Amendment No. 2 to the Agreement with Service America Corporation d/b/a Centerplate a°'8 -3oSb 7
AMENDMENT NO.2 TO THE AGREEMENT BETWEEN
THE CITY OF MIAMI BEACH AND
SERVICE AMERICA CORPORATION D/B/A CENTERPLATE
FOR CATERING CONCESSIONS AT THE
CITY OF MIAMI BEACH CONVENTION CENTER
This Amendment No. 2 is made effective as of Gcz 2, - " ("Effective Date"), 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
Service America Corporation d/b/a CENTERPLATE, a Delaware corporation whose address is
2187 Atlantic Street, Stamford, CT 06902 ("Concessionaire" or "Centerplate"), and hereby
amends the Catering and Concessions Services Agreement dated as of June 5, 2013 (the
"Agreement"), as follows:
RECITALS
WHEREAS, the City is the owner of the Miami Beach Convention Center (the
"Convention Center"or"Facility") located in the City of Miami Beach, Florida; and
WHEREAS,the parties entered into the Catering and Concessions Services Agreement on
June 5,2013 (the"Agreement"); and _
WHEREAS, the parties entered into an extension of the Agreement from July 1, 2016 •
through and including September 30, 2020, in accordance with Amendment No. 1 dated July 1,
2016(the"First Amendment"); and '
WHEREAS, the parties now desire to extend the term of the Agreement through and
including September 30, 2022 and to modify the fee structure and certain other terms and
conditions of the Agreement as set forth herein;
NOW,THEREFORE,in consideration of the mutual promises, covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged,the parties intending to be legally bound,hereby agree as follows:
1. The aforesaid recitals are true and correct and incorporated by reference herein.
2. Unless otherwise expressly stated herein, all capitalized terms shall have the
respective meanings ascribed in the Agreement.
3. Section 1 is hereby amended to include the following terms:
"Management Fee" shall mean the percentage of Gross Receipts that Centerplate
shall receive, as more fully described in Section 6 of this Amendment No. 2, in
consideration for providing catering and food and beverage services at the Facility.
"Net Operating Profits" shall be calculated by subtracting the Operating Expenses
from the total Gross Receipts. The Operating Expenses shall mean the.out-of-
pocket costs incurred and paid by Concessionaire pursuant to this Agreement and
the Annual Operating Budget (as defined herein), and shall consist of, the actual
expense of the food and beverage product, on-site direct payroll, payroll taxes,
fringe benefits, depreciation and amortization of the Additional Investment
(including Centerplate's Additional Investment made in Amendment No. 1), costs
paid to service providers and other expenses directly related to providing catering •
and food and beverage services at the Facility, repair and maintenance, cleaning,
credit card fees (net of discounts or fees received from credit card or debit card
providers),office supplies,insurance, contractual reserves required pursuant to the
Agreement,including the Marketing Reserve Fund, Capital Reserve Fund, and the
• Management Fee.
• "Net Operating Losses" shall mean the deficit, if any, of Gross Receipts less the
Operating Expenses.
4. Section 1 definition of"Gross Receipts" is hereby deleted and replaced with the
following:
"Gross Receipts"shall mean the total amounts received by Concessionaire from the
provision of Services hereunder, whether arising from sales, rentals, license fees,
service charges, administrative fees, concession fees or other payments, and
whether evidenced by cash, check, credit, charge account or otherwise, and shall
include, without limitation, the amounts received from the sale of all Food and
Beverage Items at the Facility, together with the amount received from all orders •
taken or received at the Facility, whether such orders be filled from there or
elsewhere,less only:(1)the amount of any federal,State or local sales or other such
tax collected in connection with the sale of Food and Beverage Itemsand paid to
the appropriate Governmental Authority; and (2) the amount of any gross receipts
tax,rent tax or similar tax.
5. Beginning October 1, 2018, the current structure of the Agreement is hereby
changed from a commission based structure to a Profit Sharing/Management Fee structure.
6. Section 5.3 is hereby deleted and replaced with the following:
"Centerplate shall receive a Management Fee equal to (7%) of Gross Receipts,
payable in twelve(12)monthly installments."
