TITLE
Recommendation to authorize City Manager to execute a License Agreement with Big League Dreams USA, LLC, for a minimum term of 35 years at a refundable fee of $400,000 for the licensing of the Big League Dreams image and name. (District 7)
DISCUSSION
On January 18, 2002, the Department of Community Development, on behalf of the
Department of Parks, Recreation and Marine, solicited proposals for planning and
design consulting services related to the proposed Sports Park. The solicitation also
conveyed the City's desire to contract the operation and management of the facility to
an experienced operator once the Sports Park is constructed. Big League Dreams
USA, LLC (BLD) was found to be the most qualified to provide planning and design
consulting services and to operate the Sports Park. Discussion and negotiation
subsequently commenced between City staff and BLD.
BLD has provided planning, design or construction services to fourteen cities, seven of
which are in Southern California. Five parks are currently open and are operated by
BLD, four parks are under construction and two additional parks have been approved
and are in planning and design. BLD has been successful in operating sports parks
based on a formula that involves replicas of well-known major league stadiums. BLD
has secured the rights to replicate these stadiums and licenses this right to each sports
facility. This approach, when combined with sports-themed concession buildings, a
multi-sport covered pavilion, batting cages, children's playgrounds, and other family
amenities, has proven beneficial to other communities including Cathedral City, Mira
Loma and Chino Hills.
On April 18, 2006, the City Council adopted a Resolution certifying the Recirculated
Environmental Impact Report (EIR) for the development of the Sports Park. The
preferred alternative identified in the EIR is based upon BLD's image and name. In
order to secure the right to utilize BLD's image and name during the design
development phase of the Sports Park, City staff has negotiated a License Agreement
with BLD. As design development of the Sports Park progresses, City staff will continue
negotiations for agreements for consulting services, maintenance and operations.
The proposed License Agreement with Big League Dreams USA, LLC, a California
limited liability company, contains the following major terms and provisions:
License: BLD shall grant the City non-exclusive use of the Big League Dreams
image, name and concept in connection with the development, marketing,
maintenance and operation of the Sports Park. The Sports Park shall be referred
to as the "Big League Dreams Long Beach Sports Park" unless otherwise agreed
to by the parties. BLD shall not enter into any other similar licensing agreements
in connection with any other sports park or sports facility located within a fifteenmile
radius of the Sports Park excluding Mile Square Park in Orange County and
the cities of Fountain Valley and El Segundo. The standard BLD contract radius
is ten miles. We negotiated a larger radius of fifteen miles; however, this larger
area affected these three sites that are currently in discussion with BLD. We
agreed to exclude the three sites from the larger radius as a compromise.
Term: The License Agreement shall become effective July 1, 2006 and shall
terminate 35 years following completion of construction of the Sports Park,
andlor concurrent with the terms of any Maintenance and Operations Agreement
(MOA) entered into by the parties. The term of the License Agreement shall
automatically extend concurrent with any extensions of the term of the MOA.
License Fee: The License Fee of $400,000 shall be payable in two installments
of $200,000. The first payment is due within 60 days of the effective date and
the second payment is due within 120 days of the effective date.
Termination Option: In the event the City Council does not approve an MOA by
July 1, 2007, either party may terminate the License Agreement upon thirty days'
written notice. The City shall be entitled to a full refund of the License Fee.
In the event the City Council approves an MOA and BLD fails to execute the
MOA within thirty days, the City shall be entitled to a full refund of the License
Fee.
In the event the City Council approves an MOA, the MOA is executed by BLD
within thirty days and the City fails to execute the MOA within the subsequent
thirty days, the City shall be entitled to a refund of 50 percent of the License Fee.
After full execution of the MOA, if the City terminates the MOA for reasons
provided therein, the city shall be entitled to a refund of 50 percent of the License
Fee.
After completion of the Sports Park and during the first ten full operating years, if
the City terminates the MOA due to a default on behalf of BLD, the City shall be
entitled to a full refund of the License Fee.
This letter was reviewed by Deputy City Attorney Richard F. Anthony on June 12, 2006
and Budget Management Officer David Wodynski on June 12,2006.
TIMING CONSIDERATIONS
City Council action is requested on June 20, 2006 in order to protect the City's rights to
continue to use BLD's name, image and concept during the design development phase
of the proposed Sports Park.
FISCAL IMPACT
Sufficient funds for this action are budgeted in the Capital Improvement Fund (CP) and
in the Department of Public Works (PW). There is no impact to the General Fund.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
PATRICK H. WEST
DIRECTOR OF COMMUNITY DEVELOPMENT
PHIL T. HESTER
DIRECTOR OF PARKS, RECREATION AND MARINE
CHRISTINE F. ANDERSEN |
APPROVED: |
DIRECTOR OF PUBLIC WORKS |
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GERALD R. MILLER |
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CITY MANAGER |