Travis County Commissioners Court
September 28, 2004
Item 22
It is a few minutes after 11:00. We indicated we would call up number 22
at 11:00. 22 is consider and 25 appropriate action on modification number
5 to option to license with capital hockey ventures for hockey games at the
Travis County exposition center.
>> alicia perez. Here with me at the table is jeff buck,
who is the president of hockey -- capital hockey ventures. And roger corey,
the director of facilities management and also have purview over the exposition
center. What you have before you is amendment number 5 to the ice bats' contract.
And this particular proposal covers several items. And what we wanted to do
today is present these to the court, get your reading or approval, and then
have the county attorney's office actually draft the amendment number 5. So
these are discussion points and then the amendment will come to you for approval
at a later date. Number 1 is an increase in the rental fee for the ice bats,
and that's a 10% increase to minimum and maximum and a 5% increase to if percentage
rate. This year is the first year of their second option. And that option
has two one-year extensions to it. So for the '04-'05 we are proposing an
increase of 10% to the minimum and a 10% to the maximum. The same thing for
'05-'06 season. Their season starts in October, goes through March or April
if indeed they have playoff games. Number 2 -- is there any question?
>> I知 waiting.
>> also joining us, I want to point out, is scott Davis,
and he is the director of the expo center. Number 2 is the ice bats will give
the county title to the -- to 900 chairs pending receipt of an inventory or
bill of sale from them, with the understanding that there will be no cost
to the use of the chairs. This also very explicitly states that the acceptance
of the chair will impose no obligation on the county to maintain or replace
the chairs. They will be kept and stored by the ice bats, but we will be able
to use them in any event where it's appropriate. Number 3, the bats will release
Travis County from any obligation pertaining to any pouring rights. We used
a particular soft drink there, but really it's any pouring right agreement.
And no. 4, the bats will waive any rights whether real or perceived with respect
to a sign from a beer company that has been at the arena for the past three
years in lieu of revenue for the mens league and signage fee for the 2003
and 4 season. And the value of that beer sign that is inside the arena is
$20,000. And consideration for that, what the bats would owe the county for
signage fees and mens league is $18,500. Number 5, beginning in the county's
fiscal year '05, Travis County will split annual fee from another beer company
sign that is inside the arena only. We have also looked at the mens league
play. And we are proposing a change to that. Right now it's $75 an hour, but
the contract does not address whether there is hvac or not. Give ten time
the contract was drafted, we did not have hvac. What we have done in this
particular proposal is to change the amount that is being paid per hour for
mens league to $100 per hour if the hvac is on, $50 if it is not, to provide
some incentives to the ice bats on the mens league play not to use the hvac.
It does have a minimum, both of these. When the hvac is turned on, the minimum
fee for mens league play is $300, and the maximum is 1200. Minimum cost if
the hvac is not turned on is 200 with a maximum of $600. The ice bats will
be allowed to have home Gomez up until the move-in date of the star of Texas
rodeo. We are also asking the court to consider a non-exclusive agent to sell
advertising inside the arena and have the ice bats be that non-exclusive agent.
Right now the contract provides them with exclusive agent or rights to sell
signs during their season inside the arena. This is non-exclusive. Which allows
us to bring in promoters on a date that the ice bats are not playing and the
promoters then can sell signage inside the arena. And inside the arena fee
for signage sold by the ice bats during the remainder of the year, and that's
not during the ice bat games, the county will receive 85% of the revenue and
the ice bats a 15% commission. And they do have a sales force that is ready
and able to sell signs for inside. And outside --
>> in the current contract regarding the selling of advertise
stph-g.
>> it has a clause that gives them exclusive rights to sell
signs inside the arena. Number 8 is non-exclusive agent to sell advertising
outside the arena. And on this they will be able to sell signs outside the
arena. The county will receive 80% commission and the ice bats will receive
20% commission. We would ask in both 7 and 8 to allow the director of the
exposition center to execute the ability to appoint the ice bats as the agents
to sell the advertising. On the founders club, the ice bats would like to
bring about some improvements and bring in new chairs and tables, neon lights,
banners, bar stools, tables. All such items must comply with tabc rules of
course. Must be pre-approved by the county and will be supplied at the ice
bats' expense. They will be responsible for paying for all the furniture.
