HomeMy WebLinkAboutContract 27542-A7A1CSC No. 27542-A7A1
FIRST AMENDMENT TO CITY SECRETARY CONTRACT NO. 27542-A7,
AN AMENDED AND RESTATED LICENSE AGREEMENT FOR THE MANAGEMENT
AND OPERATION OF COWTOWN COLISEUM
This First Amendment to City Secretar•y Contract No. 27542-A7 (this "First Amendment")
is made and entered into by and between the CITY OF FORT WORTH, TEXAS, a duly
incorporated home rule municipality of the State of Texas ("Citv"), and STOCKYARDS
COLISEUM, LLC, a Texas limited liability company ("Stocicyards Coliseum").
WHEREAS, City and Stockyards Coliseum, as successor-in-intet•est to Fort Worth
Heritage Development, LLC ("Herita�e"), are currently parties to that certain Fort Worth City
Secretaiy Contract No. 27542-A7 (the "Agreement"), an agreement for the management and
operation of the Cowtown Coliseum (herein so called), located at 121 East Exchange Avenue, Fort
Worth, Texas, and certain premises in and around the Cowtown Coliseum, located as 121-123 East
Exchange Avenue, Fort Worth, Texas, as more pai�ticularly described in Exhibit "A" attached to
the Agreement;
WHEREAS, the Agreement was assigned by Heritage to Stockyards Coliseum pursuant
to that cei�tain Assignment and Assumption Agreement dated effective July 15, 2020 (the
"Assignment") and such Assignment did not require the approval or consent of the City because
the Assignment was entered into compliant with and pursuant to the terms and conditions of
Section 7.1 of the Agreement;
WHEREAS, the Cowtown Coliseum is located in the heai�t of the Foi�t Worth Stockyards
Area (the "Stockvards"), which is one of the most popular area attractions in Texas, where
residents and visitors, alike, go to enjoy a taste of the true American West;
WHEREAS, over the last several yeais, Heritage and Stockyards Coliseum have made
signi�cant investments in the Stockyards, as a whole, and the Premises, in a particular, which has
directly impacted the growth and popularity of the Stockyards as a premiere tourist destination;
WHEREAS, as a result, plans are currently in place to design and construct a new public
parking facility within the Stockyards (the "Parlcin Garage") that will be owned by the City and
managed and operated by Heritage or one of its affiliates;
WHEREAS, Stockyards Coliseum currently pays City, in arrears, an annual payment
equal to twenty percent (20%) of the Net Profits generated from Operating Revenues associated
with the Premises;
WHEREAS, the City and Stockyards Coliseum desire to amend the Agreement to, among
other things, ensure that a portion of the Net Profits will be available to pay debt service related to
the Parking Garage, with the intent that the allocations set forth herein apply retroactively to all
Operating Revenues earned during calendar year 2023 and continuing for each subsequent
calendar year during the Term (as it may be hereinafter extended); and
First Amendment to CSC 27542-A7 OFFICIAL RECORD
39939785v.7 163644/00002 CITY SECRETARY
FT. WORTH, TX
NOW, THEREFORE, in consideration of the foregoing and mutual promises and
covenants contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, City and Stockyards Coliseum amend the
Agreement as follows:
1. Net Profits. City and Stockyards Coliseum agree to reallocate a portion of the Net
Profits to malce the City's portion available for debt service for future parking garage
improvements and to allow Stockyards Coliseum to retain additional Net Profits for use in the
promotion of the Stocicyards. Accordingly, the initial paragraph of Section 3.6 of the Agreement
(Operating Expenses; Net Profits) is hereby deleted in its entirety and replaced with the following:
"Section 3.6 Operatin�penses; Net Profits. Subject to the remaining
terms of this Section 3.6, Stockyards Coliseum will pay City, in arreais, an annual
payment based on the calendar year equal to twelve percent (12%) of the Net Profits
generated from Operating Revenues (the "Citv Share"), which funds will be
allocated as follows: (i) sixty-six and sixty-seven hundredths percent (66.67%) of
the Stockyard Share may be deposited into a specially designated fund for debt
service related to the Parlcing Garage, or, if other revenue streams are determined
in City's discretion to be sufficient to cover the debt service on the Parking Garage,
to any other lawful use; and (ii) thil�ty-three and thirty-three hundredths percent
(33.33%) of the Stockyar•d Share may be used by the City for any lawful purpose,
regardless of debt service coverage. Eight percent (8%) of the Net Profits generated
from Operating Revenues shall be retained by Stockyards Coliseum under this
reallocation and used for promotion of the Stocicyards. In no event shall any
negative Net Profits carry over to the next calendar year for the purpose of reducing
future Net Pro�ts. All annual payments owed to City pursuant to this Section 3.6
shall be due and payable on or before April ls� of the year following the year in
which the subject Net Profits were generated."
City and Stockyards Coliseum het•eby acknowledge and agree that Section 3.6(a), Section
3.6(bi, and Section 3.6(c) of the Agreement are unmodified by this First Amendment. City and
Stockyards Coliseum hereby further acknowledge and agree that, notwithstanding the foregoing
modification of Section 3.6 provided herein, the allocation and payment of Net Profits (as modified
by this Fiist Amendment) for calendar year 2023 will be made following the full execution of the
First Amendment.
2. Miscellaneous. All terms and conditions of the Agreement not addressed herein
remain in full force and effect and are binding upon the parties.
3. Defined Terms. All terms in this First Amendment that are capitalized but not
defined have the meanings assigned to them in the Agi•eement.
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First Amendment to CSC 27542-A7 2 of 3
39939785v.7 163644/00002
IN WITNESS WHEREOF, the City and Stockyards Coliseum have caused this First
Amendment to be executed in F01i Worth, Tarrant County, Texas.
CITY OF FORT WORTH
BY: William 4o�nson (S p 19, 202412:06 CDT)
William Johnson
Assistant City Manager
Recommended by:
Robert Sturns (Sep 17, 202415:48 CDT)
Robert Sturns
Economic Development Director
Contract Compliance Manager:
By signing, I acknowledge that I am the
person responsible for the monitoring
and administration of this contract,
including ensuring all performance and
repo1iing requirements. -�Robert Sturns (Sep 17, 202415:48 CDT)
Robe1i Sturns
Economic Development Director
Approved as to Form and Legality
Denis McElroy
Assistant City Attorney
Attest:
ri�
Jannette S. Goodall
City Secretary
M&Cs: 19-0401 (December 17, 2019)
and 24-0755 Au ust 27, 2024
First Amendment to CSC 27542-A 7
39939785v.7 163644/00002
STOCKYARDS COLISEUM, LLC,
a Texas limited liability company
By: FW Coliseum, LLC,
a Delaware limited liability company,
its managing member
By: Majestic Realty Co.,
a California corporation,
manager's agent
3 of3
City of Fort Worth,
Mayor and
Texas
Council Communication
DATE: 08/27/24 M&C FILE NUMBER: M&C 24-0755
LOG NAME: 21COWTOWN COLISEUM AMENDMENT8
SUBJECT
(CD 2) Authorize Amendment to License Agreement with Stockyards Coliseum, LLC for the Management and Operation of Cowtown Coliseum to
Reduce the City's Percentage of Net Profits from 20% to 12% in Exchange for Terms Allowing Net Profits to be Used for Debt Coverage and
Additional Funding to Developer for Promotion of Stockyards Area
RECOMMENDATION:
It is recommended that the City Council authorize the execution of an amendment to the License Agreement with Stockyards Coliseum, LLC for
the Management and Operation of Cowtown Coliseum that will: (1) reduce the City's percentage of net profits from 20% to 12%; (2) add terms that
will allow the City to utilize the net profits for debt service coverage; and (3) provide that 8% of the net profits remain with the Developer for
Promotion of the Stockyards Area.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to adjust to the Cowtown Coliseum license agreement to facilitate ongoing efforts
related to improvements in the Stockyards Area.
The adjustments consist of allowing the operator to retain an additional 8% of the net profits in exchange for authorizing amendments that allow the
City to allocate its share of the net profits to a separate debt service fund established for the construction of a new parking garage that will support
the Cowtown Coliseum and surrounding areas, with the operator's additional portion of the net profits required to be used to support and promote
the Stockyards Area with a goal of increasing tourism and other visits, which will in turn increase expenditures in and revenue to the City.
On February 12, 2002, City Council authorized the execution of a License Agreement for the management and operation of Cowtown
Coliseum, located at 122-133 East Exchange Avenue, Fort Worth, Texas 76164 (M&C C-18960) that has since been amended and extended.
On December 17, 2019, City Council authorized the execution of an amended and restated License Agreement for the management and
operation of the Cowtown Coliseum (M&C 19-0401) (License Agreement) that was later assigned to Stockyards Coliseum, LLC (Stockyards
Coliseum) and wherein Stockyards Coliseum agreed to pay the City of Fort Worth (City), in arrears, an annual payment equal to 20% of the net
profits generated from the operation of the Cowtown Coliseum in addition to participating in a 50/50 partnership with the City to fund capital
improvements using the City's net profits as the City's contribution.
Stockyards Coliseum has an ongoing interest in making investments in Cowtown Coliseum to ensure that its future includes a broad variety of on-
brand western entertainment and other programming that is designed to drive tourism and economic growth in the Fort Worth Stockyards area.
Therefore, the City's Economic Development Department has negotiated an adjustment to the amount and allocation of the net profits generated
from the operation of the Cowtown Coliseum. Under the proposed amendment to the License Agreement, Stockyards Coliseum will pay to the
City, in arrears, an annual payment of 12% of the net profits generated from the operation of the Cowtown Coliseum (Net Profits) for the remaining
term of the License Agreement, which ends July 15, 2035. The annual 12% payment will be allocated by City in the manner indicated below:
• One-third of the Net Profits will be deposited into the City's General Fund; and
• Two-thirds of the Net Profits will be deposited into a fund designated for the debt service related to construction of the Phase II parking
garage.
All annual payments owed to the City will be due and payable on or before April 1 st of the year following the year in which the net profits are
generated.
This property is located in Council District 2.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendation and execution of the agreement, funds will be deposited into the
Public Events Capital Fund for the Unspecified-Cowtown Coliseum project. The Public Events Department (and Financial Management Services)
is responsible for the collection and deposit of funds due to the City.
Submitted for City Manager's Office b� Dana Burghdoff 8018
Originating Business Unit Head: Marilyn Marvin 7708
Ricky Salazar 8379
Additional Information Contact: Michael Hennig 6024
Marilyn Schoening 7581
Expedited