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Global Spectrum Amendment 2 AMENDMENT NO. 2 TO THE MANAGEMENT AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND GLOBAL SPECTRUM L.P. FOR THE MIAMI BEACH CONVENTION CENTER, COLONY THEATER AND BYRON CARLYLE THEATER This Amendment No. 2 to the Management Agreement, is made and entered into this day of . c�7 - c - W1 6-/2.. ? 2011, by and between the CITY OF MIAMI BEACH, FLORIDA, a municipal corporation having its principal office at 1700 Convention Center Drive, Miami Beach, Florida, 33139 (City), and GLOBAL SPECTRUM, L.P., a Delaware limited partnership, whose current address is 3601 S. Broad Street, Philadelphia, PA 19148 -5290 (Global). RECITALS WHEREAS, the City and Global are parties to a Management Agreement, dated October 1, 2008, pursuant to which the City engaged Global to manage and operate the Miami Beach Convention Center, Colony Theatre,. and Byron Carlyle Theater; which agreement was amended by an Amendment No. 1, dated April 14, 2010, and further modified by an exchange of letters in April, 2011 terminating Global's rights and responsibilities with respect to the Byron Carlyle Theater (the Management Agreement, as so amended and modified, is referred to herein as the "Agreement "); and WHEREAS, the initial term of . the Agreement was three (3) years, ending on September 30, 2011, subject to the City's right to extend the term for an additional two (2) years; and WHEREAS, the City desires to exercise its right to extend the term of the Agreement for an additional two (2) years, commencing on October 1, 2011, and ending on September 30, 2013, subject to making further amendments to the Agreement as described herein, and Global desires to accept such amendments and extension of the term as provided herein; and WHEREAS, capitalized terms used herein and not defined. herein shall have the meaning given to such terms in' the Agreement. NOW, THEREFORE, in consideration of the mutual premises, covenants and agreements herein contained, and other good and valuable consideration, in receipt and adequacy of which are hereby acknowledged and intending to be legally bound, the City and Concessionaire hereby amend the Agreement as follows: 1. The aforestated recitals are true and correct and incorporated by reference herein. 2. Pursuant to Section 3.2 of the Agreement, the City hereby exercises its right to extend the Term for an additional two (2) year period (a "Renewal Term "), with such Renewal Term commencing on October 1 2011, and ending on September 30, 2013. Global hereby accepts such extension, and the parties hereby confirm that the Renewal Term shall commence on October 1, 2011, and end on September 30, 2013. Page 1 of 13 3. Sections 8.4(b) of the Agreement, entitled "Performance Guarantees ", is amended as follows. (b) Performance Guarantees Global shall secure and deliver to the City Manager no Later than ten (10) days from the date this Agreement is executed, and shall keep in full force and effect at all times during the Term of this Agreement, the following: Global Corporate Guarantee. 1) Global shall provide a corporate guarantee, in such form as shall reasonably be approved by the City Manager, in the amount of $600,000 (Corporate Guarantee), to secure Global's maintenance and other obligations (eXG fer these nhligatiens on SeG +inn 8 required to be performed by Global under this Agreement. A. All or any portion of the Corporate Guarantee may be drawn down by the City in the event that Global fails to comply with any maintenance related and /or other obligations _under the Agreement; B. Global shall pay for any /all outside legal fees that may be incurred by the City in prevailing in any action to collect. on Corporate Guarantee; and C. If payment of any amount claimed against the Corporate Guarantee is not received within thirty (30) days of submission of a claim, then Global shall also be responsible for interest at the greater of the statutory rate or prime rate, to be paid on the amount claimed against the Corporate Guarantee. D. In the event that the City "draws down" against all or any portion of the Corporate Guarantee in any Contract Year, Global shall replenish the amount so drawn for the following Operating Year, so that for each Contract Year the cap on the Corporate Guarantee is $600,000. 