15 - Event Center Lease Agreement

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Item No. 15 TO: Mayor & Council FROM: John Godwin, City Manager SUBJECT: EVENT CENTER DATE: July 12, 2019 BACKGROUND: In late 2015, after a number of years of trying to transfer their Events Center to the city, we took the facility over from the Red River Valley Fair Association. The center had been used successfully for many years by the association as a bingo hall. When that failed they tried to make it work as an event center for daily or hourly rent. However, due to the age of the building, the lack of paid fair staff to maintain it, its distance from the main fair area, and a general lack of interest, the association needed to divest itself of the facility. Because the city owns the land it sits on, we were the logical entity to take it over. STATUS OF ISSUE: Although the city added no new staff for the center, we nonetheless invested a good bit of time and money in the facility, including replacing HVAC units, painting the building inside and out, repairing and refinishing the floors, replacing all the ceiling tiles, and purchasing new tables and chairs. We have increased overall rentals, and have developed some programming for seniors, but the building is still underutilized and a financial drain. Although we were not seeking to rid ourselves of the facility, Samantha Hughes recently contacted us about leasing the facility to prepare and serve meals under a federal program(s). This will be a good service for the community, and because the facility will be leased full-time, it will also have the positive effect of reducing our time and costs taking care of the center. BUDGET: Will generate new revenues and reduce expenditures. RECOMMENDATION: Approve attached lease and authorize the city manager to execute.