HomeMy WebLinkAbout2021-02-23 - AGENDA REPORTS - ICE AND ENTERTAIN CENTER CONTR (2)Agenda Item: 17
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CITY OF SANTA CLARITA AGENDA REPORT
NEW BUSINESS
CITY MANAGER APPROVAL:1
DATE: February 23, 2021
SUBJECT: AWARD CONTRACT FOR THE OPERATION OF THE CITY OF
SANTA CLARITA ICE AND ENTERTAINMENT CENTER
DEPARTMENT: City Manager's Office
PRESENTER: Frank Oviedo
RECOMMENDED ACTION
City Council:
1. Award a five-year contract to American Sports Entertainment Company and the Los Angeles
Kings for operations of the City of Santa Clarita Ice and Entertainment Center, in the annual
amounts of: $288,126 for Fiscal Year 2020-21; $1,447,715 for Fiscal Year 2021-22;
$1,973,924 for Fiscal Year 2022-23; $2,059,410 for Fiscal Year 2023-24; $2,129,033 for
Fiscal Year 2024-25; and $1,461,844 for Fiscal Year 2025-26.
2. Appropriate $269,376 to expenditure account 15120-5161.037, $18,750 to expenditure
account 15120-5161.038, increase the On -Ice revenue account 120-4567.001 by $355,985
and the Rental revenue account 120-4311.012 by $3,000.
3. Authorize the City Manager or designee to execute a contract consistent with the deal points
outlined in this staff report, subject to final language approval by the City Manager and City
Attorney; modify the award based on revenue actuals; and execute up to two (2) five-year
renewal options, contingent upon the appropriation of funds by the City Council in the
annual budget for each fiscal year.
BACKGROUND
On August 25, 2020, the City Council approved the acquisition of real property located at 27745
Smyth Drive, herein referenced as the City of Santa Clarita (City) Ice and Entertainment Center.
Since the acquisition was complete, City staff have been diligently working on many aspects of
the Ice and Entertainment Center to ensure its consistency with other City facilities in providing
a high quality of life for members of the community through programming and recreational
offerings. Specifically, staff have been undergoing an extensive process to address facility
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improvements, technology improvements, communications branding, and the selection of an
operator.
Because various improvements to the Ice and Entertainment Center were funded in part by tax-
exempt bonds, the City must comply with IRS regulations regarding the use of the facility. Any
use of tax-exempt debt funded facilities by or for the benefit of private parties is referred to as
"private business use." IRS regulations set strict limits on the amount of private use permitted in
tax-exempt funded facilities. For this facility, because improvements were funded by both
taxable and tax-exempt bonds, private use of the facility is limited to 25%. In addition, it is
important the City maintain a certain level of control over the manner in which the facility is
managed. The RFP process and contract negotiations outlined below align with those
requirements.
Request for Proposals
On September 14, 2020, the City published a Request for Proposals (RFP) for an operator of the
facility. As a part of the RFP process, a mandatory site visit was conducted on October 6, 2020,
and included seven interested proposers. The RFP closed on October 29, 2020, with six
proposals submitted. An evaluator group, combined of six interdepartmental staff and one
external expert, reviewed the proposals and submitted their ratings. The evaluator group
conducted two rounds of interviews of the top three highest scoring proposers on November 12,
2020, and December 11, 2020.
The RFP results are shown below:
Rank
Company
Location
Score
1
American Sports Entertainment Company/ Los
Angeles Kings
El Segundo, CA
86.43
2
Ice -America
Harbor City, CA
83.36
3
Rink Management Services Corporation
Mechanicsville, VA
69
4
Special Ice
Livermore, CA
68.71
5
Community Sports Foundation
Granada Hills, CA
56.21
6
Sports Facilities Advisory
Clearwater, FL
47.36
The scoring system was based on the following criteria: the extent that the proposal
demonstrated the ability to successfully manage the multiuse facility, including a proven record
of accomplishment at other facilities; quality of overall financial plan, including fees and
marketing plan; creativity and quality of overall proposal; utilization and operation of the food,
beverage, equipment, and rental facilities; and the proposed annual revenue sharing and or
planned fee structure.
On January 19, 2021, American Sports Entertainment Company and the Los Angeles Kings
(ASEC/Kings) was selected to move forward to the negotiation and award phase of the process.
ASEC/Kings demonstrated an in-depth understanding of the scope of work and provided a
detailed operations approach. ASEC is the largest independent owner/operator of ice rink
facilities in the United States, managing five seasonal ice rinks and 17 year-round sports
facilities. Notable year-round facilities in Southern California include:
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UCLA Health Training Center, El Segundo - Approximately 120,000 square foot practice
facility with a 750-spectator arena, multiple practice courts, and offices; utilized as a
training facility for the Los Angeles Lakers
Toyota Sports Center, El Segundo - 135,000 square foot facility, three ice rinks, a fitness
center, full service restaurant, and pro shop; utilized as a training facility for the Los
Angeles Kings
LA Kings Ice at Pickwick Garden, Burbank - 35,000 square foot facility, one ice rink,
and pro shop.