7. The Net Operating Profit shall be distributed to the City and Centerplate monthly,
unless otherwise agreed to by the City and Centerplate. The City shall receive 95% of the Net
Operating Profit, and Centerplate shall receive.5% of the Net Operating Profit. Centerplate shall
not be entitled to any compensation under this Agreement, except for the Management Fee, and
5%of the Net Operating Profit, if any.
8. If during any monthly accounting period there are Net Operating Losses,
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Centerplate shall accrue any such deficit until the next monthly accounting period when sufficient
Net Operating Profits are available to pay Centerplate any amount due,with an annual settlement ;y
or"true up"of Net Operating Losses accrued from October 1 through September 30th of each year
of the Renewal Term. Any Net Operating Losses, if any, shall be reimbursed to Centerplate
annually, and payable within forty-five (45) days of City's acceptance of the final accounting
thereof.
9. The renewal term of the Agreement ("Renewal Term") shall be extended for two
(2) years. This renewal shall commence on October 1, 2020 and shall expire at midnight on
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September 20,2022 ("Termination Date");unless earlier terminated pursuant to the provisions of
• this Agreement.
10. Section 4.2 is hereby amended to include the following:
"4.2. Additional Capital Investment. Centerplate shall directly invest up to
$300,000 carried over as of October 1, 2018, plus an additional $150,000
("Additional. Investment") toward food service capital projects ("Additional
Investment Expenditures"), with the nature and scope of such Additional
Investment Expenditures to be made by mutual agreement of the parties." .
11. The Additional Investment shall be amortized and/or depreciated over the existing •
and extended term, commencing on the date of expenditure or date or installation, whichever is
last in time. If the Agreement expires or terminates for any reason whatsoever prior to
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Centerplate'.s complete amortization of the Additional Investment, the unamortized portion of the
Additional Investment shall be reimbursed to Centerplate by the City before Centerplate shall be
required to vacate the Convention Center.
12. Beginning on September 1,2018, and continuing on an annual basis thereafter, one
percent(1%) of Gross Receipts shall be contributed to the Equipment Replacement Reserve Fund. •
The Equipment Replacement Reserve Fund shall be used by Centerplate to. purchase, repair,
replace, or update equipment required by Centerplate. Centerplate will present desired
expenditures to City for approval. Unused amounts in the Equipment Replacement Reserve Fund ..
shall be carried forward from year to year. Any funds remaining in the Equipment Replacement
Reserve Fund at the end of the Renewal Term shall be paid to the City. •
13. As it relates to decisions that will have a financial impact on the catering and food •
& beverage operations at the Facility (whether such decisions are revenue-related or expense-
related),the City Manager(or his or her designee as stated from time to time in writing by the City •.
Manager)is the lead decision maker. In furtherance of the foregoing:
a. Centerplate shall annually prepare and submit to the City Manager, prior to
February 1st of each City fiscal year (Oct. 1-Sept. 30th of each calendar year)
(each, a"Fiscal Year"), an annual operating budget for the next Fiscal Year, to •
meet the scope of services and objectives under this Agreement(the "Annual
Operating Budget"). Such budget shall contain appropriate line items for Gross
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Receipts and Operating Expenses (including the Management Fee, Marketing
Reserve Fund and Equipment Reserve Fund), and the projected Net Operating
Profit or Net Operating Loss, along with a proposed cash flow budget based on
the proposed Annual Operating Budget.
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b. The Annual Operating Budget is to be prepared in accordance with the.City's
instructions and requirements. The Annual Operating Budget shall be
presented in a monthly format,with comparisons to the prior year(commencing
in the second Fiscal Year) and current year budget and actual. The Annual
Operating Budget shall include a detailed listing of recommended staffing and •
wage rate(s), and other employee expense information, for those employees
who will be funded by the City as an Operating Expense. •
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c. The Annual Operating Budget shall be subject to approval by the City Manager.
• The City shall make reasonable efforts to approve any proposed Annual
Operating Budget within forty-five (45) days after receipt thereof; provided, •
however, that the City shall not be penalized, or otherwise waive its rights to
• approve or disapprove the proposed budget,_or any portion thereof, if the City
exceeds the forty-five(45) day period provided herein.
