Title
Subject: Oakland Ice Center Lease And Capital Project
From: Economic And Workforce Development Department
Recommendation: Adopt An Ordinance (1) Authorizing The City Administrator To Negotiate And Execute The Following (A) A Lease And Management Agreement Between The City As Landlord And Sharks Ice, LLC As Tenant To Operate The Oakland Ice Center For An Initial 5-Year Term With Four 5-Year Extension Options At A Rate Of Three Hundred Thirty-Five Thousand Dollars ($335,000) In Base Rent Per Year, Less An Annual Capital Contribution By The City Of One Hundred Thousand Dollars ($100,000), With An Annual Tenant Capital Contribution Of One Hundred Thousand Dollars ($100,000) And Percentage Rent Of Seven Percent (7%) Of Annual Gross Revenue Above $4.3 Million Dollars;
(B) An Advertising Revenue Sharing Agreement With Tenant Retaining The First One Hundred Thousand Dollars ($100,000) And The City Receiving Fifty Percent (50%) Of The Remaining Net Advertising Revenue For A Term Of Five (5) Years With Four 5-Year Extension Options;
(C) The Use Of One Million Three Hundred Forty-Four Thousand Nine Hundred And Ten Dollars ($1,344,910) In Capital Reserve Funds And Up To Five Hundred Thousand Dollars ($500,000) In Anticipated Net Revenue In Fiscal Year 2025-2026 To Reimburse Sharks Ice, LLC For Losses Realized Under The Current Management Agreement; And
(D) Disbursement Agreement With The Sharks Ice, LLC, In A Total Amount Not To Exceed Ten Million Dollars ($10,000,000) Of Measure U Bond Funds For A New Refrigeration System And Related Capital Improvements
(2) Making Findings That The Lease For Below Fair Market Rental Value Is In The Best Interest Of The City’s; And
(3) Adopting Appropriate California Environmental Quality Act Findings