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HomeMy WebLinkAbout2016-04-12 Item 5 ��(/� City of Chula Vista �u z_..._ p���NS7A Staff Report File#: 16-0191, Item#: 5. CON5IDERATION OF APPROVING FINAL TERMS FOR THE AGREEMENT WITH THE POINT LOMA TRUST FOR THE OPERATIONS OF THE CHULA VISTA ELITE ATHLETE TRAINING CENTER RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING FINAL TERMS FOR THE AGREEMENT WITH THE POINT LOMA TRUST FOR THE OPERATIONS OF THE CHULA VISTA ELITE ATHLETE TRAINING CENTER AND DIRECTING STAFF TO FINALIZE AGREEMENTS CONSISTENT THEREWITH This item further implements City Council action taken on March 15, 2016 where the Council approved general terms for City's engagement of The Point Loma Trust (PLT) to be City's third-party operator of the Chula Vista Olympic Training Center (CVOTC). Final terms have now been negotiated and are presented for City Council approval, with direction to staff to finalize agreements consistent with these terms. This action is one of series that the City Council has taken to effect the transfer of fee title and operational control of the CVOTC from the United States Olympic Committee (USOC) to the City. City Council has already approved the Transfer Agreement and Core Agreement with the USOC that provides for this transfer to occur on December 31, 2016. Under the proposed agreement with PLT, woricing with City and the USOC, PLT would start transitioning its operations of the center immediately, with full responsibility for day to day operations occurring on January 1, 2017. RECOMMENDED ACTION Council adopt the resolution. SUMMARY In 2014, the United States Olympic Committee ("USOC") approached the City to determine if the City would be interested in acquiring the Chula Vista Olympic Training Center land, facilities and equipment, and in continuing to operate the facility as a U.S. Olympic and Paralympic Training Site. After extensive analysis and negotiations with the USOC, on Febn�ary 23, 2016, staff presented to the City Council, and the City Council approved, the key agreements with the USOC to implement this transaction. Attached is City's final approval ot an agreement for the operations of the facility (now known as the Chula Vista Elite Athlete Training Facility) with The Point Loma Trust. City staff has now negotiated the final terms for this agreement with the Point Loma Trust ("PLT"). This item presents these terms to the City Council for its consideration and approval. ENVIRONMENTAL REVIEW Environmental Notice The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act ("CEQA") State Guidelines; therefore, pursuant to State Guidelines 5ection 15060(c)(3) no environmental review is required. crty or cnw v�a a�� m�o �+Mea«++�zoi s � File#: i6-0191, Item#: 5. Environmental Determination The Director of Development Services has reviewed the proposed for compliance with CEQA and has determined that the activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines because the activity consists of approval of proposed business terms for an operating agreement for the USOC site, and does not involve a potentially significant physical impact on the environment. Therefore, pursuant to State Guidelines 5ection 15060(c)(3) no environmental review is required. BOARDICOMMISSION RECOMMENDATION Not Applicable DISCUSSION In 2014, the USOC approached the City to determine if the City would be interested in acquiring the Chula Vista Olympic Training Center land, facilities and equipment, and in continuing to operate the facility as a U.S. Olympic and Paralympic Training Site. Negotiations commenced and an operating model was developed that was intended to allow the City to continue operation of the facility as an Olympic and Paralympic Training Site, with other uses and events compatible with the existing elite sports training activities. The model included the construction of additional athlete dorms (which Council approved in its action on March 15, 2016 pursuant to a contract for the development of 100 beds with Baldwin & Sons). and selection of a third-party operator to minimize risk to the City's general fund. In July 2015, the City issued a Request for Expressions of Interest (RFEI) for a third party operator. Eleven potential operators responded. Through a series of evaluations, the City and the USOC narrowed the selection and ultimately selected the Point Loma Trust (PLT), and affiliate of Point Loma Nazarene University ("PLNU"), as its preferred operator. PLT was selected because of PLNU's experience with operating high quality sports facilities, buildings, residence halls and dining facilities; its understanding the need to market the facility for additional revenue generation that complements the core business such as increased use by international athletes, grass root camps, hosting additional NGB's, sport and teambuilding clinics; its existing investment in Chula Vista with their relationship with Southwestern College; its acceptance and desire to embrace and promote the vision of the City and the USOC regarding the Olympic movement and support of the Elite Athletes training at the center; its desire to exceed the expectations of USOC and the City; its desire to develop strategic partnerships with, and to maintain or enhance service levels for Easton Archery Center of Excellence; and its willingness to bear risks of operating deficits. A summary of the proposed key terms for the Operator Agreement between the City and PLT for the operation of the CVTC are set forth below. These terms are substantially the same as those previously approved by the Council on March 15th, however, items listed then as "pending" have now been fully negotiated. Any signiflcant updates or changes have been noted. Note: Section references provided [in brackets] are to Sections in the actual signed "term sheeY' between the parties, which is attached to this report. City ol Chula Vista Page 2 of 10 PnnteO on 4/8l2016 File#: 16-0191, Item#: 5. 1. In General [ferm Sheet Section 1] a. Parties. City of Chula �lsta ("City"), and The Point Loma Trust, a California trust, or a wholly owned subsidiary thereof("PLT"), acting as an independent contractor. [Sections 1.1 and 1.6] b. Basic Aqreement. PLT shall have the exclusive right and duty to operate and maintain the Chula vsta Elite Athlete Training Center (�CVTC') consistent with (1) the terms set forth in the Agreement; (2) City's Core Agreement with the United States Olympic Committee ("USOC"); and (3) the initial CVTC Business Plan approved by both parties ("Business Plan"), described in Section 3, below. City's rights and obligations under the Core Agreement will be assigned to PLT except as expressly provided in the Agreement. Without City approval PLT shail not have the right to transfer or modify any portion of the CVTC real property, facilities or equipment. [Sections 1.2, 1.3 and 1.4] c. Additional Standards of Performance/Duties. In the performance of its duties, PLT shall also be required to: (1) comply with all laws; (2) maintain an adequate and effective work force; (3) maintain the CVTC facilities and equipment per agreed upon schedules and standards; (4) maintain records and accounting system(s) in accordance with GAAP; (5) propose and comply with an annuai budget approved by the City Manager with quarteriy reports demonstrating adherence to the budget and the Core Agreement. [Section 1.5] 2. Tertn a. Term. After a transition period from April 1, 2016 until December 31, 2016, commencing January 1, 2017, PLT shall have the right and obligation to operate the Agreement for a period of up to ten (10) years (until December 31, 2026). This includes an eight (8) year initial term and a two (2) year extension at PLT's discretion. Extension terms beyond 10 years are possible, up to an additional eight (8) years, subject to each party's approval in its sole discretion. [Sections 2.1 and 