadium Finance: C- incil Notes: Agenda Item No, STAFF REPORT Backfzround On March 18, 1998, the Ways and Means Committee discussed various issues concerning the management of the San Bernardino Stadium. Information was also provided concerning past actions regarding stadium management. It was recommended that a contract be considered with a management company to market the stadium and manage events. On June 1, 1998, the Mayor and Council approved the recommendation of the Ways and Means Committee to issue a Request for Qualifications for a stadium marketing and /or facility operations manager for the Stadium. The RFQ stated that the city was seeking to contract with an experienced facility manager to develop and implement a marketing plan. The plan would include marketing the stadium on a year -round basis to generate additional revenues, and maximize the use of the facility for the benefit of the community. On June 15, 1998, the RFQ was sent out to nine (9) individuals and firms, including respondents to the previous RFQ. The RFQ was also advertised in local papers. Four (4) responses were received by the due date. A committee was formed with representatives from the Mayor's Office, City Administrator's Office, Finance, and Parks, Recreation, and Community Services to review the proposals and rank them in order of their qualifications. The four respondents were ranked in the following order: 1. Big Red Apple (San Bernardino, CA) 2. Rainy Day Productions (Oakland, CA) 3. Recreational Management Services Corporation (Utica, NY) 4. Andrew Gray (San Bernardino, CA) The committee interviewed representatives from the top two firms. Initially, the proposal by Rainy Day Productions was recommended to the Ways and Means Committee for approval. Based on information gathered by the committee, subsequent meetings were held with Mr. Bob Lewis of Big Red Apple. Big Red Apple is a San Bernardino -based business that was established in 1974. The company provided facilities management and marketing services for the Orange Show from 1986 -1994. Mr. Lewis' resume is attached. On October 5, 1998, the Mayor and Council directed staff to negotiate with Big Red Apple for the marketing and management of the Stadium and the California Theater. Subsequent to that meeting, and based upon negotiations with Theater Arts International concerning the Theater, the Mayor directed that the negotiations with Big Red Apple address only the Stadium. On November 2, 1998, the matter was referred to the Ways and Means Committee for further discussion. Various concerns were raised at the Council meeting, including legal issues regarding the guarantee provision. On December 9, the Ways and Means Committee met and discussed the matter at length. The agreement was recommended to the Council for approval in a 2 -1 vote, with Councilmember Schnetz dissenting. I Agreement Provisions Since the November 2 Council meeting, staff has met with Mr. Lewis and revised the Agreement to address the concerns of both Big Red Apple and the City. The revised provisions are indicated in the attached Agreement by the underlined text. The proposal is for a one year contract for $5,000 per month ($60,000 annually), plus 20% of gross rent and other income. Big Red Apple would assume responsibility for marketing the stadium and facilitating special events, while Parks, Recreation, and Community Services would continue to handle maintenance and grounds- keeping. Big Red Apple will also guarantee to generate at least $60,000 in gross revenue over the term of the agreement (excluding revenue paid to the City by the Stampede according to the terms of the lease, and any events already scheduled at the time of the execution of the agreement). The City will also provide funding of up to $15,000 for the development of a marketing plan for the stadium. Committee Discussions on December 7 At the Ways and Means Committee meeting, a number of aspects of the proposed Agreement were discussed in detail. A possible "draw vs. commission" payment structure was discussed, under which Big Red Apple would receive either a guaranteed minimum monthly draw or a commission payment, whichever is higher in a given month. This concept had not previously been considered, and would potentially be more financially beneficial to the City. However, Mr. Lewis has not agreed to this payment structure. The Committee also discussed the number of events that would need to be held at the Stadium during the proposed Agreement term in order for the City to at least break even. In response, Mr. Lewis has