Sparks City Council Meeting 4/12/2021 2:00:00 PMMeeting Link: https://zoom.us/j/99416800587
Meeting Dial-in #: 1-669-900-6833 Meeting ID: 994 1680 0587
General Business: 9.12
A Business Impact Statement is not required because this is not a rule.
On March 2, 2021 Governor Sisolak issued guidance for adult and youth sports that allows for limited reopening of "minimal contact" sports such as baseball, softball and soccer. With the reopening of Golden Eagle Regional Park (GERP), the concession contractor, SBAL, LLC, will be able to operate its business to serve the limited number of patrons at the facility. In light of the negative financial impacts to SBAL's business at Golden Eagle, this proposed Addendum #2 to the Agreement for Golden Eagle Regional Park Concession Services with SBAL would: (1) eliminate SBAL's monthly rent payments to the City for the months of January, February, and March of 2021; and (2) reduce SBAL's monthly rent payment by fifty percent (50%) for the period of April 1, 2021 through December 31, 2021.
In 2009, the City Council approved an agreement with SBAL, LLC (SBAL), for concession services at Golden Eagle Regional Park (GERP). 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 GERP 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 GERP's fields.
On June 8, 2020, the City Council approved an addendum to the GERP concessions agreement (AC-3762) that allowed for waiver and reduction of rent payment to the City through December 31, 2020.
On March 2, 2021 Governor Sisolak issued guidance for adult and youth sports that allows for limited reopening of "minimal contact" sports such as baseball, softball and soccer. Youth and adult sports reopened at GERP near the end of March at reduced capacity due to social distancing requirements; it is anticipated that the park will host approximately half of the number of patrons that would normally visit the park.
These actions will have a significant negative financial impact on SBAL's business. Given these financial difficulties, SBAL contacted City staff and requested an additional amendment to the concessions agreement. Through negotiations with SBAL, staff developed the proposed Addendum #2, the terms of which are discussed below.
Neither staff nor SBAL knows when GERP's fields will reopen to full capacity. Staff and SBAL anticipate that when activities fully resume at GERP, attendance - and food and beverage sales - will be greatly reduced due to social distancing requirements and potential patrons' safety concerns. In other words, staff anticipates that SBAL's revenue from GERP will be reduced for the remainder of 2021.
Therefore, under Section A(2) of the proposed Addendum, the City would waive SBAL's monthly rent for the months of January, February, and March 2021. Section A(3) of the Addendum reduces SBAL's monthly rent payment by by fifty percent (50%) from $8,333.00 per month to $4,166.50 per month for the period of April 1, 2021 through December 31, 2021. If City Council approves the Addendum, the City will forgo $62,497.50 in rent revenues in calendar year 2021.
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.
The term of the Addendum is through December 31, 2021, so SBAL's monthly rent obligations will resume in full beginning January 1, 2022. 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 GERP 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. City Council may approve the proposed Addendum.
2. City Council may reject the proposed Addendum and give further direction to the City Manager.
I move to approve the Addendum #2 to Agreement (A-3762) for Golden Eagle Regional Park Concession Services with SBAL, LLC.