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9.2. SR 01-04-2021 Request for Action To Item Number Mayor and City Council 9.2 Agenda Section Meeting Date Prepared by General Business January 4, 2021 Cal Portner, City Administrator Item Description Reviewed by Furniture and Things Community Event Center Chris Potenza, Front Burner Sports & Entertainment Concession and Catering Services Management Reviewed by Agreement Peter Beck, City Attorney Action Requested Approve, by motion, Furniture and Things Community Event Center Concession and Catering Services Management Agreement with Chow Mixed Grill & BBQ, LLC, d/b/a/ Serrano Brothers Catering. Background/Discussion In March of 2020, the City Council engaged Front Burner Sports & Entertainment to develop a naming rights strategy and solicit local and regional business to partner with the city for naming of the new multipurpose facility and facility amenities. Since that date, Chris Potenza of Front Burner Sports & Entertainment has diligently marketed and communicated with potential community partners for the facility. In October of 2020, the Council approved a 15-year facility naming rights agreement to officially brand the multipurpose facility as the Furniture and Things Community Event Center. Mr. Potenza and the city naming rights committee are proud and excited to introduce Serrano Brothers Catering as our latest facility partner. The Serrano Brothers Café will provide a broad range of concession options for visitors and be our exclusive caterer. Financial Impact The agreement is for seven years with a begin date dependent upon pandemic operations limitations. The management fee is structure for $5000 in year one $10,000 for year two and $15,000 for years three through seven. The city will also receive 12% of concession net revenue and 6.5% of catering sales in the facility. Mission/Policy/Goal Elk River is a welcoming community with revolutionary spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Attachments  Concession and Catering Services Management Agreement The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Updated: August 2020 MANAGEMENT AGREEMENT FOR CONCESSION AND CATERING SERVICES THIS CONCESSION AND CATERING SERVICES MANAGEMENT AGREEMENT ("Management Agreement"), made and entered into this day of January, 2021 ("Agreement Date"), by and between the CITY OF ELK RIVER, a political subdix ision (hereinafter referred to as "City") and CHOW MIXED GRILL & BBQ, LLC, d/b/a SERRANO BROTHERS CATERING, a MiruZesota limited liability company located at 14043 Business Center Drive ,-\rw, Elk River, MN 55330 (hereinafter referred to as "SBC"). RECITALS 1. SBC represents that it is a Minnesota limited liability company in good standing 11-71th the State of Minuiesota and that its o«Tiers, agents, representatives and employees have the necessary education, training, experience, certification and licensing required to manage food and beverage concession and cateruig services as provided in this Management Agreement. 2. The Citv is a political subdivision pursuant to Mimiesota Statutes. 3. The City owns and operates the Elk River Multi-Pu pose Facility ("MPF"). 4. Except as othem ise pro -tided herein, the City desires to have SBC manage all food and beverage concession and catering services at the MPF, and SBC is willing and able to provide these management services. In consideration of the mutual promises set forth herein, it is agreed by and between the City and SBC as follows: ARTICLE I SBC RESPONSIBILITIES A. Concession Services. SBC shall manage the concession stand on the second floor of the MPF. 1. SBC shall proilde full concession services at all times that the MPF is open to the general public. a. General operating hours for the MPF «ill initiallv be: W During the school year: Monday - Friday: 5:00 p.m. - 9:00 p.m.; and Saturday, Sunday and all school holidays: 7:00 a.m. - 9:00 p.m. (ii) During the summer months: Monday - Friday: 6:00 p.m. - 9:00 p.m.; and Saturday, Sunday and holidays: 8:00 a.m. - 9:00 p.m. (I1752655.4 )EL185-44-683214.v4 b. Special event hours. In addition to being open during the general operating hours of the MPF, SBC twill prof-ide concession services for special events which may extend beyond the general operating hours. City uvill give SBC 30 days' notice of extended hours for special events. C. City and SBC may agree to uicrease or reduce the operating hours for die concession stand, but such an agreement must be mutual and in writing. d. No alcoholic beverages, nor any red beverages such as fruit punch, etc., may be sold or served at the concession stand. B. Catering Services. SBC shall manage all catering services at the MPF and shall have die exclusive right, subject to the exceptions set forth below, to provide catering services at the MPF for all catered events. 