HomeMy WebLinkAboutAD07-300 - Amendment - #1 - Thunderbird Hockey Enterprises, LLC - License Agreement - 04/03/2012 FIRST AMENDMENT
TO THE
LICENSE AGREEMENT
BY AND BETWEEN
THE CITY OF KENT
AND
THUNDERBIRD HOCKEY ENTERPRISES, LLC
RECITALS
A. On March 15, 2011, the city of Kent sent a Letter of Intent ("LOI"), to the Seattle
Thunderbirds supporting an amendment to the Lease Agreement between the City and the
Seattle Thunderbirds that would revise the sale of suites and club seats at the ShoWare Center.
The LOI contemplated the following basic changes with regard to the seasonal sale of suites and
club seats:
1. The Seattle Thunderbirds ("Team") would be the sole contractor for the sale of suite
licenses for hockey games only and SMG, as the City's agent, would sell suites on an individual
basis for all non-hockey events.
2. This Amendment would allow suite pricing at approximately $16,200 for a ten
person suite, $19,440 for a twelve person suite, $22,680 for a fourteen person suite, and
$25,920 for a sixteen person suite for all hockey games.
3. The Team would receive a 15% commission on all "full-season" hockey game-only
suite sales. After accounting for any commission due, the Team would receive 60 percent and
the City would receive 40% of the net proceeds of the sale of suites for hockey games. The
Team would also advertise non-hockey events to its full database of customers for the purpose
of selling suites to non-hockey events. The Team would also be required to make other
reasonable efforts to sell suites to its customers for non-hockey events. If the Team sells a suite
for a non-hockey event, the Team would receive a 15% commission. After accounting for the
Team's commission, if any, the City would retain 100 percent of the net proceeds from the sale
of suites for non-hockey events.
4. The Team would be allowed to sell, on a single game basis, tickets to any suite
which is not under contract for a Hockey Event at a price to be determined by the Team. The
F
revenue from those sales would be included as both General Admission Revenue and as Net
Ticket Proceeds.
a
First Amendment to City of Kent and Thunderbird Lease Agreement Page 1 of 6
5. All of the "performance clauses" represented in the Exhibits at the end of the
current License Agreement would be mutually ad3usted to reflect the revised pricing structure of
certain seats.
6. Club Seats would be reduced to $975.00 per seat on a Season Ticket basis. The
City would receive the first $75.00 on each ticket sold on a Season Ticket basis, and the
remaining $900 would be split with Thirty Percent (30% or $270) to the City, and Seventy
Percent (70% or $630) to the Team.
B. This First Amendment (Amendment) to the License Agreement by and between the City of
Kent and Thunderbird Hockey Enterprises, LLC (License Agreement), amends the original
License Agreement executed on August 7, 2007. All other provisions of the original Agreement
not inconsistent with this Amendment shall remain in full force and effect. For valuable
consideration and by mutual consent of the parties, the parties amend the License Agreement as
follows:
AMENDMENT
1. ADD the following definition to ARTICLE I, AGREEMENT DEFINITIONS:
1.22.1 "General Admission Revenue" means all revenue generated from the sale
of all tickets to Hockey Events that are not season ticket Suite License sales.
2. DELETE Section 4.1 of the Agreement, entitled "Term; Performance Standard,"
and REPLACE with the following:
4.1 Term; Performance Standards
(a) The term of this Agreement shall be binding and effective as of the Effective
Date and shall continue in full force and effect for a period of thirty (30) years from the
Occupancy Date.
(b) The City or Team may terminate this Agreement effective as of the end of
the Operating Year during which notice of termination is given to the other Party if (i) for
any three consecutive Operating Years, the "General Admission Revenue," for Regular
Season Games at the Arena equals less than each year's amount shown on Exhibit D in
the column labeled "General Admission Revenue Target."