The furniture will be able to be used by the county on off season and, again,
the ice bats will be responsible for removing or storing them if we need them
to do so. That concludes the amendments that would be part of option number
-- amendment number 5 to the option to license.
>> how do you pronounce your last name?
>> buck.
>> buck?
>> yeah. Any additional comments? Then we'll go to the court.
>> no, I think the only comment I can make is the first year
we had some bumps in the roads, whether, you know perceived real, and I think
in the long run that the short-term problems we may have had last year I think
were really at least in my mind has really strengthened our relationship from
a point of partnership to -- none of us want to even approach what happened
last year and because of it there appears to be or there is a spirit of cooperation
that we really want to work together to not just make -- or hope for the ice
bats to make additional moneys but also to use our staff to hopefully sell
additional signage throughout the facility which can help increase the revenue
for the county as well.
>> do you feel -- I知 sorry, Commissioner Sonleitner.
>> go ahead. Go ahead first.
>> okay. I guess I知 kind of just want to make sure that
we are on the same page and I see what we're trying to do here as far as you
continuing to use the expo center for your hockey games. However, I知 still
kind of concerned about your tenure of staying out there because it had been
rumored that maybe you would be leaving us, looking for greener grass on the
other side of the hill. And if that's the case, is anything substantial to
that rumor that you will be vacating us here in the near future?
>> the -- you know, the rumors of another city perhaps building
a new arena or some private entities, you know, is there anything to the rumors.
I mean there's certainly something to the rumor. Whether it will happen or
not, I have absolutely no idea. You all have lived through this two years
ago, I believe, and nothing came of it. And whereas if I sat here in July
or in June I would have thought the likelihood of us not playing there after
our lease expires in two years I would have thought was probably fairly high.
At this point I知 not as confident of that based on some of the changes that
have happened in other municipalities and things like that. I think there's
no question we will be here for the remainder of our lease, and barring anything
changing, you know, we would like to extend that even further. Again she as
I said, two or three months ago I would have thought based on what I was told
yes, we would be vacating at the end. But right now I don't know.
>> okay.
>> let me ask about -- kind of where I was going, Commissioner.
And let me say up front, I have been a season ticket holder from the ice bats
since day one. I知 on the blue line and they are very popular auction items.
I get confused because I am reading things in the Austin business journal,
I am hearing things on the radio. In fact, I heard something on the radio
with your voice, not a reporter's voice, but your voice three or four weeks
ago saying that you look forward to going to Cedar Park, but if Cedar Park
doesn't work out, that you are confident that you will have a new arena and
you are talking to others to make that happen. And that doesn't sound to me
like you are here with Travis County and that you've discussed anything --
you are not discussing a new arena with us, so you have to be discussing it
with other municipalities or private interests. So I get very confused when
I hear in court we're partners, we've had a great relationship, and then I
hear your voice on the radio saying we look forward to being anywhere else
and not even acknowledging the relationship that has been here in terms of
the county opening its arms to the ice bats and giving you this organization
a home when others were not willing to make that same kind of an agreement.
So I知 confused. Because it was your voice that I heard on the radio.
>> that's right, no, and I知 equally confused. But I will
say there are two potentials, and again, I can't -- when I speak to the potentials,
just because I want it to be, I don't have the money to pay for it, but I
will say this. We know the Cedar Park thing has been out in the papers many
times. Where that will end up, I have no idea. We know the mayor who was behind
it is no longer there. The mayor pro tem who was our second biggest supporter
is also no longer there. So you go from there. The other site, which is a
private piece of land, is 100% in Travis County. Now, we haven't come to anyone
asking for any financial assistance, anything along those lines, but if this
facility -- and again, it's private money. At the end of the day, somebody
has to be willing to put in a large sum somewhere north of $20 million. The
land is already owned by somebody, and again, it's in Travis County. The piece
of land that we're talking about. So I guess there's two points here. If that
deal happens to happen -- and again, if you ask me what are the probabilities
of that, I have no idea. I mean again, if somebody says to you that we think
we're going to have a investor willing to put in this amount of money to build
on this piece of land, that sounds nice, that sounds great, but there's a
lot of steps before it gets to the next level. And, you know, as much as I
may want to believe it and I知 confident it may or may not happen, I知 also
a realist, and to me when people agree on a deal and the funding is supposedly
there, that's when it gets to 75%. But when we talk about the partnership
with Travis County, there's no question in my mind that this partnership is
absolutely, for the next two years without a doubt. That's all we have left
on our lease. Would we like it to continue afterwards? You know, absolutely.