2) Messe Schweiz (M.S.) Guarantee. Global shall provide a Corporate Guarantee, on behalf of M.S., in such form as shall reasonably be approved by the City Manager, in the amount of $08 25,000 (M.S. Guarantee), for the City to draw upon if, notwithstanding M.S. "best efforts," as provided for in Sections 10.2(c)(3)(e) - (2), M.S. fails to book and actualize a shows or events (as defined in Section 10.2(c)(3) hereof), as follows: A $250,009 d fn the- G . 4 t y in even M.S. rhos nn4 9F event "a e nd of +ho th RtFaGn r GA. $25,000 in event M.S. does not book during the initial Term one non -M.S. produced /owned international show or event; this show or event may Page 2 of 13 be actualized at any time up to 24 months following the end of the Term provided that, during such period, the Corporate Guarantee provided by Global to secure this obligation remains in effect, unaffected by the termination or expiration of this Agreement; D. Global shall pay for any /all outside legal fees that may be incurred by the City in prevailing in any action to collect on M.S. Guarantee; and E. 1f payment of any amount claimed against the M.S. Guarantee is not received within thirty (30) days of submission of a claim, then Global shall also be responsible for interest at the greater of the statutory rate or prime rate, to be paid on the amount claimed against the M.S. F. Notwithstanding anything to the contrary contained in this Agreement, Global shall have no liability under this Agreement in - the event the City rejects a proposed M.S. show or event that i) complies with the City's established booking policies; ii) is consistent with the City's then - current rate schedules; and iii) where the contract for the use, rental or occupancy of space for -the show or event is substantially in the form of the City's standard form agreement for the Facility (unless approved as a "Material Contract pursuant to Section 2.3(d)(3)(f) hereof. 3) Letter of GFed;t l'_`Inhnl shall pFeyide an I ette nef GFe lit� Sunh form as shall r nably be annrGyed by the Gity M ngerT ffiR the mmGwre+ of $599,900 (the y #fir Gf GFe lit nr 1 QG � +n seG ire the "blot D nrmaRGe ImpFeye m en fi�bbel�� A Net P rfnrmanne ImnrnV ' °n defined as the RRequ Imp evemen�tt GR th� year /CV\ O&GO $i the RVnQ/n9 budgeted t ne nnera nn deficn inrli ides r- r-r�T- vp��z it a n d rn r��r�� F.XeGWtiVe Salaries and Benefits R R eq line i mnrn \ /ement over the net defir+it of $4 BV nQina $ 90 9 , 900 /i a anhieve Net QperatiRg L ess of $1 nr better\ CV QW1 n - $1 ( a - Net \\ Ae rating Less of $542 or better) CV 'I gill - $1 /i e aGhieve as Net Opera Less n� 35 nr better) r the fips tCnntrnnt Year e,7 th�Tti� to the extent the anti ial anhieyed in the I= isrlTe 1 J less t han the Required ImnrGye set forth in S bbssei+tinn R above) the City shall dra nnninstt she I OC in the ame ant of the d b etwe eR h� Reny lined ImpFeye � n�d the anti gal imnrnie ± / Page 3 of 13 h e re o n after ref p nt Sh l erred to as the "I mreyeme ertml"\ 7Te r TGTtTRTCGTr re GTT�G�Qr•C'TlaT� , if r� i m 4eMeRt i R eX-GeS S of $ 1 m i 11 i n n i n the GentraGt N�`ar Global may apply the eXG , impmyement ever $'1 R;*Ili� (the Banked Pertln ") against any Imprn�iemept Shortfall in i+npd u� �prv-v-� rrr �r�rr— G