(c) If for any two consecutive Operating years the General Admission Revenue
for Regular Season Games at the Arena equals less than each year's amount shown on
Exhibit D in the column labeled "General Admission Revenue Target," the City may, at its
sole discretion, request that the WHL require the Team to produce a comprehensive
business plan covering both business and hockey operations. If the WHL so requires such
a plan, then upon receipt of the Team's business plan, the WHL and the City will jointly
evaluate the plan and make recommendations regarding proposed actions by the Team to
meet the performance standards If the Team agrees to the recommendations of the
WHL/City, the Team will be granted two Operating Years, commencing in the Operating
Year following the date of such recommendations, to achieve the performance standard
set forth above, and the City may not terminate the Agreement at the end of the third
First Amendment to City of Kent and Thunderbird Lease Agreement Page 2 of 6
low-attendance General Admission Revenue Operating Year as described in subsection
(b), immediately above. However, if the General Admission Revenue for League Games at
the Arena during those next two consecutive Operating Years (i.e., the third and fourth
Operating Years) has low attendance that does not meet the General Admission Revenue
Target; the City may then terminate this Agreement effective upon the last date of the
fourth Operating Year with low attendance. If the Team does not provide a detailed
business plan or does not substantially follow the actions recommended by the WHL/City,
the provisions of subsection (b), above, shall then become effective and the then-current
Operating Year shall serve as the final year of the evaluation period (which period will
comprise a total of three Operating Years—the two consecutive Operating Years
referenced at the beginning of this subsection plus the Operating Year referenced in this
sentence). If the City does not request the WHL to require the Team to produce a
comprehensive business plan, then the provisions of subsection (b), above, shall remain
in effect as an alternative available to the City.
(d) The Team will use its best efforts to obtain assurance by the WHL that if at
any time during the term of this Agreement, the WHL determines that the Team is no
longer a commercially viable operating member of the League and is unable to continue to
operate, and as a result the Team forfeits or otherwise loses its franchise rights to the
WHL, the WHL will offer the City the first option to purchase the franchise at fair market
value or to find a buyer acceptable to the City and the WHL.
(e) If the City terminates its license agreement with the Team without first
availing itself of the procedure set forth above in Section 4.1.(c), the WHL will be under
no obligation to maintain a WHL franchise in the Center.
3. DELETE Section 6.6 of the Agreement, entitled "Suites," in its entirety and
REPLACE with the following:
(a) The term, "Suite License" applies only to the sale of full-season hockey-only
packages for one or more Suites. The term, "Individual Suite Sale" applies to all other
Suite sales, whether for non-hockey events or individual hockey events.
(b) On or before September 30 of each calendar year, the City and the Team will
collaboratively develop the prices for Suite Licenses to be sold for the Operating Year that
begins in the following calendar year. For the 2011-2012 Operating Year, tentatively
agreed Suite License pricing is approximately as follows- $16,200 for a ten-person suite;
$19,440 for a twelve-person suite, $22,680 for a fourteen-person suite; and, $25,920 for
a sixteen-person suite. The prices listed above do not include Playoff Games, or other
special Hockey Events that are not Team Regular Season League Games. Suite License
Holders shall be required to buy tickets for Playoff Games as a part of their original Suite
License, and any amounts paid for Playoff Games under a Suite License shall be divided
between the Team and the City as described below Any amounts paid for Playoff Games
or other Hockey Events that are not Team Regular Season League Games that are not for
Suite Licenses (i.e. individual game tickets) shall not be subject to the revenue splits
described below, and shall instead be listed as General Admission Revenue. Except as
provided below, the Team shall be responsible for the sale of all Suite Licenses. The Team
shall serve as the exclusive contractor to be responsible for the sale of Suite Licenses for
Hockey Events, and shall receive a commission of fifteen percent (15%) of the revenues
from the sale of Suite Licenses, plus, as described below, an amount equal to sixty
percent (60%) of those revenues after the sales commission. The City shall retain the
remaining forty (40%) of Suite License revenues after the sales commission.
First Amendment to City of Kent and Thunderbird Lease Agreement Page 3 of 6
(c) Except as provided below, the City or the City's selected agent may market
or sell all Individual Suite Sales for non-hockey events. The Team, however, will advertise
non-hockey events to its full database of customers and make other reasonable efforts to
sell individual suites for non-hockey events. If the Team completes an Individual Suite
Sale for a non-hockey event, the Team will receive a 15% commission; otherwise the City
will retain all Individual Suite Sale proceeds. For the purposes of this Section 6.6, any
sale of a Suite to a non-hockey event to any customer in the Team's database shall be
considered a sale made by the Team, and the Team shall be entitled to any commission
due as if the Team had made the sale directly. Any subsequent sales of a Suite to a non-
hockey event to any customer that was originally in the Team's database, but has moved
into the City's database as a result of a prior sale shall still be considered a customer of
the Team's, and the Team shall still be entitled to any and all commission due.