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d.. Centerplate, in incurring Operating Expenses hereunder, shall not exceed the
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Annual Operating Budget, without the prior written approval of the City
Manager. In the event Centerplate is required to make expenditures in excess of
the amount included in the Annual Operating Budget,,because of emergencies or ••
operational necessity, and provided such expenditures are reasonable and
otherwise reimbursable as an Operating Expense hereunder, Centerplate-shall
. request written approval from ,the City Manager prior to making such
expenditure(s). The Annual Operating Budget may be modified during any
contract year at the direction of, and subject to the prior written approval of,the
City Manager, or his/her authorized designee, provided, however, that any
. modifications that are anticipated to lead to Net Operating Losses for any Fiscal
Year shall be subject to the prior approval of the City Commission. The City •
understands and agrees that imposed discounts affect the economic performance,
and the City does not hold Centerplate accountable for budget differences that
result from imposed discounts. Furthermore, the parties understand and agree
that the Annual Operating Budget includes income and expense projections that
are not guaranteed by either party, and actual results may vary, provided, •
however,that Centerplate shall not exceed the Annual Operating Budget without
the prior written approval of the City Manager or City Commission (as
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applicable). The parties agree to meet monthly, after each finalized P&L, to
review the previous months results and to discuss material changes to the yearly
forecast, and any budget amendments,if any,that may be required.
d. Notwithstanding any provision to the contrary in this Agreement, as amended,
Centerplate's consent shall be required for any request by the City for
Centerplate to reduce its pricing for any Services (including labor), such that
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any Services would be offered on an in-kind basis or below cost.. Unless
Centerplate has agreed to any such request, all pricing determinations shall be
made in accordance with the Agreement's terms(including Section 6.5 thereof),
and Centerplate shall have no obligation to provide any Services on an in-kind
or below cost basis.
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e. With respect to the operating budget for Fiscal Year 2018/19,subject to the City
Manager's review and approval of the detailed line item operating budget for •
Fiscal Year 2018/19, Centerplate shall commence performance of the Services,
• as of October 1, 2018, consistent with the FY 2018/19 budget information •
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Centerplate has previously submitted to the City.
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f. The parties will use diligent, good-faith efforts to collaboratewith each other.
• However,after such diligent,good-faith efforts have been exhausted,and in the
event of an unresolved dispute,the City Manager's determination shall be final,
• for purposes of the administration and operation of the catering and food and
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• beverage services provided at the Facility. If, as a result of any such
administrative determination, either party believes it has a claim arising under •
the Agreement, or that any amounts are due to it pursuant to the terms of the •
Agreement, then the partiesagree to mediate any such dispute in good faith
before proceeding to any legal remedy or enforcement in a court of competent
jurisdiction. Any use of a third-party mediator, if any, shall be at the mutual
agreement of the parties, and the mediation costs shall be borne equally by the•
parties.
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14. Except as expressly set forth in this Amendment No. 2, all other terms and
conditions set forth in the Agreement shall remain in full force and effect. If there is any
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inconsistency between the provisions,of this Amendment No. 2 and the provisions of the
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• Agreement or Amendment No. 1, the povisions of this Amendment No. 2 shall prevail.
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[Signature Page Follows]
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IN WITNESS WHEREOF,the parties have hereunto affixed their corporate seals attested by the
hand(s) of their proper officer(s) duly authorized in that behalf.
FOR CITY: CITY OF MIAMI BEACH,FLORIDA
ATTEST:
By: ��• 11%/1111e-
IDD �.
Raf el E. Grant do,City ? `°.......... �a!' Gelber,Mayor
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' = CORP ORATED;
Date i .IN
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26
FOR CENTERPLATE 41% V•s SERVICE AMERICA CORPORATION
DBA CENTERPLATE
ATTEST:
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By: ✓� c�
Secretary Title
Print Name Hadi onavar
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Date Date
APPROVED AS TO
FORM &LANGUAGE
&FOR EXECUTION
c2?(Jtly Or` I
City Attorney RAf ate