1- City and SBC shall work together to book duuiers, banquets and other special events at the MPF, but City shall retain the sole right to approve all catered events. 2. SBC shall manage catering services for any and all catered events booked and approved by City. 3. Alcoholic beverages may be served at catered events, provided that: a. SBC obtains all required licenses to serve alcohol at the MPF; and b. Alcoholic beverages may only be served and consumed i1 the space or room rented for the catered event. 4. City shall cooperate with SBC to discourage the public from bringing food and beverages into the MPF. However, groups under twenty-five (25) people renting space for team meetings, birthday parties aid similar family functions, will be allowed to bring m bi-thdav cakes, non-alcoholic beverages, light refreshments and potluck -type dishes, but food Ivill not be allowed to be delivered or provided by food vendors other than SBC. 5. In addition to the exception for small events, SBC will not have exchisi-,ity with respect to the Senior Center space within the MPF, which isvill not be subject to restrictions on outside food or use of outside vendors. C. Fountain and Vending Services. 1. SBC shall contract for and provide fountain beverage services for the concession stand and catered events. 2. City retains the right to enter alto a separate contract to place vending machines it the MPF. However, City agrees not to place food or beverage machines in the second floor concession swid area. 111752655.4 i EL185-44-683214.v4 D. Operations. SBC shall manage all concession and catering services operations. 1. SBC shall employ and provide adequate staffing for all concession and catering services operations, and shall be responsible for the supervision and compensation of all necessary employees. 2. SBC shall be responsible for the purchase, inventory and security of all non - vending food products sold at the MPF. 3. SBC shall meet all health regulations, city ordinances, state law, federal law and any other regulations, rules or requirements concerning food and beverage concession and catering services. 4. SBC may use appropriate promotions and advertising techniques to promote concession and catering operations at the MPF, subject to approval by the City. �. SBC shall be responsible for cleaning and maintaining the second floor concession area including the concession stand, kitchen areas, servicing areas and all accompanying equipment. 6. SBC shall be responsible for the maintenance and repair of all City -owned concession stand equipment used by SBC and its employees 7. SBC shall comply with all written procedures and policies set by the City and provided to SBC pertaining to the operation of the concession stand and use of the MPF. 8. SBC shall provide any additional food preparation equipment required by SBC not currently located in the MPF kitchen, nith approval by the City. Additional equipment attached in any way to the MPF, such as exhaust hoods, etc. shall become property of the city and shall remain in the MPF at the termination of this Agreement. 9. SBC shall properly secure and shall be solely responsible for all SBC property, including food and beverages, stored at the .MPF. 10. During the term of this Management Agreement, SBC shall obtain and maintain all required licenses and approvals to provide concession and catering services at the MPF. 11. SBC shall be responsible for the financial control of all concession and catering operations provided by SBC under this Management Agreement. All transactions regarding fees charged to the public for food and beverages will be tracked by SBC. SBC will pay the City its percentage of revenues on a monthly basis in accordance with Article III of this Management Agreement. (11752655.4 } EL185-44-683214.v4 ARTICLE H GTTY'S REsPONSIBILTM A. Integration and Branding. City shall partner mith SBC to promote the MPF and SBC through the integration and branding activities and opportunities summarized on Exhibit A attached hereto. B. Occupancy. City shall provide SBC with access to the second floor concession area of the MPF, including the kitchen and concession stand, at all times the MPF is open, and shall Pi access to other areas within the MPF as necessary for catering special events and other functions. C. Equipment. SBC shall have the right to use all City -owned equipment presently located in the concession stand area of the MPF, as enumerated on Exhibit B attached hereto. 