In 2009, the City Council approved an agreement with SBAL, LLC (SBAL), for concession services at Golden Eagle Regional Park (Golden Eagle). Pursuant to that agreement, SBAL has the exclusive right to sell food and beverages at Golden Eagle. In exchange for that right, SBAL agreed to pay the City $8,333.00 per month plus six percent of annual sales in excess of $1,666,667.00. The agreement's current term runs through 2024.

On March 15, 2020, the City cancelled all tournaments at Golden Eagle through at least April 30, 2020, in order to slow the spread of COVID-19. On March 24, 2020, the State of Nevada ordered local governments to limit the public's use of baseball and football fields, leading the City to close Golden Eagle's fields. As of the writing of this staff report, these directives remain in place; tournaments are still cancelled and Golden Eagle's fields remain closed. These actions have had a significant negative financial impact on SBAL's business. Given these financial difficulties, SBAL contacted City staff and requested to amend the 2009 agreement. Through negotiations with SBAL, staff developed the proposed Addendum, the terms of which are discussed below.

Neither staff nor SBAL knows when Golden Eagle's fields will reopen or when tournaments may safely resume. Staff and SBAL anticipate that when activities resume at Golden Eagle, attendance - and food and beverage sales - will be greatly reduced. In other words, staff anticipates that SBAL's revenue from Golden Eagle will be reduced for the foreseeable future.

Therefore, under Section A(2) of the proposed Addendum, the City would waive SBAL's monthly rent as long as the fields at Golden Eagle remain closed, up to December 31, 2020. This waiver is retroactive to April 1, 2020. Under Section A(3), when Golden Eagle does reopen, SBAL's monthly rent would be reduced to $4,167.00, or approximately fifty percent of the original monthly rent, through December 31, 2020. 

Section B of the proposed Addendum recognizes that various financial resources may be available to businesses impacted by COVID-19 and requires SBAL to notify the City if it receives a loan or grant from the Small Business Administration. If SBAL receives a substantial loan or grant, the City could terminate the Addendum, restoring the full monthly rent obligation. During negotations surrounding the Addendum, SBAL informed City staff that SBAL received a loan through the Paycheck Protection Program, but SBAL does not anticipate obtaining forgiveness of the loan amount or being able to use any substantial portion of the loan based on current regulations on the use of such funds. As a result, SBAL's obtaining this loan does not alter staff's opinion that the Addendum is reasonable under these unprecedented circumstances.

The term of the Addendum is through December 31, 2020, so SBAL's monthly rent obligations will resume in full beginning January 1, 2021. In addition, either the City or SBAL may terminate the Addendum for any reason with thirty days' notice. Terminating the Addendum would mean that the original Agreement would resume in full force and effect. 

SBAL has successfully operated the concession business at Golden Eagle for over a decade, and staff believes SBAL's continued operation at Golden Eagle is in the best interests of the City and the public. Therefore, staff recommends approval of the Addendum.

1. Council may approve the proposed Addendum.

2. Council may reject the proposed Addendum and give further direction to the City Manager.

I move to approve the Addendum to Agreement (A-3762) for Golden Eagle Regional Park Concession Services with SBAL, LLC.