DEVELOPMENT AGREEMENT EXHIBIT H. Arena Convention Center Cooperation Agreement
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1 I. INTRODUCTION DEVELOPMENT AGREEMENT EXHIBIT H Arena Convention Center Cooperation Agreement USM plans to develop and operate the Arena.The Arena will be located on City-owned land adjacent to the Virginia Beach Convention Center ( VBCC ). The VBCC is owned and operated by the City of Virginia Beach ( City ) and hosts a variety of conventions, conferences, trade and consumer shows, meetings and social events throughout the year. The City s Virginia Beach Convention & Visitors Bureau ( CVB ) is responsible for promoting year-round leisure, business, meetings and conventions, international and sports travel to Virginia Beach and is the City agency responsible for operating VBCC. USM and City are the Parties ( Parties ) to this Agreement. II. PURPOSE Due to their close proximity to one another, the Arena and VBCC will need to collaborate and closely coordinate important operational functions, such as parking, traffic control, security, signage utilization, booking, scheduling and other similar functions that could impact each facility s ability to perform, especially given the potential of future development within the Arena Project area. The purpose of this document is to set forth general policy guidelines and parameters regarding date availability, booking and scheduling in order to minimize potential conflicts with major events as well as maximize both venues utilization and to ensure to the extent possible that significant events at the Arena will be given priority as provided in this Agreement. In addition to the specific terms of this Agreement, the parties will exercise the usual and customary cooperation among the venues and commercially reasonable industry practices. It is acknowledged that due to the ever changing nature of events that might be hosted in each facility, and due to the ever changing requirements of those events that booking policies should remain evolutionary and subject to a transparent dialogue between the Parties. Currently, the majority of VBCC events take place during daytime hours, especially those that are expected to draw large numbers of patrons and it is anticpated at the onset that most Arena events will take place during evening hours. As a consequence, it is expected that issues arising from events scheduled for the same date at both facilities will be reduced. It is also acknowledged that it is the express goal of both the Arena and the VBCC to maximize venue utilization which, in turn, creates the greatest potential economic impact to the City of increased hotel stays and patronization of local restaurants and retail outlets. While overlapping schedules may require coordination and additional traffic and parking management resources, it is in the best interest of the parties for both venues to be successful, and all reasonable efforts should be made to afford each venue maximum ability to book functions and events. The potential exists for joint events such as those that may use the Arena for plenary sessions and the VBCC for exhibit space and the Parties agree to collaborate in bringing events of this nature to both facilities.
2 III. EVENT BOOKING CRITERIA A. USM, through its authorized representative, will work to maximize utilization of the Arena and provide access for ticketed events similar in type and content to those held at Comparable Arenas (it being understood that professional and intercollegiate sporting events would be subject to availability). USM will also make the Arena available for certain amateur sports, community, and civic events, and other public events in coordination with the City. USM may provide that these events have exclusive use of the Arena at agreed-upon times subject to the scheduling priorities set forth in this document. B. USM will be responsible for the booking of all events at the Arena. Subject to the terms of the Arena Lease, USM reserves final discretion to accept, modify, refuse or terminate bookings and to solicit, develop or promote any event consistent with the Arena s interests including: (1) projected economic benefit, (2) seasonal factors and repeat booking potential, (3) client s performance with respect to prior events at the Arena, (4) ensuring the integrity of primary user events (if any), as well as all other booked events within the Arena, and (5) maximization of utilization. C. City will be responsible for the booking of all events at the VBCC. City reserves final discretion to accept, modify, refuse or terminate bookings and to solicit, develop or promote any event consistent with the VBCC s interests including: (1) projected economic benefit, (2) seasonal factors and repeat booking potential, (3) client s performance with respect to prior events at the VBCC, (4) ensuring the integrity of primary user events (if any), as well as other booked events within the VBCC, and (5) maximization of utilization. IV. SCHEDULING COMMITTEE A. A scheduling committee comprised of representatives of USM and the City (the Committee ) will be created for the purpose of reviewing, defining and monitoring booking and scheduling policies and addressing coordination of potential overlapping schedules that may arise. Overlapping schedules are inevitable as many of VBCC events are scheduled over twelve (12) months in advance and, as a practical matter, cannot be rescheduled, while most Arena events are scheduled less than one (1) year in advance (with the exception of Major Arena Tenant Events (as defined in Section V.B below), or certain one-time special events such as college basketball tournaments or major political conventions that are scheduled years in advance). Additional community stakeholders may be invited to Committee meetings in an advisory capacity as unanimously agreed to by the Committee. B. The Committee will meet on an as needed basis to review scheduling and work to resolve potential overlapping schedules with a focus on maximum utilization for both facilities, economic impact, and visibility of the City. The parties will seek to avoid overlapping schedules where possible. Where such overlapping schedules cannot be avoided, the parties will agree upon measures necessary to address traffic and parking concerns arising as a result of the concurrent events. Those measures may include: 1. Adjusting starting and ending times for events to minimize overlap. 2. Satellite parking for Arena and VBCC employees and contractors.
3 3. Approximately three hundred (300) parking spaces in the area designated as VBCC Designated Parking on the site plan attached hereto as Exhibit A (the Designated Parking Plan ) will be reserved for the exclusive use of VBCC patrons, and the parking spaces in the area designated as Arena Designated Parking on the Designated Parking Plan will be reserved for exclusive use of Arena patrons (with each party being responsible for securing such parking for its exclusive use and all associated costs and expenses). 4. Satellite parking for patrons with associated shuttle service (the cost of which shall be shared equally by the City and USM). C. Issues to be considered by the Committee will include the time and type of the events, expected attendance, sequence of arrival, production requirements, time of event conclusion, ingress and egress, parking needs and parking charges (if any). V. TYPES OF EVENTS / SCHEDULING A. Legacy Events. The Committee will identify substantial Legacy Events that have: 1) established annual date patterns, 2) regular and recurring clients, 3) multi-year or longterm agreements, and 4) significant direct and indirect economic impact. Identified Legacy Events will be provided scheduling priority (i.e. the Arena will use reasonable efforts to avoid scheduling Arena events that conflict with VBCC Legacy Events and the City will use reasonable efforts to avoid scheduling VBCC Events that conflict with Arena Legacy Events. It is understood that the list of substantial Legacy Events will evolve over time to ensure they remain commercially relevant and economically competitive with alternative events. B. Major Tenant Events. Should a major or minor league sports tenant ( Major Arena Tenant ) execute a long-term use agreement to play its home games in the Arena these dates will be granted certain scheduling rights as established by the Committee. It is understood that the parties will work together to schedule around previously booked VBCC events and accommodate as many of such Major Arena Tenant dates as possible and that flexibility will be required of both parties. C. Live Entertainment. The Arena will host live entertainment events, including, but not limited to, concerts, national touring shows, motorsports and festivals. The scheduling of such live entertainment will be subject to date availability of the artist/act and at the Arena, and coordination by the Committee in the event of overlapping schedules. D. Convention and Trade Show Events. USM will cooperate with the VBCC with regard to the booking of Convention, Participatory Events, and Trade Show events. It is the intention of the Parties to provide the best venue(s) for events. E. City-sponsored Events. Subject to availability and the terms of this Section, USM shall grant City the ability to book up to ten (10) City-sponsored events of a non-commercial, non-income generating nature (not to exceed a total of ten (10) event days) at the Arena each calendar year with the City paying the actual cost of such events, including without limitation, the cost of associated with Event Day Services (police, fire, EMT, parking attendants, etc.), set up, tear down, changeover, utilities, cleaning, and staffing which the
4 City will reimburse to USM within ten (10) days after its receipt of USM s request for the same. Unless otherwise agreed to by USM, no such event may be scheduled any further in advance than four (4) months and, except for high school graduations, may not to occur on a Friday, Saturday, Sunday or holiday. Reasonable efforts will be made to accommodate City scheduling needs, with the understanding that revenue producing events at the Arena will be granted scheduling priority. VI. BOOKING CALENDAR A. USM shall control and maintain the booking calendar for the Arena and the VBCC shall control and maintain the booking calendar for the Convention Center. B. The Arena operator will utilize and maintain a computerized booking software to schedule and book its events and will provide the Committee and the VBCC with view access to the schedule to facilitate scheduling coordination. C. The VBCC will utilize and maintain a computerized booking software to schedule and book its events and will provide the Committee and USM (including its Operator) with view access to the schedule to facilitate scheduling coordination. D. It is anticipated that the scheduling software in each facility will have the capability of delineating the current status of an event (including holds and anticipated attendance level). This will allow the ongoing booking calendar to be closely monitored by all parties. E. For ease of reference, it is the intent of the Parties to track major events of the other facility on their internal calendars along with major holidays and other significant community-wide events. Once events are ready for public announcement, they may be included on a public City event calendar. VII. SITE VISITS USM and the City (or their respective designees), in coordination with each other, may conduct site visits at the other s venue with clients, including, but not limited to promoters, event planners, end-clients, etc. VIII. HOLD PERIODS USM and the City will notify each other via their scheduling calendars when they are placing certain dates on hold to finalize major events, and the other party will use reasonable efforts to avoid booking a major event during such hold period. Once the event is finalized the Parties will follow the procedures in Section IV above to mitigate and manage the effects of any resulting overlap. IX. DATE PROTECTION Either USM or the City may request a Date Protection Period for major events to coordinate the booking of similar events within a reasonable time period to protect the economic viability of the protected event. X. SIGNAGE UTILIZATION
5 USM at USM s sole cost and expense, will manage, operate, insure and maintain all major venue signs in the Project Arena and publicize VBCC events, other significant City events in the resort area and public safety messages as reasonably requested by the City. All City messages will be displayed at commercially reasonable times, for commercially reasonable durations and in a commercially reasonable manner. XI. CONFLICT RESOLUTION If the parties are unable to adequately address scheduling issues to their mutual satisfaction in the ordinary course, either party may request that the Committee shall meet within five (5) business days after a dispute is identified. The members of the Committee shall make a good faith effort to address any and all issues arising out of any such scheduling conflict.
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