on +ran+ Yea b t i ii►h_gL n shall only he vrr�--�z r v�r�.rar, - pu��uv u the earner) Incentive Fee for the first GentraGt Ye_aaF . t .ee - Gentran�Gar rest alts in an ImppeyemGn rT u the BaRk _Dn n if any from the fir + GGR an+ Year If there is a remaipipr��hnrtfall the (`i +y shall dra�ei there 06 st a r shnr+fal�l a #er applying hn +h the Banked Dnrtion /if any) and the LOG then the Gety will draw against the earner tt ) IRGenyFe f erom si inh FOSGal - arr'rGzr - rrTVG� - r a-v cur the eyeR t_th Sher+ fall evneeds the nnmhinatien of the BaRkeed DEFtinn if any! , is the I (lr v vmr , , � rr� ppllu6 the amount of a i earrie�oentiye Fee from si inh Fi Gal YeaY _ Global shall not be T Fespensihle fnTt� evGes s cnv��s F i i f r - the tt Gt Ye rre in ar► Imp� Pen; eR t Sho t h e C s h a ll d raw taiRst t L OG prnVided by GInhal in the amn6 i R Gf the j ll, up the (`itv �niiF1' dra�ni against the erl�otnt Fee from si Inh shortfall In the event the lmpFeyement Shn . JI�CIT�T7CTCT'1.i'1'I�I"1 C'r��i ^C.YG TIJT�'PGT7TGTIT QTTVrC'1"Q7T. eXG eeds the nomhinatinn of the LOG pllus the amei int_of anv earned. Ipnen' fFG � PR s inh Fisi+al Year GInhal shal T R G t be Fes PGRG i b l e f9F - the -e�Gess. G. n the Event _that _the City draws in against all nr any pvptien of the I .n: G., Glnhal shall immediatel y Fep \ n / Fi gain n the draw again pnrn and shall restore the I n r to the full eriginal Fequired aRqGURt for the following _ C'r7Vr TC'TTi 4. A new section 8.4(c) is added to the Agreement, as follows: (c) For any Contract Year in which (a) a Net Operating Profit is proiected in the Approved Budget, if the actual Net Operating Profit achieved for such year is less than 95% of the Net Operating Profit proiected in such Approved Budget: or (b) a Net Operating Loss is proiected in the Approved Budget, if the actual Net Operating Loss achieved for such year is more than 105% of the Net Operating Loss proiected in the Approved Budget, then the Incentive Fee earned by Global for such Contract Year shall be reduced by fifty cents ($.50) for every dollar of Shortfall, up to the Cap. For purposes of this subsection, Page 4 of 13 "Shortfall", with respect to any Contract Year, shall mean either 0) if the Approved Budget reflects a projected. Net Operating Profit; the amount, _ expressed in dollars, by which 95 % of the Net Operating Profit projected in the Approved Budget exceeds the actual Net Operating Profit in such year; or (ii) if the Approved Budget reflects a proiected Net Operating Loss, the amount, expressed in dollars, by which the actual Net . Operating Loss in such year exceeds 105% of the Net Operating Loss proiected in the Approved Budget for such year. The "'Cap" shall mean fifty percent (50 %) of the Incentive Fee actually earned by Global in the - applicable Contract Year. Notwithstanding the foregoing, the Incentive Fee shall not be reduced to the extent Global's failure to achieve the 95% or 105% (as . applicable) benchmark is due to reasons outside Global's reasonable control, such as a Force Majeure affecting the Facility, or new operating or maintenance requirements imposed by the City after finalization of the Approved Budget. The parties acknowledge that items within Manager's control, and therefore not Force Majeure events, may include, but are not limited to, bookings for conventions, tradeshows and corporate events 24 months and in, and day to day routine maintenance of the Facility. 