provided some revenue projections that he believes will allow the City to more than recoup the cost of the Agreement (attached). It was noted that while additional events bring additional revenue, they also create additional costs in custodial maintenance, utilities, and increased wear and tear on the facility. Also attached is information concerning the approximate net benefit to the Stadium Fund if Big Red Apple meets its projected number of events and attendance. Additionally, the Committee discussed the structure of the lease with the San Bernardino Stampede and the impact of the lease on Stadium revenues. Several members felt that since the team will benefit financially from the increased use of the facility, it could also share in the cost of the marketing manager. In response to this issue, Mayor Valles sent a letter to the team requesting a meeting to discuss the issue. Ms. Tuttle has responded to the letter, and a meeting has been scheduled for January 4. Financial Impact No funds have been budgeted for stadium management services or marketing efforts, so a budget amendment is required. For the remainder of the fiscal year, this contract would be in effect for seven months (December — June). Therefore, only seven months of the contract cost should be budgeted ($35,000). The budget must also be amended to include the development of the marketing plan ($15,000). In terms of revenue for FY 1998 -99, only $15,000 in additional revenues are anticipated due to the lag time between the start of work under the agreement and the actual receipt of revenues. In FY 1999 -2000, the balance of the base contract ($25,000), base L revenues ($45,000), incentive payments, and additional revenues will be included in the Stadium budget. The agreement with Big Red Apple would potentially increase the use of the stadium and its recognition as an excellent facility. Mr. Lewis of Big Red Apple is confident that he will exceed the minimum level of revenue required in accordance with the agreement. However, the agreement does present some financial risk. While the potential exists to increase revenues and offset the Stadium Fund deficit, it may be some time before this is accomplished. The performance incentives and revenue guarantee do offset this risk to some extent. Staff has attempted to negotiate terms under which Big Red Apple would have been required to repay the City the difference between the guarantee and the $60,000 payment; however, those terms were not agreed to by the firm. The compromise provision will require Big Red Apple to continue work uncompensated until the minimum revenue amount is reached. In the short term, there may be a larger deficit in the Stadium Fund until additional revenue is received. Recommendations It is recommended that the Mayor and Council adopt the resolution authorizing the execution of an agreement with Big Red Apple, reject all other bids, and approve the budget amendment. C� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COPY RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CI1 OF SAN BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE A SERVIC AGREEMENT WITH BIG RED APPLE, REGARDING THE MARKETING AN MANAGEMENT OF THE SAN BERNARDINO STADIUM. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF TL CITY OF SAN BERNARDINO AS FOLLOWS: SECITON 1. The Mayor of the City of San Bernardino is hereby authorized a: directed to execute on behalf of said City a Service Agreement with Big Red Apple, regardi_ the Marketing and Management of the San Bernardino Stadium, a copy of which is attach hereto, marked Exhibit "A" and incorporated herein by reference as fully as though set forth length. x 1 2 3 4 5 6 7 8 9 10' 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CIT- OF SAN BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE A SERVIC AGREEMENT WITH BIG RED APPLE, REGARDING THE MARKETING AN MANAGEMENT OF THE SAN BERNARDINO STADIUM. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the May; and Common Council of the City of San Bernardino at a meeting thereof, held on tl day of , 1998, by the following vote, to wit: Council Members: AYES NAYS ABSTAIN ABSENT ESTRADA LIEN SCHNETZ DEVLIN ANDERSON MILLER City Clerk The foregoing ordinance is hereby approved this 1998. Approved as to Form and legal content: JAMES F. PENMAN, City omey /�') By: J^ day of Judith Valles, Mayor City of San Bernardino � Y CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: The Mayor and Common Council FROM: James F. Penman, City Attorney DATE: December 16, 1998 RE: San Bernardino Stadium Service Agreement/Big Red Apple COPY TO: City Clerk; City Administrator; Agency Administrator I have attached a memorandum from Senior Assistant City Attorney Huston T. Carlyle in which he explains his analysis and the conclusions he reached as to what effects the above - referenced agreement and its language probably means to the City. This analysis, we believe, fulfills our responsibility to explain; to attempt to translate from legal language to more easily understood prose, what consequences and ramifications this document would bind us to under contract law. We make no recommendation as to whether or not the City should enter into this agreement. Although we reserve the right to object to language /contracts /documents which might legally subject the city to devastating consequences, we do not believe this agreement rises to that level. Unlike certain past projects, such as the Mobile Home Conversion program and certain language in the downtown cinema agreements, this contract's terms simply call for a policy decision determining if the ultimate goal of increasing the usage of the stadium justifies entering into this agreement; understanding that one of the legal consequences of which is to require the City to subsidize the cost of presenting events at that location in order to achieve that goal. Subsidizing events, especially if they may eventually decrease the stadium's ongoing deficit meets the legal test of a legitimate public expenditure. The risk in this agreement does not appear to be as extreme as that in the other projects referred to above. Depending on the Mayor and Council's policy determination, the risk present here may be termed a "calculated" one. Respectfully submitted, !I � MES F. PENMAN Tty Attorney Attachments: one (1) JFP:js [STADIUM.MEMI pis /J /ai1qP CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: James F. Penman City Attorney FROM: Huston T. Carlyle, Jr. � C4' Sr. Assistant City Atto y 1 DATE: December 15, 1998 RE: Services Agreement With Big Red Apple The above - referenced Services Agreement ( "Agreement ") has been modified to address our concern relative to Mr. Bob Lewis working under the terms of the Agreement after the expiration of one year in which the goal of $60,000 in gross revenue to the City was not reached. Specifically, the salient part of Section 5 on our concern is addressed as follows: "If the guaranteed amount of gross revenue has not been received by the CITY at the end of the first year as provided for herein, then CONTRACTOR shall continue to provide marketing and manage- ment services for the Stadium at no cost to CITY, but at a monthly value deemed to be $5,000, until the amount of revenue received by CITY from such gross revenue and services provided totals $60,000; or, if CONTRACTOR refuses to provide such services under such conditions or if this provision is challenged by anyone other than CITY and is deemed unenforceable in a court of law, then CONTRACTOR shall pay to CITY the difference between the amount of gross revenue generated during the first year of this Agreement and $60,000." While the subject Agreement is legal, a couple of concerns were raised at the recent Ways and Means Committee meeting relative to whether or not the City was "realistically" going to break even, lose or make money on this arrangement. The first observation necessary to make a stab at determining whether or not the City is better off with this Agreement is to realize that the time frame given to Mr. Lewis for purposes of generating the minimum $60,000 for the City is not 12 months, but is really 18 months (last sentence in Section 5 on pages 2 -3 of Agreement). With that in mind, and based upon my involvement with the Stampede Lease and its machinations since 1997, it is felt that approximately 40 events averaging 1,500 people per event with an average of 2.5 people in a car at $4 per vehicle would be needed over the "life of the Agreement" (18 months) in order to generate the guaranteed minimum of $60,000 to the City. Of course, while this amount would technically meet the requirements of the Agreement, it would occur over 18 months while the costs incurred by the City to Mr. Lewis of $60,000 (plus 20% of all gross rental income and income from other sources generated through his efforts resulting in events held at the Stadium in the first 12 months), plus the "hard costs" incurred by the City in using the Stadium, would be borne by the City in the first 12 months. In other words, the City is going to lose money on this Agreement over the next 12 months. Whether