DEPARTMENT: Parks & Recreation
DEPARTMENT HEAD: Janet A. Martin
COUNCIL DISTRICTS IMPACTED: 10
SUBJECT:
Assignment of Lease Agreement from SportsAmerica, Inc. to Northeast Independent School District for the operation of Time Warner Cable Park located in Council District 10
SUMMARY:
This Ordinance authorizes the assignment from SportsAmerica, Inc. to Northeast Independent School District (NEISD) of a Lease Agreement for an initial term of twenty-five (25) years for the operation of Time Warner Cable Park located in Council District 10 and authorizing the negotiation and execution of an amendment of the Lease Agreement to effectuate the full transfer of all operations and leasehold interests of the sports complex to NEISD; no City funds are associated with this action.
BACKGROUND INFORMATION:
In August 1990, the City leased a 45.822 acre tract of land near the northeast corner of McAllister Park on Wetmore Road to SportsAmerica, Inc. for an initial term of twenty-five (25) years for the purpose of developing and managing a sports complex currently identified as Time Warner Cable Park. The City only provided property for the tenant funded improvements at the private-for-profit operated sports complex. The Lease Agreement was amended in 1991 to expand the premises to 56.685 acres, and was subsequently amended in support of improvements and extended the term through May 24, 2026.
NEISD informed the City of the proposed purchase of improvements at the sports complex from SportsAmerica, Inc. with the intent to assume full operations on a permanent basis under the assignment of the leasehold interest from SportsAmerica, Inc. While this is allowed under the existing agreement, as a school district NEISD requires a fully amended contract reflecting modified lease terms. As a result, the proposed modified agreement has a term of twenty-five (25) years with one (1) renewal option of the same length, and NEISD will be solely responsible for all operational, maintenance, and improvement costs of the premises. The City will not provide any operational support nor will the City receive compensation as part of the amendment. The sports complex will be open to the public when not in use by the school district. To meet the needs of the school district and enhance the recreational offerings to the community, NEISD intends to make initial improvements of $8 - $10 million through the school district bond program and their general operating budget to include heating the existing pool and establishing shade over sports fields. In order to facilitate these and other improvements the City will provide approximately 10.0 additional acres.
ISSUE:
This Ordinance authorizes the assignment from SportsAmerica, Inc. to Northeast Independent School District (NEISD) of a Lease Agreement for an initial term of twenty-five (25) years for the operation of a sports complex located in Council District 10 and authorizing the negotiation and execution of an amendment of the Lease Agreement to effectuate the full transfer of all operations and leasehold interests of the sports complex to NEISD. This assignment and execution of a new Lease Agreement will retain a third-party operator at the sports complex while providing recreational opportunity in the area as outlined in the adopted park system plan.
ALTERNATIVES:
The City could elect not to approve the assignment of a fully amended Lease Agreement to NEISD and instead choose to operate the sports complex. However, this would be inconsistent with the established policy of engaging partners to operate such athletic complexes since this is no longer a core business segment of the Parks and Recreation Department. Additionally, funds would need to be identified for the ongoing operation of the sports complex.
FISCAL IMPACT:
This action has no General Fund impact and as part of the assignment, under the fully amended Lease Agreement NEISD has full responsibility for operational, maintenance, and improvement costs of the premises. This action results in cost avoidance to the City for the operation of Time Warner Cable Park.
RECOMMENDATION:
Staff recommends approval of the assignment from SportsAmerica, Inc. to Northeast Independent School District (NEISD) of a Lease Agreement for an initial term of twenty-five (25) years for the operation of Time Warner Cable Park located in Council District 10 including the negotiation and execution of an amendment of the Lease Agreement to effectuate the full transfer of all operations and leasehold interests of the sports complex to NEISD.