5. The parties agree that the amount to be paid by Global to the City under (former) Section 8.4(b)(3) for the Contract Year ending September 30, 2011 (which is $500,000, plus the earned Incentive Fee for such Contract Year anticipated to be used toward the Improvement Shortfall) shall be used by the City on mutually agreed upon revenue- generating improvements to the Facility, which may (but not necessarily shall) include financing the cost of equipment and labor to take IT/Telecommunications in- house. Global shall remit such payment to City within 120 days following the end of the Contract Year ending September 30, 2011. The City may use any funds remaining from the Improvement Shortfall, following the implementation of the above referenced mutually agreed upon revenue - generating improvements, for any other capital improvements for the Facility, which improvements shall be determined at the City's sole discretion and judgment. 6. Section 4.3 of the Agreement of the Agreement, entitled "Incentive Fee ", is amended as follows: Incentive Fee (a) Amount In addition to the Management -Fee, and "provided Global has met the criteria, as set forth in subsection (b) below, Global shall be entitled to receive an annual incentive fee (Incentive Fee) during the Term of the Agreement, in. an amount equal and subject to Section 8.4(c) to the product of (i) the aggregate amount of the Management Fee for a Contract Year, and (ii) the Applicable Percentage. The Applicable Percentage shall be defined as a percentage equal to the sum of the percentage points which Global earns pursuant to Sections 4.3(b)(1) through (5) k4} below for such Contract Year; provided that, in no event, shall the Applicable Percentage exceed 100 %. Promptly following the end of a Contract Year during the Term hereof, the City Manager, shall assess and total the percentage points which the City Manager has determined that Global has earned during the preceding Contract Year based on the Page 5of13 criteria in 4.3(b) below The City Manager shall provide Global with a .written report with respect thereto. . , (b) Incentive Fee Criteria /Calculation 1. Customer Satisfaction A. Customer SatisfactioNQGRtraGt Y eaF 1 A total of up to thirty (30) twenty (2-G percentage points will be awarded subject to the following criteria: (i) Survey Results. A total of up to twenty -five (25) percentage points will be awarded based on the average survey score for each of the following ten (10) departments (Global shall be awarded up to 2.5 points per department, for a total possible score of 25): _ Sales - Event Management Operations Food & Beverage - IT/Telecommunications Audio Visual Valet Parking Services - Business Center Visit Miami Beach Fire, Inspector If a department's average survey score is 93% or higher, Global shall be awarded 2.5 points for such department (out of 25) If a departments' average survey score is from 90% to 92.99 %, Global shall be awarded 1 point for such department (out of 25) If a departments' average survey score is less than 90 %, Global shall be - awarded 0 points for such department (out of 25) (ii) Completion of evaluations by clients: A total of up to five (5) percentage points will be awarded based upon the percentage of completed customer satisfaction surveys (which survey form shall be subject to the prior written approval of the City Manager) out of total potential surveys (of which there shall be one per Event) received from all Events that use the Facilities as detailed below: Page 6 of 13 70% completed 5 points 65% completed 3 points 55% completed 1 points Less than 55% . 0 points. 2. Financial Performance. A total of up to fifty (50) percentage points will be awarded based upon the percentage of annual Operating Revenue generated as detailed below: $16 or more 50 points $16,250,000 to 16,499,999 35 points $16,000,000 to 1.6,249,.999 25 points $15,999,999 or less 0 points 3. Maintenance and Improvement of Facility and its Capital Equipment. A total of up to fifteen (15) percentage points will be awarded if Global has met or exceeded the maintenance standards set forth in Section 2.3(h) and Exhibit F hereof (including, without limitation, the Comprehensive Preventive Maintenance Program and maintenance of Capital Equipment, as may be amended from time to time during the Term by the City). The City Manager's evaluation pursuant to this subsection shall also, without limitation, take into account the annual review by the City's Property Management Division and /or a yearly review by an outside independent consultant retained by the City Manager. 4. Discretionary. A total of up to 5 percentage points may be awarded, as determined by the City, in its sole and absolute discretion. The City may take into account, but not be mandated by, the following: community involvement; extraordinary quantifiable and measurable creative initiatives that directly result in Global securing new City -wide business for the City of Miami Beach during the off season period; and /or demonstration and integration of new strategic Global corporate resources to the benefit of the tourism and /or cultural community of Miami Beach; and /or development of new or enhanced revenue streams for Facility use and services. dicnret.ioR of the Gity Manager B G ic4om e_St+r 6 RtFaGt Years ' and ^ 3 _ 0 tGt l of i ire +n OR GUst supveys, S bjeGt t +he following nriterio: 70% or greater GGA;pleted 'I 0 PG446 Page 7 of 13 650/ nmmpleterd 7 r.nintc ti vTnr.� 50/ nnrv►nlete d 4 p e Rts Lesj than 55% omm�lett 0 r�nin}c_ /ii\ Ayerane Snnre of A te Gf up to se veR /7 r e ill w he rleterminnrJ based i I nnn nv r�GS itiv Gnro A i nnctiye crnre is �Vff7�7V -QliZ GT1"1"1'1'I'TG�17a'7V e�� N�7TlTV�J WiZ�'1�VJTl J defin as- nnv cnnre of evnollen+ nr g99d def Cnnre Q(10/ 7 nnints S2v(1 99 S 79 790/ 3 PGi_n +c Less than 70% 0 poi O A total of up tG. three (3 ° nnin +c will be n�einrrlei^) suNeys. —The , ss rG- pe r will be based upen a GG review of GGGFes nre�iin� is ( + Veer rec Itc p�tiv rvu-a-vvrTtra ai--r ��1��- I�Itmleza+inn of the Fanili + s A total of up to forty (4 (1) n e T nnin will he awarded for i itiliza +inn ° nf the FaGilitieS based OR the fnllOW criteria �nr n�ientinn (men + To + ol I- AI /i a Use Days divided by 1460 Tnt-al NumbeF ef Available Use Days F=q6ia!6 0 0 F= purpos s of thin S bSent�T` \fie Use 6holl he def as a a 24 he ur nerinrl With recnent to mi ittinle clod F.V n� +s R1n\ eenh clod of the The nnintS shell he a b FaG A. GeRtrant Vea+1lt z enter(Cvhihi+ Hells of Up tG 15 ni v i RtG (i )AGhieVinn leer th 67% - (ii)Anhievinrr 67% - 5 PGiRt 79% - 19 pGiRts /iii \Anhie�iinry 72,/ - 15 PG Page 8 of 13 B ('nntraGt ar 2 I Itiliza +inn of (` nvontin GeRter Fxhihit Halls _ 61P tG 15 PG /i \OnhieVinrr less than 67 - 0 paints t /ii \Anh 67 % — 2 . 5 points rr 69 % /iii \�nhievinrr 7'10/ — 1!1 paints /v\4nhioVing 73% - 12 nnints /iii \Arhioving 750/ — 15 nnints G ran ar 3 I It�za n of GGRVentinn GeRtc-r Exhibit Halls _ up tG15 points car � r�r.� /i \�nhic�iinrr loss than G.`QO/ - fl r�nintc J 0 i i \Onhieyinn 710/ — 1 nnints \ /iii \Orhio�iinrr :73% 1'1 - nniRts 0 15 points ID . GGntrnnt Vc�nr 1 I I}'I' -- n of ('`nn�ia� } Gant r/�/ tiF;g ee [?name _ i in tG 15 points vvTnr a vr ra�ttll car r�ttttvrrv�� -r�m v r�ti /i \Onhio�iinry loss_ s than 50% - 0 nnints /ii \�nhio�iinn 5,(10/ — '� � paints to .. 55 % 0 PG - 0 15 PGiRtS C Gen nt V '� I Itili�atinn of GGRVontinn ting Gentor Mee C?nnmc up te 15 PGORts - u rcv��rnz� rr�rvrrv�ari-mz� li\ Anhieyinn los j than 550/ - 0 nnints - AGh 6 5% 15 PG - F=. ('nntrant Vea ^ 3t�`atinn of GGRVnntinn (`QFter/ n /i\ AnhieVinn los th �haR 555% — 0 paints 0 /iii\ GhioVing 65% 10 palms /iv\ Anh meV;R9 70% 15 nnintc (i )AGhieying less than 60% —.0 nnints I /ii \Di+hicving 60% 7 nnints n 65 % 3.5 PGmRtG 0 Page 9 of 13 OnhieVinn loco than 36 - 0 points (ii) AGhieViRg 0 Ge F; t raG t Year��T ation of Gc lnny _ up to 19 points /i \Di►hio�iinn l ess than 65% - Q pnintc /ii \Onhio�iinrr 650/ - Z pniptc 75 % 0 - 19 pGmRtS /i \Anhi "o�iinrti loss than - n points (iii)AGhiovipn 85 - 10 points if gyrnn Garlylo Thea=eF asstill manag ye ar 2 nr 3 of the nitial�nnR t erni, the follGW nritoria shall apply; /i \Onhieying Ioc -,(1 paints s �2 fjj \�nhio�iinrr 65 - 7 points 75% - 3.5 pGints 0 O GGntraGt Vna�Wtilizaatinn of R \/rn p G arlvlo - u to paints (i )AGhieviRg lee tha40% - 0 points 40 - 2 paints /15.0/ - 3.5S 1 0 /i \�r+hiovipn lace than 65% - A paints fjj \Onhio�iinn 65 - 7 p int 0i i)AGhiovipn 750/ - 3.5 po 95 % (i )AGhieVinn loco thin 45 - 0 points fjj io�iiv�rr 50 - 2 paints \„ 0 3.5 pGonts 60 % Page 10 of 13 FeF any renewal yeaFs, the parties shall mutually agree GR the 6GGFing and -PeFGe tages for the °n n IRGentiy Tee 3. Marketinq and DrmmGtinn A total Gf 6ip to thiFty five (35) peFGeRtage pGiRtG Will biQ AI.AVArded fE)F fthe Cnnili�j basted n the fn GW nritorin- m� -�v�rr �su�.� -v rr ATV �i-r� A. Maple` n }i r`non� V�T (`nrnnrnto Meeti /� tel n �P Dnintc\ . CzrFr A s a� of total new hnnkinir6- - d�9 -- - �-5 15% - 1 P nints ninl D� eRt6 (g a eF ha peF6GR in +n 10 Dn � """ t " 0 :7 PG;RtS 15 (6ip,tG 15 As PeFG entage of tntnl new hnnlsin e 1 0% - 1 0 P nintS • 0 B M k`t i nr an D FGmettGn - Ge-rnr ^nt VeaF 2 li\ (�nrnnrnto AAootinnc • (Up tn1 n DnintQ\ A s a ncrncntnnc of tntnl Rew hnolsin r s 3 nnin�y ra ni " e 2 Even t \g Feat e r er- -marr 50,-- PerSnnS \• (Up t av - Asap of +n+al Rew h . 1 - 3 r,�j n 15% - 7 Pnin }c X20 10 P nintc i"1 peFG enta g e of tntnl new hnnkin . 15% 1 PGmRtS 20 - 1 P oints e Page 11 of 13 f I rri- - vrtre'r te b e GGns - a ,. aR E veR t ,GaRRp t � rra b.err h eld at a Canility fnr the three /� '2�tiaFj p eRed p F i 9F4b the Gn RtFavt � Ar�r vent will eRly be r�dcred and nni inti aT"eAked" if the hnnkiRg was nitiated by Glebal (or , net by the G la imarily by ci IGh GGFnpaReS nos R oss nrgaRizatien , 4 MaoRtenange of FaG4 ice A tGtal of up te five (5) PPFGeRtage points will be awarded Global M TeRaRGe Drng -- mnin+cr»�e_ef ^Capital Girl iiPMeRt) Th G p����� ' oinli i�finr ni irc i t n aR 4 �+s s user t 4 withO t mt -a+inr► �ur�a�rir -« - �a-r�.n -vim {�--E. �--shall, li i , by the City MaRa ror (c) Payment The Incentive Fee shall be payable to Global within 120 days of the end of a Fiscal Year. Global will thereupon be entitled to deduct the amount of such Fee from the account described in Section.5.6 hereof; provided that, to the extent that Global projects that such a deduction would leave - insufficient funds in such account to cover Operating Expenses for the remainder of the then- current fiscal quarter, Global shall be entitled not to deduct all 'or a portion of such fee from such account, and, upon notice thereof from Global, the City shall promptly pay Global the amount of the Fee that has not been deducted from such account. 7. Concurrent with Global's execution of this Amendment No. 2, Global shall contribute and remit to the City a cash contribution in the amount of $5,000., to be. used by the City, in its sole discretion and judgment, toward. Miami.. -Beach sustainability /green programs. 8. No Further Modifications. Except as provided, in this Amendment No. 2, the Agreement remains unmodified and in full force and effect. All references to the Agreement in the Agreement or in any other document referencing the Agreement shall be deemed to refer to the Agreement as amended hereby. Page 12 of 13 r IN WITNESS WHEREOF, this Amendment' has been duly executed by the parties hereto as of the day and year first above_ written. A T: CITY OF MIAMI BEACH, FLORIDA City Clerk a r (� fh day of 0 , 2010. LOBA PECTRUM, L.P. ATTEST: C ie O ratin Officer � D Secretary t ` �^ Prin am Z` day of SQ r , 2011 APPROVED AS TO FORM & LANGUAGE & FnR EXECUTION i A orne Date Page-13&13