Notwithstanding the above, events promoted by Feld Entertainment (limited to the
following events: Disney on Ice, Disney Live, and the Ringling Brothers Circus), shall not
be entitled to any commission for a sale to a customer in the Team's database.
(d) Suite Licenses shall permit their holders to view all Hockey Events without
additional charge and to use the lounge, VIP entrance, Suite level restrooms and Premium
Reserve Parking allocated to the Suites. Suite Licenses shall not permit their holders to
attend non-hockey events, or events that are not open to the general public, and/or
events for which admission is not charged. However, holders of Suite Licenses for Hockey
Events shall be provided with the privilege of buying the suite for Non-Hockey Events at
the price that suite would be offered to the general public, and those Suite License holders
will have the opportunity to purchase the suite for those Non-Hockey Events in advance of
tickets going on sale to the general public, so long as the advanced sale can be
reasonably accomplished given the nature and scheduling of the event.
(e) For any Hockey Event where a Suite is not subject to a Suite License or an
Individual Suite Sale, the Team may offer tickets for Box Seats in that Suite to the general
public on a per-seat basis at a price to be established by the Team. The proceeds from
the sale of such Box Tickets shall be included as both Net Ticket Proceeds and General
Admission Revenue and not under this Section.
(f) The City shall reset ve a Suite for its use at any and all times, and at no
charge to the City. The City may make the Suite available to governmental, nonprofit,
and school persons or entities, and may determine whether or not to charge for that use.
The City shall, by providing notice to the Team on or before August 1 of each year, have
the right to make its Suite available for sale for an entire Season; in that event, the Team
shall have the option of selling that Suite for that Season to a single person or entity, or
to sell Box Seats in that Suite on a per-seat basis, and all receipts for the seasonal sale of
that Suite or those Box Seats shall be shared with the Team as General Admission
Revenue and shall also be included as Net Ticket Proceeds.
(g) The Team shall have the right to use a Suite for both Hockey Events and
Non-Hockey Events, at no charge to the team, excluding, however, events that are not
open to the general public or events for which admission is not charged. The team may,
in its sole discretion, sell tickets to its Suite for any Hockey Event as individual game
tickets. The sale of such tickets shall be treated as if the sale occurred under Paragraph
6.6(e).
First Amendment to City of Kent and Thunderbird Lease Agreement Page 4 of 6
J
4. DELETE Section 6.7 of the Agreement entitled, "Club Seats" in its entirety and
REPLACE with the following:
(a) The Team shall have the right to sell Club Seats for Hockey Events. The
price per each Hockey Event Season Ticket Club Seat for the 2011-2012 season will be
$975.00, unless the Team and the City agree otherwise. A purchaser of a Club Seat will
be a season ticket holder for Hockey Events, and that purchaser will have the privilege of
using the Suite level lounge, VIP entrance, Suite level restrooms, Premium Reserved
Parking, and such other privileges upon which the Team and the City agree.
(b) The City shall have the right to determine the price of and sell (or to contract
for the price determination and sale of) Club Seats for Non-Hockey events and the City
shall retain or control the distribution of all revenues with respect thereto. The City shall
also have the right to make Club Seats available for Center uses that do not constitute
either Hockey Events or Non-Hockey Events (e.g. governmental or community meetings
or events at which admission is not charged). However, holders of Club Seats for Hockey
Events shall be provided with the privilege of buying seats for Non-Hockey Events at the
price of those seats to the general public, and those Club Seat holders will have the
opportunity to purchase those seats for such Non-Hockey Events in advance of tickets
going on sale to the general public, so long as such advanced sale can be reasonably
accomplished given the nature and scheduling of the event. Nevertheless, this does not
provide Club Seat holders with an opportunity to purchase tickets in Club Seats at events
that are not open to the general public, or to attend events for which admission is not
charged.