Not only from my standpoint, even if we left the facility and went somewhere
else, we still have a professional sales staff that we would love to be able
to sell in the building. And that's a big if, if we leave. But neither here
nor there. This probably didn't help you become any less confused. I just
-- I don't have an answer because I don't know. I mean I just do know what's
happened in the past and at the end we're still together.
>> well, and it's also one of those things that if it is
something that is in the unincorporated part of a city or in somebody's e.t.j.,
There are going to be development issues. And I know I知 going through this
right now in tphrao fl of something that may or may not be in our jurisdiction,
right now it is, related to a race track. And certainly there are huge issues
that you would certainly want to have conversations with transportation and
natural resources about what that kind of facility generates in terms of traffic,
impervious cover, and all sorts of issues that all of a sudden when you have
a facility that's already there and it's accepted in the community and the
impervious cover, of which there's lots, on 100-acre piece of property that's
park land, that's a very minor thing compared to putting all that impervious
cover and traffic and all sorts of issues. And that's the kind of thing that
if some other community were considering it, i'd certainly want to have conversations
with that person of be careful what you ask for and we would be happy to share
the experience of owning one of these lovely facilities of well, you are one
of our clients, we're still not making money off the expo center, as we all
know. It can be expensive to have these kind of things and we would certainly
love to share our experience and how much money has to be going into these
things. So I guess that leads into my question really for john hilly, what
does the contract say or not say related to anybody, whether it be the ice
bats or the rodeo in terms of exercising an option? Does that lock them in,
that whether they are there or not for the entire -- do they have to take
or pay for the entire event season? Because there are a lot of events that
lock in dates long out, and if all of a sudden the bats came in with, you
know, manna from heaven, somebody built us a facility overnight, we would
be stuck with a facility that had been leased, we told everybody else, no,
it's not available, and then somebody dumps out. Even if our own leases we've
got for office space, we have things listed if there that says you cannot
bail on this lease just because you find something cheap. And you have to
be fair to your landlord in terms of giving them notice. And they get to recover
costs like amortization that didn't quite get paid out over the length of
the intended lease.
>> the difficulty in answering your question is that there
are a variety of different players in the whole expo center realm of universe.
And different kinds of relationship. If you recall, the city of Austin has
first pick. They get to pick 10 days and in a year that's coming up. Then
the next in pecking or the would be the rodeo. They get to pick their use
days, which is a actual sublease. And so that is really a locking in of a
time period that we can't lease out or license out the facility for other
folks. And then the ice bats get their pick of certain days in the future
after that. But they get an option to license. Whether they exercise all those
options and they fill in the actual license agreements, that's what we're
kind of waiting for. I think you are kind of intimating that would be nice
to have it hrobgtd down and we're going to make sure we're going to get that
money. They place that on depoeutsz whenever they sign them. That's whenever
finally scott and roger and their folks get to start leasing out all those
other available dates. So it is -- once you get past all those dates, it's
hard to market a facility whenever you have those locked up.
>> we have a lot of discussion every year how is the expo
center doing, what is the certified revenue. If we know you are going to be
here all season, the auditor's office can say we're based on the rate, this
is what we can certify. If you all are to fail mid-season and say guess what,
January, we're going to move it over to chap rel ice and deal wit. What are
we supposed to do? I知 just trying to get a sense of -- I appreciate your
comments and I want to continue this partnership, but at some point we almost
need a pre-tphufplt p because people need to be able to count on each other
in this marriage.