ASEC also manages facilities across the country including but not limited to:
Westchester Skating Academy, Westchester, NY
Ice at the Galleria, Houston, TX
Polar Ice House - Wake Forest - Wake Forest, NC
Based on their management experience, completeness and financial viability of their proposal,
and interviews, staff recommends awarding the Operator Contract to ASEC/Kings.
Operator Contract
The Operator Contract provides that ASEC/Kings acts as a manager of the Ice and Entertainment
Center, providing all staffing, supplies, furniture, fixtures, equipment, inventory for sale,
amenities, routine maintenance, repairs, and services and other items as may be required to
support the operation and management of a quality municipal ice facility. ASEC/Kings will
provide programming opportunities for participants of all ages and abilities, including but not
limited to:
• Public Skating
• Youth and Adult Hockey Leagues
• Seasonal Camps
• Hockey and Figure Skating Clinics
• Contract Ice Rentals
• Birthday Parties and Special Events
In addition to the above, ASEC/Kings will be responsible for providing all services at the Ice and
Entertainment Center including, at a minimum, the following services and activities:
• Manage equipment rentals.
• Supervise and control the reservation process, i.e. ice times, tournaments, etc.
• Collect and deposit all daily revenues, including, but not limited to, monies from ice
rental fees, merchandise sales, equipment rentals, lessons, tournaments, and gift
certificate sales.
• Schedule and facilitate tournaments, clinics, and promotions that meet with the City's
image and priorities.
• Accommodate City use of the facility for non-traditional events, including but not limited
to, permitted film activity, expositions and conferences.
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• Provide diverse ice sports programming as well as other recreational type activities.
• Attend meetings, as requested, with the City to provide updates on the Ice and
Entertainment Center -related matters.
• Work cooperatively and collaboratively with the City management staff to provide a
positive experience for all users.
• Clean and maintain the facility in a manner such that it is attractive to guests and the
public.
• Maintain appropriate food and beverage services while the facility is open to the public.
City will coordinate with selected proposer on the food/beverage administration for any
non-traditional events.
Other key deal points for the ASEC/Kings contract include the following:
1. City Control: To ensure the tax-exempt status of the bonds that financed the Facility
improvements, the contract requires City review and approval of key decisions.
2. Shared Use: The Facility's ice rink, locker rooms, pro shop, cafe, fitness area, and first floor
office space will be managed by the ASEC/Kings. Meeting rooms and other rooms not
connected to the ice rink will continue to be managed by the City.
3. City Use of Rink: The City will have the ability to reserve the ice rink and other operator -
managed facilities, at no cost, a certain number of times per year for City events.
4. COVID-19: ASEC/Kings is responsible for COVID-19 protocols and compliance with related
orders from all authorities with jurisdiction.
5. Cafe: ASEC/Kings is responsible for hiring vendors for food and beverage cafe.
6. Pro Shop: ASEC/Kings is responsible for hiring vendor to run Pro Shop.
7. Customer Service Center: ASEC/Kings will likely utilize a room in the facility as a customer
service center where people can buy tickets, gear, and ASEC/Kings can host promotional events.
9. Tournaments: ASEC/Kings is responsible to schedule and run tournaments, and will
coordinate and collaborate with City scheduling, logistics, and operations of tournaments,
including the opportunity to pair hotels and offer other incentives.
10. Hours: Facility will be open approximately 15 hours per day; the City will retain final control
over setting hours.
11. Parking Lot / Landscaping: City will maintain parking lot and outside landscaping.
12. Waste Hauling: City will maintain responsibility for waste hauling.
13. Janitorial: ASEC/Kings is responsible for janitorial for entirety of area they control.
14. Technology: City is installing framework for all information technology systems;
ASEC/Kings is responsible for overseeing/ maintaining/ replacing as necessary.
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15. Maintenance: ASEC/Kings is responsible for routine maintenance; City remains responsible
for capital improvements exceeding $5,000.
The City will maintain oversight of certain operations, including marketing, sponsorship, and
special events. The contract amount for each fiscal year consist of an operating budget, base
management fee, and an annual incentive management fee of 10 percent of revenue greater than
$2,500,000 annually.
ALTERNATIVE ACTION
Other action as determined by City Council
FISCAL IMPACT
The recommended actions will address budget appropriations for Fiscal Year 2020-21, which
includes the appropriation of $288,126 in estimated expenditures and $358,985 in estimated
revenues. Future fiscal year budgets will be addressed through the annual budget process.
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