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Legislation #: 060226 Introduction Date: 2/23/2006
Type: Ordinance Effective Date: none
Sponsor: COUNCILMEMBER XBARNES
Title: Authorizing the City Manager to execute a fifth amendment to the Kansas City Arena Development Agreement with Anschutz Kansas City Arena, LLC (“AKC”) and Anschutz Entertainment Group, Inc. (“AEG”); authorizing the City Manager to execute a first amendment to the Kansas City Arena Management Agreement with AKC; authorizing a first amendment to a Development Agreement with the National Association of Basketball Coaches Foundation (“NABC”); authorizing a $ 530,000.00 amendment to an agreement with Bryan Cave, LLC, for legal services relating to the Kansas City Downtown Arena project; authorizing the City Manager to direct AKC to amend a construction manager at risk (“CM@Risk”) contract with M.A. Mortenson Company (“Mortenson”) for the Downtown Arena project with an approved Final Guaranteed Maximum Price (“FGMP”) of $178,319,302.00; estimating revenue in the amount of $76,140,103.00; appropriating it to the Arena Improvements account of the Downtown Arena Project Series C Fund; authorizing the expenditure of previously appropriated funds in the amount of $178,319,302.00; finding it is in the best interests of the City to waive certain requirements of Article II, Chapter 38, Code of Ordinances; stating the intent of the City to reimburse itself; and recognizing an emergency.

Legislation History
DateMinutesDescription
2/23/2006 Filed by the Clerk's office
2/23/2006 Referred to Finance and Audit Committee
3/1/2006 Advance and Do Pass, Debate
3/2/2006 Passed

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ORDINANCE NO. 060226

Authorizing the City Manager to execute a fifth amendment to the Kansas City Arena Development Agreement with Anschutz Kansas City Arena, LLC (AKC) and Anschutz Entertainment Group, Inc. (AEG); authorizing the City Manager to execute a first amendment to the Kansas City Arena Management Agreement with AKC; authorizing a first amendment to a Development Agreement with the National Association of Basketball Coaches Foundation (NABC); authorizing a $ 530,000.00 amendment to an agreement with Bryan Cave, LLC, for legal services relating to the Kansas City Downtown Arena project; authorizing the City Manager to direct AKC to amend a construction manager at risk (CM@Risk) contract with M.A. Mortenson Company (Mortenson) for the Downtown Arena project with an approved Final Guaranteed Maximum Price (FGMP) of $178,319,302.00; estimating revenue in the amount of $76,140,103.00; appropriating it to the Arena Improvements account of the Downtown Arena Project Series C Fund; authorizing the expenditure of previously appropriated funds in the amount of $178,319,302.00; finding it is in the best interests of the City to waive certain requirements of Article II, Chapter 38, Code of Ordinances; stating the intent of the City to reimburse itself; and recognizing an emergency.

WHEREAS, the City, AKC, and AEG entered into the Kansas City Arena Development Agreement (Development Agreement) dated as of March 17, 2005, as amended; and

WHEREAS, the City Council approved entering into the Kansas City Arena Management Agreement (Management Agreement) with AKC on March 31, 2005; and

WHEREAS, the City Council approved entering into a Development Agreement with NABC on November 3, 2005;

WHEREAS, the City and Mortenson entered into the CM@Risk contract dated as of May 11, 2005, as amended, for the construction of the Sprint Arena Project; and

WHEREAS, the City and AKC entered into an Assignment of Construction Management Agreement dated as of July 26, 2005, whereby the City assigned its rights under the CM@Risk contract to AKC; and

WHEREAS, the Citys MBE/WBE program has an overall goal of achieving 22% MBE/WBE participation on its City construction projects; and

 

WHEREAS, the City believed the Sprint Arena Project presented many opportunities for the Citys MBEs and WBEs to participate in the construction of the Project; and

 

WHEREAS, the Citys Fairness in Construction Board set a goal of 20% MBE and 12% WBE participation for the Sprint Arena Project; and

 

WHEREAS, despite its efforts, Mortenson has been unable to achieve the projects goal of 20% MBE and 12% WBE participation for the Sprint Arena Project; and

 

WHEREAS, after Mortenson submitted the Contractor Utilization Plans for the Sprint Arena Project, Mortenson and its subcontractors continued to work to increase MBE and WBE participation for the Sprint Arena Project; and

 

WHEREAS, Mortenson through its efforts after its initial Contractor Utilization Plan submission has been able to increase overall MBE/WBE participation on the Sprint Arena Project to 20%; and

WHEREAS, rejection of all bids, rebidding certain packages or awarding to the second low bidders for this Project will most likely result in delaying the date of substantial completion of the Project, potential delay claims of existing contractors, increased bond interest costs and would not assure increased MBE/WBE participation; and

WHEREAS, the City Council does not want to increase Project costs or delay the opening of the Sprint Arena which is now scheduled to coincide with the start of the 2007 NBA and NHL seasons;

 

WHEREAS, the City Council will exercise its discretion under the MBE/WBE Ordinance Section 38-91(2) and finds it is in the best interests of the City to waive certain MBE/WBE ordinance requirements and contract requirements; and

 

WHEREAS, that due to the unique nature of this Project and the critical scheduling of this project, the City Council authorizes an amendment to the contract to reflect these changes and other changes in the Mortensons contract;

WHEREAS, the City, AEG, and Mortenson have established the FGMP for the construction of the downtown arena project; and

WHEREAS, the City Council accepts the FGMP agreed upon by the parties and wishes to exercise its option for Phase 2B under the CM@Risk contract, as amended; and

WHEREAS, the City authorizes the City Manager to direct AKC to enter into a third amendment to the CM@Risk contract with Mortenson to effectuate the Citys exercise of its option for Phase 2B; NOW, THEREFORE,

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY: 

Section 1. That the City Manager is authorized to execute a fifth amendment to the Development Agreement with AKC and AEG to develop, build and manage the Kansas City Downtown Arena. The amendment is approved in substantial form as that on file in the office of the City Manager and is incorporated herein by reference.

Section 2. That the City Manager is authorized to execute a first amendment to the Management Agreement with AKC to manage and operate the Kansas City Downtown Arena. The amendment is approved in substantial form as that on file in the office of the City Manager and is incorporated herein by reference.

Section 3. Authorizing the execution of a first amendment to a Development Agreement with NABC to construct a National Basketball Experience and Hall of Fame in the Kansas City Downtown Arena. The amendment is approved in substantial form as that on file in the office of the City Manager and is incorporated herein by reference.

Section 4. That the City Manager or his designee is authorized to enter into an contract amendment not to exceed $530,000.00 with Bryan Cave LLC for legal services relating to the Downtown Arena project, to be paid from funds previously appropriated to Account No. AL-3410-897770-B. The amendment is approved in substantial form as that on file in the office of the City Manager and is incorporated herein by reference.

Section 5. That the City Manager is authorized to direct AKC to enter into an amendment to the CM@Risk contract with Mortenson for the completion of the Sprint Arena project with an approved FGMP in the amount of $178,319,302.00 subject to AKCs and the Citys issuance of the Notice to Proceed pursuant to section 2.05 of the Development Agreement and AEGs and AKCs execution of the 5th Amendment to the Development Agreement. The amendment is approved in substantial form as that on file in the office of the City Manager and is incorporated herein by reference.

Section 6. That the revenue in the following accounts of the Kansas City Downtown Arena Project Series C Fund is hereby estimated in the following amounts:

AL-3410-120000-590000 Proceeds from Sale of Bonds $12,912,082.00

AL-3410-120000-460000 Interest on Investments 10,000,000.00

AL-3410-120000-483151 Contribution from AEG 53,228,021.00

TOTAL $76,140,103.00

Section 7. That the sum of $76,140,103.00 is hereby appropriated from the Unappropriated Fund Balance of Fund No. 3410, the Kansas City Downtown Arena Project Fund to the following account:

AL-3410-897770-B Arena Improvements $76,140,103.00

Section 8. That the City Manager is hereby authorized to expend an amount up to $178,319,302.00 from funds previously appropriated to Account No. AL-3410-897770-B as and for consideration of the aforesaid contract amendment with Mortenson and related contingencies.

Section 9. That the Mayor and City Council find that the rejection of all bids, rebidding certain packages or awarding to the second low bidders for this project will most likely result in delaying the date of substantial completion of the project, potential delay claims of existing contractors, increased bond interest costs and would not assure increased MBE/WBE participation.

Section 10. That pursuant to Kansas City Code of Ordinances Section 38-91(2), the Mayor and Council hereby finds it is in the best interests of the City to waive certain requirements of the MBE/WBE program, Chapter 38, Code of Ordinances, for this contract and hereby authorizes the contract with Mortenson to be amended to reflect the necessary changes.

Section 11. That the City declares its intent to reimburse itself for certain expenditures made within sixty (60) days prior to or on and after the date of this ordinance with respect to the Kansas City Downtown Arena Project with the proceeds of bonds expected to be issued by the City. The maximum principal amount of bonds expected to be issued for the Project is not to exceed $12,912,082. This constitutes a declaration of official intent under Treasury Regulation 1-150-2.

Section 12. That this ordinance, making provision for the current expenses of the municipal government, is recognized as an emergency measure within the provisions of Section 15, Article II, of the Charter of Kansas City, and shall take effect in accordance with that section.

_____________________________________________

 

I hereby certify that there is a balance, otherwise unencumbered, to the credit of the appropriation to which the foregoing expenditure is to be charged, and a cash balance, otherwise unencumbered, in the treasury, to the credit of the fund from which payment is to be made, each sufficient to meet the obligation hereby incurred.

 

 

___________________________________

Debra R. Hinsvark

Director of Finance

 

Approved as to form and legality:

 

 

___________________________________

Nelson V. Munoz

Assistant City Attorney