arena lease and management agreement city of glendale, arizona ...

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SUBSTANTIAL FINAL DRAFT 11/27/12 12:35 11.2.1 The City and Arena Manager shall meet and confer within the first six months following the Closing Date to make any adjustments to the Renewal and Replacement Schedule that the parties mutual agree to be necessary or reasonable prudent and advisable. 11.2.2 In the event the City and Arena Manager cannot agree upon adjustments, if any, to the Renewal and Replacement Schedules that are necessary or reasonable prudent and advisable, the dispute will be submitted to Arbitration in accordance with this Agreement. 11.3 Funding of Capital Improvements.. In order to fund the Renewal and Replacement Schedule, the City shall appropriate the following amounts (collectively, the “Capital Improvement Contributions”), which shall be paid into and held in the Renewal and Replacement Account: on the first day of the applicable Fiscal Year (and for the first year of the Term, on the Closing Date): 11.3.1 $1,000500,000 during each year of the Term; and 11.3.2 An additional $1,000500,000 during the third, seventh, eleventheach Fiscal Year beginning July 1, 2020 and fifteenth yearsending June 30, 2024. 11.3.211.3.3 Any portion of the TermCapital Improvement Contribution made in a given Fiscal Year that is not utilized for Capital Improvement Expenditures in such Fiscal Year shall be retained in the Renewal and Replacement Account and may be utilized by the Arena Manager for Capital Improvement Expenditures in subsequent Fiscal Years. Such unused Capital Improvement Contribution shall not be credited towards the Capital Improvement Contribution for any subsequent Fiscal Year. 11.4 Budgeting for Capital Improvements.. The Arena Manager shall in each Annual Budget identify all Capital Improvement expenditures (“Capital Improvement Expenditures”), including those that will require Capital Improvement Contributions, that are: (a) necessary to comply with mandatory governmental requirements; (b) necessary or appropriate for the safe operation of the Arena Facility or its maintenance or repair; (c) required by any License, Concessions Agreement, Suite License Agreement or Premium Seat Agreement (it being understood that these Capital Improvement Expenditures shall not be an expense chargeable to the City); or (d) in the Arena Manager’s reasonable opinion, will improve the Arena Facility, increase Operating Revenues or reduce Operating Expenses or which are reasonably expected to ensure the economic competitiveness of the Arena Facility. Upon installation, any modifications or installations funded by the Capital Improvement Contributions shall become a part of the Arena Facility and the property of the City. 11.5 Renewal and Replacement Account.. 11.5.1 The Arena Manager shall, prior to the Closing Date, establish and maintain the Renewal and Replacement Account which shall at all times remain the property of the City until disbursed in accordance with this Section. (a) Interest earned on the Renewal and Replacement Account shall not be Operating Revenues and shall be considered part of the Renewal and Replacement Account. (b) Monies shall be disbursed from the Renewal and Replacement Account for Capital Improvement Expenditures pursuant to the provisions of this Agreement. 47
SUBSTANTIAL FINAL DRAFT 11/27/12 12:35 (c) The City shall take such actions as are required to cause such disbursements to be made as and when required by the provisions of this Agreement. (d) The amounts on deposit in the Renewal and Replacement Account pursuant to this Section shall not be Operating Revenues. (e) The City shall appropriate Capital Improvements Contributions subject to and in accordance with the City’s capital improvements budget process. 11.6 Emergencies.. In the event of an Emergency: 11.6.1 The Arena Manager shall make the repairs necessary to alleviate such Emergency, in which event the Arena Manager shall pay for or be reimbursed for the cost of the work from the Renewal and Replacement Account or such other City funds that may be legally expended. Such payment or reimbursement shall be made to the Arena Manager within seven business days from the Arena Manager’s submission of appropriate documentation. 11.6.2 The City and the Arena Manager will meet immediately to determine the extent of the work necessary and the funding for such work. 11.6.3 The Arena Manager shall comply with all of the governmental requirements pertaining to the work performed. 11.6.4 The Arena Manager may use monies from any Arena Account (other than the Renewal and Replacement Account) to pay for Capital Improvement Expenditures in the event of an Emergency requiring Capital Improvements. 11.7 City Rights.. 11.7.1 The City shall have the right, without the prior consent of the Team Owner, but with the prior consent of the Arena Manager, to make Capital Improvements or other repairs to the Arena Facility (other than the Exclusive Team Spaces) using the Renewal and Replacement Account if the Capital Improvements or other repairs are in the City’s estimation reasonable and necessary and improve the structural integrity of the Arena Facility and do not fundamentally alter the character or suitability of the Arena Facility for use as a multi-purpose arena facility in compliance with all applicable NHL requirements and Applicable Law, and are done in a manner as to not unreasonably interfere with the operation of the Arena Facility. 11.7.2 The City shall provide the Arena Manager with not less than 30-day notice of, and a schedule for, any such Capital Improvements or other repairs. 11.7.3 All work shall be performed pursuant to a schedule reasonably approved in advance by Arena Manager to minimize any interference with operations of the Arena Facility. The location of any staging area shall be subject to approval by Arena Manager, which shall not be unreasonably withheld, conditioned or delayed. 11.7.4 The City’s design and construction contractors and subcontractors shall comply with reasonable security and identification procedures established by Arena Manager for access to the Arena. 48
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