the City continues to lose money into the year 2000 will depend on what progress is made in 1999 in turning around the current non -use condition of the Stadium. The numbers and assumptions made by Mr. Lewis in his projections would appear to be "optimistic;" however, the real issue to be decided appears to go beyond mere dollars and cents: Is the City "better off' with this Agreement in the long run or not for purposes of more effectively utilizing the Stadium as a resource and tool to attract people to our City? That is a policy issue to be decided by the Mayor and Common Council. CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Fred Wilson, City Administrator Subject: Resolution authorizing the execution of an agreement with Big Red Apple for the marketing Dept: City Administrator's Office and management of the San Bernardino Stadium Date: November 9, 1998 Synopsis of Previous Council action: June 1, 1998 — Mayor and Council approve issuance of a Request for Qualifications for a Stadium marketing and /or facility operations manager. October 5, 1998 -Mayor and Council direct staff to negotiate with Big Red Apple for management and marketing services for both the San Bernardino Stadium and the California Theater. Recommended motion: Adopt resolution, reject all other bids, and authorize the Director of Finance to amend the FY 1998 -99 budget to reflect an increase of $50,000 in Account Number 133- 461 -5505 (Other Professional Services). G Signature Contact person: Fred Wilson Supporting data attached: Yes FUNDING REQUIREMENTS: Council Notes: Phone: 5122 Ward: 3 Amount: $50,000 ($35,000 for agreement for remainder of the fiscal year; $15,000 for marketing plan) Source: (Acct No) 133- 461 -5505 (Acct Description) Baseball Stadium Finance: L.- k, Agenda It STAFF REPORT Background On March 18, 1998, the Ways and Means Committee discussed various issues concerning the management of the San Bernardino Stadium. Information was also provided concerning past actions regarding stadium management. It was recommended that a contract be considered with a management company to market the stadium and manage events. On June 1, 1998, the Mayor and Council approved the recommendation of the Ways and Means Committee to issue a Request for Qualifications for a stadium marketing and/or facility operations manager for the Stadium. The RFQ stated that the city was seeking to contract with an experienced facility manager to develop and implement a marketing plan. The plan would include marketing the stadium on a year -round basis to generate additional revenues, and maximize the use of the facility for the benefit of the community. On June 15, 1998, the RFQ was sent out to nine (9) individuals and firms, including respondents to the previous RFQ. The RFQ was also advertised in local papers. Four (4) responses were received by the due date. A committee was formed with representatives from the Mayor's Office, City Administrator's Office, Finance, and Parks, Recreation, and Community Services to review the proposals and rank them in order of their qualifications. The four respondents were ranked in the following order: 1. Big Red Apple (San Bernardino, CA) 2. Rainy Day Productions (Oakland, CA) 3. Recreational Management Services Corporation (Utica, NY) 4. Andrew Gray (San Bernardino, CA) The committee interviewed representatives from the top two firms. Initially, the proposal by Rainy Day Productions was recommended to the Ways and Means Committee for approval. Based on information gathered by the committee, subsequent meetings were held with Mr. Bob Lewis of Big Red Apple. Big Red Apple is a San Bernardino -based business that was established in 1974. The company provided facilities management and marketing services for the Orange Show from 1986 -1994. Mr. Lewis' resume is attached. On October 5, 1998, the Mayor and Council directed staff to negotiate with Big Red Apple for the marketing and management of the Stadium and the California Theater. Subsequent to that meeting, and based upon negotiations with Theater Arts International concerning the Theater, the Mayor directed that the negotiations with Big Red Apple address only the Stadium. Agreement Provisions The proposal is for a one year contract for $5,000 per month ($60,000 annually), plus 20% of gross rent and other income. Big Red Apple would assume responsibility for marketing the stadium and facilitating special events, while Parks, Recreation, and Community Services would continue to handle maintenance and grounds- keeping. Big Red Apple will also guarantee to generate at least $60,000 in gross revenue over the term of the agreement (excluding revenue paid to the City by the Stampede according to the terms of the lease, and any events already scheduled at the time of the execution of the agreement). The City will also provide funding of up to $15,000 for the development of a marketing plan for the stadium. Financial Impact No funds have been budgeted for stadium management services or marketing efforts, so a budget amendment is required. For the remainder of the fiscal year, this contract would be in effect for seven months (December — June). Therefore, only seven months of the contract cost should be budgeted ($35,000). The budget must also be amended to include the development of the marketing plan ($15,000). In terms of revenue for FY 1998 -99, only $15,000 in additional revenues are anticipated due to the lag time between the start of work under the agreement and the actual receipt of revenues. In FY 1999 -2000, the balance of the base contract ($25,000), base revenues ($45,000), incentive payments, and additional revenues will be included in the Stadium budget. The agreement with Big Red Apple would potentially increase the use of the stadium and its recognition as an excellent facility. Mr. Lewis of Big Red Apple is confident that he will exceed the minimum level of revenue required in accordance with the agreement. However, the agreement does present some financial risk. While the potential exists to increase revenues and offset the Stadium Fund deficit, it may be some time before this is accomplished. The performance incentives and revenue guarantee do offset this risk to some extent. Staff has attempted to negotiate terms under which Big Red Apple would have been required to repay the City the difference between the guarantee and the $60,000 payment; however, those terms were not agreed to by the firm. The compromise provision will require Big Red Apple to continue work uncompensated until the minimum revenue amount is reached. In the short term, there may be a larger deficit in the Stadium Fund until additional revenue is received. Recommendations It is recommended that the Mayor and Council adopt the resolution authorizing the execution of an agreement with Big Red Apple, reject all other bids, and approve the budget amendment. C I T Y OF S A N B E R N A R D I N O INTEROFFICE MEMORANDUM CITY ADMINISTRATOR'S OFFICE DATE: November 13, 1998 TO: Mayor and Co pn Council FROM: Fred Wilson, ity Administrator SUBJECT: Service Agreement with Big Red Apple - Marketing and Management of the San Bernardino Stadium -------------------------------------------------------- Normally, documents not signed by the City Attorney are not included in the agenda backup. In this instance, however, the unsigned resolution and service agreement with Big Red Apple for marketing and management of the San Bernardino Stadium is being distributed for review by the Mayor and Common Council. Big Red Apple and the City have agreed to all the provisions of this agreement with the exception of Section 5. This Section relates to the guarantee that the City will receive a minimum of $60,000 in gross revenue over the term of the agreement. The City Attorney had prepared additional language, as follows: "If the guaranteed amount of gross revenue has not been received by City at the end of the first year as provided herein, then Contractor shall continue to provide marketing and management services for the Stadium at no cost to City, but at a monthly value deemed to be $5,000, until the amount of revenue received by City from such gross revenue and services provided totals $60,000; or, if Contractor refuses to provide such services under such conditions or this provision is deemed unenforceable in a court of law, then Contractor shall pay to City the difference between the amount of gross revenue generated during the first year of said Agreement and $60,000." Big Red Apple has not agreed to this provision. Big Red Apple will be present at the November 16, 1998, meeting of the Mayor and Common Council to discuss their concerns. C I T Y O F �an bernardino R A C H E L C L A R K C I T Y C L E R K December 22, 1998 Bob Lewis Big Red Apple P. O. Box 5742 San Bernardino, CA 92412 -5742 Dear Mr. Lewis: At the Mayor and Common Council meeting of December 21, 1998, the City of San Bernardino adopted Resolution 98 -346 authorizing an agreement regarding marketing and management of the San Bernardino Stadium. Enclosed is one (1) original agreement. Please sign in the appropriate location and return