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09. Kidsports AgreementAgenda -December 15, 1997 AGENDA ITEM 9 - KIDSPORTS AGREEMENT -PROPOSAL FOR YOUTH COMPLEX BACKGROUND/CONSIDERATION: On Thursday afternoon, December 11, Mike Baker, Glen Neier, Dan Johns, and I held a meeting to discuss an agreement between Kidsport and the City. We discussed two concepts of agreement and were able to arrive at a mutual conclusion. Mr. John's is recompiling an agreement with changes that we all agreed upon. The concept for this agreement is = 1;4 specify,all of the construction, cost, etc,, . Teas ncept is to determine the basic relationship of Kidsport and the City in terms of lease payments, fees, and maintenance responsibilities. I will be involved in an all day meeting on Friday. It is the intent to have a proposed contract for your review in this packet: RECOMMENDATION: To reconfirm our previous commitments, plans, and goals, I recommend approval of the agreement (if it includes the portion we agreed on - I will review it prior to the meeting.) ACTION REQUIRED: A MOTION to approve the contract is needed. AGREEMENT AGREEMENT entered into this day of 1997, between the City of Kalispell, Montana, and Kidsports, a Montana not -for -profit corporation. Recitals 1. Kalispell is party to a lease agreement with the Montana Department of State Lands, Lease No. 3053189, dated July 17, 1997 (hereafter "Lease"). A copy of said lease is attached to this Agreement as Exhibit A. 2. Pursuant to said lease, Kalispell has leased approximately 138 acres located immediately north of its city limits for a period of 40 years. The property will be developed as a youth athletic complex, and may include additional recreational improvements. 3. Kidsports was formed to represent the combined interests of user groups of the athletic field complex in the planning, development, financing, operation and maintenance of the improvements. NOW THEREFORE, the parties agree as follows: 1. Purpose. The purpose of this Agreement is to define the public -private partnership between Kalispell and Kidsports regarding the planning, development, financing, operation and maintenance of the real property described in Exhibit A as a youth athletic -complex. . Both parties are committed to the development of youth athletic facilities that will.Provide opportunities for youth to develop through wholesome physical activity. In an effort to accomplish these objectives, the parties agree to work toward this common goal in a manner that permits quality development while recognizing the financial responsibilities of each. 2. Term. This Agreement shall be effective the day and year first above written, and shall continue through the duration of the Lease attached as Exhibit A, unless sooner terminated. 3. Funding. Kalispell will provide One Million Dollars ($1,000,000.00) toward the planning and development of the athletic complex. These funds will come from the sale proceeds of property commonly known as the Haven baseball fields and Daley softball and baseball fields. The Haven fields are sold and the transaction closed on July 15, 1997, and a portion of the Daley fields are proposed to be sold for a Rosauers grocery. Priority on use of these funds shall be to replace athletic funds displaced as a result of the sale Haven and/or Dalefields. The parties agree it is their intention that proceeds from sale of the Haven and Daley fields will first be committed toward the complex, rather than an alternative use(s), until the City's total commitment.has been acquired, and that funds will first be spent on the development described in the Summary Design Review, dated January, 1997. Kalispell and Kidsports may agree in writing to alter this planning .and development requirement. Funds spent by Kalispell on Four Mite Drive or its intersection with U. S. Highway 93 North will not come from the funds dedicated by it towards the complex, but shall be in addition to the $1 million commitment (the Summary Design Review states that upon annexation of the leased property use of gas tax revenues are intended to finance these road improvements). 4. Lease Payments. While the Lease pertains to a total of 138 acres, annual lease payments are based upon the actual number of acres dedicated for complex use. Presently, approximately 80 acres are committed to development and the lease payment is calculated based on those acres. Upon acceptance of construction bids by the Kalispell City Council the annual lease payment for that year will be prorated as of the date of acceptance) and continuing through February 28, 2017, Kidsports will pay to Kalispell the annual lease payment required by Exhibit A for the acreage presently set aside for complex development, and Kidsports will also pay lease payments during said term for additional property that is developed for use by a group(s) under contract with it for user fees, etc. Each