1. City warrants that all of the equipment provided is in good and working condition. SBC shall be responsible for the maintenance and repair of the equipment. However, if a piece of equipment. breaks and is cost prohibitive to repair, City shall at its cost replace the major equipment (as identified by x on Exhibit B) with equipment of equal or better quality. D. City shall provide all utilities and shall provide trash removal and general custodial senices, other than cleaning of the kitchen, concession stand, equipment and serving areas. ARTICLE III TERM AND TERMINATION A. Commencement of Term. Due to the current Covid restrictions on opening the MPF for public use, SBC shall not begun operations at the MPF until City has given SBC written notice to do so. The City's mitten notice shall state the date that SBC will be required to begun operations (the "Effective Date"), which shall be no less than 60 days after the date of the written notice. Prior to the Effective Date SBC may, if the City grants its written permission, enter the MPF to prepare the concession stand area for the Effective Date. B. Fixed Term. The Term of this Management Agreement shall commence on the Effective Date and remain in effect for a period of seven (7) years, until the 7"' anniversary of the Effective Date (the "Expiration Date"). C. Early Termination for Cause. Either party may terminate this Management Agreement for good cause shown. The terniuiating party shall give a written "Notice of Intent to Terminate" the Management Agreement The Notice of Intent to Terminate the Management Agreement shall set forth the reason(s) for ternnination of the Management Agreement, and shall allomr for a "Cure Period" of at least thirty (30) days during which time the non-termuiating party shall have the opportunity to cure the purported breach or default. If either party fails to cure and Good Cause continues to exist follovvni ig the applicable Cure Period, the other party shall be entitled to terminate the Management Agreement or seek specific performance, and in any event, may sue for damages. In any action for damages under this Management Agreement, neither party shall be (11752655.4 1 4 EL185-44-683214.v4 liable or responsible under anv circumstances for consequential, incidental, indirect lost profit, or punitive damages of any kind. 1. "Good cause" for the City to terminate includes, but is not limited to, the following: a. Any material breach of the terms, conditions, and obligations of this Management Agreement by SBC; b. Failure by SBC to deliver the payment provided for in Article IV hereof; C. Any crime by SBC or any principal or owner of SBC that causes SBC to come into disrepute in the greater Elk River Area; d. Occurrence of insolvency or bankruptcy of SBC, or upon the general assignment by SBC for the benefit of creditors, or upon the consent of SBC to the appointment of a receiver, trustee, or liquidator of all or substantially all of its property; or e. Occurrence of a Transfer Event which the City has not consented to, as provided in Article VII of this Management Agreement. 2. "Good cause" for SBC to terminate includes, but is not limited to, the following: a. Any material breach of the terms, conditions, and obligations of this Management Agreement by the City. D. Early Termination by SBC. SBC may terminate this Management Agreement for any reason, effective any time after the third (31 anniversary of the Effective Date, by giving the City no less than one (1) year's written notice of its intent to terminate. SBC shall pay to the City, at the time of its written notice to terminate, a $15,000 early termination fee; and shall make all annual and percentage payments due prior to the effective date of such termination as othenvise provided in this Management Agreement. ARTICLE IV MANAGEMENTFEE A. Management Fee. As payment for its management of concession and catering services at the MPF, SBC shall be entitled to a Management Fee equal to the net revenues from concession and catering sales, less the Annual and Percentage Payments to City, set forth in Article IV B and C below. B. Annual Payments. 1. SBC shall make an annual payment to the City pursuant to the following schedule: 111752655.4 1 EL185-44-683214.v4 Year one: Year two: Years three through sever: $ 5,000.00 $10,000.00 $15,000.00 2. The first annual payment shall be due on the Effective Date; and subsequent annual payments shall be due on the anniversary of the Effective Date. C. Percentage Payments. 1. In addition to the annual payment, SBC «ill pay the City a percentage of the annual net revenues generated through the concession and catering services provided by SBC, as follows: Concession sales: Catering sales: 12.0% 6.5% Net revenues shall be defined as SBC's total gross sales, less sales taxes, refunds, rebates, credits or returns from its operations at the MPF. 2. Payments under the revenue sharing formula will be made to the City on or before the 30" day after the preceding year. 3. SBC agrees to provide appropriate records of gross and net revenues to the satisfaction of the City for review «vide each percentage payment. 4. SBC agrees that it is not entitled to and will not take any tax position that is inconsistent with being a ser-vice provider to the City vvith respect to the MPF. For example, SBC shall not to claim any depreciation or amortization deduction, investment tax credit, or deduction for any payment as rent «pith respect to the MPF. 5. The City may require that this Agreement be amended and restated on the 2'd anniversary of the Effective Date or any day thereafter if the City determines that, in order to preserve die tax-exempt status of the Ciq, s General Obligation Sales Tax Revenue Bonds, Series 2019A or any bonds issued to refund such bonds, it is necessary to amend this agreement to meet die requirements of a qualified management agreement ii accordance with Rev. Proc. 2017-13. ARTICLE V INDEPENDENT CONTRACTOR A. This Management Agreement calls for the management of concession and catering services by SBC as an independent contractor and SBC, its employees, agents or representatives will not be considered employees of the City for any purposes. B. SBC covenants that SBC has no interest and shall not acquire any iiterest; direct or indirect, fuiancial or othenvise, that would conflict m any manner or degree with the performance of services hereii. 111752655.4 ] EL185-44-683214.v4 C. SBC shall provide appropriate identification of its agents, employees and representatives during the performance of this Management Agreement at the MPF. SBC acknowledges and recognizes thatit is a fair and equal opportunity employer and that its employees, representatives and agents have had training in sexual harassment, gender sensitivity and cultural diversity. D. By executing this Management Agreement, SBC certifies that it has reviewed the provisions of Minnesota Statutes with respect to workers' compensation, and SBC restates that it is an independent contractor and certifies that SBC will comply with the provisions of the Workers' Compensation Statute as an independent contractor before commeneuig the performance of work under this Management Agreement- E. SBC will designate personnel whose responsibilities shall be working with the City, in coordinating and implementing this Management Agreement. ARTICLE VI NON ASSIGNABILITY A. SBC recognizes and acknowledges that this Management Agreement for concession services cannot be transferred, assigned or subcontracted by SBC. ARTICLE VH INDEMNIFICATION; INSURANCE A. Indemnification. Without a waiver of the City's statutory immunities pursuant to Miimesota Statutes Chapter 466 or other applicable law, each party agrees to defend, hold harmless and indemrnify the other Party against any and all claims, liabilities, damages, judgments, costs, and expenses (including reasonable attorneys' fees and costs) asserted against, imposed upon, or incurred by the other Party that arises out of, or in comiection the Parry's default under or failure to perform any contractual or other obligations, commitment, or undertaking under this Management Agreement, or any other act or omission of a Party or its employees, agents, or representatives to the extent allowed by the law. Each Party further agrees that it shall be responsible for its own acts and results thereof to the extent authorized by law and shall not be responsible for the acts of the other Party and results thereof. The provision of this Article shall survive the termination of the Management Agreement with respect to any claim, action, or proceeding that relates to acts or omissions during the term of this Management Agreement. B. City Insurance. The City shall maintain such insurance as is customarily maintained by owners of comparable facilities. C. SBC Insurance. Prior to performance of concession services under this Management Agreement, SBC agrees to provide the City with a copy of its Certificate of Insurance for both catering and liquor, naming the City as a co-insured, and all appropriate licenses. The anhowits of insurance shall be no less than the statutory amounts required by cities. All such insurance policies shall contain a provision that they may not be cancelled unless prior written notice thereof is given to the City not less than twenty (20) business days prior to such cancellation date. SBC shall purchase and maintain insurance to protect itself from claims under the Worker's Compensation Acts. {11752655.4 ) EL185-44-683214.v4 ARTICLE VIII NOTICES All notices herei ider by either Party to the other shall be in writing. All notices, demands, or requests shall be deemed given when mailed, postage prepaid, registered or certified mail, return receipt requested. If to the City Ifto SBC: City Administrator Chow Mixed Grill & BBQ, I L.0 City of Elk River Alin: Scott Bullock 13065 Orono Parkway 14043 Business Center Drive N TXV Elk River, MN 55330 Elk River, MN 55330 ARTICLE IX GENERAL PROVISIONS A. Amendments. Neither