(c) All revenues realized from the sale of Hockey Event Season Ticket Club Seats
shall be allocated between City and Team as follows: the first seventy-five dollars
($75.00) of revenue from the sale of a Club Seat Season tickets shall be paid to the City,
and the balance of revenue from the sale of Club Seats shall be allocated thirty percent
(30%) to the City and seventy percent (70%) to the Team.
(d) If the Team does not sell a Club Seat on a Season Ticket or License basis for
a Hockey Event, the Team may offer tickets for Club Seats to the general public on a per-
seat basis at a price to be determined by the Team. The proceeds from the sale of Club
Seats sold on a season ticket or license basis and all individual Club Seat ticket sales shall
be included in the General Admission Revenue Target and as General Admission Revenue.
The proceeds of such an individual club seat sale shall also be included as Net Ticket
Proceeds.
(e) The Team shall bear the costs of sales of Club Seats and shall not be entitled
to a commission on any Club Seats sold.
5. DELETE Exhibit C to the License Agreement.
6. DELETE Exhibit D to the License Agreement and REPLACE with the new Exhibit D
attached to this Amendment.
7. DELETE Exhibit E to the License Agreement.
All acts consistent with the authority of the Agreement, previous Amendments (if any), and this
Amendment, prior to the effective date of this Amendment, are
First Amendment to City of Kent and Thunderbird Lease Agreement Page 5 of 6
hereby ratified and affirmed, and the terms of the Agreement, previous Amendments (if any),
and this Amendment shall be deemed to have applied.
The parties whose names appear below swear under penalty of pegury that they are authorized
to enter Into this Amendment, which is binding on the parties of this contract.
IN WITNESS, by executing this Amendment, the parties below accept all requirements
of this Amendment, which will take effect on the last date entered below.
THUNDERBIRD HOCKEY ENTERPRISES, CITY OF KENT:
LLC:
By:_ (signatu e)
_(signature) � /� P(int Na �LC P 1tPrint Name: % « lize# I
Its 7 4- Nl )
(title) DATE: �-
DATE:
APPROVED AS TO FORM:
(applic�abble if
Mayor's signature required)
NNE/
Ke t Wo
Law Department
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P\Civil\Files\Open Files\1560-Showare\Thunderbirds-Forst Amendment-Final docx
5
1
First Amendment to City of Kent and Thunderbird Lease Agreement Page 6 of 6
EXHIBIT C
Deleted by First Amendment to License Agreement
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Sales, Tieket/Gence99wensiGlub Seats Revenue Pro For
GenEesslen and Glub Seats in eaeh GpeFating YeaF ef the AgFeement-Pg'iu wzhc G�ty.
Tieket cv� Gub T-E�t� Actual Guflcmd��u`a"vc
Yea ncv'cRcic rcc-veftve Seats Tccvirtvc ncvcTrcic o
�()E)8/}()9 $7GanC7C7 $?C () $030 4G2
2()09719 •zcn n20 215,009 854,628
2n� 277 2n7 370 14 C 21 C nnn 870,392
rrr/z-Tr �� r-r✓'�vvv
/n12 276 C?C 770 71 n 21 n Cnn 8741748
T
3 279 7n? ?07 ACC 71n Cnn 8821658
07 GCO
7DTTTJ �T�JI C7V IIGrP/ JQ
7n� 270 7G0 374 1 n7 71 n Cnn 8p6�� 4�6�5�
�00 II�7
701_d!1_5 777 GO? 383f A 53 224,990 OOC i ?O
G 704 Cnn 393,149 224,999
flnl 7A0
21116/i;z 291,691 402,846 224,990 91 O C?7
7nn 7n0 9G7 d1 7 n0? 228 O!'1f) nA7�J
=7CnVL' � //-OVV /
-�n� ?nG Ann 423 17n ;228 onn nro 329
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77�7 ACC "I']� i /n1TQ'i'T329
7nn 338,327 dG / I 7fi_95 ']7 1 zIv n- Tr!122
2n� 7AG GG1 A70 GCC 238 7nn
7TP/V�T � � / !
C 755 349 Ann CCC 738 7nn 1,984,694
2025(26 '7G�S Cnn '1?� i 1�=
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27 373 436 C1 C L78 7A7 Onn 1,132,914
7I7j�TQ ZTJ�O'V
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Ate? O00 1 1 C�Z6
?n7 232 CA 1 682 243 890 1 1 77 71 A
Z v L V'c./ �7'ZZTG �� Z'TJ �V/ V T/T7T7ZT
2029/30 Ani nOA CCC 345 248 fllll) i 206 7']n
TOT/7VT � !7[TC T�L'�J
7(1211/i Ai��L CG(1 !l/10 ']AO nnn 1 23O nnn
Z�Jv7 / 7PT/-�V�
7n� 4•)� 376 CObi 7ilk 1 7CII
r ! ! ! r
7n� n32 n1r 5n�& 254 7nn 1 2OC n17
r�vi� / z-✓-T-/�vv ��
2033 34 443 O?"I G19 LA7 7Ci1 ?nn 1,310,775
Z�J JT TTJ�SL VZTVTJ � '
2034/35 454,826 ��� or� 7CA ?nn 11 337 19C ?
�j 7 �VV Tj�/STJ
2035/36 466,352 Gil� 936 7C� 1 7�Qy
2 n� et 7rr> ,877 659,803 2�-rvv z 3 n; 3vv
8 nO� 6:76,5 1 2C� i AA7�G0
Exhibit b
Minimum Regular Seat Revenues
Under the terms of Section 4,1(c)of this Agreement,the following
are the standards for general admission paid attendance revenue
in each operating year of the Agreement.
v ra a General General
General Admissign Admisgion
Admission AttgOdance Revenue
Year Ticket Price Target Tareet
2008/09 $ 13.50 114,156 $ 1,541,106
2009/10 13.50 114,156 1,541,106
2010/11 13.50 114,156 1,541,106
2011/12 13.50 124,200 1,676,700
2012/13 13.77 124,200 1,710,234
2013/14 1405 124,200 1,744,439
2014/15 14.33 124,200 1,779,327
2015/16 14.61 124,200 1,814,914
2016/17 14.91 124,200 1,851,212
2017/18 15.20 124,200 1,888,237
2018119 15.51 124,200 1,926,001
2019/20 15.82 124,200 1,964,521
2020/21 16.13 124,200 2,003,812
2021/22 16,46 124,200 2,043,888
2022/23 16.79 124,200 2,084,766
2023/24 17,12 124,200 2,126,461
2024/25 17.46 124,200 2,168,990
2025/26 17.81 124,200 2,212,370
2026/27 1817 124,200 2,256,617
2027/28 18.53 124,200 2,301,750
2028/29 18.90 124,200 2,347,785
2029/30 19.28 124,200 2,394,740
2030/31 19.67 124,200 2,442,635
2031/32 20.06 124,200 2,491,488
2032/33 2046 124,200 2,541,318
2033/34 20.87 124,200 2,592,144
2034/35 21.29 124,200 2,643,987
2035/36 21.71 124,200 2,696,867
2036/37 22.15 124,200 2,750,804
2037/38 22.59 124,200 2,805,820
\ REQUEST FOR MAYOR'S SIGNATURE
Z KFENT Please Fill in All Applicable Boxes
Routing Information (ALL REQUESTS MUST FIRST BE ROUTED THROUGH THE LAW DEPARTMENT)
Originator: Tim Higgins 11,iGi „ ,'N,'_ Phone (Originator). 6701
Date Sent: 4/3/12 Date Required: ASAP
Return Signed Document to: Tim Higgins CONTRACT TERMINATION DATE: N/A
VENDOR NAME: Thunderbird Hockey DATE OF COUNCIL APPROVAL: 12/13/2011`- .
Enter rises, LLC
Brief Explanation of Document:
This agreement between the City and the Seattle Thunderbirds would revise the sale of suites
and club seats at the ShowWare Center.
All Contracts Must Be Routed Through The Law Department
(This area to be completed by the Law Department)
Received:
Approval of Law Dept.: � ���
Law Dept. Comments: APR ®3 2012
KEN
Date Forwarded to Mayor: T W DEiU1.
Shaded Areas To Be Completed By Administration St
y � 1
C'
Received:
Recommendations and Comments:
tit
Cam CIF ht,;
Disposition: .��j�/�' 9 L ,121e�e' fyy
Date Returned: