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January 27, 2022 City Council Regular Meeting
18. Approval of the First Amendment to the Enmarket Arena Operating Agreement. This amendment specifies additional services, to be provided by the Oak View Group, that are integral to the successful operation of the arena. Services will include: parking management, Waterworks park management and sponsorship sales, the Bunker Club addition, and a City suite.
Strategic Priority
Good Government

After conclusion of a competitive procurement process, the City contracted with OVG Facilities, LLC (“OVG”) in 2019 to manage and operate the new Savannah Enmarket Arena.  The City has requested OVG provide some additional services that are integral to the successful future operation of the Arena. The first amendment addresses those additional services; which include:

Parking Management.   The new arena will be served by two primary City parking facilities: a 400-space parking garage and a 2,000-space surface parking lot.   Parking is integral to the operation of the Arena and event parking is often included as part of event ticket sales/prices. Since OVG and its partner Live Nation are managing ticket sales, promotions, and related activities at the Arena, then vertical integration of services will provide efficiencies in their management of parking related to events as well. OVG will only manage these parking assets during Arena events. The City will manage these parking assets during other times. Net parking revenues generated by OVG will be split at a rate of 75% to City and 25% to OVG.   The parking management would commence once the surface parking lot is completed.

Waterworks Park Management. The former City Lot (public works complex) located immediately adjacent to the new Arena is being temporarily repurposed and activated as a community space and entertainment zone to enhance the Arena experience.   This includes activating a food truck court, sound stage for live music, ride share pickup and dropoff zone, food popup area, playground and more. As OVG is booking bands and acts in the Arena, it is better positioned to coordinate the booking of bands and events in the Waterworks Park to complement Arena activities before and after shows. OVG will book and manage the activities at Waterworks Park, and net revenues generated that are greater than $100,000 base cost recovery will be split at a rate of 75% to the City and 25% to OVG.

Waterworks Park Sponsorship Sales.    The City has requested OVG market and sell sponsorship rights at Waterworks Park to help raise funds to build a playground, rideshare zone, container food court, and other amenities at the property. The City will have the right to review and approve any sponsorship deal.   OVG will receive a 15% commission on any approved sponsorship deals.

Bunker Club.  OVG has sold out all suites at the new Arena.  As a result, due to high demand, OVG has requested the opportunity to develop an additional suite/club area at their own expense.  OVG will invest $1.6 million to develop a bunker suite/club area in space that has been designated for storage. The City will not invest any capital in the bunker club area. OVG will recover its capital investment annually over the term of the agreement, and additional revenues generated at the bunker suite will be split in accordance with the revenue share formula already provided in the Arena Agreement.

City Suite.  The Amendment codifies annual City use of Suite 8 at the arena.    The suite will facilitate 14 ticket holders per event.  Programming of this suite will be authorized by the City Manager.  

David Keating, Senior Director, Real Estate Services
Financial Impact
Review Comments

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