Recommend approval to authorize the City Manager to execute an agreement with OVG Facilities LLC for management of the Savannah Civic Center.

On April 25, 2019, City Council approved an Arena design assistance agreement with OVG as the first part of a phased contract that allows the City to enter into separate agreements for management of the existing Civic Center and operations of the new Arena. Since that approval, representatives of OVG have been working with the arena development team to design an arena that maximizes the functionality and revenue of the planned new facility.

Recently, the Director and Box Office Manager of the current Savannah Civic Center have resigned their positions for other opportunities. The City Manager now recommends approving the Civic Center Management phase of the OVG contract, rather than hiring new employees for the short time that the Civic Center will remain operational.

Under terms of the agreement, the City will pay OVG a fee of $8,500 per month for management services at the existing Civic Center. OVG will provide a Civic Center General Manager to supervise City personnel and manage operations of the facility. The OVG General Manager will not be authorized to administer discipline to the City employees, but will instead work with City management should any performance issues arise.

The City and OVG will work together to establish a City-approved operating budget, in accordance with an operations and finance manual, that will include salaries for Civic Center employees. The agreement contains several provisions designed to incentivize OVG to increase revenues at the Civic Center. Should OVG not generate new revenues above current levels in 2020 and 2021 at least equal to the management fee of those two years ($204,000), OVG must refund the difference to the City. The City will pay OVG an incentive fee equal to 25% of net operating revenues exceeding current revenue plus the management fee. In addition, the City will pay OVG 15% of new sponsorship revenue it generates at the facility.

The agreement includes a termination clause. This agreement does not address operations of the planned new Arena. That agreement will be presented to City Council at a later date.

Approval

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