>> from a point of practicality, even if somebody came to
us today and said we want to build you a new building, it is just -- i'll
say impossible. I知 not in the building business, but I just -- I don't see
any possible way that this facility could be operational operational before
the end of two years. It's not two years, it's 16, 17 months is really what
we have left on the lease. It's two seasons, but it's 16, 17 months. Even
if it's 18 months. And there isn't anybody who is going to come to me today
and say we're going to start building a building. So from a practical standpoint,
you know, we have to play, and we want to play in the expo center so we're
not going to leave. You know, you might want to kick me out, but it's -- what
skropb said is right. We have the option to lease, but if we don't, in the
following year we either have to make up that money or we're gone. But from
our standpoint, from everybody's standpoint, there's no -- I mean I say whatever
adjective you want to use, we're going to be there. It's just not possible
for us not to be.
>> i've said all I want to say, but can you please understand
the sensitivity that when we hear and read things that make it look like you
are pursuing other options and there are not conversations back to us saying
we're having these other conversations, it doesn't look good.
>> yeah.
>> and it just creates uncertainty and it's like what, we
can't pick up a telephone? I have to read about this in the business journal,
hear about it on klbj?
>> and I agree what you are saying and I do -- I am sorry
for that. I think, again, part of my original statement if we could do last
year over again would we, absolutely. From it i've learned quite a bit and
I think the relationship has gone absolutely 180 in the sense of now there
is a feeling of comfort, a feeling of if something is coming up to absolutely
let you know ahead of time. I hear what you are saying and agree with what
you are saying and on a go forward basis hopefully I will do what I say.
>> the contract does require the ice bats notify us in January
preceding the beginning of the season, which is in October, of what dates
they would request the set-aside for ice bat games much we follow up with
them with individual licenses for each of those dates. The contract also requires
a 20% deposit for the set-aside of those dates. So there is a process in the
contract laid out that would financially obligate the ice bats once the license
agreements are signed to pay for those dates even if they chose not to play
games on those dates.
>> well, I mean let's really say what there is here. I mean
it's a breach of contract. I mean jeff understands that, when you sign a contract,
you are liable for what ever you sign up for. So you have the legal remedy
of somebody just not being able to walk away from it. I mean since the ice
bats have been here, I have known, and I think everybody in this community
knows that if they could have a facility built, a new facility built for them,
I mean you know, you don't have stadiums, from dallas to all over the world,
I mean, that people aren't wanting new facilities. It's not offensive to me
if I hear something that the ice bats would like to have a chapperal ice kind
of a structure built for you. You've always wanted that. That's -- and I don't
know whether it's that people have, you know, gotten away from coming out
and watching ice hockey or whether it's a way to get out there. You know,
there are all sorts of factors and I知 sure you all have done the demographics
saying where your people come from and maybe the Cedar Park area was something
the Cedar Park-round rock area that you saw there were a lot of people. So
I知 not necessarily offended by that, but I do think we have always got in
the back of your mind, if you all had a facility, you probably would go there.
But I agree I think the return on the investment for your kind of a deal,
I mean and i've been in the recreational sports business and I know how difficult
it is so get people to look at those kind of endeavors. As long as we can
keep you there, we're probably advantageous to do that and when scott and
alicia showed me the new contract, I said this is a pretty good deal for us.
If the ice bats are willing to sign up for this deal, we don't have a lot
of exposure in the thing. We get the benefit, you know, from the thing. So
I would move that you guys are willing to sign up for this, I think it's a
good deal for us.
>> second.
>> we actually have to get the contract amendments?
>> this is a presentation of business terms and commitment
to see if jeff is ready to go with the business terms and i'll start drafting
it now.
>> motion is to put these into contract [inaudible] seconded
by Commissioner Gomez. Any more discussion? All in favor? That passes by unanimous
vote. Thank you very much.
>> thank you.
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Last Modified: Thursday, October 27, 2005 9:24 AM