annual lease payment shall be paid by Kidsports to Kalispell on or before the first day of March, with the first payment due within 90 days of Kalispell's acceptance of construction bids. Kidsports' obligation to make lease payments is contingent on Kalispell doing the following_ (1) using its best efforts to accomplish sale of the fields as described in paragraph 3; (2) completing construction and other documents related to development of the athletic field complex pursuant to the agreement entered into between Kalispell and the design/engineering team headed by Carver Engineering; (3) in the event use of all or any of the Daley softball, baseball and/or soccer fields is discontinued prior to completing replacement fields at the complex, Kalispell will provide suitable (e.g. regulation size, good playing surface, fences dugouts, backstops, etc.) interim replacement fields (the cost of providing replacement fields will not reduce the City-'s $1 million commitment to planning and development of the complex), (4) not delaying development of any portion of the youth athletic field complex, either through action or inaction; and (5) not breaching this. Agreement.. Notwithstanding the foregoing, in the event the entire $ l million is not available for development of the complex or, if available, has not been spent or contracted to be spent, by December 31, 1998, Kidsports annual lease payment obligation shall be reduced to the same percentage of the total annual lease payment as spent and contracted funds are to the $1 million. Beginning with the annual payment due on March 1, 2017, Kidsports' contribution toward the annual lease payment shall be adjusted as follows: Kidsports will pay that percentage of Kalispell's annual lease payment that is the same as the percentage of real property dedicated to the user groups under agreement with Kidsports is to the total acreage under lease. For example, if the Kidsports' groups use 70 acres, Kidsports annual payment will be 70/138 of the total annual obligation. The area considered dedicated to the user groups will include those areas developed for their exclusive use (e.g. playing fields, concession, parking areas, etc.). Initially, those users under agreement with Kidsports include the Greater Kalispell Youth Soccer Association, Kalispell Babe Ruth League, Kalispell Pee Wee Baseball League, and Kalispell Youth Softball Association. 5. User fees. Kidsports may establish fees to be paid to it by users (e.g. associations, tournament participants, individuals, etc.), visitors (e.g. admission fees to events, etc.), advertisers (sponsors, fence ads, etc.), or others using or frequenting the complex. Funds raised by Kidsports pursuant to this paragraph may be used toward lease payments and other purposes as Kidsports may determine. The parties recognize that Kidsports and the user groups may engage in fund raising activities (e.g. those just mentioned, plus concession stand sales, etc.), and neither the fund raising activities and the subsequent use of those funds are subject to this Agreement. Kalispell may charge fees to persons or groups not charged fees by Kidsports. City of Kalispell fees on persons or groups charged fees by Kidsports will be implemented only by the Joint concurrence of Kalispell and Kidsports It is anticipated that these fees will be utilized only for maintenance or improvement of the complex, and will not be eligible for recreation programs or any other facilities under the jurisdiction of Kalispell's Parks and Recreation Department If a user, or prospective user disagrees with fees established by Kaliseell or Kidsports, representatives of Kalispell and Kidsports will confer and agree upon an appropriate fee. Refusal or Nonpayment of a user fee may be grounds for denial of use of the complex. 6. Development Responsibilities The parties recognize that the initial funding furnished by Kalispell will not be sufficient to complete development of the youth athletic complex, and that Kidsports will be responsible for portions of the development. Throughout the term of this Agreement, Kalispell and Kidsports will meet for the purpose of deciding each party's development responsibilities. An addendum will be appended to this Agreement which sets forth Kalispell's planning and development activities from its initial funding. Kidsports agrees that its development activities will be consistent with the construction documents and it; orthevser will maintain liability insurance (naining-Kalispell as -a covered -party) covering its construction arnl athletic activities which names Kalispell as a covered party. User groups will also maintain liability insurance for its athletic activities which also names Kalispell as a covered party. Coverage amounts will not be less that $1 million or more than $1.5 million per occurrence unless the parties agree otherwise. Businesses performing development activities at the complex at the request. of Kidsports.must also maintain -general liability insurance coverage consistent with Kalispell's normal requirements, as well as workers compensation coverage on its employees consistent with State law. At a minimum, representatives of Kalispell and Kidsports will meet at least once annually for the purpose of conferring about the complex and this Agreement. 