this Management Agreement nor any term or provision hereof may be changed, waived, discharged or terminated, except by a written instrument signed by tlne Parties hereto. B. Interpretation of Management Agreement. The captions preceding the articles and sections of this Management Agreement have been inserted for convenience of reference only and such captions shall ui no way define or limit the scope of intent of any provision of this Management Agreement. Unless otherwise pro-,rided herein, whenever the consent of the City is required to be obtained, the City may give or withhold such consent in its sole and absolute discretion. C. Severability. If any provision of this Management Agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or miennforceable, the remainder of this Management Agreement shall not be affected thereby, and each other provision of this Management Agreement shall be valid and be enforceable to the fullest extent permitted by law. D. Attorneys' Fees. In the event of a dispute regarding any provisions of this Management Agreement, the Party not prevailing in such dispute shall pay any and all costs and expenses incurred by the other Part-v in enforcuig or establishing its right hereunder (whether or not such action is prosecuted to judgment), including -without limitation, court costs and attorneys' fees. E. Time of Essence. Time is of the essence with respect to all provisions of this Management Agreement in which a definite time for performance is specified including, but not limited to, die expiration of the terns. F. Cumulative Remedies. All rights and remedies of either party hereto set forth in this Management Agreement shall be cumulative, except as may othenvise be provided herein. G. Survival of Indemnities. Termination of this Management Agreement shall not affect the right of the City or SBC or to enforce any and all indemnities and representations and warranties (11752655.4 ) EL185-44-683214_v4 given or made to the other Party under this Management Agreement, nor shall it affect any provision of this Management Agreement that expressly states it shall survive termuiation hereof. H. Entire Agreement; Exhibits. This Management Agreement, including exhibits, shall constitute the entire agreement of the Parties. Any and all prior agreements or understandings of the Parties sliaU, upon execution of this Management. Agreement, be null and void. I. Waiver. 1. Any term or condition of this Management Agreement may be waived at any time by the Party entitled to the benefit thereof. The waiver of any terns or condition shall not be construed as a waiver of any other terns or condition of this Management Agreement. 2. The failure of either Party to give notice or demand strict performance by the other of any of the terms, obligations, covenants or conditions set forth herein shall not be construed as a waiver or relinquishment of the other Party Is right to seek a remedy for or demand strict performance of said terms, obligations, covenants and conditions. 3. The failure to terminate this Management Agreement for default shall not constitute a waiver of any remedies the non-defaultuig Party would otherwise be entitled to demand. 4. All waivers shall be done in writing to be valid. J. Force Majeure. If the performance by any Party of any obligation set forth ul this Management Agreement (other than the payment of money) is prevented by an act of God, force majeure, pandemic or similar contingency or unexpected event beyond the control of any Party, such occurrence shall be considered a valid excuse for non-performance or delay in the performance of the obligations hereunder. K. Compliance with Laws. In performing its obligations under this Management Agreement, each Party «Till comply with all local ordiriances, state and federal statutes, orders, by- laws, regulations, and other laws of any applicable governmental entity or agency. 1. SBC agrees to abide by the applicable provisions of the Minnesota Goverimient Data Practices Act, Minnesota Statutes, Chapter 13, and all other applicable state or federal lames, rules, regulations or orders pertaining to privacy and confidentiality. L. Costs and Expenses. Each Party must pay its own legal costs and expenses for the negotiation, preparation, and execution of this Management Agreement. M. Dispute Resolution. The parties shall cooperate and use their best efforts to ensure that the various provisions of this Management Agreement are fulfilled. The Parties agree to act in good faith to undertake resolution of disputes in an equitable and timely nmatuier and in accordance with the provisions of this Management Agreement. If disputes cannot be resolved umfornnally by the Parties, the following procedures shall be used: (11752555.4 ) EL185-44-683214.v4 I. Whenever there is a failure between the Parties to resolve a dispute on their own, the Parties shall first attempt to mediate the dispute. Either Party may initiate a mediation by written notice to the other party, which notice must be responded to within ten (10) days. 2. The Parties shall agree upon a mediator, or if they cannot agree, shall obtain a list of court -approved mediators from the Sherburne Comity District Court Administrator and select a mediator by alternatively striking names until one remains. The City shall strike the first name, folloived by SBC, and shall continue in that order until one name remains. 3. The mediation shall be held within thirty (30) days of the selection of the mediator. 4. If the dispute is not resolved within thirty (30) days after the end of mediation proceedings, the Parties may pursue any legal remedy. N. Governing Law andJurisdiction. Any and all matters in dispute between the Parties arisuig from or relating to this Management Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Minnesota and the exclusive jurisdiction for any claim or action arising out of or relating to this Management Agreement shall be the state or federal courts located in Sherburne County, State of Minnesota, and each Party further agrees to consent to the exercise of personal jurisdiction by such courts for the purpose of litigating any such claim or action. O. Section Headings. Section headings are for reference purposes only and are not untended to create substantive rights or obligations. (Signature page folloTI's ) (11752655.4 ) 1.0 EL185-44-683214.v4 IN WITNESS WHEREOF, the parties have executed this Management Agreement the day -aid year first above written. CITY OF ELK RIVER By: John J. Dietz Its Mayor By:_ Tina Allard Its Citv Clerk (11752655.4 j S - 1 EL185-44-683214.v4 CHOW ACC ED GRILL & BBQ, LLC, d/b/a SERRANO BROTIHM CATERING By: -z4 Scott Bullock LIts:resident By: Marco Serano Its: Vice President EXHIBIT A Integration and Branding Activities and Opportunities Cafe Integration • Branded signage to be displayed above the Cafe main counter. • Integration into signage at all MPF Upper Level Entrances. • Opportunity to display and distribute promotional materials within the MPF • Inclusion of the Cafe Logo in all city -produced marketing materials and communication. Interior Branding • Inclusion of Serrano Brothers Catering in a rotation of advertising messages displayed on video displays located between the Premier Rink Viewing Windows. • Inclusion of the Serrano Brothers Catering logo and brand messaging on the facility wide IPTV system. • Integration into interior directional signage and ancillary messaging found in the MPF Rink Branding • Two (2) X x S' dasherboards will be strategically placed on each ice rink in the MPF for maximum visibility. Video Display Exposure • Logo exposure and/or video exposure in an advertising rotation displayed on premier video screens throughout events where video screens are in operation. Fieldhouse Branding • One (1) wall banner prominently featuring Serrano Brothers Catering logo and messaging. Senior Center Integration • Serrano Brothers Catering will be promoted inside the Senior Activity Center with table tents and a posted menu promoting items available at the Cafe. Digital Activation • Inclusion on the official website and social media pages of the MPF • Inclusion in e-newsletters and other digital communication distributed by the city in connection to the MPF and any affiliated programs. 111752655.4 ) A-1 EL185-44-683214.v4 Brand Name Description Model # Serial # J Hoshizaki Two Door Freezer F2A - FS J8159M Hoshizaki Two Door Refrigerator R2A - HS J70099K Hoshizaki One Door Refrigerator UR27A-LP J70613M Hoshizaki One Door Refrigerator UR27A-LP J70614M Hoshizaki One Door Refrigerator UR27A-LP J70615M Hoshizaki One Door Refrigerator UR27A-LP J70616M Hoshizaki Mid two door Refrigerator R1A-HSL J70082L Cresor 2 Door Hot Food Warmer 1254062 CCAAJ000573569-11 Hoshizaki Ice Machine F-801MAJ-C H008442E Unox Convectional oven XAF135 287 Alto Sham Convectional oven VMC-H4H 2726679-000 Alto Sham Hot Food Holder 500 - S 2720734-000 Standex Counter Top 12x20 Warner CW-2AI 8152219080064 Standex Counter Top 12x20 Warner CW-2AI 8152219080051 Carlsle Dual lamp Food Heater HL7237 NA Vita Mix Corp Commercial Food Blender VMC-H4H 001500-97 Gold Medal Pretzel/Warmer 5552PR HPROW-00767 12729212 Curtis(Bernicks) Cappuccino Machine PCGT3 Curtis(Bernicks) Cappuccino Machine PCGT3 13696362 Gehl's Hot Cheese Machine HT2 PS-314 481607 Round -up Pizza Station 5119089 Gold Medal Popcorn Machine 2552-00-001 2522-00-001-072 Curtis Coffee Maker _ TP2S10A3100 10861566 Turbo Chef High Speed Oven 13 13-002734 Bernicks Small Refrigerator G-7s S201408170088 Bernicks I Small Refrigerator Commercial Microwave G-7s s201406270039 Sharp , 120OW/R 22GT 111752655A ) B-I EL185-44-683214.v4