2.2] b. PLT's Earlv Termination Riqhts. PLT may initiate a potential eariy termination of the Agreement by providing written notice to City at two junctures during the Term: after four (4) years and six (6) years of operation. If PLT initiates the early termination process, before termination becomes final, the parties agree to meet and confer in good faith for at least three (3) months to determine if there are mutually agreeable terms to continue PLT's operations. In the event that the parties are unable to reach agreement, PLT can then elect to terminate the Agreement with 9 months' notice to City. [Section 2.3j PLT also has early termination rights with 60 days' notice to City if(1) the Transfer from USOC to City does not occur by March 1, 2017, (2) prior to the Transfer the facility suffers in excess of$750K of material damage, (3) the 100 bed new housing facility (or aiternative housing) is not ready for occupancy by July 15, 2017, or (4) in the event of the early termination of City's four year Core Agreement with USOC. [Section 2.3] Note: New provisions give PLT additional eariy termination rights if the CVTC suffers pre- Transfer damages in excess of $750K. or if the 100 bed housing project (or alternative housing) is not available for occupancy by Juley 15, 2017. These do create additional risks, but staff believes such risks are manageabie. In the event of eariy termination by City of Chula Vis[a Page 3 of 10 Printed on 4/&2076 Y�_.��L.�"___� . . _ _, File#: 16-0191, Item#: 5. PLT in any of the above-described circumstances, City would need either to transition operations to another third party provider, operate the facility itself, or terminate operations through a negotiated arrangement with USOC. 3. Business Plan a. Initial Business Plan. PLT shall prepare a draft Business Plan that does not conflict with the Core Agreement for City review/approval. The draft Business Plan shall include, at a minimum, the following elements: (1) mission/vision statement, (2) transition plan, (3) list of the targeted types and desired mix of users, (4) marketing plan summary, (5) principles for rate setting and/or a proposed preliminary rate structure for facility users, (6) principles for budget development and compliance, including operational and capital reserves, (7) community outreach plan summary, (h) special event plan summary, (8) staffing plan, (9) retail store proposal for at least 2 years of operation, and (10) plan for identifying/funding capital enhancements, and (11) plan for identifying potential business opportunities, including without limitation, the addition of on-site retail operations such as restaurant and/or coffee retailers. [Section 3.1 and 3.2] b. USOC Review. The City-approved draft Business Plan shall be submitted to USOC for review and input, with reasonable consideration by Operator given to USOC proposed adjustments. [Section 3.3] c. Comprehensive Business Plan. Based upon and consistent with the draft Business Plan, PLT shall develop a more detailed and comprehensive Business Plan and shall submit that plan for City Manager review and approval by no later than July 1, 2016. [Section 3.4] d. Annual Review Process. The parties shall meet and confer each year of the term starting March 15' to discuss possible updates and modifcations to the Business Plan. PLT shall submit its updated plan to the City Manager for review and input, with reasonable consideration given to the City Manager's proposed modifications. [Section 3.5] 4. Staffinq/Oversiqht a. In General. PLT shall have the right and responsibility to hire/manage and terminate employees as necessary to operate/maintain the CVTC per the standards required by the Agreement. [Section 4.1] b. Kev Positions. Initially, City Manager (or designee) and PLT shall confer to identify key existing CVTC employees that may be offered positions with PLT. Until December 31, 2021, PLT shall continue to consult with City Manager (or designee) in advance of hiring, material changes in employment or termination of these individuals/positions. Notwithstanding the foregoing, the ultimate decisions regarding hiring, managing or terminating PLT employees shall be at PLT's sole discretion. [Section 4.2] City of Chula Vista Page 4 of 10 Printed on 4/8/2016 File#: 16-0191, Item#: 5. c. Citv CVTC Coordinator/Liaison. There shall be a CVTC "Coordinator/Liaison" to be employed by City, or a non-profit created thereby ("City Coordinator/Liaison"). The City Coordinator/Liaison shall be responsible for City's obligations with respect to CVTC operations, shall assist with marketing of the CVTC, and shall be PLT's point of contact with the City. PLT shall provide the City Coordinator Liaison with full access to the CVTC, along with reasonable office space and reasonabie office support services at Operator's cost. Until December 31, 2021, City shall consult with PLT in advance of hiring, material changes in employment or termination of this position. Notwithstanding the foregoing, the ultimate decisions regarding hiring, managing or terminating the City Coordinator/Liaison shall be at City's discretion. [Section 4.3] d. Facilitv Operations Advisorv Committee ("FOAC"). City envisions representative(s) from USOC. Easton, PLT, City and CVTC coaches/athletes to share ideas and issues relative to CVTC operations. This entity shall have no decision making or governance function but shall be consulted from time to time for its input on CVTC operations and policy. This entity shall have not less than 20°/a CVTC resident athlete representation. The FOAC could potentially serve as the agent for administering the annual review process [Core Agreement Section 11], and/or the "athlete representative" function [Core Agreement Section 30] required under the Core Agreement. [Section 4.4] 5. Revenues/Comaensation a. In General. All CVTC revenues generated by PLT's operations of CVTC shall go to CVTC operations and maintenance as PLT shall direct, consistent with terms of Business Plan and Budget, except as otherwise expressly provided in the Agreement. [Section 5.1] b. O�erator Fee. In consideration of PLT's provision of services under the Agreement, PLT shaii be entitled to a fee equal to the greater of$300,000, or ten percent (10%) of CVTC gross revenues ("Operator Fee"). The Operator Fee shali only be payable out of CVTC revenues on an annual basis, in arrears ("Operator Fee"); provided, however, starting in calendar year 2018, and each year of the term thereafter, the Operator Fee shall be payable monthly out of CVTC revenues based upon PLT's revenue projections for that calendar year, subject to a year-end reconciliation. To the extent that there are not sufficient CVTC revenues to pay PLT's Operator Fee in any given year, any unpaid amount of such fee shall be "carried forv✓ard" and be payable out of future CVTC revenues. The first $300,000 of any year's unpaid Operator Fee shall earn interest at the 10 Year Treasury Bill rate (currently 1.85%). [Section 5.2] Note: The terms for the Operator Fee were pending on March 15�" and are now final, on essentially the terms proposed then: a minimum fee of$300K, with a likely annual fee of 10% of CVTC gross revenues. The interest factor on "deferred" fees is now set at the 10 Year Treasury Bill rate (currently around 1.85%), with the understanding that only the "minimum" portion ($300K) of any "deferred" Operator Fee eaming interest. This interest rate also applies to any of PLT's "Deferred Operator Losses" as provided in Section 5.d. below. c. Surplus Revenues. To extent any "Surplus Revenues' are generated from PLT's operations of the CVTC (meaning revenues above and beyond amounts expended for CVTC CRy of Chula Yista Page 5 of 10 PriMetl on 4l812016 I File#: 16-0191, Item#: 5. operations, including PLT's Operator Fee), then (a) 20% of such Surplus Revenues shall be dedicated towards agreed upon "CVTC Special Projects" (to be defined by the parties mutually, but generally CVTC facility additions or enhancements) and (b) 80% of such Surplus Revenues shall be paid to PLT as an additional fee for PLT's services under the Agreement. 70% of the 80% shall be expendable by PLT as it sees fit in its sole discretion and 10% shall be dedicated by PLT towards enhancing or adding to existing PLT projects or programs benefitting Chula Vista residents or students. "Surplus Revenues" shall be determined annually, in arrears, based upon a reconciliation of revenues generated and costs incurred for that budget year, after funding required operational and capital reserves, and paying off, in order, any operational/capital costs for the current year under the approved Budget, and any "Deferred Operator Losses" (defined below) that may have been carried forward from any previous year(s). [Section 5.3] d. Losses and Loss Recoverv. The Operator shall be responsible for the payment of all costs associated with the operation of the CVTC except to the extent such costs are expressly allocated to the City under the Agreement. If Operator's obligation to pay CVTC costs results in an operating losses, such that Operator is required to pay any such losses out of Operator's own funds, the amount of such losses ("Deferred Operator Losses") may be recovered by Operator from subsequent year's revenues, plus interest at the 10 Year Treasury Bill rate per annum (currently 1.85%). Deferred Operator Losses shall be reimbursed as a priority to funding budgeted operator/capital reserves and the distribution of what otherwise would be treated and distributed as Surplus Revenues. [Section 5.4] e. Citv Responsibilitv for Certain Costs. City shall be solely responsible for payment of each of the following CVTC expenses: (1) all costs to investigate and/or remediate any environmentally sensitive materials and/or hazardous materials or substances at the CVTC existing prior to the Transfer, or relating to its operations, except to the extent caused or allowed by Operator; (2) City's violation of any and aIl obligations under the Core Agreement not assumed by Operator under the Agreement, (3) events hosted, sponsored or organized by the City and agreed to by the Operator to be held at the CVTC, (4) all costs necessary to change the signage at the CVTC, or on any off-site locations including on public streets, (5) any taxes or fees imposed on City directly, and (6) maintenance of the CVTC lateral sewer system. [Section 5.5(a)] f. Maior Repairs. In the event that any "Major Repairs" are required to be made to the CVTC, defined as a repair that must be made in order for Operator to operate the facility per the terms of the Agreement costing in excess of $750,000, where neither party is at fault, then the parties agree to meet and confer to determine how to proceed and if there should be a sharing of costs between City and Operator. In making such determination, among other factors, consideration will be given to (1) the total cost of the repair, (2) if the repairs are covered by insurance, (3) Operator Fees paid to date and projected, (4) the remaining Term of the Agreement, and (5) the ability of Operator to generate Surplus Revenues. Notwithstanding the foregoing, Operator shall be required to make the Major Repairs at its sole cost if it can be reasonably expected to recover the cost of such repairs, plus interest, out of CVTC revenues projected through the remainder of the Term. Either party's contribution to the making of such Major Repairs shall be recoverable as a priority, plus interest, out of future Surplus Revenues. If the parties agree to make additional capital contributions to the CVTC to build new facilities or enhance existing ones, reimbursements of capital shall be treated similarly, unless otherwise agreed. [Section 5.5(b)] City of Chula Vista Page 6 of 10 Printed on 4!8/2016 File#: 16-0191, Item#: 5. Note: The agreement regarding "Major Repairs" set forth in this Section was referenced as "pending" in the term sheet approved by Council on March 15"' and is now final. In effect, this provision provides for the parties to meet and confer to discuss possible cost sharing if there is a major breakdown at the facility that needs to be repaired to avoid materialiy adverse impacts on operations. PLT will be solely responsible for repairs if the cost is reasonably recoverable. If not, the City may need to consider either contributing towards the cost of the repair, or modifying the terms of the Agreement to enhance PLT's ability to recover the repair amount. g. Records/Audit Riahts. PLT shall maintain records in accordance with GAAP. City shall have the right to access and review CVTC books, financial statements and records. PLT shall pay for one complete independent audit per year, with any additional audit work required at City's cost. PLT proprietary records shali be kept confidential, but otherwise records shall be subject to disclosure under applicable public records act laws. [Section 5.6] h. Budaet Process. A process simiiar to that used for the Business Plan shali be used for budget preparation and annual review. [Section 5.7] 6. Citv Reservation of Access/Events PLT shall provide City a certain number passes to special CVTC events to be distributed by City under Ciry policies at no cost, subject to reasonable restrictions. City to have access to the CVTC (time/space permitting) for a certain number and type of City events. For example, a certain number of City staff/official retreats/meetings would be at cost oniy, with preferred rates on a certain number of additional events (e.g., the City Library Foundation, Friends of Parks and Rec. and Police Activities League). Any such City events shall be scheduled with approval of Operator. [Section 6] 7. Creation of Fundraisina Non-Profit The paRies shall meet and confer with intent of creating a separate non-profit to fund-raise and otherwise support CVTC facilities and programs. It is intended for both parties to have a role and representation, with potential addition of USOC and/or Easton. [Section 7] 8. Securitv for Performance As security for Operator's performance under the Agreement, Operator shall ensure that Operator (a) has initial capitalization of not less than $1.5 million, and (b) maintains cash reserves throughout the Term of no less than $500,000. [Section 8] Note: The terms for PLT's provision of security for its performance were "pending" on March 15'". Staff believes this mechanism is acceptable. 9. Insurance and Indemnitv. a. Insurance. Insurance will be required of both parties. patterned after the requirements under the Core Agreement unless additional/special coverages are deemed necessary/appropriate. City of Chula vsta Page 7 of 10 Primed on 4/82016 I File#: 16-0191, Item#: 5. [Section 9.1] b. Mutual Indemnities. The parties will indemnify each other in accordance with customary practice in commercial agreements, including without limitation for breach of the Agreement and for either party's negligence or willful misconduct. [Section 9.2] c. Assiqnment of Indemnities. To the extent allowed by law, City shall assign its benefits as an indemnified party under its Core Agreement and Transfer Agreement with USOC. [Section 9.3] d. Citv Special Indemnities. City agrees to indemnify PLT on specified terms for damages arising from (1) environmental conditions on the CVTC property not caused by Operator, (2) adverse title or possessions claims against the CVTC property, (3) any event or circumstance for which City obtains reimbursement under claims it may have under its agreements with USOC, and (4) City use of the facility or City sponsored events. [Section 9.4] Note: These provisions were not presented in detail on March 15th. They have been significantly negotiated and refined since then. Full detail is available in the attached formal term sheet. 10. General Provisions. a. Citv Covenants. City covenants to the Operator as follows: (a) unless required by the Core Agreement, City shall not make material alterations to any existing facilities or improvements at the CVTC or to any new facilities at the CVTC if Operator will be required to maintain and operate such facility without first receiving Operator's prior written approval, (b) City shall not take any actions to violate any use restrictions applicable to the Property, (c) City shall use reasonable efforts to work with PLT to explore cost savings and reduced utility rates for the facility, (d) City shall waive taxes or fees imposed by City related to the improvements to and/or operation of the CVTC to the extent it is legal to do so and City is not othervvise required to pay such fees itself; and (e) City shall rigorously enforce and will endeavor in good faith to make Operator a third party beneficiary of its remedies related to its contract for the construction of a new 100-bed facility at the CVTC. [Section 10.1(a)] b. Mutual Covenants. The parties will work together to negotiate mutually beneficial terms for the assignment of the Easton lease and housing agreements, and encourage USOC usage of the CVTC over and above its minimum commitment. [Section 10.1(b)] c. Naming Rights and Revenues. After meeting and conferring with PLT, City shall have reasonable approval over any agreement for naming rights for any CVTC facility, subject to PLT approval of any naming tied to a third party college or university. Naming Rights revenues that result in "Surplus Revenues" shall be specially allocated such that an increased amount (from 10% to 40%) shall be spent by PLT on Chula Vista based PLT programs and projects. [Sections 5.1 and 10.5] Note: This provision is new. Next Steps: This item presents these detailed terms to the City Council for its consideration and approval. If the City Council so directs, staff will proceed to finalize agreements consistent with these terms for City of Chula Vista Page 6 of 10 Printetl on 4l8/2016 File#: 16-0191, Item#: 5. execution by the City Manager. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. Consequentiy, this item does not present a disqualitying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the Political Reform Act (Cal. Gov't Code §87100,et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter. LINK TO STRATEGIC GOALS The City's Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community. Strong and Secure Neighborhoods and a Connected Community. The operations of the Olympic Training Center support the Economic Vitality goal as the City will be able to maximize the use of this valuable asset as an economic driver. Continued operations will also support the Healthy Community goal because it will provide the highest level of fitness, training and nutrition for elite athletes (both resident and visiting). Fitness, training and nutrition education and activities are also expected to be continued and expanded for local residents and programs. CURRENT YEAR FISCAL IMPACT Staff does not anticipate any impacts to the General Fund reserves in the current fiscal year as a result of this item. There may be in-kind services from Public Works to perform some minor capital repairs at the OTC. The capital cost of these repairs are expected to be borne by the USOC out of its budget. ONGOING FISCAL IMPACT Based on the terms noted in the staff report, there may be some City responsibility for certain costs as noted in Section 5 as follows: "City shail be solely responsible for payment of each of the following expenses on a timely basis, and the Operator shall have no obligation at any time to pay any of the following expenses: (1) all costs to investigate andlor remediate any environmentally sensitive materials and/or hazardous materials or substances at the CVTC existing prior to the Transfer, (2) City's violation of any and all obligations under the Core Agreement that expressly remain Citys responsibilities under the Agreement, (3) events hosted, sponsored or organized by the City and agreed to by the Operator to be held at the CVTC, (4) all costs necessary to change the signage at the CVTC, or on any off-site locations including on public streets, and (5) any taxes or fees imposed on City directiy." Most of these items are potential costs as opposed to projected certain costs. To the extent that the City funds any Major Repairs or capitai improvements the cost of such potential repairs would be paid out of the City's General Fund and then such costs would be City ot Chula Yista Page 9 0110 Printed on 4/8/2016 File#: 16-0191, Item#: 5. recovered, plus interest per annum at the rate equal to that of the ten (10) year U.S. Treasury rate, out of future Surplus Revenues. ATTACHMENTS Term Sheet for Facility Operations Agreement, Chula Vista Elite Athlete Training Center, dated April 1, 2016, between the City and PLT signed by PLT and the City Manager City ol C�ula Vista Page 10 of 10 PrinteA on 4/8/2016 Term Sheet 14I Facflfri Oneratioua Aereement �huL Vi�te EBte Athlete TrRlnln¢Ceahr CONFIDENT(AL This is a non-binding Term Shat for a proposed Facility Operating Agroement (the "Agrcement'7. 'Itiis Term Sheet is for negotiation piuposes only. 7'his Te�m Shea Is not Intended to be, or to tvidence, eny legally binding trnns or conditiom of any agreemeot on the part of any party. No agreement shall be btnding unless and until eech perty hes reviewed, appmved, and executed, after revlew by legel wunsel, a definidve written agrtemenG Apri16,2016 1. a Ga�eral 1.1 ert'e . City of Chula Viste, a chertered mm[cipal coryorntion ("City"), end The Point Loma Trust, a Califomia hnist, or a whoily owned apecial purpose entity subsidiery thereof("Operalor'�. Formation documents for Tha Point Lome Tcust,end if Opecator is a whofly owned speclal purpose entity of The Point Loma Tnu; the Opemtor, wlll be provided by Operator to City for review priot lo entering the Agreement 1.2 Basic A¢reement. City conuacts with Opemror to operale end maintain the Chula Viste Elite Atlilete Training Crnter("CVTC'�consistmt with Ute tertns of(a) that certain Core Agreement between the United Stetes Olympic Commlttee ("L1SOC") and City attached as xd 1t ("Com AgreemenP�; (b)the initial CV7'C Business Plan epproved by both parties("Business Plan"),whlch will be attached to the AgrcemeM;and (c)t4e Agree[nent 1.3 Auienment of Riehts and Dudes. Except as expressly provfded in the Agreement,City shall assign to Operator all of its rights and obligetions under ttte Coro Agreement 1.4 I,imits on Scooe of AulhoriN. Excepl as expressly provided herein, without City's prior written approval, to be exercised in City's sole discretion, Operator ahall not have tLe authority to: •(a) Impose or cause the lmposition oF liens or encumbmnces on CVTC property/facil ities/equipment (b) Transfer, remave or modify eny matedal roal property Interests, physical atructums or sporting venues that are paR of C VT'C. 1 uocs iawsi�00000�aswssa� 1.5 Additional Standards of PerFormance/Dutiea. (a) Compliance with laws(includfng prevailing wage rcqufrements,to the extent applicable). (b) Meintenence of edequetdetl'ecUve work force. (c) Facllity/Equipment maintenance per agreed upon schedules/ standards. (d) Management, rernrds and eccounting system(s) tl�at provide evidence of compliance with Core Agreement end(3AAP. (e) Propose annual budget for epproval by City Managa's designee and provide quarterly reports regazding adherence to approved budget. 1.6 Independent Contractor. Operator's relationships to City in the performance of its duties under the Agreement shall be that of an independent contractor. 