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12 - Love Civic Center & Hotel Occupancy Tax RateItem No. 12 s TO: Mayor & City Council FROM: John Godwin, City Manager SUBJECT: LOVE CIVIC CENTER & HOTEL OCCUPANCY TAX RATE DATE: October 12, 2018 BACKGROUND: The Love Civic Center was built in 1993 and is in need of major renovations, especially regarding major component systems such as HVAC, lighting and sound, and roofing. The Love Civic Center Board, a sub -component of the Lamar County Chamber of Commerce, is charged with oversight and management of the center. In 2017 this board contracted with WRA Architects to study the facility and help develop a long-range improvement and capital maintenance plan. Probable costs for all of the things that were looked at and identified totaled approximately $3 million, as of April 2017. The board has consistently looked at a much smaller figure, but even so, current revenues will be insufficient to fund many of the needs. STATUS OF ISSUE: Some of the board members addressed the city council in 2017 about various funding mechanisms, most prominently an increase in the Hotel Occupancy Tax (HOT) from its current 7%. Since that time the Chamber of Commerce eliminated a position from the VCC side of their overall budgeting to reduce costs, and with the city's agreement moved an additional '/2 cent from the VCC to the LCC. LCC board members have also visited with local innkeepers about an overall increase to the net HOT rate to eight or even nine cents. Support for the latter rate was a challenge, but most innkeepers see the need to repair and improve the Love Center, and understand too that current revenues will not allow us to even maintain the status quo at that aging, city -owned facility. Members of the LCC board initially asked to make a presentation to, and have a discussion with, the city council in October. However, much more work has been done in the interim. At this point, the board is asking for a two -cent rate increase in order to fund approximately $1.5 million in improvements. These costs would necessarily be funded by the issuance of certificates of obligation (COs). Our financial advisor ran a debt schedule on $1.5 million in debt with a 10 - year payback. Using the most recent year's remittances to the Chamber ($662,108), a two cent rate increase would yield $189,173. The annual debt payment would average around $185,000. When we re -wrote our agreement with the LCC in early 2018, I inserted a new provision (Section 2, attached and highlighted) that if debt is issued, the city would control those proceeds and only pass them on to the LCC as a reimbursement of work completed and invoiced. COs would be structured so that only proceeds from the HOT would pay the debt. BUDGET: Most of this much-needed remedial work is unfunded; significant capital outlay would require issuance of debt and an increase in the HOT rate to pay for it. RECOMMENDATION: Consider increasing the HOT rate by two cents to help fund capital maintenance and replacements. LEASE AGREEMENT This Agreement shall be between the City of Paris, Texas, a home rule municipal corporation (hereinafter CITY), and the Lamar County Chamber of Commerce, a 501 C-6 not- for-profit corporation (hereinafter CHAMBER), which in consideration of the mutual covenants, agreements, stipulations, and payments, do hereby contract and agree as follows. Section 1. Resonsibilities of Parties. CITY shall: 1. Convey to CHAMBER quarterly distributions of the Hotel Occupancy Tax collected pursuant to state law. 2. Retain five percent (5%) of quarterly Hotel Occupancy Tax proceeds to pay CITY's administrative costs, and for the purpose of funding special purpose grants to enhance tourism as approved by the City Council of Paris, and consistent with state law. CHAMBER shall: 1. Operate, support, fund, staff, and otherwise maintain an active Visitors and Convention Council (VCC) for the purpose of promoting tourism and the convention and hotel industry within the City of Paris. 2. Use one-half of HOT proceeds received from CITY for operation and maintenance of LCC facilities, and other such proceeds as are generated by or contributed to the LCC facilities to use, staff, maintain, and operate the Love Civic Center (LCC) facilities for the operation of a conference, meeting, convention, and exhibit center for holding conventions, meetings, exhibits and other events and activities to attract conventions, tourists, and other visitors and for the benefit of the City and the general public. 3. Deposit all Hotel Occupancy Tax (HOT) proceeds into a separate banking account at a local financial institution which is federally chartered and FDIC -insured in such a manner that no other funds of CHAMBER are or can be comingled with HOT proceeds. 4. Submit for approval by CITY, on or before August 1 of each year, a proposed annual program of work and budget for the VCC and for LCC facilities. 5. Submit minutes of the meetings of the VCC and LCC boards to CITY within thirty (30) days of approval of said minutes. 6. Comply with all state statutes and city ordinances pertaining to the use of leased facilities and of Hotel Occupancy Tax proceeds. 7. Maintain complete and accurate financial records of all expenditures of HOT and make such records available for review and inspection upon request of CITY. 8. Provide written quarterly reports to CITY, summarizing revenues and expenditures, as well as convention and tourism activities and statistics, and present such reports verbally upon request of CITY. 9. May, at its discretion, contract with qualified third parties to provide high quality promotion of tourism and the hotel industry. 10. May, at its discretion, establish operating policies and procedures that give day -of -the - week preference to activities and events at the LCC that are most likely to result in out-of-town visits which in turn will increase HOT proceeds and promote the hotel industry. 11. Subject to reasonable availability, provide to CITY six rent-free uses of LCC facilities; provided, however, CITY shall reimburse LCC for any damages, and shall make every reasonable effort to use LCC facilities on weekdays instead of weekend days. 12. Subject to reasonable availability, provide to Paris Junior College three rent-free uses of LCC facilities for college related functions; provided, however, that college shall provide a reasonable damage deposit and/or insurance coverage for each event and reimburse LCC for any damages. 13. Subject to reasonable availability, provide to the VCC three rent-free uses of LCC facilities for VCC related functions; provided, however, that VCC shall provide a reasonable damage deposit and/or insurance coverage for each event and reimburse LCC for any damages. 14. Maintain responsibility for all costs associated with the maintenance and operation of the LCC facilities, including all capital expenditures deemed necessary to keep any and all facilities in the same condition as of the date of execution of this agreement (normal wear and tear excluded) throughout the term of this Agreement. 15. Take every reasonable effort and accommodation to ensure accessibility to the LCC facilities by persons with disabilities. mss c lis iio 2. .Illl�tttu rs� �II.IIII�:I"1 rig �lir�s��s tions t e,-,trn,��m��,;r, .. s1ll,ol;tl �,� �r �!t��GUI���'�r t�tt7l.ti,�ru"��;w<1.111i, ���;rl�,�rl "t,','Ae �;w', aIrii nt,ss ',ks!tttts,'rd,lk:J'(Icl . c.t�,oetlls�urts,�a�� Ctrs:, C1 i`"" sAh�.tll a r ,t.ltt all�1Z1' serv'c 6,, cotjirill iirttowfdC1. C11"Y exll,t�i.Qa sus l�ss�l^;��. t.1 ;`srrtr .t,t s:�llrA ftorti S"'t'ir]l, CIIIAM11 1� ,''T sli�,ffl II'lave illttr rr° gll't, tsl.t,ztD Ssaibtrds,,,,d rn oft 'v4// °tti:teri. te(jtri.e,',A sl'llla;"bowl6j�r g, tO ri( lu It Nutri°r. t.ttar:llr�,rz f is l�sal �t� ,Ilss��s (".'apiiitil ILs eseo /e lb &1',) rft Vry 1 N Al hBll "R, for s ts,piW r �, " u "'ll: '^r��' rr.��t�ef. ll r� ( 'Id Lo tl� , Love C, ' ii ^tett. (,,",ens 6.t� r tritr�!it�t.tt,tt<tt:°t�°,c, �r.rrt.t;:� uts°��..srr°tas�s.,r�tts,��t��t�, ilk rrrso-, 4t s �;u°'��'uf��r,,6 a ��'� duri)rr�g t1w llr irtn o f.htii ,a r ui t 6r° rt,rr�t . Section 3. CHAMBER not an a gent of CITY. CHAMBER covenants and agrees it is an independent contractor and not an officer, agent, servant or employee of CITY; that CHAMBER shall have exclusive right and authority to control services to be performed hereunder and all persons performing same, and shall be responsible for the acts and omissions of its officers, agents, employees, contractors, subcontractors, and consultants; and that nothing contained herein shall be construed as creating a partnership or joint enterprise between CHAMBER and CITY for the purpose of this Agreement and shall, in no manner, incur expense or liability on behalf of CITY. Section 4. Hold harmless. CHAMBER does hereby agree to release, indemnify, and hold CITY and its officers and employees harmless from and against any and all demands, debts, liabilities, suits, claims, and causes of action of every kind and character whatsoever for damage or injury (including death) to persons and/or property occurring on the LCC facilities and resulting from CHAMBER's invitees, guests, agents, servants, or employees' presence upon, use, occupancy or enjoyment of the LCC facilities. CITY shall not be liable to CHAMBER invitees, guests, agents, servants, employees, or visitors due to the improvements located thereon, or hereafter constructed, or any other condition of the LCC facilities being improperly constructed, maintained, or being or becoming out of repair. However, both CHAMBER and CITY shall carry all requisite insurance Waiver by CITY of any breach by CHAMBER of the terms, covenants, conditions, or provisions of the Agreement shall not be deemed to be a waiver of any other breach of the same or other term, covenant, condition, or provision of this Agreement terminated for any of the reasons set out above and shall not bar the right of CITY to subsequently terminate this Agreement for any of the reasons set out above. Section 5. Severabilit r. complete a reement modification. In case any one or more of the provisions contained in the Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of the Agreement, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been included in the Agreement. This Agreement constitutes the sole and only Agreement of the parties to this Agreement and supersedes any prior understandings or written or oral agreements between the parties respecting the subject matter of this Agreement. However, this Agreement may be executed in duplicate originals, and each shall be considered an original document. No amendment, modification, or alteration of the terms of this Agreement shall be binding unless it is in writing, dated subsequent to the date of this Agreement, and duly executed by the parties to this Agreement. Section 6. Term. Recognizing the need of CHAMBER to invest and reinvest in LCC and facilities, and to consider long-term professional services agreements and programming for the promotion of tourism and the convention and hotel industry, this Agreement shall remain in full force and effect for a period of ten years, except that either party may terminate this Agreement, with or without cause, with a minimum of 364 days written notice. Recognizing that CITY will necessarily assume responsibility for any remaining debt for capital improvements to LCC facilities, CHAMBER shall submit to and receive approval of CITY prior to the issuance of any such debt. Section 7. Notice. All notices, demands, payments and other communications required to be given or made hereunder shall be in writing and shall be duly given if delivered by hand, messenger, telecopy or reputable overnight courier or if mailed by certified or registered mail, first class postage prepaid, and shall be effectively received upon the date of such delivery or two (2) days after such mailing, to the respective parties hereto at the addresses set forth below, or to such other address furnished in writing to the other party hereto. 01000 GENERAL REQUIREMENTS General Conditions 6.00 LS $ 10,800.00 $ 64,800.00 Architectural Fees - Interior & Exterior Design / ADA 1.00 LS $ 39,000.00 $ 39,000.00 Mechanical Engineer- Plumbing / HVAC Review 1.00 LS $ 12,000.00 $ 6,500.00 Register Accessibility Specialist - ADA Inspection 1.00 LS $ 2,400.00 $ 2,400.00 01000 GENERAL REQUIREMENTS SUBTOTAL $ 112,700.00 02000 SIIITIE DIRK ADA Signage 11.00 EA $ 60.00 $ 660.00 Landscape Planter Repair 1.00 LS $ 1,440.00 $ 1,440.00 Landscaping & Irrigation 1.00 LS $ 20,000.00 $ 20,000.00 Gravel Road Base 14,225.00 SF $ 0.90 $ 12,802.50 Pavement Markings 528.00 SP $ 30.00 $ 15,840.00 Uncover Downpout Drainage Lines 1.00 LS $ 1,800.00 $ 1,800.00 Power Wash Sidewalks 19,955.00 SF $ 0.08 $ 1,676.22 Joint Sealants - Paving / Sidewalks 590.00 LF $ 6.00 $ 3,540.00 Dumpster Screenwall 112.00 LF $ 36.00 $ - AC Unit Screenwalls 250.00 LF $ 36.00 $ - Transformer Screenwall 80.00 LF $ 36.00 $ - SITEWORK SUBTOTAL $ 57,758.72 'OT X11 Sidewalk Demo 2,200.00 SF $ 2.00 $ 4,400.00 Sidewalk Replacement 2,200.00 SF $ 6.50 $ 14,300.00 ADA Ramps 10.00 EA $ 600.00 $ 6,000.00 CONCRETE SUBTOTAL $ 24,700.00 0500011 ETALS 6' Wide Door Awning 2.00 EA $ 4,200.00 $ - Metal Panel Repair Allowance 0.00 LS $ 3,000.00 $ - METALS SUBTOTAL $ 05000 CAI PIII!!!,N"rill y Refinish Base Cabinets 0.00 LF $ 60.00 $ - Refinish Upper Cabinets 0.00 LF $ 42.00 $ - Bathroom Vainties 56.00 LF $ 222.00 $ 12,432.00 Countertops 112.00 SF $ 90.00 $ 10,080.00 CARPENTRY SUBTOTAL $ 22,512.00 07000 THEA MAUMOIISTURE Joint Sealants/Building Envelope 1.00 LS $ 5,000.00 $ 5,000.00 Roof Repair Allowance 1.00 LS $ 22,680.00 $ 22,680.00 THERMAL/MOISTURE SUBTOTAL I $ 27,680.00 �IId�JIIIIII1Il Exterior HM Doors / Frames / Hardware 0.00 EA $ 900.00 $ - Interior PLAM Doors & Hardware Allowance 1.00 LS $ 14,400.00 $ 14,400.00 Replace Glass at Storefront 200.00 SF $ 54.00 $ 10,800.00 Replace / Repair Storefront Entrances 8.00 EA $ 900.00 $ 7,200.00 Upward Coiling Security Grilles 2.00 EA $ 12,000.00 $ 24,000.00 OPENINGS SUBTOTAL $ 56,400.00 09000 FIIINISliES Drywall - Coiling Security Grilles 1.00 LS $ 5,000.00 $ 5,000.00 EIFS Repair Allowance 1,000.00 SF $ 12.00 $ 12,000.00 Main Hall - Floor Finish Demo at Main Hall 13,130.00 SF $ 0.60 $ - Main Hall - Polish Floors / Densifier / Sealer 13,130.00 SF $ 7.80 $ 102,414.00 Corridors - Tile Demo 4,706.00 SF $ 4.20 $ - Corridors - Tile Flooring 4,706.00 SF $ 7.80 $ 36,706.80 Restrooms - Tile Flooring Demo 1,450.00 SF $ 4.20 $ 6,090.00 Restrooms - Tile Flooring 1,450.00 SF $ 18.00 $ 26,100.00 Restrooms - Wall Tile Demo 2,250.00 SF $ 4.20 $ 9,450.00 Restrooms - Wall Tile 2,250.00 SF $ 12.00 $ 27,000.00 Green Room - Carpet 38.22 SY $ 54.00 $ 2,064.00 Conference Room - Tile Demo 2,314.00 SF $ 4.20 $ - Conference Room - Tile 2,314.00 SF $ 7.80 $ 18,049.20 Paint Exterior 18,611.00 SF $ 1.44 $ 26,799.84 Paint Interior 39,056.00 SF $ 0.74 $ 29,057.66 Repalce Ceiling Tile - Restrooms 1,480.00 SF $ 5.82 $ 8,613.60 Repalce Ceiling Tile - Conference Rooms 1,100.00 SF $ 4.80 $ 5,280.00 Replace Ceiling Tile - Corridors / Lobby 2,431.00 SF $ 4.80 $ 11,668.80 Replace Vinyl Ceiling Tiles - Kitchen / Scullery 5,098.00 SF $ - $ - Acoustical Panel Repair Allowance - Main Hall 3,500.00 SF $ - $ _ FINISHES TOTAL3 $ 326,29.900-� 10000 SPECIAI,,,TIES Building Letters 1.00 LS $ 9,250.56 $ 9,250.56 Toilet Partitions 26.00 EA $ 1,200.00 $ 31,200.00 Toilet Accessories 26.00 EA $ 2,280.00 $ 59,280.00 Restroom Mirrors 8.00 EA $ 720.00 $ 5,760.00 Repair Folding Partitions - Main Hall 1.00 LS $ 9,600.00 $ 9,600.00 Repair Folding Partitions - Conference Rooms 90.00 LF $ - $ - SPECIALTIES TOTAL 1 $ 115,090.56 11000 III!!!'r,QUIPMI!!rNT Icemaker 0.00 EA $ 4,210.00 $ Walk -In Cooler 0.00 EA $ 25,000.00 $ Building AN System 1.00 LS $ 250,000.00 $ 250,000.00 EQUIPMENT TOTAL $ 250,000.00 12000 FURNISIH11114GS Green Room Furniture Allowance 1.00 LS $ 5,000.00 $ 5,000.00 FURNISHINGS TOTAL $ - 5,000.00 15000 MECIII°fANIICAL Water Heaters 2.00 EA $ 4,000.00 $ 8,000.00 Replace Sinks / Faucets 18.00 EA $ 500.00 $ 9,000.00 Replace Toilets 20.00 EA $ 900.00 $ 18,000.00 Replace Urinals 8.00 EA $ 900.00 $ 7,200.00 Electric Water Coolers 8.00 EA $ 2,000.00 $ 16,000.00 HVAC (units and controls) 200.00 TON $ 1,500.00 $ 180,000.00 Hydronic System Allowance 1.00 LS $ 45,000.00 $ - MECHANICAL TOTAL$ 238,200.00] 16000 EI,,,,I','�;;C'111'"I1111CAL RV Station Boxes 1.00 LS $ 11,000.00 $ - Parking Lights / Poles 8.00 EA $ 3,000.00 $ - Wall Packs 6.00 EA $ 450.00 $ - Exterior Accent Lighting 1.00 LS $ 10,000.00 $ - Interior LED Lighting 18,500.00 sf $ 4.60 $ 98,400.00 Add Electrical Panels 1.00 LS $ 10,000.00 $ 10,000.00 Electrical for AV 1.00 LS $ 10,000.00 $ 10,000.00 Fire Alarm Panel and Components 0.00 LS $ 70,000.00 $ - Security $ - $ - ELECTRICAL TOTAL 1 $ 118,400.00 CONSTRUCTION SUBTOTAL Construction Contingency 10.0% $ 135,473.52 CONSTRUCTION TOTAL SVX31 *Siuvd HOUHNNOO AO H38WVH* ALMOO UVWVII U31N30 OIAIO SAOI wHsw 3NOIVV4 VVT A CL o ID 4D A CL c E cL E m 0 IL 06 IN i. 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