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HomeMy WebLinkAboutSkating Rink Agreement Final Draft as of 5-10-24 CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 1 OF 17 PUBLIC-PRIVATE LEASE AGREEMENT BETWEEN R&R GROUP LLC AND CITY OF REXBURG, IDAHO THIS AGREEMENT BETWEEN R&R GROUP LLC, as developer of FACILITY, THE NEUTRAL ZONE LLC, as owner of FACIILITY, AND CITY OF REXBURG, IDAHO (“Agreement”) is made and entered into this________ day of ____________, 2024, by and between the CITY OF REXBURG, IDAHO, a municipal corporation, whose address is P.O. Box 280, REXBURG, IDAHO 83440 (“CITY”) and R&R GROUP LLC, whose address is 389 PARTRIDGE LANE, REXBURG, IDAHO 83440, THE NEUTRAL ZONE LLC, whose address is 389 PARTRIDGE LANE, REXBURG, IDAHO 83440 (“R&R GROUP LLC”). W I T N E S S E T H: WHEREAS, CITY owns, maintains, and manages Riverside Park (“PARK”); and WHEREAS, CITY desires to enter into an agreement with R&R GROUP LLC to provide for the creation and operation of an indoor ice-skating venue at PARK; and WHEREAS, CITY AND R&R GROUP LLC desire to enter into this Agreement where R&R GROUP LLC will be leased a portion of the PARK to develop and operate a ice-skating facility and to potentially be paid back completely from the proceeds over a 25 year timeline; and WHEREAS, CITY has available approximately 35,000 square feet within the PARK; and WHEREAS, CITY will lease to R&R GROUP LLC a portion of the PARK for the above specified use; and WHEREAS, the Agreement grants exclusive concession rights to R&R GROUP LLC within the Facility, while leaving other concessions rights at the PARK open for other uses and occupation; NOW THEREFORE, in consideration of promises contained herein, and other good and valuable consideration, CITY hereby gives and grants to R&R GROUP LLC the right, privilege and license to use a portion of the PARK, more particularly described in Exhibit A, attached hereto and incorporated herein by reference and attachment, for purposes and pursuant to the terms set forth in this agreement as follows: 1. GRANT OF LEASE AND DESCRIPTION OF PREMISES. CITY, pursuant to the authority of, and in accordance with, Idaho Code, Title 50, Chapter 3, grants to R&R GROUP LLC and R&R GROUP LLC accepts from CITY, a Lease and the privilege to provide the required and optional services and facilities as set forth below: A. R&R GROUP LLC’S operations shall be limited to the premises marked as “Premises” in Exhibit “A” attached, and incorporated by reference into this Agreement, and hereinafter referred to as “PREMISES”. CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 2 OF 17 R&R GROUP LLC shall have the right to accept an agreement to provide additional services at the PARK under such terms and conditions as the PARTIES may then prescribe as provided in writing. R&R GROUP LLC has exclusive rights to offer concessions within the Facility at their discretion but recognizes that R&R GROUP LLC does not have a right to provide concessions any where else in the PARK besides that area identified in Exhibit A 2. TERM OF AGREEEMENT: A. The term of this Agreement shall be from the effective date of the contract for twenty-five (25) years subject to the termination of this Agreement pursuant to its terms. B. The R&R GROUP LLC’S obligations under this agreement shall include obligations to design, build, finance, operate and maintain a ice skating rink facility as described in EXHIBIT “A” of this agreement, hereafter referred to as “the Facility”. C. To construct and operate the Facility in accordance with all applicable laws, regulations, and terms outlined in this agreement. D. The R&R GROUP LLC shall, at its own cost and expense construct the FACILTY and seek reimbursement of that expense only as outlined in section 4(B) of this agreement. E. The THE NEUTRAL ZONE LLC agrees to donate the FACILTY and equipment used in operation of the FACILTIY to the CITY at a minimum of 4% of the fair market value per year. F. The THE NEUTRAL ZONE LLC may also choose to donate a higher percentage in any given year. G. The THE NEUTRAL ZONE LLC will donate the full value of the FACILITY and equipment by the 25th year of this agreement or sooner in consideration of the CITY’s lease of the PARK to R&R GROUP LLC, pursuant to the outlined retention of profits resulting from operation of the facility by R&R GROUP LLC. H. After the initial Development costs in 4(B) have been paid, should the R&R GROUP LLC choose to stop operating at any time during the 25-year term of this agreement, R&R GROUP LLC will Notify the CITY and immediately begin negotiations to turn over operation of the FACILITY to the CITY and upon that turnover immediately donate any and all remaining ownership and value of the FACILITY and equipment to CITY. I. The CITY shall pay up front permit, water and sewer connection fees, and impact fees related to construction of the FACILTIY. The CITY will recoup these fee’s as set forth in paragraph 4(B-D) below. 