the original agreement to the City Clerk's Office, ATTN: Melanie Miller, P.O. Box 1318, San Bernardino, CA, 92418 as soon as possible. Please retain a copy of the executed contract for your files. If you have any questions, please do not hesitate to contact me at (909) 384 -5002. Sincerely, Rachel Clark City Clerk By: Melanie Miller Senior Secretary Enclosures P. O. B O X 1 3 1 8, S A N B E R N A R D I N 0, C A 9 2 4 0 2 3 0 0 N O R T H D' S T R E E T S A N B E R N A R D I N O. C A L I F O R N I A 9 2 4 1 8 - 0 0 0 1 ( 9 0 9) 3 8 4 - 5 0 0 2 ( 9 0 9) 3 8 4 - 5 1 0 2 F A X -( 9 0 9) 3 8 4- 5 1 5 8 T D D/ T T Y -( 9 0 9) 3 8 4- 5 5 4 0 98 -346 SERVICES AGREEMENT THIS AGREEMENT is entered into this day of December 1998, by and between BIG RED APPLE, A California corporation ( "CONTRACTOR ") and the CITY OF SAN BERNARDINO ( "CITY "). WITNESSETH: WHEREAS, CITY desires to promote and maximize the use and availability of the San Bernardino Stadium (the "Stadium ") as a focal point for community events which will be financially self - sustaining and which will have the potential of providing a revenue source for the CITY and maximizing the enjoyment of the Stadium for all San Bernardino residents; and WHEREAS, CONTRACTOR has the professional skill, experience and ability to provide management, booking and marketing of the San Bernardino Stadium; NOW, THEREFORE, the parties hereto agree as follows: 1. During the term of this Agreement and any extension thereof pursuant to Sections 5 and 6 herein, CONTRACTOR shall furnish professional management, booking and marketing services to the CITY, and CITY shall furnish maintenance review, office space, and facilities, consistent with the Scope of Work which is attached hereto as Exhibit "A" and incorporated herein in full by this reference (the "Scope of Work "). 2. CONTRACTOR shall be paid monthly for such services in the amounts and as set forth in this Agreement. 3. In addition, CONTRACTOR shall provide the City Administrator's Office with invoices, cost projections, and receipts evidencing actual and anticipated revenues and expenditures consistent with the Scope of Work. No expenditures made by CONTRACTOR shall be reimbursed by CITY without the prior written approval of the City Administrator or his/her designee. 98 -346 4. CONTRACTOR shall be paid $60,000 for the term of the Agreement, and for any extensions thereof as provided in Section 6 herein, payable in twelve (12) monthly installments of $5,000. CONTRACTOR shall also be paid a performance incentive payment of 20 % of all gross rental income and income from other sources generated through the efforts of CONTRACTOR resulting in events held at the Stadium. Gross income included in the basis of calculation of the incentive payment shall not include revenues paid to CITY by the San Bernardino Stampede in accordance with the terms of the Stadium lease; or fees paid to CITY for skybox rentals. Incentive payments shall be made by the CITY on a monthly basis after payment has been made to the CITY by the facility users for these events. 5. CONTRACTOR hereby guarantees that the CITY shall receive a minimum of $60,000 in gross revenue generated over the term of this Agreement, excluding revenues paid to CITY by the San Bernardino Stampede in accordance with the terms of the Stadium lease and fees paid to CITY for skybox rentals. This minimum revenue shall not include events already scheduled for the Stadium prior to the execution of this Agreement. If the guaranteed amount of gross revenue has not been received by CITY at the end of the first year as provided for herein, then CONTRACTOR shall continue to provide marketing and management services for the Stadium at no cost to CITY, but at a monthly value deemed to be $5,000, until the amount of revenue received by CITY from such gross revenue and services provided totals $60,000; or, if CONTRACTOR refuse to provide such services under such conditions or if this provision is challenged by anyone other than CITY and is deemed unenforceable in a court of law, then CONTRACTOR shall pay to CITY the difference between the amount of gross revenue generated during the first year of this Agreement and $60,000. For the purposes of determining whether or not CONTRACTOR has met the guaranteed amount of revenue in accordance with this section, the CITY will take 2 98 -346 into account any booked events scheduled for the six months following the termination date when determining whether CONTRACTOR has met the guaranteed amount of revenue. 