7. Maintenance and Repair Responsibilities. Improvements at the complex are to be maintained in new condition, less reasonable wear and tear. It is the intent of the parties that the improvements not deteriorate through misuse or lack of attention, maintenance, or repair. The following maintenance and repair activities are the responsibility of Kidsports, or third parties to whom they may be assigned: a. electric and telephone utilities (including usage charges) b. concessions stands and restrooms (including metered water fees - irrigation water will not be metered) c. game preparation of playing fields d. fan seating temporary fencing f maintaining clean grounds Other responsibilities may be undertaken by Kidsports as it and Kalispell may agree. Kalispell is responsible for the following maintenance and repair activities: a. athletic fields, including turf b. roads and parking areas c. sewer, potable and irrigation water distribution systems, well (including casing, pump and panel) d. ground cover (non -turf) e. permanent fencing f trash collection g. winterizing water systems Other responsibilities may be undertaken by Kalispell as it and Kidsports may agree. 8. Modification. This Agreement may be modified by the parties by a written document signed by authorized representatives of both Kalispell and Kidsports. 9. Mediation; Termination. In the event either party fails to perform its obligations under this Agreement, the other party may give written notification of the default in writing. The parties shall meet and confer with the intent of resolving the default, but in the event the default is not cured, or reasonable efforts are not underway to correct the default (in the opinion of either party), the dispute shall be submitted to mediation. In the event the parties are not able to agree upon a mediator, a mediator shall be appointed pursuant to the rules and regulations of the American Arbitration Association. The expenses of the mediator shall be shared equally by the'. parties. The parties may mutually agree to terminate this Agreement in writing at any time. 10. Lease Termination. Upon termination of the Lease (Exhibit A or its successor), any compensation paid by the Lessor will be pro rated between Kalispell and Kidsports based on the value of each party's construction improvements at the complex. During the term of this Agreement, Kalispell and Kidsports will maintain, and provide a copy to the other party, its list of construction improvements which includes the actual cost or fair market value thereof at time of construction. The Lessor's payment will be prorated based on the aforementioned lists. 11. Miscellaneous. a. The policies and activities of users under Agreement with Kidsports are the responsibility of the various individual user groups, and not Kalispell or Kidsports, provided that Kidsports' agreements with user groups will include language requiring the groups' policies to comply with applicable laws. b. The scheduling of activities at the complex will be the responsibility of the individual user groups. Kalispell may schedule activities at the complex which do not conflict with the affected user group's scheduled activity, provided that Kalispell will first check with the user group before scheduling its activity. Kalispell will not schedule any activity which is not compatible with the improvements or which may damage or degrade the the complex. c. Kidsports, and the user groups, may place informational and advertising signs at the complex, provided that all signs must be maintained in good physical condition and approved by the Kalispell's Parks Director as to appearance and location prior to installation. The parties recognize that advertising signs at athletic facilities are sources of revenue for the Sser groups, and that it is their intent to permit tasteful advertising signs throughout the term of this agreement. d. Improvements affixed to the real property may not be removed without Kalispell's approval. e. Greater Kalispell Youth Soccer Association, Kalispell Babe Ruth League, Kalispell Pee Wee Baseball and Kalispell Youth Softball Association, including their successors and assigns, are recognized by the parties as third party beneficiaries to the terms and provisions of this Agreement, including any amendments thereto. IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written. City of Kalispell, Montana Clarence Krepps, City Manager Attest: City Clerk Kidsports, Inc. Daniel D. Johns, President Attest: