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HomeMy WebLinkAboutR-2012-065 Capitol Theatre Amended and Restated 20-Year Operating AgreementA RESOLUTION RESOLUTION NO. R-2012-65 authorizing the City Manager to execute an amended and restated Capitol Theatre Operating Agreement between Capitol Theatre Committee, Inc. and City of Yakima for operation of performing arts facility (Capitol Theatre). WHEREAS, the City of Yakima (City) is the owner of performing arts facility known as the Capitol Theatre; and WHEREAS, the City has previously entered into an operating agreement with Capitol Theatre Committee, Inc., for the operation of such facilities, which Agreement was executed July 7, 2009, and thereafter amended July 2011; and WHEREAS, the City and Capitol Theatre Committee, Inc. have negotiated an amended and restated operating agreement providing for a term of twenty (20) years, subject to annual review of operating expenses and payment, and provisions related thereto; and WHEREAS, the City Council finds and determines that such amended and restated provisions are necessary and appropriate to incorporate amendments to the parties' previous operating agreement, and to enable Capitol Theatre Committee to be eligible to apply for and administer grant funds for improvement of the performing arts facilities; and WHEREAS, the City Council finds and determines that approval of such amended and restated operating agreement is in the best interests of residents of the City of Yakima and will promote the general health, safety and welfare; therefore; BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized to execute and administer the amended and restated "Capitol Theatre Operating Agreement," a copy of which is attached hereto as Exhibit "A" and incorporated herein by this reference, now, therefore, ADOPTED BY THE CITY COUNCIL this 15th day of May, 2012. Micah Cawley Mayor CAPITOL THEATRE OPERATING AGREEMENT THIS AGREEMENT, made and entered into this fay of May, 2012, by and between CITY OF YAKIMA, a municipal corporation, hereinafter called "City," and CAPITOL THEATRE COMMITTEE, INC., a Washington non-profit corporation, hereinafter referred to as "CTC." WITNES SETH: WHEREAS, the City of Yakima is the owner of a performing arts facility (hereinafter referred to as the "THEATRE" which is situated upon the following described real property in Yakima County, State of Washington, to wit: Lots 13, 14, 15, 16, 17, 29, 30, 31 and 32, Block 71, Town of North Yakima, now Yakima, Washington, according to the official plat thereof recorded in Volume "A" of Plats, page 10, and re- recorded in Volume "E" of Plats, page 1, records of Yakima County, Washington. WHEREAS, CTC has been organized for the express purpose of occupying, managing and operating the THEATRE as provided by this agreement, and WHEREAS, both parties desire that the THEATRE be managed and operated as a place for public entertainment and cultural events in accordance with the provisions, terms and conditions of this agreement, to the end that the THEATRE will serve as an economic and cultural stimulant for the community and the people of the City of Yakima and its environs; hl consideration of the mutual undertaking and promises contained herein, and the benefits to be realized by each party and in future consideration of the benefit to the general public by the enhancement of the economic and culture climate of the City and its environs to be realized by the performance of this agreement, and as a direct benefit to the City, the parties agree as follows: A. RESPONSIBILITIES OF CTC. 1. CTC shall occupy, manage and operate the THEATRE according to the provisions, terms and conditions of this agreement. CTC shall generally promote the THEATRE through brochures or other means of advertising designated to attract performances and state exhibitions and events to the THEATRE, and shall schedule and book such performances, exhibits and events to occur at the THEATRE. CTC shall diligently pursue continuous use of the THEATRE and shall promote current shows and events of public interest. CTC shall be responsible for all costs of administration and daily operational expenses as the same shall directly relate to such facility's use as a performing arts facility, auditorium and meeting hall. CTC shall be the sole operator of the facility and, in addition to other necessary functions, shall 1) approve all requests for the use of said facility and 2) be responsible for the control and security of the THEATRE and all property pertaining thereto. 2. CTC shall be responsible for general maintenance of the THEATRE building and premises, including but not limited to, janitorial and cleaning services; removal of snow, ice and debris from pedestrian walkways; routine minor repair and replacement of THEATRE premises, property and fixtures (including, but not limited to, plumbing, electrical, lighting fixtures and damage resulting from vandalism or accident); provided, the liability of CTC to the City pursuant to this section shall not exceed Two Thousand Dollars ($2,000.00) for each incident or item of damage or repair, or a total annual aggregate of Twenty Five Thousand Dollars ($25,000.00) of loss or damage not covered by insurance or otherwise reimbursable to CTC, unless the damage or necessity for repair was caused by or as a result of CTC's negligent use of the premises or CTC's failure to perform routine repairs and maintenance as contemplated by this agreement, in such cases the CTC shall be fully and solely responsible for the full cost of repair. 3. All funds expended by CTC shall directly or indirectly relate to the enhancement of the economic and cultural climate of the City and its environs. This includes, but is not limited to the promotion, operation and/or use of such facility for assembly purposes. 4. CTC shall obtain and maintain commercial general liability insurance and umbrella liability insurance with a minimum amount of Five Million Dollars ($5,000,000.00) combined single limit bodily injury and property damage and name the City, its agents, employees and elected and appointed officials as additional insureds. CTC shall file with the City a copy of such policies or a certificate of insurance with the provision that they may not be canceled without ten (10) days prior notice to the City. 5. CTC shall defend, indemnify, and hold harmless the City, its officers, elected officials, employees and agents from and against any and all claims, causes of action, damages, losses, and expenses of any kind or nature whatsoever, including but not limited to, attorney's fees and court costs, arising out of, relating to, or resulting from CTC's performance or non-performance of the services, duties and obligations required of it under this Agreement. 6. CTC shall manage and operate the THEATRE in accordance with all applicable laws related thereto. 7. CTC, for information purposes, shall furnish to City, copies of policies, rules and regulations, rental procedures, charges, hours of operation, uses to which the THEATRE may be put, together with sample license agreements and contracts entered into with the performances, concessionaires and so forth. 8. The rules and regulations adopted by CTC shall specifically prohibit the giving of free tickets or other free entry to any performance of event to any City employee or officer or to CTC employees or officers, except in the performance of their duties. 9. CTC agrees that it shall maintain fiscal records and accounts in accordance with systems and procedures prescribed .by law„ regulation, City policies and generally accepted accounting principles as applicable to financial affairs of the City for fiscal year end financial reporting purposes; and CTC will annually render to the City a written -2- financial operating statement within sixty (60) days after the end of CTC's fiscal year. It is understood that the intenm internally prepared financial books and records of CTC may not comply with general accepted accounting principles applicable to the financial affairs of the City. 10. CTC agrees that all of its books and records pertaining to THEATRE management and operations shall be open and available for examination at all times by the Yakima City Manager, Director of Finance and Budget, and other City or third party personnel designated by either of them. The City Manager and others designated by him shall have the right to enter upon and inspect the premises at any reasonable time. 11. Except as specifically required for THEATRE operation in accord with individual performance contracts, CTC shall not subcontract or assign to any person, firm or corporation, any rights or obligations of CTC under this agreement. 12. CTC agrees and promises to manage and operate the THEATRE and afford its services to the public on a fair, equal and not unjustly discriminatory basis to all users thereof, and further agrees that during the performance of this Agreement CTC shall not discriminate in violation of any applicable federal, state and/or local law or regulation on the basis of age, sex, race, creed, religion, color, national origin, marital status, disability, honorably discharged veteran or military status, pregnancy, sexual onentation, and any other classification protected under federal, state, or local law. 13. The CTC covenants that it will not take or permit to be taken on its behalf any action that would adversely affect the tax-exempt status of bonds issued by the City on its behalf, and will take or require to be taken such acts as may reasonably be within its ability, as may from time to time be required under applicable law, to continue the tax-exempt status of the City's bonds. City shall be responsible for providing and updating CTC with the requirements necessary to maintain the tax-exempt status of the said bonds. The CTC shall notify the City of any change in operating procedures having effect on any Pnvate Activity Use of the Theatre and be granted permission at the sole discretion of the City prior to any such change. Private Activity Use is defined by Sec. 141 if the Internal Revenue Code of 1986, as amended. If CTC is unsure of the affect of any change they shall contact the City for guidance. B. RESPONSIBILITIES OF CITY. 1. The City shall perform, or cause to be performed by contract, the major upkeep, maintenance, and repair of THEATRE premises and fixtures as indicated on the schedule attached hereto marked Exhibit "A", to this agreement, which items of expense shall be borne directly by the City and which will not be included within the CTC obligation of maintenance, management and operation responsibility. In order to assure that necessary repairs, maintenance and upkeep are provided when required, CTC shall advise the City of necessary repairs, upkeep and maintenance on systems identified in Exhibit "A", in writing, as soon as any such deficiencies are identified. 2. The City shall maintain property insurance on the building and its contents in such amount as the City deems appropriate. The City shall not be responsible for insuring any property owned by the CTC. Any funds denved from such insurance shall be used to repair or -3- replace the damaged items or property; except should said property as a whole be damaged to an extent of over fifty percent (50%) of its value, either party may cancel this agreement by notice in writing within sixty (60) days of the date of damage. CTC and the City hereby release and discharge each other from and against all liability arising either from fire loss or damage caused by any of the perils covered by insurance policies which are in force and effect at the time of such loss or damage, even though such loss or damage may be due to negligence, act or neglect of either CTC or the City or agents or employees of either party. It is expressly understood and agreed that it is the intention of the parties that this provision constitutes a waiver and release of any and all subrogation rights which the insurance companies might have under such insurance policies. 3. The City shall make available to CTC the use of City financial and purchasing systems and forms for bookkeeping purposes, rights for the purchase of equipment, materials and supplies, and other record keeping and business purposes connected with THEATRE maintenance, management and operation. To facilitate the management and operation of the THEATRE, CTC may utilize City services, procedures and forms to the extent that the parties may agree from time to time. C. TAXES. CTC agrees to collect and pay to the City the admission tax on the tickets to THEATRE events as required by applicable City laws, as they now exist or as they may be amended from time to time. Taxes that are applicable to CTC's operation, customary use and management of the THEATRE shall be the responsibility of CTC. D. TERMS OF AGREEMENT 1. This agreement shall be in full force and effect for a period of twenty (20) years from the date set forth at the top of this agreement, subject to the provisions herein and below. 2. Subject to the City's annual budget review and approval process the City will pay CTC for the services to be performed by CTC consisting of the occupation, management, general maintenance (pursuant to paragraph A.2. of the agreement), and operation of the THEATRE. Annual payments shall be made in four (4) installments, one installment to be paid on or about the tenth (10th) day of the month of February, May, August and November, during the terms of this agreement. The annual service fee is considered a base -line and may be adjusted, on an annual basis, depending on the needs of CTC and resources available to the City for such purposes. In the event that the City and CTC do not agree on an annual service fee to be paid to CTC for its performance hereunder, the service fee then in effect will continue until such time as the Parties agree on a new fee or either party exercises its option to terminate this agreement as provided in Section 3 below. 3. In the event the parties are unable to reach agreement on the service fee to be paid, then either party shall be entitled to terminate this agreement by giving the other party thirty (30) days written notice, by registered or certified mail return receipt requested, at the -4- address provided under Paragraph D.5. This agreement shall not be considered as terminated if during the 30 day notice period the parties are able to reach agreement relating to the. amount of the service fee to be paid hereunder. In the event either party hereto shall fail to perform the terms and conditions of this agreement ("default") the non defaulting party shall be entitled to terminate this agreement by giving the other party thirty (30) days written notice, by registered or certified mail return receipt requested, at the address provided under Paragraph D.5, below, stating its desire to terminate the agreement, which notice shall contain a complete and itemized list of all matters in which the defaulting party is in default. During said thirty (30) day period, the party receiving notice shall be entitled to reinstate itself by correcting such default. 4. CTC shall be considered as an independent contractor in the operation of the THEATRE, and this agreement shall not be construed as creating any form of partnership between City and CTC. As an independent contractor CTC and its employees shall make no claim of City employment or claim against the City any related employment benefits, social security, and/or retirement benefits. Nothing contained herein shall be interpreted as creating a relationship of servant, employee, partnership or agency between CTC or any officer, employee or agent of CTC and the City. 5. In the event that any dispute shall arise as to the interpretation of this agreement, or in the event of a notice of default as to whether such default does constitute a breach of the contract, and if the parties hereto cannot mutually settle such differences, then the parties shall first pursue mediation as a means to resolve the dispute. If the afore mentioned methods are not successful then any dispute relating to this Agreement shall be decided in the Yakima Superior Court in accordance with the laws of Washington. If both parties consent in writing, other available means of dispute resolution may be implemented including but not limited to final and binding arbitration. 6. Any notice herein provided to be given to the City shall be addressed and delivered to the City Manager, Yakima City Hall, 129 North Second Street, Yakima, Washington, 98901. Any notice to be given to the CTC shall be addressed and delivered to the Executive Director, Capitol Theatre, 19 South Third Street, Yakima, Washington 98901. 7. The waiver of either the City or CTC of the breach of any provision of this Agreement by the other party shall not operate and/or be construed as a waiver of any subsequent breach by either party or prevent either party thereafter enforcing such provision. 8. If any portion of this Agreement is held to be invalid, the remainder of the terms and conditions of the Agreement shall remain in full force and effect. 9. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the term or expiration of this agreement and shall be binding on the parties to this Agreement. 10. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. The venue for any action to enforce or interpret this Agreement shall he in the Superior Court of Washington for Yakima County, Washington. -5- 11. This Agreement amends, restates and replaces the "Capitol Theatre Operating Agreement" executed July 7, 2009 (City's Agreement No. 2009-78), as amended pursuant to Amendment No 1 (July 2011). IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year first above written. CITY OF YAKIMA ATT T: By By v Michael A. Morales, Interim City Manager Sonya C�.r-Tee, City Cler S'}v i11 I tiilk CAPITOL THEATRE COMMITTEE, INC. By CITY CONTRACT NO. RESOLUTION NO. /2 -6- EXHIBIT "A" CAPITOL THEATRE OPERATING AGREEMENT Pursuant to paragraph B.1 of the Agreement, following is a schedule of major upkeep, maintenance and repair which shall be the obligation of the City: A. System Maintenance 1. Air Handling System and Controls 2. Air Conditioning Equipment, Associated Pumps, Controls, etc. 3. Heating Equipment 4. Pump Motors 5. Elevator 6. Orchestra Pit Mechanism 7. Sound System 8. Lighting Control System The City will furnish to CTC a maintenance schedule and/or other information relative to the means by which the maintenance and repair work is to be accomplished on the foregoing items, which maintenance schedule may be revised from time to time by the City, with mfonnation relative to any such revision also to be furnished to CTC. Additionally, CTC shall advise the City, in writing, of necessary repairs, maintenance and upkeep needed when such are identified. B. Periodic Refurbishing The City shall periodically refurbish the Theatre building, as shall be necessary by mutual agreement of City and CTC. C. Damage - Repair Pursuant to paragraph A.2. of the Agreement, the City shall be responsible for the repair or replacement of Theatre premises, property and fixtures for any amount in excess of $2,000 for each incident or item of damage or repair, or if the total annual aggregate exceeds $25,000, not covered by insurance nor otherwise reimbursable to CTC, unless the damage or necessity for repair was caused by CTC or results from the negligent use of the premises by CTC or from the failure of CTC to perform routine repairs and maintenance as contemplated by this Agreement; in such cases the CTC shall be fully and solely responsible for payment of damages or repairs. The parties agree that this schedule, and the provisions of paragraphs A.2. and B.1. of the Agreement, shall be reviewed from time to time with a view toward CTC undertaking some or A-1 all the responsibilities of the City; and if the parties agree, this schedule and paragraphs A.2. and B.1. shall be then amended, accordingly. -8- BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: May 15, 2012 ITEM TITLE: SUBMITTED BY: CONTACT PERSON/TELEPHONE: SUMMARY EXPLANATION: Resolution amending the Capitol Theatre Operating Agreement between City of Yakima and Capitol Theatre Committee, Inc. Michael A. Morales, Interim City Manager Mark Kunkler, Senior Assistant City Attorney (509) 575- 6030 The City of Yakima and Capitol Theatre Committee, Inc. entered into an operating agreement dated July 7, 2009 for the Capitol Theatre performing arts facility. The agreement was subsequently amended in July 2011. Capital Theatre Committee, Inc. is in the process of applying for grant funding to defray costs of capital improvements to Capitol Theatre. In order to be eligible for such grant funding, the State of Washington requires an agreement between the owner and operator containing a term sufficient to provide sufficient continuance of the performing arts programs in any facility receiving such grant funding. The minimum recommended term is ten years, but Capitol Theatre Committee, Inc. has requested a set term of twenty (20) years to provide flexible administration. The original agreement contained a term of three (3) years, subject to renewals of additional three-year terms thereafter. The attached amended and restated operating agreement incorporates a set term of twenty (20) years, but leaves unchanged the ability of both parties to terminate such agreement earlier in the event no agreement can be reached regarding annual maintenance and operation costs. Resolution X Ordinance Contract: X Contract Term: Insurance Required? No Funding Source: APPROVED FOR SUBMITTAL: Other (specify) Mail to: Steven J. Caffery, CEO, The Capitol Theatre, 19 South 3rd Street, Yakima WA 98901 Amount: Expiration Date: Phone: (509) 853-8000 City Manager I i STAFF RECOMMENDATION: Adopt Resolution Approving Agreement BOARD/COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download ❑ Resolution amending capitol theatre agreement El Capitol Theatre Operating Agreement Revised May 2012 c