SUBJECT/RECOMMENDATION:
Title
Approve the seventh amendment to the Capitol Theatre Operating Agreement (CTOA) between the City of Clearwater (City) and Ruth Eckerd Hall, Inc. (REH) transferring the Reserve Fund and eliminating future annual payments and authorize the appropriate officials to execute same. (consent)
Body
SUMMARY:
On September 20, 2012, the City entered into the CTOA with REH to renovate and operate the Capitol Theatre facility located at 401, 403 and 409 Cleveland Street for a period of 30 years.
The CTOA stipulated the creation of a Reserve Fund in the amount of $3,000,000 to fund the costs of operation and maintenance of, and capital improvements to the Theatre to the extent there are insufficient gross revenue generated by the activities conducted by REH at the Capitol Theatre.
On October 17, 2016, in accordance with the CTOA, city representatives (Jay Ravins, Finance Director; Kevin Dunbar, Parks and Recreation Director and Felicia Donnelly, Parks and Recreations Administrative Support Manager) met with REH staff to review the status of the Reserve Fund. The purpose of this review was to determine if the balance in the Reserve Fund was sufficient or did it need to be increased or decreased.
The following documents were reviewed:
1. Actual historical operating statements
2. Future projections estimating the realistic and practical reserve level needed taking into account historical and anticipated increases in the Cost of Operation and Maintenance and Capital Improvement Needs
3. The 2016 Building and Maintenance Annual Maintenance Inspection
After review of the documentation, city representatives decided the current Reserve Fund balance of $1,500,000 was sufficient at this time and proposed the following components of a Seventh Amendment:
1. The elimination of future annual payments into the Reserve Fund
2. The existing reserve fund balance of $1,500,000 will be transferred to a third party account at Raymond James Trust Company. The account amount will have a floor of $1,250,000 and ceiling of $1,500,000.If the account falls below $1,250,000, REH will have 3 months to replenish.
3. REH will maintain and fund a specific Capitol Theatre Capital Improvement Projects Fund. Contributions to this fund will be made in annual amount of $99,665 until 2036.
All other terms and conditions of the original agreement will remain in full force and effect.
APPROPRIATION CODE AND AMOUNT: N/A
USE OF RESERVE FUNDS: N/A