2. Term 2.1 Ini6el Term. The effective date of the Agreement shell be April I, 2016, and the Agreement shall remain in effeet unti! December 31, 2024 {"lnitial Term"). However,Operator shall not have any obltgations under Ihe Agreement Crom the time the Agreement is executed until the CVTC is transferred to the City (the "Pre-Acquisition Pedod"); provided that Operator will be subject to certain obl3gations during the Pre- Acquisition period to be memorielized in e separate Interim Agreement between City end Operator, which the perties will make commercialty reasonable efforts to negoGato in good feith within the first ten days after the commencement of the Pre-Acquisition Pcriod in accordance with e term sheet to be attached as an exhibit to the Agceement. Operalor shall have one option to extend lhe Initial Temt of the Agreement by an additionel hvo (2) yeara,ta ba axeroised by providing written notice to Ciry by no leter than 7anuary l, 2024. � 2.2 Extenslan Term(sl. By no later then 18 months prior to ihe expiralion of the Initial Term (as the same may be extended by Operator), the parties shsll meet and confer regarding possible terms for extension of the term of the Agreement for up to en additional eight (8)years, Any agreement to exlend the Initiel Term shall be su6ject to esch party's approval in its solc discretton. The]nitial7erm,as it may be extended, shall sometimes be refeRed to herein es the"Term:' 23 Ooerator's Earlv Termination Ri�hts. The Opemtor shall have the right to tettninate the Agreement on the fourth{4 )anniversary and the sixth (6�') wmiversery of the TransFer Dnte with nine (9) months' pdor written notice (the "Termination Nodce"} to the City;provided that such r3ght may be exercised aily if Operator and City havc mct and conferred for the purpose of agreein�upon an altemative business plan for the CVTC at leest three (3) months prior to the Operator's delivery of the Termination Notice. ]n 2 oocs iototi•0000mnsasse� eddition,the Operator shell have the right to terminate the Agrcement on sixty (60)days prlor written notico to the City upon the occurrence of one or more of the foliowing evonts: {i)the impmvements and fecilities at the CVTC suffer materiel daznege (defined es demage cosdng in excess of 5750,000 to restore or repair)from the time the Core end Transfer Agroements are entered 3nto until the TYansfer Dete,provlded ttiat such damage would materielly adversely lmpect the Operator's ability to fulfill Operator's obligations under the Agreement, (Ii) the City does not acquire tho CVTC prior to Merch 1, 2017, (tii) tha 100 bed facility to bo constnicted by Baldwin & Sons et the CVTC is not ava(lable for occupency and City has not provided 100 altemative beds within 5 miles of the CVTC al no cost to PLT pdor to Juty 1 S, 2017, end (iv) due to no fault of Operator, lhe Core Agreement is termineted dwing lhe first four(4)ycars of the Initiel Term. If lhe Operator elects to tenninau the Agceement pursuant to one of foregoing rights,afler the expiretion of the b0 day notia perlod, neither !ho Operetor or the City shall kieve eny further obligetions rotated to the operation of the CVTC, other than obligations that arc expressly lntended to survive the tetminadon of the Agreement. As used herein, lhe '"fiansfer Dald' shall mean tt�e date on which tt�e City acquires the CVTC from the USOC. 3. Bualacu Plan 3.1 Initial Susiness Plan. Operator shell prepare a draft Business Pien that does not conflia with the Con Ageeement for Ciry review/approval. 'Che diaft Susiness Plan shell include, at a minimum, the follow3ng elements: (a) mission/vision statement, (6)trensidon plen, (c) list of the tergeted types end daired mix of usera, (d) markedng plan summery, (e)pdnciples for rate setting and/or a proposed preliminary rete sweture for facility uSers, (� principles for budget development and compliance, lncluding operationallcapital reserves, (p,J community outreach plan summary, (h) speciel event plen summary, (i) staffing plen,(j)retail ston proposal (to the extent the OperaWr elects to maintain and operete n reteil ston at CVTC), (k) plan for identifying/funding capital enhanaments, end (I) plan for identifying potentiel 6usiness opportunities, including, without limltetion,expanslon of on-site relail such as rcstaurant end coffee rotailera. 3.2 ReWI Swre. City anticipata proposal Gom Operetor for Operator to diroctly or indirocdy operete the e�clsting rotail atore for a minimum of two ycars, with a Ciry option to�operete the rotail srore thereafter if Operator declines to operete the same. 3.3 USOC Review. The Ciry-approved draR Buslness Plan shall be submined to USOC for review end ioput, with reesoneble consideretion by Operator givrn to proposed USOC proposed adjustments. 3.4 Comurchensive Business Plan. Baved upon and consistent with the draft Buciness Plen, Opemtor shall develop a more detailed end comprehensive Business Plan and shall submit that plan for the Ciry Meneger's review and epprnval by no latu than July l,2016. 3.5 !Annusl Review Pracess. The parties shall meet end confer each yeer of the Tenn starting March 1'�to discuss possible updates and modifications to the Business 3 oocs�owsi�aoaownsatss.t � Plen. Operator shall submit its updated plen ta ttie City Menager for roview and input, with reasonable wnsideration givan to tha City Maneger's proposed modificetions. 4. Staffln¢/Ovenleht 4.l In Geneial. Operetor shall have the dght end responslbility to hire/manage end terminete employees as necessary to operete/maintain the CVTC per thc standards required by the Agreemenl. 4.2 Kev Pasitions. Initisliy, City Mansger (or designce) and Operator ahail confor to idenUfy key exisNng CVTC employees that may be offered positions with Operatoc Until December 31, 2021, Operator shell cantinue to consult wilh City Mansger (or designee) in advance of hiring, muterlel che�iges in emplpymenl or termination of these individuals/positions. Notwithstanding the foregoing, the ullimate decisions regnrding hiring, maneging or terminating Operalor employees shail be at Operator's sole discretion. 43 Citv CVTC Coordinator/Lisison. Thcre shnll be a CVTC "CoordinetodLiaison" to be employcd by Ciry, or a non-profit created thereby ("City Coordinator/Liaison").The City Coordinator/Lleison shall be responsible for City's obligadons in respect of CVTC operalions, and ahall be Operetor's point of contact wlth the Ciry and shall assist with the merketing of the CVTC, et no cost to Operator. Operetor shall provide the City Coordinator Lialson with full access to the CVTC, elong with reasonable office apace and reesonable office support services at Operator's cost. Until December 31, 2021,Ciry shall consult wfth Operator in edvance of hiring,material changes in employment or lerminaUon of this position. Nohvithstanding Ihe foregoing, the ultimate decisions regercling h3ring, managing or terminating the City Coordinator/Liaison shall be at City's discrotion. 4.4 Facilitv Oneretlons Advisorv Commtttee ("FOAC"1. City envisions representative(s) from USOC, Easton, Operator, City and CVTC coaches/ethletes to shore idess and issues relstive to CVTC operetions. This entity shall have no decision meking or govemance function but shall be consulled from time to time for its input on CVTC operetions end policy. This entity sheU have not less than 20% CVTC resldent athlete reprosentation Dotermine if the FOAC could setve as lhe agont for administering the annunl review prceess [Section 11], nnd/or the "ethlete representative" function [3ection 3Dj required under the Con Agreement. 5. Revenuen/CamoenaeHon 5.1 n General. All CVTC revenues genereted by ihe use and/or operation of CVTC shall go to CVTC operelions and meintenance es Operator shall direct, consistent with terms of Business Plen and Budget, except as othenvise expressly providod hereln. All revcnues from the salc of natning rtghts shall bc treatcd the snnte es all other rovenues generated by the operation of the CVTC,provided that to thc extcnt that revenues from the sale of naming rights generate "Surplus Revenues" (as defined below), the percentages designatcd in Section 53(b) below shall bc chenged from l0% end 70% to a nocs io�osim000�ntae9s.� 1 40Yo and 40X with respect to t}wse portiw�s of a►e Sucpl�Reva�ua di[ecdy alloceble to the sek of such naming righu. 5,2 Ooerator Fee. la consideration of OperaWr's provision of services under the Agreement,Oparetar shell be eatitled to a fee equal to the greater of 5300,000 or 109G of CVTC gross revenues, payable out oF CVTC revenues on an annual bnsis, in urars ("Operator Fx'7. Starting in calendaz year 2018, end each yeaz of the Term theceafter, the Operator Fee shall be payable monthly out of CYI'C revenues based upon OperaWr's reasooeble revenue projectiom for thet calendar yeaz,wbject to a yeer-end reconciliatioa Although the Operator Fee is the greater of a fixed amount or an smount calculated based on a percentage of�oss revenues,the Operator Fee shall be paid only to the extent Uxro is sufficient revenue generated from the CVTC to fust pay all mher ihird pmty creditors providing goods or services to the CVTC and eny end ell other operating cosis for which the Operator is responsible under ihe Opecating A�eement, provided that the Operator Fee will be patd before nny monles are sa aside to fund eny budgeted operating reswve or capitel resern requiroments. To the extmt il�et there ls not sufficient revrnue to pay the Operator Fees wben due,the unpaid poAions of the Operecor Fees shall be treated es Defe:red Operator Losses (es defned below); prorided,however, that if fn eny year the Operator Fee 8xaeds 5300,000, ao intercst will aocrue with rapect to the unpaid portion of the Operewr Fee that exceeds f300,00D. 53 �$.�1us Revenues. To extent eny "surplus net revenues" are 8en�cated from operations of the CVTC(to be defined) ("Swplus Revenues'7,then(a)20%of such Surplus Revenues shall be allocnted towazds "CVTC Spacial Projects° to be mutually agrced between the peRies, but generally intended to eddress CVTC additions end/or enhencemrnts, end (b) 8U% of such Surplus Revenues shnll paid to Opuetor as an additional fee for Operatvr's services under the Agreement, wilh (i) 10% of the Su�plus Revenues to be donated by Operetor towards enhencing or adding to existing Operetor projects or pm�ams benefiting Chula Vista residents or studenW determincd after consultetions rvich the City, end (i� the remaining 70°/. of the Surplus Revenues to be evailable for disposition by Operator in its sole discretion. "Sucplus Revenues" shnll be detamined ennuelly. in nnee:s. besed upon a ieconciliation of revenues generated and wsts inwaed for that budget yeer, stter paying off(in the following order) any end all opernling costs far the cu:rent year,any unpaid Operetor Fees and any Defecred OperaWr Losses. 5.4 j��� R�rvm. The Operator shall be responsible for the payment oF all losses resulting from the operntion of the CVTC except to the extent that such losses are ceused by costs expressly ellocated to the City under the Agreemrnt (the "Deferted Operator Losses'7• 'C1u emount of Deferred Operator Losses from each year of operations, plus lnterest to acerue on the outstanding balance of such losses at a per ennum rete equal to that of the ten(10)year U.S. Treasury rate,as such may change from time to time shall be recavered by the OperaWr from subse�uent years revenues from operations and capitel events(such as a sale or refinancing of the CVTC)net of opereling expenscs but not net of operettng or capital reserves. 5 oocs iowsi�a0000msae9s.� � 5.5 ��w Resoonsibilitv for Cenain Casts. (a) City shall be solely responsible for payment of each of the following expenses on a timely besis, and the Operator shall have no obligation at any dme to pay eny of the following expenses: {i) all costs to tnvestigete and/or remediate any endvonmentally sensitive materials end/or hazerdous materials or substances that relate to the CVTC and 1he operation theroof, including the operation of the Sports Performance Facilities by the USOC,except to the extent caused or allowed by�perator, (ii)City's violation of eny end all obligadons under the Core Agreement and the Transfer Agreement that are not speclfical)y asslgned and essumed by the Operetor under the Agreement, (1ti) events hosted, sponsored or organized by the City and agreed to by the Operator to 6e held at the CVTC, (iv) aii costs necessary to change the signage at the CVTC, or on any off-site tocetions including on public streets, (v) the cost of properry insurance for the CVTC, including coverage end su6ject to deduclibles that are standard for a project of similar siu end scope,provided that the pariies scknowledge that the City may self-insure if permitted to do so under the Core Agreement, (vi) sny taxes of any kind {includidg real property tenes, possessory interest or similar tsxcs) imposed by any texing authority arisiog out of City's ownership of ihe CVTC, as opposed to Opecator's use and operetion of the CVTC and/or Operator's tax exempt stetus, or lack thereof; provided, however, that if the eppliceble tnxing euthority determines lhat real property taxes, possessory interest taxes or similar taxes mus[ be paid due to the operation of the CVTC by an entity other than the City, or for any other renson,such taues ahall be treated es operating expenses of the CVTC end shall be subject to the loss recovery provisions set forth in S�ction 5.4 hereaf, and (vii) any cost related to the condition of the sewer lines servicing the CVTC. (b) In the event that any"Mejor Repairs" (defined as repairs cosling in excess of 5750,000 that must be mede to the CVTC,that nre not caused by force majeure events,that ere not due to the fault of the City or the Operetor(in which event the mpeirs shal! be mede by the pazty causing such demage) and which, if not repaired, would materielly adversely impact the Operator's ability to fulfill Operator's obligations under the Agreement), or if the City and the Opetetor determine that certain capitel improvements should bc built on the CVTC, then the Operator end lhe City ahall mect end confer to determine (i) which Major Repairs or cepite! improvements should be made, and (ii) if s mutual decision is msde to proceed, how to reasonably allocatc the eost and responsibility of commencing and completing such Major Repairs or capitel lmprovemenis behveen the Operator and the City. In such discussions, the parties will give consideration to all relevant facts and circumstances, including without limitation the(A)cost of such repairs and/or cepital improvemrnts,(B)if the tepairs are covered by either party's insurence poticy or policies, or ere self•insured by City through an applicable prrigram of self inswance(in which event the cost of the Major Repalrs will be covered to the extent of such insurance proceeds ), (C)Opemtor Fees then paid to dete and projected, (D}the remaining Term of the Agreement, end (E)the ability of the Operetor to generate Surplus Revenues. Notvrithstending the foregoing, the parties agree that the Operator shell be required to pay all amounts towards Major Repairs to the extent thnt Operutor reasonably oocs iorosi�00000zrzsae�� 6 anticipates it will6e able W rcoover such amounts,plus intuat at a per annum rate equal to that of the un(10)year U.S.Treesury rete,es such rau may change from Hme to time until paid in fLll, from the paymenb due to the Opemtor under the Agreement for the to- be-agrced-upan remainder of the Tum. In the event that the Ciry end the Operetor have a di�ute over whether lhe Operalor can reasonably anticipate thst it will be pble to recover sucJ�smounts, plus interest at e pu ennum rate equal to that of the ten(10) year U.S. Treaaury rate,es such rate may change irom time to time undl paid in Cull, from the payments due to the Operator under the AgrcemeM for the to-be-agrad-upon remainder of the Tertn, thm such dispute wil] be raolved in accordance wlth a dispute rcsolution mxhenism to be agreed upon between the partia end set focth ln ffie AgcnemenG To the extent that the City or the Operalor funds such Major Repairs or capital improvements, (unless otherwise agrced with respect to cepitel improvemenb)each such paAy sheil heve the tight lo recover its contributians toward fLnding such Major Repairs or capltal tmprovements, plus interest per ennum at the rete equel to that of the ten (10) yeer U.S. Trcesury rate, as such mey chenge from time to time, out of [uturo Swplus Revenues peri passu with the other party and prior to tt�e ellocetion of Surplus Revenue set forth in Section 5.3 hereof; provided, however, that the City's right ro recover ils conUibutions Wwerd funding any Major Repeirs shaEl be given priority over pnyment to the Operator of any unpaid Operator Fees included in the Defetred Operator Losses but sueh ptiodty shall epply(i)only to the extent that such unpaid Operetor Fees are first due end peyable efter the City mekes its first conMbuUon of capital tawazds the spplicable MaJor Repairs, end (ii) with nspect to tt�at portion of the unpaid Operator Fees that exceed 5300.000 in any given year commencing with the year in which lhe Ciry mekes its first contribution of capital towards the applicable MaJor Repeirs. 5.6 Records/Audit Riahb (a) Duty to Maintain Records in aocardancc with 4AAP. (b) City Access to Review R�wds and pay for one complete sudit per year,with any sdditional audiCs at City's sole cost. (c) Conf'idendal Treetment of Operator Records that ere proprietery in , nature, except to the exteut that they must be relesved pursuant to ; ePPlicsble law. 5.7 Budaet Process. Propoxd similar to process for ennual review of Business Plen. 6, (`itv��,yervation of Acccsa/Events PLT shall provide City a specified number passes to special CVTC events to be dimibnted by City under City policies at no cost, subject to reasoneble resWctions, City to have eccess to the CVTC (time/space permitting) for a certain number end type of City events. By way of example, a certein number of City staff/o�ciel retreatslmatings would be nt eqst only,with preferred rates on e certain number of additional events(e.g., 7 oocs iows�-0a000lnsacss.a the Ciry Library Fovndation, Friends of Parks and Rec. snd Police Activities League). My such City events shall be schedu]ed with prior approval of Operator 7. Creation of Fundraielne Non-Protit Perties to meet and confer with intent of creating a separnte non-profit to fund- raise end othenvise support CVTC facilities and progrnms. Intendcd for both parties to havc a role and representation,with potential addition of USOC end/or Easton. S. SecurilvforParfarmancc As security for Operator's performence under the Agreement,Operetor sha!! ensure that(a) Operetor has initisl cepltalizetion ofnot less than 51,500,000,and(b) Operator maintalns cash reserves during thc Term of the Agrocment of no less than $i00,000. 9. Insuraace and IndemniN, 9.1 n u . Intended to be pattemed ufter Core Agreement unless additfonaUspec3al coveteges deemed necessary/appropdote, 9.2 Nlutuellndemnitles. (a) Except for those matters for which the City is 3ndemnifying Operator in eocordsace wilh Seclion 9.2(b)below, Operator egrees to protect, indemnify, defend and hold hermless City end 1ts respecllve officers, officials, dircctors, electcd officials, officers, direators, employees, agents, affiliates, representatives end lenders ("City's Affiliates")entlrely harmless from and against any and all linbilities,wsts,fas, losses, demands, actions,judgments, expenses or claims (including reasonable attomey's fees, fees of experts and court costs) for personal and bodily injury to or deeth of any person or Cor dameges to eny property arising out of or in eny manner connectod with{i) the managemant, operation, occupanay or enjoyment of thc CVTC by Operator and any of its sublessees, agents,employees, permittces, licensees or contraclors{the"Operator's Agents") or any work or ectivity or other things allowed or sufl'ered hy Operator or Operator's Agents to be done in or about the CVTC,and (ii)any breach or default in the performance obligations of Operator undar the Agreement. If Operotor is required to defend City, Operetor shall be responsible for thc nasoneble cost of counsel, provided that Operator�hall have the right to control the defense, subject to City's dght to consent to any settlement of claims. (b) Except to the extent ceused by Operatar's negligence or willful misconduct,Giry agrees to protcet, indemnify,defend and hoid hamiless aperator and ils olTicers, officlsls, directora, employees, agents, ufTilintes, representatives and ]enders ("Operator's Af(ilietes") entirely htumless from end ageinst any and alI liabilities, costs, fees, losses, demands, actions, judgments, expenses or cleims (including reasonable attorney's fees, fees of experts end court costs) for personal and bodily injury to or death of any person or for damages to any property arising out of or tn any manner connected with (i) the ective negligence, willfully wrong or illegal use, mnnegement, operation, . $ oocs io�os��00000msaess i accupancy or enjoyment of Ihe CV7'C by City end any of its,agents,employees,invitees, pertnittees, licensces or convectors (excluding Operator) (the "City's Agenu") or eny work or activity or other things negligently, wrongfully, or illegally causod by City or City's Agents to be done in or about the CVTC, end (ii)any bttach or default in the performance obiigations of City under the Agreement. If City is required to defend Operetor, City shall be responsible for the reasonable cost of such counsel,provided that City shall have the right to control the defense, subJect to Operetor's right to consent to any settlement of cielms. 9.3 Assletunent of Indemnitv from USOC. To the extent such assi�unent is eflective under appiicable law, City shall assign its rights under the expreu indemnides from USOC in City's favor pwsuant to thc Corc Agroement and the Trensfer Agreement (the"USOC Indemnitias")to Operator. 9.4 Additional Indemniri from Ciri to Ooerator. Except to ihe extent such matters are caused or allowed by Operator, City will indemnify, defend, protect (with counsel accepteble to the Operator) and hold the Operator harmless from eny and all costs, fees, expenses, cleims, liebilities, damages, or losses (the "Cleims") related to the following: (i)eny envlronmental condition related to the CVTC not caused by Operator, (ii)any claim�for or by any occupant,tenant, licensee,invitee,declerent,or any party that ciaims a righl to the CVTC pursuanl to e recorded or urvecorded instrument,or by means of adverse possessian or prescription,that their rights have been violated by the operetion of the CVTC as required by the Core Agreement, the Transfer Agreement, the Fsston Agreement, the Agreement, that is not caused by the Operator after the Trensfer Date acting in violation of its obligations in the Core Agreement, (iii) any event or circumstences that occurs related to the operetion,menagement,awnership end use af the CVTC that is not due to eny act or omission of the Operator or any of Opemtor's affiliates, em�loyees, agents, represantatives, or contractors, to the extent that the City actually recovers the emount of such Claims from the USOC pursuant to City's rights under the Core Agreement or the Trensfer Agreement, provided ihat the City shall meke good faith efforts to exercise any rights City may have under boffi such agreements to recover such amounls,and(iv)for any evenu held at the CVTC by the City,sponsored or co-sponsored by the Ciry. Under no c'ucumstences will any of the foregoing indemnity rights require any indemnifying party to indemnify the other parly for the indemnified pazty's negligence or wrongful conduct. In addition, in the event that a claim is made against both the City and the Operetor by any USOC employee besed on events,benefits or salary accruing prior lo the Transfer Date, the City end the Operator will equally share the 1ega1 fees incucred In defending such claim by counsel reasonebly acceptable lo both parties end each perty shall have the right to approve or disapprove of any settlement agreement affecting such party in connection with such claim. 9 DOCS I07051-0D000725Pi696.7 I 10. General Provtsions. 10.1 Additional Covenents. (a) �cv Covenants. City covenanis to the Operator as follows: (i) City shell not meke or allow any material alterations to any existing facilities or improvemenis at the CVTC or to eny new facllities st the CVTC, to the extent that nny the Operator reasonably believes that such alterations or lmprovements would have a mnteriai adverse impact on the Operator's ability to operete the CVTC in accordance �vith the Agreement ar lhe Buslness Plan, without first receiving Operator's prior written approval, (ii) Ciry shall not take any actions to violate any use restrictions appiicable to the CVTC, end the Operator shall egree to do the same,(iii) City shall use good faith efforts to and cooperate with ALT to seek ways to increase revenues and decrease cosis of operetions for the CVTC, including good feith ef�'orls to ettempt to negotiate an a�reement with the locei electricity and �vater providers to lower the cos! of electricity and wnter, respectively, if the City is able to achieve e lower elechicity and/or water rate; (iv) to the extent permissible under appliceble law and to the extent City will not have to pay for the following items, City shall waive any and ail City based taxes, fees, payments, chuges, processing costs, {nspection costs or fees, ar any other costs or fees relaled to the operation and use of the CVTC that City is authorized to charge to privale landowners;(v)City sha11 rigorously enforce its rights end remedies under its agrecment for construction of ihe 100-bed facility pursuant to with Baldwin & Sons; and (vi) City will endeavor, in good faith, to make Operator sn express third-party bene6ciary under City's agreement with Baldwin&Sons. ' (b) Mutual Covenents. Durin�the initial trensition period, the parties shall cooperate to attempt lo obtain a fsvorable arrangement with Easton, which would include significant nvailebility of the usage of Easton Housing, and will work wilh the USOC to expfore additional opportunities for usage of the CVTC by the USOC,over and above its Minimum Usege Commitment 10.2 Assienment _of Aereement. Neither party may assign the Agreement without the other party's prior written consent, except to a wholly-owned subsidiary of the assigning party. ]0.3 Lim{tation of Remedies. In the event of a breach by either party hereunder, or the enforcement of ony indemnity obligation, the other party may recover only its direct, actual damages es a result of such breach. In no event shail either perty have a right to recover punitive or conseyuential damages including, without limitation, lost profits. � 10.4 � Force Majeure. Operator and City to include a mutually acceptable provision addressing respansibility for repairing damage caused to the CVTC by force majeure events. ]0.5 .Namine Riehts. Any agreement with respect to naming rights for all or any portion of the CVTC shall be subject to the prior written appro�al of ihe City, after ]0 oocs io�osi-00000�nswess� meetutg and wnfaring with PLT, in City's rm1om61e disccetion; Provided. however, in 0o event will Ctiry approve naming rights for any CVTC Scility for a univex�ty or colkge instiwdoa widaix PLT's prior epproval. [I�ct Page is Signehm Page� 11 oocs to�os�-0ooaouzsou�.� � 'Ihis Term Shxt is for negotietion purposes only. This Term Sheet is not intended to be, or to evidence,any kgapy binding terms or conditions of eny agreeme� on the psrt of any party. No agnxment shall be binding unless and until each pazty has reviewed, appmved, end executed, afler roview by legal counsel, a definitive written �� ACIQVOWLEDGED BY CITY AND OPEItATOR City of Chrle V'uta, a chaRered unicipal orpo 'on By: Name: ��: �e�- The Poiat Lotn�Traat, a Catifora t� By_ l/l/ Neme: oG s� Ita: CE O n�ssasen Signature Pege to Term Sheet oocs�o�os��000007rzsoaevc� RESOLUTION NO. 2016- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING FINAL TERMS FOR THE AGREEMENT WITH THE POINT LOMA 7'RUST FOR THE OPERATIONS OF THE CHULA VISTA ELITE ATHLETE TRAINING CENTER AND DIRECTING STAFF TO FINAL[ZE AGREEMENTS CONSISTENT THEREW[TH WHEREAS, the United States Olympic Committee ("USOC") owns the Olympic Trauung Center ("OTC" or"CVOTC") located in the City of Chula Vista; and WHEREAS, the USOC wishes to transfer to the City the OTC, including the land upon which the OTC is situated and OTC operations, as set forth in an attendant agreement; and WHEREAS, the Ciry desires to accept said transfer and continue to operate the OTC as a training site for Olympic and elite level athletes; and WHEREAS, to further the goal of operating the OTC as a training site for OlyTnpic and elite level athletes, the Ciry desires to contract with The Point Loma Trust ("PLT") for said operations and seeks to enter in an operating agreement ("Operating Agreemenf')with PLT; and WHEREAS, PLT was chosen to contract with via a selection process which began in July 2015, a-hen the City issued a Request for Expressions of Interest (RFEI) for an operator. Eleven potential operators responded. Through a series of evaluations, the City and the USOC narrowed the selection and ultimately selected PLT, an affiliate of Point Loma Nazarene University (`PLNU"), as its preferred operator; and WHEREAS, PLT was selected because of PLNU's experience w�th operating high quality sports facilities, buildings, residence halls and dining facilities; its understanding of the need to mazket the facility for additional revenue generation that complements the core business such as i�creased use by intemational athletes, grass root camps, hosting additional NGB's, sport and teambuilding clinics; its existing investment in Chula Vista w�th their relationship w�th Southwestem College; iu acceptance and desire to embrace and promote the vision of the City and the USOC regarding the Olympic movement and support of Olympic and elite level athletes training at the center; its desire to exceed the expectations of USOC and the Ciry; its desire to decelop strategic partnerships w�th, and to maintain or enhance service levels for Easton Archery Center of Ezcellence; and its willingness to bear risks of operating deficits; and WHEREAS, on Mazch 15. 2016, City staff presented to the Council proposed terms for the Operating Agreement between City and PLT, the Council approved such terms and directed staff to finalize its negotiations on terms consistent therewith: and WHEREAS. staff has now finalized its negotiations w�hich resulted in an executed term sheet ("Final Term Sheet') signed b} PLT and the City Manager, which is now presented to the City Council for its consideration and approval. I Resolution No. 2016- Page 2 NOW, THEREFORE BE IT RESOLVED by City Council of the City of Chula Vista, that it does hereby (1) approve the proposed terms for an Operating Agreement between the City and PLT o� the terms presented in the Final Term Sheet, (2) authorizes and directs the City Manager to execute a final Operator Agreement consistent therewith, in a form approved by the City Attomey, with such minor modifications as maybe required or approved thereby, and (3) authorizes and directs the City Manager or his designee, to take all necessary and appropriate steps to implement the terms of the Operator Agreement, including, without limitation, any reasonably required implementation agreement(s), subject to City Attorney review and approval as to form. Presented by: Approved as to form by: Kelley K. Baco� Glen R. Googins Deputy City Manager City Attorney