6. The term of this Agreement shall be for one (1) year from the date above, with two (1) one -year options for renewal upon the mutual written consent of CONTRACTOR and CITY. This Agreement may be terminated at any time by thirty (30) days written notice by either party. If the Agreement is terminated, CONTRACTOR shall be entitled to receive performance incentive payments for future events that have been booked by CONTRACTOR prior to termination of the Agreement, in accordance with Section 4 herein. These incentive payments shall be made by the CITY after payment has been made to the CITY by the facility users for these events. If this Agreement is terminated by CITY pursuant hereto, CONTRACTOR shall be relieved of further Verformance or repayment obligations set forth in Section 5 herein If at any time during the term of this Agreement CONTRACTOR dies becomes disabled or for any reason outside CONTRACTOR'S control becomes unable to perform the services required under this Agreement, CONTRACTOR'S obligations shall be terminated without further obligation of CITY or CONTRACTOR. 7. CONTRACTOR shall indemnify, defend and hold harmless the CITY, its officers, employees and agents (including, without limitation, reasonable costs of defense and reasonable attorneys' fees) arising out of or related to CONTRACTOR's performance of this Agreement, except that such duty to indemnify, defend and hold harmless shall not apply where injury to person or property is caused by CITY's willful misconduct or negligence. CITY shall indemnify, defend and hold harmless the CONTRACTOR, its officers, employees and agents (including, without limitation, reasonable costs of defense and reasonable attorney's fees) arising out of or related to 3 98 -346 CONTRACTOR's performance of this Agreement, except that such duty to indemnify, defend and hold harmless shall not apply where injury to person or property is caused by CONTRACTOR's willful misconduct or negligence. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement on behalf of CITY shall be considered as "attorneys' fees" for the purposes of this paragraph. 8. While not restricting or limiting the foregoing, during the term of this Agreement, CONTRACTOR shall maintain in effect policies of comprehensive public, general and automobile liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory Worker's compensation coverage, and shall file copies of said policies with the CITY's Risk Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an additional named insured in each policy of insurance provided hereunder. The Certificate of Insurance furnished to the City shall require the insurer to notify CITY of any change or termination in the policy. 9. CONTRACTOR shall perform work tasks provided by this Agreement; but for all intents and purposes CONTRACTOR shall be an independent contractor and not an agent or employee of the CITY. 10. CONTRACTOR shall be permitted to produce, promote, co- produce, or co- promote events at the Stadium as an independent agent, and not as the representative of the CITY, only upon the express written consent of the CITY for each such event. Big Red Apple shall pay the established rental rate and all other costs that would normally apply to any other renter for such events at the Stadium. Any financial risk assumed by CONTRACTOR as a producer, promoter, co- producer, or co- promoter of events at the Stadium shall be the sole responsibility of Big Red Apple and not the CITY. 4 98 -346 11. In the performance of this Agreement and in the hiring and recruitment of employees, CONTRACTOR shall not discriminate on the basis of race, creed, color, religion, sex, physical handicap, ethnic background or country of origin. 12. Any notice to be given pursuant to this Agreement shall be deposited with the United Postal Services, postage prepaid and addressed as follows: TO THE CITY: TO THE CONTRACTOR: City Administrator's Office 300 North "D" street San Bernardino, CA 92418 Facsimile (909) 384 -5138 Big Red Apple P.O. Box 5742 San Bernardino, CA 92412 -5742 Facsimile (909) 885 -6064 Notice may also be given by facsimile ( "fax ") during regular business hours to the numbers listed above, and such notice shall be deemed given upon receipt as reflected in a transmission verification. Nothing in this paragraph shall be construed to prevent the giving of notice by personal service. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and date first above written. Date: November '1998 Date: - %-P ATTEST: Rac l Clark, City Clerk APPROVED AS TO FORM AND LEGAL CONTENT: James F. Penman, City Attorney By: (7 BIG RED APPLE, a California corporation By: CITY OF S BERNARDINO By: Judith V les, Mayor 5 9g -346 EXHIBIT "A" SCOPE OF WORK Management of the San Bernardino Stadium Scope of Work and Work Program To provide professional management booking and marketing of the San Bernardino Stadium. Big Red Apple ( "BRA ") shall be responsible for: 1. Supervising all aspects of non - baseball Stadium event operations, including: a. Recruiting and scheduling events (other than baseball) into the Stadium, parking lots and any other ancillary facilities which are available for such use. b. Supervising Stadium operation at all performances or use of the facility (other than baseball). Supervision shall include all aspects of the operation, including ticket sales, concessions, merchandise, stagehands and related personnel, including, but not limited to ushers, security and other production services. BRA will be physically present at all events. c. BRA will not be responsible for supervising City events, or events for which fees have been waived. 2. Reporting monthly to the City Administrator's Office regarding work in progress, prior year activity and projected marketing, booking and use of the Stadium. 3. Creating a direct marketing plan for the Stadium. The marketing plan shall be submitted to the City within 10 business days after Contract approval by City. BRA will direct the marketing plan for the Stadium and place advertising in order to receive long- lasting exposure in reaching the specific segments of the live entertainment and amusement industries that utilize facilities similar to the Stadium, and/or which have previous positive experience in the Inland Empire. The marketing plan will concentrate on attracting promoters, producers personal managers, booking agents, performers, associations and organizations that produce trade shows, film locations and other events. With approval by the City, the marketing plan will be in place within forty -five (45) days thereafter. The marketing plan shall be developed in consideration with all other city marketing plans and in coordination with the Marketing and Public Affairs Officer. 6 98 -346 4. Reporting income to City in the form required by City Administrator on a monthly basis, and depositing funds in City account(s) as required by City procedures. 5. Assisting the City in renegotiating the Stadium lease, upon written request and authorization of the City. 6. Making recommendations to the City for facilities modifications to enhance and expand the capabilities of the Stadium for parking lot, concert, and other events compatible with the facility. City shall be responsible for: 1. Maintaining the premises as required by Building Codes. 2. Reviewing and/or approving show offers on 48 -hour notice. 3. Maintaining and providing for major capital facility improvements, utilities and landscaping. 4. Providing BRA with one office, secretarial space, shared conference room facilities, and telephone and fax service lines. BRA shall pay all costs associated with telephone usage. 5. The City Administrator or his designee shall review with BRA and approve a marketing plan for the Stadium within forty-five days after submission of the plan by BRA. 6. Budgeting and commit appropriate funds (a maximum of $15,000) for start-up marketing and advertising of the Stadium, subject to submission of appropriate requests and verification of expenditures by BRA. 7. Developing a policy concerning the waiver of rental fees for non - profit organizations. The policy shall balance the desire to make the facility available for community events with the need to have the maximum number of days available to book fee - paying events into the Stadium. 7 • 98 -346 SAN BERNARDINO STADIUM PROJECTED SCHEDULE: 1999 EVENT LOCATIONS MONTH PARKING LOT CONCERTS OTHER COMMUNITY JANUARY 0 0 0 0 FEBRUARY 1 0 0 0 MARCH 1 1 1 0 APRIL 1 0 0 0 MAY 1 1 0 1 JUNE 1 1 0 1 JULY 1 2 0 1 AUGUST 0 1 0 1 SEPTEMBER 1 1 0 1 OCTOBER 1 1 1 0 NOVEMBER 1 0 1 0 DECEMBER 1 0 2 1 TOTALS: 10 8 5 6 TOTAL EVENTS: 29 98 -346 SAN BERNARDINO STADIUM PROJECTED REVENUES: YEAR # EVENTS TOTAL REVENUE TO CITY 1999 29 $ 143000 2000 37 200725 2001 48 260400 TOTAL: $ 604125 MAXIMUM NUMBER OF AVAILABLE DATES PER YEAR JAN 0 FEB 0 MAR 3 APR 2 MAY 4 JUN 4 JUL 7 AUG 5 SEP 6 OCT 7 Nov 6 DEC 4 TOTAL: 48 .4:3 THIS FORECAST OF FUTURE OPERATIONS IS BASED ON NUMEROUS ASSUMPTIONS RELATING TO FUTURE ACTIVITIES AT THE STADIUM. THESE ASSUMPTIONS ARE NOT SUBJECT TO AUDIT VERIFICATION AS THEY RELATE TO FUTURE ACTIVITIES. 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