4. PAYMENT OF COMPENSATION TO CITY. A. R&R GROUP LLC shall pay to CITY each year during the term of this Agreement one dollar ($1) as a lease in consideration of the Premises and Facilities. This amount shall be paid every year R&R GROUP LLC remains in possession of the Premises. B. R&R GROUP LLC shall have the right to retain all proceeds from Net Income from the Facility and Concession Operations to cover all operational expenses with any remaining funds being applied in accordance with 4(B) of this Agreement towards development costs until such time as One Hundred Percent (100%) of all initial costs of construction, as CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 3 OF 17 verified by the CITY and agreed to by R&R GROUP LLC, plus a twelve percent (12%) annual rate of return on the initial costs have been recouped. C. Once the R&R GROUP LLC has recouped the initial investment, the profit-sharing model shall transition to a division of net proceeds whereby the R&R GROUP LLC retains twenty-five percent (25%) and the CITY receives seventy-five percent (75%) during the period necessary to recoup CITY’s initial outlay including permit fees, water and sewer connection fees, other impact fees and all other initial costs associated with contruction of the Facility. This reflects a balanced distribution that acknowledges the R&R GROUP LLC's substantial investment and operational risks. D. Once the CITY’s upfront contributions, and R&R GROUP LLC’s initial investment and annual rate of return has been paid in accordance with 4(B), the profit sharing model shall transition to a division of net proceeds whereby the R&R GROUP LLC retains 50 percent (50%) and the CITY receives fifty percent (50%). Payment to CITY and R&R GROUP LLC’s annual revenue as well as Financial Reports for the prior calendar year are due by May 1st of each year while this Agreement is in effect. The Annual Financial Reports should be submitted in an electronic format and include an Income Statement and Balance Sheet, in such form as common and accepted industry accounting standards dictate. (See section 5 below for more details). E. Payment shall be made to the order of the City of Rexburg, Attn: City Treasurer, P.O. Box 280, REXBURG, IDAHO 83440. After the expenses are paid fully as outlined in Section 5 below. Late payments shall accrue interest at the legal rate of interest as set by CITY Treasurer for the accrual of interest on judgments until paid. Payments that are more than thirty (30) days late will constitute a breach of this Agreement absent a written addendum to this Agreement signed by both parties. If this Agreement is breached by R&R GROUP LLC, unpaid annual rent shall be considered at once due and payable by R&R GROUP LLC without notice or demand by CITY. 5. ACCOUNTING AND RECORDS. A. For the purposes of this agreement, “net income” shall be defined as the gross revenues derived from the operations after the deduction of reasonable and necessary operating expenses, as documented in the annual financial reports required under this agreement. R&R GROUP LLC shall install and maintain inventory, bookkeeping, and accounting methods; and methods of collection of monies, which shall permit CITY to accurately compute the net income of R&R GROUP LLC. Net Income is to be defined generally as gross revenues less expenses. C. R&R GROUP LLC shall submit to CITY, no later than May 1st of each year of this Agreement, a statement of annual gross receipts and a copy of the year-end sales tax report for the preceding calendar year. Such statement shall contain an appropriate certification CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 4 OF 17 that all gross receipts during the yearly accounting period have been duly and properly reported to CITY. 6. EXCLUSIVENESS POLICY. R&R GROUP LLC shall have the exclusive right to provide the required and optional services for the FACILITY. R&R GROUP LLC shall not provide any concession services whatsoever on any portion of the PARK outside PREMISES. The CITY cannot provide a competing enterprise to those offered by R&R GROUP LLC, other than food concessions, within the Park, whether paid or free. The City further agrees not to operate an ice rink within the City without prior consent from R&R GROUP LLC, however such consent shall not be unreasonably withheld. 7. QUALITY OF SERVICE. All items sold and all food service provided shall comply with the Rules of the Idaho Department of Health and Welfare governing Food Safety and Sanitation Standards for Food Establishments, as enforced by Eastern Idaho Public Health Department. A copy of any required permit, license, and inspection report issued by Eastern Idaho Public Health Department shall be made available to CITY. 8. NON-DISCRIMINATORY. R&R GROUP LLC shall not discriminate as it relates to federal, state and local rules, in any way. 9. INITIAL CONSTRUCTION OR IMPROVEMENTS ON R&R GROUP LLC PREMISES. A. The initial investment, which includes all development costs plus the twelve percent (12%) annual rate of return shall be determined after all development costs have been completed and a occupancy permit has been issued for the Facility. (“Initial investment”). After completion of the Facility the Initial Investment shall be calculated and adjusted for interest, commensurate with prevailing industry standards, and agreed upon by both CITY and R&R GROUP LLC and added by Addendum to this Agreement at the time of completion. 10. CONSTRUCTION OR MODIFICATION OF IMPROVEMENTS. A. The R&R GROUP LLC’S obligations under this agreement shall include obligations to: Design, build, finance, operate and maintain “the facility” as required under this agreement. Construct and operate the facility in accordance with all applicable laws and regulations, prudent industry practice, and service standards, alterations, or modification of PREMISES, R&R GROUP LLC shall submit, for the review and prior written approval of CITY, all plans, drawings, and specifications. CITY shall approve, reject, or require modifications of such plans within thirty (30) days after submission of those plans to CITY. R&R GROUP LLC shall obtain all necessary licenses, permits and warranties to carry out its obligations under this agreement. The CITY, according to 4(B-D), shall include any necessary costs due to the CITY in its reimbursable costs noted in clause 4 and not charge R&R GROUP LLC. CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 5 OF 17 11. MAINTENANCE, REPAIRS, OR DAMAGE TO PREMISES. As an allowable expense according to 4B above, R&R GROUP LLC shall maintain PREMISES in clean, healthful, and safe condition, and in accordance with applicable state, county, and federal laws and regulations. R&R GROUP LLC shall be legally and financially responsible for the maintenance and repair of all equipment related to R&R GROUP LLC’s use of the PREMISES. 12. CONDITIONS OF PROJECT SITE. A. Commencing from the Effective Date, the CITY undertakes to make the PREMESIS available to and grant (i) access, (ii) possession of, and (iii) an exclusive right of use of the FACILITY to the R&R GROUP LLC and its Subcontractors. B. R&R GROUP LLC shall, throughout the progress of the work and the conduct of the development of the FACILITY, as far as reasonably possible, have regard for the safety of all persons at the PREMESIS (whether lawfully or not) to the extent required by law, and shall keep the PREMESIS, the works and the Facilities in an orderly state as appropriate in accordance with Good Industry Practice to avoid danger to such persons. C. It is understood that during construction that the PREMESIS will be secured in a manner that reduces the opportunity for injury to anyone entering the property. D. R&R GROUP LLC understands that the premises leased for use is first and foremost a “City” Park and the build site is adjacent to Rexburg Rapids. The City will provide adequate access and the CITY’S Public Works department will designate specific areas of access and parking for R&R GROUP LLC and its subcontractors for the duration of construction. R&R GROUP LLC and subcontractors will make best efforts ensuring minimal impact on Rexburg Rapids and its patrons during the construction period. 13. PARKING/LANDSCAPING/EXTERNAL LIGHTING/IRRIGATION AND OTHER COMMON AREA EXPENSES A. The CITY will make available the required parking for the Facility, either as common parking with other Park features, or by adding additional parking. In addition, the City will be responsible for common area expenses, landscaping, external lighting (except that specific to the Facility), irrigation costs and any other such reasonable and foreseeable expenses for the Facility. B. PARKING NOT EXCLUSIVE TO R&R GROUP LLC OR ITS PATRONS. Parking at the Park, including parking on R&R GROUP LLC PREMISES, shall be available to the general public, without charge, whether or not the users parking on R&R GROUP LLC PREMISES are patrons of R&R GROUP LLC. C. R&R GROUP LLC acknowledges that employees may be restricted in their parking consistent with responsible parking management and in consultation with CITY. 14. INSURANCE. The CITY agrees to list and maintain Insurance for the property under their ICRMP Policy. If the PARTIES mutually determine that any additional Insurance is required beyond that of the ICRMP Policy, including builders risk insurance during the course of CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 6 OF 17 construction, that expense shall be an operational expense as it relates to paragraph 4(B). Policies shall provide, or be endorsed to provide, all required coverage. R&R GROUP LLC shall provide certificates of insurance or certified endorsements as applicable for the insurance required. R&R GROUP LLC shall not commence work under this Agreement until satisfactory evidence of all required insurance is provided to CITY. A. Additional Insured. All R&R GROUP LLC insurance required in this Agreement, except for Workers Compensation, shall name the “City of Rexburg, Idaho” as an Additional Insured. B. Ratings. All insurance shall be with insurers rated A-, VII, or better in the latest Bests Rating Guide, and be in good standing and authorized to transact business in Idaho. The coverage provided by such policies shall be primary. Policies may contain deductibles, but such deductibles shall not be deducted from any damages due CITY. C. Required Coverages. R&R GROUP LLC shall maintain insurance in amounts not less than the following: 1. Commercial General Liability (CGL) with a limit of not less than one million dollars ($1,000,000) each occurrence, and one million dollars ($1,000,000) annual aggregate, if defense is outside the limits. If defense is inside the limits, the limit must be two million dollars ($2,000,000) each occurrence, and two million dollars ($2,000,000) aggregate. If necessary, a commercial umbrella or excess policy may be used to meet the limits required, providing the CGL is listed on the underlying insurance in the umbrella or excess policy, and the umbrella/excess policy meets the requirements above for acceptable carriers. 2. CITY shall obtain insurance for the building through their insurance provider and will also provide and maintain a general liability insurance policy. The CITY is not allowed per Idaho Statute to name the R&R GROUP LLC as additional insured on their policy. The City can provide the R&R GROUP LLC with a certificate of Insurance, which shows that there is insurance on the property and that we will accept a tender of your defense if you are named party to a lawsuit solely because of your relationship with the member and not as a result of your own conduct. 3. Workers Compensation Insurance in amounts as required by statute, and Employers’ Liability with a limit of one hundred thousand dollars ($100,000) Bodily Injury by Accident-each Accident, one hundred thousand dollars ($100,000) Bodily Injury by Disease-each employee, five hundred thousand dollars ($500,000) Bodily Injury by Disease-policy limit. 15. HOLD HARMLESS AGREEMENT. For the benefit of the CITY, R&R GROUP LLC shall indemnify, defend, save and hold harmless for any incident or occurrence within the FACILITY, its officers, agents, elected officials, and employees from and against any and all liability, claims, damages, losses, expenses, actions, attorneys’ fees and suits whatsoever caused by or arising out of R&R GROUP LLC’s negligent or wrongful performance, acts or CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 7 OF 17 omissions under this Agreement or R&R GROUP LLC’s failure to comply with any state or federal statute, law, regulation or rule. Nothing contained herein shall be deemed to constitute a waiver of CITY’s sovereign immunity, which immunity is hereby expressly reserved. 16. ALCOHOL CONSUMPTION AND SALES. No alcohol shall be sold or consumed on PREMISES until after a required change in Rexburg City Code or policy is made by CITY Council and terms of such sale or consumption is agreed to in writing, including provision for insurance to cover associated risks and liabilities. 17. BREACH AND TERMINATION. Each term and condition of this Agreement is material, and default as to, or breach of any, of these terms by R&R GROUP LLC shall be grounds for termination of the entire agreement by CITY. A. Bankruptcy. The FACILITY will not be used or included in any Bankruptcy as an Asset of R&R GROUP LLC and the PARTIES agree that the FACILITY or the Initial Development Costs incurred by R&R GROUP LLC are not an Asset of R&R GROUP LLC regardless of any Bankruptcy filed by R&R GROUP LLC, however, CITY shall remain obligated to reimburse R&R GROUP LLC for initial construction or initial improvements due and owing, if any, prior to the date of R&R GROUP LLC’s bankruptcy filing. B. Violation of Environmental laws: R&R GROUP LLC shall not knowingly violate state or federal law or regulation regulating the use, storage, transport or manufacture or a hazardous substances and agrees to strictly comply with all terms and provisions of such acts, statutes and laws, and any other similar environmental law or any rule or regulations C. Breach of Agreement: Any substantial breach of this Agreement by R&R GROUP LLC shall be cause for the Termination of this Agreement according to the the following provisions: 1. Notice of Violation of Agreement. CITY shall provide written notice to R&R GROUP LLC of violation of this Agreement, legal, or regulatory rule violation and shall allow R&R GROUP LLC thirty (30) days from service of the notice to cure the violation. 2. Notice of Termination. Agreement or rule violations which have not been cured within thirty (30) days of receipt of the notice of violation shall subject the Agreement to termination. Notice of termination shall be in writing and shall be effective upon service. 3. Reinstatement. Not later than thirty (30) days following the termination of this Agreement for cause, R&R GROUP LLC may submit to CITY a written request for reinstatement setting forth good cause why the Agreement should be reinstated. At CITY’s discretion, the Agreement may be reinstated upon the payment of a reinstatement fee of four hundred dollars ($400), and upon such other terms and conditions as CITY deems appropriate. D. Termination by R&R GROUP LLC. In addition to the right to terminate for breach or cause as outlined above, R&R GROUP LLC may terminate this Agreement at any time by giving three (3) months written notice to CITY of its intent to terminate. Upon notice by R&R CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 8 OF 17 GROUP LLC of such intent, they will have thirty (30) days to come to an agreement on a mutually agreed exit strategy and to remove any personal property from the PREMISES in a commercially reliable manner. E. Termination by CITY. In addition to the right to terminate for breach or cause as outlined above, CITY may terminate this Agreement upon a finding by the Rexburg City Council that it is in the Public Interest to terminate this Agreement. CITY shall give three (3) months’ written notice to R&R GROUP LLC that the City is exercising its right to terminate for the Public Interest. In the event that CITY exercises its right to terminate for the Public Interest, CITY shall Reimburse R&R GROUP LLC any un-donated value of the total initial capital improvement costs as outlined in Section 4(B-D)of this Agreement, to the extent that R&R GROUP LLC is entitled to reimbursement under Section 4.(B-D) of this Agreement. CITY shall not exercise its right to terminate for the Public Interest nor its option of First Right of Refusal as set forth in Section 23 for twelve (12) years after the execution of this Agreement. 18. ASSIGNMENTS OR SALE OF INTEREST. A. R&R GROUP LLC and/or any person or entity that owns a “controlling interest” as herein defined in R&R GROUP LLC’s ownership (collectively defined as the R&R GROUP LLC for the purpose of this section), shall not assign, sublease, or otherwise sell or transfer responsibilities under this Agreement or the concession operations authorized hereunder, or sell, or otherwise assign or transfer (including but not limited to mergers, consolidations, reorganizations, or other business combinations) a controlling interest in such operations, this Agreement, or controlling interest in R&R GROUP LLC’s ownership as defined herein, without the prior written consent of CITY, such permission not to be unreasonably withheld. Failure to comply with this provision or the procedures described herein shall constitute a material breach of this Agreement for which the Agreement may be terminated immediately by CITY without regard to the procedures for termination set forth above; and CITY shall not be obligated to recognize any right of any person or entity claiming an interest in this Agreement or claiming the right to own or operate the concession operations authorized hereunder. B. R&R GROUP LLC shall advise the person or entity proposing to enter into a transaction described above that CITY shall be notified and the proposed transaction is subject to review and approval by CITY. R&R GROUP LLC shall request in writing CITY’s approval of the proposed transaction and shall promptly provide CITY all relevant documents related to the transaction including all prospective R&R GROUP LLC data forms that must be obtained from and filed with CITY prior to any approval by CITY. C. CITY in exercising its discretionary authority herein shall, among other matters, take into consideration the management qualifications of any individual or entity that would obtain an interest in facilities or services authorized hereunder, the experience of any such individual or entity with similar operations, and the ability of any such individual or entity to operate the concession authorized hereunder in the public interest under the regulation of CITY. CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 9 OF 17 D. For the purposes of this section, the term “majority interest” in R&R GROUP LLC’s ownership shall mean, in the instance where R&R GROUP LLC is a corporation or limited liability company, an interest beneficial or otherwise of sufficient outstanding voting securities or capital of R&R GROUP LLC so as to permit exercise of majority vote over the operations of R&R GROUP LLC; and, in the instance of a partnership, limited partnership, joint venture, or individual entrepreneurship, any beneficial ownership of the capital assets of R&R GROUP LLC sufficient to permit substantial managerial influence over the operations of R&R GROUP LLC shall constitute a controlling interest for purposes of this Agreement. E. No mortgage shall be executed and no bonds or other evidence of interest in, or indebtedness upon the assets or proposed assets of R&R GROUP LLC shall be issued, Except as set forth in this agreement. 19. DELEGATION OF MANAGEMENT A. Third-Party Management Authorization: R&R GROUP LLC shall have the authority to delegate the management of the ice-skating facility to a third-party management company (“Management Company”). Such delegation is subject to the terms and conditions of this Agreement and to the approval of the CITY, which shall not be unreasonably withheld. B. Selection of Management Company: The CITY will actively participate in the selection process of the Management Company. R&R GROUP LLC agrees to present a shortlist of qualified Management Companies to the CITY. Both parties shall mutually agree upon the criteria for selection, which shall include but not be limited to, the Management Company’s experience, financial stability, reputation, and proposed management plan for the facility. C. Management Company Authority: The Management Company, upon approval and designation, shall be granted all the operational rights and obligations of R&R GROUP LLC under this Agreement. This includes, without limitation, the rights to collect revenues, cover operational expenses, maintain the facility, and provide the services. D. Consent for Delegation: The CITY agrees to not unreasonably delay or withhold consent for the delegation of management responsibilities to the Management Company. The CITY’s consent shall be based upon the CITY’s reasonable determination that the Management Company can fulfill the roles and responsibilities of R&R GROUP LLC under this Agreement. E. Contractual Relationship with Management Company: R&R GROUP LLC shall ensure that its contractual relationship with the Management Company is consistent with the terms of this Agreement. The Management Company will be required to adhere to the stipulations of this Agreement as if it were the original party in place of R&R GROUP LLC. CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 10 OF 17 F. Termination of Management Company’s Authority: Should the Management Company fail to perform its obligations under this Agreement or under its contract with R&R GROUP LLC, R&R GROUP LLC may terminate the Management Company’s authority to operate the facility, subject to providing reasonable notice and evidence of failure to perform to the CITY. R&R GROUP LLC shall resume the operational responsibilities or appoint a new Management Company with the CITY’s consent. G. Reporting Requirements: The Management Company shall adhere to the annual reporting requirements as set out in Section 5 of this Agreement. The CITY shall have the same rights of access and audit with respect to the Management Company as it does with R&R GROUP LLC. H. Amendment to Reflect Management Change: Upon the appointment of a Management Company, an amendment to this Agreement shall be executed to reflect the change in management. Such amendment shall not otherwise alter the terms and conditions of this Agreement. 20. RIGHTS UPON TERMINATION OR EXPIRATION. A. At the expiration or early termination of this Agreement, R&R GROUP LLC shall, within thirty (30) days thereafter, remove from PREMISES or otherwise dispose of in a manner satisfactory to CITY all personal property belonging to R&R GROUP LLC located on PREMISES. If removal and restoration is not completed within thirty (30) days after termination, CITY may, at its election, perform the work and bill R&R GROUP LLC for the costs thereof. R&R GROUP LLC shall pay such bill within thirty (30) days of receipt. B. All fixtures or improvements permanently installed upon PREMISES by or at the direction of R&R GROUP LLC shall become the property of CITY upon the termination or expiration of this Agreement after the 30 days. 21. BUILDINGS AND IMPROVEMENTS. R&R GROUP LLC shall not erect any buildings, structures, improvements or fixtures upon PREMISES, other than those contemplated by the terms of this Agreement, unless otherwise permitted in writing by CITY, at CITY’s sole discretion. 22. EQUIPMENT. R&R GROUP LLC, subject to 4(B-D) reimbursement noted above, shall provide PREMISES with all equipment necessary for the services required under this Agreement. The quality and maintenance of such equipment shall comply with all applicable laws and regulations. 23. RIGHT OF FIRST REFUSAL FOR CONCESSION EQUIPMENT. During the term of this Agreement, CITY shall have a Right of First Refusal for the operation of the facility and concession equipment utilized by R&R GROUP LLC on PREMISES. If R&R GROUP LLC receives a bona fide offer from a third party for the operation of all or any portion of the facility equipment or concession equipment, within twenty (20) days of receiving said offer, R&R GROUP LLC shall give CITY written notice thereof and shall send to CITY a copy of the offer CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 11 OF 17 and proposed assignment of operation agreement outlining the terms of agreement to said third party. R&R GROUP LLC further agrees that it shall not accept such offer without full and complete compliance with the terms and conditions of this section. CITY shall have twenty (20) days following the date R&R GROUP LLC first physically delivers such proposed purchase agreement to decide whether to purchase the amusement devices and concession equipment from R&R GROUP LLC at the same price and on the same terms as contained in the proposed operation agreement. 24. SIGNS, ADVERTISING NAME. R&R GROUP LLC shall not erect a sign on PREMISES or in the vicinity thereof, without first obtaining the prior written approval of CITY. All intellectual property rights whatsoever (whether capable of registration or not) regarding the CITY’S name, trademarks, logos, image and all other intellectual property matters relating to CITY, including its name, trademarks, logos and/or image shall remain the sole property of the CITY. R&R GROUP LLC will refrain from using CITY’S name, trademarks, logos without first gaining written permission of CITY. 25. BUSINESS NAME. Any assumed or fictional business name used by R&R GROUP LLC in conjunction with its concession operations upon PREMISES shall be subject to the approval of CITY. 26. LICENSES AND PERMITS. R&R GROUP LLC shall obtain and pay for all permits or licenses that may be required for the operation of the concession allowed by this Agreement which shall not be a reimbursable expenses. 27. COMPLIANCE WITH APPLICABLE LAWS. R&R GROUP LLC shall at all times comply with all applicable laws, ordinances, and regulations of the county of Madison, CITY, and the United States. Violation of such laws, ordinances, or regulations may be considered as cause for termination of this Agreement. R&R GROUP LLC shall likewise follow all applicable Environmental laws. Upon reasonable notice the CITY, and its agents, attorneys, employees, consultants and contractors, hereby reserve the right to enter upon and inspect the real property and facilities leased hereby at any time for the purpose of determining R&R GROUP LLC’s compliance with the provisions of this section, including, without limitation , the right to perform such inspections, examinations, subsurface testing, soils and ground water testing and other tests necessary to protect CITY’s interest in the property and ensure R&R GROUP LLC’s compliance with the terms and provisions of this section. In the event R&R GROUP LLC’s failure to strictly comply with the terms and provisions of said statutes or laws, CITY may immediately and without prior notice enter upon PREMISES and take such response action as reasonably necessary to bring the property into compliance with such laws and comply with any response action taken by any agency charged with the enforcement thereof. In such event, all costs, expenses and consultants’ fees incurred by CITY shall be promptly and immediately paid by R&R GROUP LLC, and together with interest at CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 12 OF 17 an annual rate of twelve percent (12%) per annum until paid, from the date such costs were incurred by CITY. 28. UTILITIES. R&R GROUP LLC or its designee shall, at R&R GROUP LLC’s own expense, be responsible for the metering and payment of all utilities used in connection with PREMISES, subject to the operational expense in 4 (b). 29. OPERATION. A. R&R GROUP LLC shall have discretion to operate the required facilities and services for the FACILITY subject to the reasonable suggestions of the CITY. 1. R&R GROUP LLC is encouraged to be open for service before and after the above dates to better service PARK visitors. R&R GROUP LLC may provide facilities and services to public on other dates at R&R GROUP LLC's discretion with the approval of CITY. CITY reserves the right to require changes in the dates and times of required facilities and services to ensure adequate service to the public. R&R GROUP LLC shall provide CITY with an operation schedule indicating times of operation. 2. R&R GROUP LLC, its employees, and representatives shall conduct themselves in such a manner as to promote a positive image for the business, PARK and CITY. 3. R&R GROUP LLC shall keep PREMISES in a clean and sanitary condition at all times. 4. DISORDERLY PERSONS: R&R GROUP LLC shall exercise every reasonable effort not to allow boisterous disorderly persons to loiter about the leased premises. 5. ILLEGAL ACTIVITES: R&R GROUP LLC shall not knowingly permit any illegal activities to be conducted upon the leased premises. 30. TAXES. It is anticipated that Property taxes for the leased PREMISIS will be exempt. If it is later determined they are not fully tax exempt then the parties agree to renegotiate relative to this expense. R&R GROUP LLC shall pay all taxes on any personal property belonging to R&R GROUP LLC located on PREMISES. R&R GROUP LLC shall pay all sales taxes levied against the operation of the concession as an operational expense. Subject to the terms of this Agreement, including by not limited to 4(B) above R&R GROUP LLC shall pay all taxes or assessments or charges, which at any time may be lawfully levied upon any interest in this Agreement or any possessory right that R&R GROUP LLC may have in or to PREMISES. R&R GROUP LLC shall provide CITY with a valid tax identification number. 31. WAIVER OF AGREEMENT TERMS. No waiver by either Party at any time of any of the terms, conditions, or covenants of this Agreement shall be deemed a waiver at any time thereafter of the same or any other term, condition, or covenant herein contained, nor of the strict and prompt performance thereof. No delay or failure by the PARTIES to reenter PREMISES or to exercise any right, power or privilege or option arising from any default, nor any subsequent acceptance of rent then or thereafter accrued shall impair any such right, power, CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 13 OF 17 privilege, or option held by PARTIES, or be construed as a waiver of such default or relinquishment of any rights herein. No notice to R&R GROUP LLC shall be required to restore or revive the condition that time is of the essence after the waiver by PARTIES of any default. No option, right, power, remedy, or privilege of PARTIES shall be construed as being exhausted by the exercise thereof in one or more instances. The rights, powers, options, and remedies given to PARTIES by this Agreement shall be deemed cumulative. 32. MODIFICATION. Notwithstanding any of the provisions in this Agreement, the Parties, by mutual consent, may agree to written modifications or additions to this Agreement, subject to approval of the Mayor and City Council. CITY shall have the right to grant reasonable extensions of time to R&R GROUP LLC for any purpose or for performance of any obligation of R&R GROUP LLC hereunder. 33. TERMS BINDING UPON SUCCESSOR. All the terms, covenants, and conditions of this Agreement shall inure to the benefit of and be binding upon the successors and assignees of the Parties hereto. The provisions of this Section shall not be deemed as a waiver of any of the conditions against assignment set forth in this Agreement. 34. NON-DISCRIMINATION. R&R GROUP LLC shall not discriminate against any employee or applicant for employment on the basis of race, color, religion, creed, political ideals, sex, age, marital status, physical, or mental handicap, gender identity/expression, sexual orientation, or national origin. 35. TIME OF THE ESSENCE. Time is expressly declared to be of the essence in this Agreement. 