HomeMy WebLinkAboutLOI - Skating Rink for Council Meeting 3-7-24Letter of Intent: Partnership Agreement for Ice Skating
Parties: City of Rexburg (the "City") and the R&R Group (the "Developer").
Purpose:
To establish terms for the development and operation of an ice-skating facility on City provided land,
with a focus on partnership, operational responsibility, and future operational options.
1. Land Provision
• The City agrees to provide approximately 35,000 sq. ft. of land for the construction of an ice
arena facility. Developer will have no ownership of land and will have a lease payment of
$1/year for use of the land and no additional fees for the operations of the facility.
2. Construction and Operation
• Developer agrees to construct, at their own expense, a skating rink facility. (Generally as shown
in Exhibit A)
• Developer agrees to donate the building and equipment to the City at a minimum of 4% of the
fair market value per year, but may also choose to donate a higher percentage in any given year.
The Developer will donate the full value of the building and equipment by year 25 or sooner.
• Once operational, Developer agrees to operate the project for a period of up to 25 years.
• Developer will be entitled to 100% of cash flow to cover operational expenses with any profits to
be allocated first to repaying Developer development costs including a mutually agreed upon
rate of return).
• Developer may, at their own discretion, continue to operate the facility for up to 25 years
however, once Developer has recouped their total development cost plus the mutually agreed
upon rate of return, all profits will be split with the City on a predetermined percentage in the
final contract.
• Should the Developer choose to stop operating the facility at any time during the 25-year period,
whether or not they have recouped their development costs, they would immediately turn
operations to the city and donate all remaining undonated value for the building and equipment.
• Developer may, with the approval of the City, assign their operations to a 3rd party management
company at any time during the 25-year lease period.
• Developer will provide financials annually to the City.
• City will Pay the up-front permit, connection, and impact fees related to the construction of the
building to be recouped by the City after Developers cost plus the mutually agreed upon rate of
return and before profit sharing.
3. Parking Facilities
• City will provide required parking for the developed facility, acknowledging seasonal variation in
demand, ensuring minimal impact on Rexburg Rapids during summer months. City will be
responsible for all costs related to the maintenance, snow removal, painting and sealing of the
parking area.
4. Insurance and Liability
• City will cover insurance on liability, land, assets, and equipment through their insurance
provider.
Note: The terms outlined in this Letter of Intent are not final and are subject to negotiation and revision.
This document serves as a general outline to allow preliminary work to commence on the part of the
developers. Both parties acknowledge that a formal and binding agreement will be executed following
the finalization of terms.
The City Council met on March 5th ,2024 and determined to move forward with the intent to finalize this
agreement with the Developer and authorizes Mayor and Staff to move forward with this process.
Signatures:
City of Rexburg ___________________________________________
Title: _________________________
Date: _________________________
Developer _______________________________________________
Title: _________________________
Date: _________________________
Exhibit A