REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Chris Slama, Director of Community & Library Services
Subject:
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Approve and authorize execution of an Operational/Management Agreement between the City of Huntington Beach and HBSC Partners, LLC, for Facility Management and Operation Services at the Huntington Central Park Sports Complex
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Statement of Issue:
There is a need to approve an Operational/Management Agreement between the City of Huntington Beach (CITY) and HBSC Partners, LLC (HBSC) to manage, promote, and operate the City’s Huntington Central Park Sports Complex (Sports Complex). The initial term of the agreement is three years with two possible three-year extensions. A Request for Proposal (RFP) was circulated and HBSC Partners, LLC was selected as the recommended contractor.
Financial Impact:
There are no new appropriations associated with approval of the Recommended Action. The proposed agreement is based on a profit sharing model wherein the Contractor shall pay City 10% of gross sales, increasing to 12% in year 2, and to 14% in year 3. The agreement also provides two, three-year extensions wherein the CITY’s percentage share increases to 16% for the first three-year extension and 18% for the second and final three-year extension.
Recommended Action:
recommendation
Approve and authorize the Mayor and City Clerk to execute an Operational/Management Agreement between the City of Huntington Beach and HBSC Partners, LLC, for facility management and operation services of the Huntington Central Park Sports Complex.
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Alternative Action(s):
Do not approve the recommended action and direct staff accordingly.
Analysis:
The Huntington Central Park Sports Complex (Complex) is located within Huntington Central Park, south of Huntington Central Library at the corner of Goldenwest Street and Talbert Avenue. The Complex was dedicated on April 24, 2004, and began operation in May 2004, with seven lighted softball fields, two artificial lighted turf fields, a maintenance area, and two concession stands. Later phases included the addition of an eighth softball field, one additional lighted turf field, one lighted arena field, seven lighted batting cages, a batting cage office building with restrooms, and a team room/office building.
Since 2004, the Complex has been host to hundreds of youth softball, adult softball, youth baseball, and youth soccer tournaments, as well as league play throughout the year. The Complex serves as the main hub for the City’s Adult Softball and Soccer programs, as well as PeeWee Soccer and Skatedogs skateboarding contract classes. Annually, the facility hosts major Specific Events, including the Easter Hunt, Taste of Huntington Beach, and the EPIC Challenge. The Premier Girls Fastpitch (PGF) organization reserves the facility annually as one of its main sites during its two-week National Championship tournament. The Complex is also used for a variety of rental events that include company softball and soccer tournaments, as well as Laser Tag parties.
Based on a reorganization of our existing operations, the City released a Request for Proposals (RFP) on March 5, 2021, for Sports Complex Activities and Facility Management of the Complex. A total of four bids were received. An interdepartmental staff panel from the Office of Business Development, Finance, and Community & Library Services reviewed and ranked the submittals. Three of the four proposers were interviewed and after a lengthy review and negotiation process, HBSC Partners, LLC was selected as the recommended contractor.
As included in their RFP (Attachment 1), “HBSC Partners, LLC is a partnership formed for the sole purpose of developing the Huntington Beach Sports Complex into a hub of youth and adult sports for our local community and a destination for sports competition. The partners at HBSC have been born, raised, lived, and worked in Huntington Beach and have developed strong ties with HB Community organizations, hospitality and retail businesses, and the families that are the fabric of this great community. As a team, our sole mission is dedicated to creating a place for our local athletes to call home while inspiring community growth and vitality.”
Under the terms of the proposed agreement (Attachment 2), the City will retain full possession of the Complex. The Premises referred to in the Agreement consists of forty-five (45) acres and features eight (8) multi-use softball/soccer fields; seven (7) batting cages; three (3) open artificial turf fields; one (1) artificial arena turf field; one (1) team room/office building; one (1) batting cage office building, two (2) attached restroom buildings; a maintenance yard; and over 800 parking spaces.
In general, the proposed agreement is based on a profit sharing arrangement wherein the HBSC will program, promote, and manage all aspects of the City’s Adult/Youth Softball and Soccer programs. HBSC is also encouraged to expand programming by adding additional events, tournaments, and/or recreational services when the Premises are not scheduled for use by the City.
The proposed profit sharing percentages pertain to field rentals, cash sponsorships, event revenues, tournament, leagues, as well as batting cage fees. During year 1 of the proposed agreement, HBSC shall pay CITY 10% of gross sales, increasing to 12% in year 2, and to 14% in year 3. The agreement also provides two, three-year extensions wherein the CITY’s percentage share increases to 16% for the first three-year extension and 18% for the second and final three-year extension.
As part of the proposed agreement, HBSC will have revenue-generating opportunities through the Batting Cage Concession facility and upon approval by the City, HBSC may provide concessions for merchandise, apparel, and supplies related to Sports Complex activities. The proposed profit sharing percentages for these sales shall be subject to a five-percent (5%) share to the City.
A listing of the major deal points and responsibilities assigned to HBSC and City are listed below. Additional detailed HBSC responsibilities are listed in Exhibit A, of the Agreement.
CONTRACTOR:
• Premises shall be operated and managed for the purpose of sports activities and events, including, but not limited to, league management, field maintenance, activity rentals, and concession sales of approved products and services.
• At its sole cost and expense, shall equip, operate, manage, and maintain the Premises in a safe and good working condition.
• May use mutually agreed upon City-owned maintenance equipment housed at Premises, during the term of this Agreement or until the end of its useful purpose. Once maintenance equipment has exhausted its lifespan, any and all approved-replacement equipment shall be made at HBSC’s sole cost and expense.
• Maintain and operate the Premises and adjacent areas, in a clean, safe, wholesome and sanitary condition free of trash, garbage or obstructions of any kind and in compliance with any and all present and future laws, general rules or regulations of any governmental authority now, or at any time during the term of agreement.
• Shall use the current approved Master Fee and Charges Schedule for all facility rentals and recreational program charges through February 2022. Following this time, fees may be adjusted once on March 1, 2022 (6-month review) with annual adjustments thereafter on January 1 following submittal of satisfactory documentation of rates at similar facilities in Los Angeles and Orange Counties at rates no higher than the Consumer Price Index (CPI) upon approval by the Director of Community and Library Services.
• Shall use CITY’s current approved Master Fee and Charges Schedule where applicable for parking fees, specific and/or special event fees, or other city programming fees.
• Shall be permitted to display sponsorship banners and signs within the Premises.in compliance with the general provisions of Zoning Code 233.10 (M) and H.B.M.C. 13.48.140.
CITY:
• Shall pay major public utility charges, including water, sewer, gas, and electric and service parking lot trash receptacles.
• Shall maintain all sewers and drain lines, roofs, attached public restrooms, and general Premises landscaping, which shall include, but is not limited to, outfield turf maintenance, and shrubbery, plants, and planter maintenance throughout the Premises.
• Shall retain 100% of all metered parking and fees received for special or specific event fees.
• Shall have the right, upon reasonable notice, during the Agreement Term and any extension thereof, and within three (3) years after Expiration or Termination of this Agreement to inspect and audit CONTRACTOR’s books and records.
• At its sole and absolute discretion, may request removal of any banner or sign from the Premises.
Staff believes that the proposed agreement and partnership will provide new joint promotional and program expansion opportunities for the City and recommends the approval of the Recommended Action.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Infrastructure & Parks
Attachment(s):
1) HBSC Partners RFP Submittal dated April 15, 2021.
2) Operational/Management Agreement between the City of Huntington Beach and HBSC Partners, LLC, for Facility Management and Operation Services of the Huntington Central Park Sports Complex.