36. NOTICES. Any notices that may be given by either Party to the other shall be deemed to have been fully given when made in writing deposited in the United Stated mail, postage prepaid, and addressed as follows: TO R&R GROUP LLC AT: TO CITY AT: R&R GROUP LLC. City of REXBURG, IDAHO 389 Partridge Ln Phone: (208) 359-3020 Rexburg, Idaho 83440 Fax: (208) 359-3022 THE NEUTRAL ZONE LLC 389 Partridge Ln Rexburg, Idaho 83440 The address to which notices may be mailed shall be changed by written notice to the other Party. 37. PUBLIC RECORDS. Pursuant to Idaho Code Title 74, Chapter 1, information or documents received from R&R GROUP LLC may be open to public inspection and copying unless exempt from disclosure. R&R GROUP LLC shall clearly designate individual documents as "exempt" and shall indicate the basis for such exemption, if any. CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 14 OF 17 38. ANTI-BOYCOTT AGAINST ISRAEL ACT. Pursuant to Idaho Code section 67-2346, if payments under this Agreement exceed one hundred thousand dollars ($100,000) and R&R GROUP LLC employs ten (10) or more persons, R&R GROUP LLC certifies that it is not currently engaged in, and will not for the duration of this Agreement engage in, a boycott of goods or services from Israel or territories under its control. The terms in this section that are defined in Idaho Code section 67-2346 shall have the meaning defined therein. 39. CERTIFICATION OF NO CHINESE OWNERSHIP. Pursuant to Idaho Code 67-2359, R&R GROUP LLC certifies that R&R GROUP LLC is not currently owned or operated by the government of the People’s Republic of China and will not, for the duration of this Agreement, be owned or operated by the government of the People’s Republic China. 40. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement between the Parties related to the subject matter of this Agreement and may not be modified without the written consent of both Parties. IN WITNESS WHEREOF, the Parties hereto have executed the foregoing Agreement as indicated above. ATTEST: “CITY” City of Rexburg, Idaho By____________________________ By_____________________________ City Clerk Mayor THE NEUTRAL ZONE LLC “R&R GROUP LLC” R&R GROUP LLC By____________________________its, By______________________________its, Managing Member Managing Member STATE OF IDAHO ) ) ss. County of Madison ) On this _______ day of _________________, 2024, before me, the undersigned, a notary public for Idaho, personally appeared Jerry Merrill, known to me to be the Mayor of the City of Rexburg, Idaho, a municipal corporation that executed the foregoing document, and acknowledged to me that they are authorized to execute the same for and on behalf of said City. CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 15 OF 17 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. ___________________________________ Notary Public of Idaho (Seal) Residing at: ________________________ My Commission Expires: ______________ STATE OF __________ ) ) ss: County of ____________ ) On this ________ day of _________________, 2024, before me, the undersigned, a notary public, in and for said State, personally appeared _______________________, known or identified to me to be the owner of R&R GROUP LLC, and whose name is subscribed to the within instrument and acknowledged to me that they are authorized to execute the same for and on behalf of R&R GROUP LLC. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. ___________________________________ Notary Public of Idaho (Seal) Residing at: ________________________ My Commission Expires: ______________ CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 16 OF 17 EXHIBIT “A” 1. Concept Layout of Riverside Park CONCESSION AGREEMENT – RIVERSIDE PARK SKATING RINK 4/1/2024 PAGE 17 OF 17 EXHIBIT “B” Required and Optional Concession Services A. Required Services and Facilities: 1. Establishment, maintenance, and management of an approximately 35,000 square feet ice skating venue as detailed within the Premises outlined in Exhibit “A”. B. Optional Concession Services: The R&R GROUP LLC is authorized to develop, introduce, and offer a diverse range of services, products, or activities that complement and enhance the experience of visitors to the ice skating venue. These may include, but are not limited to: 1. Hosting and managing ice-related activities such as Hockey, Open Skate sessions, Curling, and other ice sheet events or leagues. 2. Provisioning of a variety of prepared food and beverage options suitable for patrons. 3. Facilitation of sponsorship opportunities and advertising within the FACILITY in return for financial or in-kind support. 4. Organization and operation of community events, which may be ticketed or free to the public, fostering community engagement and participation. C. Dynamic Service Adaptation: The R&R GROUP LLC retains the flexibility to adapt, modify, or expand the services offered at the FACILITY to meet evolving market demands, subject to compliance with applicable laws and regulations, and alignment with the general purpose and character of the FACILITY as a community recreational asset. All new services or adaptations will be conducted in consultation with and, where necessary, subject to the approval of the City of Rexburg. D. Prohibited Activities: The following activity is expressly prohibited within the Premises: 1. Sale, distribution, or consumption of alcoholic beverages on the Premises.